Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.47  

 
 

CREDIT AGREEMENT    
  

by and among  

 MAGNETEK, INC.

(Borrower)

and

BANC ONE CAPITAL MARKETS, INC.

(Sole Lead Arranger)

and

BANK ONE, KENTUCKY, N.A.

(Administrative Agent)

and

WACHOVIA BANK, NATIONAL ASSOCIATION

(Syndication Agent)

and

THE PROVIDENT BANK,

(Documentation Agent)  

 Dated June 17, 2002  

 
 

CREDIT AGREEMENT    
  

        This Agreement, dated as of June 17, 2002, is among MAGNETEK, INC., a Delaware corporation, the Lenders, Bank One, Kentucky, NA, a national banking
association having an office in Louisville, Kentucky, as Administrative Agent, and Wachovia Bank, National Association, as Syndication Agent, and The Provident Bank, as Documentation Agent. The
parties hereto agree as follows: 

 
 

ARTICLE I
  DEFINITIONS    
  

        As used in this Agreement: 

        "Account
Debtor" means any Person who is or who may become obligated to the Borrower under, with respect to, or on account of an Account. 

        "Accounts"
means all rights to payment for goods sold or leased or services rendered by the Borrower, whether or not earned by performance, together with all security interests or other
security held by or granted to the Borrower to secure such rights to payment. 

        "Acquired
Person" means any corporation, company, partnership, limited liability company or similar business organization whether domestic or foreign that is the subject of a Permitted
Acquisition. 

        "Acquisition"
means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries
(i) acquires or, in the case of a Subsidiary that conducts no business as of the date of this Agreement, starts up any going business or all or substantially all of the assets of any firm,
corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited
liability company. 

        "Advance"
means a borrowing hereunder, (i) made by the Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or
continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period. 

        "Affiliate"
of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another
Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. 

        "Agent"
means Bank One in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Agent
appointed pursuant to Article X. 

        "Aggregate
Commitment" means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. 

        "Aggregate
Outstanding Credit Exposure" means, at any time, the aggregate of the Outstanding Credit Exposure of all the Lenders. 

        "Agreement"
means this credit agreement, as it may be amended or modified and in effect from time to time. 

 

        "Agreement
Accounting Principles" means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with that used in preparing the financial
statements referred to in Section 5.4. 

        "Alternate
Base Rate" means, for any day, a rate of interest per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for such day plus 1/2% per annum. 

        "Applicable
Fee Rate" means, at any time, the percentage rate per annum at which Commitment Fees are accruing on the unused portion of the Aggregate Commitment at such time as set forth
in the Pricing Schedule. 

        "Applicable
Margin" means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set
forth in the Pricing Schedule. 

        "Approved
Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender. 

        "Arranger"
means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as Lead Arranger and Sole Book Runner. 

        "Article"
means an article of this Agreement unless another document is specifically referenced. 

        "Authorized
Officer" means any of the chief executive officer, chief financial officer, treasurer or corporate secretary of the Borrower, acting singly. 

        "Available
Aggregate Commitment" means, at any time, the Aggregate Commitment then in effect minus the Aggregate Outstanding Credit Exposure at such time. 

        "Bank
One" means Bank One, Kentucky, NA, a national banking association having its principal office in Louisville, Kentucky, in its individual capacity, and its successors. 

        "Borrower"
means Magnetek, Inc., a Delaware corporation, and its successors and assigns. 

        "Borrowing
Base" means, on any date of determination, an amount equal to the sum of: 

	(i)
	80%
of the net amount of Eligible Accounts,

	(ii)
	50%
of Eligible Inventory, and

	(iii)
	50%
of Eligible Machinery and Equipment, 

(provided that, (x) notwithstanding any other provision of this definition, the Inventory component of the Borrowing Base may not exceed fifty
percent (50%) of the Borrowing Base and (y) the percentages set forth in clauses (i) and (ii), above, may be redetermined pursuant to Section 2.1.2(b)), all as evidenced by the
most recent Borrowing Base Certificate). 

        "Borrowing
Base Certificate" means a certificate in the form of Exhibit F delivered by the Borrower to the Agent pursuant to the terms hereof. 

        "Borrowing
Date" means a date on which an Advance is made hereunder. 

        "Borrowing
Notice" is defined in Section 2.8. 

        "Business
Day" means (i) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open
in Chicago and New York City for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday) 

3

 

on which banks generally are open in Chicago for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system. 

        "Capital
Expenditures" means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with Agreement Accounting Principles. 

        "Capitalized
Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles. 

        "Capitalized
Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles. 

        "Cash
Equivalent Investments" means (i) short-term obligations of, or fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000; provided in each
case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest. 

        "Change
in Control" means the occurrence of any event or condition in which the individuals who, as of the date of this Agreement, constitute the members of Borrower's board of directors
(the "Incumbent Board") do not constitute or cease for any reason to constitute at least 51% of: (a) the Borrower's board of directors; or (b) the surviving corporation's board of
directors in the case of any merger permitted by this Agreement involving the Borrower; or (c) the controlling entity's board of directors, the comparable body if there is no board of
directors, or voting control if there is no comparable body, in the event that the surviving entity pursuant to clause (b) is controlled by another entity. Any individual who becomes a member
of the board of directors or comparable body or who obtains a voting interest, as applicable pursuant to clause (a), (b) or (c) above, after the date of this Agreement and whose
appointment or nomination was approved or ratified by a vote of the individuals comprising at least 51% of the Incumbent Board shall be deemed to be a member of the Incumbent Board. 

        "Code"
means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. 

        "Collateral
Documents" means, collectively, the Security Agreement, the Stock Pledge Agreement, all UCC financing statements and stock powers related thereto. 

        "Collateral
Shortfall Amount" is defined in Section 8.1. 

        "Commitment"
means, for each Lender, the obligation of such Lender to make Loans to, and participate in Facility LCs issued upon the application of, the Borrower in an aggregate amount
not exceeding the amount set forth opposite its signature below, as it may be modified as a result of any
assignment that has become effective pursuant to Section 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof. 

        "Consolidated
Capital Expenditures" means, with reference to any period, the Capital Expenditures of the Borrower and its Subsidiaries calculated on a consolidated basis for such period. 

        "Consolidated
EBITDA" means Consolidated Net Income (without regard to extraordinary items) plus, to the extent actually deducted from
revenues in determining Consolidated Net Income, 

4

 

(i) Consolidated Interest Expense, (ii) expense for income taxes paid or accrued, (iii) depreciation, (iv) amortization from continuing operations,  minus or plus, respectively, any
net gains or losses from discontinued operations that are not extraordinary items, all calculated for the Borrower and
its Subsidiaries on a consolidated basis; and for purposes of calculating EBITDA for any four-quarter period, the EBITDA for that period shall, to the extent reflected in financial
statements acceptable to Agent, include the EBITDA of any Person that became a Subsidiary of Borrower or was merged with or consolidated into Borrower during that period as if it had been acquired,
merged, or consolidated at the beginning of that period. 

        "Consolidated
Funded Indebtedness" means at any time the aggregate dollar amount for each and all of Borrower and its Subsidiaries, of: (i) the principal amount of all
Indebtedness for borrowed money, (ii) total Capitalized Lease Obligations, (iii) Indebtedness under acceptance facilities or facilities for the discount or sale of Accounts, and
(iv) all guarantees by Borrower or Subsidiaries of Indebtedness for borrowed money of Persons other than Borrower or any Subsidiaries. 

        "Consolidated
Indebtedness" means at any time the Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated basis as of such time. 

        "Consolidated
Interest Expense" means, with reference to any period, the interest expense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period. 

        "Consolidated
Net Income" means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period. 

        "Consolidated
Net Worth" means at any time the consolidated stockholders' equity of the Borrower and its Subsidiaries calculated on a consolidated basis as of such time. 

        "Contingent
Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial
condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement,
take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership. 

        "Conversion/Continuation
Notice" is defined in Section 2.9. 

        "Controlled
Group" means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code. 

        "Credit
Extension" means the making of an Advance or the issuance of a Facility LC hereunder. 

        "Credit
Extension Date" means the Borrowing Date for an Advance or the issuance date for a Facility LC. 

        "Default"
means an event described in Article VII. 

        "Documentation
Agent" means The Provident Bank. 

        "Eligible
Account" means an Account owing by an Account Debtor to the Borrower which meets the following requirements at the time it comes into existence and continues to meet the same
until it is collected in full: 

	 	(i)	 	it is genuine and in all respects what it purports to be;

5

 

	

 	

(ii)	
 	

it is created in the ordinary course of the Borrower's business and arises from: (a) the bona fide performance of services by the Borrower and such services have been fully performed, acknowledged and accepted by the Account Debtor; or
(b) the bona fide sale or lease of goods by the Borrower, and such goods have been completed in accordance with Account Debtor's specifications (if any) and delivered to and accepted by the Account Debtor, and the Borrower has possession of, or
has delivered to the Agent at the Agent's request, shipping and delivery receipts evidencing such shipment, and, in the case of clauses (a) and (b) of this clause (ii), no part of such Account which represents interest or incidental
service charges shall be considered an Eligible Account;
	

 	

(iii)	
 	

if the Account arises because of the sale of goods, such goods have been shipped or delivered on open account and on an absolute sale basis and not on consignment, on approval or on a sale-or-return basis or subject to any other repurchase or return
agreement and no material part of such goods has been returned, repossessed, rejected, lost or damaged, provided that such goods may have been shipped on a C.O.D. basis (except to the extent that the
Agent objects to the Account Debtor in question);
	

 	

(iv)	
 	

it is not evidenced by chattel paper or an instrument of any kind;
	

 	

(v)	
 	

it is evidenced by an invoice rendered to the Account Debtor thereunder which invoice is in form reasonably acceptable to the Agent and was sent to the Account Debtor concurrently with or not more than ten (10) days after the shipment and
delivery to and acceptance by said Account Debtor of the goods giving rise thereto or performance of the services giving rise thereto, and such Account is paid on or before ninety (90) days after the date of such invoice;
	

 	

(vi)	
 	

not more than ten percent (10%) of the balance of all Accounts owing from the Account Debtor and/or any Affiliate or Subsidiaries of Account Debtor obligated on such Account has remained unpaid for more than ninety (90) days after the date of
the relevant invoice (at all times when this condition is not met, all Accounts upon which such Account Debtor is obligated shall be ineligible Accounts);
	

 	

(vii)	
 	

it is owned by the Borrower, the Borrower has the right to subject it to a security interest in favor of Agent for the ratable benefit of the Lenders, and it is subject to a first priority perfected security interest in favor of the Agent for the
ratable benefit of the Lenders, and to no other claims, Liens, security interests or encumbrances whatsoever;
	

 	

(viii)	
 	

it is a valid, legally enforceable and unconditional obligation of the Account Debtor thereunder, and is not subject to setoff, counterclaim, credit, allowance or adjustment by the Account Debtor thereunder, or to any claim by such Account Debtor
denying liability thereunder in whole or in part, and such Account Debtor has not refused to accept and/or has not returned or offered to return any of the goods or services which are the subject of such Account;
	

 	

(ix)	
 	

the Account Debtor obligated on such Account is not insolvent or the subject of any bankruptcy or insolvency proceeding of any kind, neither the Agent nor the Required Lenders are dissatisfied with the creditworthiness of such Account Debtor, and, to
the knowledge of the Borrower, there are no actions or proceedings which are then threatened or pending against the Account Debtor which might result in any material adverse change in its financial condition or in its ability to pay any Account in
full;
	

 	

(x)	
 	

it does not arise out of a contract or order which, by its terms, forbids or effectively makes void or unenforceable the assignment by the Borrower to the Agent of the Account arising with respect thereto;
	
 	

 	
 	

 

6

 

	

 	

(xi)	
 	

the Account Debtor is not a director, officer, employee, agent, Subsidiary or Affiliate of the Borrower or any Subsidiary of the Borrower;
	

 	

(xii)	
 	

the Account Debtor is a resident or citizen of and is located within the United States of America, unless such Account Debtor has furnished the Borrower with an irrevocable letter of credit which has been issued or confirmed by a financial
institution acceptable to the Agent, is in form and substance acceptable to the Required Lenders, has been pledged to the Agent for the benefit of the Lenders, and is payable in United States Dollars in an amount not less than the face value of the
Account or there is FCIA (Foreign Credit Insurance Association) insurance or other insurance acceptable to the Agent in effect covering such account with the Agent named as loss payee;
	

 	

(xiii)	
 	

it is not an Account with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless the Borrower assigns its right to payment of such Account to the Agent pursuant to, and in full
compliance with, the Assignment of Claims Act of 1940, as amended;
	

 	

(xiv)	
 	

it is not an Account with respect to which the Account Debtor is any state, municipality or any department, agency or instrumentality thereof, unless the Borrower assigns its rights to payment of such Account to Agent pursuant to, and in full
compliance with all applicable laws, rules and regulations relating thereto;
	

 	

(xv)	
 	

it is not an Account with respect to which the Account Debtor is located in a state which requires the Borrower, as a precondition to commencing or maintaining an action in the courts of that state, either to (A) receive a certificate of
authority to do business and be in good standing in such state, or (B) file a notice of business activities report or similar report with such state's taxing authority, unless (x) the Borrower has taken one of the actions described in
clauses (A) or (B), (y) the failure to take one of the actions described in either clause (A) or (B) may be cured retroactively by the Borrower at its election, or (z) the Borrower has proven, to Agent's satisfaction, that it
is exempt from any such requirements under any such state's laws;
	

 	

(xvi)	
 	

it is an Account against which each Lender is legally permitted to make advances; and
	

 	

(xvii)	
 	

it is not an Account which, when added to the relevant Account Debtor's other indebtedness to the Borrower, results in all Accounts in the aggregate from such Account Debtor exceeding ten percent (10%) of all Accounts due to the Borrower.

        Accounts
that would otherwise constitute Eligible Accounts but which are excluded as Eligible Accounts, may be included as Eligible Accounts on Borrower's request, provided that: Agent
receives a first-priority, properly perfected security interest in such Accounts pursuant to documentation executed by such parties as Agent may require, and UCC financing statements (or the local law
equivalent) filed in such jurisdictions as the Agent may require and/or that may be otherwise necessary to cause Agent to have a perfected security interest in such Accounts, all to be in form and
substance satisfactory to Agent, and together with opinions of legal counsel satisfactory to Agent confirming the perfected security interest of Agent in such Accounts, and containing opinions
satisfactory to Agent, and Borrower shall pay the costs and expenses of Agent in connection therewith, including without limitation filing and recording costs and legal fees. 

        An
Account which is at any time an Eligible Account, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account. Further,
with respect to any Account, if the Agent at any time or times hereafter determines, in its sole and absolute discretion, that the prospect of payment or performance by the Account Debtor is or will
be impaired, notwithstanding anything to the contrary contained above, such Account shall no longer be an Eligible Account and the Agent shall promptly thereafter notify the Borrower in writing of
such classification. 

7

 

        "Eligible
Inventory" means Inventory (exclusive of work in process) of the Borrower valued at the lower of cost (determined on a first-in, first-out basis) or
market, which at all times meets the following requirements: 

	(i)
	it
is owned by the Borrower, the Borrower has the right to subject it to a security interest in favor of the Agent for the ratable benefit of the
Lenders, it is subject to a first priority, perfected security interest in favor of the Agent for the ratable benefit of the Lenders, and to no other claims, liens, security interests or encumbrances
whatsoever, and it is located at a location identified to the Lenders in the Loan Documents as a location within the United States of America where the Borrower will keep Inventory;

	(ii)
	it
is not obsolete or slow-moving, it is in good condition, it is fully insured, it meets all standards imposed by any governmental agency,
or department or division thereof, having regulatory authority over such goods, it is currently usable or saleable in the ordinary course of the Borrower's business and is not unacceptable to the
Agent due to age, type, category and/or quantity;

	(iii)
	it
is not stored or placed with a bailee, consignee, warehouseman, supplier, lessor (i.e., at a location not owned by the Borrower) or similar party,
except for (x) inventory located at public warehouses with respect to which the Borrower has provided the Agent with bailee letters in form and content acceptable to the Agent, and
(y) inventory located at leased locations with respect to which the Borrower has provided the Agent with landlord's waiver letters in form and content acceptable to the Agent;

	(iv)
	it
is not delivered to the Borrower on consignment and has not been consigned to a customer of the Borrower; and

	(v)
	the
Inventory was not purchased by the Borrower in or as part of a "bulk" transfer or sale of assets unless the Borrower has complied with all applicable
bulk sales or bulk transfer laws or has provided an indemnity agreement satisfactory to the Required Lenders. 

