10-K405

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

[X]        Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2000

or

[  ]       Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________

Commission file number: 1-1969

ARBITRON INC.
(formerly Ceridian Corporation)
(Exact Name of Registrant as Specified in Its Charter)

Delaware	52-0278528
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

142 West 57th Street
New York, New York 10019
(Address of principal executive offices) (Zip Code)
(212) 887-1300
(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act:

Title of Each Class Registered	Name of Each Exchange on Which Registered
Common Stock, par value $.50 per share	The New York Stock Exchange

Securities registered under Section 12(g) of the act:
None

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes  [X]  No  [  ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K or any amendment to this Form 10-K.  [X]

      The aggregate market value of the registrant’s voting stock as of March 30, 2001 (based upon the closing sale price of Arbitron’s common stock in the when-issued trading market on that date as reported by the New York Stock Exchange), excluding outstanding shares beneficially owned by executive officers and directors of Arbitron, was approximately $670,500,000.

      Common stock, par value $0.50 per share, outstanding as of March 30, 2001 - - 29,163,942 shares

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DOCUMENTS INCORPORATED BY REFERENCE

      Part III incorporation certain information by reference from the registrant's definitive proxy statement for the 2001 annual meeting of shareholders. which proxy statement will be filed no later then 120 days after the close of the registrant's fiscal year ended December 31, 2000.

FORWARD-LOOKING STATEMENTS

      This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Arbitron in this document that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “believes” or “plans,” or comparable terminology, are forward-looking statements based on current expectations about future events, which Arbitron has derived from the information currently available to it. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied in such forward-looking statements. These risk and uncertainties include whether we will be able to:

•	realize the benefits we expect to achieve from the Spin-off,
•	successfully execute our business strategies, including timely implementation of our
	Portable People Meter and our Webcast Ratings SM service, as well as expansion on international operations;
•	continue to benefit from further consolidation in the radio industry; and
•	keep up with rapidly changing technological needs of our customer base, including creating new products and services that meet these needs.

      Additional important factors known to Arbitron that could cause forward-looking statements to turn out to be incorrect are identified and discussed from time to time in Arbitron's filings with the Securities and Exchange Commission, including in particular the risk factors discussed under the caption “ITEM 1. BUSINESS — Business Risk” in this Annual Report on Form 10-K.

      The forward-looking statements contained in this document speak only as of the date hereof, and Arbitron undertakes no obligation to correct or update any forward-looking statements, whether as a results of new information, future events or otherwise.

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PART I

ITEM 1.    BUSINESS.

      Arbitron Inc., formerly known as Ceridian Corporation, which was formed in 1957, is incorporated in Delaware. Arbitron’s principal executive offices are located at 142 West 57th Street, New York, New York 10019, and the telephone number is (212) 887-1300.

      Prior to March 30, 2001, Ceridian Corporation (“Ceridian”) was a publicly traded company which principal lines of business were the human resources services business, the Comdata business, which provided transaction processing and regulatory compliance services for the transportation industry, and the radio audience measurement business.

      On March 30, 2001, Ceridian completed a reverse spin-off (the “Spin-off”). In connection with the Spin-off, the assets and liabilities associated with the human resource services division, human resource services and Comdata subsidiaries were transferred to a new corporation (which we call “New Ceridian” in this document). The radio audience measurement business stayed with Ceridian. Ceridian then distributed the stock of this new company to all of Ceridian’s existing stockholders. As a result, New Ceridian is now a separate publicly traded corporation. In connection with the Spin-off, Ceridian changed its name to Arbitron Inc. and effected a one-for-five reverse stock split, and New Ceridian changed its name to Ceridian Corporation.

      Because of the relative significance of the businesses transferred to New Ceridian, New Ceridian was considered the accounting successor to Ceridian for financial reporting purposes.

      The information presented below relates to the business of Arbitron following the Spin-off unless the context otherwise requires. Historical financial information is presented for the radio audience measurement business that was conducted by Ceridian during the periods presented. For information relating to the human resource services business and the Comdata business that existed within Ceridian prior to March 30, 2001, including historical financial information regarding this business, please see New Ceridian’s Annual Report on Form 10-K for the year ended December 31, 2000.

      Both Arbitron and New Ceridian will have management, fundamentals, growth characteristics and strategic priorities that are different from those of Ceridian. Arbitron does not have an interest in New Ceridian, and New Ceridian does not have an interest in Arbitron.

      Except as the context otherwise requires, the terms “Arbitron” or the “Company” as used herein shall include Arbitron Inc. and its subsidiaries.

Overview

      Arbitron is an international media and marketing research firm primarily serving radio and other broadcasters, cable companies, advertisers and advertising agencies in the United States and Europe. Arbitron currently has four core businesses:

• measuring radio audiences in local markets across the United States;

• surveying the retail, media and product patterns of local market consumers;

• providing application software used for accessing and analyzing media audience and marketing information data; and

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• providing survey research services to the cable, broadcast television, magazine, newspaper and online industries.

      Arbitron provides radio audience measurement information in the United States to over 3,700 radio stations in approximately 283 local markets. Arbitron estimates audience size and demographics in the United States for local radio stations, and reports these estimates and related data to its customers. This information is used as a form of “currency” for media transactions in the radio industry. Radio stations use Arbitron’s data to price and sell advertising time, and advertising agencies and large corporate advertisers use Arbitron’s data in purchasing advertising time. Arbitron also provides software applications that give its customers access to Arbitron’s estimates via a proprietary database, and enables them to more effectively analyze and understand that information for sales, management and programming purposes.

      In addition to its core radio ratings service which provides primarily quantitative data, such as how many people are listening, Arbitron also provides qualitative data on listeners, viewers and readers that contains detailed socioeconomic information and information on what the respondents buy, where they shop and what forms of media they use. Arbitron provides these qualitative measurements of consumer demographics, retail behavior and media usage in approximately 261 local markets throughout the United States. Arbitron Cable provides qualitative audience descriptors to the local cable advertising sales organizations of cable companies. Arbitron’s Webcast Ratings service, which Arbitron plans to offer to its customers in the third quarter of 2001, measures the audiences of audio and video content on the Internet, commonly known as “Webcasts” or “streaming media.”

      Arbitron’s radio audience measurement business has generally accounted for a substantial portion of its revenue. The radio audience measurement service and related software sales represented 87 percent of Arbitron’s total 2000 revenue.

Industry Background and Markets

      Since 1965, Arbitron has delivered reliable and timely radio audience information collected from a representative sample of radio listeners. For over 35 years, Arbitron’s core business has been to provide high quality, comprehensive audience measurement information to the radio industry. Arbitron’s radio audience estimates have filled a need for a respected and credible reporting of audience delivery. The presence of reliable, credible audience estimates in the radio industry has permitted radio stations to price and sell advertising time, and advertising agencies and large corporate advertisers to purchase advertising time. The Arbitron ratings have also become a valuable tool for use in radio programming, distribution and scheduling decisions.

      In recent years, significant consolidation of radio station ownership has occurred in the United States. Consolidation has tended to intensify competition for advertising dollars both within the radio industry and between radio and other forms of media. At the same time, audiences have become more fragmented as a result of greatly increased programming choices and entertainment and media options. As a result, advertisers have increasingly sought to tailor their advertising strategies to target specific demographic groups through specific media. The audience information needs of radio broadcasters, advertising agencies and advertisers have correspondingly become more complex. Increased competition and more complex information requirements have heightened the need of radio broadcasters for improved information management systems and more sophisticated means to analyze this information. In addition, there is a demand for quality radio audience information internationally from global advertisers, United States broadcasters who have acquired broadcasting interests in other countries and an increasing number of private commercial broadcasters in other countries.

      These trends also affect other media. As the importance of reaching niche audiences with targeted marketing strategies increases, broadcasters, publishers, advertising agencies and advertisers increasingly require that information regarding exposure to advertising be provided on a more individualized basis and that this information be coupled with more detailed information regarding lifestyles and purchasing behavior. The need for purchase data information may create opportunities for innovative approaches to satisfy these information needs,

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particularly as technological advances, including the possibilities available with interactive communication and the Internet, increase the alternatives available to advertisers for reaching potential customers.

      In addition to radio stations, Arbitron also markets its products and services to cable companies. Feedback from Arbitron’s cable customers suggests that the cable industry is in need of improved local measurement systems because current quantitative measurement methods, such as diaries and TV meter-based measurement systems, have not provided sufficient sample sizes to adequately reflect the demographic audiences of the cable networks available in a local market and may have undervalued the local cable viewership. Without solid measures of demographic audiences at the local market level, cable may not have been achieving its full potential of local and national advertising revenues. In response to this need, Arbitron provides cable companies with qualitative audience information and software programs that help cable companies show their advertisers that cable is a highly targeted and effective way to reach the people who purchase their products and services. One of the reasons Arbitron has developed its Portable People Meter is to more adequately measure the multitude of channels available over cable.

      In recent years, the Internet has presented radio stations and other broadcasters with a new media outlet and advertisers with an opportunity to target prospective consumers. The popularity and use of the Internet has increased dramatically within the last couple of years. As the Internet attracts larger numbers of users, spending for Internet advertising is expected to increase. According to Paul Kagan Associates, a division of Media Central, LLC, global annual online advertising expenditures are projected to increase to over $12.8 billion in 2003. Arbitron is developing its Webcast Ratings service to meet the industry need for credible audience measurement.

      Since 1998, Arbitron has conducted large scale national analyses of consumer interest and utilization of webcasting. Over a two-year period, these studies conducted every six months have demonstrated a significant growth in the usage of webcasting by the American consumer. Since 1998, the three-year trend for the percentage of Americans that have listened to radio stations over the Internet has surged from six percent to 20 percent. Arbitron believes these studies validate the rapid adoption of webcasting, thereby reinforcing the need for audience measurement of this new media.

Radio Audience Measurement Services

      Arbitron provides radio audience measurement information in the United States to over 3,700 radio station customers. Arbitron estimates audience size and demographics in the United States for local radio stations, and reports these estimates and related data to its customers. This information is used as a form of “currency” for media transactions in the radio industry. Radio stations use Arbitron’s data to price and sell advertising time, and advertising agencies and large corporate advertisers use Arbitron’s data in purchasing advertising time.

      Collection of Listener Data. Arbitron uses listener diaries to gather radio listening data from sample households in approximately 283 United States local markets for which it currently provides radio ratings. Participants in Arbitron surveys are selected at random by telephone. When participants (known as “diarykeepers”) agree to take part in a survey, they are mailed a small pocket-sized diary and asked to record their listening in it over the course of a seven-day period. Participants are asked to designate in their diary what station(s) they are listening to, when they are listening and where they are listening, such as home, car, work or other place. Although survey periods are 12 weeks long, no one keeps his or her diary for more than seven days. At the beginning of the survey period, each diarykeeper receives his or her diary, instructions for filling it out and a small cash premium. The premium varies according to markets, and the range is $1.00 to $6.00 for each diarykeeper in the household. Diarykeepers mail their diaries to Arbitron’s operations center in Columbia, Maryland where Arbitron conducts a series of quality control checks, enters the information into its database and produces periodic audience measurement estimates. Arbitron collects more than one million diaries every year to produce its audience listening estimates. All markets are measured at least twice each year, and major markets are measured four times per year. Arbitron’s proprietary data regarding radio audience size and demographics is then provided to customers through multi-year license agreements.

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      One of the challenges in measuring radio listening is to ensure that the composition of survey respondents is representative of the market being measured. Arbitron strives to achieve representative samples. For example, if 20 percent of a given market is composed of women aged 18 to 34, Arbitron works to ensure that 20 percent of the diarykeepers in the sample are women aged 18 to 34. Therefore, each diarykeeper’s listening will effectively represent not only the diary keeper’s personal listening, but the listening of his or her demographic segment in the market overall. In markets with a high concentration of Hispanic or African American households, Arbitron provides enhanced premiums to encourage Hispanic and African American participation. In markets with high concentrations of Hispanic households, Arbitron also uses Spanish-language materials and interviewers to reach Spanish-speaking households.

      Arbitron has invested heavily in quality improvements for its radio audience measurement service. Since 1995, Arbitron has implemented programs designed to:

• encourage high survey response rates;

• increase samples by up to 70 percent in a majority of surveyed markets;

• improve the sample representation of young men;

• maintain excellent representation of African Americans and Hispanics;

• increase survey frequency so that all markets are measured at least twice each year (spring and fall) and major markets are measured four times per year; and

• add consumer and retail questions to its standard radio diary in 162 small markets.

      Portable People Meter. In response to a growing demand to develop a more efficient and less time consuming method of recording listening and other data, Arbitron has developed a Portable People Meter system capable of measuring radio, television, cable, Internet streaming and satellite audiences. The Portable People Meter is a pager-sized device that is worn or carried by a survey participant throughout the day. It automatically detects inaudible codes that radio, television, cable, Internet and satellite providers embed in the audio portion of their programming using encoders provided by Arbitron. These codes identify the media that a participant is exposed to throughout the day without the person having to engage in manual recording activities. At the end of each day, the meter is placed into a base station that recharges the device and sends the collected codes to Arbitron for tabulation.

      There are several advantages of the Portable People Meter system. It is simple and easy for respondents to use. It requires no button pushing, which disrupts media use, no recall and no effort to identify and write down channels or radio stations tuned to. The Portable People Meter is able to passively detect exposure to encoded media by identifying each source through unique identification codes. The Portable People Meter is able to capture a consumer’s use of electronic media measuring cable, broadcast television, radio and Internet audio.

      During 1999, Arbitron tested the Portable People Meter in Manchester, England. The testing in the United Kingdom determined that the Portable People Meter technology operated as intended and that survey participants carried the Portable People Meter with them to a degree that was satisfactory for the test. It also determined that television audience estimates made using the Portable People Meter were comparable to existing United Kingdom television audience measurements and that radio audience estimates comparisons were inconclusive.

      In October 2000, Arbitron began a United States market trial of the Portable People Meter. The test will take place in two phases. The initial deployment will use 300 survey participants in the Wilmington, Delaware, radio Metro, which is part of the Philadelphia television market. In 2001, Arbitron plans to begin increasing the survey participants to cover the Philadelphia market.

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      On May 31, 2000, Arbitron entered into an agreement with Nielsen Media Research, Inc., a provider of United States television audience measurement services, under which Arbitron granted Nielsen Media Research an option to join Arbitron in the potential commercial deployment of the Portable People Meter on a nationwide basis in the United States. In the event Nielsen Media Research exercises the option, the parties have agreed to form a joint venture to implement the commercial deployment in the United States of the Portable People Meter and to operate the business of data collection based on the use of the Portable People Meter on an ongoing basis. Recognizing that the successful commercial deployment of the Portable People Meter is uncertain and risky, Arbitron believes that a joint venture with Nielsen Media Research creates a significantly greater likelihood of successful commercial deployment than other commercial options or alternatives.

      The parties would each use the data generated by the jointly-deployed Portable People Meter in creating their own media measurement services. Generally, each company would be licensed to use the Portable People Meter data to create measurement services for particular media and would receive revenues from the sale of these services. Arbitron would also receive a royalty from Nielsen Media Research based on profits generated by Nielsen Media Research using the Portable People Meter data. The division of revenues from Internet data remains to be negotiated by the parties. The costs, expenses and capital expenditures for operating the joint venture would be shared by Arbitron and Nielsen Media Research based on the degree to which use of the Portable People Meter displaces costs at each company.

      Arbitron retains the right under the agreement at any time to license, test and/or implement a commercial deployment of the Portable People Meter and the technology contained in the Portable People Meter outside of the United States. In the event Nielsen Media Research exercises its option to form the joint venture in the United States, Nielsen Media Research also has the right to purchase from Arbitron, at fair value, a portion of Arbitron’s interest in all audience measurement business activities arising out of the commercial deployment of the Portable People Meter and the technology contained in the Portable People Meter outside of the United States.

      Radio Market Report and Other Reports. Arbitron’s listening estimates are provided in a number of different reports that are published and licensed to its customers. The cornerstone of Arbitron’s radio audience measurement services is the Radio Market Report, which is currently available in approximately 283 United States local markets. The Radio Market Report provides audience estimates covering a wide variety of demographics and dayparts, which are time periods for which audience estimates may be reported, for the stations in a market which meet Arbitron's minimum reporting standards. Each Radio Market Report contains more than 100,000 estimates to help radio stations, advertising agencies and advertisers understand: who is listening to the radio, which stations they are listening to and the time and location of the listening.

      In addition to the Radio Market Report, Arbitron provides additional services, such as its Radio County Coverage Reports, Hispanic Radio Market Reports and Black Radio Market Reports. Radio County Coverage is an annual study that is published each spring and provides radio audience estimates for every county in the continental United States, plus metropolitan counties in Alaska and Hawaii. Radio County Coverage Reports are available by the county, by the state or for the whole country. Hispanic Radio Market Reports are available exclusively by tape access and are issued twice a year. Information is collected from bilingual diaries placed in Hispanic homes. Black Radio Market Report tape access provides radio listening estimates for African American audiences. Data is available either once or twice a year, depending on the market.

Software Applications

      In addition to its reports, Arbitron also licenses software applications that provide its customers access to Arbitron’s estimates via Arbitron’s proprietary database of estimates, and enable them to more effectively analyze and understand that information for sales, management and programming purposes. Arbitron is also developing applications to enable customers to link the estimates in Arbitron’s database with information from other databases (such as product purchasing behavior) so as to enable customers to further refine sales strategies and compete more effectively for advertising dollars.

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      Arbitron’s Tapscan family of software solutions, which Arbitron acquired in 1998 from Tapscan, Incorporated, are used by many radio stations, advertisers and advertising agencies. One service, QualiTap, is also made available under a licensing arrangement with Tapscan, Incorporated to television and cable outlets in the United States. The Tapscan software is one of the advertising industry’s leading radio analysis applications. It can help to create colorful charts and graphs that make complicated information more usable to potential advertisers. Other features include prebuy research including frequency-based tables, cost-per-point analysis, hour-by-hour and trending, use of respondent-level radio data, automatic scheduling and goal tracking, instant access to station format and contact information.

      Other key software applications Arbitron offers its radio clients are the Maximi$er®, a registered mark of Arbitron Inc., service for radio stations and the Media Professional service for advertising agencies and advertisers. Both of these software applications offer respondent-level database access, which allows radio stations, advertising agencies and advertisers to customize survey areas, dayparts, demographics and time periods to support targeted marketing strategies. The Maximi$er service includes a Windows-based application that accesses a market’s entire radio diary database to a client’s personal computer. Radio stations use Maximi$er to produce information about their station and programming not available in Arbitron’s published Radio Market Reports. Media Professional is designed to help advertising agencies and advertisers plan and buy radio advertising time quickly, accurately and easily. The easy-to-use software integrates radio planning and buying into one comprehensive research and media buying tool. It allows agencies and advertisers to uncover key areas critical to the buying process, including determining the most effective media target, understanding market trends, and identifying potential new business.

Local Market Consumer Information Services

      In addition to its core radio ratings service which provides primarily quantitative data, such as how many people are listening, Arbitron also provides qualitative data to radio stations, cable companies, advertising agencies and advertisers on listeners, viewers and readers that provides more detailed socioeconomic information and information on what the respondents buy, where they shop and what forms of media they use. Arbitron provides these measurements of consumer demographics, retail behavior and media usage in approximately 261 local markets throughout the United States.

      Arbitron provides four qualitative services tailored to fit a customer’s specific market size and marketing requirements:

• Scarborough Report, which is offered in larger markets;

• RetailDirect®, a registered mark of Arbitron Inc., which is available in medium markets; and

• Qualitative Diary Service and RetailDirect Lite, which are offered in smaller markets.

      Each service profiles a market, the consumers and the media choices in terms of key characteristics. These four services cover the major retail and media usage categories in almost any area. Arbitron also offers training and support services that help its customers understand and use the local market consumer information Arbitron provides them.

      Scarborough Report. The Scarborough service is provided through a joint venture between Arbitron and VNU Marketing Information, Inc. The Scarborough service provides detailed information about media usage, retail and shopping habits, demographics and lifestyles in 75 large United States markets, utilizing a sample of consumers in the relevant markets. Scarborough data feature more than 500 retail and lifestyle characteristics, which can help radio stations, cable companies, advertising agencies and advertisers provide an in-depth profile of their consumers and listeners. Examples of Scarborough categories include retail shopping (e.g., major stores shopped or purchases during the past 30 days), auto purchases (e.g., plan to buy new auto or truck), leisure activities (e.g., attended sporting event) and personal activities (e.g., golfing). Media information includes broadcast and cable television viewing, radio listenership, newspaper readership by section, magazine readership and yellow pages usage. This

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information is provided twice each year to newspapers, radio and television broadcasters, cable companies, advertising agencies and advertisers in the form of the Scarborough Report. Arbitron is the exclusive marketer of the Scarborough Report to radio broadcasters and cable companies. Arbitron also markets the Scarborough Report to advertisers, advertising agencies and outdoor advertisers on a shared basis with VNU Marketing Information, Inc.

      RetailDirect. Arbitron has also developed and currently provides in approximately 24 mid-sized United States markets its RetailDirect service, which is a locally oriented, purchase data and media usage research service. This service, which utilizes diaries and telephone surveys, provides a profile of the broadcast audience in terms of local media, retail and consumer preferences so that local radio and television broadcasters and cable companies will have information to help them develop target sales and programming strategies. Retail categories include automotive, audio-video, furniture and appliances, soft drinks and beer, fast food, department stores, grocery stores, banks and hospitals. Media usage categories include local radio, broadcast TV, local network cable, newspapers, yellow pages and advertising circulars.

      Qualitative Diary Service. Arbitron’s Qualitative Diary Service collects consumer and media usage information from Arbitron radio diary keepers in approximately 162 smaller United States markets. The same people who report their radio listenership in the market also answer over 20 product and service questions. Consumer behavior information is collected for key local market retail categories, such as automotive sales, grocery, fast food, furniture and bedding stores, beer, soft drinks and banking. The Qualitative Diary Service also collects information about other media, such as cable television viewing and newspaper readership.

      RetailDirect Lite. RetailDirect Lite provides detailed information about demographics, retail and shopping habits and lifestyles of cable subscribers. This qualitative service for cable companies is available in 162 markets. Offering personal viewing information on 15 different cable networks, RetailDirect Lite provides information, such as what percentages of a retailer’s customers and prospects have cable television, what cable networks its customers are watching and other socioeconomic data.

Arbitron Cable Services

      Arbitron has expanded its local market consumer information services to media other than radio, including cable television. Feedback from Arbitron’s cable customers suggests that the cable industry is in need of improved local measurement systems because current quantitative measurement methods may have undervalued the local cable viewership. Without solid measures of demographic audiences at the local market level, cable may not have been achieving its full potential of local and national advertising revenues. In response to this need, Arbitron Cable provides cable companies with qualitative audience information and software programs that help cable companies show their advertisers that cable is a highly targeted and effective way to reach the people who purchase their products and services. Arbitron has also developed its Portable People Meter, which is designed to more adequately measure the multitude of channels available over cable.

      Arbitron believes that its Portable People Meter technology holds great promise for the cable industry. Arbitron expects that its Portable People Meter will provide a reliable, accepted local audience measurement service for the cable industry. Arbitron also envisions that the Portable People Meter data could be linked to consumer/client databases to optimize cable campaigns to enhance local/national spot sales efforts; validate audiences to national cable networks, regional sports and entertainment channels and local origination channels; provide valuable insights into local audience size and demographics of cable networks; deliver targeted schedule recommendations for cross-channel promotional campaigns; maximize the promotional and advertising sales power of local cable channels; and provide in-depth information on the electronic media usage of cable subscribers for media planning.

Arbitron Webcast Ratings

      Arbitron’s Webcast Ratings service measures the audiences of audio and video content on the Internet, commonly known as “Webcasts” or “streaming media.” Arbitron’s Webcast Ratings service has been in operation as

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a pilot since October 1999, and Arbitron plans to offer the service to its customers in the third quarter of 2001. Arbitron’s Webcast Ratings service helps webcasters “monetize” their Internet business models by enabling them to demonstrate the size and value of their online audience to advertising agencies and advertisers who require independent and credible audience measurement information to justify their advertising expenditures and to make informed media planning and buying decisions.

      In July 2000, Arbitron entered into a business development and software license agreement with Lariat Software, Inc., a provider of software applications to streaming media companies that deliver audio and video content over the Internet. The software licensed by Lariat to Arbitron will help Arbitron collect data regarding audiences that are listening and/or viewing (also known as tuning) to streaming media from these streaming media content delivery companies. The Lariat software will be installed at the streaming media companies and the data collected from tuning to streaming media produced by these companies will be collected by Arbitron and used in the production of the Arbitron’s Webcast Ratings service. Under the terms of the agreement, Lariat will license its MediaReports software to Arbitron to streamline the collection of data and help Arbitron manage the high volume of Internet tuning events Arbitron expects to compile. The combination of Lariat’s market-leading data collection and reporting solutions and Arbitron’s expertise in the creating and marketing of credible third-party ratings will, Arbitron believes, provide webcasters, advertising agencies and advertisers with the information that will be critical in making advertising and programming decisions.

International Operations

      Arbitron’s international operations consist primarily of its Continental Research subsidiary, which operates in the United Kingdom and elsewhere in Europe. In addition, Arbitron has recently expanded its sales and marketing efforts to other countries, such as Mexico and Japan. Arbitron has also entered into agreements with international media information services companies, such as Taylor Nelson Sofres, a United Kingdom company, and BBM Bureau of Broadcast Measurement, a Canadian audience measurement service, to license Arbitron’s technology.

Continental Research

      Through its Continental Research subsidiary, Arbitron provides media, advertising, financial, telecommunications and Internet research services in the United Kingdom and elsewhere in Europe.

      Media. Continental Research’s media clients cover the full spectrum of traditional and new media, with particular strength in the television and radio markets. Its media services include measuring audiences, evaluating existing services or building forecasting models.

      Advertising. Continental Research also evaluates every stage of the advertising process: from strategy development, creative development, pre-campaign testing, pre and post advertising and tracking, and on-air coincidental studies, to analysis of those responding to the campaign, and those converting to purchase.

      Financial. Continental Research’s experience in business to business financial research ranges from new product development to market measurement to advertising tracking. When conducting financial research among consumers, Continental Research uses The Million Plus Panel, which comprises a pool of approximately 3.7 million United Kingdom residents and holds up to 3,000 demographic, lifestyle and purchasing details for each resident.

      Telecommunications and Internet. Continental Research’s telecommunications and Internet projects have ranged from local area markets through to multi-national markets and have examined pricing, promotion, billing, product differentiation, advertising effectiveness, distribution systems, customer satisfaction, market estimation and new product development research.

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Other International Operations

      Arbitron has recently expanded its international sales and marketing efforts to other countries, such as Mexico and Japan. Arbitron has proposed to Mexican broadcasters a syndicated radio ratings service for Mexico. In Japan, Arbitron has produced a large one-time-only study of consumers called “Media Targeting 2000 Japan” for the National Association of Broadcasters in Japan. Additionally, Arbitron has entered into agreements with international media information services companies, such as Taylor Nelson Sofres and BBM Bureau of Broadcast Measurement to license Arbitron’s technology. In Australia, ACNielsen has an agreement to distribute, on an exclusive basis, Arbitron’s Tapscan software to the Australia radio and advertising agency marketplace.

Strategy

      Arbitron’s objective is to grow its radio audience measurement business and to expand its audience measurement services to a broader range of media types, including television, cable, satellite delivered media and webcasting. Key elements of Arbitron’s strategy to pursue this objective include:

• Continue to invest in quality improvements in its radio audience measurement service and seek opportunities to further expand the business. Arbitron provides radio audience measurement information in the United States and intends to continue to invest in quality improvements in its radio audience measurement services and in new software-based information applications. Additionally, Arbitron believes that a growth opportunity exists in the advertiser market and intends to seek to expand its customer base of large corporate advertisers by developing and marketing new information services designed to assist corporate advertisers in implementing targeted marketing strategies.

• Build on Arbitron’s experience in the radio audience measurement industry and its new Portable People Meter technology to expand into measurement services for other types of media. Arbitron intends to utilize its experience in the radio audience measurement industry and its Portable People Meter technology to expand into measurement services for other types of media, such as satellite delivered radio, television, cable and the Internet. Arbitron is also currently prototyping a webcast ratings service called Arbitron Webcast Ratings that measures the audiences of audio and video webcasts online. Arbitron has entered into a business development and software license agreement with Lariat Software Inc. to jointly offer each company’s respective webcast measurement services. Arbitron intends to enter into agreements with third parties to assist it in the marketing, technical and financial aspects of expanding into measurement services for other types of media.

• Develop and commercialize the next generation data collection and processing technique. Arbitron’s businesses require sophisticated data collection and processing systems, software and other technology. The collection of Arbitron’s estimates is dependent on a number of individuals keeping track of their listening, viewing and reading activities in diaries. The technology underlying the media measurement industry is undergoing rapid change, and Arbitron will need to continue to develop and refine its techniques for data collection and processing to accommodate these changes. The development of Arbitron’s Portable People Meter is an attempt to respond to a growing demand to develop more efficient and less time consuming methods for measuring audiences. Eventually, Arbitron hopes to develop an integrated measurement service that will measure all media from a single source, enabling media buyers to make multi-media decisions in an integrated fashion.

• Expand international presence. Arbitron continues to explore opportunities that would facilitate the expansion of its audience measurement service into selected international markets, such as Western Europe, Singapore, Mexico and Japan. Arbitron believes there is a demand for quality radio audience information internationally from global advertisers, United States broadcasters who have acquired broadcasting interests in other countries and an increasing number of private commercial broadcasters in other countries. International advertising markets operate similarly to the United States advertising market. Multi-national advertisers and advertising agencies tend to set the standards for measurement

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around the world, and historically the lead has come from the United States. Additionally, Arbitron believes that its webcast audience measurement service is a natural area for its international expansion. There are already hundreds of radio stations and webcasters in international markets streaming their signals over the Internet. Most of these radio stations and webcasters have a business model supported by advertising revenues, which necessitates credible audience measurement. Arbitron’s current webcast audience measurement methodology permits international webcasters to participate in Arbitron’s service because the service gathers data electronically from worldwide servers and content companies that provide content to end-users. Arbitron also believes that its Portable People Meter is a natural area for international expansion.

Customers, Sales and Marketing

      Arbitron’s customers are primarily radio stations, cable companies, advertising agencies and large corporate advertisers. As of December 31, 2000, Arbitron provided its radio audience measurement and related services to approximately 3,700 radio stations and 2,600 advertising agencies and advertisers nationwide under contracts that generally vary in length from one to seven years. In recent years, a small number of enterprises have greatly expanded their holdings of United States radio broadcasters, and this consolidation of ownership is continuing. As a result of consolidation of United States radio broadcasters, Arbitron’s customers Clear Channel Communications, Inc. and Infinity Broadcasting Corp. represented approximately 22 percent and 10 percent, respectively, of Arbitron’s revenue in 2000. Although the industry consolidation that has led to the increased concentration of Arbitron’s customer base could put pressure on the pricing of Arbitron’s radio ratings service, it has also contributed to an increase in the number of stations subscribing for the ratings service, as stations have become Arbitron customers upon their acquisition by larger broadcasting groups. It has also been Arbitron’s experience that stations that are part of larger broadcasting groups have been somewhat more likely to purchase Arbitron’s analytical software applications and other services in addition to its core ratings service. Furthermore, Arbitron believes that it is well positioned to provide products and services that meet the needs of large broadcasting groups.

      Through Arbitron’s Webcasting Ratings service and Portable People Meter project, Arbitron is seeking to expand its constituency beyond traditional broadcasters, such as radio stations, to new media, such as cable television, satellite radio, wireless broadcasters and Internet audio and video webcasters. As of December 31, 2000, Arbitron provided its qualitative measurement and related services to approximately 150 local cable systems.

      Arbitron markets its products and services in the United States through a direct sales force of approximately 68 sales account representatives and 22 trainers operating through offices in seven cities around the United States.

      Arbitron has entered into a number of agreements with third parties to assist it in marketing and selling its products and services in the United States. For example, Tapscan, Incorporated, which is an entity that is not affiliated with Arbitron, distributes, on an exclusive basis, Arbitron’s QualiTap software to the television and cable industries in the United States. Arbitron has entered into a business development and software license agreement with Lariat Software Inc., a provider of software applications to streaming media companies that deliver audio and video content over the Internet, to jointly offer each other’s respective webcast measurement services.

      Arbitron supports its sales and marketing efforts through the following promotional efforts:

• Gathering and publishing studies on emerging trends in the radio and other media industries as well as the media habits of radio listeners and television, cable and Internet viewers, which studies are available for no charge on Arbitron’s web site (http://www.arbitron.com);

• Advertising in a number of key industry publications, including Inside Radio, Radio and Records, MediaWeek, Broadcasting and Cable, and Mulitichannel News;

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• Direct marketing programs directed toward radio stations, cable companies, advertising agencies and large corporate advertisers;

• A public relations program that promotes Arbitron and the industries Arbitron serves to the broadcasting, Internet, advertising and marketing trade press as well as select local and national consumer and business press;

• Participating in key industry forums and interest groups, such as the Advertising Research Foundation, The American Association of Advertising Agencies, National Association of Broadcasters, and The Television Bureau of Advertising as well as Internet roundtables and many state and local advertising and broadcaster associations; and

• Significant presence at major industry conventions, such as those sponsored by the National Association of Broadcasters and Radio Advertising Bureau.

      Internationally, Arbitron markets its services through approximately 16 research executives operating through Continental Research’s office in the United Kingdom. Arbitron has recently expanded its international sales and marketing efforts to other countries, such as Mexico and Japan. Additionally, Arbitron has entered into agreements with international media information services companies, such as Taylor Nelson Sofres, to license Arbitron’s technology. Arbitron also has an agreement with ACNielsen to distribute, on an exclusive basis, Arbitron’s Tapscan software in Australia.

Technology and Competition

      Arbitron’s businesses require sophisticated data collection and processing systems, software and other technology. The technology underlying the media measurement industry is undergoing rapid change, and Arbitron will need to continue to develop and refine its techniques for data collection and processing to accommodate these changes. The development of Arbitron’s Portable People Meter is an attempt to respond to a growing demand to develop more efficient and less time consuming methods of recording listener, viewer and reader data. Although Arbitron provides radio audience measurement services to over 3,700 radio stations, it recognizes that it must enhance its existing services and develop new services in response to the rapidly changing media marketplace. In addition to responding to a growing demand to develop a more efficient and less time consuming method of recording listening, viewing and reading data, Arbitron’s Portable People Meter is also a response to media customer needs for a service designed to track and measure all media from a single source. Similarly, the development of Arbitron’s proposed Arbitron Webcast Ratings service is in response to requests by Arbitron’s customers to include webcasts in Arbitron’s radio audience measurements. There can be no assurance that Arbitron will be able to develop and refine its Portable People Meter and Arbitron Webcast Ratings service or any other new technologies for data collection and processing and broad media measurement or that it will be able to do so as quickly or cost-effectively as its competitors.

      Arbitron competes with a large number of other providers of applications software, qualitative data and proprietary qualitative studies used by broadcasters, cable companies, advertising agencies and advertisers. These competitors include Strata Marketing Inc., Marketing Resources Plus, a division of VNU and Telmar Information Services Corp. in the area of applications software, and The Media Audit, a division of International Demographics, Inc., and Simmons Research Bureau in the area of qualitative data. Arbitron competes with these companies primarily on the basis of ease of use, reliability, end user experience and price. Arbitron is also aware of at least two companies, Telecontrol AG and The Pretesting Company, that are in the process of developing technologies that may compete with Arbitron’s Portable People Meter.

      Arbitron also competes with a number of companies in the webcast and Internet audience measurement industry, namely MeasureCast, Inc., Jupiter Media Metrix, Inc. and NetRatings, Inc. The market for webcast ratings and Internet audience measurement is new and rapidly evolving and becoming increasingly competitive. As the demand for webcasting and Internet measurement information increases, Arbitron expects competition in this area to

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intensify, especially given the pressure to create a uniform standard upon which companies will make meaningful decisions regarding online advertising. Arbitron believes that the principal competitive factors in this market are reliability, timeliness, the breadth and depth of measurement services offered, the ability to provide quality analytical services derived from the audience measurement information, end user experience and price.

      Some of Arbitron’s competitors may have greater financial, marketing, distribution and technical resources than Arbitron. Arbitron believes that its future growth and success will be dependent on its ability to compete with these and any other competitors and to design, develop and commercialize new products and services that address the industry needs for more efficient and less time consuming methods of data collection and processing and broader media measurement techniques. Arbitron cannot assure success in that competition.

Intellectual Property

      Arbitron relies on a combination of patents, copyrights, trademarks, service marks and trade secret laws, license agreements and other contractual restrictions to establish and protect its proprietary rights in its products and services. In the United States, Arbitron has been granted 24 patents and has two patent applications pending. Internationally, Arbitron has been granted 69 issued patents and has 67 patent applications pending. Arbitron’s patents primarily relate to its data collection and processing systems and software and its Portable People Meter.

      Arbitron’s audience listening estimates are original works of authorship and are copyrightable under the federal copyright laws in the United States. Arbitron registers two core reports that contain the estimates, the Radio Market Report and the Radio County Coverage Report. The Radio Market Report is published either quarterly or semi-annually, depending on the Arbitron market surveyed, while the Radio County Coverage Report is released annually. Arbitron seeks copyrights for every Radio Market Report, for every survey and for each of the approximately 283 markets measured by Arbitron and each Radio County Coverage Report for every state in the United States. Arbitron also seeks copyright protection for the databases comprising the Radio Market Report, Radio County Coverage Report, software and other services containing its audience estimates and respondent level data. Prior to the publication of the printed Arbitron reports and release of the software containing the respondent level data, Arbitron registers its databases under the United States federal copyright laws. Arbitron’s proprietary data regarding audience size and demographics is provided to customers through multi-year license agreements.

      A number of Arbitron’s services are marketed under United States federally registered trademarks that are helpful in creating recognition in the marketplace. Some of Arbitron’s registered trademarks include: the Arbitron name and logo, Maximi$er and RetailDirect. Arbitron has a pending trademark application for Arbitron PPM. Arbitron also has a number of common law trademarks, including Media Professional, Qualitap, MediaMaster, Prospector and Schedule It. Arbitron has registered its name as a trademark in the United Kingdom, the European Community, Japan and is exploring the registration of its marks in other foreign countries.

      The laws of some countries might not protect Arbitron’s intellectual property rights to the same extent as the laws of the United States. Effective patent, copyright, trademark and trade secret protection may not be available in every country in which Arbitron markets or licenses its products and services.

      Arbitron believes its success depends primarily on the innovative skills, technical competence and marketing abilities of its personnel. Arbitron entered into confidentiality and assignment of inventions agreements with substantially all of its employees and has entered into non-disclosure agreements with its suppliers and customers to limit access to and disclosure of its proprietary information.

      Arbitron also must guard against the unauthorized use or misappropriation of its audience estimates, databases and technology by third parties. There can be no assurance that the copyright laws and other statutory and contractual arrangements Arbitron currently depends upon will provide it sufficient protection to prevent the use or misappropriation of its audience estimates, databases and technology or deter independent third party development of competing information and technologies. The failure to protect Arbitron’s proprietary information and intellectual property rights, and in particular, its audience estimates and databases, could severely harm Arbitron’s business.

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      In addition, claims by third parties that Arbitron’s current or future products or services infringe upon their intellectual property rights may harm its business. Intellectual property litigation is complex and expensive, and the outcome of this litigation is difficult to predict. Arbitron has in the past been involved in litigation relating to the enforcement of its copyrights covering its radio listening estimates. Although Arbitron has generally been successful in these cases, there can be no assurance that the copyright laws and other statutory and contractual arrangements Arbitron currently depends upon will provide it sufficient protection to prevent the use or misappropriation of its audience estimates, databases and technology in the future. Arbitron was also involved in the successful defense of a patent infringement claim relating to its Portable People Meter. In 1993, The Pretesting Company sued Arbitron alleging infringement of one of The Pretesting Company’s patents. Arbitron denied the claims, the court found that The Pretesting Company patent was invalid and the infringement case was dismissed. Any future litigation, regardless of outcome, may result in substantial expense to Arbitron and significant diversion of its management and technical personnel. Any adverse determination in any litigation may subject Arbitron to significant liabilities to third parties, require Arbitron to license disputed rights from other parties, if licenses to these rights could be obtained, or require Arbitron to cease using the technology.

Research and Development

      Arbitron’s research and development activities have related primarily to the design and development of its data collection and processing systems, software applications used to assist Arbitron’s customers in understanding how to use Arbitron’s data in their businesses, Arbitron’s Portable People Meter and its new proposed Arbitron Webcast Ratings service. Arbitron expects that it will continue to spend money on research and development activities over the next several years, particularly in light of the rapid technological changes affecting its business. The majority of the investment effort and spending will be dedicated to improving the quality and efficiency of Arbitron’s data collection and processing systems, developing new software applications that will assist Arbitron’s customers in realizing the full potential of Arbitron’s audience measurement services, developing Arbitron Webcast Ratings technology and Arbitron’s Portable People Meter technology, and developing a single source service that will be able to measure audience and other information from a number of different forms of media. As of December 31, 2000, Arbitron employed 128 employees dedicated to research and development.

Governmental Regulation

      Arbitron’s Portable People Meter has been certified to meet Federal Communications Commission requirements relating to emissions standards. Additionally, the Portable People Meter has been certified to meet the safety standards of Underwriter’s Laboratories (commonly referred to as UL) as well as Canadian and European safety standards.

      Arbitron’s media research activities are regulated by the United States Federal Trade Commission in accordance with a Decision and Order issued in 1962 to CEIR, Inc., a predecessor company. This order originally arose in connection with the television ratings business and Arbitron believes that today it applies to all of Arbitron’s media measurement services. The order requires full disclosure of the methodologies used by Arbitron and prohibits Arbitron from making representations in selling or offering to sell an audience measurement service without proper qualifications and limitations regarding probability sample, sampling error and accuracy or reliability of data. It also prohibits Arbitron from making a statement regarding diary precautions unless those precautions are taken, and making overbroad statements regarding the viewing a diary reflects. The order further prohibits Arbitron from representing the data as anything other than estimates and making a statement that the data is accurate to any precise mathematical value. The order requires that Arbitron make affirmative representations in its reports regarding non-response by survey participants and the effect of this non-response on the data, the hearsay nature of a survey participant’s response, the fact that projections have been made, and the limitations and deficiencies of the techniques or procedures used. Arbitron believes that it has conducted and continues to conduct its radio audience measurement services in compliance with the order.

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      Arbitron’s radio audience measurement service and its Maximi$er software application are accredited by and subject to the review of the Media Ratings Council. The Media Ratings Council is an industry organization created to assure high ethical and operational standards in audience measurement research. Arbitron’s radio ratings service has been accredited by the Media Ratings Council since 1968. To merit continued accreditation of its ratings services and its Maximi$er software, Arbitron must: (1) adhere to the Council’s Minimum Standards for Media Rating Research; (2) supply full information to the Media Ratings Council regarding details of its operations; (3) conduct its media measurement services substantially in accordance with representations to its subscribers and the Council; and (4) submit to, and pay the cost of, thorough annual audits of accredited Arbitron services by certified public accounting firms engaged by the Media Ratings Council.