Any
Inventory which is at any time Eligible Inventory, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be Eligible Inventory. Notwithstanding the
foregoing, the Agent shall have the right to exclude and reserve Inventory from eligibility due to any actual or potential liens, claims or risks which the Agent reasonably believes might impair the
value of the Inventory, the Agent's rights and interests therein and/or the Borrower's ability to repay the Obligations and the Agent shall promptly thereafter notify the Borrower in writing of such
exclusion. Any Inventory otherwise valued by a Borrower on a last-in first-out ("LIFO") basis shall, for purposes of calculating the value of Eligible Inventory, be valued by
adding to the value determined on a LIFO basis the amount of the LIFO reserve allocable thereto. 

        "Eligible
Machinery and Equipment" means the aggregate net book value or, if Agent reasonably requires an appraisal thereof at Borrower's expense, fair market value, whichever is less,
of non-obsolete machinery and equipment owned by the Borrower and used in connection with the Borrower's business and as to which no Lien has attached other than a first-priority,
perfected lien and security interest in favor of Agent and all of which is located in the United States. 

        "Environmental
Laws" means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (i) the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other
remediation thereof. 

8

 

        "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder. 

        "Eurodollar
Advance" means an Advance which, except as otherwise provided in Section 2.11, bears interest at the applicable Eurodollar Rate. 

        "Eurodollar
Base Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the applicable British Bankers' Association LIBOR rate for deposits in U.S. dollars
as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, and having a maturity
equal to such Interest Period, provided that, if no such British Bankers' Association LIBOR rate is available to the Agent, the applicable Eurodollar
Base Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars
with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of
Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period. 

        "Eurodollar
Loan" means a Loan which, except as otherwise provided in Section 2.11, bears interest at the applicable Eurodollar Rate. 

        "Eurodollar
Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to
such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin. 

        "Excluded
Taxes" means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by
(i) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (ii) the jurisdiction in which the Agent's or such Lender's principal executive
office or such Lender's applicable Lending Installation is located. 

        "Exhibit"
refers to an exhibit to this Agreement, unless another document is specifically referenced. 

        "Extension
Request" is defined in Section 2.20. 

        "Facility
LC" is defined in Section 2.19.1. 

        "Facility
LC Application" is defined in Section 2.19.3. 

        "Facility
LC Collateral Account" is defined in Section 2.19.11. 

        "Facility
Termination Date" means December 17, 2003 or any later date as may be specified as the Facility Termination Date in accordance with Section 2.20 or any earlier
date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof. 

        "Federal
Funds Effective Rate" means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Louisville time) on such day on
such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion. 

9

 

        "Financial
Contract" of a Person means (i) any exchange-traded or over-the-counter futures, forward, swap or option contract or other financial instrument
with similar characteristics, or (ii) any Rate Management Transaction. 

        "Floating
Rate" means, for any day, a rate per annum equal to (i) the Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case changing when and as
the Alternate Base Rate changes. 

        "Floating
Rate Advance" means an Advance which, except as otherwise provided in Section 2.11, bears interest at the Floating Rate. 

        "Floating
Rate Loan" means a Loan which, except as otherwise provided in Section 2.11, bears interest at the Floating Rate. 

        "Fund"
means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business. 

        "Guarantor"
means, collectively, jointly, severally and individually, each and all of J-Tec Inc., MagneTek Mondel Holdings, Inc., Magnetek ADS
Power, Inc. and Magnetek Leasing Corporation and their successors and assigns. 

        "Guaranty"
means each guaranty agreement dated as of the date hereof executed by any Guarantor in favor of the Agent, for the ratable benefit of the Lenders, as it may be amended or
modified and in effect from time to time. 

        "Hazardous
Substance" and "Hazardous Substances" mean any substance or material defined or designated as hazardous or toxic waste, hazardous material, a hazardous or toxic substance, or
infectious material, substance or waste or other similar term by any federal, state or local environmental statute, regulation, ordinance or decree presently in effect or that may be promulgated in
the future, as such statutes, regulations, and ordinances may be amended from time to time, including without limitation, asbestos in friable form, petroleum products, mining wastes, fly ash and
agricultural chemical products. 

        "Highest
Lawful Rate" shall mean, on any day, the maximum nonusurious rate of interest permitted for that day by whichever of applicable federal or New York law permits the higher
interest rate, stated as a rate per annum. 

        "Indebtedness"
of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of Property or services (other
than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments,
(v) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property,
(vi) Capitalized Lease Obligations, (vii) Contingent Obligations, (viii) Letters of Credit, (ix) Net Mark -to-Market Exposure under Rate Management
Transactions, (x) Off-Balance Sheet Liabilities, (xi) Operating Lease Obligations, (xii) Rate Management Obligations, (xiii) Sale and Leaseback Transactions,
and (xiv) any other obligation for borrowed money or other financial accommodation which in accordance with Agreement Accounting Principles would be shown as a liability on the consolidated
balance sheet of such Person. 

        "Interest
Period" means, with respect to a Eurodollar Advance, a period of one, two, three or six months commencing on a Business Day selected by the Borrower pursuant to this Agreement.
Such Interest Period shall end on the day which corresponds numerically to such date one, two, three or six months thereafter, provided, however, that
if there is no such numerically corresponding day in such 

10

 

next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. 

        "Inventory"
shall mean any and all goods, merchandise, and other personal property now owned or hereafter acquired by the Borrower that are held for sale or lease, or are furnished or to
be furnished under any contract of service or are raw materials, work-in-process, supplies, or materials used or consumed in the Borrower's business, and all products thereof,
and all substitutions, replacements, additions, or accessions therefor and thereto. 

        "Investment"
of a Person means any loan, advance (other than commission, travel and similar advances to officers and employees made in the ordinary course of business), extension of
credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any deposit accounts and certificate of deposit owned by such Person; and structured notes, derivative financial instruments and
other similar instruments or contracts owned by such Person. 

        "LC
Fee" is defined in Section 2.19.4. 

        "LC
Issuer" means any Lender in its capacity as issuer of Facility LCs hereunder. 

        "LC
Obligations" means, at any time, the sum, without duplication, of (i) the aggregate undrawn stated amount under all Facility LCs outstanding at such time plus (ii) the
aggregate unpaid amount at such time of all Reimbursement Obligations. 

        "LC
Payment Date" is defined in Section 2.19.5. 

        "Lenders"
means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns. 

        "Lending
Installation" means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Agent pursuant to Section 2.17. 

        "Letter
of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for
which such Person is in any way liable. 

        "Leverage
Ratio" means, as of any date of calculation, the ratio of (i) Consolidated Funded Indebtedness outstanding on such date to (ii) Consolidated EBITDA for the
Borrower's then most-recently ended four fiscal quarters. 

        "Lien"
means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention
agreement). 

        "Loan"
means, with respect to a Lender, such Lender's loan made pursuant to Article II (or any conversion or continuation thereof). 

        "Loan
Documents" means this Agreement, the Facility LC Applications and any Notes issued pursuant to Section 2.13, the Collateral Documents and the Guaranty. 

11

   
        "Material Adverse Effect" means a material adverse effect on (i) the business, Property, condition (financial or otherwise), results of operations, or prospects of the Borrower
and its Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its obligations under the Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent, the LC Issuer or the Lenders thereunder. 

        "Material
Indebtedness" means Indebtedness in an outstanding principal amount of $3,000,000 or more in the aggregate (or the equivalent thereof in any currency other than U.S. dollars). 

        "Material
Indebtedness Agreement" means any agreement under which any Material Indebtedness was created or is governed or which provides for the incurrence of Indebtedness in an amount
which would constitute Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder). 

        "Modify"
and "Modification" are defined in Section 2.19.1. 

        "Moody's"
means Moody's Investors Service, Inc. 

        "Multiemployer
Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any member of the Controlled Group is a party
to which more than one employer is obligated to make contributions. 

        "Net
Mark-to-Market Exposure" of a Person means, as of any date of determination, the excess (if any) of all unrealized losses over all unrealized profits of such
Person arising from Rate Management Transactions. "Unrealized losses" means the fair market value of the cost to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as of that date), and "unrealized profits" means the fair market value of the gain to such Person of replacing such Rate
Management Transaction as of the date of determination (assuming such Rate Management Transaction were to be terminated as of that date). 

        "Non-U.S.
Lender" is defined in Section 3.5(iv). 

        "Note"
is defined in Section 2.13. 

        "Obligations"
means all unpaid principal of and accrued and unpaid interest on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party arising under the Loan Documents. 

        "Off-Balance
Sheet Liability" of a Person means (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such
Person, (ii) any liability under any Sale and Leaseback Transaction which is not a Capitalized Lease, (iii) any liability under any so-called "synthetic lease" transaction
entered into by such Person, or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the balance sheets of such Person, but excluding from this clause Operating Leases. 

        "Operating
Lease" of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any
renewals effective at the option of the lessor) of one year or more. 

        "Operating
Lease Obligations" means, as at any date of determination, the amount obtained by aggregating the present values, determined in the case of each particular Operating Lease by
applying a discount rate (which discount rate shall equal the discount rate which would be applied under Agreement Accounting Principles if such Operating Lease were a Capitalized Lease) from the date
on which each fixed lease payment is due under such Operating Lease to such date of determination, of all fixed lease payments due under all Operating Leases of the Borrower and its Subsidiaries. 

12

 

        "Other
Taxes" is defined in Section 3.5(ii). 

        "Outstanding
Credit Exposure" means, as to any Lender at any time, the sum of (i) the aggregate principal amount of its Loans outstanding at such time, plus (ii) an amount
equal to its Pro Rata Share of the LC Obligations at such time. 

        "Participants"
is defined in Section 12.2.1. 

        "Payment
Date" means the tenth (10th) day of each month. 

        "PBGC"
means the Pension Benefit Guaranty Corporation, or any successor thereto. 

        "Permitted
Acquisitions" means Acquisitions of Acquired Persons for consideration not exceeding $10,000,000 for any one Acquisition or $15,000,000 in the aggregate for all Acquisitions
in any twelve-month period beginning on the date of this Agreement; provided that in each case: (a) the Acquired Person must be in the same or similar line of business as that being now
conducted by Borrower and its subsidiaries; (b) after giving effect to the pro forma financial condition of the Acquired Persons, no breach or default under this Agreement would occur and no
financial or other covenant contained herein would be violated; (c) each Acquired Person must execute a Joinder Agreement in form and substance satisfactory to the Agent, as well as, in respect
of a domestic Acquired Person, a Guaranty and a security agreement, and in respect of all other Acquired Persons, a pledge of 65% of its securities, all in form and substance satisfactory to Agent,
(d) in respect of a domestic Acquired Person, Agent must receive for the ratable benefit of Lenders a valid, perfected, first-priority lien and security interest on and in all of its assets,
pursuant to UCC financing statements filed in such locations as Agent may determine; and (e) in respect of a domestic Acquired Person, Agent must receive for the ratable benefit of Lenders
copies of UCC searches, a certificate of good standing/existence from the jurisdiction of formation of such Person in each location in which it does business, and (f) in respect of all Acquired
Persons, the Agent must receive copies of the organizational documents (including all amendments thereto) of such Person, authorizing resolutions of the boards of directors, and an opinion of counsel
to such Person, such counsel to be subject to the reasonable approval of Agent, in each case all of the foregoing UCC search results, certificates of existence/good standing, organizational documents,
resolutions and opinions to be subject to the review and approval of Agent, to be delivered by such times as Agent may require, and to be at the expense of the Borrower. 

        "Permitted
Debt" means Indebtedness permitted by Section 6.11. 

        "Person"
means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or instrumentality thereof. 

        "Plan"
means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the
Borrower or any member of the Controlled Group may have any liability. 

        "Pledgor"
means the Borrower and its successors and assigns. 

        "Pricing
Schedule" means Schedule 5 attached hereto. 

        "Prime
Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any
customer), changing when and as said prime rate changes. 

        "Pro
Rata Share" means, with respect to a Lender, a portion equal to a fraction the numerator of which is such Lender's Commitment and the denominator of which is the Aggregate
Commitment. 

        "Property"
of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. 

13

 

        "Purchasers"
is defined in Section 12.3.1. 

        "Rate
Management Transaction" means any transaction (including an agreement with respect thereto) now existing or hereafter entered by the Borrower which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial
measures. 

        "Rate
Management Obligations" of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Rate Management Transactions, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Rate Management Transactions. 

        "Regulation
D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. 

        "Regulation
U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. 

        "Reimbursement
Obligations" means, at any time, the aggregate of all obligations of the Borrower then outstanding under Section 2.19 to reimburse the LC Issuer for amounts paid by
the LC Issuer in respect of any one or more drawings under Facility LCs. 

        "Rentals"
of a Person means the aggregate fixed amounts payable by such Person under any Operating Lease. 

        "Reportable
Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such
events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event,  provided, however, that a
failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. 

        "Reports"
is defined in Section 9.6. 

        "Required
Lenders" means Lenders in the aggregate having at least 66.7% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding
at least a majority of the aggregate unpaid principal amount of the outstanding Advances; and in addition to such 66.7% requirement, if at any time there are exactly three (3) Lenders, then at
least two (2) Lenders shall be required to constitute the Required Lenders and such two (2) Lenders must in the aggregate hold such 66.7% interest. 

        "Reserve
Requirement" means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on Eurocurrency liabilities. 

        "Response
Date" is defined in Section 2.19. 

14

 

        "S&P"
means Standard and Poor's Ratings Services, a division of The McGraw Hill Companies, Inc. 

        "Sale
and Leaseback Transaction" means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee. 

        "Schedule"
refers to a specific schedule to this Agreement, unless another document is specifically referenced. 

        "Section"
means a numbered section of this Agreement, unless another document is specifically referenced. 

        "Secured
Obligations" means, collectively, (i) the Obligations and (ii) all Rate Management Obligations owing to one or more Lenders. 

        "Security
Agreement" means that certain Security Agreement executed by Borrower and the Guarantors in favor of Agent for the ratable benefit of the Lenders, dated as of even date
herewith, in form and substance satisfactory to the Agent and Lenders, and all amendments thereto. 

        "Single
Employer Plan" means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group. 

        "Stated
Rate" is defined in Section 2.22. 

        "Stock
Pledge Agreement" means, collectively, jointly, severally and individually, any and all Stock Pledge Agreement(s) executed by Borrower and the Pledgors in favor of Agent for the
ratable benefit of the Lenders, in form and substance satisfactory to the Agent and Lenders, and all amendments thereto. 

        "Subordinated
Indebtedness" of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Obligations to the written satisfaction of the
Required Lenders. 

        "Subsidiary"
of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower. 

        "Substantial
Portion" means, with respect to the Property of the Borrower and its Subsidiaries, Property which represents more than 10% of the consolidated assets of the Borrower and its
Subsidiaries or property which is responsible for more than 10% of the consolidated net sales or of the consolidated net income of the Borrower and its Subsidiaries, in each case, as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made (or if financial
statements have not been delivered hereunder for that month which begins the twelve-month period, then the financial statements delivered hereunder for the quarter ending immediately prior to that
month). 

        "Syndication
Agent" means Wachovia Bank, National Association, a national banking association. 

        "Taxes"
means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but  excluding Excluded Taxes and Other
Taxes. 

        "Transferee"
is defined in Section 12.4. 

15

 

        "Type"
means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as a Floating Rate Loan or a Eurodollar
Loan. 

        "Unfunded
Liabilities" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of
all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. 

        "Unmatured
Default" means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default. 

        "Wholly-Owned
Subsidiary" of a Person means (i) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly,
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, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. 

        The
foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 

ARTICLE II

THE CREDITS  

        2.1    Commitment and Borrowing Base.    

        2.1.1    Commitment.    From and including the date of this Agreement and prior to the Facility Termination Date, each
Lender severally agrees, on the terms and conditions set forth in this Agreement, to (i) make Loans to the Borrower and (ii) participate in Facility LCs issued upon the request of the
Borrower, provided that, after giving effect to the making of each such Loan and the issuance of each such Facility LC, such Lender's Outstanding Credit
Exposure shall not exceed its Commitment; and provided further, that at no time shall the Aggregate Outstanding Credit Exposure exceed the amount set
forth in the first sentence of Section 2.1.2(a) below. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Facility Termination Date.
The Commitments to extend credit hereunder shall expire on the Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.19. 

        2.1.2.    Borrowing Base.    

        2.1.2(a)    Limitation on Credit Extensions.    Notwithstanding anything to the contrary contained in this Agreement
or in any other Loan Document, the Aggregate Outstanding Credit Exposure shall at no time exceed the lesser of (i) the Borrowing Base and
(ii) the Aggregate Commitment. The Borrower agrees that if at any time any such excess shall arise, it shall, without presentment, demand, protest or notice of any kind from the Agent or any
Lender, all of which it hereby expressly waives, immediately repay Loans in the amount necessary to eliminate such excess. 

        2.1.2(b)    Redetermination; Change in Advance Percentages; Reserves.    The Borrowing Base will be calculated by the
Agent once a month upon receipt of the Borrowing Base Certificates described in Section 2.1.2(c). In addition, the Agent, on its own initiative or at the request of the Required Lenders, may
recalculate the Borrowing Base at other times in its discretion as necessary to reduce the Borrowing Base as a result of its reasonable determination that Inventory or Accounts included therein are no
longer Eligible Inventory or Eligible Accounts, as the case may be. The Agent may (on its own initiative or at the request of the Required 

16

 

Lenders) in the exercise of its discretion in determining the Borrowing Base, at any time and from time to time, (i) decrease or (with the consent of all of the Lenders) increase the advance
percentages to be applied to Eligible Accounts and Eligible Inventory which are set forth in the definition of "Borrowing Base" in Article I,  provided that in the event either of such percentages
is decreased, such decrease shall become effective immediately for the purpose of calculating
availability under this Agreement, and (ii) establish reserves, or increase or decrease the amount of reserves, with respect to Eligible Accounts. 

        2.1.2(c)    Borrowing Base Certificates.    The Borrower shall keep accurate and complete records of its Accounts and,
as frequently as the Required Lenders shall require, but not less frequently than once per month on the tenth Business Day following the last day of each fiscal month, the Borrower shall deliver to
the Agent and each Lender a Borrowing Base Certificate covering all of its Accounts and Inventory, together with (if requested by the Required Lenders) formal written assignments of such Accounts and
copies of the invoices related thereto. The Borrower shall also make available to the Agent and any Lender for its inspection, upon demand, the original copy of all documents (and will deliver any
such original copy to the Agent if required by the Agent to enforce its rights and remedies hereunder), including, without limitation, repayment histories, present status reports and shipment reports,
relating to the Accounts included in any Borrowing Base Certificate and such other matters and information relating to the status of then existing Accounts as the Agent or any Lender shall reasonably
request. 

        2.2    Required Payments; Termination.    The Aggregate Outstanding Credit Exposure and all other unpaid Obligations
shall be paid in full by the Borrower on the Facility Termination Date. 

        2.3    Ratable Loans.    Each Advance hereunder shall consist of Loans made from the several Lenders ratably according
to their Pro Rata Shares. 

        2.4    Types of Advances.    The Advances may be Floating Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the Borrower in accordance with Sections 2.8 and 2.9. 

        2.5    Commitment Fee; Reductions in Aggregate Commitment.    The Borrower agrees to pay to the Agent for the account
of each Lender according to its Pro Rata Share a commitment fee at a per annum rate equal to the Applicable Fee Rate on the average daily Available Aggregate Commitment from the date hereof to and
including the Facility Termination Date, payable on each Payment Date hereafter and on
the Facility Termination Date. The Borrower may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in integral multiples of $1,000,000, upon at least three
Business Days' prior written notice to the Agent, which notice shall specify the amount of any such reduction, provided, however, that the amount of the
Aggregate Commitment may not be reduced below the Aggregate Outstanding Credit Exposure. All accrued commitment fees shall be payable on the effective date of any termination of the obligations of the
Lenders to make Credit Extensions hereunder. 

        2.6    Minimum Amount of Each Advance.    Each Eurodollar Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $250,000 if in excess thereof), and each Floating Rate Advance shall be in the minimum amount of $500,000 (and in multiples of $100,000 if in excess thereof),  provided, however, that any
Floating Rate Advance may be in the amount of the Available Aggregate Commitment. 

        2.7    Optional Principal Payments.    The Borrower may from time to time pay, without penalty or premium, all
outstanding Floating Rate Advances, or, in a minimum aggregate amount of $1,000,000 or any integral multiple of $500,000 in excess thereof, any portion of the outstanding Floating Rate Advances upon
one Business Day's prior written notice to the Agent. The Borrower may from time to time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but 

17

 

without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $500,000 or any integral multiple of $250,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior written notice to the Agent. 

        2.8    Method of Selecting Types and Interest Periods for New Advances.    The Borrower shall select the Type of
Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto from time to time. The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not later
than noon (Louisville time) on the Borrowing Date of each Floating Rate Advance and two Business Days before the Borrowing Date for each Eurodollar Advance, specifying: 

	(i)
	the
Borrowing Date, which shall be a Business Day, of such Advance,

	(ii)
	the
aggregate amount of such Advance,

	(iii)
	the
Type of Advance selected, and

	(iv)
	in
the case of each Eurodollar Advance, the Interest Period applicable thereto. 

Not
later than 1 p.m. (Louisville time) on each Borrowing Date, each Lender shall make available its Loan or Loans in funds immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. The Agent will make the funds so received from the Lenders available to the Borrower at the Agent's aforesaid address. 

        2.9    Conversion and Continuation of Outstanding Advances.    Floating Rate Advances shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into a Floating
Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the Borrower shall have given the Agent a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of
Section 2.6, the Borrower may elect from time to time to convert all or any part of a Floating Rate Advance into a Eurodollar Advance. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not later than 10:00 a.m. (Louisville time) at
least three Business Days prior to the date of the requested conversion or continuation, specifying: 

	(i)
	the
requested date, which shall be a Business Day, of such conversion or continuation,

	(ii)
	the
aggregate amount and Type of the Advance which is to be converted or continued, and

	(iii)
	the
amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable
thereto. 

        2.10    Changes in Interest Rate, etc.    Each Floating Rate Advance shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to
but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate
determined by the Agent as applicable to such Eurodollar Advance based upon the Borrower's 

18

 

selections under Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest Period may end after the Facility Termination Date. 

        2.11    Rates Applicable After Default.    Notwithstanding anything to the contrary contained in Section 2.8,
2.9 or 2.10, during the continuance of a Default or Unmatured Default the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that no Advance may be made as, converted into or
continued as a Eurodollar Advance. During the continuance of a Default the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that (i) each Eurodollar Advance shall bear
interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall bear interest at a
rate per annum equal to the Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per annum,  provided that, during the continuance of a Default
under Section 7.6 or 7.7, the interest rates set forth in clauses (i) and
(ii) above and the increase in the LC Fee set forth in clause (iii) above shall be applicable to all Credit Extensions without any election or action on the part of the Agent or any
Lender. 

        2.12    Method of Payment.    All payments of the Obligations hereunder shall be made, without setoff, deduction, or
counterclaim, in immediately available funds to the Agent at the Agent's address specified pursuant to Article XIII, or at any other Lending Installation of the Agent specified in writing by
the Agent to the Borrower, by noon (Louisville time) on the date when due and shall (except in the case of Reimbursement Obligations for which the LC Issuer has not been fully indemnified by the
Lenders, or as otherwise specifically required hereunder) be applied ratably by the Agent among the Lenders. Each payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Agent from such Lender. The Agent is hereby authorized to charge the account of the Borrower maintained with Bank One for each payment of principal, interest, Reimbursement Obligations
and fees as it becomes due hereunder. Each reference to the Agent in this Section 2.12 shall also be deemed to refer, and shall apply equally, to the LC Issuer, in the case of payments required
to be made by the Borrower to the LC Issuer pursuant to Section 2.19.6. 

        2.13    Noteless Agreement; Evidence of Indebtedness.    (i) 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 hereunder. 

        (ii)  The
Agent shall also maintain accounts in which it will record (a) the amount of each Loan made hereunder, the Type thereof and the Interest Period with respect
thereto, (b) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, (c) the original stated amount of each
Facility LC and the amount of LC Obligations outstanding at any time, and (d) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's share thereof. 

        (iii)  The
entries maintained in the accounts maintained pursuant to paragraphs (i) and (ii) above shall be prima facie  evidence of the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or
any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms. 

19

 

        (iv)  Any
Lender may request that its Loans be evidenced by a promissory note (a "Note"). In such event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Lender in a form supplied by the Agent. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (prior to any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Lender subsequently returns any such Note for cancellation
and requests that such Loans once again be evidenced as described in paragraphs (i) and (ii) above. 

        2.14    Telephonic Notices.    The Borrower hereby authorizes the Lenders and the Agent to extend, convert or continue
Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be acting on behalf
of the Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. The Borrower
agrees to deliver promptly to the Agent a written confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error. 

        2.15    Interest Payment Dates; Interest and Fee Basis.    Interest accrued on each Floating Rate Advance shall be
payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal amount of any Floating Rate Advance converted into a Eurodollar Advance on a day other than a Payment Date shall be
payable on the date of conversion. Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having an Interest Period longer than three months shall also be payable on the last day of
each three-month interval during such Interest Period. Interest, commitment fees and LC Fees shall be calculated for actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of
or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment. 

        2.16    Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.    Promptly after receipt
thereof, the Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it
hereunder. Promptly after notice from the LC Issuer, the Agent will notify each Lender of the contents of each request for issuance of a Facility LC hereunder. The Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate. 

        2.17    Lending Installations.    Each Lender may book its Loans and its participation in any LC Obligations and the
LC Issuer may book the Facility LCs at any Lending Installation selected by such Lender or the LC Issuer, as the case may be, and may change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and the Loans, Facility LCs, participations in LC Obligations and any Notes issued hereunder shall be deemed held by each Lender or the LC
Issuer, as the case may be, for the benefit of any such Lending Installation. Each Lender and the LC Issuer may, by written notice to the Agent and the Borrower in accordance with Article XIII,
designate replacement or additional Lending Installations through which Loans will be made by it or Facility LCs will be issued by it and for whose account Loan payments or payments with respect to
Facility LCs are to be made. 

20

   
        2.18    Non-Receipt of Funds by the Agent.    Unless the Borrower or a Lender, as the case may be,
notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by
a Lender, the Federal Funds Effective Rate for such day for the first three days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan. 

        2.19    Facility LCs.    

        2.19.1.    Issuance.    The LC Issuer hereby agrees, on the terms and conditions set forth in this Agreement, to issue
standby and commercial letters of credit (each, a "Facility LC") and to renew, extend, increase, decrease or otherwise modify each Facility LC ("Modify," and each such action a "Modification"), from
time to time from and including the date of this Agreement and prior to the Facility Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the aggregate amount of the outstanding LC Obligations shall not exceed: (A) from the closing date to July 31,
2002, $18,000,000, and (B) from August 1, 2002, $10,000,000, and (ii) the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment and provided further that
no Facility LC may be issued or modified by an LC Issuer if a Default of which Agent has given Borrower formal written notice shall have occurred and be continuing or the Required Lenders have
otherwise accelerated the Obligations pursuant to the terms of this Agreement. No Facility LC shall have an expiry date later than the earlier of (x) the fifth Business Day prior to the
Facility Termination Date and (y) one year after its issuance; and no Facility LC shall have an expiry date beyond July 31, 2002 if such would cause the aggregate face amounts of issued
and outstanding Facility LCs to be greater than $18,000,000 beyond July 31, 2002. 

        2.19.2.    Participations.    Upon the issuance or Modification by the LC Issuer of a Facility LC in accordance with
this Section 2.19, the LC Issuer shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share. 

        2.19.3.    Notice.    Subject to Section 2.19.1, the Borrower shall give the LC Issuer notice prior to
10:00 a.m. (Louisville time) at least three Business Days prior to the proposed date of issuance or Modification of each Facility LC, specifying the beneficiary, the proposed date of issuance
(or Modification) and the expiry date of such Facility LC, and describing the proposed terms of such Facility LC and the nature of the transactions proposed to be supported thereby. Upon receipt of
such notice, the LC Issuer shall promptly notify the Agent, and the Agent shall promptly notify each Lender, of the contents thereof and of the amount of such Lender's participation in such proposed
Facility LC. The issuance or Modification by the LC Issuer of any Facility LC shall, in addition to the conditions precedent set forth in Article IV (the satisfaction of which the LC Issuer
shall have no duty to ascertain), be subject to the conditions precedent that such Facility LC shall be satisfactory to the LC Issuer and that the Borrower shall have executed and delivered such
application agreement and/or such other instruments and agreements relating to such Facility LC 

21

 

as the LC Issuer shall have reasonably requested (each, a "Facility LC Application"). In the event of any conflict between the terms of this Agreement and the terms of any Facility LC Application,
the terms of this Agreement shall control. No Lender shall be responsible for the failure or delay by any other Lender in its obligation to make its ratable share of a borrowing hereunder; provided,
however, that the failure of any Lender to fulfill its obligations hereunder shall not relieve any other Lender of its obligations hereunder. 

        2.19.4.    LC Fees.    The Borrower shall pay to the Agent, for the account of the Lenders ratably in accordance with
their respective Pro Rata Shares, (i) with respect to each standby Facility LC, a letter of credit fee at a per annum rate equal to the Applicable Margin for Eurodollar Loans in effect from
time to time on the average daily undrawn stated amount under such standby Facility LC, such fee to be payable in arrears on each Payment Date, and (ii) with respect to each commercial Facility
LC, a one-time letter of credit fee in an amount equal to one percent (1%) of the initial stated amount (or, with respect to a Modification of any such commercial Facility LC which
increases the stated amount thereof, such increase in the stated amount) thereof, such fee to be payable on the date of such issuance or increase (each such fee described in this sentence an "LC
Fee"). The LC Fee shall be increased by 2% after the occurrence of any Default or Unmatured Default. The Borrower shall also pay to the LC Issuer for its own account (x) at the time of issuance
of each Facility LC, a fronting fee in an amount equal to 0.125% of the face amount of each Facility LC to be agreed upon between the LC Issuer and the Borrower, and (y) documentary and
processing charges in connection with the issuance or Modification, cancellation, negotiation, and/or transfer of and draws under Facility LCs in accordance with the LC Issuer's standard schedule for
such charges as in effect from time to time. 

        2.19.5.    Administration; Reimbursement by Lenders.    Upon receipt from the beneficiary of any Facility LC of any
demand for payment under such Facility LC, the LC Issuer shall notify the Agent and the Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC Payment Date"). The responsibility of the LC Issuer to the Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in connection with such presentment shall be in conformity in all material respects with such Facility LC. The LC Issuer
shall endeavor to exercise the same care in the issuance and administration of the Facility LCs as it does with respect to letters of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by the LC Issuer, each Lender shall be unconditionally and irrevocably liable without regard to the occurrence of any Default or any
condition precedent whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's Pro Rata Share of the amount of each payment made by the LC Issuer under each Facility LC to the
extent such amount is not reimbursed by the Borrower pursuant to Section 2.19.6 below, plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such demand is made after 11:00 a.m. (Louisville time) on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Effective Rate for the first three days and, thereafter, at a rate of interest equal to
the rate applicable to Floating Rate Advances. 

        2.19.6.    Reimbursement by Borrower.    The Borrower shall be irrevocably and unconditionally obligated to reimburse
the LC Issuer on or before the applicable LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing under any Facility LC, without presentment, demand, protest or other formalities
of any kind; provided that neither the Borrower nor any Lender shall hereby be precluded from asserting any claim for direct (but not consequential)
damages suffered by the Borrower or such Lender to the extent, but only to the 

22

 

extent, caused by the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC issued by it complied with the terms of such Facility
LC. All such amounts paid by the LC Issuer and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to (x) the rate
applicable to Floating Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to Floating Rate Advances for such
day if such day falls after such LC Payment Date. The LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all amounts received by it from the Borrower for application in
payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer, but only to the extent such Lender has made payment to the LC Issuer in respect of
such Facility LC pursuant to Section 2.19.5. Subject to the terms and conditions of this Agreement (including without limitation the submission of a Borrowing Notice in compliance with
Section 2.8 and the satisfaction of the applicable conditions precedent set forth in Article IV), the Borrower may request an Advance hereunder for the purpose of satisfying any
Reimbursement Obligation. 