Employees

      As of December 31, 2000, Arbitron employed approximately 656 people on a full-time basis and 347 on a part-time basis in the United States and 37 people on a full-time basis and 198 on a part-time basis internationally. None of Arbitron’s employees is covered by a collective bargaining agreement. Arbitron believes its employee relations are good.

Business Risks

      Risk Factors Relating to Arbitron’s Businesses and the Industry in which Arbitron Operates

      Arbitron’s business, financial condition and operating results will be dependent on the performance of its radio audience measurement business.

      Arbitron’s radio audience measurement service and related software sales represented 87 percent of Arbitron’s total revenue for 2000. If Arbitron is successful in launching its proposed Arbitron Webcast Ratings and Portable People Meter services, Arbitron expects that given the demand it believes will exist for these services, the revenue from these services will account for an increasing portion of its revenue in the future. Nonetheless, it is likely that sales of its radio audience measurement service and related software will continue to represent a substantial portion of Arbitron’s revenue for the foreseeable future. Any factors adversely affecting the pricing of, demand for or market acceptance of Arbitron’s radio audience measurement service and related software, such as competition or technological change, could significantly harm Arbitron’s business, financial condition and operating results.

      Consolidation in the radio broadcasting industry may put pressure on the pricing of Arbitron’s radio audience measurement service and related software sales, thereby leading to decreased earnings.

      The continuing consolidation in the radio broadcasting industry could put pressure on the pricing of Arbitron’s radio audience measurement service and related software sales, from which Arbitron derives a substantial majority of its total revenue. Arbitron prices its radio audience measurement service and related software applications on a per radio station, per service or product basis, negotiating licenses and pricing with the owner of each radio station or group of radio stations. Consolidation in the radio broadcasting industry, which results in a particular radio station owner purchasing services and applications from Arbitron for a greater number of radio stations, could have the effect that the greater the number of radio stations owned and the greater the number of services and applications purchased by the radio station owner, the more likely the owner is to seek to obtain discounts from Arbitron. While Arbitron has experienced some success in offsetting the revenue impact of any pricing pressure by providing radio audience measurement services and additional software applications and other services to additional stations within a radio group, there can be no assurance as to the degree to which Arbitron will be able to continue to do so.

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      Arbitron’s agreements with its customers are not exclusive and contain no renewal obligations.

      Arbitron’s customers are not prohibited from entering into agreements with any other competing service provider, and once the term of the agreement (usually one to seven years) expires, there is no automatic renewal feature in the contract. Because the Arbitron Radio Market Report is delivered on a quarterly basis, it is common for Arbitron’s customer contracts to expire before renewal negotiations are concluded. Therefore, there may be significant uncertainty as to whether a particular customer will renew its contract, and if so, on what terms. If a customer(s) owning stations in a significant number of markets does not renew its contracts, this could have a material adverse effect on Arbitron’s business and operating results.

      Consolidation in the radio broadcasting industry has led to Arbitron’s increasing dependence on key customers. The loss of a key customer could significantly reduce Arbitron’s revenue.

      The continuing consolidation in the radio broadcasting industry has led to Arbitron’s increasing dependence on key customers. The loss of a key customer could significantly reduce Arbitron’s revenue. Arbitron’s customers, Clear Channel Communications, Inc. and Infinity Broadcasting Corp., represented approximately 22 percent and 10 percent, respectively, of Arbitron’s revenue in 2000. Arbitron’s agreements with these customers are not exclusive and contain no renewal obligations. Arbitron cannot be certain that it will retain these key customers. The loss of any one or more of these key customers could harm Arbitron’s business and operating results.

      Arbitron has multiple contracts with Clear Channel and Infinity Broadcasting. A significant number of Clear Channel’s contracts (which collectively accounted for approximately 14% of Arbitron’s revenue in 2000) expired at the end of 2000. As of March 30, 2001, Clear Channel signed a contract extension that provides the Arbitron ratings survey for Winter 2001, which delivers in the second quarter, and also indicated that it did not intend to subscribe to future Arbitron ratings surveys for its stations licensed in these contracts. Most of Arbitron’s other contracts with Clear Channel (which collectively accounted for approximately 8% of Arbitron’s revenue in 2000) and Arbitron’s contracts with Infinity Broadcasting (which collectively accounted for 10% of Arbitron’s revenue in 2000) expire at the end of 2001. Arbitron is currently in negotiations with Clear Channel regarding a new agreement and expects renewal negotiations with Infinity Broadcasting to commence during the fourth quarter of 2001. Arbitron cannot make any assurances that it will retain Clear Channel and Infinity Broadcasting or attract new customers that would replace the revenue that could be lost if a key customer failed to renew its agreement with Arbitron. The loss of any one or more of these key customers could materially harm Arbitron’s business and operating results.

      Technological change may render Arbitron’s products and services obsolete.

      Arbitron expects that the market for its products and services will be characterized by rapidly changing technology, evolving industry standards, frequent new product and service announcements and enhancements and changing customer demands. The introduction of new products and services embodying new technologies and the emergence of new industry standards can render existing products and services obsolete. Arbitron’s success will depend on its ability to adapt to rapidly changing technologies and to improve the performance, features and reliability of its products and services in response to changing customer and industry demands. Furthermore, Arbitron may experience difficulties that could delay or prevent the successful design, development, testing, introduction or marketing of its products and services. Arbitron’s new products and services, or enhancements to its existing products and services, such as its proposed Portable People Meter and Arbitron Webcast Ratings services, may not adequately meet the requirements of its current and prospective customers or achieve any degree of significant market acceptance.

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      Arbitron expects to invest in the development and commercialization of its Portable People Meter and Arbitron Webcast Ratings technologies, neither of which may be successfully developed or commercialized. The diversion of Arbitron’s resources to these technologies could adversely affect Arbitron’s operating results.

      Arbitron expects to continue to invest in the development of its Portable People Meter, which is a technology that measures radio, television, cable, Internet streaming and satellite audiences. In October 2000 Arbitron began recruiting survey participants for testing in the Wilmington, Delaware, radio Metro, which is part of the Philadelphia television market. In 2001, Arbitron plans to begin increasing the survey participants to cover the Philadelphia market. Arbitron also expects to invest in the development of Arbitron Webcast Ratings, a webcast ratings service that measures the audiences of audio and video webcasts online. The Portable People Meter and Arbitron Webcast Ratings may never be successfully developed or commercialized. The diversion of Arbitron’s resources to the development and commercialization of the Portable People Meter and Arbitron Webcast Ratings may adversely affect Arbitron’s operating results.

      Nielsen Media Research, Inc. may decide not to exercise its option to join Arbitron and share in the potential deployment of the Portable People Meter on a nationwide basis, which could adversely affect the commercial success of the Portable People Meter and could harm Arbitron’s business.

      On May 31, 2000, Arbitron entered into an agreement with Nielsen Media Research, Inc., a provider of United States television audience measurement services, under which Arbitron granted Nielsen Media Research an option to join Arbitron in the potential commercial deployment of the Portable People Meter on a nationwide basis. A decision by Nielsen Media Research not to exercise this option could adversely affect the commercial success of the Portable People Meter and could harm Arbitron’s business.

      Arbitron’s success will depend on its ability to protect its intellectual property rights.

      Arbitron believes that the success of its business will depend, in part, on:

• obtaining patent protection for its technology, products and services, in particular its Portable People Meter;

• defending its patents once obtained;

• preserving its trade secrets;

• defending its copyrights for its data services and audience estimates; and

• operating without infringing upon patents and proprietary rights held by third parties.

      Arbitron relies on a combination of contractual provisions, confidentiality procedures and patent, copyright, trademark, service mark and trade secret laws to protect the proprietary aspects of its technology, data and estimates. These legal measures afford only limited protection and competitors may gain access to Arbitron’s intellectual property and proprietary information. Litigation may be necessary to enforce Arbitron’s intellectual property rights, to protect its trade secrets and to determine the validity and scope of Arbitron’s proprietary rights. Arbitron has in the past been involved in litigation relating to the enforcement of its copyrights covering its radio listening estimates. Although Arbitron has generally been successful in these cases, there can be no assurance that the copyright laws and other statutory and contractual arrangements Arbitron currently depends upon will provide it sufficient protection in the future to prevent the use or misappropriation of its audience estimates, databases and technology. Arbitron was also involved in the successful defense of a patent infringement claim relating to its Portable People Meter. In 1993, The Pretesting Company sued Arbitron alleging infringement of one of The Pretesting Company’s patents. Arbitron denied the claims, the court found that The Pretesting Company patent was invalid and the infringement case was dismissed. Any future litigation, regardless of outcome, could result in substantial expense and diversion of resources with no assurance of success and could seriously harm Arbitron’s business and operating results.

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      One of Arbitron’s strategies is to expand its international operations, which involve unique risks and, if unsuccessful, may harm Arbitron’s business.

      Arbitron continues to explore opportunities that would facilitate the expansion of its audience measurement service into selected international markets, such as Western Europe, Singapore, Mexico and Japan. Arbitron believes that there is demand for quality audience measurement services internationally because international advertising markets operate similarly to the United States advertising market. Multi-national advertisers and advertising agencies tend to set the standards for measurement around the world, and historically the lead has come from the United States.

      Arbitron believes its webcast audience measurement service is a natural area for its international expansion because there are already hundreds of radio stations and webcasters in international markets streaming their signals over the Internet. Most of these radio stations and webcasters have a business model supported by advertising revenues, which necessitates credible audience measurement. Just recently, Virgin Radio in the United Kingdom announced that it was setting up a special sales unit to sell advertising on its streamed signal. Arbitron’s current webcast audience measurement methodology permits international webcasters to participate in Arbitron’s service because the service gathers data electronically from worldwide servers and content companies that provide content to end-users.

      International operations are subject to various additional risks which could adversely affect Arbitron’s business, including:

• costs of customizing services for foreign customers;

• difficulties in managing and staffing international operations;

• reduced protection for intellectual property rights in some countries;

• longer sales and payment cycles;

• the burdens of complying with a wide variety of foreign laws;

• exposure to local economic conditions; and

• exposure to local political conditions, including the risk of seizure of assets by a foreign government.

      Audience estimates become “currency” when they achieve credibility and trust in the eyes of the media marketplace. In some countries, there is little trust in existing measurement services due to the perception of tampering and fraud in the current ratings system. In expanding its international scope, potential tampering and fraud by broadcasters or other third parties with Arbitron’s methodology is also a potential risk.

      The success of Arbitron’s radio audience measurement business depends on diarykeepers who record their listening habits in diaries and send these diaries to Arbitron. The failure of Arbitron to collect these diaries would severely harm Arbitron’s business.

      Arbitron uses listener diaries to gather radio listening data from sample households in approximately 283 United States local markets for which it currently provides radio ratings. Participants are asked to designate in their diary what station(s) they are listening to, when they are listening and where they are listening, such as home, car, work or other place. To encourage their participation in the survey, Arbitron pays these diarykeepers a modest cash incentive. Arbitron collects more than one million diaries every year to compile audience listening estimates. The failure of Arbitron to convince diarykeepers to record their listening habits and mail in their diaries for a small cash payment would severely harm Arbitron’s radio audience measurement business.

      Arbitron’s future growth and success will depend on its ability to design, develop and commercialize new products and services that address industry needs for more efficient and less time consuming methods of data collection and processing and broader media measurement techniques.

      Arbitron competes with a large number of other providers of applications software, qualitative data and proprietary qualitative studies used by broadcasters, cable systems, advertising agencies and advertisers. These

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competitors include Strata Marketing Inc., Marketing Resources Plus, a division of VNU and Telmar Information Services Corp. in the area of applications software and The Media Audit, a division of International Demographics, Inc., and Simmons Research Bureau in the area of qualitative data. Arbitron is also aware of at least two companies, Telecontrol AG and The Pretesting Company, that are in the process of developing technologies that may compete with Arbitron’s Portable People Meter. Arbitron also will compete with a number of companies in the webcast and Internet audience measurement industry, namely MeasureCast, Inc., Jupiter Media Metrix, Inc. and NetRatings, Inc. The market for webcast ratings and Internet audience measurement is new and rapidly evolving and becoming increasingly competitive. As the demand for webcasting and Internet measurement information increases, Arbitron expects competition in this area to intensify, especially given the pressure to create a uniform standard upon which companies will make meaningful decisions regarding online advertising. Some of Arbitron’s competitors may have greater financial, marketing, distribution and technical resources than Arbitron. Arbitron believes that its future growth and success will be dependent on its ability to compete with these and any other competitors and to design, develop and commercialize new products and services that address the industry needs for more efficient and less time consuming methods of data collection and processing and broader media measurement techniques. Arbitron cannot assure you that it will be successful in that competition.

Risks Relating to Owning Arbitron’s Common Stock

      Variability of quarterly operating results may cause Arbitron’s stock price to decrease or fluctuate.

      The market prices of Arbitron’s common stock may decrease or fluctuate because Arbitron’s revenue, gross profit, operating income and net income or net loss may vary substantially from quarter to quarter. Many factors may contribute to fluctuations in Arbitron’s operating results, some of which are within Arbitron’s control, including:

• changes in pricing policies;

• introduction of new products and services and successful utilization of technology;

• the timing and number of personnel hired;

• the timing and acquisition of new businesses; and

• the efficiency with which employees are utilized.

Other factors are not exclusively within Arbitron’s control, including:

• changes in competitors’ pricing policies;

• introduction of new products and services by competitors;

• acceptance of new products and services;

• the market for qualified personnel;

• cancellation or delay of contract renewals by customers or potential customers; and

• changing technology.

      Arbitron’s stock price may be volatile which could lead to a decrease in the market value of your shares and possibly class action litigation.

      The market price of Arbitron’s common stock may be more volatile than the market price of Ceridian’s common stock because factors that may have been previously immaterial to Ceridian, due to its larger size, may be considered material to Arbitron as an independent company. In addition, the stock prices for many technology companies have experienced wide fluctuations that often have been unrelated to operating performance. Because of the market’s adverse reaction during these periods of volatility, you may not be able to resell your shares of Arbitron common stock at acceptable prices. Factors that could cause volatility in Arbitron’s stock prices include, among other things:

• actual or anticipated variations in quarterly results;

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• variations in operating results which may cause Arbitron to fail to meet analysts’ or investors’ expectations;

• changes in revenue and earnings estimates or recommendations by securities analysts;

• changes in the market valuations of, and earnings and other announcements, by competitors;

• announcements by Arbitron or its competitors of technological innovations;

• additions or departures of key personnel;

• the significant redistribution of shares of Arbitron common stock that may occur during the first few weeks or even months following completion of the Spin-off because of the differing objectives and strategies of investors, including mutual and index funds; and

• volume and timing of sales of Arbitron common stock.

      When the market price of a stock has been volatile, leading to a decrease in market value of shares, holders of that stock have occasionally instituted securities class action litigation against the company that issued the stock. If any of Arbitron’s stockholders were to bring this type of lawsuit against Arbitron, even if the lawsuit was without merit, Arbitron could incur substantial costs defending the lawsuit which costs may not be covered by insurance. The lawsuit could also divert the time and attention of management.

      It may be difficult for a third party to acquire Arbitron, which could depress the stock price of Arbitron.

      Delaware corporate law and Arbitron’s amended and restated certificate of incorporation and bylaws contain provisions that could have the effect of delaying, deferring or preventing a change in control of Arbitron or its management that stockholders may consider favorable or beneficial. These provisions could discourage proxy contests and make it more difficult for you and other stockholders to elect directors and take other corporate actions. These provisions could also limit the price that investors might be willing to pay in the future for shares of Arbitron’s common stock. These provisions include:

• a stockholders’ rights plan, which likely will limit through September 30, 2001 the ability of a third party to acquire a substantial amount of Arbitron’s common stock without prior approval of the Board of Directors;

• restriction from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder under Section 203 of the Delaware General Corporation Law;

• authorization to issue “blank check” preferred stock, which is preferred stock that can be created and issued by the board of directors without prior stockholder approval, with rights senior to common stockholders; and

• advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting.

      Arbitron’s certificate of incorporation also contains the following provisions:

• a supermajority vote of two-thirds of the stockholders to approve some mergers and other business combinations; and

• restriction from engaging in a “business combination” with a “controlling person” unless either a modified supermajority vote is received or the business combination will result in the termination of ownership of all shares of Arbitron’s common stock and the receipt of consideration equal to at least “fair market value.”

      In addition, provisions in the tax matters agreement that Arbitron and New Ceridian entered into in connection with the Spin-off and restrictions relating to applicable tax law and IRS regulations could deter the acquisition of Arbitron by a third party for some period of time. These provisions and restrictions could diminish your opportunities to participate in tender offers, including tender offers at a price above the then-current market value of Arbitron’s common stock. These provisions and restrictions may also inhibit fluctuations in the market price

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of Arbitron’s common stock that could result from takeover attempts. They could also make it more difficult for third parties to cause the immediate removal and replacement of the members of Arbitron’s board of directors and management without the concurrence of Arbitron’s board of directors.

Risk Factors Relating to Arbitron’s Indebtedness After the Spin-Off

      Arbitron historically has not incurred debt independently. In connection with the Spin-off, however, Arbitron entered into two financing facilities. As a result, as of March 30, 2001, Arbitron had $250 million of indebtedness outstanding; $200 million of this debt is through a revolving credit facility that matures on March 30, 2006, and the remaining $50 million of debt is in senior notes that mature on January 31, 2008. Arbitron may borrow up to an additional $25 million under the revolving credit facility. Advances under the revolving credit facility bear interest at LIBOR plus a margin of 2.00% to 2.75%. The senior notes bear interest at a fixed rate of 9.96% per annum.

      Arbitron’s borrowings contain non-investment grade financial terms, covenants and operating restrictions that will increase its cost of financing its business, will restrict its financial flexibility and could adversely impact its ability to conduct its business. These include (i) the required grant of security interests in most of the assets of Arbitron and its subsidiaries, (ii) the required guarantees of Arbitron’s debt by Arbitron’s subsidiaries and (iii) restrictions on various operating activities, including restrictions on debt, liens, investments, dividends, capital expenditures, and mergers and acquisitions. These restrictions could hurt Arbitron’s ability to finance its future operations or capital needs or make acquisitions that may be in its best interest. In addition, Arbitron’s ability to comply with these financial requirements and other restrictions may be affected by events beyond its control, and its inability to comply with them could result in a default under the new credit facility or other debt instruments.

      If a default occurs under the new credit facility, either because Arbitron is unable to generate sufficient cash flow to service the debt or because Arbitron fails to comply with one or more of the restrictive covenants, the lenders under the facility and the holder of its notes could elect to declare all of the outstanding borrowings, as well as accrued interest and fees, to be due and payable and require Arbitron to apply all of its available cash to repay those borrowings. The lenders under Arbitron’s new secured credit facility and secured notes could also proceed against the lenders’ collateral, which includes a first priority lien on substantially all of the assets of Arbitron and its domestic subsidiaries and a pledge of the capital stock of all of its domestic subsidiaries and of 65% of the capital stock of its foreign subsidiaries. In addition, a default may result in higher rates of interest and the inability to obtain additional capital.

      Arbitron has, as required under its bank credit facility, entered into an interest rate swap to hedge the market risk associated with changing interest rates related to borrowing under its bank credit facility. Risks associated with this hedging strategy include, but are not limited to:

• the counterparties to these instruments may be unable to perform,

• Arbitron may be required to pay a lump-sum termination amount upon the occurrence of specified events of default under these swap instruments,

• Arbitron may be unable to take full advantage of a decrease in market interest rates and

• Arbitron’s hedge positions may not precisely align with its actual borrowing exposure.

      Furthermore, an increase in market interest rates, and the loss of benefits of any related hedging agreements, would increase Arbitron’s interest expense that could have an adverse effect on Arbitron’s cash flows. Future decreases in interest rates would result in Arbitron’s interest expense being higher than it would have been compared to the floating rate debt underlying Arbitron’s hedging agreements, and could result in the Arbitron making payments to terminate such agreements.

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ITEM 2.    PROPERTIES

      Arbitron’s primary locations are its research and technology center in Columbia, Maryland and its headquarters located at 142 West 57th Street, New York, New York. In addition, Arbitron has five regional sales offices located in the metropolitan areas of Atlanta, Georgia; Washington, D.C./Baltimore, Maryland; Chicago, Illinois; Dallas, Texas and Los Angeles, California. Arbitron’s New York City office serves as its home base for sales and marketing, while its research, technology and operations are located in its Columbia, Maryland facility. Arbitron’s Tapscan operations are located primarily in Birmingham, Alabama, and its Continental Research subsidiary is located in London, England. Arbitron also maintains leased premises in India. Arbitron conducts all of its operations in leased facilities. Most of these leases contain renewal options and require payments for taxes, insurance and maintenance in addition to base rental payments. Arbitron and New Ceridian entered into a sublease agreement pursuant to which Arbitron subleased to New Ceridian a portion of leased office space located in New York City. Arbitron believes that its facilities are adequate for their intended purposes, are adequately maintained and are reasonably necessary for current and anticipated business purposes.

ITEM 3.    LEGAL PROCEEDINGS

      Arbitron and its subsidiaries are involved from time to time in a number of judicial and administrative proceedings considered normal in the nature of their current and past operations, including employment-related disputes, contract disputes, government proceedings, customer disputes and tort claims. In some proceedings, the claimant seeks damages as well as other relief, which, if granted, would require substantial expenditures on the part of Arbitron. Some of these matters raise difficult and complex factual and legal issues, and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular action, and the jurisdiction, forum and law under which each action is proceeding. Because of this complexity, final disposition of some of these proceedings may not occur for several years. As such, Arbitron is not always able to estimate the amount of its possible future liabilities. There can be no certainty that Arbitron may not ultimately incur charges in excess of presently or future established accruals or insurance coverage. Although occasional adverse decisions (or settlements) may occur, it is the opinion of management that the final disposition of these proceedings will not, considering the merits of the claims, have a material adverse effect on Arbitron’s financial position or results of operations.

      Pursuant to the terms of the Distribution Agreement entered into in connection with the Spin-off, New Ceridian has agreed to indemnify Arbitron for liabilities relating to some of the litigation in which Ceridian or its subsidiaries were involved, including the Flying J and NCR litigation discussed below. To the extent that New Ceridian is unable for any reason to indemnify Arbitron for the liabilities resulting from such litigation, Arbitron will be solely liable as the legal successor to Ceridian.

Flying J and NCR

      Flying J, Inc., which operates a chain of truck stops, and its affiliated entities, TCH, LLC, CFJ Properties, Inc., TFJ and TON Services, Inc., filed a complaint in the United States District Court for the Northern District of Utah against Comdata Network, Inc., a wholly-owned subsidiary of Ceridian, alleging violations of federal and state antitrust laws and asserting state law claims of interference with contractual relations and unfair competition. The complaint, which was originally filed on July 11, 1996, has subsequently been amended four times. In addition, NCR Corporation has intervened in this lawsuit as an additional plaintiff, filing a complaint on September 10, 1999, alleging claims similar to those asserted by the original plaintiffs (which this document refers to as the “Flying J plaintiffs”). This lawsuit is presently set for a jury trial beginning in June 2001. Flying J’s motion to add Ceridian as a defendant was denied three times. On November 15, 2000, Flying J served and filed a complaint based on a similar allegation against Ceridian in the same court accompanied by a motion to stay following Ceridian’s answer. Ceridian has answered and will file dispositive motions.

      The Flying J plaintiffs allege that Comdata unlawfully interfered with their efforts to market a point-of-sale device called “ROSS,” a kiosk device called “Roadlinks,” and a fuel card called the “TCH” card. Specifically,

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the Flying J plaintiffs allege that Comdata has unlawfully refused to accept the TCH card on Comdata’s Trendar point-of-sale system. Flying J also alleges that Comdata unlawfully caused TIC Financial Systems, Inc., a payment card company acquired by Comdata, to cease doing business with Flying J and that Comdata acquired the assets of NTS, Inc., a card company, in order to harm Flying J. Flying J alleges further that Comdata unlawfully terminated the acceptance of Comdata’s Comchek card at Flying J locations in response to Flying J’s marketing efforts, which allegedly resulted in lost fuel sales at Flying J branded locations. NCR alleges that it would have been the designated third-party support representative for ROSS and, as a result, has allegedly suffered lost profits arising from lost hardware sales, support fees, and installation revenue because it has not participated in any successful sales or support effort for ROSS outside the Flying J network to date.

      The plaintiffs in this lawsuit seek compensatory and punitive damages and injunctive relief requiring Comdata to allow Comchek and FDIS (a data capture and reporting feature presently only processed through the Trendar point-of-sale system) transactions to be processed on ROSS and requiring Comdata to allow TCH transactions to be processed on the Trendar point-of-sale system. In addition, with respect to antitrust claims, the plaintiffs are seeking to be awarded three times their claimed actual damages. Comdata believes that the amount of actual damages that will be claimed by the plaintiffs will be in the range of $200 to $300 million prior to trebling. Comdata believes the plaintiffs’ claims are without merit and that the damage claims are grossly inflated, unsupported by the evidence and highly speculative. Comdata is contesting each of the claims asserted by the plaintiffs, and intends to continue to defend this matter vigorously.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      On September 5, 2000, Ceridian issued a proxy statement notifying its shareholders of a special meeting to be held on October 5, 2000, to vote on a proposal to amend Ceridian’s restated certificate of incorporation, as amended, to effect a one-for-five reverse stock split. On October 5, 2000, the shareholders approved the amendment of Ceridian’s restated certificate of incorporation by a vote of 103,598,517 to 10,072,291 with 61,035 shares abstaining, and the reverse stock split was consummated on March 30, 2001.

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
                   MATTERS

      Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “ARB”. As of March 30, 2001, there were 29,163,942 shares outstanding (taking into account the effect of a one-for-five reverse stock split that was effected on March 30, 2001) and approximately 12,400 shareholders of record of Arbitron common stock.

      The following table sets forth the high and low sale prices of Ceridian common stock as reported on the NYSE Composite Tape for each quarterly period for the past two years ending December 31, 2000. These prices reflect the market value of Ceridian stock during the period in which both the human resource services division, human resource services and Comdata subsidiaries and radio audience measurement business were included within Ceridian (i.e., before the Spin-off), and therefore is not indicative of the past or future performance of Arbitron stock following the Spin-off.

2000	1Q		2Q		3Q		4Q		Full Year
High		23 1/4		26 7/16		29		29 3/16		29 3/16
Low		14 3/4		18 1/8		21 5/16		19 13/16		14 3/4

1999	1Q		2Q		3Q		4Q		Full Year
High		40 1/2		38 1/16		33 1/4		24		40 1/2
Low		33 1/4		30 7/16		24 3/4		16 5/8		16 5/8

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      During the periods presented, Ceridian did not pay any dividends on its common stock. Arbitron’s new credit facility restricts the payment of dividends on its common stock.

      Until the market has fully evaluated the business of Arbitron without the human resource services business and the Comdata business, the price at which Arbitron’s common stock trades may fluctuate significantly. In transactions similar to the Spin-off, it is not unusual for a significant redistribution of shares to occur during the first few weeks or even months following completion of the transaction because of the differing objectives and strategies of investors, including mutual funds, that will find themselves holding Arbitron’s common stock, which is a company that is very different from Ceridian. The market may view Arbitron as a “new” company after the Spin-off, and due to its smaller size and focus, it may be the subject of different or less research analyst coverage. Sales of substantial amounts of Arbitron’s common stock in the public market following the Spin-off or the perception that any redistribution has not been completed could cause the market price of Arbitron’s common stock to decrease significantly.

      The transfer agent and registrar for the Arbitron common stock is The Bank of New York.

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ITEM 6.    SELECTED HISTORICAL COMBINED FINANCIAL DATA

      The following table summarizes selected historical combined financial data for Arbitron. The statements of income data for the years ended December 31, 2000, 1999 and 1998 and the balance sheet data as of December 31, 2000 and 1999 set forth below are derived from audited combined financial statements of Arbitron included elsewhere in this Form 10-K. The statement of income data for the year ended December 31, 1997 and balance sheet data as of December 31, 1998, are derived from audited combined financial statements of Arbitron not included in this Form 10-K. The statements of income data for the year ended December 31, 1996 and the balance sheet data as of December 31, 1997 and 1996 set forth below are derived from unaudited combined financial statements of Arbitron not included in this Form 10-K.

      The summary historical combined financial data is not necessarily indicative of the results of operations or financial position that would have occurred if Arbitron had been a separate, independent company during the periods presented, nor is it indicative of its future performance. This historical data should be read together with the information under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Arbitron’s combined financial statements and related notes included in this Form 10-K.

		Years Ended December 31,
		2000		1999		1998		1997			1996
		(Dollars in thousands, except per share data)
Statement of Income Data:
Revenue		$	206,791	$	190,117	$	173,805	$	143,851		$	133,675
Costs and expenses			135,373		126,982		119,778		104,763			90,638
Operating income			71,418		63,135		54,027		39,088			43,037
Equity in net income of affiliate			3,397		2,553		2,452		1,768			880
Income before income tax expense			74,815		65,688		56,479		40,856			43,917
Income tax expense			29,552		25,946		22,288		16,137			17,347
Net income		$	45,263	$	39,742	$	34,191	$	24,719		$	26,570
Unaudited Pro Forma Net Income Per
	Common Share Data (1):
	Basic	$	1.56	$	1.37	$	1.19	$	0.79		$	0.98
	Diluted	$	1.54	$	1.34	$	1.16	$	0.77		$	0.82
Weighted average common shares used in       the calculation:
	Basic		29,046		28,905		28,814		31,367			27,168
	Diluted (2)		29,347		29,593		29,519		31,896			32,388
Balance Sheet Data:
Current assets		$	60,344	$	43,643	$	42,241	$	41,391		$	35,400
Total assets			107,876		79,298		82,295		65,028			60,400
Divisional equity (deficit)			33,222		6,567		9,145		(777	)		700

(1)	The computation of unaudited pro forma net income per common share data for the periods presented is based upon Ceridian’s historical weighted average number of shares of Ceridian common stock, adjusted for a reverse stock split of one-for-five, which was effective immediately after the Spin-off.
(2)	The diluted weighted average common shares assumes that all of Ceridian’s historical dilutive securities were converted into Arbitron securities.

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                  RESULTS OF OPERATIONS

      The following discussion should be read in conjunction with Arbitron’s combined financial statements and the notes related to those combined financial statements contained elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Arbitron’s actual results could differ materially from those anticipated by the forward-looking information due to competitive factors and other factors discussed under “Business Risks” and elsewhere in this Form 10-K.

Overview

      The combined financial statements of Arbitron reflect the combined financial position, results of operations and cash flows of The Arbitron Company, Tapscan Worldwide, and Northstar, each of which was a division of Ceridian, and CSW Research Limited and Ceridian Infotech (India) Private Limited, each of which was a wholly-owned subsidiary of Ceridian during the periods presented. The financial information included in this Form 10-K includes expenses related to certain centralized services provided by Ceridian during the periods presented. The expenses for these services have been allocated to Arbitron based on utilization of specific services or, where an estimate could not be determined, based on Arbitron’s revenues in proportion to Ceridian’s total revenues. Management believes these allocation methods provide a rational basis for allocation. However, the costs of these services and benefits charged to Arbitron are not necessarily indicative of the costs that would have been incurred if Arbitron had performed these services as a separate entity. Furthermore, in connection with the Spin-off, Arbitron entered into a $225 million bank credit facility and borrowed $200 million under this facility, which was used to satisfy a portion of Ceridian’s debt obligations with the remaining balance being available to Arbitron for working capital purposes. In connection with the Spin-off, Arbitron also issued seven-year secured notes with an aggregate principal amount of $50 million and used the proceeds to repay a portion of Ceridian’s debt obligations. Accordingly, following the Spin-off, the financial results of Arbitron are likely to be substantially different than results for periods prior to the Spin-off.

      Arbitron’s radio audience measurement business has generally accounted for a substantial portion of its revenue. In recent years, significant consolidation of radio station ownership has tended to intensify competition within the radio industry and to intensify competition between radio and other forms of media for advertising dollars. At the same time, audiences have become more fragmented as a result of the greatly increased programming choices and entertainment and media options. Consequently, the increased competition together with the desire for more complex information have driven demand by radio broadcasters, advertising agencies and advertisers for Arbitron’s audience measurement information. In addition, although radio industry consolidation has led to the increased concentration of Arbitron’s customer base, it has also contributed to an increase in the number of stations subscribing for the ratings service as well as increases in sales of Arbitron’s analytical software applications and other services.

      Arbitron recognizes revenue for products and services over the term of the license agreement as products and services are delivered. Direct costs associated with data collection and diary processing are expensed as incurred.

      Arbitron has presented pro forma net income per weighted average common share for all periods presented. The computation of pro forma net income per common share is based upon Ceridian’s historical weighted average number of shares of Ceridian common stock, adjusted for a reverse stock split of one-for-five, which was effected immediately after the Spin-off. The diluted weighted average common shares used in the computation assumes that all of Ceridian’s historical dilutive securities were converted into Arbitron securities. Arbitron has also presented EBITDA as supplemental information that management of Arbitron believes may be useful to some investors in evaluating Arbitron because it is widely used as a measure to evaluate a company’s operating performance before

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interest expense, as well as to evaluate its operating cash flow. Interest expense and income tax expense are added back to net income to arrive at EBIT. EBITDA is calculated by adding back to interest expense, income tax expense depreciation and amortization on property and equipment, amortization of goodwill and other tangible assets and asset impairment charges to net income. EBITDA should not be considered a substitute either for net income, as an indicator of Arbitron’s operating performance, or for cash flow, as a measure of Arbitron’s liquidity. In addition, because EBITDA is not calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

Results of Operations

Comparison of Year Ended December 31, 2000 to Year Ended December 31, 1999

      The following table sets forth information with respect to the combined statements of income of Arbitron for the years ended December 31, 2000 and 1999 (dollars in millions, except pro forma share amounts).

Combined Statements of Operations
(Dollars in millions, except pro froma per share amounts)

														Percentage of
								Increase						Revenue
				2000		1999		Dollar			Percent			2000			1999
Revenue				$	206.8	$	190.1	$	16.7			8.8	%		100.0	%		100.0	%
Cost of revenue					75.7		73.5		2.2			3.0	%		36.6	%		38.7	%
Selling, general and administrative					45.7		38.7		7.0			18.1	%		22.0	%		20.4	%
Research and development					14.0		13.0		1.0			7.7	%		6.8	%		6.8	%
Asset impairment					—		1.8		(1.8	)		(100.0	%)		0.0	%		0.9	%
			Total costs and expenses		135.4		127.0		8.4			6.6	%		65.4	%		66.8	%
			Operating income		71.4		63.1		8.3			13.2	%		34.6	%		33.2	%
Equity in net income of affiliate					3.4		2.5		0.9			—			1.6	%		1.3	%
			Income before income tax expense		74.8		65.6		9.2			14.0	%		36.2	%		34.5	%
Income tax expense					29.5		25.9		3.6			13.9	%		14.3	%		13.6	%
			Net income	$	45.3	$	39.7	$	5.6			14.1	%		21.9	%		20.9	%
Pro forma net income per weighted average        common share:
		Basic		$	1.56	$	1.37	$	0.19			13.9	%
		Diluted		$	1.54	$	1.34	$	0.20			14.9	%
Other data:
	EBITDA			$	79.1	$	72.0	$	7.1			9.9	%		38.2	%		37.9	%

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      Revenue. Revenue increased 8.8% from $190.1 million in 1999 to $206.8 million in 2000. Approximately 66% of the increase is related to an increase in the ratings subscriber base and escalations in multi-year customer contracts and contract renewals. Additionally, analytical software applications contributed approximately 23% of the increase, with the remaining growth being mainly attributable to qualitative services.

      Cost of Revenue. Cost of revenue increased 3.0% from $73.5 million in 1999 to $75.7 million in 2000 but decreased as a percentage of revenue from 38.7% in 1999 to 36.6% in 2000. The dollar increase is largely attributable to royalties paid to the Scarborough Research Partnership (Scarborough) for revenue related to Scarborough’s qualitative services ($2.0 million). The remaining increase in costs is primarily associated with diary data collection and processing.

      Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 18.1% from $38.7 million in 1999 to $45.7 million in 2000 and increased as a percentage of revenue from 20.4% in 1999 to 22.0% in 2000. The increase in dollar amount is attributable to certain variable costs, including selling commissions ($2.5 million) and other sales and marketing expenses.

      Research and Development Costs. Research and development costs increased 7.7% from $13.0 million in 1999 to $14.0 million in 2000 and remained relatively consistent as a percentage of revenue. These increases are related to increased spending on new product development, primarily related to the development of the Portable People Meter (PPM), an electronic data collection technology.

      Operating Income. Operating income increased 13.2% from $63.1 million in 1999 to $71.4 million in 2000. Operating margin increased from 33.2% in 1999 to 34.6% in 2000. These fluctuations are attributed primarily to the 8.8% increase in revenue while the cost of revenue increased 3.0%.

      Equity in Net Income of Affiliate. Equity in net income of affiliate increased from $2.5 million in 1999 to income of $3.4 million in 2000. The increase is attributed to the growth in revenue and net income of Scarborough.

      Income Tax Expense. Income tax expense increased 13.9% from $25.9 million in 1999 to $29.5 million in 2000. Arbitron’s effective tax rate was 39.5% for both 1999 and 2000.

      Net Income. Net income increased 14.1% from $39.7 million in 1999 to $45.3 million in 2000 as a result of the factors discussed above.

      EBITDA. EBITDA increased 9.9% from $72.0 million in 1999 to $79.1 million in 2000 as a result of an increase in income before income tax expense.

Comparison of Year Ended December 31, 1999 to Year Ended December 31, 1998

      The following table sets forth information with respect to the combined statements of income of Arbitron for the years ended December 31, 1999 and 1998 (dollars in millions, except pro forma share amounts).

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														Percentage of
								Increase						Revenue
				1999		1998		Dollar			Percent			1999			1998
Revenue				$	190.1	$	173.8	$	16.3			9.4	%		100.0	%		100.0	%
Cost of revenue					73.5		69.5		4.0			5.8	%		38.7	%		40.0	%
Selling, general and administrative					38.7		39.5		(0.8	)		(2.0	%)		20.4	%		22.7	%
Research and development					13.0		10.8		2.2			20.4	%		6.8	%		6.2	%
Asset impairment					1.8		—		1.8			100.0	%		0.9	%		0.0	%
			Total costs and expenses		127.0		119.8		7.2			6.0	%		66.8	%		68.9	%
			Operating income		63.1		54.0		9.1			16.9	%		33.2	%		31.1	%
Equity in net income of affiliate					2.5		2.5		—			—			1.3	%		1.4	%
			Income before income tax expense		65.6		56.5		9.1			16.1	%		34.5	%		32.5	%
Income tax expense					25.9		22.3		3.6			16.1	%		13.6	%		12.8	%
			Net income	$	39.7	$	34.2	$	5.5			16.1	%		20.9	%		19.7	%
Pro forma net income per weighted average        common share:
		Basic		$	1.37	$	1.19	$	0.18			15.1	%
		Diluted		$	1.34	$	1.16	$	0.18			15.5	%
Other data:
	EBITDA			$	72.0	$	60.9	$	11.1			18.2	%		37.9	%		35.0	%

      Revenue. Revenue increased 9.4% from $173.8 million in 1998 to $190.1 million in 1999. Approximately 50% of the increase is related to an increase in the ratings subscriber base and escalations in multi-year customer contracts and contract renewals. Arbitron’s acquisition of the radio station, advertiser/agency and international assets of Tapscan, Incorporated in May 1998 resulted in a full year of revenue in 1999 compared to a partial year in 1998, which contributed approximately 22% of Arbitron’s 1999 growth in revenue.

      Cost of Revenue. Cost of revenue increased 5.8% from $69.5 million in 1998 to $73.5 million in 1999 but decreased as a percentage of revenue from 40.0% in 1998 to 38.7% in 1999. The dollar increase is primarily attributed to increases in costs associated with diary data collection and processing.

      Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased 2.0% from $39.5 million in 1998 to $38.7 million in 1999 and decreased as a percentage of revenue from 22.7% in 1998 to 20.4% in 1999. These variances are primarily attributable to reduced costs associated with selling commissions.

      Research and Development Costs. Research and development costs increased 20.4% from $10.8 million in 1998 to $13.0 million in 1999 and increased as a percentage of revenue from 6.2% in 1998 to 6.8% in 1999. These increases are related to increased spending on new product development, primarily related to the development of the Portable People Meter. The Portable People Meter was field tested in the United Kingdom during 1999.

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      Asset Impairment Charges. Asset impairment charges, which represented 0.9% of revenue in 1999 related to Arbitron’s non-cash charge to write-off the book value of purchased software related to a system for processing radio listener diary data that was not being used.

      Operating Income. Operating income increased 16.9% from $54.0 million in 1998 to $63.1 million in 1999. Operating margin increased from 31.1% in 1998 to 33.2% in 1999. These fluctuations are attributed primarily to the 9.4% increase in revenue while the cost of revenue increased 5.8%.

      Equity in Net Income of Affiliate. Equity in net income of affiliate remained relatively consistent from 1998 to 1999.

      Income Tax Expense. Income tax expense increased 16.1% from $22.3 million in 1998 to $25.9 million in 1999. Arbitron’s effective tax rate was 39.5% for both 1999 and 1998.

      Net Income. Net income increased 16.1% from $34.2 million in 1998 to $39.7 million in 1999 as a result of the factors discussed above.

      EBITDA. EBITDA increased 18.2% from $60.9 million in 1998 to $72.0 million in 1999 primarily as a result of the increase in income before income tax expense.

Liquidity and Capital Resources

      Prior to the Spin-off, Arbitron participated in Ceridian’s centralized cash management system to finance its operations. Cash deposits from the majority of Arbitron’s operations were transferred to Ceridian on a daily basis and Arbitron’s cash disbursements were funded by Ceridian from the centralized cash management system. This cash management process resulted in net distributions to Ceridian during the years ended December 31, 2000, 1999 and 1998 of $47.8 million, $42.2 million and $24.3 million, respectively. Accordingly, Arbitron’s net change in cash is not indicative of its liquidity or cash flow. Arbitron’s cash flow from operating activities was $51.1 million, $46.0 million and $40.9 million, respectively, during the corresponding periods.

      Arbitron’s business is not capital intensive and, accordingly, cash used in investing activities has not been significant with the exception of business acquisitions. Additions to property and equipment during the years ended December 31, 2000, 1999 and 1998 were $2.0 million, $2.5 million and $4.0 million, respectively.

      On January 31, 2001, Arbitron entered into a $225 million five-year revolving credit agreement with a consortium of banks (“Credit Facility”). In connection with the Spin-off, $200 million was drawn on the facility and distributed to Ceridian.

      The Credit Facility has two borrowing options, a Eurodollar rate option or a base rate option, as defined in the agreement. Under the Eurodollar option, Arbitron may elect interest periods of one, two, three or six months at the inception date and each renewal date. Borrowings under the Eurodollar option bear interest at the London Interbank Offered Rate (LIBOR) plus a margin of 2.00 % to 2.75%. Borrowings under the base rate option bear interest at the higher of the lead lender’s prime rate or the Federal Funds rate plus 50 basis points, plus a margin of .50% to 1.25%. The specific margins, under both options, will be determined based on Arbitron’s ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (leverage ratio), and will be adjusted every ninety days. The agreement contains a commitment fee provision whereby Arbitron will be charged a fee based on the unused portion of the facility. Under the terms of the Credit Facility, Arbitron is required to maintain certain other financial ratios, in addition to the leverage ratio, and meet other financial conditions. The agreement restricts, among other things, Arbitron’s ability to sell assets, incur additional indebtedness, grant or incur liens on its assets, repay indebtedness, pay dividends, make investments or acquisitions, repurchase or redeem capital stock and engage in certain mergers or consolidations.