        2.19.7.    Obligations Absolute.    The Borrower's obligations under this Section 2.19 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC. The Borrower further agrees with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall not be responsible for, and the Borrower's Reimbursement
Obligation in respect of any Facility LC shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or any financing institution
or other party to whom any Facility LC may be transferred or any claims or defenses whatsoever of the Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any
Facility LC not resulting from the gross
negligence or willful misconduct of LC Issuer. The Borrower agrees that any action taken or omitted by the LC Issuer or any Lender under or in connection with each Facility LC and the related drafts
and documents, if done without gross negligence or willful misconduct, shall be binding upon the Borrower and shall not put the LC Issuer or any Lender under any liability to the Borrower. Nothing in
this Section 2.19.7 is intended to limit the right of the Borrower to make a claim against the LC Issuer for damages as contemplated by the proviso to the first sentence of
Section 2.19.6. 

        2.19.8.    Actions of LC Issuer.    The LC Issuer shall be entitled to rely, and shall be fully protected in relying,
upon any Facility LC, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed
by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts
selected by the LC Issuer in good faith. The LC Issuer shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.19, the LC Issuer shall in all cases be fully protected in
acting, or in refraining from acting, in good faith under this Agreement in accordance with a request of the Required Lenders, and such request and any action taken or 

23

 

failure to act pursuant thereto shall be binding upon the Lenders and any future holders of a participation in any Facility LC. 

        2.19.9.    Indemnification.    The Borrower hereby agrees to indemnify and hold harmless each Lender, the LC Issuer
and the Agent, and their respective directors, officers, agents and employees from and against any and all claims and damages, losses, liabilities, costs or expenses which such Lender, the LC Issuer
or the Agent may incur (or which may be claimed against such Lender, the LC Issuer or the Agent by any Person whatsoever) by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any actual or proposed use of any Facility LC, including, without limitation, any claims, damages, losses, liabilities, costs or
expenses which the LC Issuer may incur by reason of or in connection with (i) the failure of any other Lender to fulfill or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against any defaulting Lender) or (ii) by reason of or on account of the LC Issuer issuing any Facility LC which specifies that
the term "Beneficiary" included therein includes any successor by operation of law of the named Beneficiary, but which Facility LC does not require that any drawing by any such successor Beneficiary
be accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the appointment of such successor Beneficiary; provided that the
Borrower shall not be required to indemnify any Lender, the LC Issuer or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by
(x) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC complied with the terms of such Facility LC or (y) the LC
Issuer's failure to pay under any Facility LC after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. Nothing in this Section 2.19.9 is
intended to limit the obligations of the Borrower under any other provision of this Agreement. 

        2.19.10.    Lenders' Indemnification.    Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify
the LC Issuer, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees
and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct or the LC Issuer's failure to pay under any Facility
LC after the presentation to it of a request strictly complying with the terms and conditions of the Facility LC) that such indemnitees may suffer or incur in connection with this Section 2.19
or any action taken or omitted by such indemnitees hereunder. 

        2.19.11.    Facility LC Collateral Account.    The Borrower agrees that it will, upon the request of the Agent or the
Required Lenders and until the final expiration date of any Facility LC and thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Facility LC, maintain a
special collateral account pursuant to arrangements satisfactory to the Agent (the "Facility LC Collateral Account") at the Agent's office at the address specified pursuant to Article XIII, in
the name of such Borrower but under the sole dominion and control of the Agent, for the benefit of the Lenders and in which such Borrower shall have no interest other than as set forth in
Section 8.1. The Borrower hereby pledges, assigns and grants to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of the
Borrower's right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of
the Obligations. The Agent will invest any funds on deposit from time to time in the Facility LC Collateral Account in certificates of deposit of Bank One having a maturity not exceeding
30 days. Nothing in this Section 2.19.11 shall either obligate the Agent to require the Borrower to deposit any funds in the Facility LC Collateral Account or limit the right of the
Agent to release any funds held in the Facility LC Collateral Account in each case other than as required by Section 8.1. 

24

 

        2.19.12.    Rights as a Lender.    In its capacity as a Lender, the LC Issuer shall have the same rights and
obligations as any other Lender. 

        2.20    Extension of Facility Termination Date.    The Borrower may request a one-year extension of the
Facility Termination Date by submitting a request for an extension to the Agent (an "Extension Request") no more than 90 and no less than 30 days prior to the first anniversary of the closing
of this Agreement. Promptly upon receipt of an Extension Request, the Agent shall notify each Lender thereof and shall request each Lender to approve the Extension Request. Each Lender approving the
Extension Request shall deliver its written consent no later than 15 days prior to such first anniversary of the closing of this Agreement. If the consent of each of the Lenders is received by
the Agent, the Facility Termination Date shall be extended by one year and any additional terms or provisions that may be required by the Lenders in connection with such extension, to be evidenced by
such amendments and documentation as Agent or Lenders may require, together with payment of such fees as may be required, and the Agent shall promptly notify the Borrower and each Lender of the new
Facility Termination Date. 

        2.21    Replacement of Lender.    If the Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any
additional payment to any Lender or if any Lender's obligation to make or continue, or to convert Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section 3.3
(any Lender so affected an "Affected Lender"), the Borrower may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party
to this Agreement, provided that no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and  provided further that, concurrently with such replacement, (i) another bank or other entity to which Borrower is not required to make such
additional payments which is reasonably satisfactory to the Borrower and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender
pursuant to an assignment substantially in the form of Exhibit C and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected Lender in same day funds on the
day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of
such replacement under Section 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender. 

        2.22    Limitation of Interest.    The Borrower, the Agent and the Lenders intend to strictly comply with all
applicable laws, including applicable usury laws. Accordingly, the provisions of this Section 2.22 shall govern and control over every other provision of this Agreement or any other Loan
Document which conflicts or is inconsistent with this Section 2.22, even if such provision declares that it controls. As used in this Section 2.22, the term "interest" includes the
aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law, provided that, to the maximum extent
permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of
money and not as interest, and (b) all interest at any time contracted for, reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall the Borrower or any other Person be obligated to pay, or any Lender have any right or privilege to reserve, receive or retain, (a) any interest in excess
of the maximum amount of nonusurious interest permitted under the laws of the State of New York or the applicable laws (if any) of the United States or of any other applicable state, or
(b) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of
the Obligations at the Highest Lawful Rate. On each day, if any, that the 

25

 

interest rate (the "Stated Rate ") called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by
operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the
total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated
Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to
be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such
calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without
reference to this Section 2.21, or be construed to create a contract to pay for the use, forbearance or detention of money
at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has
received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the Borrower's obligations to such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be
promptly refunded to its payor. 

ARTICLE III

YIELD PROTECTION; TAXES  

        3.1    Yield Protection.    If, on or after the date of this Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation or the LC
Issuer with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency (collectively, a "Change"): 

	(i)
	subjects
any Lender or any applicable Lending Installation or the LC Issuer to any Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or participations therein, or

	(ii)
	imposes
or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or

	(iii)
	imposes
any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of
making, funding or maintaining its Eurodollar Loans, or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC
Issuer in connection with its Eurodollar Loans, Facility LCs or participations therein, or requires any 

26

 

Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the amount of Eurodollar Loans, Facility LCs or participations therein held or interest
or LC Fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be, 

and
the result of any of the Change is to increase the cost to such Lender or applicable Lending Installation or the LC Issuer, as the case may be, of making or maintaining its Eurodollar Loans or
Commitment or of issuing or participating in Facility LCs or to reduce the return received by such Lender or applicable Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans or Commitment, Facility LCs or participations therein, then, within 15 days of demand by such Lender or the LC Issuer, as the case may be, the Borrower shall pay such
Lender or the LC Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the LC Issuer, as the case may be, for such increased cost or reduction in amount
received. 

        3.2    Changes in Capital Adequacy Regulations.    If a Lender or the LC Issuer determines the amount of capital
required or expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any corporation controlling such Lender or the LC Issuer is
increased as a result of a Change, then, within 15 days of demand by such Lender or the LC Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which such Lender or the LC Issuer determines is attributable to this Agreement, its Outstanding Credit Exposure or its
Commitment to make Loans and issue or participate in Facility LCs, as the case may be, hereunder (after taking into account such Lender's or the LC Issuer's policies as to capital adequacy). "Change"
means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or the LC Issuer or any Lending Installation or any corporation controlling any Lender or the LC Issuer. "Risk-Based Capital Guidelines"
means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement. 

        3.3    Availability of Types of Advances.    If any Lender determines that maintenance of its Eurodollar Loans at a
suitable Lending Installation would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, or if the Required Lenders determine that (i) deposits of
a type and maturity appropriate to match fund Eurodollar Advances are not available or (ii) the interest rate applicable to Eurodollar Advances does not accurately reflect the cost of making or
maintaining Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be repaid or converted to Floating Rate Advances,
subject to the payment of any funding indemnification amounts required by Section 3.4. 

        3.4    Funding Indemnification.    If any payment of a Eurodollar Advance occurs on a date which is not the last day
of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or
a Eurodollar Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance. 

        3.5    Taxes.    (i) All payments by the Borrower to or for the account of any Lender, the LC Issuer or the
Agent hereunder or under any Note or Facility LC Application shall be made free and clear of 

27

 

and without deduction for any and all Taxes. If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, the LC Issuer or the Agent,
(a) 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 3.5) such
Lender, the LC Issuer or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) the Borrower shall make such deductions,
(c) the Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (d) the Borrower shall furnish to the Agent the original copy of a
receipt evidencing payment thereof within 30 days after such payment is made. 

        (ii)  In
addition, the Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under any Note or Facility LC Application or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Facility LC
Application ("Other Taxes"). 

        (iii)  The
Borrower hereby agrees to indemnify the Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its Commitment, any Loans made by it hereunder, or otherwise in
connection with its participation in this Agreement and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification
shall be made within 30 days of the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant to Section 3.6. 

        (iv)  Each
Lender that is not incorporated under the laws of the United States of America or a state thereof (each a "Non-U.S. Lender") agrees that it will, not
more than ten Business Days after the date of this Agreement, (i) deliver to the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or
W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, and
(ii) deliver to the Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from United States
backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of the Borrower and the Agent (x) renewals or additional copies of such form (or any successor
form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional
forms or amendments thereto as may be reasonably requested by the Borrower or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any
such form or amendment with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal
income tax. 

        (v)  For
any period during which a Non-U.S. Lender has failed to provide the Borrower with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date such
Non-U.S. Lender first became a Lender), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the United
States; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become
subject to Taxes because of its failure to deliver a form required under clause (iv), above, the Borrower shall take such steps as such Non-U.S. Lender shall reasonably request to
assist such Non-U.S. Lender to recover such Taxes. 

28

 

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

      (vii)  If
the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim
that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason), such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under
this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The
obligations of the Lenders under this Section 3.5(vii) shall survive the payment of the Obligations and termination of this Agreement. 

        3.6    Lender Statements; Survival of Indemnity.    To the extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to
the Borrower (with a copy to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which
such Lender
determined such amount and shall be final, conclusive and binding on the Borrower in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurodollar
Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this
Agreement. 

ARTICLE IV

CONDITIONS PRECEDENT  

        4.1    Credit Agreement and Initial Credit Extension.    The Credit Agreement shall not take effect and the Lenders
shall not be required to make the initial Credit Extension hereunder unless and until the Borrower has furnished to the Agent with sufficient copies for the Lenders of all of the following, and all of
the following requirements and conditions have been satisfied: 

	(i)
	Copies
of the articles or certificate of incorporation of the Borrower, together with all amendments, and a certificate of good standing, each certified
by the appropriate governmental officer in its jurisdiction of incorporation.

	(ii)
	Copies,
certified by the Secretary or Assistant Secretary of the Borrower, of its by-laws and of its Board of Directors' resolutions and of
resolutions or actions of any other body authorizing the execution of the Loan Documents to which the Borrower is a party.

	(iii)
	An
incumbency certificate, executed by the Secretary or Assistant Secretary of the Borrower, which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers of the Borrower authorized to sign the Loan Documents to which the 

29

 

Borrower
is a party, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Borrower. 

	(iv)
	A
certificate, signed by the chief financial officer or the vice president and treasurer of the Borrower, stating that on the initial Credit Extension
Date no Default or Unmatured Default has occurred and is continuing.

	(v)
	A
written opinion of the Borrower's counsel, addressed to the Lenders in substantially the form of Exhibit A.

	(vi)
	Any
Notes requested by a Lender pursuant to Section 2.13 payable to the order of each such requesting Lender.

	(vii)
	Written
money transfer instructions, in substantially the form of Exhibit D, addressed to the Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the Agent may have reasonably requested.

	(viii)
	The
fully executed Guaranty and Collateral Documents and other items related thereto, including without limitation all and each of the following:

	(A)
	The
Security Agreements executed by each of Borrower and Guarantors;

	(B)
	UCC-1
financing statements describing all of the Collateral, to be filed in the jurisdictions described on Schedule 4 attached hereto;

	(C)
	UCC
searches from all jurisdictions described on Schedule 4, showing no liens prior to those of Agent and disclosing no facts or results objectionable to Agent;

	(D)
	Organizational
documents in form and substance satisfactory to Agent of each of Borrower and Guarantors;

	(E)
	The
Stock Pledge Agreement;

	(F)
	All
original stock certificates evidencing shares of each of the Guarantors and MagneTek SpA owned by Borrower;

	(G)
	Executed
(in blank) stock powers for the stock certificates described in (F) above. 

	(ix)
	The
insurance certificate described in Section 5.21.

	(x)
	The
Agent shall have determined that (i) since May 15, 2002, there is an absence of any material adverse change or disruption in primary or
secondary loan syndication markets, financial markets or in capital markets generally (whether resulting from events prior to or after the date of the commitment) that would likely impair syndication
of the Loans hereunder and (ii) the Borrower has fully cooperated with the Agent's syndication efforts including, without limitation, by providing the Agent with information regarding the
Borrower's operations and prospects and such other information as the Agent deems necessary to successfully syndicate the Loans hereunder.

	(xi)
	Such
other documents as any Lender or its counsel may have reasonably requested.

	(xii)
	If
the initial Credit Extension will be the issuance of a Facility LC, a properly completed Facility LC Application.

	(xiii)
	The
representations and warranties contained in Article V are true and correct as of the date of this Agreement except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date. 

30

   
        4.2    Each Credit Extension.    The Lenders shall not be required to make any Credit Extension unless on the
applicable Credit Extension Date: 

	(i)
	There
exists no Default or Unmatured Default.

	(ii)
	The
representations and warranties contained in Article V are true and correct as of such Credit Extension Date (and are deemed made as of the
Credit Extension Date) except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and
correct on and as of such earlier date.

	(iii)
	All
legal matters incident to the making of such Credit Extension shall be satisfactory to the Lenders and their counsel. 

        Each
Borrowing Notice or request for issuance of a Facility LC with respect to each such Credit Extension shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may require a duly completed compliance certificate in substantially the form of Exhibit B as a
condition to making a Credit Extension. 

ARTICLE V

REPRESENTATIONS AND WARRANTIES  

        The Borrower represents and warrants to the Lenders that: 

        5.1    Existence and Standing.    Each of the Borrower and its Subsidiaries is a corporation, partnership (in the case
of Subsidiaries only) or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted. 

        5.2    Authorization and Validity.    The Borrower has the corporate power and authority and legal right to execute
and deliver the Loan Documents and to perform its obligations thereunder. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder have been
duly authorized by proper corporate proceedings, and the Loan Documents to which the Borrower is a party constitute legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally. 

        5.3    No Conflict; Government Consent.    Neither the execution and delivery by the Borrower of the Loan Documents,
nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on the Borrower or any of its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any material indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by the Borrower or any of its Subsidiaries, is required to be obtained by the Borrower or any of its Subsidiaries in connection with
the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents. 

31

 

        5.4    Financial Statements.    The March 31, 2002 consolidated financial statements of the Borrower and its
Subsidiaries and the audit of the Financial Statement of the Borrower and its subsidiaries dated June 30, 2001, both of which have heretofore been delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect on the date such statements were prepared and fairly present in all material respects the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. 

        5.5    Material Adverse Change.    Since March 31, 2002, there has been no change in the business, Property,
condition (financial or otherwise) or results of operations of the Borrower and its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. 

        5.6    Taxes.    The Borrower and its Subsidiaries have filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Borrower or any of its Subsidiaries, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists. No tax liens have been
filed and no claims are being asserted with respect to any such taxes except in connection with any good faith contest described in the preceding sentence. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of any taxes or other governmental charges are adequate. 

        5.7    Litigation and Contingent Obligations.    Except as set forth on Schedule 5.7, there is no litigation,
arbitration, governmental investigation, or proceeding pending or, to the knowledge of any Authorized Officer, threatened against the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. Other than any liability incident to any litigation, arbitration or
proceeding which is set forth on Schedule 3, the Borrower has no material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4, which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. 

        5.8    Subsidiaries.    Schedule 1 contains an accurate list of all Subsidiaries of the Borrower including
Subsidiaries that are in the process of being dissolved or that conduct no business of any kind as of the date of this Agreement, setting forth their respective jurisdictions of organization and the
percentage of their respective capital stock or other ownership interests owned by the Borrower or other Subsidiaries. All of the issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and
non-assessable. 

        5.9    ERISA.    Each Plan complies in all material respects with all applicable requirements of law and regulations,
no Reportable Event has occurred with respect to any Plan, neither the Borrower nor any other member of the Controlled Group has withdrawn from any Plan or initiated steps to do so except in
connection with completed transactions as to which the remaining liability does not exceed $250,000, and no steps have been taken to reorganize or terminate any Plan. The Borrower and each other
member of the Controlled Group are in compliance in all material respects with each Plan, and with all applicable provisions of the Code and ERISA. The fair market value of the assets of all Single
Employer Plans is equal to or exceeds the accumulated benefit obligations under the Single Employer Plans, all determined in accordance with GAAP as of the date of the most recently audited financial
statements. 

        5.10    Accuracy of Information.    No information, exhibit or report furnished by the Borrower or any of its
Subsidiaries to the Agent or to any Lender in connection with the negotiation of, or 

32

 

compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading. 

        5.11    Regulation U.    Margin stock (as defined in Regulation U) constitutes less than 25% of the
value of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder and the proceeds of the Loans are not being used to
purchase or carry any margin stock. 

        5.12    Material Agreements.    Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or
subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing Indebtedness. 

        5.13    Compliance With Laws.    The Borrower and its Subsidiaries have complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof having jurisdiction over the conduct of their respective businesses or the ownership
of their respective Property. 

        5.14    Ownership of Properties.    Except as set forth on Schedule 2, on the date of this Agreement, the
Borrower and its Subsidiaries will have good title, free of all Liens other than those permitted by Section 6.15, to all of the Property and assets reflected in the Borrower's most recent
consolidated financial statements provided to the Agent as owned by the Borrower and its Subsidiaries. 

        5.15    Plan Assets; Prohibited Transactions.    The Borrower is not an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan
(within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code. 

        5.16    Environmental Matters.    In the ordinary course of its business, the officers of the Borrower consider the
effect of Environmental Laws on the business of the Borrower and its Subsidiaries, in the course of which they identify and evaluate potential risks and liabilities accruing to the Borrower due to
Environmental Laws. On the basis of this consideration, the Borrower has concluded that Environmental Laws cannot reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect. 

        5.17    Investment Company Act.    Neither the Borrower nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 

        5.18    Public Utility Holding Company Act.    Neither the Borrower nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended. 

        5.19    Subordinated Indebtedness.    The Obligations constitute senior indebtedness which is entitled to the benefits
of the subordination provisions of all outstanding Subordinated Indebtedness. 

33

 

        5.20    Post-Retirement Benefits.    The present value of the expected cost of post-retirement
medical and insurance benefits payable by the Borrower and its Subsidiaries to its employees and former employees, as estimated by the Borrower in accordance with Agreement Accounting Principles as of
June 30, 2001, does not exceed $33,000,000. 

        5.21    Insurance.    The certificate signed by the President or Chief Financial Officer of the Borrower, that attests
to the existence and adequacy of, and summarizes, the property and casualty insurance program carried by the Borrower with respect to itself and its Subsidiaries and that has been furnished by the
Borrower to the Agent and the Lenders, is complete and accurate. This summary contains such information as the Agent may require. 

        5.22    Solvency.    (i) Immediately after the consummation of the transactions to occur on the date hereof and
immediately following the making of each Loan, if any, made on the date hereof and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of the
Borrower and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Borrower and its Subsidiaries on a
consolidated basis; (b) the present fair saleable value of the Property of the Borrower and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay
the probable liability of the Borrower and its Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Borrower and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) the Borrower and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. 

        (ii)  The
Borrower does not intend to, or to permit any of its Subsidiaries to, and does not believe that it or any of its Subsidiaries will, incur debts beyond its ability
to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary. 

ARTICLE VI

COVENANTS  

        During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing: 

        6.1    Financial Reporting.    The Borrower will maintain, for itself and each Subsidiary, a system of accounting
established and administered in accordance with generally accepted accounting principles, and furnish to the Lenders: 

	 	(i)	 	Within 90 days after the close of each of its fiscal years, an unqualified audit report certified by independent certified public accountants acceptable to the Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis (consolidating statements need not be certified by such accountants) for itself and its Subsidiaries, including balance sheets as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows, accompanied by any management letter prepared by said accountants.

34

 

	

 	

(ii)	
 	

Within 45 days after the close of the first three quarterly periods of each of its fiscal years, for itself and its Subsidiaries, consolidated and consolidating unaudited balance sheets as at the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its chief financial officer or
treasurer.
	

 	

(iii)	
 	

As soon as available, but in any event within 90 days after the beginning of each fiscal year of the Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow
statement) of the Borrower for such fiscal year.
	

 	

(iv)	
 	

Together with the financial statements required under Sections 6.1(i) and (ii), a compliance certificate in substantially the form of Exhibit B signed by its chief financial officer or treasurer showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.
	

 	

(v)	
 	

Within 270 days after the close of each fiscal year, a copy of the actuarial report used by the Borrower to prepare the footnote disclosure to its audited financial statements in respect of its employee benefit plans.
	

 	

(vi)	
 	

As soon as possible and in any event within 10 days after the Borrower knows that any Reportable Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of the Borrower, describing said Reportable Event
and the action which the Borrower proposes to take with respect thereto.
	

 	

(vii)	
 	

As soon as possible and in any event within 10 days after receipt by the Borrower, a copy of (a) any notice or claim to the effect that the Borrower or any of its Subsidiaries is or may be liable to any Person as a result of the release by
the Borrower, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (b) any notice alleging any violation of any federal, state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries.
	

 	

(viii)	
 	

Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of all financial statements, reports and proxy statements so furnished.
	

 	

(ix)	
 	

Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission.
	

 	

(x)	
 	

On each yearly anniversary of the Closing Date, a certificate of good standing for the Borrower and each other Person which has pledged collateral in support of the Obligations from the appropriate governmental officer in its jurisdiction of
incorporation or organization.
	

 	

(xi)	
 	

Such other information (including non-financial information) as the Agent or any Lender may from time to time reasonably request.

        6.2    Use of Proceeds.    The Borrower will, and will cause each Subsidiary to, use the
proceeds of the Credit Extensions to refinance all existing indebtedness of Borrower with Bank of America, and for general corporate purposes and permitted acquisitions. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any "margin stock" (as defined in Regulation U). 

35

 

        6.3    Notice of Default.    The Borrower will, and will cause each Subsidiary to, give at least three
(3) Business Days' prior notice in writing to the Lenders of the occurrence of any Default or Unmatured Default and of any other development, financial or otherwise, including litigation, which
could reasonably be expected to have a Material Adverse Effect. 

        6.4    Conduct of Business.    The Borrower will, and will cause each Subsidiary to, carry on and conduct its business
in substantially the same manner and in substantially the same fields of enterprise and as it is presently conducted and in any ancillary or related fields, do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted. Notwithstanding
the foregoing, the Borrower will be permitted to dissolve any Subsidiary that ceases to conduct business or to merge any Subisdiary into the Borrower or another Subsidiary provided such Subsidiary is
or becomes a Pledgor and Guarantor and delivers to Agent all documents, stock certificates and other items required to be delivered by Guarantors and Pledgors, including without limitation
organizational documents and amendments, UCC searches, certificates of good standing/existence, authorizing resolutions, legal opinions, UCC financing statements and other items, all to be in form and
substance satisfactory to Agent, and all by such deadlines as Agent may determine. 

        6.5    Taxes.    The Borrower will, and will cause each Subsidiary to, timely file complete and correct United States
federal and applicable foreign, state and local tax returns required by law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with Agreement Accounting Principles. At
any time that the Borrower or any of its Subsidiaries is organized as a limited liability company, each such limited liability company will qualify for partnership tax treatment under United States
federal tax law. 

        6.6    Insurance.    The Borrower will, and will cause each Subsidiary to, maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts and covering such risks as is consistent with sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried. 

        6.7    Compliance with Laws.    The Borrower will, and will cause each Subsidiary to, comply in all material respects
with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws. 

        6.8    Maintenance of Properties.    The Borrower will, and will cause each Subsidiary to, do all things necessary to
maintain, preserve, protect and keep its Property in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times. 

        6.9    Inspection.    The Borrower will, and will cause each Subsidiary to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property, books and financial records of the Borrower and each Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent or any Lender may designate. 

        6.10    Dividends.    The Borrower will not, nor will it permit any Subsidiary to, declare or pay any dividends or
make any distributions on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time 

36

 

outstanding, except that (i) any Subsidiary may declare and pay dividends or make distributions to the Borrower, and (ii) the Borrower may declare and pay dividends on its capital
stock, or redeem, repurchase or otherwise acquire or retire any of its common stock at any time outstanding, in an aggregate value or consideration, whichever is lesser, during the term of this
Agreement of no more than (a) the sum of $2,000,000 plus fifty percent (50%) of Borrower's Net Income earned during any quarter on a cumulative basis (reduced by losses in any quarter, but in
no event reduced below $2,000,000); or (b) $10,000,000; provided, in each case, that no Default or Unmatured Default shall exist before or after giving effect to such dividends or be created as
a result thereof. 

        6.11    Indebtedness.    The Borrower will not, nor will it permit any Subsidiary to, create, incur or suffer to exist
any Indebtedness, except: 

	(i)
	The
Loans and the Reimbursement Obligations.

	(ii)
	Indebtedness
described in Schedule 2.

	(iii)
	Indebtedness
arising under Rate Management Obligations. 

        6.12    Merger.    The Borrower will not, nor will it permit any Subsidiary to, merge or consolidate with or into any
other Person, except that a Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary and a Permitted Acquisition may be consummated as a merger. 

        6.13    Sale of Assets.    The Borrower will not, nor will it permit any Subsidiary to, lease, sell or otherwise
dispose of its Property to any other Person, except: 

	(i)
	Sales
of inventory in the ordinary course of business.

	(ii)
	Leases,
sales or other dispositions of its Property that, together with all other Property of the Borrower and its Subsidiaries previously leased, sold
or disposed of (other than inventory in the ordinary course of business) as permitted by this Section during the twelve-month period ending with
the month in which any such lease, sale or other disposition occurs, do not constitute a Substantial Portion of the Property of the Borrower and its Subsidiaries. 

        6.14    Investments and Acquisitions.    The Borrower will not, nor will it permit any Subsidiary to, make or suffer
to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of any Person, except: 

	(i)
	Cash
Equivalent Investments.

	(ii)
	Investments
described in Schedule 1.

	(iii)
	Permitted
Acquisitions. 

        6.15    Liens.    The Borrower will not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any
Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except: 

	(i)
	Liens
for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its
books.

	(ii)
	Liens
imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which
secure payment of obligations not more than 60 days past due.

	(iii)
	Liens
arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation. 

37

 

	(iv)
	Utility
easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect
to properties of a similar character and
which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or its Subsidiaries.

	(v)
	Liens
described in Schedule 2.

	(vi)
	Liens
in favor of the Agent, for the benefit of the Lenders, granted pursuant to any Collateral Document.

	(vii)
	Liens
securing Permitted Debt

	(viii)
	Liens
securing foreign debt of Borrower that is otherwise permitted under this Agreement.

	(ix)
	Liens
securing Operating Leases permitted under this Agreement. 

        6.16    Capital Expenditures.    The Borrower will not, nor will it permit any Subsidiary to, expend, or be committed
to expend, in excess of $12,000,000 for Capital Expenditures during any one fiscal year on a non-cumulative basis in the aggregate for the Borrower and its Subsidiaries. 

        6.17    Rentals.    The Borrower will not, nor will it permit any Subsidiary to, create, incur or suffer to exist
obligations for Rentals in excess of $8,000,000 during any one fiscal year on a non-cumulative basis in the aggregate for the Borrower and its Subsidiaries. 

        6.18    Affiliates.    The Borrower will not, and will not permit any Subsidiary to, enter into any material
transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except (a) those transactions described on
Schedule 6, (b) transactions between Subsidiaries and the Borrower or among Subsidiaries in the ordinary course of business and on terms consistent with past practices,
(c) transactions permitted by Sections 6.11, 6.13 or 6.14, (d) transactions in the ordinary course of business and upon fair and reasonable terms not materially less favorable to the
Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms-length transaction, (e) transactions approved by the Borrower's stockholders,
(f) transactions, such as employment and escrow arrangements, pursuant to the agreements whereby a Subsidiary has been acquired, and (g) compensation arrangements in the ordinary course
of business with directors and officers of the Borrower and its Subsidiaries. 

        6.19    Subordinated Indebtedness.    The Borrower will not, and will not permit any Subsidiary to, make any amendment
or modification to the indenture, note or other agreement evidencing or governing any
Subordinated Indebtedness, or directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness. 

        6.20    Required Rate Management Transactions.    The Borrower will consider entering into one or more transactions of
the type described in the definition of "Rate Management Transactions" with one or more financial institutions acceptable to the Required Lenders in their reasonable discretion. Any Rate Management
Agreements shall be entered into in the ordinary course of business to manage existing risks and not entered into for speculative purposes. 

        6.21    Sale of Accounts.    The Borrower will not, nor will it permit any Subsidiary to, sell or otherwise dispose of
any notes receivable or accounts receivable, with or without recourse. 

        6.22    Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities.    The Borrower will not,
nor will it permit any Subsidiary to, enter into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other transaction pursuant to which it incurs or has incurred
Off-Balance Sheet Liabilities, except for (a) Rate Management Obligations permitted to be incurred under the terms of Section 6.21. 

38

 

        6.23    Contingent Obligations.    The Borrower will not, nor will it permit any Subsidiary to, make or suffer to
exist any Contingent Obligation (including, without limitation, any Contingent Obligation with respect to the obligations of a Subsidiary), except (i) by endorsement of instruments for deposit
or collection in the ordinary course of business, (ii) the Reimbursement Obligations, (iii) the Guaranty, and (iv) Contingent Obligations described on Schedule 2 hereto. 

        6.24    Letters of Credit.    The Borrower will not, nor will it permit any Subsidiary to, apply for or become liable
upon or in respect of any Letter of Credit other than Facility LCs and other than letters of credit issued by foreign banks for the account of MagneTek SpA secured solely by the assets of MagneTek
SpA. 

        6.25    Financial Contracts.    The Borrower will not, nor will it permit any Subsidiary to, enter into or remain
liable upon any Financial Contract, except: Rate Management Transactions allowed under Section 6.11. 

        6.26    Financial Covenants.    

        6.26.1.    Interest Coverage Ratio.    The Borrower will not permit the ratio, determined as of the end of each of
Borrower's fiscal quarter on a rolling four-quarters basis, of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense to be less than 3.0 to 1.0. 

        6.26.2.    Leverage Ratio.    The Borrower will not permit the ratio, determined as of the end of each of Borrower's
fiscal quarters on a rolling four-quarters basis, of (i) Consolidated Funded Indebtedness to (ii) Consolidated EBITDA to be greater than 2.25 to 1.0. For purposes of
calculating this ratio, pro forma EBITDA for Permitted Acquisitions shall be included. 

        6.26.3.    Minimum Net Worth.    The Borrower will at all times maintain Consolidated Net Worth of not less than the
sum of (i) $155,000,000 plus (ii) 50% of Consolidated Net Income earned in each fiscal quarter beginning with the quarter ending June 30, 2002 (without deduction for losses). 

ARTICLE VII

DEFAULTS  

        The occurrence of any one or more of the following events shall constitute a Default: 

        7.1  Any
representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or in connection with
this Agreement, any Credit Extension, or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be materially false on the date as of which made. 

        7.2  Nonpayment
of principal of any Loan when due, nonpayment of any Reimbursement Obligation when due, or nonpayment of interest upon any Loan or of any commitment fee, LC
Fee or other obligations under any of the Loan Documents within five days after the same becomes due. 