      Upon consummation of the Spin-off, Arbitron issued $50 million of senior secured notes due January 31, 2008. In connection with the Spin-off, Arbitron distributed the $50 million of note proceeds to Ceridian. The notes bear interest at a fixed rate of 9.96%.

31

      The Company has hedged its variable rate debt as indicated below under Item 7A.

      Arbitron expects that cash flow generated from operations and available borrowings from its bank credit facility, if any, will be sufficient to support its operations.

Seasonality

      Arbitron recognizes revenue for products and services over the terms of license agreements as products and services are delivered, and expenses are recognized as incurred. Arbitron gathers radio-listening data in approximately 283 United States local markets. All markets are measured at least twice per year (April, May, June, “Spring Survey,” and October, November, December, “Fall Survey”). In addition, all major markets are measured two additional times per year (January, February, March, “Winter Survey,” and July, August, September “Summer Survey”). Arbitron’s revenue is generally higher in the first and third quarters as the result of the delivery of the Fall Survey and Spring Survey, respectively, to all markets compared to revenue in the second and fourth quarters when delivery of the Winter Survey and Summer Survey, respectively, is only delivered to major markets. Arbitron’s expenses are generally higher in the second and fourth quarters as the “Spring Survey” and “Fall Survey” are being conducted.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Risk

      Following the Spin-off, Arbitron will have market risk with respect to changes in interest rates. Immediately following the Spin-off, Arbitron expects to have $200 million in floating rate debt outstanding under its bank credit facility. Borrowings under the facility will bear interest at LIBOR or the lender’s base rate plus an applicable margin, as defined, between 2.0% and 2.75%.

      Arbitron entered into an interest rate swap contract on March 19, 2001 to hedge against rate fluctuations relating to its variable rate debt. The contract’s notional amount is $200,000 at inception, and declines each quarter over the life of the contract in proportion to Arbitron’s estimated outstanding balance on its revolving credit agreement. Under the terms of the contract, Arbitron will pay a fixed rate of 5.02% and receive LIBOR, which resets every 90 days. The contract matures on March 31, 2005. As a result, Arbitron will be protected from interest rate changes. However, Arbitron will be exposed to certain risks associated with hedge agreements.

Foreign Currency Risk

      Arbitron’s foreign operations are not significant at this time, and, therefore, Arbitron’s exposure to foreign currency risk is negligible.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The report of independent auditors and financial statements are set forth below (see Item 14(a) for list of financial statements and financial statement schedules):

32

ARBITRON

INDEX TO COMBINED FINANCIAL STATEMENTS

	Page
Independent Auditors’ Report		34
Combined Balance Sheets – December 31, 2000 and 1999		35
Combined Statements of Income —Years ended December 31, 2000, 1999 and 1998		36
Combined Statements of Changes in Divisional Equity (Deficit) and Comprehensive Income – Years ended December 31, 2000, 1999 and 1998		37
Combined Statements of Cash Flows —Years ended December 31, 2000, 1999 and 1998		38
Notes to Combined Financial Statements		39

33

Independent Auditors’ Report

The Board of Directors
Ceridian Corporation:

      We have audited the accompanying combined financial statements of Arbitron (the “Company” as defined in note 2 to the combined financial statements), a division of Ceridian Corporation, as listed in the accompanying index. In connection with our audits of the combined financial statements, we have also audited the combined financial statement schedule listed under Item 14(a)(2). These combined financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these combined financial statements and financial statement schedule based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Arbitron as of December 31, 2000 and 1999, and the results of its operations and cash flows for each of the years in the three-year period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related combined financial statement schedule, when considered in relation to the basic combined financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Baltimore, Maryland
February 9, 2001

34

ARBITRON
(As defined in note 2 to the combined financial statements)
Combined Balance Sheets
December 31, 2000 and 1999
(Dollars in thousands)

				2000			1999
			Assets
Current assets:
	Cash			$	3,540		$	2,255
	Trade accounts receivable, net of allowance for doubtful accounts of       $1,076 in 2000 and $1,468 in 1999				19,017			18,646
	Deferred tax assets				34,731			21,426
	Prepaid expenses and other current assets				3,056			1,316
			Total current assets		60,344			43,643
Investments in affiliates					10,262			9,740
Property and equipment, net					4,844			4,824
Goodwill and other intangibles, net					13,849			16,244
Deferred tax assets					16,346			1,016
Other noncurrent assets					2,231			3,831
			Total assets	$	107,876		$	79,298
		Liabilities and Divisional Equity
Current liabilities:
	Trade accounts payable			$	8,758		$	6,325
	Accrued expenses and other current liabilities				15,543			14,168
	Deferred revenue				47,833			44,285
			Total current liabilities		72,134			64,778
Other noncurrent liabilities					2,520			7,953
			Total liabilities		74,654			72,731
Divisional equity:
	Net investment of Ceridian Corporation				33,361			6,464
	Accumulated other comprehensive income (loss)				(139	)		103
			Total divisional equity		33,222			6,567
			Total liabilities and divisional equity	$	107,876		$	79,298

               See notes to combined financial statements.

35

ARBITRON
(As defined in note 2 to the combined financial statements)
Combined Statements of Income
Years ended December 31, 2000, 1999, and 1998
(Dollars in thousands, except per share data)

			2000		1999		1998
Revenue			$	206,791	$	190,117	$	173,805
Costs and expenses:
	Cost of revenue			75,694		73,476		69,522
	Selling, general and administrative			45,641		38,722		39,435
	Research and development			14,038		12,936		10,821
	Asset impairment charge			—		1,848		—
		Total costs and expenses		135,373		126,982		119,778
		Operating income before equity in net income of       affiliate and income tax expense		71,418		63,135		54,027
Equity in net income of affiliate				3,397		2,553		2,452
		Income before income tax expense		74,815		65,688		56,479
Income tax expense				29,552		25,946		22,288
		Net income	$	45,263	$	39,742	$	34,191
Unaudited pro forma net income per common share:
	Basic		$	1.56	$	1.37	$	1.19
	Diluted		$	1.54	$	1.34	$	1.16
Shares used in calculations:
	Basic weighted average common shares			29,046		28,905		28,814
	Potentially dilutive securities			301		688		705
	Diluted weighted average common shares			29,347		29,593		29,519

              See notes to combined financial statements.

36

ARBITRON
(As defined in note 2 to the combined financial statements)
Combined Statements of Changes in Divisional Equity (Deficit) and Comprehensive Income
Years ended December 31, 2000, 1999, and 1998
(Dollars in thousands)

			Net			Accumulated			Total
			Investment			other			divisional
			of Ceridian			comprehensive			equity			Comprehensive
			Corporation			income (loss)			(deficit)			income
Balance at December 31, 1997			$	(966	)	$	189		$	(777	)
Net income				34,191			—			34,191		$	34,191
Distributions to Ceridian Corporation, net				(24,280	)		—			(24,280	)
Comprehensive income :
	Net change in foreign currency    translation adjustment			—			13			13			13
	Pension liability change			—			(2	)		(2	)		(2	)
		Total comprehensive income										$	34,202
Balance at December 31, 1998				8,945			200			9,145
Net income				39,742			—			39,742		$	39,742
Distributions to Ceridian Corporation, net				(42,223	)		—			(42,223	)
Comprehensive income :
	Net change in foreign currency    translation adjustment			—			(79	)		(79	)		(79	)
	Pension liability change			—			(18	)		(18	)		(18	)
		Total comprehensive income										$	39,645
Balance at December 31, 1999				6,464			103			6,567
Net income				45,263			—			45,263		$	45,263
Distributions to Ceridian Corporation, net				(18,366	)		—			(18,366	)
Comprehensive income :
	Net change in foreign currency    translation adjustment			—			(272	)		(272	)		(272	)
	Pension liability change			—			30			30			30
		Total comprehensive income										$	45,021
Balance at December 31, 2000			$	33,361		$	(139	)	$	33,222

              See notes to combined financial statements.

37

ARBITRON
(As defined in note 2 to the combined financial statements)
Combined Statements of Cash Flows
Years ended December 31, 2000, 1999 and 1998
(Dollars in thousands)

				2000			1999			1998
Cash flows from operating activities:
	Net income			$	45,263		$	39,742		$	34,191
	Adjustments to reconcile net income to net cash provided   by operating activities:
		Depreciation and amortization of property and equipment			1,884			2,130			2,721
		Other amortization			2,395			2,394			1,711
		(Gain) loss on disposals of property and equipment			(13	)		119			(532	)
		Asset impairment charge			—			1,848			—
		Deferred income taxes			765			(1,563	)		(1,394	)
		Equity in net income of affiliate			(3,397	)		(2,553	)		(2,452	)
		Distributions from affiliate			2,875			3,276			2,750
		Bad debt (recoveries) expense			(134	)		144			671
		Changes in operating assets and liabilities, net of effects   of purchase acquisition:
			Trade accounts receivable		(491	)		71			(418	)
			Prepaid expenses and other assets		(156	)		(263	)		163
			Trade accounts payable		2,532			(317	)		(542	)
			Accrued expenses and other current liabilities		1,472			(2,319	)		2,794
			Deferred revenue		3,563			3,834			3,815
			Other noncurrent liabilities		(5,417	)		(528	)		(2,587	)
			Net cash provided by operating activities		51,141			46,015			40,891
Cash flows from investing activities:
	Additions to property and equipment				(1,960	)		(2,502	)		(3,981	)
	Business acquisitions, net of cash acquired				—			(1,186	)		(14,000	)
	Proceeds from disposals of property and equipment				16			61			1,881
	Purchase of equity interest in affiliate				—			—			(500	)
			Net cash used in investing activities		(1,944	)		(3,627	)		(16,600	)
Cash flows from financing activities -
	Net cash distributions to Ceridian Corporation				(47,766	)		(42,223	)		(24,280	)
Effect of exchange rate changes on cash					(146	)		(26	)		(15	)
			Net increase (decrease) in cash		1,285			139			(4	)
Cash at beginning of year					2,255			2,116			2,120
Cash at end of year				$	3,540		$	2,255		$	2,116

     See notes to combined financial statements.

38

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements
(Dollars in thousands, except per share data)

1.     Basis of Presentation and Nature of the Business

Presentation

      On March 30, 2001, Ceridian Corporation (“Ceridian”) will separate into two independent, publicly traded companies — New Ceridian Corporation (“New Ceridian”) and Arbitron Inc. (“Arbitron” or the “Company”). The separation will be accomplished through a tax-free spin-off to the shareholders of Ceridian (the “Spin-off”) of all of the shares of common stock of a newly formed, wholly owned subsidiary corporation (New Ceridian). In connection with the Spin-off, Ceridian will complete an internal reorganization so that the business of New Ceridian consists solely of the business of Ceridian’s human resource service division and subsidiaries and Comdata subsidiaries (the “New Ceridian Business”) and the business of Ceridian consists solely of the media information division and subsidiaries (the “Arbitron Business”). In addition, at the time of the Spin-off, Ceridian will be renamed “Arbitron Inc.” and New Ceridian will be renamed “Ceridian Corporation.” Shares of common stock of Ceridian represent a continuing interest in the Arbitron Business.

      For purposes of, among other things, governing certain of the ongoing relations between New Ceridian and Arbitron as a result of the Spin-off, as well as to allocate certain tax, employee benefit and other liabilities arising prior to the Spin-off, the companies will enter into various agreements, including a Distribution Agreement, Personnel Agreement, Tax Matters Agreement, Transition Services Agreement and Sublease Agreement.

      In general, pursuant to the terms of the Distribution Agreement, all assets of Ceridian prior to the date of the Spin-off, other than those specifically relating to the Arbitron Business, will become assets of New Ceridian. The Distribution Agreement also provides for assumptions of liabilities and cross-indemnities designed to allocate generally, effective as of the date of the Spin-off, financial responsibility for all liabilities arising out of or in connection with the New Ceridian Business to New Ceridian and all liabilities arising out of or in connection with the Arbitron Business to Arbitron. In addition, New Ceridian will indemnify Arbitron for liabilities relating to past divestitures made by Ceridian to the extent these divestitures relate to all businesses other than the business of Arbitron and for liabilities relating to some of the litigation in which Ceridian is involved or its subsidiaries are involved. New Ceridian will also be liable for any claims arising from or based upon “controlling person” liability relating to the registration statement on Form 10 filed with the SEC by New Ceridian other than liabilities, if any, relating to material misstatements or omissions pertaining to the Arbitron Business, which liabilities will remain liabilities of Arbitron. Liabilities contemplated under the Distribution Agreement have been included in the combined financial statements of Arbitron as of December 31, 2000 and 1999, except as otherwise disclosed.

      On January 31, 2001, in connection with completion of the Spin-off, Arbitron entered into a bank credit facility for $225,000 of financing. Proceeds of $200,000 will be used to satisfy debt obligations of Ceridian with the remaining balance being available to Arbitron for working capital purposes. Arbitron will also issue senior secured notes with an aggregate principal amount of $50,000 and distributed the proceeds realized from that issuance to New Ceridian to satisfy $50,000 of Ceridian’s debt obligations (see Note 18).

      Prior to the date of the Spin-off, New Ceridian and Arbitron will enter into a Personnel Agreement to set forth the manner in which assets and liabilities under Ceridian’s employee benefit plans and other employee related liabilities will be divided between them. In general, New Ceridian is responsible for compensation and employee benefits relating to New Ceridian’s current employees and Ceridian’s former employees and Arbitron is responsible for compensation and employee benefits relating to its current employees. The Personnel Agreement also provides that substantially all unexercised Ceridian stock options outstanding at the date of the Spin-off will become options to purchase Arbitron common stock or options to purchase New Ceridian common stock. Ceridian stock options held by Arbitron employees, regardless of whether the options are vested or unvested, remain options to purchase

39

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

Arbitron common stock. The number of shares and exercise price will be adjusted to reflect the effect of the Spin-off and a reverse stock split. The options will otherwise continue to be and become exercisable on substantially the same terms and conditions set forth in the original Ceridian benefit plans. Ceridian stock options held by New Ceridian employees and consultants, regardless of whether the options are vested or unvested, will be converted into options to purchase New Ceridian common stock. The value of replacement awards will preserve, as closely as possible, the intrinsic value of awards that existed prior to the Spin-off.

      Due to the relative significance of New Ceridian as compared to Arbitron, the transaction will be accounted for as a reverse Spin-off, with New Ceridian treated as the accounting successor to Ceridian for financial reporting purposes.

Nature of the Business

      Arbitron is an international media and marketing research firm serving radio and other broadcasters, cable companies, advertisers and advertising agencies in the United States and Europe.

      Arbitron currently has four core businesses: measuring radio audiences in local markets across the United States; surveying the retail, media and product patterns of local market consumers; providing application software used for accessing and analyzing media audience and marketing information data; and providing survey research services to the cable, broadcast television, magazine, newspaper and online industries.

2.     Summary of Significant Accounting Policies

Basis of Combination

      The combined financial statements of Arbitron reflect the combined financial position, results of operations and cash flows of The Arbitron Company, Tapscan Worldwide, and Northstar, each of which is a division of Ceridian, and CSW Research Limited and Ceridian Infotech (India) Private Limited, each of which is a wholly owned subsidiary of Ceridian. These combined financial statements include allocations of certain Ceridian corporate assets, liabilities and expenses relating to Arbitron (see note 14). The financial information included herein may not necessarily reflect the financial position, results of operations and cash flows of Arbitron in the future or what they would have been had it been operated as a separate, stand-alone entity during the periods presented.

Revenue Recognition

      Syndicated or recurring products and services are licensed on a contractual basis. Revenues for such products and services are recognized over the term of the license agreement as products or services are delivered. Customer billings in advance of delivery are recorded as deferred revenue in the accompanying combined balance sheets. Included in deferred revenue as of December 31, 2000 and 1999 are $47,833 and $44,285, respectively, primarily related to the Fall 2000 and 1999 quantitative radio measurement surveys that were recognized as income in 2001 and 2000, respectively, when the market surveys were delivered to the customers.

40

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

Expense Recognition

      Direct costs associated with the Company’s data collection and diary processing are recognized when incurred and are included in cost of revenue. Research and development expenses consist primarily of expenses associated with the development of new products and are expensed as incurred.

Property and Equipment

      Property and equipment are recorded at cost and depreciated or amortized generally using the straight-line method over their estimated useful lives of the assets, which are as follows:

Computer equipment	3 years
Purchased software and development costs	3 — 5 years
Leasehold improvements	5 years or life of lease
Machinery, furniture and fixtures	3 — 6 years

      Repairs and maintenance are charged to expense as incurred. Gains and losses on dispositions are included in the combined results of operations at the date of disposal.

Impairment of Long-Lived Assets

      The recoverability of long-lived assets is assessed whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable through future undiscounted cash flows expected to be generated by the asset. If such assets are deemed to be impaired, the impairment is measured by determining the amount by which the carrying value of an asset exceeds its estimated fair value.

Investments in Affiliates

      Investments in affiliates are accounted for using the equity method where the Company has an ownership interest of 50 percent or less and the ability to exercise significant influence or has a majority ownership interest but does not have the ability to exercise effective control. Investments in affiliates of less than 20 percent where the Company does not have the ability to exercise significant influence are accounted for using the cost method.

Goodwill and Other Intangibles

      Goodwill, which represents the excess purchase price over the fair value of net assets of businesses acquired, is amortized using the straight-line method over the periods expected to be benefited not to exceed forty years. Other intangible assets represents amounts assigned to intangible assets at the time of a purchase acquisition and includes such items as technology and other rights. Such costs are amortized on a straight-line basis over periods ranging up to ten years. The Company assesses the recoverability of goodwill and other intangibles by determining whether amortization of the capitalized asset over its remaining life can be recovered through undiscounted future operating cash flows of the acquired operations. Impairment, if any, is measured by determining the amount by which the carrying value of the goodwill or other intangibles exceeds their fair value based upon discounted future cash flows.

41

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

Income Taxes

      Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.

Stock-Based Compensation

      The Company accounts for stock based compensation under APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Therefore, compensation expense is not recorded with respect to Ceridian’s fixed stock options, since the exercise price is set at the market price on the date of grant, or for Ceridian’s employee stock purchase plans. Compensation expense for outstanding restricted stock awards, none of which is performance-based, is recognized by charging the fair value of the award at the time of grant to operations ratably over the vesting period. Grants of stock options to consultants or independent contractors, none of which have been made to date, are accounted for under the fair value method. The Company also reports under the disclosure-only provisions of SFAS 123, Accounting for Stock-Based Compensation.

Pro Forma Net Income Per Common Share (Unaudited)

      The computation of pro forma basic net income per common share for the periods presented is based upon Ceridian’s historical weighted average number of shares of Ceridian common stock outstanding. The computation of pro forma diluted net income per common share is calculated by dividing net income by the sum of Ceridian’s historical weighted average common shares outstanding and potentially dilutive Ceridian securities. Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all Ceridian stock options are used to repurchase Ceridian’s common stock at the average market price for the period. Options shares totaling 1,149,481, 169,800 and 68,200 for 2000, 1999 and 1998, respectively, were not included in the computation of diluted net income per common share because the options’ exercise prices were greater than the average market price of Ceridian’s common stock. The impact of potentially dilutive securities on diluted net income per common share assumes that all of Ceridian’s historical dilutive securities will be converted into Arbitron securities.

      In November 2000, Ceridian’s board of directors approved a one-for-five reverse stock split for Arbitron Inc. common stock, which will be effective immediately after the Spin-off. Pro forma net income per common share and weighted average common shares outstanding included in the accompanying combined financial statements and related notes have been adjusted to reflect this stock split.

Translation of Foreign Currencies

      Financial statements of foreign subsidiaries are translated into United States dollars at current rates at the end of the period except that revenue and expenses are translated at average current exchange rates during each reporting period. Net exchange gains or losses and the effect of exchange rate changes on intercompany transactions of a long-term nature are accumulated and charged directly to a separate component of other comprehensive income in divisional equity. Gains and losses from translation of assets and liabilities denominated in other than the functional currency of the operation are recorded in income as incurred.

42

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

Fair Values of Financial Instruments

      Fair values of financial instruments, such as trade accounts receivable and trade accounts payable, approximate carrying values because of the short-term nature of these items.

Advertising Expense

      The Company recognizes advertising expense the first time advertising takes place. Advertising expense for the years ended December 31, 2000, 1999 and 1998 was $1,327, $1,278 and $1,667, respectively.

Software and Development Costs

      The Company capitalizes purchased software which is ready for service, and development costs incurred from the time of technological feasibility until the software is ready for use. Capitalized costs are amortized using the straight-line method over three to five years, but not exceeding the expected life of the software. Computer software maintenance costs are expensed as incurred.

Accounting Estimates

      The preparation of the combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements

      Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activity (as amended by SFAS No. 138 with respect to certain interpretations) will be effective for the Company in January 2001. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and for hedging activities and requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. These fair value adjustments are to be included either in the determination of net income or as a component of other comprehensive income, depending on the nature of the transaction. The Company estimates that the initial adoption of SFAS No. 133 as amended, will not have a material impact on the Company’s combined financial statements.

3.    Purchase Acquisition

      Effective May 1, 1998, Ceridian purchased certain assets and assumed certain liabilities of Tapscan, Incorporated, a developer of software for broadcasters, agencies and advertisers, to be associated with its Arbitron operations (“Tapscan Worldwide”). The excess of the purchase price over the net tangible assets acquired of $16,900, was allocated to goodwill and other intangible assets, and is being amortized using the straight-line method over periods up to 10 years. The results of Tapscan Worldwide since May 1, 1998 are included in the Company’s combined statements of income.

43

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

4.    Property and Equipment

      Property and equipment at December 31, 2000 and 1999 consist of the following:

		2000			1999
Computer equipment		$	7,836		$	7,592
Purchased software and development costs			4,169			4,154
Leasehold improvements			5,521			5,112
Machinery, furniture and fixtures			2,374			2,339
			19,900			19,197
Accumulated depreciation			(15,056	)		(14,373	)
	Property and equipment, net	$	4,844		$	4,824

      Depreciation and amortization expense for 2000, 1999 and 1998 was $1,884, $2,130 and $2,721, respectively.

5.    Goodwill and Other Intangibles

      Goodwill and other intangibles at December 31, 2000 and 1999 consist of the following:

	2000			1999
Goodwill	$	16,779		$	16,779
Accumulated amortization		(4,619	)		(2,941	)
		12,160			13,838
Other intangibles		3,600			3,600
Accumulated amortization		(1,911	)		(1,194	)
		1,689			2,406
Goodwill and other intangibles, net	$	13,849		$	16,244

      Amortization expense for 2000, 1999 and 1998 was $2,395, $2,394 and $1,711, respectively.

6.    Investments in Affiliates

      Investments in affiliates at December 31, 2000 and 1999 consist of the Company’s 50.5 percent interest in Scarborough Research Group (a Partnership) (“Scarborough”), a syndicated, qualitative local market research partnership, accounted for using the equity method of accounting, and a six percent ownership interest in a research consulting services firm held since March 1997, accounted for using the cost method of accounting.

44

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

      Under the Scarborough partnership agreement, the Company has the exclusive right to license Scarborough’s base product to radio stations and pays a royalty fee to Scarborough based on a fixed percentage of revenues. Royalties of approximately $11,800, $9,800 and $8,700 for 2000, 1999 and 1998, respectively, are included in cost of revenue in the Company’s combined statements of income. Accrued royalties due to Scarborough as of December 31, 2000 and 1999 of $1,330 and $1,531, respectively, are included in accrued expenses and other current liabilities.

      Revenue of Scarborough was $35,881, $31,187 and $27,614 in 2000, 1999 and 1998, respectively. The Company’s equity in net income of Scarborough was $3,397, $2,553 and $2,452 in 2000, 1999 and 1998, respectively. The Company received dividends from Scarborough in 2000, 1999 and 1998 of $2,875, $3,276 and $2,750, respectively.

7.    Accrued Expenses and Other Current Liabilities

      Accrued expenses and other current liabilities at December 31, 2000 and 1999 consist of the following:

	2000		1999
Employee compensation and benefits	$	7,437	$	6,884
Royalties due to Scarborough		1,330		1,531
Insurance		1,685		2,006
Sales and value added taxes		387		2,466
Other		4,704		1,281
	$	15,543	$	14,168

8.    Other Noncurrent Liabilities

      Other noncurrent liabilities at December 31, 2000 and 1999 consist of the following:

	2000		1999
Employee benefit obligations	$	1,800	$	2,547
Other		720		5,406
	$	2,520	$	7,953

9.    Lease Commitments

      Arbitron conducts all of its operations in leased facilities and leases certain equipment, for which Ceridian or Arbitron have minimum lease obligations under noncancelable operating leases. Certain of these leases contain rent escalations based on specified percentages. Most of the leases contain renewal options and require payments for taxes, insurance and maintenance. Rent expense is charged to operations as incurred except for escalating rents, which are charged to operations on a straight line basis over the life of the lease. Rent expense was $7,223, $6,759 and $6,677 in 2000, 1999 and 1998, respectively.

45

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

      Future minimum lease commitments, related to the Company, under noncancelable operating leases having an initial term of more than one year, are as follows:

2001	$	5,771
2002		4,711
2003		3,494
2004		4,304
2005		1,058
Thereafter		804

10.     Asset Impairment Charge

      In December 1999, the Company recorded a non-cash charge of $1,848 to write-off the book value of certain purchased software related to a system for processing radio listener diary data. After certain testing of the purchased software, it was determined that the software did not perform as anticipated. Management decided to abandon the application.

11.     Income Taxes

      The provision for income taxes is based on income recognized for combined financial statement purposes and includes the effects of temporary differences between such income and that recognized for tax return purposes. Ceridian and its eligible subsidiaries file a consolidated United States federal income tax return. Arbitron is a division included in Ceridian’s federal and state income tax returns. The combined financial statements presented here treat Arbitron as if it were a separate stand-alone entity. Ceridian’s net operating loss and tax credit carryforwards, if any, will become the assets of Arbitron at the time of Spin-off. Deferred tax assets at December 31, 2000 include $29,400 representing the income tax effects of estimated net operating loss carryforwards expected to be used by Arbitron in 2001 during the period before the Spin-off and the estimated tax credits and net operating loss remaining with Arbitron after the Spin-off. Such amounts were allocated to Arbitron by Ceridian as of December 31, 2000 and have been reflected as a capital contribution.

      The components of income before income tax expense and income tax expense and a reconciliation of the statutory federal income tax rate to the income tax rate on income before income tax expense for the years ended December 31, 2000, 1999 and 1998 are as follows:

46

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

				2000			1999			1998
Income before income tax expense:
	U.S			$	75,718		$	66,156		$	56,397
	International				(903	)		(468	)		82
			Total	$	74,815		$	65,688		$	56,479
Income tax expense (benefit):
	Current:
		U.S		$	24,333		$	23,289		$	20,049
		State and other			4,454			4,220			3,633
					28,787			27,509			23,682
	Deferred:
		U.S			690			(1,385	)		(1,235	)
		State and other			75			(178	)		(159	)
			Total		765			(1,563	)		(1,394	)
				$	29,552		$	25,946		$	22,288
U.S. statutory rate					35	%		35	%		35	%
Income tax expense at U.S. statutory rate				$	26,185		$	22,991		$	19,768
State income taxes, net of federal benefit					2,944			2,627			2,258
Meals and entertainment					463			204			187
Goodwill					122			122			122
Other					(162	)		2			(47	)
			Income tax expense	$	29,552		$	25,946		$	22,288
Effective tax rate					39.5	%		39.5	%		39.5	%

47

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

      Temporary differences and the resulting deferred income tax assets at December 31, 2000 and 1999 are as follows:

	2000		1999
Deferred revenue	$	17,668	$	16,356
Net operating loss carryforwards		14,709		—
Tax credit carryforwards		14,691		—
Accruals		2,090		4,403
Depreciation		1,104		1,022
Other		815		661
	$	51,077	$	22,442

      In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during periods in which the temporary differences become deductible and before tax credits or net operating loss carryforwards expire. Management considered historical results of Arbitron during the previous three years and projected future income and determined no valuation allowance was required at December 31, 2000 and 1999.

12.     Retirement Plans

Pension Benefits

      Arbitron’s United States employees have participated in a defined benefit pension plan maintained by Ceridian that closed to new participants effective January 1, 1995. Assets of the plan consisted principally of equity securities, United States government securities, and other fixed income obligations and did not include securities issued by Ceridian. Benefits under the plan were calculated on maximum or career average earnings and years of participation in the plan. Employees participated in this plan by means of salary reduction contributions. Certain former employees were inactive participants in the plan. Retirement plan funding amounts were based on independent consulting actuaries’ determination of the Employee Retirement Income Security Act of 1974 funding requirements.

      As specified in the Personnel Agreement, Arbitron will assume responsibility for pension benefits related to its active employees with benefits under Ceridian’s defined benefit pension plan after the Spin-off. Arbitron will be allocated a portion of the assets of Ceridian’s defined benefit pension plan as agreed with Ceridian. Accordingly, an allocation of prepaid pension expenses attributable to Arbitron’s active employees of approximately $1,835 and $2,570 has been reflected in the combined balance sheets as of December 31, 2000 and 1999, respectively. Through the date of the Spin-off, Arbitron will participate in Ceridian’s defined benefit pension plan and has accounted for such activity as participation in a multi-employer plan. Arbitron has recorded net pension costs allocated by Ceridian totaling $120, $241 and $141 for 2000, 1999 and 1998, respectively.

      Certain Arbitron employees also participate in a nonqualified supplemental retirement plan sponsored by Ceridian. The net periodic pension costs with respect to Arbitron employees’ participation in this plan were $190, $164 and $153 for 2000, 1999 and 1998, respectively.

48

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

      Arbitron employees also participated in Ceridian’s defined contribution plans. These plans generally provide for United States employee salary deferral contributions of up to 17% of eligible employee compensation. Under the terms of the plans, the employer contributes a matching contribution of 25% to 50% up to a maximum of 3% to 6% of eligible employee compensation. The employer may also make additional discretionary matching contributions to the plans. Arbitron’s costs with respect to its contributions to the defined contribution plans were $1,108, $936 and $792 in 2000, 1999 and 1998, respectively. Arbitron employees will participate in Ceridian’s defined contribution plans through the date of the Spin-off. Separate defined contribution plans, with similar terms, will be established for Arbitron employees effective as of the Spin-off date.

Postretirement Benefits

      Ceridian provided health care and life insurance benefits for eligible retired employees, including Arbitron employees who retire before the date of the Spin-off. These benefits are provided by several health care plans in the United States for both pre- and post-age 65 retirees. Employer contributions to these plans differ for various groups of retirees and future retirees. Employees hired on or after January 1, 1992 may enroll at retirement in Ceridian sponsored plans with no company subsidy. Employees hired before and retiring after that date may enroll in plans that subsidize pre-age 65 coverage only.

      Arbitron will assume responsibility for postretirement benefits for its active employees after the date of the Spin-off. Accordingly, an allocation of liabilities related to postretirement benefits for active Arbitron employees of $467 and $875 has been reflected in the combined balance sheets as of December 31, 2000 and 1999, respectively. Through the date of the Spin-off, Arbitron will continue to participate in Ceridian’s postretirement benefit plans and has accounted for such activity as participation in a multi-employer plan. Arbitron has recorded net postretirement benefit costs allocated by Ceridian totaling $45, $39 and $45 for 2000, 1999 and 1998, respectively.

13.     Stock Based Compensation

      During the three-year period ended December 31, 2000, Ceridian provided stock-based compensation plans for directors, officers, other employees, consultants and independent contractors including Arbitron employees.

      Ceridian’s 1999 Stock Incentive Plan (“1999 SIP”) authorizes the issuance of Ceridian common shares in connection with awards of stock options, restricted stock awards and performance unit awards to eligible participants in the 1999 SIP. Eligible participants in the 1999 SIP include all employees of Ceridian and any non-employee director, consultant and independent contractor of Ceridian. Stock options awarded under the 1999 SIP and its predecessor plans generally vest annually either over a three-year period or on a specific date if certain performance criteria are satisfied, have 10-year terms and have an exercise price that may not be less than the fair market value of the underlying stock at the date of grant. The vesting of stock option awards granted in 1999 under the 1999 SIP will accelerate upon a change of control of Ceridian. The predecessor employee plans also provide for the accelerated exercisability of options and the accelerated lapse of transfer restrictions on restricted stock if a participant’s employment terminates for specified reasons within two years of a change of control of Ceridian.

      The following table describes separately stock option activity and options outstanding related to the participation of Arbitron employees in Ceridian stock plans, and therefore has not been adjusted for the stock split described in note 2:

49

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

									Weighted
									average
									exercise
	Option price								price of
	per share		Outstanding			Exercisable			options
At December 31, 1997	$	3.76 - $25.07		1,207,179			435,292		$	18.20
Granted		26.38 - 29.75		497,800			—			27.40
Became exercisable		12.50 - 25.07		—			242,396			—
Exercised		7.38 - 25.07		(73,544	)		(73,544	)		13.21
Canceled		20.00 - 27.41		(50,661	)		(268	)		24.70
At December 31, 1998	$	3.76 - $29.75		1,580,774			603,876		$	21.12
Granted		19.94 - 36.75		364,250			—			20.22
Became exercisable		19.94 - 29.75		—			362,314			—
Exercised		7.38 - 25.07		(45,664	)		(45,664	)		15.55
Canceled		19.94 - 36.75		(53,933	)		—			26.23
At December 31, 1999	$	3.76 - $35.63		1,845,427			920,526		$	20.93
Granted		16.00 - 27.88		18,500			—			24.35
Became exercisable		19.94 - 35.63		—			279,097			—
Exercised		16.38 - 21.25		(26,584	)		(26,584	)		19.46
Canceled		12.50 - 29.75		(118,815	)		—			24.03
At December 31, 2000	$	3.76 - $35.63		1,718,528			1,173,039		$	20.78

      Information on outstanding and exercisable stock options by exercise price range as of the end of the current year with respect to Arbitron employees is included in the following table:

	Options Outstanding						Options Excercisable
			Average		Weighted				Weighted
			remaining		average				average
Range of	Number		contractual		exercise		Number		exercise
exercise price	outstanding		life		price		exercisable		price
$3.76 - $16.38		280,052		3.23	$	10.61		276,552	$	10.54
$19.94 - $19.94		304,250		8.80		19.94		64,120		19.94
$20.00 - $22.07		636,830		6.23		20.84		560,498		20.78
$23.13 - $35.63		497,396		7.41		26.93		271,869		26.50
$3.76 - $35.63		1,718,528		6.54	$	20.78		1,173,039	$	19.65

      Ceridian’s Employee Stock Purchase Plan (“ESPP”) provides for the issuance of up to 3,000,000 shares of newly issued or treasury common stock of Ceridian to eligible Arbitron and other Ceridian employees. The purchase

50

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

price of the stock to ESPP participants is 85% of the lesser of the fair market value on either the first day or the last day of the applicable three-month offering period.

      Arbitron utilizes the intrinsic method of accounting for stock-based compensation and has adopted the disclosure-only provisions of SFAS 123. Therefore, no expense is recorded with respect to Arbitron participation in Ceridian’s stock option or employee stock purchase plan. The estimated fair value of stock option grants and ESPP purchases is as follows:

	2000				1999				1998
			Fair				Fair				Fair
	Shares		value		Shares		value		Shares		value
Stock options		18,500	$	8.10		364,250	$	7.34		497,800	$	8.61
ESPP		21,714	$	5.00		14,427	$	5.13		11,610	$	1.09

      Arbitron is required to report the pro forma effect on net income and net income per common share that would have resulted if the fair value method of accounting for stock-based compensation issued in those years had been adopted. The application of the fair value method would have resulted in the determination of compensation cost for grants of stock options and purchases under the ESPP. Such compensation cost would then be allocated to the related period of service. The results of this calculation and the assumptions used are as follows:

		2000			1999			1998
Net income as reported		$	45,263		$	39,742		$	34,191
Pro forma net income		$	43,807		$	37,743		$	32,702
Pro forma diluted net income per weighted average common share as reported		$	1.54		$	1.34		$	1.16
Pro forma diluted net income per weighted average common share		$	1.49		$	1.28		$	1.11
Weighted-average assumptions:
	Expected lives in years		4			4			4
	Expected volatility		40.4	%		37.4	%		34.5	%
	Expected dividend rate		—			—			—
	Risk-free interest rate		5.0	%		6.3	%		4.8	%

14.     Related Party Transactions

      Ceridian uses a centralized cash management system to finance its operations. Cash deposits from the majority of Arbitron’s businesses are transferred to Ceridian on a daily basis. In addition, the majority of Arbitron’s cash disbursements are funded by Ceridian from its centralized cash management system. Net distributions to Ceridian reflect these intercompany cash activities. No interest has been credited or charged for these transactions.

51

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

      Ceridian provides certain centralized services to Arbitron. Expenses related to these services have been allocated to Arbitron based on utilization of specific services or, where an estimate could not be determined, based on Arbitron’s revenues in proportion to Ceridian’s total revenues. Management believes these allocation methods are reasonable. However, the costs of these services and benefits charged to Arbitron are not necessarily indicative of the costs that would have been incurred if Arbitron had performed these services as a separate entity. These allocations included in expenses in the combined statements of income totaled $8,205, $7,292 and $6,314 in 2000, 1999 and 1998, respectively.

15.     Significant Customers and Concentration of Credit Risk

      Arbitron’s radio audience measurement service and related software sales has generally accounted for approximately 87% of its revenue, the largest portion of which is provided to radio broadcasters. In recent years, a small number of enterprises have greatly expanded their holdings of United States radio broadcasters. As a result of this consolidation of United States radio broadcasters, Arbitron has two customers in 2000 that represented 22% and 10% of its revenue and two customers in 1999 that represented 13% and 10% of its revenue. Certain contracts for one of these customers are due to be renewed in 2001. Although the industry consolidation has led to an increased concentration of Arbitron’s customer base, the Company believes that the consolidating enterprises are well financed, publicly held companies with whom it has a good relationship. Arbitron routinely assesses the financial strength of its customers and has experienced only nominal losses on its trade accounts receivable.

16.     Quarterly Information (Unaudited)

												Year
						Three months ended						Ended
				March 31		June 30		September 30		December 31		December 31
			2000
Revenue				$	55,533	$	45,665	$	58,395	$	47,198	$	206,791
Operating income					25,438		10,094		27,155		8,731		71,418
Net income					14,710		7,998		15,383		7,172		45,263
Pro forma net income per weighted average common share:
	Basic			$	0.51	$	0.27	$	0.53	$	0.25	$	1.56
	Diluted			$	0.51	$	0.27	$	0.52	$	0.24	$	1.54
		1999
Revenue				$	50,704	$	41,984	$	53,447	$	43,982	$	190,117
Operating income					22,688		9,474		23,260		7,713		63,135
Net income					12,760		7,313		13,311		6,358		39,742
Pro forma net income per weighted average common share:
	Basic			$	0.44	$	0.25	$	0.46	$	0.22	$	1.37
	Diluted			$	0.43	$	0.24	$	0.45	$	0.22	$	1.34

52

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

17.     Legal Matters

      The Company is involved, from time to time, in litigation and proceedings arising out of the ordinary course of business. There are no pending material legal proceedings or environmental investigations to which the Company is a party or to which the property of the Company is subject.

18.     Subsequent Events (unaudited)

Spin-off Transaction

      On March 30, 2001, the Spin-off and the ensuing one-for-five reverse stock split, described in Notes 1 and 2, were consummated. Also on that date, the Company, formerly Ceridian Corporation, was renamed Arbitron Inc.

Long-Term Debt and Notes Payable

      On January 31, 2001, the Company entered into a $225,000 five-year revolving credit agreement with a consortium of banks (“Credit Facility”). In connection with the Spin-off, $200,000 was drawn on the facility and distributed to Ceridian Corporation.

      The Credit Facility has two borrowing options, a Eurodollar rate option or a base rate option, as defined in the agreement. Under the Eurodollar option, the Company may elect interest periods of one, two, three or six months at the inception date and each renewal date. Borrowings under the Eurodollar option bear interest at the London Interbank Offered Rate (LIBOR) plus a margin of 2.00 % to 2.75%. Borrowings under the base rate option bear interest at the higher of the lead lender’s prime rate or the Federal Funds rate plus 50 basis points, plus a margin of .50% to 1.25%. The specific margins, under both options, will be determined based on the Company’s ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (leverage ratio), and will be adjusted every ninety days. The agreement contains a commitment fee provision whereby the Company will be charged a fee based on the unused portion of the facility. Under the terms of the Credit Facility, the Company is required to maintain certain other financial ratios, in addition to the leverage ratio, and meet other financial conditions. The agreement restricts, among other things, the Company’s abiltiy to sell assets, incur additional indebtedness, grant or incur liens on its assets, repay indebtedness, pay dividends, make investments or acquisitions, repurchase or redeem capital stock and engage in certain mergers or consolidations.

      The Company entered into an interest rate swap contract on March 19, 2001 to hedge against rate fluctuations relating to its variable rate debt. The contract’s notional amount is $200,000 at inception, and declines each quarter over the life of the contract in proportion to the Company’s estimated outstanding balance on its revolving credit agreement. Under the terms of the contract, the Company will pay a fixed rate of 5.02% and receive LIBOR, which resets every 90 days. The contract matures on March 31, 2005. The Company will account for the contract as a cash flow hedge under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activity.

      Upon consummation of the Spin-off, the Company issued $50,000 of senior secured notes due January 31, 2008. In connection with the Spin-off, the Company distributed the $50,000 of note proceeds to Ceridian Corporation. The notes bear interest at a fixed rate of 9.96%.

53

ARBITRON
(As defined in note 2 to the combined financial statements)
Notes to Combined Financial Statements — (Continued)
(Dollars in thousands, except per share data)

Common and Preferred Stock

      On March 30, 2001, approximately 29 million shares of Arbitron Inc. common stock were distributed to the shareholders of Ceridian Corporation. There were approximately 32 million shares outstanding, less approximately 3 million shares of treasury stock. The Company had no outstanding preferred stock as of the Spin-off date.

      The Company is authorized to issue up to 750 thousand shares of preferred stock and 500 million shares of common stock, each having a par value of $.50.

Pro Forma Stockholders’ Deficit of Arbitron

      The following table sets forth the unaudited pro forma stockholders’ deficit of Arbitron as of December 31, 2000, after giving effect to the debt financing and distribution to Ceridian Corporation, the Spin-off, the reverse stock split, and related transactions, each as if they occurred on that date. Historically, the Company has distributed its earnings to Ceridian Corporation. Those distributions, as well as $250,000 of debt and note proceeds that were distributed to Ceridian Corporation by the Company, gave rise to the pro forma stockholders’ deficit.