        7.3  The
breach by the Borrower of any of the terms or provisions of Article VI. 

        7.4  The
breach by the Borrower (other than a breach which constitutes a Default under another Section of this Article VII) of any of the terms or provisions of this
Agreement which is not remedied within five days after written notice from the Agent or any Lender. 

        7.5  Failure
of the Borrower or any of its Subsidiaries or any Guarantor or any Pledgor to pay when due any Material Indebtedness; or the default by the Borrower or any of
its Subsidiaries or any Guarantor or any Pledgor in the performance of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the effect of which default, event or condition is to cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such Material Indebtedness to become 

39

 

due prior to its stated maturity or any commitment to lend under any Material Indebtedness Agreement to be terminated prior to its stated expiration date; or any Material Indebtedness of the Borrower
or any of its Subsidiaries or any Guarantor or any Pledgor shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the
stated maturity thereof; or the Borrower or any of its Subsidiaries or any Guarantor or any Pledgor shall not pay, or admit in writing its inability to pay, its debts generally as they become due. 

        7.6  The
Borrower or any of its Subsidiaries or any Guarantor or any Pledgor shall (i) have an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (iv) institute any proceeding seeking an order for relief under the Federal bankruptcy laws
as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed
against it, (v) take any corporate or partnership action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good faith
any appointment or proceeding described in Section 7.7. 

        7.7  Without
the application, approval or consent of the Borrower or any of its Subsidiaries, or any Guarantor or any Pledgor a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its Subsidiaries or any Guarantor or any Pledgor or any Substantial Portion of its Property, or a proceeding described in
Section 7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries or any Guarantor or any Pledgor and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days. 

        7.8  Any
court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of the
Borrower and its Subsidiaries or any Guarantor or any Pledgor which, when taken together with all other Property of the Borrower and its Subsidiaries or any Guarantor or any Pledgor so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such action occurs, constitutes a Substantial Portion. 

        7.9  The
Borrower or any of its Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge one or more (i) judgments or orders for the payment
of money in excess of $3,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested in good faith. 

        7.10 Any
Reportable Event involving liability in excess of $3,000,000 or requiring payment exceeding $2,000,000 per annum by the Borrower shall occur in connection with any
Plan. 

        7.11 Nonpayment
by the Borrower or any Subsidiary of any Rate Management Obligation when due or the breach by the Borrower or any Subsidiary of any term, provision or
condition contained in any Rate Management Transaction or any transaction of the type described in the definition of "Rate Management Transactions," whether or not any Lender or Affiliate of a Lender
is a party thereto. 

        7.12 Any
Change in Control shall occur. 

        7.13 The
Borrower or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $5,000,000 or requires payments exceeding $2,000,000 per annum. 

40

   
        7.14 The Borrower or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans which are then in reorganization or being terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of each such Multiemployer Plan immediately preceding the plan year in which the reorganization or termination occurs by an amount exceeding
$5,000,000. 

        7.15 The
Borrower or any of its Subsidiaries shall (i) be the subject of any proceeding or investigation pertaining to the release by the Borrower or any of its
Subsidiaries of any toxic or hazardous waste or substance into the environment, or (ii) violate any Environmental Law, which, in each case described in clause (i) or clause (ii),
could reasonably be expected to have a Material Adverse Effect. 

        7.16 The
occurrence of any "default", as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other
than this Agreement), which default or breach continues beyond any period of grace therein provided. 

        7.17 Any
Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Guaranty,
or any Guarantor shall fail to comply with any of the terms or provisions of any Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect. 

        7.18 Any
Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any collateral purported to be covered thereby,
except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or the Borrower shall fail to comply with any of the terms or provisions of any Collateral Document. 

        7.19 The
representations and warranties set forth in Section 5.15 (Plan Assets; Prohibited Transactions") shall at any time made not be true and correct. 

        7.20 The
Borrower or any Subsidiary shall fail to pay when due any Operating Lease Obligation, obligation with respect to a Letter of Credit, obligation under a Sale and
Leaseback Transaction or Contingent Obligation, in any such case in an amount comprising Material Indebtedness. 

ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES  

        8.1    Acceleration; Facility LC Collateral Account.    (i) If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs shall automatically terminate and
the Obligations shall immediately become due and payable without any election or action on the part of the Agent, the LC Issuer or any Lender and the Borrower will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to the Agent for the ratable benefit of the Lenders an amount in immediately available funds, which funds shall be held in
the Facility LC Collateral Account, equal to the difference of (x) the amount of LC Obligations at such time, less (y) the amount on deposit in the Facility LC Collateral Account at such
time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations (such difference, the "Collateral Shortfall Amount"). If any other Default
occurs, the Required Lenders (or the Agent with the consent of the Required Lenders) may (a) terminate or suspend the obligations of the Lenders 

41

 

to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives, and (b) upon notice to the Borrower and in addition
to the continuing right to demand payment of all amounts payable under this Agreement, make demand on the Borrower to pay, and the Borrower will, forthwith upon such demand and without any further
notice or act, pay to the Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account. In any such case, the Agent may enforce any and all rights and
interests created and existing under the Loan Documents including, without limitation, all rights and remedies existing under the Loan Documents, all rights and remedies against Guarantors and all
rights of set-off. 

        (ii)  If
at any time while any Default is continuing, the Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Agent may, or on the
request of the Required Lenders, shall make demand on the Borrower to pay, and the Borrower will, forthwith upon such demand and without any further notice or act, pay to the Agent the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account. 

        (iii)  The
Agent may or on the request of the Required Lenders, shall at any time or from time to time after funds are deposited in the Facility LC Collateral Account, apply
such funds to the payment of the
Obligations and any other amounts as shall from time to time have become due and payable by the Borrower to the Lenders or the LC Issuer under the Loan Documents. 

        (iv)  At
any time while any Default is continuing, neither the Borrower nor any Person claiming on behalf of or through the Borrower shall have any right to withdraw any of
the funds held in the Facility LC Collateral Account. After all of the Obligations have been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Borrower or paid to whomever may be legally entitled thereto at such time. 

        (v)  If,
within 30 days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and
power of the LC Issuer to issue Facility LCs hereunder as a result of any Default (other than any Default as described in Section 7.6 or 7.7 with respect to the Borrower) and before any
judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination. 

        8.2    Amendments.    Subject to the provisions of this Section 8.2, the Required Lenders (or the Agent with
the consent in writing of the Required Lenders) and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Lenders: 

	(i)
	Extend
the final maturity of any Loan, or extend the expiry date of any Facility LC to a date after the Facility Termination Date or forgive all or any
portion of the principal amount thereof or any Reimbursement Obligation related thereto, or reduce the rate or extend the time of payment of interest or fees thereon or Reimbursement Obligations
related thereto.

	(ii)
	Reduce
the percentage specified in the definition of Required Lenders.

	(iii)
	Extend
the Facility Termination Date, or reduce the amount or extend the payment date for, the mandatory payments required under Section 2.2, or
increase the amount of the Aggregate Commitment, the Commitment of any Lender hereunder or the commitment to issue Facility LCs, or permit the Borrower to assign its rights under this Agreement. 

42

 

	(iv)
	Amend
this Section 8.2.

	(v)
	Release
any guarantor of any Advance or, except as provided in the Collateral Documents, release all or substantially all of the Collateral. 

No
amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent, and no amendment of any provision relating to the LC Issuer shall be
effective without the written consent of the LC Issuer. The Agent may waive payment of the fee required under Section 12.3.3 without obtaining the consent of any other party to this Agreement. 

        8.3    Preservation of Rights.    No delay or omission of the Lenders, the LC Issuer or the Agent to exercise any
right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent, the LC Issuer and the Lenders until the Obligations have been paid in full. 

ARTICLE IX

GENERAL PROVISIONS  

        9.1    Survival of Representations.    All representations and warranties of the Borrower contained in this Agreement
shall survive the making of the Credit Extensions herein contemplated. 

        9.2    Governmental Regulation.    Anything contained in this Agreement to the contrary notwithstanding, neither the
LC Issuer nor any Lender shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 

        9.3    Headings.    Section headings in the Loan Documents are for convenience of reference only, and shall not govern
the interpretation of any of the provisions of the Loan Documents. 

        9.4    Entire Agreement.    The Loan Documents embody the entire agreement and understanding among the Borrower, the
Agent, the LC Issuer and the Lenders and supersede all prior agreements and understandings among the Borrower, the Agent, the LC Issuer and the Lenders relating to the subject matter thereof other
than those contained in the fee letter described in Section 10.13, which shall survive and remain in full force and effect during the term of this Agreement. 

        9.5    Several Obligations; Benefits of this Agreement.    The respective obligations of the Lenders hereunder are
several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement and their respective successors and assigns, provided, however, that the parties hereto expressly agree that the Arranger
shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its
own name to the same extent as if it were a party to this Agreement. 

        9.6    Expenses; Indemnification.    (i) The Borrower shall reimburse the Agent and the Arranger for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent) paid or
incurred by the 

43

 

Agent or the Arranger in connection with the preparation, negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment,
modification, and administration of the Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger, the LC Issuer and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may be employees of
the Agent, the Arranger, the LC Issuer or the Lenders) paid or incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection with the collection and enforcement of the Loan Documents.
Expenses being reimbursed by the Borrower under this Section include, without limitation, costs and expenses incurred in connection with the Reports described in the following sentence. The Borrower
acknowledges that from time to time Bank One may prepare and may distribute to the Lenders (but shall have no obligation or duty to prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets for internal use by Bank One from information furnished to it by or on behalf of the Borrower, after Bank One has exercised its rights of inspection
pursuant to this Agreement. 

        (ii)  The
Borrower hereby further agrees to indemnify the Agent, the Arranger, the LC Issuer and each Lender, their respective affiliates, and each of their directors,
officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or
not the Agent, the Arranger, the LC Issuer or any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of any Credit Extension hereunder except to the extent that they are determined in a
final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party
seeking indemnification. The obligations of the Borrower under this Section 9.6 shall survive the termination of this Agreement. 

        (iii)  Borrower
and each of its Subsidiaries agrees to and hereby does indemnify and hold the Agent, the Arranger, the LC Issuer and each Lender, their respective affiliates,
and each of their directors, officers and employees harmless from and against any and all claims, demands, damages, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings, costs
and expenses (including, without limitation, reasonable attorneys' fees), arising directly or indirectly from or out of, or in any way connected with (a) the presence of any Hazardous
Substances on any real property formerly or currently or hereafter owned by the Borrower or any of its Subsidiaries ("Real Property"); (b) any violation or alleged violation of any local, state
or federal environmental law, regulation, ordinance or administrative or judicial order relating to Hazardous Substances on any Real Property, whether attributable to events occurring before or after
Borrower's acquisition of such Real Property; or (c) any inaccuracy in the certifications contained herein. This indemnification shall be binding upon Borrower and its successors and assigns,
and shall inure to the benefit of and may be relied upon by the Lender, its successors and assigns. 

        9.7    Numbers of Documents.    All statements, notices, closing documents, and requests hereunder shall be furnished
to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders. 

        9.8    Accounting.    Except as provided to the contrary herein, all accounting terms used herein shall be interpreted
and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles, except that at Agent's option, any calculation or determination which is to be made on a
consolidated basis shall be made for the Borrower and all its Subsidiaries, including those Subsidiaries, if any, which are unconsolidated on the Borrower's audited financial statements. 

        9.9    Severability of Provisions.    Any provision in any Loan Document that is held to be inoperative,
unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, 

44

 

unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end
the provisions of all Loan Documents are declared to be severable. 

        9.10    Nonliability of Lenders.    The relationship between the Borrower on the one hand and the Lenders, the LC
Issuer and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the Agent, the Arranger, the LC Issuer nor any Lender shall have liability to the Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a
final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue for, any special, indirect,
consequential or punitive damages suffered by the Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby. 

        9.11    Confidentiality.    Each Lender agrees to hold any confidential information which it may receive from the
Borrower pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which such Lender is a party, (vi) to such Lender's direct or indirect contractual counterparties in swap agreements
or to legal counsel, accountants and other professional advisors to such counterparties, (vii) permitted by Section 12.4 and (viii) to rating agencies if requested or required by
such agencies in connection with a rating relating to the Advances hereunder. 

        9.12    Nonreliance.    Each Lender hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System) for the repayment of the Credit Extensions provided for herein. 

        9.13    Disclosure.    The Borrower and each Lender hereby acknowledge and agree that Bank One and/or its Affiliates
from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its Affiliates. 

ARTICLE X

THE AGENT  

        10.1    Appointment; Nature of Relationship.    Bank One, NA is hereby appointed by each of the Lenders as its
contractual representative (herein referred to as the "Agent") hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express
conditions contained in this Article X. Notwithstanding the use of the defined term "Agent," it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities
to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set
forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative, 

45

 

the Agent (i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of the Lenders within the meaning of the term "secured party" as defined in
the New York Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other
Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives. 

        10.2    Powers.    The Agent shall have and may exercise such powers under the Loan Documents as are specifically
delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Agent. 

        10.3    General Immunity.    Neither the Agent nor any of its directors, officers, agents or employees shall be liable
to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the
extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such
Person. 

        10.4    No Responsibility for Loans, Recitals, etc.    Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor
to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered solely to the Agent;
(d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any collateral security; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of any of the Borrower's or any such guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrower to the Agent at such time, but is voluntarily furnished by the Borrower to the Agent (either in its capacity as Agent or in its
individual capacity). 

        10.5    Action on Instructions of Lenders.    The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders. The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 

        10.6    Employment of Agents and Counsel.    The Agent may execute any of its duties as Agent hereunder and under any
other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual 

46

 

arrangement between the Agent and the Lenders and all matters pertaining to the Agent's duties hereunder and under any other Loan Document. 

        10.7    Reliance on Documents; Counsel.    The Agent shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent in good faith, which counsel may be employees of the Agent. 

        10.8    Agent's Reimbursement and Indemnification.    The Lenders agree to reimburse and indemnify the Agent ratably
in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders,
in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents,  provided that
(i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement. 

        10.9    Notice of Default.    The Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders. 

        10.10    Rights as a Lender.    In the event the Agent is a Lender, the Agent shall have the same rights and powers
hereunder and under any other Loan Document with respect to its Commitment and its Loans as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders"
shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not obligated to remain a Lender. 

        10.11    Lender Credit Decision.    Each Lender acknowledges that it has, independently and without reliance upon the
Agent, the Arranger or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Arranger or any
other Lender and based on such documents and information as it shall deem 

47

 

appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 

        10.12    Successor Agent.    The Agent may resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring Agent gives notice of
its intention to resign. The Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Agent's giving notice of its intention to resign, then the resigning Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the Agent has resigned or been removed and no successor Agent has been appointed, the Lenders may perform all the duties of the
Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Agent
shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of the Agent, the resigning or removed Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of an Agent, the provisions of this Article X shall continue in effect for the benefit of such
Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. In the event that there is a successor to the Agent by merger, or the Agent assigns its duties
and obligations to an Affiliate pursuant to this Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new
Agent. 

        10.13    Agent and Arranger Fees.    The Borrower agrees to pay to the Agent and the Arranger, for their respective
accounts, the fees agreed to by the Borrower, the Agent and the Arranger pursuant to that certain letter agreement dated May 15, 2002, or as otherwise agreed from time to time. 

        10.14.    Delegation to Affiliates.    The Borrower and the Lenders agree that the Agent may delegate any of its
duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents and employees) which performs duties in connection with this Agreement shall
be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under Articles IX and X. 

        10.14    Execution of Collateral Documents.    The Lenders hereby empower and authorize the Agent to execute and
deliver to the Borrower on their behalf the Security Agreement(s) and all related financing statements and any financing statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Security Agreement(s). 

        10.15    Collateral Releases.    The Lenders hereby empower and authorize the Agent to execute and deliver to the
Borrower on their behalf any agreements, documents or instruments as shall be necessary or appropriate to effect any releases of Collateral which shall be permitted by the terms hereof or of any other
Loan Document or which shall otherwise have been approved by the Required Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in writing. 

48

 

ARTICLE XI

SETOFF; RATABLE PAYMENTS  

        11.1    Setoff.    In addition to, and without limitation of, any rights of the Lenders under applicable law, if the
Borrower becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and
any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due. 

        11.2    Ratable Payments.    If any Lender, whether by setoff or otherwise, has payment made to it upon its
Outstanding Credit Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of the Aggregate
Outstanding Credit Exposure. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or
such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in
proportion to their respective Pro Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall
be made. 

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS  

        12.1    Successors and Assigns.    The terms and provisions of the Loan Documents shall be binding upon and inure to
the benefit of the Borrower and the Lenders and their respective successors and assigns permitted hereby, except that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each Lender, (ii) any assignment by any Lender must be made in compliance with Section 12.3, and
(iii) any transfer by Participation must be made in compliance with Section 12.2. Any attempted assignment or transfer by any party not made in compliance with this Section 12.1
shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this Section 12.1 does not prohibit assignments creating security interests, including, without
limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender
which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee;  provided, however, that no
such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder
unless and until the parties thereto have complied with the provisions of Section 12.3. The Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3; provided, however, that the Agent may in its discretion (but shall not
be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any
Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making
such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan. 

49

 

        12.2    Participations.    

        12.2.1.    Permitted Participants; Effect.    Any Lender may at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit Exposure of such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the
Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Outstanding Credit Exposure and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating
interests, and the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents. 

        12.2.2.    Voting Rights.    Each Lender shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Credit Extension or Commitment in which
such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 8.2 or of any other Loan Document. 

        12.2.3.    Benefit of Certain Provisions.    The Borrower agrees that each Participant shall be deemed to have the
right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with
Section 11.2 as if each Participant were a Lender. The Borrower further agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section 12.3, provided that (i) a Participant shall not be
entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the Borrower, and (ii) any Participant not incorporated under the laws of the
United States of America or any State thereof agrees to comply with the provisions of Section 3.5 to the same extent as if it were a Lender. 

        12.3    Assignments.    

        12.3.1.    Permitted Assignments.    Any Lender may at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit C or in such other form as may be agreed to
by the parties thereto. Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be in an amount equal to the entire
applicable Commitment and Loans of the assigning Lender or (unless each of the Borrower and the Agent otherwise consents) be in an aggregate amount not less than $5,000,000. The amount of the
assignment shall be based on the Commitment or outstanding Loans (if the Commitment has been terminated) subject to the assignment, determined as of the date of such assignment or as of the "Trade
Date," if the "Trade Date" is specified in the assignment. 

50

  

        12.3.1.    Permitted Assignments.    Any Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or other entities ("Purchasers") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially
in the form of Exhibit C or in such other form as may be agreed to by the parties thereto. The consent of the Borrower, the Agent and the LC Issuer shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or an Affiliate thereof; provided, however, that if a Default has occurred and is
continuing, the consent of the Borrower shall not be required. Such consent shall not be unreasonably withheld or delayed. Each such assignment with respect to a Purchaser which is not a Lender or an
Affiliate thereof shall (unless each of the Borrower and the Agent otherwise consents) be in an amount not less than $5,000,000, and no assignment shall be made if following such assignment the
assigning Lender would retain a commitment of less than $5,000,000, unless such assigning Lender assigns its entire commitment. 

        12.3.2.    Consents.    The consent of the Borrower shall be required prior to an assignment becoming effective unless
the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund, provided that the consent of the Borrower shall not be required if a Default has occurred and is continuing. The consent of the
Agent shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund. The consent of the Issuing Bank shall be required
prior to an assignment of a Revolving Commitment becoming effective unless the Purchaser is a Lender with a Revolving Commitment. Any consent required under this Section 12.3.2 shall not be
unreasonably withheld or delayed. 

        12.3.3.    Effect; Effective Date.    Upon (i) delivery to the Agent of an assignment, together with any
consents required by Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such assignment shall
become effective on the effective date specified in such assignment. The assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the applicable assignment agreement constitutes "plan assets" as defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and
any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party
thereto, and the transferor Lender shall be released with respect to the Commitment and Outstanding Credit Exposure assigned to such Purchaser without any further consent or action by the Borrower,
the Lenders or the Agent. In the case of an assignment covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall
continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the applicable
agreement. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Section 12.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.2. Upon the
consummation of any assignment to a Purchaser pursuant to this Section 12.3.3, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment. 

51

 

        12.3.4.    Register.    The Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one
of its offices in Louisville, Kentucky a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts 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 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 and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 

        12.4    Dissemination of Information.    The Borrower authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "Transferee") and any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including without limitation any information contained in any Reports; provided
that each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement. 

        12.5    Tax Treatment.    If any interest in any Loan Document is transferred to any Transferee which is not
incorporated under the laws of the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv). 

ARTICLE XIII

NOTICES  

        13.1    Notices.    Except as otherwise permitted by Section 2.14 with respect to borrowing notices, all
notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party:
(x) in the case
of the Borrower or the Agent, at its address or facsimile number set forth on the signature pages hereof, (y) in the case of any Lender, at its address or facsimile number set forth below its
signature hereto or (z) in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is received, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section;  provided that notices to the Agent under Article II shall not be effective until received.
 

        13.2    Change of Address.    The Borrower, the Agent and any Lender may each change the address for service of notice
upon it by a notice in writing to the other parties hereto. 

ARTICLE XIV

COUNTERPARTS  

        This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Agent, the LC Issuer and the Lenders and each party has
notified the Agent by facsimile transmission or telephone that it has taken such action. 

52

 

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL  

        15.1    CHOICE OF LAW.    THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

        15.2    CONSENT TO JURISDICTION.    THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR KENTUCKY STATE COURT SITTING IN LOUISVILLE, KENTUCKY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO
BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT,
THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN LOUISVILLE,
KENTUCKY.

        15.3    WAIVER OF JURY TRIAL.    THE BORROWER, THE AGENT, THE LC
ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

53

 

        IN
WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Agent have executed this Agreement as of the date first above written. 

	 	 	MAGNETEK, INC.
	

 	
 	

By:	

 	

 
	 	 	 	
 John P. Colling, Jr.,

Vice President and Treasurer
	

 	
 	

26 Century Blvd.

Nashville, Tennessee 37229-0159
	 	 	Telephone:	(615) 316-5255
	 	 	FAX:	(615) 316-5192
	 	 	and

10900 Wilshire Boulevard, Suite 850

Los Angeles, CA 90024
	 	 	Telephone:	(310) 689-1614
	 	 	FAX:	(310)             

54

 

Commitments  

	$17,500,000	 	BANK ONE, KENTUCKY, NA,

Individually and as Agent
	

 	
 	

By:	

 	

 
	 	 	 	

	

 	
 	

Title:	

 	

 
	 	 	 	

	

 	
 	

416 West Jefferson Street

Suite KY1-2216

Louisville, Kentucky 40202

Attention: Ms. Thelma B. Ferguson
	 	 	Telephone:	(502) 566-2821
	 	 	FAX:	(502) 566-8339

55

 

	$15,000,000	 	WACHOVIA BANK, N.A.
	

 	
 	

By:	

 	

 
	 	 	 	

	

 	
 	

Title:	

 	

 
	 	 	 	

	 	 	 	 	 
	 	 	

	 	 	 	 	 
	 	 	

	 	 	Attention: Mr. Gene Sellers

Telephone:        (803) 432-8591

56

 

	$7,500,000	 	THE PROVIDENT BANK
	

 	
 	

By:	

 	

 
	 	 	 	
 Christopher B. Gribble
	 	 	Title:	Vice President
	

 	
 	

One East Fourth Street

Mailstop 216A

Cincinnati, OH 45202

Attention: Christopher B. Gribble
	 	 	Telephone:	(513) 579-2750
	 	 	FAX:	(513) 579-2858

	TOTAL:	 	$	40,000,000	 	 
	 	 	
	 	 

57

QuickLinks

CREDIT AGREEMENT

CREDIT AGREEMENT

ARTICLE I DEFINITIONSQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.48  

 
 

STOCK PLEDGE AGREEMENT    
  

        THIS STOCK PLEDGE AGREEMENT, dated as of June 17, 2002, is made by the undersigned (herein, the "Pledgor")
to and in favor of BANK ONE, KENTUCKY, N.A., in its capacity as "Agent" under the Credit Agreement defined below (herein, the "Pledgee"); 

W I T N E S S E T H:  

        WHEREAS, Pledgor is the record and beneficial owner of the issued and outstanding shares of stock of each of those corporations listed on Schedule I
attached hereto (each, individually, a "Subsidiary" and, collectively, the "Subsidiaries"), as such
stock is described on Schedule I attached hereto (the "Pledged Shares"); and 

        WHEREAS,
Pledgor, among other Obligors, has entered into a certain Credit Agreement, dated as of June 17, 2002, with the Lenders party thereto, and Pledgee acting as Agent on
behalf of the Lenders, (as amended, modified or supplemented from time to time hereafter, the "Credit Agreement"), pursuant to which, subject to the
terms and conditions set forth therein, Lenders have made available certain financial accommodations to or for the benefit of Pledgor; and 

        WHEREAS,
as a condition precedent, among others, to the making of such financial accommodations to or for the benefit of Pledgor under the Credit Agreement, the Pledgor is required to
execute and deliver this Stock Pledge Agreement; 

        NOW,
THEREFORE, in consideration of the foregoing premises and to induce the Lenders to provide the financial accommodations to or for the benefit of Pledgor set forth in the Credit
Agreement, Pledgor hereby agrees in favor of Pledgee as follows: 

        1.    Definitions.    In addition to the terms defined hereinabove, unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being
equally applicable to both the singular and plural form of the terms defined): 

        "Act" shall mean the Securities Act of 1933, as amended (or any similar statute thereafter in effect). 

        "Agreement" shall mean this Agreement, and shall include all further amendments, modifications and supplements hereto and shall refer to
this Agreement as the same may be in effect at the time such reference becomes operative. 

        "Bankruptcy Code" shall mean title 11, United States Code, as amended from time to time, and any successor statute thereto. 

        "Event of Default" shall have the meaning assigned to such term in Section 8(a) hereof. 

        "Pledged Collateral" shall have the meaning assigned to such term in Section 2 hereof. 

        "Secured Obligations" shall have the meaning assigned to such term in Section 3 hereof. 

        "UCC" shall mean the Uniform Commercial Code of the State of New York. 

        2.    Pledge.    Pledgor hereby pledges to Pledgee, and grants to Pledgee a first priority security interest in, all
of the following (all of the following, herein, collectively, the "Pledged Collateral"): 

        (a)  the
Pledged Shares and the certificates representing the Pledged Shares, and all dividends, cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; and 

        (b)  all
additional shares of stock of the Subsidiaries from time to time acquired by Pledgor in any manner (which shares shall be deemed to be part of the Pledged Shares)
and the certificates 

 

representing such shares, and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or
all of such shares. 

Anything
contained herein or in any of the other Loan Documents to the contrary notwithstanding, the pledge of the capital stock of any Subsidiary organized outside of the United States shall be
limited in an amount equal to 65% of the issued and outstanding capital stock of such subsidiary. 

        3.    Security for Obligations.    This Agreement secures, and the Pledged Collateral is security for, the prompt
payment by Pledgor in full when due, whether at stated maturity, by acceleration or otherwise, and the performance by Pledgor of (a) all Obligations under the Credit Agreement and
(b) all duties, liabilities and obligations of Pledgor to Pledgee hereunder (herein, collectively, the "Secured Obligations"). The term
"Secured Obligations" includes, without limitation, all interest, charges, expenses, fees, attorneys' fees and other sums chargeable to Pledgor under
this Agreement or any of the other Loan Documents. 

        4.    Delivery of Pledged Collateral.    All certificates representing or evidencing the Pledged Shares shall be
delivered to and held by or on behalf of Pledgee pursuant hereto and shall contain on the back of the document, or by assignment separate therefrom, the endorsement in favor and to the order of
Pledgee, as such form and substance as Pledgee may, in its discretion, accept or approve. 

        5.    Representations and Warranties.    Pledgor represents and warrants to Pledgee that: 

        (a)  Pledgor
is, and at the time of delivery of the Pledged Shares to Pledgee pursuant to Section 4 hereof will be, the sole holder of record and the sole beneficial
owner of the Pledged Collateral free and clear of any lien thereon or affecting the title thereto except for the lien and security interest created by this Agreement. 

        (b)  All
of the Pledged Shares have been duly authorized, validly issued and are fully paid and non-assessable. 

        (c)  Pledgor
has the right and requisite corporate authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral to Pledgee as provided herein.
This Agreement is the legal, valid and binding obligation of Pledgor, enforceable against Pledgor in accordance with its terms, except as such enforcement is subject to the effect of (i) any
applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other law relating to or affecting creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). 

        (d)  None
of the Pledged Shares has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which
such issuance or transfer may be subject. 

        (e)  On
the date hereof, the authorized capital stock of each Subsidiary consists of the number of shares of common stock, with the number of shares issued and outstanding,
that are described in Schedule I hereto with regard to such Subsidiary. As of the date hereof, (i) no subscription, warrant, option or
other right to purchase or acquire any shares of any class of capital stock of any Subsidiary is authorized and outstanding, and (ii) there is no commitment by any Subsidiary to issue any such
shares, warrants, options or other such rights or securities. The Pledged Shares constitute sixty-five percent (65%) of the issued and outstanding shares of stock of Magnetek, S.p.A., one
hundred percent (100%) of the issued and outstanding shares of stock of Magnetek ADS Power, Inc., Magnetek Mondel Holding, Inc., and J-Tec, Inc., and eighty percent
(80%) of the issued and outstanding shares of stock of Magnetek Leasing Corporation. 

        (f)    The
pledge of the Pledged Collateral is not in contravention of any law or of any agreement to which Pledgor is party or by which Pledgor is otherwise bound, and no
consent, approval, 

2

 

authorization or other order of, or other action by, any Person or notice to or filing with, any Person is required for the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement,
except to the extent the local law of the jurisdiction of organization of a foreign subsidiary may prescribe certain actions that must be taken to perfect a security interest in the capital stock of a
company organized under those laws. 

        (g)  The
pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will create a valid first priority lien on and a first priority perfected
security interest in the Pledged Collateral and the proceeds thereof, securing the payment of the Secured Obligations. 

        The
representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement. 

        6.    Covenants.    Each Pledgor covenants and agrees, with respect to itself and the Pledged Collateral owned by it,
that until the Credit Agreement has been terminated and the Secured Obligations have been paid in full: 

        (a)  Without
the prior written consent of Pledgee, Pledgor will not sell, assign, transfer, pledge or otherwise encumber any of its rights in or to the Pledged Collateral or
any unpaid dividends or other distributions or payments with respect thereto or grant a lien in any thereof. 

        (b)  Pledgor
will not, subsequent to the date of this Agreement, without the prior written consent of Pledgee, cause or permit any Subsidiary to issue or grant any warrants,
stock options of any nature or other instruments convertible into shares of any class of capital stock or issue any additional shares of capital stock or sell or transfer any treasury stock. 

        (c)  Pledgor
will, at its expense, promptly execute, acknowledge and deliver all such instruments and take all such action as Pledgee from time to time may request in order
to ensure to Pledgee the benefits of the lien and security interest in and to the Pledged Collateral intended to be created by this Agreement. 

        (d)  Pledgor
has and will defend the title to the Pledged Collateral and the lien and security interest of Pledgee thereon against the claim of any Person and will maintain
and preserve such lien and security interest until the date of termination of the Credit Agreement and payment in full of the Secured Obligations. 

        (e)  Pledgor
will pay all taxes, assessments and charges levied, assessed or imposed upon the Pledged Collateral before the same become delinquent or become liens upon any of
the Pledged Collateral except where the same may be contested in good faith by appropriate proceedings and as to which adequate reserves have been provided. 

        (f)    Except
as permitted by Section 7(a)(ii) hereof with respect to cash dividends, Pledgor will cause any additional Pledged Collateral issued to or received
by it to be forthwith deposited and pledged with Pledgee in each case accompanied by instruments of assignment in conformity with Section 4 hereof. 

        7.    Pledgor's Rights; Termination of Rights.    

        (a)  As
long as no Event of Default shall have occurred and be continuing: 

          (i)  Pledgor
shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral or any part thereof for all purposes not inconsistent
with the provisions of this Agreement, the Credit Agreement or any other Loan Document; provided, however, that no vote shall be cast, and no consent
shall be given or action taken by Pledgor which would have the effect of impairing the position of Pledgee hereunder or which would authorize or effect (A) the dissolution or liquidation, in
whole or in part, of any Subsidiary, (B) the consolidation or merger of any Subsidiary with any other Person, (C) the sale, disposition or encumbrance of any material 

3

 

portion of the assets of any Subsidiary or a business or division of any Subsidiary, (D) any change in the authorized number of shares, the stated capital or the authorized shares of
Subsidiaries or the issuance of any additional shares of capital stock of any Subsidiary, or (E) the alteration of the voting rights with respect to the capital stock of any Subsidiary, except
in each case as set forth in the Credit Agreement. 