Stockholders’ deficit:
	Preferred stock, $.50 par value; 750,000 shares authorized; no shares issued		$	—
	Common stock, $.50 par value; 500,000,000 authorized shares; 32,337,119       shares issued, less treasury shares of 3,210,686			14,575
	Additional paid-in capital			58,302
	Net distributions to Ceridian Corporation in excess of historical earnings			(268,056	)
	Accumulated other comprehensive income			(139	)
		Total stockholders’ deficit	$	(195,318	)

Contract Negotiations with Significant Customer

      On March 30, 2001, the Company received notice from one of its significant customers that the customer did not intend to subscribe to ratings surveys in 130 markets covering periods after March 31, 2001.

54

ARBITRON
(As defined in note 2 to the combined financial statements)
Combined Schedule of Valuation and Qualifying Accounts
(Dollars in thousands)

			Years ended December 31,
			2000			1999			1998
Allowance for doubtful trade accounts receivable:
	Balance at beginning of year		$	1,468		$	1,473		$	952
	Additions (recoveries) charged to expenses			(134	)		144			671
	Write-offs			(258	)		(149	)		(150	)
		Balance at end of year	$	1,076		$	1,468		$	1,473

55

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                    FINANCIAL DISCLOSURE

      There have been no changes in, or disagreements with, accountants on accounting and financial disclosure.

PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Biographical information of Directors and Executive Officers required by this item is included in the Election of Directors portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed with the Securities and Exchange Commission (the “Commission”) not later than 120 days after the close of Arbitron’s fiscal year ended December 31, 2000.

      Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this item is included in the Other Matters portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Arbitron’s fiscal year ended December 31, 2000.

ITEM 11.     EXECUTIVE COMPENSATION

      Information required by this item is included in the Election of Directors, Report of Compensation and Human Resources Committee and Executive Compensation sections of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Arbitron’s fiscal year ended December 31, 2000.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Information required by this item is included in the Stock Ownership Information section of the Election of Directors portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Arbitron’s fiscal year ended December 31, 2000.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Information required by this item is included in the Certain Relationships and Related Transactions portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Arbitron’s fiscal year ended December 31, 2000.

56

PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report

       (1) Financial Statements: The following financial statements, together with the report thereon of independent auditors, are included in this Report:

• Combined balance sheets as of December 31, 2000 and 1999

• Combined statements of income for the years ended December 31, 2000, 1999 and 1998

• Combined statements of cash flows for the years ended December 31, 2000, 1999 and 1998

• Combined statements of divisional equity (deficit) and comprehensive income for the years ended December 31, 2000, 1999 and 1998

• Notes to combined financial statements for the years ended December 31, 2000, 1999 and 1998 Report of Independent Public Accountants

        (2) Combined Financial Statement Schedules of Valuation and Qualifying Accounts: All other financial statement schedules are not applicable.

        (3) Exhibits:

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of Arbitron Inc. (formerly known as Ceridian Corporation) (Filed as Exhibit 4.01 to Ceridian’s Registration Statement on Form S-8 (File No. 33-54379) and incorporated herein by reference).
3.2	Certificate of Amendment of Restated Certificate of Incorporation of Arbitron Inc. (formerly known as Ceridian Corporation) (Filed as Exhibit 3 to Ceridian’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference).
3.3	Certificate of Amendment of Restated Certificate of Incorporation of Arbitron Inc. (formerly known as Ceridian Corporation) (Filed as Exhibit 3.01 to Ceridian’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 and incorporated herein by reference).
3.4	Certificate of Amendment to Restated Certificate of Incorporation of Arbitron Inc. (formerly known as Ceridian Corporation)
3.5	Bylaws of Arbitron Inc. (formerly known as Ceridian Corporation), as amended (Filed as Exhibit 3.01 to Ceridian’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and incorporated herein by reference).
4.1	Specimen of Common Stock Certificate.

57

10.1	Distribution Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.1 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.2	Personnel Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.2 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.3	Tax Matters Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.3 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.4	Transition Services Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.4 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.5	Sublease Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.5 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.6	Credit Agreement, dated as of January 31, 2001, by and among Arbitron Inc. and the Lenders referred to therein and Bank of American, N.A., as administrative agent.
10.7	Note Purchase Agreement, January 31, 2001, by and among Arbitron inc. and the Note Holders referred to therein.
10.8	Secured Subordinated Promissory Notes maturing January 31, 2008 of Arbitron Inc.
10.9	Subsidiary Guaranty, dated as of January 31, 2001, of Arbitron Holdings Inc. in favor of the Lenders referred to therein, the Swap Provider referred to therein and the Note Holders referred to therein.
10.10	Arbitron Inc. 1999 Stock Incentive Plan.*
10.11	Form of Stock Option Award Agreement.

58

10.16	Form of Customer Contract by and between Arbitron Inc. and Clear Channel Communications, Inc.
10.17	Form of Customer Contract by and between Arbitron Inc. and Infinity Broadcasting Corp.
21	Subsidiaries of Arbitron Inc.
23	Consent of KPMG LLP.
24	Power of Attorney

* Indicates management contract or compensatory plan required to be filed as an Exhibit.

(b)	Reports on Form 8-K
	•   Ceridian filed a Current Report on Form 8-K on October 17, 2000 reporting its      issuance of a press release announcing its third quarter 2000 earnings results.
(c)	Exhibits
	See (a)(3), above.
(d)	Financial Statement Schedules
	See (a)(2), above.

59

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARBITRON INC.

By:  /s/ Stephen B. Morris
Stephen B. Morris
Chief Executive Officer and President

Date: March 30, 2001

      Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Company in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Stephen B. Morris Stephen B. Morris	Chief Executive Officer, President and Director (Principal Executive Officer)	March 30, 2001
/s/ William J. Walsh William J. Walsh	Executive Vice President of Finance and Planning and Chief Financial Officer (Principal Financial and Principal Accounting Officer)	March 30, 2001
*                                 Erica Farber	Director	_______, 2001
*                                 Kenneth F. Gorman	Director	_______, 2001
*                                 Philip Guarascio	Director	_______, 2001
*                                 Larry E. Kittelberger	Director	_______, 2001
*                                 Luis G. Nogales	Director	_______, 2001
*                                 Lawrence Perlman	Director	_______, 2001
*                                 Richard A. Post	Director	_______, 2001
* By: /s/ Dolores Cody           Dolores Cody           Attorney-in-Fact

60 EX-3.4 2 w46446ex3-4.txt CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INC. 1 EXHIBIT 3.4 CERTIFICATE OF AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION OF ARBITRON INC. Arbitron Inc., a corporation organized and existing under and by virtue of the laws of the State of Delaware (the "Corporation"), pursuant to the provisions of the General Corporation Law of the State of Delaware (the "DGCL"), DOES HEREBY CERTIFY that: FIRST: That the Board of Directors of the Corporation, at a duly called meeting, duly adopted resolutions setting forth a proposed amendment of the Restated Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and proposing that said amendment be considered by the stockholders of the Corporation. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Board of Directors declares that it is advisable to amend Article IV of the Restated Certificate of Incorporation of the Corporation as follows, subject to the determination of the appropriate split ratio not to exceed one-for-five by an officer of the Corporation. Amend Article IV by adding the following at the end of Paragraph A of Article IV: Simultaneously with the effective date of the filing of this amendment to the Corporation's Restated Certificate of Incorporation (the "Effective Date"), each [five] shares of common stock, par value fifty cents ($.50) per share, of the Corporation issued and outstanding or held as treasury shares immediately prior to the Effective Date shall automatically be reclassified (the "Reverse Split"), without any action on the part of the holder thereof, into one fully paid and nonassessable share of common stock, par value fifty cents ($.50) per share. The Corporation shall not issue fractional shares to the stockholders entitled to a fractional interest in a share of common stock issued pursuant to the Reverse Split but shall pay instead to such shareholders, in lieu of such fractional interest, an amount in equal cash to their pro rata share of the proceeds received from the sale of all fractional interests. SECOND: The amendment to the Restated Certificate of Incorporation of the Corporation set forth in this Certificate of Amendment has been duly adopted in accordance with the provisions of Section 242 of the DGCL; (a) the Board of Directors of the Corporation having duly adopted resolutions on July 20, 2000 setting forth such amendment, declaring its advisability and directing that such amendment be submitted to the stockholders of the Corporation for their consideration and approval, and (b) the stockholders of the Corporation having duly approved and adopted such amendment be a vote of the holders of a majority of the shares of outstanding stock of the Corporation entitled to vote thereon at a duly called meeting of stockholders duly held on October 5, 2000, upon notice in accordance with Section 222 of the DGCL. 2 IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Dolores L. Cody, its Executive Vice President, there unto duly authorized and attested by Patricia O'Donnell, its Assistant Secretary, this 30th day of March, 2001. ARBITRON INC. By: /s/ Dolores L. Cody ----------------------------- Name: Dolores L. Cody Title: Executive Vice President ATTEST: /s/ Patricia O'Donnell - ---------------------------------- Name: Patricia O'Donnell Title: Assistant Secretary 3 SECRETARY'S CERTIFICATE OF ARBITRON INC. (ARBITRON NAME CHANGE) In connection with the merger of Arbitron Inc., a Delaware corporation ("Arbitron"), with and into Ceridian Corporation, a Delaware corporation ("Ceridian"), the undersigned hereby certifies that attached hereto as Exhibit A is a true and correct copy of the Certificate of Ownership and Merger of Arbitron Inc. with and into Ceridian Corporation, which such Certificate was filed with the Secretary of State of the State of Delaware on March 30, 2001. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 30th day of March, 2001. /s/ Dolores L. Cody ---------------------- Dolores L. Cody Executive Vice President, Chief Legal Officer and Secretary 4 EXHIBIT A - CERTIFICATE OF OWNERSHIP AND MERGER 5 CERTIFICATE OF OWNERSHIP AND MERGER OF ARBITRON INC. (A DELAWARE CORPORATION) INTO CERIDIAN CORPORATION (A DELAWARE CORPORATION) Pursuant to Section 253 of the Delaware General Corporation Law, Ceridian Corporation, a Delaware corporation ("Ceridian"), the holder of 100% of the outstanding common stock, par value $.01 per share, of Arbitron Inc., a Delaware corporation ("Arbitron"), and Arbitron hereby adopt this Certificate of Ownership and Merger for the purpose of merging Arbitron with and into Ceridian (the "Merger") and do hereby certify that: FIRST: Ceridian is the owner of all of the outstanding shares of common stock of Arbitron, which has only one class of capital stock outstanding. SECOND: A copy of the resolutions of Ceridian's Board of Directors authorizing the Merger, adopted as of February 14, 2001, is attached as Attachment A and incorporated by reference into this Certificate of Ownership and Merger. The Merger has been adopted, approved, certified, executed and acknowledged by Ceridian in accordance with the laws of the State of Delaware. THIRD: A copy of the resolutions of the Board of Directors of Arbitron authorizing the merger, adopted February 14, 2001, is attached as Attachment B and incorporated into this Certificate of Ownership and Merger. The Merger has been adopted, approved, certified, executed and acknowledged by Arbitron in accordance with the laws of the State of Delaware. FOURTH: Ceridian Corporation, a Delaware corporation, shall be the surviving corporation. FIFTH: The Merger will become effective at 7:00 a.m., CST, on March 30, 2001. SIXTH: As of the effective time of the Merger, Article I of the Certificate of Incorporation of Ceridian is hereby amended to change Ceridian's corporate name to "Arbitron Inc." 6 IN WITNESS WHEREOF, the undersigned signatures shall constitute the affirmation or acknowledgment of the signatory, under penalties of perjury, that the instrument is the signatory's act and deed and that the facts stated herein are true. Dated: March 30, 2001 CERIDIAN CORPORATION, a Delaware corporation By: /s/ Dolores L. Cody ----------------------------------- Its: Executive Vice President, Chief Legal Counsel and Secretary Dated: March 30, 2001 ARBITRON INC., a Delaware corporation By: /s/ Dolores L. Cody ----------------------------------- Its: Vice President 7 ATTACHMENT A PROPOSED CONSENT RESOLUTIONS OF THE BOARD OF DIRECTORS OF CERIDIAN CORPORATION WHEREAS, Ceridian Corporation ("Ceridian") owns all of the outstanding shares of common stock of Arbitron Inc., a stock corporation which is organized under the Delaware General Corporation Law and which has only one class of capital stock ("Arbitron Inc."). WHEREAS, the Board of Directors of Ceridian has deemed it advisable that Arbitron be merged with and into Ceridian pursuant to Section 253 of the Delaware General Corporation Law, and that in connection therewith, Article I of the Certificate of Incorporation of Ceridian be amended to change the name of Ceridian to "Arbitron Inc." RESOLVED, that Arbitron Inc. be merged with and into Ceridian and that all of the property, rights, privileges and other assets of Arbitron Inc. be transferred to, and all of its obligations be assumed by, Ceridian, which shall be the surviving corporation. FURTHER RESOLVED, that as of the effective time of the merger of Arbitron Inc. into Ceridian, Article I of the Certificate of Incorporation of Ceridian be amended to change Ceridian's corporate name to "Arbitron Inc." FURTHER RESOLVED, that the Board of Directors hereby approves and adopts in all respects a Certificate of Ownership and Merger, substantially in the form described to the Board of Directors at this meeting, which certificate has been prepared pursuant to Section 253 of the Delaware General Corporation Law for the purpose of effecting the above described merger. FURTHER RESOLVED, that appropriate officers of Ceridian, or each acting individually, be and they hereby are authorized and directed to make and execute, in the name of and on behalf of Ceridian a Certificate of Ownership and Merger, and to file such certificate in the office of the Secretary of State of Delaware, and to do all other acts and things that may be necessary to carry out and effectuate the purpose and intent of these resolutions. FURTHER RESOLVED, that the merger shall become effective at 7:00 a.m., CST, on March 30, 2001. 8 ATTACHMENT B PROPOSED CONSENT RESOLUTIONS OF THE BOARD OF DIRECTORS OF ARBITRON INC. WHEREAS, Arbitron Inc. ("Arbitron") is a wholly-owned subsidiary of Ceridian Corporation, a stock corporation which is organized under the Delaware General Corporation Law ("Ceridian"). WHEREAS, the Board of Directors of Arbitron has deemed it advisable that Arbitron be merged with and into Ceridian pursuant to Section 253 of the Delaware General Corporation Law, and that in connection therewith, Article I of the Certificate of Incorporation of Ceridian be amended to change the name of Ceridian Corporation to "Arbitron Inc." RESOLVED, that Arbitron be merged with and into Ceridian and that all of the property, rights, privileges and other assets of Arbitron be transferred to, and all of its obligations be assumed by, Ceridian, which shall be the surviving corporation. FURTHER RESOLVED, that as of the effective time of the merger of Arbitron into Ceridian, Article I of the Certificate of Incorporation of Ceridian be amended to change Ceridian's corporate name to "Arbitron Inc." FURTHER RESOLVED, that the Board of Directors hereby approves and adopts in all respects a Certificate of Ownership and Merger, substantially in the form described to the Board of Directors at this meeting, which certificate has been prepared pursuant to Section 253 of the Delaware General Corporation Law for the purpose of effecting the above described merger. FURTHER RESOLVED, that appropriate officers of Arbitron, or each acting individually, be and they hereby are authorized and directed to make and execute, in the name of and on behalf of Arbitron a Certificate of Ownership and Merger, and to file such certificate in the office of the Secretary of State of Delaware, and to do all other acts and things that may be necessary to carry out and effectuate the purpose and intent of these resolutions. FURTHER RESOLVED, that the merger shall become effective at 7:00 a.m., CST, on March 30, 2001. 9 SECRETARY'S CERTIFICATE OF ARBITRON INC. (REVERSE STOCK SPLIT) In connection with the appointment of The Bank of New York as the Exchange Agent to effect the one-for-five reverse stock split (the "Reverse Stock Split") of the common stock of Arbitron Inc., a Delaware corporation formerly known as Ceridian Corporation (the "Company"), the undersigned hereby certifies that: 1. Attached hereto as Exhibit A is the Amended and Restated Certificate of Incorporation of the Company as in full force and effect as of the date hereof. 2. Attached hereto as Exhibit B are resolutions duly adopted by the Board of Directors of the Company on November 28, 2000, such resolutions being in full force and effect on the date hereof and not having been modified in any respect by any other resolutions. IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the 30th day of March, 2001. /s/ Dolores L. Cody ------------------------------------ Dolores L. Cody Executive Vice President, Chief Legal Officer and Secretary 10 EXHIBIT A - AMENDED AND RESTATED CERTIFICATE OF INCORPORATION 11 SEE EXHIBIT 3.1, 3.2 AND 3.3 TO FORM 10-K 12 EXHIBIT B - RESOLUTIONS WHEREAS, at a special meeting of the stockholders of Ceridian held on October 5, 2000, the stockholders approved a proposal to amend Ceridian's Restated Certificate of Incorporation, as amended, to effect immediately after the completion of the spin-off of a newly formed entity ("New Ceridian") that will contain Ceridian's human resource services business and human resource services and Comdata subsidiaries in the form of a distribution of all of the issued and outstanding shares of common stock of New Ceridian to Ceridian's stockholders in a tax-free transaction, resulting in two public companies (the "Spin-Off"), a reverse stock split of Ceridian Common Stock at a ratio to be established by Ceridian in its sole discretion, not to exceed 1-for-5. RESOLVED, that the Board hereby approves and adopts a 1-for-5 reverse stock split of Ceridian Common Stock (the "Reverse Stock Split"), contingent upon the completion of the Spin-Off, with the record date for such Reverse Stock Split to be the same record date as that for the Spin-Off (the "Reverse Stock Split Record Date") and the distribution date for such Reverse Stock Split to be the same date as the Distribution Date for the Spin-Off (the "Reverse Stock Split Effective Date"), with the effective time of the Reverse Stock Split (the "Reverse Stock Split Effective Time") to be immediately after the completion of the Spin-Off and the name change of Ceridian. FURTHER RESOLVED, that the following plan providing for the Reverse Stock Split is adopted and approved: (a) Each five (5) shares of Ceridian Common Stock outstanding as the end of the business day on the Reverse Stock Split Record Date shall be converted to one (1) share of fully paid and non-assessable share of Ceridian Common Stock. Ceridian shall issue one (1) share of Ceridian Common Stock at the Effective Time for each five (5) shares of Ceridian Common Stock (which will then be known as Arbitron Common Stock) outstanding as of the close of business on the Reverse Stock Split Record Date. (b) No fractional shares of Ceridian Common Stock will be issued as a result of the Reverse Stock Split. Holders of Ceridian Common Stock who would otherwise be entitled to receive fractional shares because the number of shares of Ceridian Common Stock they hold is not evenly divisible by five (5) will be entitled, in lieu of the fractional shares, to receive, upon surrender to Ceridian's transfer agent of the appropriate stock certificate(s), a cash payment the amount of which will be the proportionate portions of the net proceeds from the sale by the transfer agent on behalf of all fractional share holders of the aggregate fractional shares of Ceridian Common Stock. (c) From and after the Reverse Stock Split Effective Date, (i) all rights pertaining to the shares of Ceridian Common Stock outstanding prior to 13 the Reverse Stock Split Distribute Date, or accruing by virtue of the ownership thereof, shall cease and terminate, and (ii) certificates representing shares of Ceridian Common Stock shall be deemed to represent only the right to receive the applicable number of shares of common stock that are properly outstanding after the Reverse Stock Split Effective Date in accordance with the foregoing resolutions. (d) Stockholders of Ceridian shall be required to deliver the certificates representing their shares of Ceridian Common Stock outstanding immediately prior to the Reverse Stock Split Effective Time, upon which Ceridian shall issue a certificate representing such stockholders holdings of Ceridian Common Stock after the Reverse Stock Split Effective Date as a result of the Reverse Stock Split. (f) The Bank of New York, as Ceridian's transfer agent, after having received written instructions from Ceridian of the effectiveness of the Reverse Stock Split described in these resolutions, shall, upon receipt of a stock certificate representing shares of Ceridian Common Stock outstanding immediately prior to the Reverse Stock Split Effective Time (an "Old Certificate") cause such certificate to be cancelled and a new certificate to be issued evidencing the appropriate number of shares that were formerly represented by the Old Certificate, as determined by reference to these resolutions (a "New Certificate"), and record, register and countersign such New Certificates in accordance with its usual practices and instructions to be provided by the appropriate officers of Ceridian, and, alternatively, instead of issuing the New Certificates, registered holders of Ceridian Common Stock on the Reverse Stock Split Record Date will have their book-entry accounts adjusted to reflect the Reverse Stock (g) All outstanding stock options and all other contractual rights entitling the holders of such rights to acquire shares of Ceridian Common Stock shall be appropriately adjusted to give effect to the Reverse Stock Split and to prevent dilution or enlargement of the respective rights of such holders. The number of shares of Ceridian Common Stock which remain available for issuance under Ceridian's benefit plans will also be reduced by dividing such number of shares available prior to the Reverse Stock Split Effective Date by five (5) as provided under the anti-dilution provisions of each plan. FURTHER RESOLVED, that William Walsh, who will be the Executive Vice President and Chief Financial Officer of Ceridian as of the effectiveness of the resignation of John R. Eickhoff be, and hereby is, authorized and directed to make appropriate adjustments to Ceridian's capital accounts and financial statements and books and records to reflect the Reverse Stock Split. FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each of them hereby is, authorized and directed, in the name and on behalf of Ceridian, to take (i) all 14 reasonable steps as may be necessary from time to time in order to carry out the purpose and intent of these resolutions, including, without limitation, the preparation and completion, with legal counsel, of all required documents for the consummation of the Reverse Stock Split and (ii) any and all actions, including the execution and delivery of any documents, information statements, or agreements, as may reasonably be necessary or proper, to evidence the action taken pursuant to these resolutions, including without limitation the filing of a certificate of amendment to Ceridian's Restated Certificate of Incorporation substantially in the form previously approved by Ceridian's stockholders at the special meeting of stockholders held on October 5, 2000. FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each of them hereby is, authorized and directed to make, execute, acknowledge and file such certificates and documents as may be required by law with respect to the foregoing resolutions with the Secretary of State of the State of Delaware and such other federal, state and local authorities, and to take such steps as are in their sole judgment necessary or appropriate, to give effect to the Reverse Stock Split; and that all of the actions of any of such officers that are consistent with the purpose and intent of these resolutions are hereby ratified, confirmed and approved in all respects. FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each of them hereby is authorized and directed, in the name and on behalf of Ceridian to enter into an exchange agent agreement with The Bank of New York pursuant to which The Bank of New York will assist Ceridian in effecting the Reverse Stock Split. FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each of them hereby is authorized and directed, in the name and on behalf of Ceridian, to notify The New York Stock Exchange of the proposed Reverse Stock Split of Ceridian Common Stock, along with the Reverse Stock Split Record Date and Reverse Stock Split Effective Date and any other information required by The New York Stock Exchange, in such form and with such substance necessary to satisfy Ceridian's obligations under Rule 10b-17 promulgated under the Exchange Act. EX-4.1 3 w46446ex4-1.htm SPECIMEN OF COMMON STOCK CERTIFICATE.

EXHIBIT 4.1

INCORPORATED UNDER THE LAWS OF	THIS CERTIFICATE IS TRANSFERABLE		SEE REVERSE SIDE FOR
THE STATE OF DELAWARE	IN NEW YORK, NEW YORK		CERTAIN DEFINITIONS
ARBITRON INC.
COMMON STOCK	NUMBER	SHARES	CUSIP	03875Q 10 8
	ARB
THIS CERTIFIES THAT
	[SPECIMEN]
IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.50 PAR VALUE, OF	Dated
Arbitron Inc., transferable on the books of the Corporation by the holder hereof, in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar	COUNTERSIGNED AND REGISTERED: THE BANK OF NEW YORK TRANSFER AGENT AND REGISTRAR
Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers	/s/ Stephen B. Morris
	PRESIDENT AND CHIEF EXECUTIVE OFFICER
CERTIFICATE OF STOCK
	/s/ Dolores L. Cody
[SEAL]	SECRETARY

ARBITRON INC.

The Corporation will furnish without charge to each stockholder who so requests a statement of the designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Any such request is to be addressed to the Secretary of Arbitron Inc., at its principal office, or to its transfer agent named on the face of this certificate.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM —	as tenants in common	UNIF GIFT MIN ACT —_________Custodian__________                                                   (Cust)                           (Minor)
TEN ENT —	as tenants by the entireties	under Uniform Gifts to Minors
		Act___________________________                                                                   (State)
JTTEN —	as joint tenants with right of survivorship and not as tenants in common	UNIF TRF MIN ACT — _________Custodian_________                                                   (Cust)                           (Minor)
		under Uniform Gifts to Minors
		Act___________________________                                                                   (State)

For value received _______________ hereby sell, assign and transfer unto

Please insert Social Security or other
Identifying number of assignee

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Please print or typewrite name and address including postal zip code of assignee

_____________________________________________________________________________________________

_____________________________________________________________________________________ Shares

of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ______________________________________________ Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated ___________________________________

X   ___________________________________________

X   ___________________________________________________
                     THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
NOTICE:    THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE
                     IN EVERY PARTICULAR, WITHOUT ALTERATION OR
                     ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed

By _____________________________________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

EX-10.6 4 w46446ex10-6.txt CREDIT AGREEMENT 1 EXHIBIT 10.6 ================================================================================ CREDIT AGREEMENT Dated as of January 31, 2001 among CERIDIAN CORPORATION (DBA THE ARBITRON COMPANY), as the Borrower, BANK OF AMERICA, N.A., as the Administrative Agent and Letter of Credit Issuer, and The Other Lenders Party Hereto BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager ================================================================================ 2 TABLE OF CONTENTS

Section Page ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS..................................................1 1.01 Defined Terms.................................................................1 1.02 Other Interpretive Provisions................................................25 1.03 Accounting Terms.............................................................26 1.04 Rounding.....................................................................26 1.05 References to Agreements and Laws............................................26 ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS...........................................26 2.01 Loans........................................................................26 2.02 Borrowings, Conversions and Continuations of Loans...........................26 2.03 Letters of Credit............................................................28 2.04 Optional Prepayments.........................................................34 2.05 Mandatory Prepayments........................................................35 2.06 Reduction or Termination of Commitments......................................35 2.07 Repayment of Loans...........................................................37 2.08 Interest.....................................................................37 2.09 Fees.........................................................................38 2.10 Computation of Interest and Fees.............................................38 2.11 Evidence of Debt.............................................................38 2.12 Payments Generally...........................................................39 2.13 Sharing of Payments..........................................................41 2.14 Security and Guaranties......................................................41 ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY.........................................42 3.01 Taxes........................................................................42 3.02 Illegality...................................................................43 3.03 Inability to Determine Rates.................................................43 3.04 Increased Cost and Reduced Return; Capital Adequacy..........................44 3.05 Funding Losses...............................................................44 3.06 Matters Applicable to all Requests for Compensation..........................45 3.07 Survival.....................................................................45 ARTICLE IV. CONDITIONS PRECEDENT............................................................46 4.01 Conditions to Effectiveness..................................................46 4.02 Conditions to Initial Credit Extension.......................................49 4.03 Conditions to all Credit Extensions..........................................51 ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................................52 5.01 Corporate Existence and Power................................................52 5.02 Corporate Authorization; No Contravention....................................52 5.03 Governmental Authorization...................................................53 5.04 Binding Effect...............................................................53 5.05 Litigation...................................................................53

i. 3

5.06 No Default...................................................................54 5.07 ERISA Compliance.............................................................54 5.08 Title to Properties..........................................................55 5.09 Taxes........................................................................55 5.10 Financial Condition..........................................................56 5.11 Environmental Matters........................................................56 5.12 Regulated Entities...........................................................57 5.13 Collateral Documents.........................................................57 5.14 No Burdensome Restrictions...................................................57 5.15 Solvency.....................................................................57 5.16 Labor Relations..............................................................58 5.17 Intellectual Property; Proprietary Information...............................58 5.18 Insurance....................................................................59 5.19 Employment Agreements........................................................59 5.20 Spin-Off Documents; Private Placement Documents..............................59 5.21 Capitalization; Subsidiaries.................................................59 5.22 Margin Regulations...........................................................60 5.23 Brokers; Certain Expenses....................................................60 5.24 Year End.....................................................................60 5.25 Third Party Consents.........................................................60 5.26 Existing Indebtedness........................................................61 5.27 New Ceridian Obligations.....................................................61 5.28 Swap Contracts...............................................................61 5.29 Full Disclosure..............................................................61 ARTICLE VI. AFFIRMATIVE COVENANTS...........................................................61 6.01 Financial Statements.........................................................61 6.02 Certificates; Other Information..............................................62 6.03 Notices......................................................................63 6.04 Preservation of Corporate Existence, Etc.....................................65 6.05 Maintenance of Property......................................................65 6.06 Insurance....................................................................66 6.07 Payment of Obligations.......................................................66 6.08 Compliance with Laws.........................................................66 6.09 ERISA Compliance.............................................................67 6.10 Interest Rate Protection.....................................................67 6.11 Inspection of Property and Books and Records.................................67 6.12 Environmental Laws...........................................................67 6.13 Use of Proceeds..............................................................67 6.14 Additional Guarantors........................................................68 6.15 Additional Subsidiaries......................................................68 6.16 Additional Intellectual Property.............................................68 6.17 Licenses.....................................................................69 6.18 Further Assurances...........................................................69 ARTICLE VII. NEGATIVE COVENANTS.............................................................70 7.01 Limitation on Liens..........................................................70

ii. 4 7.02 Mergers and Consolidations...................................................72 7.03 Indebtedness.................................................................72 7.04 Disposition of Assets........................................................73 7.05 Contingent Obligations.......................................................75 7.06 Loans and Investments........................................................76 7.07 Dividends and Payments.......................................................77 7.08 Use of Proceeds..............................................................77 7.09 Hostile Acquisition..........................................................78 7.10 Leverage Ratio...............................................................78 7.11 Fixed Charge Coverage Ratio..................................................78 7.12 Foreign Subsidiaries.........................................................79 7.13 Change in Business...........................................................79 7.14 Accounting Changes...........................................................79 7.15 Certain Contracts............................................................79 7.16 Transactions with Affiliates.................................................80 7.17 Capital Expenditures.........................................................80 7.18 Sales and Leasebacks.........................................................81 7.19 Certain Tax Matters..........................................................81 ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES................................................81 8.01 Events of Default............................................................81 8.02 Remedies Upon Event of Default...............................................84 ARTICLE IX. ADMINISTRATIVE AGENT............................................................85 9.01 Appointment and Authorization of Administrative Agent........................85 9.02 Delegation of Duties.........................................................85 9.03 Liability of Administrative Agent............................................85 9.04 Reliance by Administrative Agent.............................................86 9.05 Notice of Default............................................................86 9.06 Credit Decision; Disclosure of Information by Administrative Agent...........87 9.07 Indemnification of Administrative Agent......................................87 9.08 Administrative Agent in its Individual Capacity..............................88 9.09 Successor Administrative Agent...............................................88 9.10 Other Agents; Lead Managers..................................................88 9.11 Collateral Matters...........................................................89 ARTICLE X. MISCELLANEOUS....................................................................89 10.01 Amendments, Etc..............................................................89 10.02 Notices and Other Communications; Facsimile Copies...........................91 10.03 No Waiver; Cumulative Remedies...............................................92 10.04 Attorney Costs, Expenses and Taxes...........................................92 10.05 Indemnification by the Borrower..............................................92 10.06 Payments Set Aside...........................................................93 10.07 Successors and Assigns.......................................................96 10.08 Confidentiality..............................................................97 10.09 Set-off......................................................................97 10.10 Interest Rate Limitation.....................................................97 iii. 5 10.11 Counterparts.................................................................97 10.12 Integration..................................................................97 10.13 Survival of Representations and Warranties...................................97 10.14 Severability.................................................................98 10.15 Foreign Lenders..............................................................98 10.16 Removal and Replacement of Lenders...........................................99 10.17 Governing Law................................................................99 10.18 Waiver of Right to Trial by Jury............................................100 SCHEDULES 1.01(e) Existing Letters of Credit 1.01(i) Initial Permitted Indebtedness 1.01(s) Spin-Off Documents 2.01 Commitments and Pro Rata Shares 5.05 Litigation Affecting Loan Parties 5.07 ERISA Compliance 5.10 Contingent Obligations 5.11 Environmental Matters 5.17 Intellectual Property; Proprietary Information 5.19 Employment Agreements 5.21 Capitalization; Subsidiaries 5.23 Brokers' Fees and Related Expenses 5.25 Third Party Consents 7.01 Permitted Liens 7.02(b) Permitted Transactions 7.06(b) Permitted Investments 10.02 Eurodollar and Domestic Lending Offices, Addresses for Notices iv. 6 EXHIBITS

FORM OF A Loan Notice B Loan Note C Compliance Certificate D Assignment and Acceptance E New Ceridian Guaranty F Subsidiary Guaranty G Borrower Security Agreement H Subsidiary Security Agreement I Supplemental IP Security Agreement J Borrower Pledge Agreement K Subsidiary Pledge Agreement L Effectiveness Date Opinion of Counsel (Content Summary) M Closing Date Opinion of Counsel (Content Summary) N Additional Guarantor Assumption Agreement O Additional Guarantor Opinion of Counsel

v. 7 CREDIT AGREEMENT This CREDIT AGREEMENT ("Agreement") is entered into as of January ___, 2001, among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), each lender from time to time party hereto (collectively, the "Lenders" and individually, a "Lender"), BANK OF AMERICA, N.A., as the Administrative Agent and L/C Issuer, and FLEET NATIONAL BANK, as the Syndication Agent. The Borrower has requested that the Lenders provide a revolving credit facility, and the Lenders are willing to do so on the terms and conditions set forth herein. In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS 1.01 DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings set forth below: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit account for purposes of Article 9 of the UCC or other applicable law. "Acquisition" means, as to the Borrower and each of its Subsidiaries, any transaction or series of related transactions for the purpose of or resulting directly or indirectly in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary). "Additional Guarantor Assumption Agreement" has the meaning specified in Section 6.14(a). "Administrative Agent" means Bank of America in its capacity as the administrative agent under any of the Loan Documents, or any successor administrative agent, and, to the extent applicable, in its capacity as "Collateral Agent" under and as defined in the Intercreditor Agreement. "Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders. "Affiliate" means, as to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or 1. 8 indirectly, power (a) to vote 15% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. "Agent/Arranger Fee Letter" has the meaning specified in Section 2.09(b). "Agent-Related Persons" means the Administrative Agent (including any successor administrative agent), together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Aggregate Distributable Income" means an amount equal to 50% of Consolidated Net Income (positive or negative) calculated on a cumulative basis, based on the year-end financial statements delivered to the Administrative Agent pursuant to Section 6.01(a); provided that any and all amounts paid pursuant to Section 7.07(a)(iv) or pursuant to any equivalent provision in the Private Placement Documents shall reduce the amount of Aggregate Distributable Income on a dollar for dollar basis. "Aggregate Commitments" has the meaning set forth in the definition of "Commitment." "Agreement" means this Credit Agreement. "Applicable Rate" means the following percentages per annum, each based upon the applicable "Pricing Level":

APPLICABLE RATE --------------------------------------------------------------------------------- Eurodollar Rate + ------------- Pricing Commitment Letters of Base Rate Level Leverage Ratio Fee Credit + -------------------------------------------------------------------------------- 1 Less than or equal to 0.375% 2.00% 0.500% 1.50:1 2 Less than or equal to 0.400% 2.125% 0.750% 2.00:1 but greater than 1.50:1 3 Less than or equal to 0.425% 2.250% 0.875% 2.50:1 but greater than 2.00:1 4 Less than or equal to 0.475% 2.375% 1.000% 3.00:1 but greater than 2.50:1 5 Less than or equal to 0.500% 2.500% 1.125% 3.50:1 but greater than 3.00:1 6 Greater than 3.50:1 0.550% 2.750% 1.250% --------------------------------------------------------------------------------

2. 9 Initially, and at all times during the first 180 days after the Closing Date, the applicable Pricing Level shall be Level 5 unless the Leverage Ratio, as evidenced in the pro forma Compliance Certificate delivered on the Closing Date or thereafter (based on the Compliance Certificates delivered under Section 6.02(a)), equates to Level 6, in which case the applicable Pricing Level shall be Level 6 thereafter for the balance of such 180-day period. Each change in the Applicable Rate based on a change of the Leverage Ratio shall be effective five Business Days after the date the most recent Compliance Certificate is received by the Administrative Agent until but excluding the date five Business Days after the next Compliance Certificate is received. In the event that the Borrower shall fail to deliver the Compliance Certificate within the time period provided by Section 6.02(a), then, without limitation of the Lenders' other rights and remedies hereunder, the Pricing Level shall be Level 6 from the date upon which such Compliance Certificate was due under Section 6.02(a) until the date upon which such Compliance Certificate is actually received by the Administrative Agent. "Arbitron Business" means collectively the businesses of: (a) providing media and marketing research services to broadcasters, advertising agencies, advertisers, on-line webcasters and cable television; (b) providing media audience and consumer retail behavior research services to cable systems, broadcasters, magazines, advertising agencies and newspapers; and (c) providing application software used to access and analyze media audience information and software applications to access and analyze consumer retail behavior and media usage. "Arbitron Subsidiaries" means, at all times prior to the Spin-Off Consummation Date, those Subsidiaries designated as Arbitron Subsidiaries on Schedule 5.21 and, at all times after the Spin-Off Consummation Date, all Subsidiaries of the Borrower. "Arranger" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. "Assignment and Acceptance" means an Assignment and Acceptance substantially in the form of Exhibit D. "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel and the non-duplicative allocated cost of internal legal services and all disbursements of internal counsel. "Attributable Indebtedness" means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease. "Audited Financial Statements" means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal years ended December 31, 1998 and December 31, 1999 (in each case, giving effect to the Spin-Off Transaction) and the related consolidated statements of income and cash flows for the fiscal years of the Borrower ended December 31, 3. 10 1997, December 31, 1998 and December 31, 1999, each in the final form attached to the Form 10. "Bank of America" means Bank of America, N.A. "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." Such rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Loan" means a Loan that bears interest based on the Base Rate. "Borrower" has the meaning set forth in the introductory paragraph hereto. "Borrower Pledge Agreement" means a Pledge Agreement executed by the Borrower, in substantially the form of Exhibit J. "Borrower Security Agreement" means a Security Agreement executed by the Borrower, in substantially the form of Exhibit G. "Borrowing" means a borrowing consisting of simultaneous Loans of the same Type and having the same Interest Period made by each of the Lenders pursuant to Section 2.01. "Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent's Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the applicable offshore Dollar interbank market. "Capital Lease" means, as applied to any Person, any lease of property by such Person as lessee that is classified as a capital lease under GAAP. "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term shall have corresponding meaning. Effective as of the time of such pledge, deposit or delivery, the Borrower hereby grants the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a Lien on all such cash and deposit account balances. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative Agent as depository. 4. 11 "Cash Equivalents" means: (a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof, having maturities of not more than six months from the date of acquisition; (b) certificates of deposit, time deposits, Eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers' acceptances, having in each case a tenor of not more than six months, issued by any Lender, or by any U.S. commercial or investment bank or broker having combined capital and surplus of not less than $100,000,000 whose short term securities are rated at least A-1 by S&P and P-1 by Moody's; (c) commercial paper or promissory notes of an issuer rated at least A-1 by S&P or P-1 by Moody's and in either case having a tenor of not more than three months; and (d) money market funds that comply with all material provisions of Rule 2a-7 issued by the SEC under the Investment Company Act of 1940. "Change of Control" means, with respect to the Borrower, an event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of the Borrower or its Subsidiaries, or any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire (such rights, "option rights"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 30% or more of the equity interests of the Borrower on a partially diluted basis taking into account equity interests realizable upon the exercise of such person's or group's option rights; or (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. "Closing Date" means the first date all the conditions precedent in Section 4.02 are satisfied or waived in accordance with Section 4.02. 5. 12 "Co-Agent" means Fleet National Bank in its capacity as syndication agent hereunder. "Code" means the Internal Revenue Code of 1986. "Collateral" means all property and interests in property and proceeds thereof now owned or hereafter acquired by the Borrower or any Guarantor and their respective Subsidiaries in or upon which a Lien now or hereafter exists in favor of the Lenders, or the Administrative Agent on behalf of the Lenders, whether under this Agreement or under any other Collateral Documents. "Collateral Agent" has the meaning specified in the Intercreditor Agreement. "Collateral Documents" means, collectively, (i) the Security Agreements, (ii) the Pledge Agreements, (iii) all Account Control Agreements executed and delivered pursuant to any other Loan Document, (iv) all documents executed by the Borrower to accomplish Cash Collateralization or pledges of deposit accounts, and (v) all licenses, UCC financing statements, notices and other documents executed from time to time under or in connection with the foregoing. "Commitment" means, as to each Lender, its obligation (a) to make Loans to the Borrower pursuant to Section 2.01, and (b) to purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.01, as such amount may be reduced or adjusted from time to time in accordance with this Agreement (collectively, the "Aggregate Commitments"). "Compensation Period" has the meaning specified in Section 2.12(d)(ii). "Compliance Certificate" means a certificate substantially in the form of Exhibit C. "Consolidated EBITDA" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated Net Income, plus (d) the amount of all depreciation expense and amortization expense for such period, less (e) interest income for such period; provided, however, that Consolidated Net Income shall be computed for these purposes without giving effect to (i) extraordinary non-cash losses or non-cash gains, or (ii) non-cash losses or non-cash gains from discontinued operations, except that cash payments made in any current period in respect of non-cash charges incurred under clause (i) or (ii) in any previous period shall be deducted from Consolidated Net Income in such current period. "Consolidated Funded Indebtedness" means, as of any date of determination, for Borrower and its Subsidiaries on a consolidated basis, all (a) obligations for borrowed money, (b) obligations evidenced by bonds, debentures, notes and loan agreements, (c) obligations in respect of letters of credit, surety bonds, bankers' acceptances or similar instruments, (d) obligations to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time), (e) Attributable Indebtedness incurred by the Borrower or any of its Subsidiaries in connection with Synthetic Lease Obligations and Capital Leases and (f) Guaranty 6. 13 Obligations of the Borrower and its Subsidiaries in respect of obligations of any Person in the nature of (a) through (d) above. "Consolidated Interest Expense" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, but excluding any fees, charges and expenses of the Borrower and its Subsidiaries arising from the negotiation, execution, closing and consummation of the Spin-Off Documents and the "Facility Documents" (as such term is defined in the Intercreditor Agreement); and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP. "Consolidated Net Income" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries, as determined in accordance with GAAP. "Consolidated Net Worth" means, as of any date of determination, with respect to the Borrower and its Subsidiaries on a consolidated basis, shareholders' equity on the date of determination as determined in accordance with GAAP. "Consolidated Total Assets" means, as of any date of determination, the total consolidated assets of the Borrower and its Subsidiaries as determined in accordance with GAAP. "Contingent Obligation" means, as to the Borrower or any of its Subsidiaries, (a) any Guaranty Obligation of that Person; (b) any reimbursement obligation of that Person with respect to a standby letter of credit, surety bond, banker's acceptance, bank guaranty or similar instrument; (c) any obligation of that Person to purchase any materials, supplies or other property from, or to obtain the services of, another Person (other than the Borrower or one of its Subsidiaries) if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; and (d) all Indebtedness (other than that of the Borrower or any of its Subsidiaries) secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by the Borrower or any such Subsidiary. "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Credit Extension" means each of the following: (a) a Borrowing, and (b) an L/C Credit Extension. "Current Portion of Long Term Debt" means, as of any date of determination, in respect of the Borrower and its Subsidiaries on a consolidated basis, (a) current portion of long term debt 7. 14 as determined on such date in accordance with GAAP, plus (b) an amount equal to the amount, if any, by which the Outstanding Amount on such date exceeds (i) the Aggregate Commitments on such date less (ii) the amount of any mandatory reduction in Aggregate Commitments scheduled to occur within the four fiscal quarter period commencing on such date pursuant to Section 2.06(b)(i); provided, however, during the 365 days prior to the scheduled Maturity Date (under clause (a) of the definition of such term), "Current Portion of Long Term Debt" shall be calculated excluding the then-Outstanding Amount. "Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. "Default" means any event that, with the giving of any notice, the passage of time, or both, would be an Event of Default. "Default Rate" means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws. "Disposition" or "Dispose" means the direct or indirect sale, assignment, conveyance, lease, transfer, license or other disposition (including any sale and leaseback transaction) of any property (other than cash or Cash Equivalents) by any Person, including any sale, assignment, transfer or other disposition, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. "Distribution" means the distribution by dividend of all stock of New Ceridian held by the Borrower to the Borrower's shareholders, pursuant to a tax-free transaction under Section 355 of the Code and undertaken pursuant to the Spin-Off Documents. "Dollar" and "$" means lawful money of the United States of America. "EBITDA" means, in respect of any Person, for any period as determined in accordance with GAAP, an amount equal to the sum of (a) net income, plus (b) interest expense, plus (c) the amount of taxes, based on or measured by income, used or included in the determination of such net income, plus (d) the amount of all depreciation expense and amortization expense for such period, less (e) interest income for such period; provided, however, that net income shall be computed for these purposes without giving effect to (i) extraordinary non-cash losses or non-cash gains, or (ii) non-cash losses or non-cash gains from discontinued operations, except that cash payments made in any current period in respect of non-cash charges incurred under clause (i) or (ii) in any previous period shall be deducted from consolidated net income in such current period. 8. 15 "Effectiveness Date" means the first day all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of Section 4.01(c), waived by the Person entitled to receive the applicable payment). "Eligible Assignee" has the meaning specified in Section 10.07(h). "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the alleged or actual presence, placement, migration, spillage, leakage, disposal, discharge, emission or release of any Hazardous Material at, in, or from property, whether or not owned by the Borrower, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations, registration requirements and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental and land use matters or health and safety matters involving Hazardous Materials. "ERISA" means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto. "ERISA Affiliate" means any trade or business (whether or not incorporated) that is currently or at any relevant time in the past was under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. 9. 16 "Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula: Eurodollar Rate = Eurodollar Base Rate -------------------------------------------- 1.00 -- Eurodollar Reserve Percentage Where, "Eurodollar Base Rate" means, for such Interest Period: (a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (b) in the event the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (c) in the event the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest (rounded upward to the next 1/16th of 1%) at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period. "Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities") having a term comparable to such Interest Period. The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. 10. 17 "Eurodollar Rate Loan" means a means a Loan that bears interest at a rate based on the Eurodollar Rate. "Event of Default" means any of the events or circumstances specified in Article VIII. "Event of Loss" means with respect to any asset of any Person, any of the following: (i) any loss, destruction or damage of such asset; (ii) any sale or transfer of such asset in connection with any pending or threatened institution of any proceedings for the condemnation of or seizure of such asset or of any right of any eminent domain; or (iii) any actual condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such asset, or confiscation of such asset or requisition of the use of such asset. "Evergreen Letter of Credit" has the meaning specified in Section 2.03(b)(iii). "Excess Cash Flow" means, for any fiscal year, in respect of the Borrower and its Subsidiaries on a consolidated basis, the excess, if any, of Consolidated EBITDA, less the sum of (a) the aggregate amount of all principal payments made during such year pursuant to (i) Section 2.05 and (ii) the Private Placement Documents, plus (b) Consolidated Interest Expense for such year, plus (c) capital expenditures and (without duplication) PPM Expenditures, to the extent such expenditures are actually made during such year and are otherwise permitted under Article VII, plus (d) cash taxes actually paid during such year; provided, however, that Excess Cash Flow shall be calculated without taking into account Consolidated EBITDA, Consolidated Interest Expense, capital expenditures or cash taxes accrued or paid prior to the Spin-Off Consummation Date. "Exchange Act" means the Securities Exchange Act of 1934. "Existing Credit Facility" means that certain Amended and Restated Credit Agreement dated as of July 31, 1997 among the Borrower, Bank of America, as agent, and a syndicate of lenders, and after giving effect to that certain "Waiver to Credit Agreement" entered into by such parties dated as of December 20, 2000. "Existing Letters of Credit" means the letters of credit set forth on Schedule 1.01(e) and issued by the "Issuing Bank" under, and as defined in, the Existing Credit Facility. "Federal Funds Rate" means, for any day, the rate per annum (rounded upwards to the nearest 1/100 of 1%) 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 by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Bank of America on such day on such transactions as determined by the Administrative Agent. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System of the United States of America. 11. 18 "Foreign Lender" has the meaning specified in Section 10.15. "Foreign Subsidiary" means any Subsidiary of the Borrower incorporated or organized, and existing, under the laws of any jurisdiction other than the United States or any state thereof. "Form 10" means, until the Closing Date, that certain Form 10 filing prepared by New Ceridian and delivered to the SEC on or about December 6, 2000 in connection with the Spin-Off Transaction, as amended by that amendment filed with the SEC on or about December 22, 2000, and by that amendment filed with the SEC on or about January 22, 2001. From and after the Closing Date, the term "Form 10" also includes: (a) any amendments to the Form 10 filed with the SEC between the Effectiveness Date and the Closing Date to the extent permitted by Section 4.02(a)(i)(H), and (b) any amendments filed with the SEC after the Closing Date to the extent necessary to accommodate changes to the Spin-Off Documents permitted by Section 7.15(c). "Form 10 Financial Statements" means the Audited Financial Statements plus all related unaudited financial statements of the Borrower filed with the Form 10. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination, consistently applied. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. "Guarantor" means each Arbitron Subsidiary party to a Guaranty and, at all times prior to the Spin-Off Consummation Date, New Ceridian. "Guaranties" means the Subsidiary Guaranties and the New Ceridian Guaranty. "Guaranty Obligation" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guarantying or having the economic effect of guarantying any Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligees in 12. 19 respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligees against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person; provided, however, that the term "Guaranty Obligation" shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guarantying Person in good faith. "Hazardous Materials" means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, hazardous chemicals, special waste, hazardous substance, hazardous material, regulated substance, or toxic substance, or petroleum or petroleum derived substance or waste. "Honor Date" has the meaning set forth in Section 2.03(c)(i). "Indebtedness" means, as to any Person at a particular time, all of the following: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) any fixed (non-contingent) obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations under any Swap Contract in an amount equal to (i) if such Swap Contract has been closed out, the Swap Termination Value, or (ii) if such Swap Contract has not been closed out, the mark-to-market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such Swap Contract; (d) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time), and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; and (e) Capital Leases and Synthetic Lease Obligations. For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (that is not itself a corporation, limited liability company or limited 13. 20 liability partnership) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to the Required Lenders. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. Without limiting the generality of the foregoing, any indebtedness of the Borrower to any of the Borrower's Wholly-Owned Subsidiaries, or of any of the Borrower's Wholly-Owned Subsidiaries to other of the Borrower's Wholly-Owned Subsidiaries, shall not constitute Indebtedness hereunder. "Indemnified Liabilities" has the meaning set forth in Section 10.05. "Indemnitees" has the meaning set forth in Section 10.05. "Initial Permitted Indebtedness" means that Indebtedness set forth on Schedule 1.01(i). "Intellectual Property" means all trademarks, trademark rights, trade names, trade name rights, service marks, patents, pending patent applications, copyrights, franchises, authorizations, inventions, Proprietary Information and goodwill now existing or hereafter arising, and all other intellectual property rights held or used by the Borrower and its Subsidiaries. "Intercreditor Agreement" means that Intercreditor Agreement, dated as of the Closing Date, entered into among the Collateral Agent, the Administrative Agent, the Private Placement Noteholders, and the "Swap Provider" (as defined therein) as counterparty to Specified Swap Contracts, in form and substance satisfactory to the Administrative Agent and the Lenders. "Interest Payment Date" means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date. "Interest Period" means as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of any Eurodollar Rate Loan) converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided that: (i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and 14. 21 (iii) no Interest Period shall extend beyond the scheduled Maturity Date. "Investment" of a Person means (i) the outstanding principal amount of any loan, advance, extension of credit (other than loans, advances or extensions of credit arising in the Ordinary Course of Business), or (ii) the amount (measured by the amount of cash expended or the then-current fair market value of other assets, including stock of such Person, utilized as consideration) of any contribution of capital by such Person to any other Person or any investment in, or purchase or other acquisition of, the stock, partnership or membership interests, notes, debentures or other securities of any other Person made by such Person, reduced by the amount of any distribution by such other Person constituting a return of capital, any payment of principal on such notes, debentures or other debt securities, or any proceeds from the sale of any equity or debt securities of such other Person. "IRS" means the United States Internal Revenue Service. "IRS Ruling Letter" means an affirmative private letter ruling by the IRS regarding the tax-free nature of the Spin-Off Transaction. "Laws" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. "L/C Advance" means, with respect to each Lender, such Lender's participation in any L/C Borrowing in accordance with its Pro Rata Share. "L/C Application" means an application and agreement for the issuance or amendment of a letter of credit in the form from time to time in use by the L/C Issuer. "L/C Backstop Date" means the day that is seven days prior to the scheduled Maturity Date (or, if such day is not a Business Day, the next preceding Business Day). "L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing. "L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof. "L/C Issuer" means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder. "L/C Obligations" means, as at any date of determination, the aggregate undrawn face amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. 15. 22 "L/C Sublimit" means an amount equal to the lesser of the Aggregate Commitments and $25,000,000. The L/C Sublimit is part of, and not in addition to, the Aggregate Commitments. "Lead Lender" means Bank of America or Fleet National Bank. "Lender" has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuer. "Lending Office" means, as to any Lender, the office or offices of such Lender described as such on Schedule 10.02, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent. "Letters of Credit" means any standby letters of credit issued or deemed issued hereunder, and shall include the Existing Letters of Credit. "Leverage Ratio" means, as of any date of determination, for Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters ending on such date. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable Laws of any jurisdiction), including the interest of a purchaser of accounts receivable, but excluding the interest of a lessor under an Operating Lease. "Loan" has the meaning specified in Section 2.01. "Loan Documents" means this Agreement, each Loan Note, the Collateral Documents, the Guaranties, each Additional Guarantor Assumption Agreement, the Intercreditor Agreement, each Request for Credit Extension, the Agent/Arranger Fee Letter, and each Compliance Certificate and other certificates delivered under any of the foregoing. "Loan Note" means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B. "Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Loans as the same Type, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A. "Loan Parties" means, collectively, the Borrower and all Guarantors. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole and includes, at any time prior to the Spin-Off Consummation Date, New Ceridian and its Subsidiaries taken as a whole; 16. 23 (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party or, at any time prior to the Spin-Off Consummation Date, the ability of New Ceridian to perform its obligations under any Spin-Off Document to which it is party; or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against any Loan Party or Subsidiary of any Loan Document to which it is a party or, at any time prior to the Spin-Off Consummation Date, against New Ceridian of any Spin-Off Document to which it is a party, or (ii) the perfection or priority of any Lien granted under any of the Collateral Documents. "Material Software" means, at any time, any software program (including all releases, versions and modifications thereof) developed, acquired or used in connection with the Arbitron Business and as to which the Borrower and its Subsidiaries have received gross royalty or license payments from any and all third parties in an aggregate amount in excess of $1,000,000 during any of the five fiscal years preceding such time. "Material Subsidiary" means, at any time, any Arbitron Subsidiary: (a) the assets of which are either 5% or more of Consolidated Total Assets (or the equivalent thereof in another currency) or the gross revenues of which are 5% or more of consolidated gross revenue of the Borrower and its Subsidiaries, based on the most recent financial statements delivered to the Administrative Agent under Section 4.01(a), 4.02(a) or 6.01; or (b) designated by the Borrower as a Material Subsidiary pursuant to Section 6.15(b) and not de-designated pursuant to Section 6.15(c). "Maturity Date" means (a) the date that is five years after the Closing Date, or (b) such earlier date upon which the Commitments may be terminated in accordance with the terms hereof. "Maximum Rate" has the meaning specified in Section 10.10. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding three calendar years, has made or been obligated to make contributions. "Net Cash Proceeds" has the meaning specified in Section 2.06(b)(ii). "New Ceridian" means New Ceridian Corporation, a Delaware corporation. "New Ceridian Assets" means, at all times prior to the Spin-Off Consummation Date, all assets of the Borrower and its Subsidiaries intended (consistent with the Form 10) to be transferred to New Ceridian pursuant to the Separation and not including any assets necessary to conduct the Arbitron Business. "New Ceridian Credit Agreement" means that certain Credit Agreement dated as of the Effectiveness Date, among New Ceridian, the lenders from time to time party thereto and Bank of America, N.A., as the administrative agent. 17. 24 "New Ceridian Guaranty" means a Guaranty executed by New Ceridian, in substantially the form of Exhibit E. "Nielsen" means Nielsen Media Research, Inc., a Delaware corporation. "Nielsen JV" means a joint venture that may be created upon the exercise of an option granted to Nielsen pursuant to the Nielsen JV Option Agreement. "Nielsen JV Option Agreement" means that Option Agreement between the Borrower and Nielsen dated as of May 31, 2000 and as in effect as of the Effectiveness Date. "Nonrenewal Notice Date" has the meaning specified in Section 2.03(b)(iii). "Notice of Lien" means any "notice of lien" or similar document intended to be filed or recorded with any court, registry, recorder" office, central filing office, or other Governmental Authority for the purpose of evidencing, creating, perfecting or preserving the priority of a lien securing obligations owing to a Governmental Authority. "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest that accrues after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. "Operating Lease" means, as applied to any Person, any lease of property which is not a Capital Lease. "Ordinary Course of Business" means, in respect of any transaction involving the Borrower or any Subsidiary, the ordinary course of such Person's business, as conducted by any such Person (or its predecessor) in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document. "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the articles of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time. "Other Taxes" has the meaning specified in Section 3.01(b). "Outstanding Amount" means (i) with respect to Loans, on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C 18. 25 Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date. "Participant" has the meaning specified in Section 10.07(d). "PBGC" means the Pension Benefit Guaranty Corporation. "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years. "Permitted Acquisition" means any Acquisition as to which all of the following conditions are satisfied: (a) total cash and non cash consideration (including any deferred payment) paid or required to be paid by the Borrower and its Subsidiaries in connection with such Acquisition does not exceed $30,000,000; (b) after giving effect to such Acquisition, total cash and non cash consideration (including any deferred payment) paid or required to be paid by the Borrower and its Subsidiaries in connection with all such Acquisitions in any fiscal year does not exceed $50,000,000; (c) after giving effect to such Acquisition, the Person, or business or division of such Person, so acquired shall be a division or Wholly-Owned Subsidiary of the Borrower or one of its Subsidiaries; and (d) immediately after giving effect to such Acquisition, there shall exist no Default or Event of Default. "Permitted Indebtedness" has the meaning specified in Section 7.03(a). "Permitted Liens" has the meaning specified in Section 7.01. "Permitted Nielsen JV" means any Person that is a Nielsen JV, provided the following conditions are at all times satisfied: (i) such Person is an entity duly formed and existing under the Laws of its jurisdiction of incorporation or organization; (ii) no less than 50% of the beneficial ownership of such person is owned by the Borrower and such Person is not a Subsidiary of Nielsen or of any Affiliate of Nielsen; (iii) the assets and property of such Person consisting of Intellectual Property or Proprietary Information contributed by the Borrower or any Subsidiary of the Borrower are subject to no Liens in favor of any other Person other than Permitted Liens; (iv) such Person is authorized to use and license the Borrower's PPM Technology to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement; and (v) the Organization Documents, and all material contracts and licenses of such Person entered into, directly or indirectly, with the Borrower or any Subsidiary, and other material contracts to be entered into by such Person substantially contemporaneously with its organization are in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. "Permitted Swap Contract" means any Swap Contract entered into by the Borrower or any Subsidiary for which each of the following conditions is satisfied: (a) such contract is (or was) entered into by such Person in the Ordinary Course of Business for the purpose of directly 19. 26 mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated by such Person (including any Swap Contract entered into by the Borrower or any Subsidiary for the purpose of hedging interest rate risk arising in connection with the Obligations (a "Specified Swap Contract")), or with changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a "market view"; and (b) such Swap Contract does not contain: (i) any provision (a "walk-away" provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party, or (ii) with respect to any Swap Contract that it is not a Specified Swap Contract, any provision creating or permitting the declaration of an event of default, termination event, or similar event upon the occurrence of an Event of Default hereunder (other than an Event of Default under Section 8.01(a)). "Person" means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture or Governmental Authority. "Placement Agent" means Banc of America Securities LLC or such other Person designated as the placement agent under the terms of the Private Placement Documents. "Pledge Agreements" means the Borrower Pledge Agreement and the Subsidiary Pledge Agreements. "Pledged Collateral" has the meaning specified in the Pledge Agreements. "PPM Expenditures" means (a) at any time prior to the initial exercise of the option under the Nielsen JV Option Agreement to establish a Nielsen JV, all capital expenditures and capitalized expenditures (including in respect of software development and acquisition), made or incurred by the Borrower or its Subsidiaries in anticipation of a Nielsen JV or in furtherance of the development or Disposition of PPM Technology, and (b) at any time thereafter, the sum of the items specified in clause (a) plus all Investments made by the Borrower and its Subsidiaries in any and all Nielsen JV's. "PPM Technology" means (a) all patent, copyright and other intellectual property rights and technology of the Borrower and its Subsidiaries in the Borrower's "Portable People Meter" and "Critical Band Encoding Technique," as such terms are defined in the Nielsen JV Option Agreement, together with all improvements and additions thereto, and (b) all other audio encoding patents held by the Borrower and subject to the Nielsen JV Option Agreement. "Preliminary Opening Balance Sheet" has the meaning specified in Section 4.01(a)(viii). "Private Placement" means a private placement of senior secured notes of the Borrower in an aggregate principal amount of not less than $50,000,000 pursuant to the Private Placement Documents and entered into on or before the Effectiveness Date. "Private Placement Documents" means, collectively, the Note Purchase Agreement dated of near or even date herewith among the Borrower, John Hancock Life Insurance Company and the other Private Placement Noteholders party thereto, together with all "Note Documents" as defined in such Note Purchase Agreement. 20. 27 "Private Placement Noteholders" means the "Note Holders" under and as defined in the Private Placement Documents. "Proprietary Information" means, as to the Borrower and each of its Subsidiaries, such Person's trade secrets, including know-how, computer programs, and technical data, used in the development, production and sale of products and services. "Pro Rata Share" means, with respect to each Lender, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender's Commitment, and set forth opposite the name of such Lender on Schedule 2.01, as such share may be adjusted as contemplated herein. "Register" has the meaning set forth in Section 10.07(c). "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived. "Request for Credit Extension" means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit Extension, an L/C Application. "Required Lenders" means, as of any date of determination, Lenders whose Voting Percentages aggregate more than 50%. "Responsible Officer" means the president, chief executive officer, chief financial officer, treasurer or controller of a Loan Party, and also includes, in respect of the Borrower, the Executive Vice President of Finance and Planning of Arbitron. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. "Revocable" means, in relation to any license of Intellectual Property, that such license may be revoked or terminated by the licensor at any time or upon a default or breach of condition by the licensee. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "Scarborough Partnership" means that New York general partnership created pursuant to the Scarborough Partnership Agreement. "Scarborough Partnership Agreement" means that Partnership Agreement between VNU Advertising Expenditure Corp. and the Borrower, dated as of December 31, 1994, as amended and in effect as of the Effectiveness Date. "SEC" means the Securities and Exchange Commission. 21. 28 "Security Agreements" means the Borrower Security Agreement, the Subsidiary Security Agreements and the Supplemental IP Security Agreements. "Senior Credit Ratable Amount" means, at any time, with reference to any mandatory prepayment hereunder pursuant to Section 2.05, an amount equal to the quotient of: (a) the Aggregate Commitments at such time, divided by (b) the sum of (i) the Aggregate Commitments at such time, plus (ii) the principal amount outstanding at such time of all notes issued pursuant to the Private Placement; provided, however, that if there exists at such time no mandatory prepayment requirement pursuant to the Private Placement Documents in respect of such prepayment, or if any such mandatory prepayment has been waived, the "Senior Credit Ratable Amount" shall equal 1.0. "Senior Note Indenture" means that Indenture dated as of June 10, 1999 between Ceridian Corporation, as Issuer, and the Bank of New York, as Trustee, relating to 7.25% Senior Notes due 2004. "Separation" means the consummation of (a) the transfer by way of absolute assignment and contribution by the Borrower to New Ceridian of all assets and businesses of the Borrower, other than the Arbitron Business, and (b) the corresponding allocation of liabilities of the Borrower as between the Borrower and New Ceridian, through means of novation or cross-indemnities, pursuant to the Spin-Off Documents. "Separation Date" means the date upon which all material aspects of the Separation have been completed. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the fair value of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the Uniform Fraudulent Conveyances Act (as enacted in the State of New York); (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Contract" has the meaning specified in the definition of "Permitted Swap Contract". "Spin-Off Consummation Date" means the date upon which all material aspects of the Spin-Off Transaction have been consummated. "Spin-Off Deadline" means the earlier of (a) March 30, 2001 or (b) the date occurring three Business Days after the Closing Date. 22. 29 "Spin-Off Documents" means the documents set forth in Schedule 1.01(s), each substantially in the form attached to the Form 10 or delivered to the Administrative Agent pursuant to Article IV. "Spin-Off Transaction" means, collectively, (i) the Separation and (ii) the Distribution. "Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests, having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower. "Subsidiary Guaranty" means a Guaranty executed by any Arbitron Subsidiary, in substantially the form of Exhibit F. "Subsidiary Pledge Agreement" means a Pledge Agreement executed by any Arbitron Subsidiary, in substantially the form of Exhibit K. "Subsidiary Security Agreement" means a Security Agreement executed by any Arbitron Subsidiary, in substantially the form of Exhibit H. "Supplemental Financial Statements" means the unaudited pro forma consolidated balance sheet of the Borrower and its Arbitron Subsidiaries on a stand-alone basis for the fiscal quarter ended March 31, 2000 (giving effect to the Spin-Off Transaction) and the related pro forma consolidated income statement for such fiscal quarter. "Supplemental IP Security Agreement" means any Supplemental Intellectual Property Security Agreement, in substantially the form of Exhibit I, executed pursuant to Section 6.16. "Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. 23. 30 "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Lender). "Synthetic Lease Obligation" means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). "Taxes" has the meaning specified in Section 3.01(a). "Test Period" means a period of four consecutive fiscal quarters. "Threshold Amount" means $5,000,000, except that in respect of Indebtedness under the Private Placement Documents or any Swap Termination Value in respect of Specified Swap Contracts, "Threshold Amount" means $0. "Transaction Liens" means, collectively, all Liens from time to time existing in favor of the Collateral Agent for the benefit of the Administrative Agent and the Lenders, the Private Placement Noteholders, and any Lender counterparty to a Specified Swap Contract, to the extent subject to the Intercreditor Agreement. "Type" means with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that in the event that by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for the purposes of definitions related to such provisions. "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i). "Voting Percentage" means, as to any Lender, (a) at any time when the Commitments are in effect, such Lender's Pro Rata Share and (b) at any time after the termination of the Commitments, the percentage (carried out to the ninth decimal place) which (i) the sum of (a) the Outstanding Amount of such Lender's Loans, plus (b) such Lender's Pro Rata Share of the Outstanding Amount of L/C Obligations, then constitutes of (ii) the Outstanding Amount of all Loans and L/C Obligations; provided, however, that if any Lender has failed to fund any portion of the Loans, or participations in L/C Obligations required to be funded by it hereunder, such 24. 31 Lender's Voting Percentage shall be deemed to be -0-, and the respective Pro Rata Shares and Voting Percentages of the other Lenders shall be recomputed for purposes of this definition and the definition of "Required Lenders" without regard to such Lender's Commitment or the outstanding amount of its Loans, and L/C Advances, as the case may be. "Wholly-Owned Subsidiary" means any Subsidiary in which (other than directors' qualifying shares required by law) 100% of the capital stock of each class having ordinary voting power, and 100% of the capital stock of every other class, in each case, at the time as of which any determination is being made, is owned, beneficially and of record, by the Borrower, or by one or more of the other Wholly-Owned Subsidiaries of the Borrower, or both. 1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) (i) The words "herein" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (ii) Unless otherwise specified herein, Article, Section, Exhibit and Schedule references are to this Agreement. (iii) The term "including" is by way of example and not limitation. (iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced. (c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." (d) Section headings herein and the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document. 1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. (b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate 25. 32 in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. 1.04 ROUNDING. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number). 1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided herein, (a) references to agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law. ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS 2.01 LOANS. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a "Loan") to the Borrower from time to time on any Business Day during the period from the Closing Date to the Maturity Date, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Commitment; provided, however, that after giving effect to any Borrowing, (i) the aggregate Outstanding Amount of all Loans and L/C Obligations shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations shall not exceed such Lender's Commitment. Within the limits of each Lender's Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.04, and reborrow under this Section 2.01. Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein. 2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS. (a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Loans as the same Type shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m., New York time, (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each such telephonic notice must be 26. 33 confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Loans as the same Type, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made or continued as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of its Pro Rata Share of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 2:00 p.m., New York time, on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.03 (and, if such Borrowing is the initial Credit Extension, Section 4.02), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to the Administrative Agent by the Borrower; provided, however, that if, on the date of the Borrowing there are L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings, and second, to the Borrower as provided above. (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans. (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Eurodollar Rate Loan upon determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the 27. 34 absence of manifest error. The Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change. (e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than eight Interest Periods in effect with respect to Loans. 2.03 LETTERS OF CREDIT. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the L/C Backstop Date, to issue Letters of Credit for the account of the Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided that the L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in, any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Outstanding Amount of all L/C Obligations and all Loans would exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, would exceed such Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the L/C Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit outstanding as of the Closing Date shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof. (ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if: (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer 28. 35 in good faith deems material to it; (B) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date; (C) the expiry date of such requested Letter of Credit would occur after the L/C Backstop Date, unless all the Lenders have approved such expiry date; (D) the issuance of such Letter of Credit would violate one or more generally applicable policies of the L/C Issuer; or (E) such Letter of Credit is in a face amount less than $100,000, or is to be denominated in a currency other than Dollars. (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. (b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of an L/C Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such L/C Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m., New York time, at least two Business Days (or such later date and time as the L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such L/C Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such L/C Application shall specify in form and detail satisfactory to the L/C Issuer (I) the Letter of Credit to be amended; (II) the proposed date of amendment thereof (which shall be a Business Day); (III) the nature of the proposed amendment; and (IV) such other matters as the L/C Issuer may require. (ii) Promptly after receipt of any L/C Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such L/C Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested issuance or 29. 36 amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Letter of Credit. (iii) If the Borrower so requests in any applicable L/C Application, the L/C Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "Evergreen Letter of Credit"); provided that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the renewal of such Letter of Credit at any time to a date not later than the L/C Backstop Date; provided, however, that the L/C Issuer shall not permit any such renewal if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the Business Day immediately preceding the Nonrenewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.03 is not then satisfied. Notwithstanding anything to the contrary contained herein, the L/C Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit at any time. (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Drawings and Reimbursements; Funding of Participations. (i) Upon any drawing under any Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m., New York time, on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be 30. 37 disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.03 (other than the delivery of a Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 2:00 p.m., New York time, on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer. (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in Section 4.03 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03. (iv) Until each Lender funds its Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Share of such amount shall be solely for the account of the L/C Issuer. (v) Each Lender's obligation to make Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein. 31. 38 (vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error. (d) Repayment of Participations. (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), or any payment of interest thereon, the Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by the Administrative Agent. (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned, each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit, and to repay each L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or 32. 39 any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or (v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower. The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid. (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document except to the extent of the L/C Issuer's gross negligence or willful misconduct. No Agent-Related Person nor any of the respective correspondents, participants or assignees of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or L/C Application. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. No Agent-Related Person, nor any of the respective correspondents, participants or assignees of the L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may 33. 40 accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. (g) Letter of Credit Cash Collateral. Upon the request of the Administrative Agent (which shall be made at the direction of the L/C Issuer or the Required Lenders), (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the L/C Backstop Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount) until (x) in the case of clause (i) above, such L/C Borrowing together with all related interest and fees is repaid pursuant to a Borrowing or otherwise, or (y) in the case clause (ii) above, such Letter of Credit expires without being drawn. (h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit. (i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit equal to the Applicable Rate times the actual daily maximum amount available to be drawn under each Letter of Credit. Such fee for each Letter of Credit shall be due and payable on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the L/C Backstop Date. If there is any change in the Applicable Rate during any quarter, the actual daily amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee in an amount with respect to each Letter of Credit equal to the percent specified in the Agent/Arranger Fee Letter on the maximum amount available to be drawn thereunder, due and payable on the issuance of such Letter of Credit. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable. (k) Conflict with L/C Application. In the event of any conflict between the terms hereof and the terms of any L/C Application, the terms hereof shall control. 2.04 OPTIONAL PREPAYMENTS. The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m., New York time, (a) three Business Days prior to any date of 34. 41 prepayment of Eurodollar Rate Loans, and (b) on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares. 2.05 MANDATORY PREPAYMENTS. (a) Outstanding Amount in Excess. If for any reason the Outstanding Amount of all Loans and L/C Obligations exceeds the Aggregate Commitments then in effect, the Borrower shall immediately prepay Loans and Cash Collateralize L/C Obligations in an amount equal to such excess. (b) General. Any prepayments pursuant to this Section 2.05 shall be applied: (i) first to any Base Rate Loans then outstanding; (ii) second to Eurodollar Rate Loans with the shortest Interest Periods remaining; provided, however, that if the amount of Base Rate Loans then outstanding is not sufficient to satisfy the entire prepayment requirement, provided there exists no Event of Default, the Borrower may, at its option, place any amounts which it would otherwise be required to use to prepay Eurodollar Rate Loans on a day other than the last day of the Interest Period therefor in an interest-bearing account pledged to the Administrative Agent for the benefit of the Lenders pursuant to documentation satisfactory to the Administrative Agent until the end of such Interest Period at which time such pledged amounts (plus accrued interest thereon) will be applied to prepay such Eurodollar Rate Loans; and (iii) third to amounts held to Cash Collateralize any Letters of Credit. The Borrower shall pay, together with each prepayment under this Section 2.05, accrued interest on the amount of any Eurodollar Rate Loans prepaid, and any amounts required pursuant to Section 3.05. 2.06 REDUCTION OR TERMINATION OF COMMITMENTS. (a) Optional Commitment Reduction. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or permanently reduce the Aggregate Commitments to an amount not less than the then Outstanding Amount of all Loans and L/C Obligations; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. (New York Time), three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall pay any amounts required by Section 3.05. The Administrative Agent shall promptly notify the Lenders of any such notice of reduction or termination of the Aggregate Commitments. Once reduced in accordance with this subsection, the Commitments may not be increased. 35. 42 (b) Mandatory Commitment Reductions. (i) Scheduled Reductions. The Aggregate Commitments shall reduce automatically on an aggregate basis in the amount of $25,000,000 upon each of the first, second, third and fourth year anniversary dates following the Closing Date. (ii) Asset Dispositions. If the Borrower or any Arbitron Subsidiary shall at any time or from time to time make or agree to make a Disposition, other than a Disposition specified in Section 7.04(b) (but subject to clause (d) of Section 7.04(b)(ii)), or shall suffer an Event of Loss (except to the extent the insurance or other third party recovery proceeds received in connection therewith are within 25 days of receipt applied to the purchase price of replacement assets substantially similar to those experiencing the Event of Loss), other than any Disposition or Event of Loss occurring prior to the Separation Date to the extent relating to New Ceridian Assets, then (A) the Borrower shall promptly notify the Agent of such proposed Disposition or such Event of Loss (including the amount of the estimated net cash or Cash Equivalents proceeds, calculated exclusive of (x) reasonable out-of-pocket expenses, (y) taxes actually paid and (z) the amount of any Indebtedness secured solely or principally by such asset and actually repaid ("Net Cash Proceeds") to be received by the Borrower or such Subsidiary in respect thereof) (a "Disposition Notice") and (B) upon the earlier of (1) the date specified for such purpose by the Borrower in the Disposition Notice or (2) 30 days after receipt of such Net Cash Proceeds by the Borrower or Subsidiary, the Aggregate Commitments shall be permanently reduced by an amount equal to the Senior Credit Ratable Amount times the amount of such Net Cash Proceeds; provided, however, that no reduction of Commitments shall be required under this subsection in connection with any Disposition that, alone or together with all related Dispositions to the same Person or Affiliate of such Person, involves Net Cash Proceeds of less than $1,000,000. (iii) Equity or Debt Issuance. (A) If the Borrower shall issue new common or preferred equity, or any debt securities, the Borrower shall promptly notify the Administrative Agent of the estimated proceeds of such issuance net of reasonable out-of-pocket expenses incurred by the Borrower ("Net Issuance Proceeds") to be received by the Borrower in respect thereof (an "Issuance Notice"). Upon the earlier of (1) the date specified for such purpose in such Issuance Notice or (2) 30 days after the date of receipt of such Net Issuance Proceeds actually received, the Aggregate Commitments shall be permanently reduced by an amount equal to the Senior Credit Ratable Amount times the amount of such Net Issuance Proceeds actually received. (B) No Commitment reduction shall be required under this subsection (iii) in connection with (1) the issuance of equity securities pursuant to Section 7.07(a)(i), (2) the Acquisition by the Borrower or any Subsidiary of cash or Cash Equivalents in any Permitted Acquisition, provided that the cash or Cash Equivalents so acquired is merely incidental to such Permitted Acquisition; or (3) the issuance of debt securities pursuant to the Private Placement. 36. 43 (iv) Excess Cash Flow. Commencing with the fiscal year ending in December 2001, and continuing thereafter for so long as the Aggregate Commitments as of the last day of any fiscal year shall exceed $50,000,000, the Aggregate Commitments shall be automatically reduced on the fifth Business Day after the date of delivery to the Administrative Agent of the financial statements required under Section 6.01(a) by an amount equal to the Senior Credit Ratable Amount times 50% of the amount of Excess Cash Flow (if positive) for such fiscal year, provided that the Aggregate Commitments, after taking into account such reduction, are not required to be reduced under this Section 2.06(b)(iv) to an amount that is less than $50,000,000. (v) Prepayment under Private Placement. If in respect of the Private Placement the Borrower shall make or participate in any prepayment of notes, note purchase or repurchase, redemption, or mandatory or optional call of notes, or shall have any notes tendered to it pursuant to any voluntary or mandatory put provision, prior to the scheduled maturity date specified in the Private Placement Documents, other than in respect of matters specified in Section 2.06(b)(ii) or (iii) (collectively, a "Private Placement Prepayment"), the Borrower shall promptly notify the Administrative Agent of such fact and the Aggregate Commitments shall be permanently reduced by an amount equal to the amount that would cause the ratio of the Commitment reduction required under this subsection to the sum of such amount plus the Private Placement Prepayment to equal the Senior Credit Ratable Amount, such reduction to occur on the day such Private Placement Prepayment is made. (c) General. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Share. All commitment and utilization fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination. Optional Commitment reductions pursuant to subsection (a) shall be applied to mandatory Commitment reductions pursuant to subsection (b)(i) in reverse chronological order. 2.07 REPAYMENT OF LOANS. The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Loans outstanding on such date. 2.08 INTEREST. (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the Outstanding Amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate. (b) While any Event of Default exists or after acceleration, the Borrower shall pay interest on the Outstanding Amount of all Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand. 37. 44 (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. 2.09 FEES. In addition to certain fees described in subsections (i) and (j) of Section 2.03: (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a commitment fee equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times from the Effectiveness Date until the Maturity Date and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Effectiveness Date, and on the Maturity Date. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. The commitment fee shall accrue at all times, including at any time during which one or more of the conditions in Article IV is not met. (b) Arrangement and Agency Fees. The Borrower shall pay an arrangement fee to the Arranger for the Arranger's own account, and shall pay an agency fee to the Administrative Agent for the Administrative Agent's own account, in the amounts and at the times specified in the letter agreement, dated September 7, 2000 (the "Agent/Arranger Fee Letter"), among the Borrower, the Arranger and the Administrative Agent. Such fees shall be fully earned when paid and shall be nonrefundable for any reason whatsoever. (c) Lenders' Upfront Fee. On the Effectiveness Date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders in accordance with their respective Pro Rata Shares, an upfront fee in an amount set forth in the Agent/Arranger Fee Letter. Such upfront fees are for the credit facilities committed by the Lenders under this Agreement and are fully earned on the date paid. The upfront fee paid to each Lender is solely for its own account and is nonrefundable for any reason whatsoever. 2.10 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed. Computation of all other types of interest and all fees shall be calculated on the basis of a year of 360 days and the actual number of days elapsed, which results in a higher yield to the payee thereof than a method based on a year of 365 or 366 days. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day. 2.11 EVIDENCE OF DEBT. 38. 45 (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loans and L/C Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of such Lender shall control. Upon the request of any Lender made through the Administrative Agent, such Lender's Loans may be evidenced by a Loan Note, in addition to such accounts or records. Each Lender may attach schedules to its Loan Note(s) and endorse thereon the date, Type (if applicable), amount and maturity of the applicable Loans and payments with respect thereto. (b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control. 2.12 PAYMENTS GENERALLY. (a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 12:00 noon, New York time, on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 12:00 noon, New York time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. (b) Subject to the definition of "Interest Period," if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. (c) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under Article III) incurred by the Administrative Agent and each Lender, (ii) second, toward repayment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, toward repayment of principal and L/C Borrowings then due 39. 46 hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties. (d) Unless the Borrower or any Lender has notified the Administrative Agent prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then: (i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds, at the Federal Funds Rate from time to time in effect; and (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan, included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder. A notice of the Administrative Agent to any Lender with respect to any amount owing under this subsection (d) shall be conclusive, absent manifest error. (e) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest. (f) The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit are several and not joint. The failure of any Lender to make 40. 47 any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation. (g) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. 2.13 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans of any Type made by it, or the participations in L/C Obligations held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans of such Type made by them and/or such subparticipations in the participations in L/C Obligations, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Type of Loan or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased. 2.14 SECURITY AND GUARANTIES. (a) (a) The Obligations shall be secured at all times in accordance with the terms hereof and the Collateral Documents. (b) The Obligations of the Borrower under this Agreement, each of the Loan Notes and all other Loan Documents shall be unconditionally guaranteed by the Guarantors pursuant to the Guaranties. 41. 48 ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY 3.01 TAXES. (a) Subject to Section 3.01(e), any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains a lending office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes"). (c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed. (d) Subject to Section 3.01(e), the Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be 42. 49 made within 30 days after the date the Lender or the Administrative Agent makes a demand therefor. (e) The Borrower shall not be required to pay any additional amount in respect of United States federal income tax pursuant to Section 3.01(a) to any Lender for the account of any Lending Office of such Lender: (i) if the obligation to pay such additional amounts would not have arisen but for a failure by such Lender to comply with its obligations under Section 10.15 in respect of such Lending Office; or (ii) If any Lender shall have delivered to the Borrower the forms referred to in Section 10.15, and such Lender shall not at any time be entitled to exemption from deduction or withholding of United States federal income tax in respect of payments by the Borrower hereunder for the account of the Lending Office of such Lender for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such forms. 3.02 ILLEGALITY. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or materially restricts the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable offshore Dollar market, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. 3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent determines in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the applicable offshore Dollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar Rate Loan, or (c) the Eurodollar Rate for such Eurodollar Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders to 43. 50 make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein. 3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY. (a) If any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or has its Lending Office, and (iii) reserve requirements utilized, as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then from time to time within 30 days after written demand of such Lender (such demand to be accompanied by a certificate pursuant to Section 3.06(a)), with a copy of such demand to be sent to the Administrative Agent, the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. (b) If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time within 30 days after written demand of such Lender (such demand to be accompanied by a certificate pursuant to Section 3.06(a)), with a copy of such demand to be sent to the Administrative Agent, the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction. (c) If the Borrower is required to pay any amount to any Lender or the Administrative Agent pursuant to subsection (a) or (b) of this Section 3.04, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office to another existing location of such Lender so as to eliminate any such additional payment by the Borrower which may thereafter accrue, if such change in the sole judgment of such Lender is not otherwise disadvantageous to such Lender. 3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of: 44. 51 (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.16; or (d) any assignment by any Lead Lender of a Eurodollar Rate Loan on a day on or before 180 days after the Closing date and other than the last day of the Interest Period therefor; including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the applicable offshore Dollar interbank market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. 3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. (a) A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods. (b) Upon any Lender's making a claim for compensation under Section 3.01, 3.02 or 3.04, the Borrower may remove or replace such Lender in accordance with Section 10.16. (c) The Borrower shall not be obligated to pay any amounts under Sections 3.01(d), 3.04(a) or 3.04(b) which arose prior to the date that is 180 days preceding the date of the demand required by each such Section or that is attributable to periods prior to the date that is 180 days preceding the date of such demand. 3.07 SURVIVAL. All of the Borrower's obligations under this Article III shall survive termination of the Commitments and payment in full of all the other Obligations. 45. 52 ARTICLE IV. CONDITIONS PRECEDENT 4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement is subject to satisfaction of the following conditions precedent; provided that at the election of the Administrative Agent any of the items required to be delivered pursuant to subsection (a)(iv), (a)(vi), (e) or (f) may be waived for purposes of this Section 4.01 provided they shall be deemed added to Section 4.02 and delivered or accomplished by no later than the Closing Date: (a) Unless waived by all the Lenders (or by the Administrative Agent with respect to immaterial matters or items specified in clause (iv) below with respect to which the Borrower has given assurances satisfactory to the Administrative Agent that such items shall be delivered promptly following the Effectiveness Date), the Administrative Agent's receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party that is a party thereto, each dated the Effectiveness Date (or, in the case of certificates of governmental officials, a recent date before the Effectiveness Date) and each in form and substance satisfactory to the Administrative Agent and the Lenders: (i) executed counterparts of this Agreement and the Guaranties, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower; (ii) Loan Notes executed by the Borrower in favor of each Lender requesting such a Loan Note, each in a principal amount equal to such Lender's Commitment; (iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require to establish the identities of and verify the authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; (iv) such evidence as the Administrative Agent may reasonably require to verify that each Loan Party is duly organized or formed, validly existing, in good standing and qualified to engage in business in each jurisdiction (A) in which it is incorporated, or has any headquarter function, or (B) in which it is required to be qualified to engage in business if the absence of such qualification could have a Material Adverse Effect; including certified copies of each Loan Party's Organization Documents, certificates of good standing and/or qualification to engage in business and tax good standing certificates in such jurisdictions; (v) a certificate signed by a Responsible Officer of the Borrower certifying (A) that all representations and warranties contained in Article V are true and correct on and as of the Effectiveness Date and no Default or Event of Default exists on and as of such date; (B) that there has been no event or circumstance since the date of the most recent of the Audited Financial Statements which has or could be reasonably expected to have a Material Adverse Effect; and (C) that the Borrower's and New Ceridian's senior management are highly confident that the Spin-Off Consummation Date will occur by no 46. 53 later than the Spin-Off Deadline under the terms specified in the Spin-Off Documents delivered under subsection (a)(vii) below. (vi) one or more opinions of counsel to each Loan Party with respect to those matters set forth listed at Exhibit L; (vii) a certificate signed by a Responsible Officer of the Borrower certifying the attachment of (A) true and complete draft or final copies of all material Spin-Off Documents, which shall be in form and substance reasonably satisfactory to the Administrative Agent and the Lenders; (B) true and complete copy of the Form 10 as submitted by the Borrower to the SEC in connection with the Spin-Off Transaction (together with and including all exhibits and attachments thereto), which shall be in form and substance satisfactory to the Administrative Agent and the Lenders; (C) true and complete copy of the Private Placement Documents, which shall satisfy the following conditions: (I) having a maturity date occurring not sooner than January 31, 2008, (II) having representations and warranties, covenants and events of default not more restrictive than those contained in the Loan Documents; (III) having no prepayment or amortization of the principal amount of such notes until maturity, or prepayments in form and substance satisfactory to the Lenders; (IV) having no collateral other than the Collateral, and (V) having no guarantor other than the Guarantors; (D) a true and complete copy of the Scarborough Partnership Agreement; (E) a true and complete copy of the Nielsen JV Option Agreement; and (F) a solvency opinion provided by the Houlihan Lokey firm in respect of the Borrower and New Ceridian, respectively, addressed to the Administrative Agent, dated as of the Effectiveness Date, and any and all certificates and other documents provided by the Borrower to the Houlihan Lokey firm in respect of such opinion; (viii) such other financial information and documentation as the Administrative Agent or any Lender may reasonably request, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, including (A) five-year financial projections for the Borrower and its Arbitron Subsidiaries on a stand-alone basis, (B) a preliminary pro forma opening balance sheet of the Borrower and its Subsidiaries as of the Separation Date ("Preliminary Opening Balance Sheet"), prepared by the Borrower, and (C) a consolidated balance sheet of the Borrower and its Arbitron Subsidiaries on a stand-alone basis, as of December 31, 2000, as prepared by the Borrower consistent with GAAP, reflecting the consummation of the Spin-Off Transaction as of such date, but without giving effect to the refinancing of the Borrower's Existing Credit Facility and other Indebtedness pursuant to this Agreement, the New Ceridian Credit Agreement and the Private Placement, and in substantially similar form as the column captioned "Historical-Arbitron" in the balance sheet labeled as "Arbitron Unaudited Pro Forma Condensed Combined Balance Sheet Data" set forth in the Form 10; (ix) evidence of the Borrower's receipt of the IRS Ruling Letter; (x) evidence of a waiver or consent with respect to defaults otherwise arising under the Existing Credit Facility from the consummation of the Spin-Off Transaction 47. 54 and the financings contemplated thereby by the "Agent" and "Lenders" as defined in and party to the Existing Credit Facility; and (xi) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, or the Required Lenders reasonably may require. (b) The corporate, legal, capital, tax, contractual, and management structure and attributes of the Borrower and its Subsidiaries and of the Spin-Off Transaction shall be satisfactory to the Administrative Agent and the Lenders. (c) Any fees required to be paid on or before the Effectiveness Date shall have been paid, and unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent to the extent invoiced prior to or on the Effectiveness Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent). (d) The Effectiveness Date shall occur no later than February 5, 2001. (e) The Collateral Documents shall be executed by each Loan Party other than New Ceridian, in appropriate form for recording, where necessary, together with: (i) acknowledgment copies of all UCC-l financing statements filed, registered or recorded to perfect the security interests of the Collateral Agent for the benefit of the Administrative Agent and the Lenders, or other evidence reasonably satisfactory to the Administrative Agent that there has been filed, registered or recorded all financing statements and other filings, registrations and recordings (including filings at the U.S. Copyright Office, the U.S. Patent and Trademark Office or other applicable Governmental Authority in respect of Intellectual Property and Proprietary Information) necessary and advisable to perfect or protect the Liens of the Collateral Agent for the benefit of the Lenders in accordance with applicable law, with such exceptions as the Administrative Agent and the Lenders may permit in their discretion; (ii) true and complete copies of copyright filings of the Borrower and its Subsidiaries at the U.S. Copyright Office in respect of computer databases registered during the years 1999 and 2000 and of Material Software, as more fully required pursuant to the Security Agreements; (iii) written advice relating to such Lien and judgment searches as the Administrative Agent shall have requested, and such termination statements or other documents as may be necessary to confirm that the Collateral is subject to no other Liens in favor of any Persons (other than Permitted Liens); (iv) all certificates and instruments representing the Pledged Collateral, stock transfer powers executed in blank with signatures guaranteed as the Administrative Agent or any Lender may specify; provided that in no event shall more than 65% of the capital stock of any Foreign Subsidiary be required to be so pledged; 48. 