        (ii)  Pledgor
shall be entitled, from time to time, to collect and receive, for Pledgor's own use, all dividends paid in respect of the Pledged Shares to the extent not in
violation of the Credit Agreement other than any and all (A) dividends paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution, and (C) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Collateral; provided,
however, that until actually paid all rights to such dividends shall remain subject to the lien created by this Agreement. 

        (b)  All
dividends (other than such cash dividends as are permitted to be paid to Pledgor in accordance with clause (a)(ii) above) and all other distributions
in respect of any of the Pledged Shares, whenever paid or made, shall be delivered to Pledgee to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for the benefit of
Pledgee, be segregated from all other property or funds of Pledgor, and be forthwith delivered to Pledgee as Pledged Collateral in the same form as so received (with any necessary endorsement or
assignment). 

        (c)  Upon
the occurrence of an Event of Default and during the continuance thereof, all of Pledgor's rights to exercise voting and other consensual rights pursuant to
Section 7(a)(i) hereof and all of Pledgor's rights to receive any cash dividends pursuant to Section 7(a)(ii) hereof shall cease and all such rights shall thereupon become
vested in Pledgee who shall have the sole and exclusive right to exercise the voting and other consensual rights which Pledgor would otherwise be authorized to exercise pursuant to
Section 7(a)(i) hereof and to receive and retain the dividends which Pledgor would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii) hereof;  provided, however, that notwithstanding anything contained in this Agreement to the contrary, no voting or other consensual rights shall be vested in
Pledgee unless and until Pledgee gives written notice to Pledgor that Pledgee intends to have such voting or other consensual rights vest in itself. Upon the occurrence of an Event of Default and
during the continuation thereof, Pledgor shall pay over to Pledgee any cash dividends received by Pledgor with respect to the Pledged Collateral and any and all money and other property paid over to
or received by Pledgee shall be retained by Pledgee as Pledged Collateral hereunder and shall be applied in accordance with the provisions hereof. 

        8.    Defaults and Remedies.    (a) Each of the following shall constitute an "Event of
Default" hereunder: 

          (i)  if
there shall occur any Event of Default under the Credit Agreement; 

        (ii)  if
any of the Pledged Collateral shall be attached or levied upon or seized in any legal proceeding, or held by virtue of any lien or distress; 

        (iii)  if
Pledgor shall breach any covenant which (if susceptible to cure) is not cured within five (5) days after the occurrence thereof (except that no cure period
shall apply with respect to breaches of covenants regarding sales or dispositions of Pledged Collateral or the attachment of liens on or security interests in the Pledged Collateral set forth herein);
or 

        (iv)  if
Pledgor makes any misrepresentation of any material fact to Pledgee in connection with this Agreement or any transaction relating thereto. 

4

 

        (b)  Upon
the occurrence of an Event of Default and during the continuation of such Event of Default, Pledgee may exercise all rights of a secured party under the UCC. In
addition, Pledgee is hereby authorized and empowered to (i) transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, (ii) exercise
the voting rights with respect thereto, (iii) collect and receive all cash dividends and other distributions made thereon, (iv) sell in one or more sales after ten (10) days'
notice of the time and place of any public sale or of the time after which a private sale is to take place (which notice Pledgor agrees is commercially reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged Collateral and (v) otherwise act with respect to the Pledged Collateral as though Pledgee were the outright owner thereof. Pledgor hereby
irrevocably constitutes and appoints Pledgee as the proxy and attorney-in-fact of Pledgor, with full power of substitution to exercise any of the rights provided in the
preceding sentence; provided, however, that Pledgee shall not have any duty to exercise any such right or to preserve the same and shall not be liable
for any failure to do so or for any delay in doing so. Any sale shall be made at a public or private sale at Pledgee's place of business, or at any public building in Louisville, Kentucky or elsewhere
to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as Pledgee may deem fair, and Pledgee may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or any right of redemption, which Pledgor hereby waives to the maximum extent permitted by
applicable law. Each sale shall be made to the highest bidder, but Pledgee reserves the right to reject any and all bids at such sale which, in its discretion, it shall deem inadequate. Demands of
performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer or agent of Pledgee. 

        (c)  Pledgee
may, on one or more occasions and in its discretion, postpone any sale or other disposition of any or all of the Pledged Collateral by public announcement at the
time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived. 

        (d)  If,
at any time Pledgee shall determine to exercise its rights to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part
thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Act, Pledgee may, in its discretion (subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under such circumstances as Pledgee may deem necessary or advisable, and shall not be required to effect such registration or to cause the
same to be effected. Without limiting the generality of the foregoing, in any such event Pledgee in its discretion (i) may, in accordance with applicable securities laws, proceed to make such
private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Act, (ii) may
approach and negotiate with a single possible purchaser to effect such sale, (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or part thereof, and (iv) may place all or any part of the Pledged Collateral with an
investment banking firm for private placement which firm shall be entitled to purchase all or any part of the Pledged Collateral for its own account. In addition to a private sale as provided above in
this Section 8, if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act at the time of any proposed sale pursuant to this
Section 8, then Pledgee shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject to restrictions (i) as to the financial sophistication and ability of any Person permitted to bid or purchase at any
such sale, (ii) as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof,
(iii) as to the representations required to be made by each Person bidding or 

5

 

purchasing at such sale relating to that Person's access to financial information about Pledgor's and such Person's intentions as to the holding of the Pledged Collateral so sold for investment, for
its own account, and not with a view of the distribution thereof, and (iv) as to such other matters as Pledgee may, in its discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with the UCC and other laws affecting the enforcement of creditors' rights and the Act and all applicable state securities
laws. 

        (e)  Pledgor
recognizes that Pledgee may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales
thereof. Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Pledgee shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit Pledgor to cause such securities to be registered for public sale under the Act, or under applicable state securities laws, even if Pledgor would
agree to do so. 

        (f)    Pledgor
agrees that following the occurrence and during the continuance of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the
Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws to the extent it lawfully may do so. Pledgor agrees that it will
not interfere with any right, power and remedy of Pledgee provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of
the exercise by Pledgee of any one or more of such rights, powers, or remedies. No failure or delay on the part of Pledgee to exercise any such right, power or remedy and no notice or demand which may
be given to or made upon Pledgor by Pledgee with respect to any such remedies shall operate as a waiver thereof, or limit or impair Pledgee's right to take any action or to exercise any power or
remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect. Pledgor waives all claims, damages and demands against Pledgee arising out of the repossession,
retention or sale of the Pledged Collateral except such as result from Pledgee's gross negligence or willful misconduct. 

        (g)  Pledgor
further agrees that a breach of any of the covenants contained in this Section 8 will cause irreparable injury to Pledgee, that Pledgee has no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 8 shall be specifically enforceable against Pledgor, and Pledgor
hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable in
accordance with the agreements and instruments governing and evidencing such obligations. Pledgor further acknowledges the impossibility of ascertaining the amount of damages which would be suffered
by Pledgee by reason of a breach of any of such covenants and, consequently, agrees that, if Pledgee shall sue for damages for breach, it shall pay, as liquidated damages and not as a penalty, an
amount equal to the lesser of (i) the value of the Pledged Collateral pledged by Pledgor on the date that Pledgee shall demand compliance with this Section 8, and (ii) the amount
required to pay in full the Secured Obligations. 

        9.    Application of Proceeds.    Any cash held by Pledgee as Pledged Collateral and all cash proceeds received by
Pledgee in respect of any sale of, liquidation of, or other realization upon all or any part of the Pledged Collateral after the occurrence and during the continuance of an Event of Default, shall be
applied or distributed by Pledgee first, to the payment of the reasonable costs and expenses of such sale, including, without limitation, reasonable fees and expenses of counsel and all reasonable
expenses, liabilities and advances made or incurred by Pledgee in connection therewith and then to the payment of all other Secured Obligations in accordance with the terms of the Credit Agreement.
After the application of all such proceeds as aforesaid, Pledgee will return any excess to Pledgor (or any other 

6

 

Person as a court of competent jurisdiction otherwise may direct) and Pledgor shall remain liable for any deficiency. 

        10.    Power of Attorney.    Pledgor appoints Pledgee as Pledgor's attorney, with power, after the occurrence and
during the continuance of an Event of Default, to endorse Pledgor's name on any checks, notes, acceptances, money orders, drafts or other form of payment or security representing a portion of the
Pledged Collateral after the occurrence and during the continuance of an Event of Default that may
come into Pledgee's possession and to do all things necessary to carry out this Agreement. Pledgor ratifies and approves all such acts of such attorney. Pledgee, as attorney hereunder, will not be
liable for any acts or omissions, nor for any errors of judgment or mistakes of fact or law. This power, coupled with an interest, is irrevocable until the payment in full of the Secured Obligations
and termination of the Credit Agreement. 

        11.    Waiver.    No delay on Pledgee's part in exercising any power of sale, lien, option or other right hereunder,
and no notice or demand which may be given to or made upon Pledgor by Pledgee with respect to any power of sale, lien, option or other right hereunder, shall constitute a waiver thereof, or limit or
impair Pledgee's right to take any action or to exercise any power of sale, lien, option, or any other right hereunder, without notice or demand, or prejudice Pledgee's rights as against Pledgor in
any respect. 

        12.    Assignment.    Pledgee may assign, endorse or transfer any instrument evidencing all or any part of the Secured
Obligations to any Person, and the holder of such instrument shall be entitled to the benefits of this Agreement. 

        13.    Termination.    As soon as practicable following, but in any event within three (3) Business Days
following, the payment in full of the Secured Obligations and the termination of the Credit Agreement, Pledgee shall, at Pledgor's expense, deliver to Pledgor the Pledged Collateral pledged by Pledgor
at the time subject to this Agreement and all instruments of assignment executed in connection therewith, free and clear of the liens hereof and, except as otherwise provided herein, all of Pledgor's
obligations hereunder shall at such time terminate. 

        14.    Lien Absolute.    All right of Pledgee hereunder, and all obligations of Pledgor hereunder, shall be absolute
and unconditional irrespective of: 

        (a)  any
lack of validity or enforceability of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured
Obligations; 

        (b)  any
change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured 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 governing or evidencing any Secured Obligations; 

        (c)  any
exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from the terms of, any
guaranty, for all of any of the Secured Obligations; or 

        (d)  any
other circumstance which might otherwise constitute a defense available to, or a discharge of, Pledgor. 

        15.    Release.    Pledgor consents and agrees that Pledgee may at any time, or from time to time, in its discretion
(a) renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Secured Obligations and (b) exchange, release and/or surrender all
or any of the Pledged Collateral, or any part thereof, by whomsoever deposited, which is now or may hereafter be held by Pledgee in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as Pledgee may deem proper, and without notice to or further assent from Pledgor, it being hereby agreed that Pledgor shall be and remain bound upon this Agreement, 

7

 

irrespective of the existence, value or condition of any of the Pledged Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension,
and notwithstanding also that the Secured Obligations may, at any time exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Secured
Obligations. Pledgor hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of any and all of the Secured Obligations, and promptness in
commencing suit against any party hereto or liable hereon, and in giving any notice to or of making any claim or demand hereunder upon Pledgor. No act or omission of any kind on Pledgee's part shall
in any event affect or impair this Agreement. 

        16.    Pledgee's Right to Take Action.    In the event that Pledgor fails or refuses to perform any of its obligations
set forth herein, including, without limitation its obligation pursuant to Section 6(e) hereof to pay taxes, assessments and other charges levied, assessed or imposed on the Pledged Collateral,
or otherwise fails or refuses to pay any amount necessary for the preservation and protection of the Pledged Collateral, Pledgee shall have the right, without obligation, to do all things it deems
necessary or advisable to discharge the same (including, without limitation, to pay any such taxes, assessments, charges or other sums, together with interest and penalties thereon) and any sums paid
by Pledgee, or the cost thereof, including, without limitation, attorneys' fees, shall be reimbursed by Pledgor to Pledgee on demand and, until so reimbursed, shall bear interest at the default rate
of interest chargeable pursuant to the Credit Agreement. 

        17.    Indemnification.    Pledgor agrees to indemnify and hold Pledgee and each Lender harmless from and against
(a) any taxes, liabilities, obligations, losses, penalties, suits, costs, actions, judgments, claims and damages, including attorney's fees and disbursements, and other expenses incurred or
arising by reason of the taking or the failure to take action by Pledgee or any Lender, in good faith, in respect of any transaction effected under this Agreement or in connection with the lien
provided for herein, including, without limitation, any taxes payable in connection with the delivery or registration of any of the Pledged Collateral as provided herein, and (b) any
liabilities, obligations, losses, penalties, suits, costs, actions, judgments, claims and damages, including attorney's fees and disbursements and other expenses which may be imposed on, incurred by,
or asserted against Pledgee or any Lender in any litigation, proceeding or investigation, including, without limitation, any of the foregoing brought under any federal or state securities laws which
is threatened, instituted or conducted by any governmental agency or instrumentality or any other Person with respect to any aspect of or any transaction contemplated by or referred to in, or any
other matter related to this Agreement, whether or not Pledgee or any Lender
is a party thereto. The obligations of Pledgor under this Section 17 shall survive the termination of this Agreement. 

        18.    Payments.    Pledgee shall have the continuing and exclusive right to apply or reverse and reapply any and all
payments to any portion of the Secured Obligations. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor under the
Bankruptcy Code, should Pledgor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor's assets,
and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by Pledgee, whether as a "voidable preference", "fraudulent conveyance" or otherwise all as though such payment or performance
had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored, or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned. 

8

 

        19.    Miscellaneous.    

        (a)    No Liability.    Neither Pledgee nor any of its officers, directors, employees, agents or counsel shall be
liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct. 

        (b)    No Changes.    No term, covenant or condition of this Agreement can be changed or terminated except in
accordance with Section 11.11 of the Credit Agreement. 

        (c)    Successors and Assigns.    All of the rights, privileges, remedies and options given to Pledgee hereunder shall
inure to the benefit of its successors and assigns; and all the terms, conditions, promises, covenants, provisions and warranties of this Agreement shall inure to the benefit of and shall bind the
representatives, successors and assigns of Pledgee and Pledgor. Pledgor may not assign this Agreement to any Person. 

        (d)    Interpretation.    Wherever possible, each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

        (e)    GOVERNING LAW.    THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW YORK. 

        (f)    Injunctive Relief.    Pledgor recognizes that, in the event that Pledgor fails to perform, observe or discharge
any of its obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to Pledgee; therefore, Pledgor agrees that Pledgee, if Pledgee so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. 

        (g)    Notices.    Except as otherwise provided herein, any notice required hereunder shall be given in the manner and
to the party to be notified and its counsel, at the addresses and in the manner provided in the Credit Agreement. 

        (h)    Section Headings.    Any section headings used herein are solely for the convenience of the parties and shall
be without legal effect. 

        (i)    TIME OF ESSENCE.    TIME IS OF THE ESSENCE IN ALL MATTERS PERTAINING TO THE PAYMENT OR PERFORMANCE BY PLEDGOR
OF ITS OBLIGATIONS HEREUNDER. 

        20.    Survival of Rights, Duties, Etc.    No termination or cancellation (regardless of cause or procedure) of the
Credit Agreement shall in any way affect or impair the powers, obligations, duties, rights and liabilities of the parties hereto in any way with respect to (i) any transaction or event
occurring prior to such termination or cancellation, (ii) the Pledged Collateral, or (iii) any of Pledgor's undertakings, agreements, covenants, warranties and representations contained
in this Agreement and all such undertakings, agreements, covenants, warranties and representations shall survive such termination or cancellation until all of the Secured Obligations of every nature
whatsoever shall have been fully paid and satisfied. 

9

 

        IN
WITNESS WHEREOF, each Pledgor has caused this Agreement to be executed by an officer thereunto duly authorized as of the date first above written. 

	 	 	"PLEDGOR"
	

 	
 	

MAGNETEK, INC.
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	

Attest:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	

ACCEPTED:
	

 	
 	

"PLEDGEE"
	

 	
 	

BANK ONE, KENTUCKY, N.A., as Agent
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

10

QuickLinks

STOCK PLEDGE AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]