55 (v) Account Control Agreements, executed by all parties thereto, relating to (A) any deposit accounts maintained by the Borrower in relation to the Arbitron Business with Bank of America or any of its Affiliates, and (B) any securities accounts maintained by the Borrower in relation to the Arbitron Business; (vi) such consents, estoppels, subordination agreements and other documents and instruments executed by landlords, tenants and other Persons party to material contracts relating to any Collateral as to which the Collateral Agent shall be granted a Lien for the benefit of the Lenders, as requested by the Collateral Agent or any Lender; and (vii) evidence that all other actions necessary or, in the reasonable opinion of the Administrative Agent or the Lenders, desirable to perfect and protect the first priority Lien created by the Collateral Documents and to enhance the Administrative Agent's ability to preserve and protect its interests in and access to the Collateral, have been taken. (f) Insurance Policies. The Borrower shall provide evidence in form and substance satisfactory to Administrative Agent and any Lender that the Administrative Agent has been named as loss payee/mortgagee and as additional insured, for the benefit of the Lenders, as their interests may appear, as required in accordance with Section 6.06 and the Collateral Documents, together with a certificate of insurance as to all insurance coverage on the properties of the Borrower and its Subsidiaries. 4.02 CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent: (a) Unless waived by all the Lenders, the Administrative Agent's receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date and each in form and substance satisfactory to the Administrative Agent and the Lenders: (i) a certificate signed by a Responsible Officer of the Borrower certifying (A) that all representations and warranties of the Borrower contained in Article V are true and correct on and as of the Closing Date, (B) that there exists as of such date no Default or Event of Default, (C) that there has been no event or circumstance since the date of the most recent Audited Financial Statements which has or could reasonably be expected to have a Material Adverse Effect, (D) that the Separation Date has occurred pursuant to the Spin-Off Documents, which are in full force and effect and in substantially the form delivered in connection with the Effectiveness Date (or otherwise in form and substance satisfactory to the Administrative Agent and the Lenders), (E) that the Borrower's and New Ceridian's senior management are highly confident that the Spin-Off Consummation Date will occur by no later than the Spin-Off Deadline; (F) that the Borrower has obtained stockholder approval to effect a reverse stock split of the Borrower's shares of common stock at a ratio not to exceed 1-for-5, which shall occur 49. 56 promptly but in any event not more than 60 days after the Spin-Off Consummation Date; (G) that the Board of Directors of the Borrower has authorized and approved the final terms of the Spin-Off Transaction (including declaration of a dividend of shares of New Ceridian's common stock to Borrower's shareholders); (H) that the SEC has approved the form of the Form 10, as it may have been amended since the Effectiveness Date to reflect (I) revisions made to conform the Spin-Off Documents filed with the Form 10 to those delivered to the Administrative Agent pursuant to Section 4.01(a)(vii), (II) the inclusion of the opinions described in Section 4.02(a)(iv), (III) any required date revisions not inconsistent with the terms hereof, (IV) ministerial revisions necessary to address administrative issues or facial ambiguities, and (V) other amendments satisfactory to the Required Lenders , (I) that all conditions precedent pursuant to the Private Placement have been satisfied and that the Private Placement has been, or is contemporaneously with the initial funding hereunder being, fully funded; and (J) such other matters relating to the Spin-Off Transaction as the Administrative Agent may request; (ii) a pro forma Compliance Certificate of the Borrower and its Subsidiaries, signed by a Responsible Officer of the Borrower; (iii) a certificate signed by a Responsible Officer of the Borrower certifying the attachment of (A) a true and complete copy of the final pro forma opening balance sheet of the Borrower and its Subsidiaries as of the Separation Date, by the Borrower, which shall contain in the opinion of the Administrative Agent and the Lenders no material adverse discrepancies from the Preliminary Opening Balance Sheet, (B) a true and complete copy of the Supplemental Financial Statements, and (C) an audited balance sheet of the Borrower and its Arbitron Subsidiaries as of December 31, 2000, which balance sheet shall contain in the opinion of the Administrative Agent and the Lenders no material adverse discrepancies from the balance sheet delivered by the Borrower under Section 4.01(a)(viii)(C), accompanied by the opinion of KPMG Peat Marwick LLP or another nationally-recognized independent public accounting firm, which report shall state that such balance sheet presents fairly in all material respects the financial position of the Borrower and the Arbitron Subsidiaries on a stand-alone basis as of such date and such opinion shall not be qualified or limited for any reason; (iv) a certificate signed by a Responsible Officer of the Borrower certifying the Borrower's receipt, and attaching a true and complete copy, of (A) a solvency opinion provided by the Houlihan Lokey firm in respect of the Borrower and New Ceridian, respectively, addressed to the Administrative Agent, dated as of the Closing Date, and including any and all certificates and other documents provided by the Borrower to the Houlihan Lokey firm in respect of such opinion; (B) a fairness, financial viability and "fair value" opinion addressed to the Borrower (or its Board of Directors) and relating to the Spin-Off Transaction, provided by the Borrower's financial advisors, Bear Stearns & Co., and including any and all certificates and other documents provided by the Borrower to Bear Stearns & Co. in respect of such opinion; (v) evidence: (A) of payment (prior to or upon the initial funding) of all funded Indebtedness of the Borrower existing immediately prior to the Closing Date and termination of all credit commitments, including the Existing Credit Facility, together 50. 57 with evidence of the release of all Liens securing obligations in connection therewith, but excluding the Initial Permitted Indebtedness, and (B) of the allocation, which shall be satisfactory to the Administrative Agent and the Lenders, of all contingent and other liabilities of the Borrower as between the Borrower and New Ceridian, with such third party acknowledgments or consents relating thereto as the Administrative Agent may request; (vi) one or more opinions of counsel to the Borrower regarding the matters specified in Exhibit M; and (vii) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, or the Required Lenders reasonably may require. (b) The Closing Date shall occur no later than March 30, 2001. (c) The corporate, legal, capital, tax, contractual, and management structure and attributes of the Borrower and its Subsidiaries and of the Spin-Off Transaction shall conform to those deemed satisfactory by the Administrative Agent and the Lenders as a condition to the Effectiveness Date, or shall otherwise be satisfactory to the Administrative Agent and the Lenders. 4.03 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Loans as the same Type) is subject to the following conditions precedent: (a) The representations and warranties of the Borrower contained in Article V, and the representations and warranties of any Loan Party in any Loan Document, shall be true and correct and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date. (b) No Default or Event of Default shall exist, or would result from such proposed Credit Extension. (c) The Administrative Agent and, if applicable, the L/C Issuer shall have received a Request for Credit Extension in accordance with the requirements hereof. (d) The Administrative Agent shall have received, in form and substance satisfactory to it, such other assurances, certificates, documents or consents related to the foregoing as the Administrative Agent or the Required Lenders reasonably may require. Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Loans as the same Type) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.03(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension. 51. 58 ARTICLE V. REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Administrative Agent and each Lender as follows: 5.01 CORPORATE EXISTENCE AND POWER. (a) Each of the Borrower and each Material Subsidiary: (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (ii) has the power and authority and all material governmental licenses, authorizations, consents and approvals to own its assets and carry on its business and to execute, deliver, and perform its obligations under the Loan Documents; (iii) is duly qualified as a foreign corporation, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except where the failure to be so qualified, licensed or in good standing would not adversely affect the business or operations of the Borrower or such Subsidiary in any significant manner; and (iv) is in compliance with all material Laws applicable to it. (b) Each Subsidiary of the Borrower which is not a Material Subsidiary: (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (ii) has the power and authority and all governmental licenses, authorizations, consents and approvals to own its assets and carry on its business; (iii) is duly qualified as a foreign corporation, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification; and (iv) is in compliance with all material Laws applicable to it; except where any failure to comply with the requirements of this subsection (b) would not, individually or in the aggregate, result in a Material Adverse Effect. (c) As of the Closing Date, the Borrower does not have any material place of business other than in the State of New York and the State of Maryland. 5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and performance by each Loan Party of this Agreement and each other Loan Document and each Spin-Off Document, and the consummation of the Spin-Off Transaction, have been duly 52 59 authorized by all necessary corporate action by or on behalf of such Loan Party, and do not and will not: (a) contravene the terms of such Loan Party's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any Contractual Obligation (other than the Senior Note Indenture) to which such Loan Party is a party or any order, injunction, writ or decree of any Governmental Authority to which such Loan Party or its property is subject; or (c) violate any Law applicable to such Loan Party. 5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (except for recordings or filings in connection with the Liens granted to the Administrative Agent under the Collateral Documents) is necessary or required in connection (a) with the execution, delivery or performance by, or enforcement against, the Borrower or any other Loan Party of this Agreement or any other Loan Document or (b) the execution, delivery or performance by or enforcement against the Borrower or any other Person party thereto of the Spin-Off Documents, or (c) the consummation of the Spin-Off Transaction, except in each case as have been obtained on or before the Closing Date. 5.04 BINDING EFFECT. (a) This Agreement and each other Loan Document to which the Borrower or any of its Subsidiaries is a party, when executed and delivered, will constitute the legal, valid and binding obligations of the Borrower and any of its Subsidiaries to the extent it is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (b) From and after the Closing Date, each Spin-Off Document constitutes the legal, valid and binding obligation of each Person party thereto, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. As of the Closing Date, all conditions precedent to the effectiveness of the Spin-Off Documents have been satisfied. 5.05 LITIGATION. Attached hereto as Schedule 5.05 is a list of all material litigation in which the Borrower or any Subsidiary of the Borrower is a plaintiff or a defendant as of the Effectiveness Date. There are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Borrower or its Subsidiaries or their respective properties which: (a) purport to affect or pertain to this Agreement, or any other Loan Document, or any of the transactions contemplated hereby or thereby; or 53. 60 (b) challenge in any respect the legality or validity of any material aspect of the Spin-Off Transaction; or (c) except as provided in Schedule 5.05, would reasonably be expected to have a Material Adverse Effect (and assuming for this purpose the reasonable likelihood of an adverse decision). No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document, or the consummation of any material aspect of the Spin-Off Transaction, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. Since the Effectiveness Date, there has been no change in the status of any of the matters set forth in Schedule 5.05 that would reasonably be expected to result in a Material Adverse Effect. All amounts potentially payable by the Borrower or any Arbitron Subsidiary (including upon judgment or settlement) in connection with any matter set forth in Schedule 5.05 not relating to the Arbitron Business are subject from and after the Separation Date to a binding indemnification obligation by New Ceridian in favor of the Borrower or such Arbitron Subsidiary. 5.06 NO DEFAULT. No Default or Event of Default exists or would result from the incurring of any Obligations by the Borrower or any other Loan Party or from the grant or perfection of the Transaction Liens on the Collateral. As of the Effectiveness Date and the Closing Date, neither the Borrower nor any of its Subsidiaries, (a) is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect, or (b) is in default under or with respect to any Spin-Off Document. As of the Effectiveness Date, there exists no "Default" or "Event of Default," and as of the Closing Date, there exists no "Event of Default," under and as defined in (i) the Existing Credit Facility, (ii) the Senior Note Indenture, or (iii) the Private Placement Documents. 5.07 ERISA COMPLIANCE. Except as referenced or provided for in either Schedule 5.05 or Schedule 5.07 attached hereto: (a) To the best knowledge of the Borrower, no facts or circumstances exist which would reasonably be expected to have a Material Adverse Effect in connection with the failure of any Plan, or the failure of the Borrower, an ERISA Affiliate or any Person with regard to the Plan, to comply with the applicable provisions of ERISA, the Code and other Federal or state law. The Borrower and each ERISA Affiliate have made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. (b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or would, if determined adversely to the Borrower or any Plan, reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or would reasonably be expected to result in a Material Adverse Effect. 54. 61 (c) To the best knowledge of the Borrower (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) neither the Borrower nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) neither the Borrower nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that would reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA. 5.08 TITLE TO PROPERTIES. As of the Effectiveness Date and the Closing Date, the property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens. As of the Closing Date, the Borrower has retained and has title to or a valid and enforceable leasehold or licensee's interest in all assets necessary to and appropriate for conducting the Arbitron Business, and such assets are subject to no Liens, claims or interest of third parties other than Permitted Liens, and the interests of lessors and licensors not otherwise prohibited under any Loan Document or Private Placement Document. 5.09 TAXES. (a) The Borrower and its Subsidiaries have filed all Federal and other material tax returns and reports required to be filed, and have paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP and no Notice of Lien has been filed or recorded. There is no proposed tax assessment against the Borrower or any of its Subsidiaries which would, if the assessment were made, have a Material Adverse Effect. (b) None of the representations and warranties made by the Borrower, New Ceridian or any of their Subsidiaries to the IRS in connection with the Spin-Off Transaction (including with respect to the tax-free nature of the Spin-Off Transaction and in connection with the Borrower's request for the IRS Ruling Letter) as of the date such representations and warranties are made or deemed made, and none of the statements contained in any report, exhibit, statement or certificate furnished by or on behalf of the Borrower, New Ceridian or any of their Subsidiaries to the IRS in connection with the Spin-Off Transaction as of the date such statements are made or deemed made, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading. (c) As of the Effectiveness Date, the Closing Date and Spin-Off Consummation Date, there is no "plan or series of related transactions" of the type described in Section 355(e) of the Code. 55. 62 5.10 FINANCIAL CONDITION. (a) The Form 10 Financial Statements and the Supplemental Financial Statements: (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject to ordinary, good faith year-end audit adjustments and the absence of footnotes in the case of quarterly financial statements, (ii) are complete, accurate and fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof, and results of operation for the period covered thereby, in each case based upon the assumed consummation of the Spin-Off Transaction on such date, and (iii) comply with all applicable Laws relating to spin-off transactions. (b) Except as disclosed in filings by the Borrower with the Securities and Exchange Commission on Form 10-Q for the quarter ended June 30, 2000, or the Form 10, since December 31, 1999 there has been no Material Adverse Effect. (c) As of the Effectiveness Date and the Closing Date, the Borrower and its consolidated Subsidiaries have not incurred any material Contingent Obligations except for those specified in Schedule 5.10, which Schedule also specifies which Contingent Obligations pertain to the Arbitron Business, and those specified in Section 7.05(a), Section 7.05(d)(i) or Section 7.05(f). Except as expressly otherwise stated in Schedule 5.10, New Ceridian is subject, from and after the Separation Date, to a binding obligation to fully indemnify the Borrower in respect of all Contingent Obligations specified in such Schedule 5.10 not relating to the Arbitron Business. The projections delivered pursuant to Section 4.01(a)(viii) have been reasonably prepared, in good faith, based upon reasonable assumptions, and are consistent with the prepayment requirements set forth in this Agreement and in the Note Purchase Agreement. (d) The Preliminary Opening Balance Sheet delivered by the Borrower to the Administrative Agent pursuant to Section 4.01(a)(viii) and the pro forma opening balance sheet delivered by the Borrower to the Administrative Agent pursuant to Section 4.02(a)(iii): (i) were prepared on a basis consistent with GAAP as applied to the Borrower's financial statements, (ii) have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the senior management of the Borrower and New Ceridian as to the expected future performance of the Borrower, (iii) accurately reflect all material adjustments required to be made to give effect to the Spin-Off Transaction, and (iv) present fairly on a pro forma basis the estimated consolidated financial position of the Borrower and its Arbitron Subsidiaries as of the date thereof, assuming consummation of the Spin-Off Transaction. 5.11 ENVIRONMENTAL MATTERS. (a) The ongoing operations of the Borrower and each of its Subsidiaries comply in all respects with all Environmental Laws, except such non-compliance which would not (if enforced in accordance with applicable law) result in liability that would reasonably be expected to have a Material Adverse Effect. 56. 63 (b) As of the Effectiveness Date and the Closing Date, except as specifically disclosed on Schedule 5.11, neither the Borrower nor any of its Subsidiaries, nor any of their respective present property or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material. (c) Except as specifically disclosed on Schedule 5.11, there are no Hazardous Materials or other conditions or circumstances existing with respect to any property, or arising from operations of the Borrower or any of its Subsidiaries that would reasonably be expected to give rise to Environmental Claims with a potential liability of the Borrower and its Subsidiaries that in the aggregate for any such condition, circumstance or property would reasonably be expected to have a Material Adverse Effect. (d) Except as expressly otherwise stated in Schedule 5.11, New Ceridian is subject from and after the Separation Date, to a binding obligation to fully indemnify the Borrower in respect of all matters referenced in such Schedule 5.11 not relating to the Arbitron Business. 5.12 REGULATED ENTITIES. None of the Borrower, any Person controlling the Borrower, or any Subsidiary of the Borrower, is (a) an "investment company" within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness, except that certain Persons who may be deemed to control the Borrower are registered investment companies within the meaning of the Investment Company Act of 1940. 5.13 COLLATERAL DOCUMENTS. The Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Lenders, a legal, valid and enforceable first priority security interest, subject to the terms of the Intercreditor Agreement, in all right, title and interest of the Loan Parties in the Collateral described therein; and UCC-1 financing statements have been filed in the offices in all of the jurisdictions listed in the schedules to the Security Agreements. 5.14 NO BURDENSOME RESTRICTIONS. Neither the Borrower nor any of its Subsidiaries is a party to or bound by any Contractual Obligation, or subject to any charter or corporate restriction, or any Law, which could reasonably be expected to have a Material Adverse Effect. As of the Effectiveness Date and the Closing Date, no Subsidiary (other than New Ceridian and Subsidiaries that are not Arbitron Subsidiaries) is party to or bound by any Contractual Obligation restricting the ability of such Subsidiary to pay dividends or make loans to the Borrower. 5.15 SOLVENCY. The Borrower and each of its Material Subsidiaries are Solvent. Both immediately before and after the Separation Date and the Spin-Off Consummation Date, New Ceridian is Solvent. All statements contained in any certificate delivered to the Administrative Agent pursuant to Section 4.01(a)(viii) and Section 4.02(a)(iv) are true and accurate in all material respects and not materially misleading, and do not contain any material omissions of fact. 57. 64 5.16 LABOR RELATIONS. There are no strikes, lockouts or other labor disputes against the Borrower or any of its Subsidiaries, or, to the best of the Borrower's knowledge, threatened against or affecting the Borrower or any of its Subsidiaries, and no significant unfair labor practice complaint is pending against the Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower, threatened against any of them before any Governmental Authority which, in any case, could reasonably be expected to have a Material Adverse Effect. 5.17 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION Except as specifically set forth on Schedule 5.17: (a) The Borrower owns (directly or through the Arbitron Subsidiaries) all of the Intellectual Property and Proprietary Information that is material to the Arbitron Business (including that in relation to the "Portable People Meter" and "Critical Band Encoding Technique"), free of any right, claim or interest of any Person, except for Permitted Liens. (b) To the best knowledge of the Borrower, no Intellectual Property or Proprietary Information now employed by the Borrower or its Subsidiaries and relating to the Arbitron Business infringes upon any rights held by any other Person. (c) As of the Closing Date and Spin-Off Consummation Date, except as specifically disclosed on Schedule 5.05 attached hereto, no claim or litigation regarding any Intellectual Property or Proprietary Information relating to the Arbitron Business is pending against the Borrower or its Subsidiaries or, to the Borrower's knowledge, threatened against any of such Persons. (d) As of the Closing Date and Spin-Off Consummation Date, neither Borrower nor any of its Subsidiaries uses pursuant to a license agreement with any third party (except for ordinary shrinkwrap licenses for software products that the Borrower and its Subsidiaries use in the Ordinary Course of Business and licenses specified on Schedule 5.17) any patents, trademarks, service marks, trade names, copyrights, trade secrets or franchises material to the conduct of the Arbitron Business. (e) As of the Closing Date and Spin-Off Consummation Date, in relation to the Arbitron Business, each of the Borrower's and its Subsidiaries' respective employees who, either alone or in concert with others, developed, invented, discovered, derived, programmed or designed Intellectual Property or Proprietary Information, or who has knowledge of or access to information about Intellectual Property or Proprietary Information, has entered into one or more effective assignment of rights agreements in favor of the Borrower or its Subsidiaries, as applicable, no material exceptions have been taken by any such employee to the terms of any such agreements, and neither the Borrower nor any of its Subsidiaries is aware that any of its respective employees is in violation thereof. (f) As of the Closing Date and Spin-Off Consummation Date, neither the Borrower nor its Subsidiaries believes it is or will be necessary in relation to the Arbitron Business to utilize any inventions of any of their respective employees (or people they currently intend to hire or retain) that were invented prior to such employment, except those inventions formally 58. 65 assigned or transferred to the Borrower or the Arbitron Subsidiaries, as applicable, by such employees. (g) As of the Effectiveness Date, neither Borrower nor any Arbitron Subsidiary owns, licenses or sub-licenses any Material Software in connection with the Arbitron Business. 5.18 INSURANCE. As of the Closing Date and Spin-Off Consummation Date, the properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or such Subsidiary operates. 5.19 EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 5.19, as of the Effectiveness Date, Closing Date and Spin-Off Consummation Date, in relation to the Arbitron Business neither the Borrower nor any of its Subsidiaries is (a) party to or bound by any employment contract or agreement, agency, independent contractor or sales representative agreement involving annual compensation at a base rate equal to or exceeding $200,000, golden parachute agreement, or change of control agreement; or (b) obligated to make any payments on account of any severance, golden-parachute, or change of control agreement. 5.20 SPIN-OFF DOCUMENTS; PRIVATE PLACEMENT DOCUMENTS. (a) The representations and warranties of the Borrower contained in the Spin-Off Documents and in any other document filed or delivered to the SEC in connection with the Spin-Off Transaction are true and correct in all material respects as of the Effectiveness Date and the Closing Date and as of any other date specified in such documents. There are no material documents or agreements to be entered into by the Borrower or the Arbitron Subsidiaries in connection with the Spin-Off Transaction, other than the Spin-Off Documents. (b) The representations and warranties of the Borrower contained in the Private Placement Documents, and in any other documents delivered to the Placement Agent in connection therewith, are true and correct in all material respects as of the Effectiveness Date and the Closing Date and as of any other date specified in such documents. 5.21 CAPITALIZATION; SUBSIDIARIES. (a) As of the Effectiveness Date, the Closing Date, and the Spin-Off Consummation Date, Schedule 5.21 sets forth: (i) a true, correct and reasonably detailed description of all Subsidiaries, and specifying which Subsidiaries are (a) Arbitron Subsidiaries and (b) Material Subsidiaries; and (ii) all authorized shares of capital stock of the Borrower and all the Arbitron Subsidiaries, and the number of shares of each class of capital stock of such Subsidiaries that are issued and outstanding. All of the issued and outstanding shares of capital stock of the Borrower and the Subsidiaries have been duly authorized and are validly issued, fully paid and non-assessable, and are free and clear of any Liens and other restrictions (including any restrictions on the right to vote, sell or otherwise dispose of such capital stock) and of any preemptive or other similar rights to subscribe for or to purchase any such capital stock. 59. 66 (b) Except as set forth on Schedule 5.21 (which Schedule sets forth a true, correct and complete description of, with respect to each security, title, name of the holder or Person, as applicable, the number of shares of capital stock underlying such security, exercise price, expiration date and percentage of shares of such capital stock on a fully diluted basis), as of the Effectiveness Date and Closing Date, there are: (i) no outstanding rights to acquire equity in any Subsidiary; (ii) no voting trusts of other agreements or undertakings with respect to the voting of the capital stock of any Subsidiary; (iii) no obligations or rights (whether fixed or contingent) on the part of any Subsidiary, any of its directors or officers, or any other Person to purchase, repurchase, redeem or "put" any outstanding shares of the capital stock of such Persons; and (iv) no agreements to which any Subsidiary, any of its directors or officers, or any other Person is a party granting any other Person any rights of first offer or first refusal, registration rights or "drag-along" "tag-along" or similar rights with respect to any transfer of any capital stock or equity rights of any Subsidiary. (c) As of the Effectiveness Date, the Closing Date and the Spin-Off Consummation Date, all shares of capital stock and equity rights of the Borrower or any Subsidiary that have been issued have been issued and offered in compliance with all applicable federal and state securities laws. Except as set forth on Schedule 5.21 no additional shares of capital stock of any Arbitron Subsidiary will become issuable to any Person pursuant to any "anti-dilution" provisions of any such issued and outstanding securities of any Subsidiary on account of the issuance of any securities. 5.22 MARGIN REGULATIONS. Neither the Borrower, New Ceridian, nor any Subsidiary is engaged in the business of extending credit for the purpose of purchasing or carrying "margin stock" (within the meaning of Regulation U of the Federal Reserve Board). No part of the proceeds of the Loans is being or will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. 5.23 BROKERS; CERTAIN EXPENSES. No Loan Party or Affiliate has paid or is obligated to pay any fee or commission to any broker, finder, investment bank or other intermediary, in connection with this Agreement or any of the Spin-Off Documents or the transactions contemplated hereby or thereby, other than as set forth on Schedule 5.23. No Loan Party or Affiliate is bound by any agreement or commitment for the provision of investment banking or financial advisory services with respect to any recapitalization, issuance of debt or equity securities or other capital or financing transactions involving the Loan Parties that would operate to restrict or prevent the occurrence of the Closing Date or the Spin-Off Consummation Date. 5.24 YEAR END. As of the Effectiveness Date, Borrower's and New Ceridian's fiscal year ends on December 31 of each year. 5.25 THIRD PARTY CONSENTS. Other than as set forth in Schedule 5.25, and except as have been obtained before the Closing Date, no approval, consent, exemption, authorization, amendment or waiver, or other action by, or notice to, or filing with, any Person is necessary or required in connection with (a) the execution, delivery or performance by or enforcement against the Borrower or New Ceridian of the Spin-Off Documents, (b) the consummation of the Spin-Off Transaction or (c) the conduct of the Arbitron Business from and after the Closing Date and the Spin-Off Consummation Date. 60. 67 5.26 EXISTING INDEBTEDNESS. As of the Closing Date, neither the Borrower nor any of the Arbitron Subsidiaries is indebted on account of any Indebtedness, except Initial Permitted Indebtedness. The allocation of Indebtedness and other obligations existing as of the Closing Date, as between the Borrower and New Ceridian, has been undertaken in a fair and reasonable fashion. 5.27 NEW CERIDIAN OBLIGATIONS. From and after the Closing Date, New Ceridian is legally obligated, under the Spin-Off Documents, to indemnify the Borrower and hold the Borrower harmless from all material obligations of the Borrower and its Arbitron Subsidiaries other than those incurred pursuant to or in furtherance of the Arbitron Business, and New Ceridian has neither repudiated nor breached in any material respect such obligation. 5.28 SWAP CONTRACTS. As of the Closing Date, neither the Borrower nor any Subsidiary is party to any Swap Contracts other than Permitted Swap Contracts. 5.29 FULL DISCLOSURE. None of the representations or warranties made by the Borrower, New Ceridian or any of their respective Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of the Borrower or any Subsidiary in connection with the Loan Documents as of the date such statements are made or deemed made, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading. The Form 10 (including all Exhibits thereto) does not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading. ARTICLE VI. AFFIRMATIVE COVENANTS The Borrower covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Required Lenders waive compliance in writing: 6.01 FINANCIAL STATEMENTS. The Borrower shall deliver to the Administrative Agent and each Lender in form and detail satisfactory to the Administrative Agent and the Required Lenders: (a) as soon as available, but not later than 90 days after the end of each fiscal year commencing with the fiscal year ending December 31, 2000, a copy of the audited consolidated financial statements of the Borrower as of the end of such fiscal year, setting forth in each case in comparative form the figures for the previous year (based on the Audited Financial Statements, if applicable), and accompanied by the opinion of KPMG Peat Marwick LLP or another nationally-recognized independent public accounting firm, which opinion shall state that such consolidated financial statements present fairly in all material respects the financial position of the Borrower and its Subsidiaries as of the dates indicated (on a stand-alone basis reflecting the consummation of the Spin-Off Transaction, in the case of the December 31, 2000 statements) and the results of 61. 68 their operations and their cash flows for the periods indicated in conformity with GAAP; such opinion shall not be qualified or limited for any reason, including because of a restricted or limited examination by such accountant of any material portion of the Borrower's or any Subsidiary's records; (b) (i) as soon as available, but not later than 45 days after the end of the first three fiscal quarters of each fiscal year of the Borrower, (A) a copy of the Borrower's quarterly report on Form 10-Q filed with the SEC with respect to such fiscal quarter, (B) an operating report summarizing the Borrower's consolidated year-to-date profit and loss, revenue, operating profit, invested capital, and cash flow information; and (ii) if the Borrower at such time is not required to file such Form 10-Q with the SEC under the Exchange Act, as soon as available, but in any event within 60 days after the end of each fiscal quarter, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows for such fiscal quarter and for the portion of the Borrower's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year, and the corresponding portion of the previous fiscal year (based on the Audited Financial Statements or the Supplemental Financial Statements, if applicable), together with the items described in clause (i)(B) of this subsection; all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting the financial condition, results of operations, and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; (c) promptly upon receipt thereof, copies of all reports submitted to the Borrower or any of its Subsidiaries by its independent certified public accountants in connection with each annual, interim or special audit examination of the Borrower or any of its Subsidiaries made by such accountants, including the "management letter" submitted by such accountants to the Borrower or any of its Subsidiaries in connection with their annual audit; and (d) as soon as available and in any event not less than 30 days prior to the start of each fiscal year, a consolidated financial forecast for the Borrower and its Subsidiaries for the following fiscal year, including forecasted consolidated balance sheets, consolidated statements of income, shareholders' equity and cash flows of the Borrower and its Subsidiaries, which forecast shall (i) state the assumptions used in the preparation thereof, (ii) contain such other information as reasonably requested by any Lender and (iii) be in form reasonably satisfactory to the Administrative Agent and the Required Lenders. 6.02 CERTIFICATES; OTHER INFORMATION. The Borrower shall furnish to the Administrative Agent and each Lender: (a) as soon as available, but in any event not later than 15 days after the delivery of the financial statements referred to in Section 6.01(a) and (b) above, a Compliance Certificate, signed by a Responsible Officer; (b) copies of each registration statement (or prospectus contained therein) of the Borrower other than with respect to employee benefit plans, each periodic report regarding the Borrower required pursuant to Section 13 of the Exchange Act, each annual report, each proxy 62. 69 statement and any amendments to any of the above filed or reported by the Borrower with or to any securities exchange or the SEC, copies of each communication from the Borrower or any Subsidiary to the Borrower's shareholders generally, promptly upon the filing or making thereof and copies of such other filings, reports and communications with the Borrower's shareholders as the Administrative Agent may from time to time request; (c) upon release, copies of all financially material press releases by the Borrower or any Material Subsidiary; (d) promptly after the creation or Acquisition of any Material Subsidiary, the name of such Subsidiary, a description of its business, the price paid for the stock or assets of such Subsidiary, its net worth and the value of its assets; (e) promptly after the execution and filing thereof, copies of all patent, trademark and copyright filing certificates of the Borrower and any Subsidiary as required more fully under the Security Agreements; and (f) promptly, such additional business, financial, corporate affairs and other information as the Administrative Agent, at the request of any Lender, may from time to time reasonably request. Reports required to be delivered pursuant to Sections 6.01 or 6.02(b) shall be deemed to have been delivered on the date on which Borrower posts such reports on the Borrower's website on the Internet at the website address listed on Schedule 10.02 hereof or when such report is posted on the Securities and Exchange Commission's website at www.sec.gov.; provided that (x) Borrower shall deliver paper copies of such reports to the Administrative Agent and any Lender who requests the Borrower to deliver such paper copies until written request to cease delivering paper copies is given by the Administrative Agent or such Lender, (y) the Borrower shall notify by facsimile the Administrative Agent and each Lender of the posting of any such reports, and (z) in every instance the Borrower shall provide paper copies of the Compliance Certificates required by Section 6.02(a) to the Administrative Agent and each of the Lenders. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the reports referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such reports. 6.03 NOTICES. The Borrower shall promptly notify the Administrative Agent and each Lender upon a Responsible Officer of the Borrower obtaining knowledge: (a) of the occurrence of any Default or Event of Default and, until the Spin-Off Consummation Date, the occurrence of any "Default" or "Event of Default" under and as defined in the New Ceridian Credit Agreement; (b) of (i) any breach or non-performance of, or any default under, any Contractual Obligation of the Borrower or any of its Subsidiaries which would reasonably be expected to result in a Material Adverse Effect; and (ii) any dispute, litigation, investigation, proceeding or suspension by an Governmental Authority that may exist or come to exist at any time in which 63. 70 the Borrower or any of its Subsidiaries is a party which would reasonably be expected to result in a Material Adverse Effect (and assuming for this purpose the reasonable likelihood of an adverse decision); (c) of the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary which would reasonably be expected to: (i) have a Material Adverse Effect (and taking into account the reasonable likelihood of an adverse decision), (ii) if adversely resolved against such Person, result in the imposition of an injunction or other stay of the performance of this Agreement or any Loan Document or the consummation of the Spin-Off Transaction, or (iii) involve an aggregate liability of $1,000,000 (or its equivalent in another currency) or more; (d) of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions affecting the Borrower or any of its Subsidiaries or any of their respective properties pursuant to any applicable Environmental Laws, (ii) all other Environmental Claims, and (iii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of the Borrower or any Subsidiary that could reasonably be anticipated to cause the property of the Borrower or any of its Subsidiaries or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws, if, individually or in the aggregate, the events or conditions described or the amount claimed in clauses (i), (ii) and (iii) would reasonably be expected to result in a Material Adverse Effect; (e) of the occurrence of any ERISA Event affecting the Borrower or any ERISA Affiliate, and deliver to the Administrative Agent and each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Borrower or any ERISA Affiliate with respect to such event; (f) of any Material Adverse Effect subsequent to the date of the most recent audited financial statements of the Borrower delivered to the Lenders pursuant to Section 6.01(a); (g) of any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving the Borrower or any of its Subsidiaries; (h) of the creation, purchase, or acquisition of any Subsidiary (including its jurisdiction of incorporation); (i) of: (i) any Subsidiary being or becoming a Material Subsidiary, and (ii) of any Material Subsidiary ceasing to be a Material Subsidiary; (j) of the occurrence of the Separation Date and the Spin-Off Consummation Date; (k) of (i) the exercise or termination of any option under the Nielsen JV Option Agreement, (ii) the formation of any Nielsen JV, (iii) any decision by the Borrower not to commercially deploy the PPM Technology and (iv) the occurrence of any material breach or default under the terms of the Nielsen JV Option Agreement or the Scarborough Partnership Agreement; 64. 71 (l) of any material breach or default under, or any material waiver or consent granted pursuant to, any Spin-Off Document; (m) of the occurrence of any Event of Loss or Disposition with respect to any assets of the Borrower or any Material Subsidiary (other than New Ceridian) where the fair value of the assets exceed on an aggregate basis, for each such occurrence, $250,000; and (n) of the occurrence of any "Default" or "Event of Default" (or comparable term) under, and as defined in, the Private Placement Documents. Each notice pursuant to this Section 6.03 shall be accompanied by a certificate by a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein, and stating what action, if any, the Borrower proposes to take with respect thereto and at what time. Each notice under Section 6.03(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated. 6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower shall, and shall cause each of its Subsidiaries to: (a) except as permitted in Section 7.02, preserve and maintain in full force and effect its corporate existence and good standing under the laws of its state or jurisdiction of incorporation; (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business except in connection with transactions permitted by Sections 7.02 and 7.04; (c) use its reasonable efforts, in the Ordinary Course of Business, to preserve its business organization and preserve the goodwill and business of the customers, suppliers and others having material business relations with it; and (d) preserve or renew all of its registered trademarks, trade names and service marks, the non-preservation of which would reasonably be expected to have a Material Adverse Effect, provided, however, that the Borrower shall not be deemed to be in default under this Section 6.04 if a Subsidiary (other than a Material Subsidiary) fails to comply herewith so long as such failure is not material. On or before the Spin-Off Consummation Date, the Borrower shall file with appropriate Governmental Authorities all necessary filings in order to change its name to "Arbitron Inc." 6.05 MAINTENANCE OF PROPERTY. The Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted, make all necessary repairs thereto and renewals and replacements thereof, except as permitted by Section 7.04, and to keep such property free of any Hazardous Materials. The Borrower shall use at least the standard of care typical in the industry in the operation of its facilities. 65. 72 6.06 INSURANCE. The Borrower shall maintain, and shall cause each of its Material Subsidiaries to maintain, with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons; including workers' compensation insurance, public liability and property and casualty insurance. All such policies, to the extent consisting of CGL or property or casualty policies, shall name the Administrative Agent as loss payee/mortgagee and as additional insured, for the benefit of the Lenders, as their interests may appear. Upon request of the Administrative Agent or any Lender, the Borrower shall furnish the Administrative Agent, with sufficient copies for each Lender, at reasonable intervals (but not more than once per calendar year) a certificate of a Responsible Officer of the Borrower (and, if requested by the Administrative Agent, any insurance broker of the Borrower) setting forth the nature and extent of all insurance maintained by the Borrower and its Material Subsidiaries in accordance with this Section 6.06 (and which, in the case of a certificate of a broker, were placed through such broker). 6.07 PAYMENT OF OBLIGATIONS. (a) The Borrower shall, and shall cause its Subsidiaries to, pay and discharge as the same shall become due and payable, all their respective obligations and liabilities, including: (i) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (ii) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (iii) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; provided, however, that the Borrower and its Subsidiaries shall not be deemed to be in default under this Section 6.07(a) if failure to comply herewith would not result in a Material Adverse Effect. (b) The Borrower shall use its commercially reasonable efforts to cause, on or prior to the Spin-Off Consummation Date or as soon as practicable thereafter, the Borrower and all Arbitron Subsidiaries to be released as guarantors of or obligors for any liability described in Schedule 5.10 and allocated to New Ceridian pursuant to the Distribution Agreement between the Borrower and New Ceridian dated on or before the Separation Date. 6.08 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall cause each of its Subsidiaries to comply, in all material respects with all material Laws applicable to it or its business (including the Federal Fair Labor Standards Act), except such as may be contested in good faith or as to which a bona fide dispute may exist. 66. 73 6.09 ERISA COMPLIANCE. The Borrower shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with ERISA, the Code and other applicable Laws; (b) cause each Pension Plan that is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Pension Plan subject to Section 412 of the Code. 6.10 INTEREST RATE PROTECTION. Within 90 days of the Closing Date, the Borrower shall enter into and shall maintain in effect one or more Specified Swap Contracts providing protection against fluctuations in interest rates with respect to at least 50% of the difference between the Outstanding Amount from time to time and the outstanding principal amount from time to time of notes issued pursuant to the Private Placement; on such terms and with such financial institutions as shall be satisfactory to the Administrative Agent and the Required Lenders. 6.11 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Borrower shall maintain and shall cause each of its Material Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower and such Subsidiaries. The Borrower shall permit, and shall cause each of its Material Subsidiaries to permit, representatives and independent contractors of the Administrative Agent or any Lender to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, when a Default exists, (i) the Administrative Agent or any Lender may do any of the foregoing with respect to the Borrower or any Subsidiary at any time during normal business hours and without advance notice and (ii) such inspection, examination and meetings shall be at the Borrower's expense. 6.12 ENVIRONMENTAL LAWS. (a) The Borrower shall, and shall cause each of its Subsidiaries to, conduct its operations and keep and maintain its property in compliance in all material respects with all Environmental Laws. (b) Upon the written request of the Administrative Agent or any Lender, the Borrower shall submit to the Administrative Agent with sufficient copies for each Lender, at the Borrower's sole cost and expense, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report required pursuant to Section 6.03(d). 6.13 USE OF PROCEEDS. The Borrower may use the proceeds of the Loans and the Letters of Credit (a) to provide all or a portion of the funds necessary to repay in full all of the Indebtedness of the Borrower that is outstanding as of the Closing Date, to the extent otherwise permitted or required hereunder, and to replace any letters of credit outstanding under the Existing Credit Facility, (b) to the extent otherwise permitted or required hereunder, to 67. 74 repurchase or redeem securities of the Borrower, and (c) for working capital and other general corporate purposes (including Permitted Acquisitions). 6.14 ADDITIONAL GUARANTORS. If any Arbitron Subsidiary, other than a Foreign Subsidiary, shall at any time become a Material Subsidiary, or if the Borrower or any Subsidiary otherwise shall incorporate, create or acquire any Material Subsidiary, other than a Foreign Subsidiary, the Borrower shall cause such Material Subsidiary to furnish promptly, but in no event more than 30 days thereafter, each of the following to the Administrative Agent, in sufficient quantities for each Lender: (a) if such Subsidiary is the first such Subsidiary, a duly executed Subsidiary Guaranty, and for each such succeeding Subsidiary, a duly executed notice and agreement in substantially the form of Exhibit N (an "Additional Guarantor Assumption Agreement"); (b) a duly executed Subsidiary Security Agreement, in substantially the form of Exhibit H, together with such other Collateral Documents as the Administrative Agent or any Lender may request; and (c) (i) copies of the resolutions of the board of directors (or equivalent governing body) of such Subsidiary approving and authorizing the execution, delivery and performance by such Subsidiary of its Subsidiary Guaranty or Additional Guarantor Assumption Agreement, this Agreement, and the other Loan Documents, including all Collateral Documents to which it is a party), certified as of the effective date of such Additional Guarantor Assumption Agreement by the Secretary or an Assistant Secretary (or other appropriate officer) of such Subsidiary; (ii) a certificate of the Secretary or Assistant Secretary (or other appropriate officer) of such Subsidiary certifying the names and true signatures of the officers of such Subsidiary authorized to execute and deliver and perform, as applicable, its Additional Guarantor Assumption Agreement, this Agreement and all other Loan Documents and Collateral Documents to be delivered hereunder; (iii) copies of the articles or certificate of incorporation and bylaws (or other applicable Organization Documents) of such Subsidiary as in effect on the effective date of such Additional Guarantor Assumption Agreement, certified by the Secretary or Assistant Secretary (or other appropriate officer) of such Subsidiary as of such date; and (iv) an opinion of counsel to such Subsidiary and addressed to the Administrative Agent and the Lenders, in form satisfactory to the Administrative Agent and addressing the matters set forth in Exhibit O. 6.15 ADDITIONAL SUBSIDIARIES. (a) If the Borrower directly or indirectly incorporates, creates or acquires any additional Arbitron Subsidiary, then within 10 days thereafter, the Borrower shall (i) (A) pledge the capital stock of such additional Subsidiary to the Collateral Agent pursuant to the Borrower Pledge Agreement, if such stock is directly owned by the Borrower, or (B) if such stock is owned by a Subsidiary, cause such Subsidiary to pledge the capital stock of such additional Subsidiary to the Administrative Agent pursuant to a Subsidiary Pledge Agreement, (ii) execute and deliver, or cause such Subsidiary to have executed and delivered, to the Collateral Agent stock transfer powers executed in blank with signatures guaranteed as the Collateral Agent shall request, such Subsidiary Security Agreements and UCC-1 financing statements (as furnished by the Collateral Agent) for filing in each jurisdiction in which such filing is necessary to establish and perfect the 68. 75 first priority security interest of the Collateral Agent (subject to the terms of the Intercreditor Agreement) in the Collateral with respect to the Borrower or such Subsidiary, and (iii) deliver such other items as reasonably requested by the Administrative Agent in connection with the foregoing, including resolutions, incumbency and officers' certificates, opinions of counsel, search reports and other certificates and documents; provided, however, that if any additional Subsidiary so incorporated, created or acquired is a Foreign Subsidiary, in no event shall more than 65% of the capital stock of any such Foreign Subsidiary be required to be so pledged. (b) If the combined EBITDA of all Arbitron Subsidiaries that are not Material Subsidiaries is greater than or equal to 10% of Consolidated EBITDA, based on the Borrower's quarterly financial statements for the most recent calendar quarter delivered to the Administrative Agent pursuant to Section 6.01, the Borrower shall designate one or more such Subsidiaries as a Material Subsidiary, such that after giving effect to all such designations the combined EBITDA of all remaining Arbitron Subsidiaries that are not Material Subsidiaries is less than 10% of Consolidated EBITDA. Within 10 days of the date of any such designation, the Borrower and any Subsidiary designated as a Material Subsidiary shall take all actions required under Section 6.14. (c) Following the delivery of Borrower's quarterly financial statements pursuant to Section 6.01, the Borrower may de-designate any Subsidiary previously designated as a Material Subsidiary under subsection (b) of this Section so that such Subsidiary shall no longer be treated as a Material Subsidiary, effective as of the date on which such de-designation is made, provided that: (i) such Subsidiary is not independently a Material Subsidiary under subsection (a) of the definition thereof and (ii) after giving effect to such de-designation the combined EBITDA of all Subsidiaries that are not Material Subsidiaries (including the EBITDA of the Subsidiary that has been de-designated) shall be less than 10% of Consolidated EBITDA. Notwithstanding any such de-designation, all Collateral Documents and Subsidiary Guaranties executed by each such Subsidiary pursuant to Section 6.14 shall continue in full force and effect according to their respective terms, and subject to the terms of the Intercreditor Agreement. 6.16 ADDITIONAL INTELLECTUAL PROPERTY. The Borrower and each Arbitron Subsidiary shall execute such Supplemental IP Security Agreements and shall undertake such other filings, recordations, registrations and actions from time to time with respect to Intellectual Property created, purchased or otherwise acquired by the Borrower or such Subsidiary after the Effectiveness Date, as more fully set forth in the Borrower Security Agreement and Subsidiary Security Agreement or as reasonably requested by the Administrative Agent or any Lender. 6.17 LICENSES. The Borrower shall, and shall cause each of its Subsidiaries to, obtain and maintain all material licenses, authorizations, consents, filings, exemptions, registrations and other governmental approvals necessary in connection with the execution, delivery and performance of the Loan Documents, the consummation of the transactions therein contemplated or the operation and conduct of its business and ownership of their properties. 6.18 FURTHER ASSURANCES. (a) The Borrower shall ensure that all written information, exhibits and reports furnished to the Administrative Agent or the Lenders do not and will not contain any untrue 69. 76 statement of a material fact and do not and will not omit to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Administrative Agent and the Lenders and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgment or recordation thereof. (b) Promptly upon request by the Administrative Agent or the Required Lenders, the Borrower shall (and shall cause any of its Subsidiaries to) do, execute, acknowledge and deliver any and all such further acts, certificates, security agreements, assignments, estoppel certificates, financing statements, and continuations or amendments thereof, termination statements, notices of assignment, transfers, assurances and other instruments as the Administrative Agent or such Lenders, as the case may be, may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Loan Document, (ii) to subject to the Liens created by any of the Collateral Documents any of the properties, rights or interests covered by any of the Collateral Documents, (iii) to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Administrative Agent and Lenders the rights granted or now or hereafter intended to be granted to the Lenders under any Loan Document or under any other document executed in connection therewith. ARTICLE VII. NEGATIVE COVENANTS The Borrower hereby covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Required Lenders waive compliance in writing: 7.01 LIMITATION ON LIENS. The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its property (including Intellectual Property, Proprietary Information and accounts and notes receivable, with or without recourse), whether now owned or hereafter acquired, other than the following ("Permitted Liens"): (a) any Lien created under any Loan Document; (b) (i) Liens existing on the Closing Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(a)(iii); and (ii) at any time prior to the Spin-Off Consummation Date, Liens on New Ceridian Assets that would, if such assets were at such time owned or held by New Ceridian, constitute "Permitted Liens" under and as defined in the New Ceridian Credit Agreement; (c) Liens for taxes, fees, assessments or other governmental charges or statutory obligations which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.07, provided that no Notice of Lien has been filed or recorded under the Code; 70. 77 (d) Liens arising in the Ordinary Course of Business in connection with obligations (other than obligations for borrowed money) that are not overdue or which are being contested in good faith and by appropriate proceedings, including, but not limited to Liens under bid, performance and other surety bonds, supersedeas and appeal bonds, Liens on advance or progress payments received from customers under contracts for the sale, lease or license of goods, software, services, or real estate and upon the products being sold or licensed, in each case securing performance of the underlying contract or the repayment of such advances in the event final acceptance of performance under such contracts does not occur; and Liens upon funds collected temporarily from others pending payment or remittance on their behalf; provided that the aggregate value of all collateral pledged by the Borrower together with its Subsidiaries to secure Liens arising under this subsection and subsection (e) of this Section do not exceed on an aggregate, consolidated basis at any time outstanding the amount of $2,500,000; (e) Liens (other than any Lien imposed by ERISA) required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation; provided that the aggregate value of all collateral pledged by the Borrower together with its Subsidiaries to secure Liens arising under this subsection and subsection (d) of this Section do not exceed on an aggregate, consolidated basis at any time outstanding the amount of $2,500,000; (f) easements, rights-of-way, restrictions and other similar encumbrances incurred in the Ordinary Course of Business which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businesses of the Borrower and its Subsidiaries; (g) purchase money security interests on any property acquired or held by the Borrower or its Subsidiaries in the Ordinary Course of Business securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such property to the extent permitted under Section 7.03; provided, however, that (i) any such Lien attaches to such property concurrently with or within 20 days after the acquisition thereof, (ii) such Lien attaches solely to the property so acquired in such transaction, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such property; (h) Liens securing the property of any Person that is acquired by the Borrower or any of its Subsidiaries after the Effectiveness Date; provided that such Liens existed prior to the date of such acquisition and were not created in contemplation thereof or for purposes of circumventing this Agreement; (i) Liens consisting of pledges of cash collateral or government securities to secure on a mark-to-market basis Permitted Swap Contracts, provided that the aggregate value of such collateral so pledged by the Borrower and all such Subsidiaries in favor of all counterparties thereunder does not at any time exceed $1,000,000; (j) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access 71. 78 by the Borrower in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (ii) such deposit account is not intended by the Borrower or any of its Subsidiaries to provide collateral to the depository institution; and (k) Liens existing pursuant to the Private Placement Documents or pursuant to collateral documents securing any Specified Swap Contract, and in each case, subject to the Intercreditor Agreement. 7.02 MERGERS AND CONSOLIDATIONS. (a) The Borrower shall not, and shall not permit any of its Arbitron Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one or a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except as provided in subsection (b) of this Section. (b) Section 7.02(a) shall not prohibit: (i) Permitted Acquisitions; (ii) the merger or consolidation of any Subsidiary (except New Ceridian) into the Borrower, or with or into any other Subsidiary, provided that if any such transaction is between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary is the continuing or surviving corporation; (iii) dispositions of assets pursuant to a dissolution or liquidation otherwise permitted under this Agreement of a Subsidiary; (iv) the sale or other disposition of all or substantially all of the assets of a Subsidiary of the Borrower to the Borrower or to a Wholly-Owned Subsidiary of the Borrower; or (v) the mergers, consolidations or transfers of assets listed on Schedule 7.02(b) attached hereto. 7.03 INDEBTEDNESS. (a) Borrower and Subsidiaries. The Borrower shall not, and shall not permit any Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness other than the following (collectively referred to herein as "Permitted Indebtedness"): (i) the Obligations; (ii) Indebtedness arising from taxes, fees, assessments or other governmental charges or statutory obligations which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.07; 72. 79 (iii) (A) Initial Permitted Indebtedness of the Borrower or any Subsidiary existing on the Closing Date or extensions, renewals and refinancings of such Indebtedness, provided that the principal amount of such Indebtedness being extended, renewed or refinanced does not increase; and (B) at all times prior to the Spin-Off Consummation Date, Indebtedness constituting "Initial Permitted Indebtedness" under and as defined in the New Ceridian Credit Agreement; (iv) accounts payable of Borrower or its Subsidiaries to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the Ordinary Course of Business in accordance with customary terms and paid within the specified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP; (v) obligations in respect of Permitted Swap Contracts; (vi) Indebtedness of Borrower or any Subsidiary of the Borrower secured by Permitted Liens of the type referred to in Section 7.01(g), in a principal amount (including imputed principal for Capital Leases) not to exceed $5,000,000, in the aggregate for the Borrower and all Subsidiaries of the Borrower, at any time outstanding; (vii) Indebtedness not secured by any Lien, in an outstanding principal amount not to exceed, together with the principal amount of Indebtedness outstanding at such time under clause (vi), $10,000,000 at any time in the aggregate for the Borrower and all Subsidiaries; (viii) unsecured Indebtedness not to exceed $14,000,000 incurred prior to December 31, 2001 in favor of the seller of certain assets relating to a Person known as "Coventry", as partial consideration for the Borrower's acquisition of such assets; provided the sum of all payments (including principal, interest, fees and other amounts) required to be made thereunder over the scheduled term thereof does not exceed $16,000,000; (ix) Indebtedness arising in connection with the Private Placement Documents; (x) prior to the Closing Date, Indebtedness required to be repaid on or before the Closing Date pursuant to Section 4.02(a)(v); and (xi) Indebtedness of Wholly-Owned Subsidiaries incurred pursuant to transactions permitted under Section 7.06(f). (b) Subsidiaries. The Borrower shall not permit any of its Subsidiaries to incur, assume or suffer to exist any Indebtedness if the aggregate principal amount of all Indebtedness of any such Subsidiary at any time would exceed 10% of such Subsidiary's net worth. 7.04 DISPOSITION OF ASSETS. (a) The Borrower shall not, and shall not permit any of its Subsidiaries, to Dispose of any assets (including Intellectual Property, Proprietary Information, accounts and rights to 73. 80 payment), whether now owned or hereafter acquired, or enter into any agreement to make any Disposition of such assets, except as permitted under subsection (b). (b) Section 7.04(a) shall not apply to or restrict: (i) (A) the Spin-Off Transaction; or (B) at any time prior to the Spin-Off Consummation Date, Dispositions of New Ceridian Assets that would be permitted under the New Ceridian Credit Agreement if such assets were at such time assets of New Ceridian; (ii) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are reasonably promptly, but in no event more than 30 days, applied to the purchase price of such replacement equipment; provided, however, that: (A) the replacement equipment has comparable value and is of the same type, and used for the same purpose, as the equipment sold; (B) the Person selling equipment under this subsection is the same Person that purchases any replacement equipment; (C) any such sale is conducted at arm's length and under commercially reasonable terms; and (D) to the extent there exists more than $1,000,000 of Net Cash Proceeds from all such equipment sold which have not yet been invested in replacement equipment, such amount shall be promptly applied under Section 2.05(a); (iii) the transfer of assets by the Borrower (A) to any of its Material Subsidiaries if such transfer is a sale for fair market value and the consideration received by the Borrower is cash; or (B) to any Wholly-Owned Subsidiary; (iv) Revocable licenses in the Ordinary Course of Business of Intellectual Property of the Borrower or its Subsidiaries to third parties (other than a Nielsen JV) upon commercially reasonable terms and that do not, singly or in the aggregate, result in a Material Adverse Effect; (v) (A) assignments and sales to a Permitted Nielsen JV of software used or usable for the compilation of data solely derived from PPM Technology, and to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement; and (B) Revocable, non-exclusive licenses of software and other Intellectual Property to a Permitted Nielsen JV in the Ordinary Course of Business upon commercially reasonable terms that do not, singly or in the aggregate, result in a Material Adverse Effect; (vi) the license by the Borrower of its PPM Technology, solely for the purpose of audience measurement, to a Permitted Nielsen JV to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance satisfactory to the Administrative Agent and the Required Lenders; (vii) the non-transferable, exclusive U.S. license by the Borrower of its "Critical Band Encoding Technology" to Nielsen and the license to a Permitted Nielsen JV of encoding patents, to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders; 74. 81 (viii) the Disposition of assets or stock of Ceridian Info Tech (India) Private Limited and CSW Research Limited; provided that no Intellectual Property or Proprietary Information is Disposed of as part of any such Disposition, other than Intellectual Property and Proprietary Information that is not materially related to the Arbitron Business; and further provided that the total aggregate value of all assets and stock transferred pursuant to this clause does not exceed $3,500,000; (ix) the transfer by any Subsidiary of the Borrower of assets (upon voluntary liquidation or otherwise) to the Borrower or a Wholly-Owned Subsidiary of the Borrower that is a Material Subsidiary; or (x) transfers by the Borrower or its Subsidiaries totaling on a consolidated, aggregate basis for all such transfers in any fiscal year an amount not in excess of $1,000,000; provided that (A) each such transfer is otherwise permitted pursuant to the Loan Documents, (B) the consideration paid to the Company or its Subsidiaries in connection with each such transfer is exclusively in the form of cash or Cash Equivalents, (C) unused transfers permitted by this subsection (b)(x) shall not accrue to the following year, and (D) after giving effect to each such transfer there shall exist no Default or Event of Default. 7.05 CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations, except: (a) Contingent Obligations set forth in Schedule 5.10, or incurred pursuant to any Loan Document or any Specified Swap Contract; (b) Contingent Obligations arising in connection with supersedeas or appeal bonds in respect of litigation to which the Borrower or any of its Subsidiaries is a party or a real party in interest, in an amount for all such obligations on an aggregate consolidated basis not to exceed $1,000,000 at any time outstanding; provided that after giving effect to each such obligation there shall exist no Default or Event of Default; (c) endorsements for collection or deposit in the Ordinary Course of Business; (d) until the Spin-Off Consummation Date, (i) Contingent Obligations incurred in connection with the guaranty, of near or even date herewith, made by the Borrower in favor of Bank of America, N.A. (in its capacity as administrative agent under the New Ceridian Credit Agreement) to guarantee the obligations of New Ceridian under the New Ceridian Credit Agreement; and (ii) Contingent Obligations not incurred pursuant to or in furtherance of the Arbitron Business; (e) Contingent Obligations incurred pursuant to the Private Placement Documents; (f) Contingent Obligations consisting of Guaranty Obligations of (i) the Borrower in respect of Indebtedness of any Wholly-Owned Subsidiary or (ii) any Subsidiary in respect of Indebtedness of the Borrower or any Wholly-Owned Subsidiary; and 75. 82 (g) other Contingent Obligations of the Borrower and its Subsidiaries in an aggregate amount not in excess of $1,000,000 at any time outstanding. 7.06 LOANS AND INVESTMENTS. The Borrower shall not, nor shall it permit any of its Subsidiaries to, purchase, acquire, hold or maintain the capital stock, assets (constituting a business unit), obligations or other securities of or any interest in any Person, or otherwise extend any credit to, make any Guaranty Obligation with respect to or make any additional investments in any Person, other than: (a) Investments listed on Schedule 7.06(b) and held by the Borrower or any Subsidiary as of the Closing Date; (b) Investments in the form of Cash Equivalents or investment grade marketable securities; (c) extensions of credit in the nature of accounts receivable or notes receivable arising from the sales of goods or services or franchising activities in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; (d) Investments resulting in Permitted Acquisitions; (e) advances to officers, directors and employees of the Borrower and its Subsidiaries in an aggregate amount for all such advances by the Borrower and its Subsidiaries not to exceed in the aggregate $1,000,000 at any time outstanding, for travel, entertainment, relocation and analogous purposes arising in the Ordinary Course of Business; (f) extensions of credit by the Borrower to any of its Wholly-Owned Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its Wholly-Owned Subsidiaries or the Borrower, in each case in the Ordinary Course of Business; (g) Contingent Obligations permitted by Section 7.05; (h) Investments permitted by Section 7.02; (i) Investments resulting from Dispositions permitted under Section 7.04(b)(iii), (vi), (vii) or (ix); (j) Investments consisting of PPM Expenditures in an amount not to exceed $5,000,000 for all such Investments in respect of all Nielsen JV's on an aggregate basis in any fiscal year; (k) Investments existing or entered into prior to the Separation Date to the extent constituting New Ceridian Assets; or (l) additional Investments otherwise permitted hereunder in Persons that are not, and will not be after giving effect to each such Investment, a Subsidiary, in an amount not to exceed 76. 83 $3,500,000 in the aggregate for all such Investments in any fiscal year; provided that this subsection shall not permit Investments in either the Scarborough Partnership or any Nielsen JV. 7.07 DIVIDENDS AND PAYMENTS. (a) The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of its capital stock, or purchase, redeem, or otherwise acquire for value any shares of its capital stock or any warrants, rights or options to acquire such shares, now or hereafter outstanding, except that the Borrower may: (i) declare and make (A) the Distribution, or (B) dividend payments or other distributions payable solely in shares of its common stock (and, solely in respect of fractional shares, cash of a de minimis amount); (ii) purchase, redeem or otherwise acquire shares of its common stock or warrants or options to acquire any such shares out of proceeds received from the substantially concurrent issue of new shares of its common stock, after taking into account (A) any prepayment made under Section 2.05 as a result of any reduction in the Aggregate Commitments under Section 2.06(b)(iii) in relation to such issuance and (B) any prepayment made or required to be made under the Private Placement Documents in relation to such issuance; (iii) make payments in the Ordinary Course of Business in connection with its Pension Plan or in connection with the employment, termination or compensation of its employees, officers or directors; and (iv) from and after that date on which the Borrower's 2002 year end financial statements are received by the Administrative Agent pursuant to Section 6.01, declare or pay cash dividends to its stockholders out of (and in an aggregate amount not exceeding) Aggregate Distributable Income; provided, however, that immediately after giving effect to any such proposed declaration or payment there exists no Default or Event of Default. (b) The Borrower shall not suffer or permit any Subsidiary of the Borrower (other than New Ceridian) to grant or otherwise agree to or suffer to exist any consensual restrictions on the ability of such Subsidiary to pay dividends and make other distributions to the Borrower, or to pay any Indebtedness owed to the Borrower or transfer properties and assets to the Borrower. (c) After the Spin-Off Consummation Date, the Subsidiaries may declare and make dividend payments in the Ordinary Course of Business to the Borrower and to Wholly-Owned Subsidiaries (and, in the case of a dividend payment by a non-Wholly-Owned Subsidiary, to the Borrower and any Subsidiary and to each other owner of capital stock of such Subsidiary on a pro rata basis based on their relative ownership interests). 7.08 USE OF PROCEEDS. The Borrower shall not and shall not suffer or permit any of its Subsidiaries to use any portion of the Loan proceeds, or the Letter of Credit, directly or indirectly, in violation of Regulation T, U or X of the Federal Reserve Board. 77. 84 7.09 HOSTILE ACQUISITION. The Borrower shall not, and shall not permit any of its Subsidiaries to, make any Acquisition unless: (a) the Acquisition complies with applicable Laws, (b) the board of directors or equivalent governing body of the Person to be so acquired provides written consent or approval of such Acquisition prior to its commencement; and (c) such Acquisition is otherwise permitted hereunder. 7.10 LEVERAGE RATIO. The Borrower shall not permit its Leverage Ratio for any fiscal quarter, beginning with the fiscal quarter ended December 31, 2000, calculated as of the last date of such quarter, to exceed, for the Test Period ending on such date (including in respect of Test Period fiscal quarters ending prior to the Effectiveness Date, and using for this purpose the Form 10 Financial Statements and the Supplemental Financial Statements), the following amounts:

------------------------------------------------------------ FISCAL QUARTER ENDING: MAXIMUM LEVERAGE RATIO ------------------------------------------------------------ December 31, 2000 through 3.75 to 1.00 September 30, 2001 ------------------------------------------------------------ December 31, 2001 through September 30, 2002 3.25 to 1.00 ------------------------------------------------------------ December 31, 2002 through September 30, 2003 3.00 to 1.00 ------------------------------------------------------------ December 31, 2003 through September 30, 2004 2.75 to 1.00 ------------------------------------------------------------ December 31, 2004 and thereafter 2.50 to 1.00 ------------------------------------------------------------

7.11 FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2000: (a) the sum of (i) the Borrower's Consolidated EBITDA for the Test Period ending on such day, less (ii) taxes actually paid in cash or Cash Equivalents for the Test Period ending on such day, less (iii) capital expenditures plus (without duplication) PPM Expenditures for the Test Period ending on such day, (b) divided by the sum of (i) Consolidated Interest Expense for the Test Period ending on such day plus (ii) Current Portion of Long-Term Debt as of such day; for the Borrower and its Subsidiaries on a consolidated basis (including in respect of Test Period fiscal quarters ending prior to the Effectiveness Date, and using for this purpose the Form 10 Financial Statements and the Supplemental Financial Statements), to be less than the following amounts: 78. 85

------------------------------------------------------------ FISCAL QUARTER ENDING MINIMUM RATIO ------------------------------------------------------------ December 31, 2000 through 2.00 to 1.00 September 30, 2001 ------------------------------------------------------------ December 31, 2001 through 2.25 to 1.00 September 30, 2002 ------------------------------------------------------------ December 31, 2002 through 2.50 to 1.00 September 30, 2003 ------------------------------------------------------------ December 31, 2003 through 3.00 to 1.00 September 30, 2004 ------------------------------------------------------------ December 31, 2004 and 3.50 to 1.00 thereafter ------------------------------------------------------------

7.12 FOREIGN SUBSIDIARIES. The Borrower shall not, and shall not suffer or permit any Subsidiary to, (a) make any Disposition of, or make any Investment of, any of its property, business or assets (including Intellectual Property, Proprietary Information, accounts and rights to payment), whether now owned or hereafter acquired, to or in any Foreign Subsidiary, except Dispositions or Investments that, individually or in the aggregate, (i) are otherwise permitted hereunder and (ii) would not reasonably be expected to have a Material Adverse Effect on the business, results of operation or financial condition of the Borrower together with those of its Subsidiaries that are not Foreign Subsidiaries, taken as a whole, or (b) make any Investment in, or any Disposition to, Ceridian Info Tech (India) Private Limited in an aggregate amount, for all such Investments and Dispositions in respect of the Borrower and all Subsidiaries together from and after the Effectiveness Date, in excess of $200,000. 7.13 CHANGE IN BUSINESS. The Borrower shall not, and shall not permit any of its Subsidiaries to, (i) engage in any material line of business substantially different from those lines of business carried on by the Borrower and its Subsidiaries on the Closing Date; (ii) extend any material amount of Indebtedness to or make any material equity Investment in any Person which engages in one or more lines of business all of which are substantially different from those lines of business carried on by the Borrower and its Subsidiaries on the Effectiveness Date; or (iii) enter into any joint venture which engages in a material line of business substantially different from those lines of business carried on by the Borrower and its Subsidiaries on the Effectiveness Date. 7.14 ACCOUNTING CHANGES. The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, make any significant change in accounting treatment or reporting practices, except as required or permitted by GAAP, or change the fiscal year of the Borrower or of any of its consolidated Subsidiaries. 7.15 CERTAIN CONTRACTS. (a) The Borrower shall not permit any of its Arbitron Subsidiaries (other than New Ceridian) to enter into any Contractual Obligation restricting the ability of such Subsidiary to pay dividends or make loans to the Borrower or Arbitron Subsidiaries of the Borrower. (b) The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any amendment, restatement, extension, supplement or other modification of the 79. 86 Private Placement Documents (i) if the effect of any such action would be to render any of the conditions set forth in Section 4.01(a)(vii)(c) inaccurate or unsatisfied in any respect, or (ii) that would increase the rate of interest or any "Make Whole Amount" payable under the Private Placement Documents. (c) Unless consented to by the Required Lenders, the Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any amendment, revision, supplement or modification to any of the Spin-Off Documents after the Closing Date, other than (i) ministerial changes necessary to address administrative issues, or (ii) changes necessary to address facial ambiguities. 7.16 TRANSACTIONS WITH AFFILIATES. (a) The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any material transaction of any kind with any Affiliate of the Borrower (other than a Subsidiary), or with New Ceridian and any of its Subsidiaries, other than arm's-length transactions with such Persons that are otherwise permitted hereunder. (b) The Borrower shall not suffer or permit any Nielsen JV or the Scarborough Partnership to Dispose of, or grant any Lien upon, Intellectual Property or Proprietary Information licensed to either such Person by the Borrower, provided, however, that the Scarborough Partnership may grant licenses of such Intellectual Property (i) to the Borrower, and (ii) to third Persons in the Ordinary Course of Business upon commercially reasonable terms; and provided further that a Permitted Nielsen JV may grant licenses in such Intellectual Property (A) to the Borrower, (B) to Nielsen to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance satisfactory to the Administrative Agent and the Required Lenders and (C) which are non-exclusive, non-transferable and Revocable to other Persons on commercially reasonable terms in the Ordinary Course of Business and consistent with the Nielsen JV Option Agreement. (c) Except as consented to in writing by the Administrative Agent and the Required Lenders, the Borrower shall not make or permit any amendment, modification, extension, renewal, restatement or assignment of the Nielsen JV Option Agreement or the Scarborough Partnership Agreement that would, directly or indirectly, (i) increase the amount of cash contributions or payments required to be made by the Borrower or any of its Subsidiaries to Nielsen, any Nielsen JV, or the Scarborough Partnership (ii) require the license or other Disposition of Intellectual Property of the Borrower or its Subsidiaries other than the property previously contemplated or alter the license or other transfer arrangements such that they involve longer terms, or less consideration than previously contemplated, or (iii) include products, applications or markets other than as previously contemplated, (iv) cause any such Nielsen JV to no longer satisfy the requirements of a Permitted Nielsen JV, or (v) foreseeably be detrimental to the Borrower or its Subsidiaries or to the interests of the Lenders. 7.17 CAPITAL EXPENDITURES. The Borrower shall not, nor shall it permit any of its Subsidiaries to, make any expenditures for fixed or capital assets of the Borrower or its Subsidiaries, including obligations under Capital Leases, in excess of $5,000,000 in the aggregate for all such Persons, on a consolidated basis, in any fiscal year (not including 80. 87 equipment and real estate subject to a sale-leaseback transaction consented to by the Required Lenders, and completed no later than 90 days after the date on which such property is sold by the Borrower or Subsidiary pursuant to such sale-leaseback transaction); provided, however, that this Section shall not restrict the incurrence of capital expenditures in respect of New Ceridian Assets prior to the Spin-Off Consummation Date, provided that any lease or other obligation (other than obligations in respect of trade payables entered into in the Ordinary Course of Business on customary payment terms) of the Borrower or any Arbitron Subsidiary related to such New Ceridian Asset shall be released or terminated on or before the Spin-Off Consummation Date. 7.18 SALES AND LEASEBACKS. The Borrower shall not, nor shall it permit any of its Subsidiaries to, become liable, directly or indirectly, with respect to any lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which the Borrower or such Subsidiary has sold or transferred or is to sell or transfer to any other Person, or (b) which the Borrower or such Subsidiary intends to use for substantially the same purposes as any other property which has been or is to be sold or transferred by the Borrower or such Subsidiary to any other Person in connection with such lease. 7.19 CERTAIN TAX MATTERS. The Borrower shall not, (a) during the two year period following the Closing Date, cease to be engaged in the active trade or business relied upon for purposes of satisfying the requirements of Section 355(b) of the Code and obtaining, and staying in conformity with, the IRS Ruling Letter; or (b) during the applicable period provided by Section 355(e)(2)(b) of the Code with respect to the Distribution, enter into any transaction or make any change to its equity structure (including stock issuance, pursuant to the exercise of options, option grants or otherwise, capital contributions or acquisitions, but not including the Distribution) that may cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly capital stock of the Borrower representing a "50 percent or greater interest" within the meaning of Section 355(e) of the Code; provided that, in each case, the Borrower may take such actions if (i) the Borrower obtains an private letter ruling from the IRS to the effect that such actions should not result in the Distribution being taxable to New Ceridian or its shareholders, or (ii) the Borrower delivers to the Administrative Agent an opinion of independent counsel addressed to the Administrative Agent to the same effect, provided, that such opinion is reasonably acceptable in form and substance to the Administrative Agent. ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES 8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of Default: (a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any commitment, utilization or other fee due hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or 81. 88 (b) Specific Covenants. The Borrower fails to perform or observe any term, covenant, or agreement contained in Section 6.03(a), (b), (c), (d), or (f), Section 6.09, Section 6.13 or in Article VII; or the Borrower fails to perform or observe any term, covenant or agreement contained in Section 6.01 or Section 6.02 or in Section 6.03 (other than subsections (a), (b), (c), (d) or (f) thereof) and such failure continues unremedied for a period of 10 days; or (c) Other Defaults. The Borrower fails to perform or observe any other term or covenant contained in this Agreement or any other Loan Document, and such default continues unremedied for a period of 20 days; or (d) Representations and Warranties. Any representation or warranty made or deemed made by the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith proves to have been incorrect in any material respect when made or deemed made; or (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty Obligation (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guaranty Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guaranty Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated maturity, or such Guaranty Obligation to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (I) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (II) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or (f) Insolvency Proceedings, Etc. Any Loan Party, any of its Subsidiaries, the Scarborough Partnership or the Nielsen JV institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is 82. 89 entered in any such proceeding; provided, however, that it shall not be an Event of Default under this subsection (f) if any Subsidiary of the Borrower to which this subsection applies does not have annual revenues in excess of 1% of the consolidated revenues of the Borrower or net worth which constitutes more than 5% of the Consolidated Net Worth of the Borrower in the fiscal year immediately preceding the date this subsection first becomes applicable to such Subsidiary; or (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; provided, however, that it shall not be an Event of Default under this subsection (g) if any Subsidiary of the Borrower to which this subsection applies does not have annual revenues in excess of 1% of the consolidated revenues of the Borrower or net worth which constitutes more than 5% of the Consolidated Net Worth of the Borrower in the fiscal year immediately preceding the date this subsection first becomes applicable to such Subsidiary; or (h) Judgments. There is entered against the Borrower or any Subsidiary (i) a final judgment, order or decree for the payment of money in an aggregate amount exceeding $5,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any non-monetary final judgment, order or decree that has, or would reasonably be expected to have, a Material Adverse Effect and, in either case, (a) enforcement proceedings are commenced by any creditor upon such judgment, order or decree, or (b) there shall be any period of 10 consecutive days during which such judgment, order or decree continues unsatisfied and during which a stay of enforcement of such judgment, order, or decree by reason of a pending appeal or otherwise, shall not be in effect; or (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or would reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount that would reasonably be expected to result in a Material Adverse Effect, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount that would reasonably be expected to result in a Material Adverse Effect; or (j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement of all the Lenders or satisfaction in full of all the Obligations, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any material respect; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or (k) Invalidity of Spin-Off Documents. Any Spin-Off Document, at any time after its execution and delivery and for any reason other than the satisfaction in full of all the obligations therein, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect; or any party thereto denies that it has 83. 90 any or further liability or obligation under any Spin-Off Document, or purports to revoke, terminate or rescind any Spin-Off Document; or (l) Change of Control. There occurs any Change of Control; (m) Collateral. (i) Any provision of any Collateral Document shall for any reason cease to be valid and binding on or enforceable against the Borrower or any Subsidiary party thereto, or the Borrower or any Subsidiary shall so state in writing or bring an action to limit its obligations or liabilities thereunder, or (ii) any Collateral Document shall for any reason (other than pursuant to the terms thereof) cease to create a valid security interest in the Collateral purported to be covered thereby, or such security interest shall for any reason cease to be a perfected and first priority security interest subject only to Permitted Liens; or (n) Guarantor Defaults. Any Guarantor fails in any material respect to perform or observe any term, covenant or agreement in its Guaranty; or any Guaranty is for any reason partially (including with respect to future advances) or wholly revoked or invalidated, or otherwise ceases to be in full force and effect, or any Guarantor or any other Person contests in any manner the validity or enforceability thereof or denies that it has any further liability or obligation thereunder; or any event described at subsections (f) or (g) of this Section occurs with respect to any Guarantor; or (o) Spin-Off Consummation. The Spin-Off Consummation Date does not occur on or before the Spin-Off Deadline. 8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated; (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law; provided, however, that upon the occurrence of any event specified in subsection (f) of Section 8.01, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become 84. 91 due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender. ARTICLE IX. ADMINISTRATIVE AGENT 9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. (a) Each Lender hereby irrevocably (subject to Section 9.09) appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. (b) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith until such time (and except for so long) as the Administrative Agent may agree at the request of the Required Lenders to act for the L/C Issuer with respect thereto; provided, however, that the L/C Issuer shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term "Administrative Agent" as used in this Article IX included the L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the L/C Issuer. 9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. 9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its 85. 92 own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof. 9.04 RELIANCE BY ADMINISTRATIVE AGENT. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders or all the Lenders, if required hereunder, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and participants. Where this Agreement expressly permits or prohibits an action unless the Required Lenders otherwise determine, the Administrative Agent shall, and in all other instances, the Administrative Agent may, but shall not be required to, initiate any solicitation for the consent or a vote of the Lenders. (b) For purposes of determining compliance with the conditions specified in Section 4.01 and Section 4.02, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by the Administrative Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender. 9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default." The 86. 93 Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be directed by the Required Lenders in accordance with Article VIII; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders. 9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), based on such Lender's Pro Rata Share, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting from such Person's gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders or all Lenders, as the case may be, shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share (based on such Lender's Pro Rata Share) of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the 87. 94 preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertaking in this Section shall survive termination of the Commitments, the payment of all Obligations hereunder and the resignation or replacement of the Administrative Agent. 9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Loan Parties and their respective Affiliates as though Bank of America were not the Administrative Agent or the L/C Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Loan Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders" include Bank of America in its individual capacity. 9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders which successor administrative agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article IX and Sections 10.03 and 10.13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 9.10 OTHER AGENTS; LEAD MANAGERS. None of the Lenders identified on the facing page or signature pages of this Agreement as a "syndication agent," "documentation agent," "co- 88. 95 agent" or "lead manager" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. 9.11 COLLATERAL MATTERS. (a) The Administrative Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to any Collateral or the Collateral Documents which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Collateral Documents. (b) The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon termination of the Commitments and payment in full of all Loans and all other Obligations known to the Administrative Agent and payable under this Agreement or any other Loan Document; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any Disposition permitted hereunder; (iii) constituting property in which the Borrower or any Subsidiary owned no interest at the time the Lien was granted or at any time thereafter; (iv) constituting property leased to the Borrower or any Subsidiary in a transaction permitted under this Agreement; (v) consisting of an instrument evidencing Indebtedness or other debt instrument, if the indebtedness evidenced thereby has been paid in full; or (vi) if approved, authorized or ratified in writing by the Required Lenders or all the Lenders, as the case may be, as provided in Section 10.01(f). Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent's authority to release particular types or items of Collateral pursuant to this Section 9.11(b), provided that the absence of any such confirmation for whatever reason shall not affect the Administrative Agent's rights under this Section 9.11. Each Bank agrees with and in favor of each other (which agreement shall not be for the benefit of the Borrower or any Subsidiary) that the Borrower's obligation to such Bank under this Agreement and the other Loan Documents is not and shall not be secured by any real property collateral now or hereafter acquired by such Bank. ARTICLE X. MISCELLANEOUS 10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall, unless in writing and signed by each of the Lenders directly 89. 96 affected thereby and by the Borrower, and acknowledged by the Administrative Agent, do any of the following: (a) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02); (b) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document; (c) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan Document; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrower to pay interest at the Default Rate; (d) change the percentage of the Aggregate Commitments or of the aggregate unpaid principal amount of the Loans and L/C Obligations which is required for the Lenders or any of them to take any action hereunder; (e) change the Pro Rata Share or Voting Percentage of any Lender other than as set forth in Section 3.06(b) or 10.16; (f) amend this Section, or any provision herein providing for consent or other action by all the Lenders; (g) amend Section 2.06(b), or amend Section 4.01 or 4.02 or waive any condition precedent specified therein (subject to the proviso in the introductory clause to Section 4.01); or (h) discharge any Guarantor, or release all or substantially all of the Collateral except as otherwise may be provided herein or in the Collateral Documents; and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the L/C Issuer under this Agreement or any L/C Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iii) the Agent/Arranger Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, any Lender that has failed to fund any portion of the Loans, or participations in L/C Obligations required to be funded by it hereunder shall not have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share or the Commitment amount of such Lender may not be increased without the consent of such Lender. 90. 97 10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES. (a) General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered, to the address, facsimile number or (subject to subsection (c) below) electronic mail address specified for notices on Schedule 10.02; or, in the case of the Borrower, the Administrative Agent, or the L/C Issuer to such other address as shall be designated by such party in a notice to the other parties, and in the case of any other party, to such other address as shall be designated by such party in a notice to the Borrower, the Administrative Agent, and the L/C Issuer. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when signed for by the intended recipient; (B) if delivered by first class mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided, however, that notices and other communications to the Administrative Agent, or the L/C Issuer pursuant to Article II shall be in writing and shall not be effective until actually received by such Person. Any notice or other communication permitted to be given, made or confirmed by telephone hereunder shall be given, made or confirmed by means of a telephone call to the intended recipient at the number specified on Schedule 10.02, it being understood and agreed that a voicemail message shall in no event be effective as a notice, communication or confirmation hereunder. (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) Limited Use of Electronic Mail. Electronic mail and internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. 91. 98 10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein or therein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. The agreements in this Section shall survive the termination of the Commitments and repayment of all the other Obligations. At the election of any Indemnitee, the Borrower shall defend such Indemnitee using legal counsel satisfactory to such Indemnitee in such Person's sole discretion, at the sole cost and expense of the Borrower; provided, however, that the Borrower shall only be obligated to hire one counsel to represent all of the Lenders unless any Lender advises the Borrower that its legal counsel has advised it that its interest is materially different from that of the other Lenders and it would not be adequately represented without its own separate counsel, in which case the borrower shall hire separate counsel for such Lender, satisfactory to such Lender. All amounts owing under this Section 10.04 shall be paid within 30 days after demand. 10.05 INDEMNIFICATION BY THE BORROWER. Whether or not the transactions contemplated hereby are consummated, the Borrower agrees to indemnify, save and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against: (a) any and all claims, demands, actions or causes of action that are asserted against any Indemnitee by any Person (other than the Administrative Agent or any Lender) relating directly or indirectly to a claim, demand, action or cause of action that such Person asserts or may assert against any Loan Party, any Affiliate of any Loan Party or any of their respective officers or directors; (b) any and all claims, demands, actions or causes of action that may at any time (including at any time following repayment of the Obligations and the resignation or removal of the Administrative Agent or the replacement of any Lender) be asserted or imposed against any Indemnitee, arising out of or relating to, the Loan Documents, any predecessor loan documents, the Commitments, the use or contemplated use of the proceeds of any Credit 92. 99 Extension, or the relationship of any Loan Party, the Administrative Agent and the Lenders under this Agreement or any other Loan Document; (c) any administrative or investigative proceeding by any Governmental Authority arising out of or related to a claim, demand, action or cause of action described in subsection (a) or (b) above; and (d) any and all liabilities (including liabilities under indemnities), losses, costs or expenses (including Attorney Costs) that any Indemnitee suffers or incurs as a result of the assertion of any foregoing claim, demand, action, cause of action or proceeding, or as a result of the preparation of any defense in connection with any foregoing claim, demand, action, cause of action or proceeding, in all cases, and whether or not an Indemnitee is a party to such claim, demand, action, cause of action or proceeding (all the foregoing, collectively, the "Indemnified Liabilities"); provided that no Indemnitee shall be entitled to indemnification for any claim caused by its own gross negligence or willful misconduct or for any loss asserted against it by another Indemnitee. The agreements in this Section shall survive the termination of the Commitments and repayment of all the other Obligations. 10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a payment to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. 10.07 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Subject to the prior consent of the Administrative Agent, the L/C Issuer and, provided there exists no Default or Event of Default, the Borrower (such Borrower consent not to be unreasonably withheld), any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations at the time owing to it); provided that (i) except in the case of an assignment of the 93. 100 entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent, shall not be less than $5,000,000 unless the Administrative Agent otherwise consents, (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, and (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $4,000. Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 10.04 and 10.05). Upon request, the Borrower (at its expense) shall execute and deliver new or replacement Loan Notes to the assigning Lender and the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 subsection (d) of this Section. (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent 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. (d) Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations in L/C Obligations) owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any 94. 101 provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification that would (A) postpone any date upon which any payment of money is scheduled to be paid to such Participant (B) reduce the principal, interest, fees or other amounts payable to such Participant, or (C) release the Guarantor from the Guaranty. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.12 as though it were a Lender. (e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 10.15 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Loan Notes, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment threshold specified in clause (i) of the proviso to the first sentence of Section 10.07(b)), the Borrower shall be deemed to have given its consent five Business Days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such fifth Business Day. (h) As used herein, the following terms have the following meanings: "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. "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural Person) approved by the Administrative Agent, in the case of any assignment of a Loan, and the L/C Issuer, and unless (x) such Person is taking delivery of an assignment in connection with physical settlement of a credit derivatives transaction or (y) an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). 95. 102 "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. (i) Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, upon 20 days' notice to the Borrower and the Lenders, resign as L/C Issuer. The Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer. Bank of America shall retain all the rights and obligations of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund participations in Unreimbursed Amounts pursuant to Section 2.03(c)). 10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of the Borrower; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower; (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender's or its Affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates; or (j) to any Person from time to time party (directly, or through any agent or trustee) to the Intercreditor Agreement. For the purposes of this Section, "Information" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 96. 103 10.09 SET-OFF. In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. 10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations. 10.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 10.12 INTEGRATION. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the 97. 104 Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. 10.14 SEVERABILITY. Any provision of this Agreement and the other Loan Documents to which the Borrower is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation, partnership or trust" within the meaning of the Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or after accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by the Borrower pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax. Thereafter and from time to time, each such Person shall (a) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by the Borrower pursuant to this Agreement, (b) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (c) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. If any Governmental Authority asserts that the Administrative Agent did not properly withhold any tax or other amount from payments made in respect of such Person, such Person shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the payment of all Obligations and the resignation or replacement of the Administrative Agent. 98. 105 10.16 REMOVAL AND REPLACEMENT OF LENDERS. (a) Under any circumstances set forth herein providing that the Borrower shall have the right to remove or replace a Lender as a party to this Agreement, the Borrower may, upon notice to such Lender and the Administrative Agent, (i) remove such Lender by terminating such Lender's Commitment or (ii) replace such Lender by causing such Lender to assign its Commitment (without payment of any assignment fee) pursuant to Section 10.07(b) to one or more other Lenders or Eligible Assignees procured by the Borrower; provided, however, that if the Borrower elects to exercise such right with respect to any Lender pursuant to Section 3.06(b), it shall be obligated to remove or replace, as the case may be, all Lenders that have made similar requests for compensation pursuant to Section 3.01 or 3.04. The Borrower shall (x) pay in full all principal, interest, fees and other amounts owing to such Lender through the date of termination or assignment (including any amounts payable pursuant to Section 3.05), (y) provide appropriate assurances and indemnities (which may include letters of credit) to the L/C Issuer as it may reasonably require with respect to any continuing obligation to purchase participation interests in any L/C Obligations then outstanding, and (z) release such Lender from its obligations under the Loan Documents. Any Lender being replaced shall execute and deliver an Assignment and Acceptance with respect to such Lender's Commitment and outstanding Credit Extensions. The Administrative Agent shall distribute an amended Schedule 2.01, which shall be deemed incorporated into this Agreement, to reflect changes in the identities of the Lenders and adjustments of their respective Commitments and/or Pro Rata Shares resulting from any such removal or replacement. The Borrower may not under any circumstances remove or replace the Lender that is the L/C Issuer without causing such Lender simultaneously to be replaced as L/C Issuer and, causing such Lender to be released from all liability in respect of then-outstanding Letters of Credit; all pursuant to documentation in form and substance satisfactory to such Lender. (b) In order to make all the Lenders' interests in any outstanding Credit Extensions ratable in accordance with any revised Pro Rata Shares after giving effect to the removal or replacement of a Lender, the Borrower shall pay or prepay, if necessary, on the effective date thereof, all outstanding Loans of all Lenders, together with any amounts due under Section 3.05. The Borrower may then request Loans from the Lenders in accordance with their revised Pro Rata Shares. The Borrower may net any payments required hereunder against any funds being provided by any Lender or Eligible Assignee replacing a terminating Lender. The effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect thereto. 10.17 GOVERNING LAW. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE 99. 106 COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 100. 107 SCHEDULE 1.01(e) EXISTING LETTERS OF CREDIT

- --------------------- ------------------ ------------------------- -------------- --------------- LETTER OF CREDIT BENEFICIARY U.S. DOLLAR AMOUNT ISSUE DATE EXPIRATION NO. (AS OF DATE EFFECTIVENESS DATE) - --------------------- ------------------ ------------------------- -------------- --------------- 7504494 222 Riverside $151,283.33 11/28/00 12/01/01 Plaza Corp c/o (Arbitron) NY State Teachers' Retirement System - --------------------- ------------------ ------------------------- -------------- ---------------

1. 108 SCHEDULE 1.01(i) INITIAL PERMITTED INDEBTEDNESS 1. Repayment obligations pursuant to the Letters of Credit described in Schedule 1.01(e). 2. There are no existing capital leases. 3. Final payment in the amount of three million dollars ($3,000,000) to Tapscan Inc. due on May 4, 2001 under the Asset Purchase Agreement dated May 4, 1998. 1. 109 SCHEDULE 1.01(s) SPIN-OFF DOCUMENTS 1. The Form 10 2. Amended and Restated Certificate of Incorporation of the Borrower 3. Amended and Restated Bylaws of the Borrower 4. Distribution Agreement dated on or before the Separation Date between the Borrower and New Ceridian (see Schedules below)

Schedule Description of Schedule -------- ----------------------- 1.1(o) Conveyancing and Assumption Instruments 1.1(g) Debt Realignment Plan 1.1(ff) List of Divested Business Entities Relating to Arbitron Business 1.1(gg) December 31, 1999 Media Information Balance Sheet 1.1 (ii)(iii) Government Contracts Exclusively Relating to Media Information Business 1.1 (ii)(iv) Lease Agreements Relating to Media Information Business 1.1(ll) List of Certain Liabilities to remain with the Corporation after Spin-Off 1.1(ll) A List of Certain Liabilities to be Assumed by New Ceridian 2.8(a) Guarantees where Corporation (Arbitron Inc.) is to be removed as a Guarantor 2.8(b) Guarantees where New Ceridian is to be removed as a guarantor of a Media Information Liability 7.3(b) Allocation of deductibles with respect to Shared Insurance Policies 7.3(e) Allocation of deductible for Workers' Compensation, General Liability and Automotive Liability Claims 8.5 Allocation of Expenses

5. Personnel Agreement dated on or before the Separation Date between Arbitron and New Ceridian 1. 110 6. Tax Matters Agreement dated on or before the Separation Date between Arbitron and New Ceridian 7. Transition Services Agreement dated on or before the Separation Date between Arbitron and New Ceridian 8. Information Statement dated December 6, 2000 attached as Annex A to the Form 10 9. Bill of Sale and Assumption Agreement, dated on or before the Separation Date, between the Borrower and the Parent. 10. Real Estate Sublease Agreement, dated on or before the Separation Date, between the Borrower, as sub-lessor, and the Parent, as sub-lessee, related to the facilities located at 142 W. 57th Street, New York, New York. 2. 111 SCHEDULE 2.01 COMMITMENTS AND PRO RATA SHARES

LENDER COMMITMENT PRO RATA SHARE - ------------------------------------------- -------------------------- ------------------------------- Bank of America, N.A. $40,000,000 17.777777778% Fleet National Bank $40,000,000 17.777777778% The Chase Manhattan Bank $30,000,000 13.333333333% U.S. Bank National Association $30,000,000 13.333333333% The Bank of New York $20,000,000 8.888888889% BNP Paribas $20,000,000 8.888888889% Bear Stearns Corporate Lending Inc. $15,000,000 6.666666667% Citizens Bank of Massachusetts $15,000,000 6.666666667% The Royal Bank of Scotland plc $15,000,000 6.666666667% - ------------------------------------------- -------------------------- ------------------------------- Total $225,000,000 100% - ----- ------------ ---- - ------------------------------------------- -------------------------- -------------------------------

1. 112 SCHEDULE 5.05 LITIGATION AFFECTING LOAN PARTIES The following information is provided regarding various matters in litigation involving the Borrower and the Subsidiaries of the Borrower. The information provided includes matters where the plaintiff has alleged damages in an amount that exceeds $5,000,000 or where such damages are currently unknown, but could potentially exceed $5,000,000, and excludes threatened litigation where the threatening party or parties specified no Dollar threshold. Inclusion of any matter on the lists provided below shall not be deemed a conclusion on the part of the Borrower or its Subsidiaries that an adverse determination in connection with such matter is likely or expected, or that such a determination would necessarily result in a Material Adverse Effect. Terms not otherwise defined in this Schedule are used herein as defined in the Agreement. 1. Flying J, Inc. v. Comdata Network, Inc. and Trendar Corporation, et. al. In July 1996, Comdata was sued in the U.S. District Court for the Northern District of Utah by Flying J, an operator of a large chain of truck stops and formerly a significant Comdata customer. The complaint alleges violations of various antitrust laws, tortious interference with contract and unfair competition. Specifically, Flying J alleges that Comdata's market position in the transportation industry caused Flying J's agreement(s) with another truck stop chain to deploy point-of-sale authorization devices and truck driver service kiosks to unravel. Comdata filed a motion to dismiss, stay or transfer this case to the U.S. District Court for the Eastern District of Tennessee where Comdata had previously filed suit against Flying J in April 1996, seeking a temporary restraining order and, later, a permanent injunction to prevent Flying J from misappropriating certain confidential and proprietary information of Comdata, including misuse of Comdata's Comchek card numbers. Although the temporary restraining order was granted by the Tennessee court and remained in place through mid-December 1996, the Tennessee court declined to issue a permanent injunction and the Tennessee case, accordingly, was dismissed. The plaintiff filed an amended complaint in the Utah case in mid-January 1997. In January 1999, plaintiffs filed a second and third amended complaint seeking to add claims for interference with contractual relations with NCR and NTS, Inc. Plaintiffs' expert report has been filed under seal. A motion is pending to have the court reconsider its denial of plaintiffs' motion the Borrower as a party. Similar motions have been denied twice previously. Meanwhile, plaintiffs have sued the Borrower separately, repeating the same allegations made against Comdata. The complaint was accompanied with a motion to stay following the Borrower's answer. Ceridian has answered and is pursuing dispositive motions to dismiss. Ceridian believes that the separate suit filed against it is subject to various affirmative defenses, including, without limitation, lack of standing, laches, unclean hands, no damages as a result of conduct of the Borrower and statute of limitation defenses, and in addition the Borrower does not believe that suit reaches the damages thresholds specified above. The suit is disclosed only to provide a complete description of the current circumstances. The lawsuit against Comdata is currently scheduled for a four-week trial beginning in June 2001. 2. Fortune Funding LLC, et al. v. Ceridian Corporation. On July 28, 2000 the owner of the Borrower's former headquarters building sued the Borrower in the United States District Court for the District of Minnesota. The complaint alleges breach of contract, violation of Minn. Stat. 1. 113 561.17, common law waste, intentional and negligent misrepresentation, and violation of the consumer fraud act. 3. The Huntington National Bank v. ABR Benefits Services, Inc. The Huntington National Bank sued ABR Benefits Services in Circuit Court, Pinellas County, Florida. Plaintiff terminated their contract with ABR and claims breach of contract and wrongful retention of hardware and software. ABR's professional liability carrier is paying costs. The matter is currently in the discovery phase. 2. 114 SCHEDULE 5.07 ERISA COMPLIANCE Not Applicable. 1. 115 SCHEDULE 5.10 CONTINGENT OBLIGATIONS 1. Reimbursement obligations relating to letters of credit set forth in Schedule 1.01(e). 2. Contingent Obligations arising in connection with the Borrower's guarantee of the obligations of New Ceridian under the New Ceridian Credit Agreement. 3. The Borrower's obligations to pay certain obligations as expressly set forth in the Spin-Off Documents. 4. Existing Contingent Obligations relating to a $1,200,000 letter of credit required by Liberty Sites, Ltd., the landlord of the Montreal, Canada facilities, and Contingent Obligations related to a guaranty of the account party's obligations in respect thereto, given to the issuing bank (CIBC) by the Borrower as of the Effectiveness Date, and by New Ceridian on the Closing Date. 5. Existing Contingent Obligations of $100,000 relating to the obligations of Resumix (a divested subsidiary) under a switchboard lease/purchase. 6. Existing Contingent Obligations of $18,900,000 under surety bonds primarily relating to various licensing or permitting requirements of Comdata (and its subsidiaries) for fuel tax, ATM, check cashing and related matters. 7. Existing Contingent Obligations of $900,000 under performance guarantees of Empros (a divested business operation) in Mexico, as to which the Borrower has a "back-up" indemnity from Siemens, the acquiror of Empros. 8. Existing Guarantees by the Borrower as of the Effectiveness Date, as described in Schedule 1.01(i), by New Ceridian as of the Closing Date, in substantially the form of Exhibit E, and by the Borrower's domestic Material Subsidiaries, in substantially the form of Exhibit F. 9. Contingent Obligations relating to a $2,000,000 Letter of Credit (the amount subject to rescission) issued under the Existing Credit Facility and to be reissued under the New Ceridian Credit Agreement. 10. Contingent Obligations arising in connection with the Borrower's guarantee to landlords in respect of 5 sales office locations leased by CCL (no sum certain), which guarantees were executed on March 10, 1998. 11. Contingent Obligations arising in connection with the Borrower's guarantee in the amount of $1,103,170 to IBM Canada, LTd of obligations of CCL, which guarantee was executed on December 7, 1998 and expires on January 1, 2003. 12. Contingent Obligations arising in connection with the Borrower's guarantee in the amount of $3,000,000 to CIBC of obligations of Pernicom, which guarantee was executed on August 27, 1999. 1. 116 13. Contingent Obligations arising in connection with the Borrower's customer guarantee for no sum certain to Asda of obligations of Centre-File, which guarantee was executed on September 5, 1997. 14. Contingent Obligations arising in connection with the Borrower's overdraft guarantee for no sum certain to National Westminster of obligations of Centre-File, which guarantee was executed on August 18, 1997. 15. Contingent Obligations arising in connection with the Borrower's landlord guarantee in the amount of $34,000 to Kingsway Group PLC of obligations of CCP, which guarantee was executed on July 1, 2000 and expires on December 24, 2002. 16. Contingent Obligations arising in connection with the Borrower's customer guarantee for no sum certain to Exxon Card Services of obligations of LAES/Comdata, which guarantee was executed on September 24, 1997 and expires on September 24, 2002. 17. Contingent Obligations arising in connection with the Borrower's customer guarantee for no sum certain to Exxon Card Services of obligations of SVS/Comdata, which guarantee was executed on March 1, 1999 and expires on March 1, 2004. 18. Contingent Obligations arising in connection with the Borrower's guarantee for no sum certain to IBM of obligations of Comdata, which guarantee was executed on June 30, 1998. 19. Contingent Obligations arising in connection with the Borrower's landlord guarantee for no sum certain to Norwestern Mutual Insurance of obligations of Comdata. 20. Contingent Obligations arising in connection with the Borrower's guarantee in the amount of $0 to AmSouth (1st American) of obligations of Comdata, which guarantee was executed on September 4, 1998. 21. Contingent Obligations arising in connection with the Borrower's guarantee in the amount of $0 to Chase Manhattan Bank of obligations of PowerPay.com, which guarantee was executed on October 1, 1999. 22. Contingent Obligations arising in connection with the Borrower's guarantee in the amount of $575,000 to Amplicon of obligations of Usertech, which guarantee was executed on November 3, 2000 and expires on November 1, 2003. 2. 117 SCHEDULE 5.11 ENVIRONMENTAL MATTERS The following information is provided regarding various matters relating to Environmental Laws, Environmental Claims and Hazardous Materials involving the Borrower and its Subsidiaries. Inclusion of any matter on the lists provided below shall not be deemed a conclusion on the part of the Borrower that such matter would or could reasonably be expected to result in a Material Adverse Effect. Terms not otherwise defined in this Schedule are used herein as defined in the Agreement. 1. Printed Circuits Operations, St. Louis Park, Minnesota. Groundwater contamination was discovered at the printed circuits facility formerly operated by the Borrower's Computer Products division in St. Louis Park. Despite the sale of the printed circuits business and the transfer of the St. Louis Park real estate to CD Systems in connection with the spin-off of CD Systems, the Borrower remains responsible for environmental matters related to this site. A consent order was signed with the Minnesota Pollution Control Agency ("MPCA") which obligates the Borrower to perform MPCA-approved remedial actions. The MPCA has accepted the Borrower's proposed remedial alternative involving the treatment and discharge of contaminated groundwater, and has issued a record of decision setting the recommended cleanup levels for the groundwater. A response action plan was submitted and approved and remediation facilities have been in operation since July 1990. Groundwater clean up has progressed to the point where the site is expected to start the closure and delisting process within the next 1-2 years. CD Systems is pursuing a sale of this property. The remaining cost of implementing remedial actions was most recently estimated by management to be under $500,000. 2. Imprimis/Seagate Environmental Matters. The Borrower has agreed to indemnify Seagate against a portion of environmental liabilities relating the Imprimis facilities and sites where Imprimis may have disposed of hazardous materials, to the extent such liabilities relate to occurrences that predate the sale of Imprimis to Seagate, and to the extent such liabilities exceed the amount of applicable reserves on the closing balance sheet of Imprimis. Because those reserves have been exhausted, the Borrower is responsible for up to $8.2 million of the next $9.2 million of such liabilities, and for 50 percent of such liabilities beyond that amount, with a maximum indemnification obligation of $15.7 million. The Borrower has paid approximately $8.2 million to Seagate pursuant to this indemnity through mid-2000. The Borrower has established reserves for the full amount of its remaining liability with respect to this indemnification undertaking. 3. Chemical Marketing Corporation of America. In April and May 1999, MPCA has requested information, under the Minnesota Environmental Response and Liability Act regarding the possible release of hazardous substances or pollutants of contaminants at the Chemical Marketing Company of America Site, previously located at 180 Humboldt Avenue North, Hennepin County, Minneapolis. The Borrower's initial review of its documents shows that it had shipped hazardous waste from its former VTC subsidiary's location at 2800 E. Old Shakopee Road, Bloomington, MN back in the early 1980's. The Borrower has responded to the requests and is in discussion with MPCA and other PRPs regarding site clean up. Total clean up 1. 118 costs are estimated by management to be between $660,000 to $1,400,000. The Borrower has adequate reserves available to cover anticipated clean up costs. 4. Spring Grove, Minnesota. After detecting low levels of contamination in two municipal wells in Spring Grove, the MPCA requested information from the Borrower and Northern Engraving Corporation ("NEC") regarding a facility in Spring Grove operated by the Borrower from 1965 to 1971 and since that time by NEC. The Borrower and NEC subsequently entered into a consent order with the MPCA pursuant to which the Borrower and NEC are implementing certain remedial actions and have reimbursed the MPCA for 75% of its past costs in connection with this matter. Estimated future costs for the Borrower under the consent order may be as much as $500,000 over a period of as much as thirty years. 5. Freeway Sanitary Landfill, Burnsville, Minnesota. In April 1994, the Borrower received a request for information from the MPCA regarding the Borrower's connection with this landfill. Apparently groundwater contamination has been discovered in connection with this facility. The Borrower's investigation to date suggests that some waste materials generated by the Borrower were disposed of at this landfill during the relevant time period (1969-1990) in accordance with applicable law. In 1996, the State of Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Borrower to preserve its rights to insurance coverage for cleanup costs at the site. 6. Oak Grove Landfill, Anoka County, Minnesota. This landfill in Anoka County, Minnesota, closed in 1984, was the subject of an investigation by the EPA and MPCA for several years. The Borrower's involvement with the site, allegedly as a result of utilizing a transporter who disposed of waste at the landfill, was relatively small. Nevertheless, the Borrower joined an Oak Grove PRP group, which has negotiated a consent decree with the EPA. The Borrower contributed approximately $250,000 to the PRP group and does not expect to make any significant future payments with respect to this site. In 1996, the State of Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Borrower to preserve its rights to insurance coverage for cleanup costs at the site. The State of Minnesota has recently brought a lawsuit against the insurance companies and has subpoenaed all applicable records from PRP. 7. Isanti County, Minnesota. In the 1991 settlement of a civil action filed in the U.S. District Court for Minnesota, the Borrower and nine other parties agreed to reimburse the EPA and the MPCA for costs incurred in the surface cleanup of five waste disposal sites in Isanti County, and to create a remediation fund to conduct remedial activities at the sites for a period of 12 years, at which time the State of Minnesota would take over the sites. The Borrower has paid its share of these amounts. The settlement agreement also provides that unless new information is discovered during the 12 year period that indicates the seven settling PRPs have in the past been responsible for any additional contamination at these sites, the settling PRPs would obtain a full release from the State at the conclusion of the 12 year period. 8. Ecolotech, Minneapolis and St. Paul, Minnesota. Prior to 1987, the Borrower shipped wastes to Ecolotech, which operated facilities in Minneapolis and St. Paul. Soil and groundwater contamination where discovered at the sites and a consent order was entered into by the generators (including the Borrower) with the MPCA in 1987. Remedial efforts specified for the 2. 119 sites have been completed. The Borrower is awaiting termination of the consent order by the MPCA. 9. Hopkins Landfill, Hopkins, Minnesota. In March 1994, the Borrower received a letter from the City of Hopkins identifying the Borrower as having used the Hopkins Landfill for disposal of waste and seeking reimbursement of methane remediation costs. The City then placed a "hold" on its reimbursement request until the state legislature passed the Landfill Cleanup Law. In July 1996, the Borrower received a request from MPCA for information regarding the Borrower's connection with this landfill. The records search to date has not uncovered any disposal records for the Hopkins Landfill. The State of Minnesota, under the Minnesota Landfill Cleanup Law, has assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Borrower to preserve its rights to insurance coverage for cleanup costs at the site. 10. Other. The Borrower has identified certain of its facilities that contain asbestos containing materials ("ACM"). As to such facilities, it is the Borrower's policy and practice, in accordance with applicable Environmental Laws, to manage ACM in place or remove it when necessary. The Borrower is also aware of underground storage tanks located in its Comdata subsidiary facilities in Brentwood, Tennessee and Newberry, South Carolina which are being utilized in accordance with applicable Environmental Laws. 3. 120 SCHEDULE 5.17 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION (a) (i) TVScan software and trademark license dated May 1, 1998 from Tapscan Inc. to Arbitron for its exclusive use in the radio, agency and advertising industries worldwide and the television and cable industries outside the U.S. TVScan processes and provides custom analysis reports of television viewing data. (ii) Software used for internal business: See 4(d) below. (iii) License agreement between Arbitron and Claritas Inc. for PRIZM/Clusters (population) data. (iv) License agreement between Arbitron and Market Statistics for demographic and economic data. (v) Software license agreement dated July 17, 2000 between Ceridian and Lariat Software, Inc. for software to be used in Borrower's services or processes. (vi) Software license agreement between CSW Research Ltd., and outside third parties. The licensed software is used in connection with survey research, including questionnaire design, automated telephone dialing, and data analysis. All agreements listed are for a one year term and are auto renewing for a like term. (b) None. (c) See Schedule 5.05, Item 3. (d) See the list below. ACT Add Strip Adobe Acrobat 4 ADOBE ACROBAT FULL Adobe After Effects 4 Adobe Illustrator 6 Adobe Illustrator 7 Adobe PageMaker 6.5 Adobe Photoshop 5.5, 6 and 5LE Adobe Type Manager Deluxe and Lite 4.6 Alladin StuffIt Deluxe 5.5 Allaire Cold Fusion 4 Apple OS 8.6 and 9.0.4 ARCSERVE 1. 121 ASPChart Charting Component ATAMAN TELNET ATLAS GIS AUDIX VOICEPOWER BackupEXEC BARSPOOL C++/DEC CAS FOR WINDOWS CDR CLIENTS & PROFITS Clients & Profits 4.0 CODE1+ COLD FUSION COMPARERITE Corel Draw 6 CRYSTAL INFO CUTEFTP DATAJET DB BRZ DBASE IV DEFINITY G1 Deltagraph 4.5 DESIGNER DEVELOPER DOC1/DEC DOC1/NT DTC MANAGER EDIFY EXCEED6 Extensis Portfolio 5 Extensis Suitcase 8 and 9 EZCASE EZFLOW Fetch 3.03 FileMaker Pro 3, 4 and 5 FOREHELP FREELANCE GRAPHICS GEMBASE GEOCODER GHOST GOLDMINE HELPDESK HP UNIX HYPERION IMAGE PRO 2. 122 IMAGEBASIC IMAGEKEY JAVA/DEC Kai's Power Tools 3 KAWA LAN WORKGROUP LAN WORKPLACE LAWSON INSIGHT LEAD TOOLS LEXMARK TOOLKIT LISTCONV LOTUS 1-2-3 V4.0 LOTUS 1-2-3 V5.0 LWP PRO 95/NT MacLink Plus 9.7.1 through 11 Macromedia Dreamweaver 3 and 4 Macromedia Fireworks 3 Macromedia Flash 4 and 5 Macromedia Fontographer 4.1.5 Macromedia Freehand 8.01 and 9 MAILSTREAM MCAFEE VIRUS SCAN MEDIAMAX MICRO FOCUS COBOL MICRO FOCUS COBOL\DEC MICROSOFT ACCESS MICROSOFT EXCEL MICROSOFT FOXPRO MICROSOFT FRONTPAGE Microsoft Internet Explorer 5 MICROSOFT OFFICE 2000 Microsoft Office 98 for Mac MICROSOFT OFFICE PRO MICROSOFT OFFICE97 MICROSOFT OFFICE97 Microsoft Outlook Exchange 8.2.1 Microsoft Outlook Express 5 MICROSOFT PROJECT MICROSOFT PUBLISHER MICROSOFT VB MICROSOFT VFOXPRO MICROSOFT VISSTUDIO MICROSOFT WIN 2000 Microsoft Windows Media Player MICROSOFT WORD MICRPSOFT POWERPNT 3. 123 MITEK ICR/OCR MS IIS MS INTERNET EXPLORER Netscape Communicator 4.7 and 6 NETWARE NFS Maestro Norton AntiVirus 5 and 6 Norton Utilities 4 and 5 ODBC FOR OS/2 ODBC FOR WINDOWS ORACLE/NT ORACLE/DEC OS/2 LAN REQUESTER OS/2 LAN SERVER PAGEMAKER PARADOX PcAnywhere PHOTOSHOP PIXTOOLS/EZ PIXTOOLS/IMAGE PROC PKZIP/PKUNZIP Pocket Ethernet Adapter III PowerBuilder Desktop PowerBuilder Professional PowerPoint PPI Modem Utilities Project PROMIX ProtoView PROXY PVCS DEC PVCS TRAKKER PVCS Version Manager PVCS\PC Columbia PVCS\PC New York QA Plus QA Plus QBAL Quark Express 3.32 Quick Xpense Quicken ExpensAble QuickLink II Fax QuickLink II Windows and DOS Quancept CATI Quanquest Quantum 4. 124 Quanvert Quanvert DBA Quicktime Quinput Quinput DOS REELBACKUP REELIBRARIAN REFLECTIONS FOR HP ReFox Removable Cartridge Disk Utilities Roadmap to Developer Products and Services ROBO HELP ROBOT ROLM CBXII ROLM PHONEMAIL RTPatch for InstallShield Professional SALES TAX Sanyo Boot Floppy SAS SAVEU2 SCO Unix Driver for AHA SCSI Interface Kit SCSI Network Manager SCSI Pro! SDK's, DDK's, and Operating Systems SEAGATE CRYSTAL REPT Serv-U FTP Server Sheridan Developer's Toolkit SideBar Try-n-Buy Sidekick SMARTGATE SmartSuite 97 SmartSuite ATM Program Disk SMAX Solutions Development Kit Sound Blaster 16 Software Special Enhancements R410 Spread SPSS SQLNET SQLNET FOR OS/2 SQLPLUS SQZ! Stacker Stacker Stacker 5. 125 Stacker Stealth 64 Stealth 64 DRAM Stealth 64 Video Stealth II S220 Stealth II S220 Game Sampler CD Stealth VRAM Stonefield Database Toolkit Superdisk for EtherCard SYLVAN MAPS SYNCSORT SYSTEM COMMANDER T4900 Reference Manual Tab Pro TCP/IP TCP/IP DOS TCP/IP OS2 Tech Net TELEMATE TELETHENA Test TEXTPAD ThinkPad Bundle Tools and Systems TOTAL ACCESS STATS Track for Windows TrackMate TRU64 UNIX DEC TRUE DB GRID PRO 5.0 True DBGrid Pro True DBGrid Pro VC++ UNIFACE VBAssist Vibra 16 Video for Windows Runtime View for Windows Viper V330 Viper VLB VISIO VISIO NETWORK EQ 2000 Visio Professional Visio2000 Professional Vistacom VISUAL BASIC Visual Basic Professional Visual C++ 6. 126 Visual C++ Power Tools Visual C++ Subscription Visual Components Visual FoxPro Visual FoxPro Professional Edition Visual FoxPro Professional Training Series Visual FoxPro Windows Professional Visual FoxPro Windows Standard Visual J++ Technology Preview 2 Visual Studio 97 Service Pack 3 Visual Studio Enterprise Edition Visual Studio MSDN Library Visual Studio Professional Edition Visual Studio Professional Edition Licenses Visual Test VSFlexGrid Pro VS-OCX WEBBASE Windows WINDOWS 3.51 WINDOWS 95 Windows 95 Windows 95, Win32 SDK Windows 95, Win32 SDK and Windows NT Windows 95, Win32 SDK, Backoffice 1.5 SDK Windows 98 Windows for Workgroups/DOS WINDOWS NT 4.0 Clients WINDOWS NT 4.0 Servers WINDOWS NT 4.0 W/S Windows NT Server Windows NT Server Windows NT Workstation Windows NT Workstation, Win32 SDK, Windows NT DDK Windows Sound System Winfax Lite Winfax Pro Winfax Pro Patch WinLib Wizard WinList for Windows Winstone 94 Winzip Wordperfect Workgroup Add-On for Windows 7. 127 XTree Gold XTree Gold zip Install zip tools 100 (e) None. (f) None. (g) Material Software owned and used by Arbitron: (i) Maximi$er/MediaProfessional (owned by Arbitron); performs research and sales analysis using respondent-level radio audience estimate data. (ii) Tapscan (owned by Arbitron); processes respondent-level and summary-level radio audience estimate data. (iii) Qualitap (owned by Arbitron); processes qualitative data. (iv) TV Qualitap (owned by Arbitron and licensed to Tapscan Inc. for its exclusive use in the television and cable industries in the U.S.); processes qualitative data. (v) TVScan software (owned by Tapscan Inc. and licensed to Arbitron for its exclusive use in the radio, agency and advertising industries worldwide and the television and cable industries outside the U.S.) Note: Copyright registration applications were filed on Form TX in the U.S. Copyright Office for Maximi$er (a/k/a MediaProfessional), Tapscan, TVScan and Qualitap on December 18, 2000. Copyright registration applications were filed on December 28, 2000 for Borrower's internal software used to produce its ratings data.. 8. 128 SCHEDULE 5.19 EMPLOYMENT AGREEMENTS There is currently an employment agreement with Stephen B. Morris. Borrower's policy for its Arbitron division prior to the Spin-Off Consummation Date is that members of the Arbitron Executive Staff are generally eligible to receive up to one year's salary as severance in the event of termination of employment for reasons other than for cause. It is expected that change of control agreements will be entered into with members of the Executive Staff of Arbitron Inc. after the Spin-Off Consummation Date. 1. 129 SCHEDULE 5.21 CAPITALIZATION; SUBSIDIARIES Information as of the Effectiveness Date 1. Borrower's capitalization as of the Effectiveness Date: No. shares authorized: 500,000,000 No. shares issued: 161,685,596 No. shares outstanding: 145,681,462 Please note that the shares listed above are subject to a reverse stock split at a ratio of one-for-five. The reverse stock split will be effective immediately after the Spin-Off Consummation Date. 2. Following is a list of Borrower's Subsidiaries as of the Effectiveness Date:

- -------------------------------------- ---------------------- --------------------- -------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - -------------------------------------- ---------------------- --------------------- -------------- Arbitron Holdings Inc. (First Tier Delaware 100% 1000/1000 Arbitron subsidiary) formed in October 2000 - -------------------------------------- ---------------------- --------------------- -------------- CSW Research Ltd. (Second Tier United Kingdom 100% 410,000/ Subsidiary of Arbitron Holdings, Inc.) 405,000 - -------------------------------------- ---------------------- --------------------- -------------- Euro-Fieldswork Ltd. (First Tier United Kingdom 100% No shares yet Arbitron Subsidiary) authorized nor issued - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Infotech (India) Private India 100% 8,400,000/ Limited (First Tier Arbitron Subsidiary) 1,712,374 - -------------------------------------- ---------------------- --------------------- -------------- ABR Information Services, Inc. Florida 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- ABR Employer Services, Inc. Florida 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- ABR Properties, Inc. Florida 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- BMC Consultants, Inc. Colorado 100% N/A - -------------------------------------- ---------------------- --------------------- --------------

1. 130

- -------------------------------------- ---------------------- --------------------- -------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Benefits Services, Inc. Florida 100% N/A (f/k/a ABR Benefits Services, Inc.) - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Retirement Plan Florida 100% N/A Services, Inc. (f/k/a ABR Retirement Plan Services, Inc.) - -------------------------------------- ---------------------- --------------------- -------------- Charing Company, Inc. Wisconsin 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Chowning, Ltd. Wisconsin 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- The Barrington Group Wisconsin 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Matthews, Malone & Associates, Ltd. Arizona 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- MidAtlantic 401(k) Services, Inc. Virginia 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Western Pension Service California 100% N/A Corporation - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Investors Advisors, Florida 100% N/A Inc. (f/k/a ABR Investment Advisors, Inc.) - -------------------------------------- ---------------------- --------------------- -------------- Arbat Middle East E.C. (held in Bahrain 100% N/A trust) (inactive) - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Canada Holdings, Inc. Delaware 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Canada Ltd. Canada 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- 33444651 Canada Ltd. Canada 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Performance Partners Canada 100% N/A Ltd. - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Holdings U.K. Limited United Kingdom 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Centrefile Limited United Kingdom 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Centrefile APS Limited United Kingdom 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Centrefile (Mauritius) Ltd. Mauritius 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Performance Partners United Kingdom 100% N/A Limited - -------------------------------------- ---------------------- --------------------- -------------- Usertech UK Limited United Kingdom 100% N/A - -------------------------------------- ---------------------- --------------------- --------------

2. 131

- -------------------------------------- ---------------------- --------------------- -------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - -------------------------------------- ---------------------- --------------------- -------------- Ceridian Tax Services, Inc. California 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Comdata Network, Inc. Maryland 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Comdata Network Inc. of California 100% N/A California - -------------------------------------- ---------------------- --------------------- -------------- Comdata Telecommunications Delaware 100% N/A Services, Inc. - -------------------------------------- ---------------------- --------------------- -------------- International Automated Energy Florida 100% N/A Systems, Inc. - -------------------------------------- ---------------------- --------------------- -------------- Permicom Permits Services, Inc. Canada 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Stored Value Systems, Inc. Delaware 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Computing Devices International Delaware 100% N/A Satellite Services, Inc. - -------------------------------------- ---------------------- --------------------- -------------- Partnership Group, Inc., The Pennsylvania 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- Plan Ware Inc. (inactive) Pennsylvania 100% N/A - -------------------------------------- ---------------------- --------------------- -------------- POWERPAY.COM INC. New Jersey 100% N/A (f/k/a Ceridian Small Business Solutions, Inc.) - -------------------------------------- ---------------------- --------------------- -------------- User Technology Services, Inc. New York 100% N/A - -------------------------------------- ---------------------- --------------------- --------------

3. Following is a list of Borrower's Arbitron Subsidiaries as of the Effectiveness Date:

- ------------------------------------------------- ------------------------------------------------ SUBSIDIARY STATE OR OTHER JURISDICTION OF ORGANIZATION - ------------------------------------------------- ------------------------------------------------ - ------------------------------------------------- ------------------------------------------------ Arbitron Holdings Inc. Delaware - ------------------------------------------------- ------------------------------------------------ CSW Research Limited United Kingdom - ------------------------------------------------- ------------------------------------------------ Euro-Fieldwork Limited United Kingdom - ------------------------------------------------- ------------------------------------------------ Ceridian Infotech (India) Private Limited India - ------------------------------------------------- ------------------------------------------------

3. 132 4. Following is a list of Borrower's Material Subsidiaries as of the Effectiveness Date:

- ------------------------------------------------- ----------------------------------------------- MATERIAL SUBSIDIARIES STATE OR OTHER JURISDICTION OF ORGANIZATION - ------------------------------------------------- ----------------------------------------------- ABR Information Services, Inc. Florida - ------------------------------------------------- ----------------------------------------------- Comdata Network, Inc. Maryland - ------------------------------------------------- -----------------------------------------------

Information as of the Spin-Off Consummation Date 1. Following is a list of Borrower's Arbitron Subsidiaries after the Spin-Off Consummation Date:

- ------------------------------- --------------------------- --------------------- --------------- PERCENTAGE OF NO. OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - ------------------------------- --------------------------- --------------------- --------------- Arbitron Holdings Inc. Delaware 100% 1000/1000 - ------------------------------- --------------------------- --------------------- --------------- CSW Research Limited 410,000/ United Kingdom 100% 405,000 - ------------------------------- --------------------------- --------------------- --------------- Euro-Fieldwork Limited No shares yet United Kingdom 100% authorized nor issued - ------------------------------- --------------------------- --------------------- --------------- 8,400,000/ Ceridian Infotech (India) Private Limited India 100% 1,712,374 - ------------------------------- --------------------------- --------------------- ---------------

2. There will not be any Material Subsidiaries of the Borrower as of the Spin-Off Consummation Date. 4. 133 SCHEDULE 5.23 BROKERS' FEES AND RELATED EXPENSES None. 1. 134 SCHEDULE 5.25 THIRD PARTY CONSENTS None. 1. 135 SCHEDULE 7.01 PERMITTED LIENS None. 1. 136 SCHEDULE 7.02(b) PERMITTED TRANSACTIONS 1. Sale of assets of Ceridian Infotech (India) Private, Limited 2. Sale of assets of CSW Research Limited 3. Dissolution of Euro-Fieldword Limited 3. Separation ("Spin-off") of Ceridian Corporation into two publicly traded companies to be known as Ceridian Corporation and Arbitron Inc., respectively, pursuant to Spin-off documents. 1. 137 SCHEDULE 7.06(b) PERMITTED INVESTMENTS 1. The following is a list of the Investments of the Borrower and its Subsidiaries (other than Investments in Subsidiaries) as of the Effectiveness Date:

- ------------------------------ ------------------ ----------------------- ----------------------- STATE OR OTHER JURISDICTION OF PERCENTAGE OF VOTING COMPANY INCORPORATION SECURITIES OWNED ARBITRON INVESTMENT - ------------------------------ ------------------ ----------------------- ----------------------- Barrios Technology, Inc. Texas 9.9% 0 - ------------------------------ ------------------ ----------------------- ----------------------- Buyers' Health Care Action Minnesota 9.3% 0 Group, Inc. - ------------------------------ ------------------ ----------------------- ----------------------- HotJobs.com, Ltd. Delaware 1.4% 0 - ------------------------------ ------------------ ----------------------- ----------------------- Revelation Technologies, Inc. Delaware 7.4% 0 - ------------------------------ ------------------ ----------------------- ----------------------- TruckersB2B, Inc. Delaware 800,000 shares 0 - ------------------------------ ------------------ ---------------------- ------------------------ Delaware 13.75% 1994: $2,000,000 1995: $1,000,000 ADcom Information Services, 1996: $1,585,000 ------------------ Inc. Total: $4,585,000 - ------------------------------ ------------------ ---------------------- ------------------------ The Center for Online Learning, Inc. Florida 2.8% 2000: $2,000 - ------------------------------ ------------------ ---------------------- ------------------------ Symmetrical Holdings, Inc. Florida 7.5% 1997: $900,000 (f/k/a Symmetrical Resources 1998: $500,000 ------------------ Corporation) Total: $1,400,000 - ------------------------------ ------------------ ---------------------- ------------------------

2. The following is a list of the Investments of the Borrower and its Subsidiaries (other than Investments in Subsidiaries) as of the Spin-Off Consummation Date:

- ------------------------------------------ ------------------------------------------------------ COMPANY STATE OR OTHER JURISDICTION OF INCORPORATION - ------------------------------------------ ------------------------------------------------------ ADcom Information Services, Inc. Delaware - ------------------------------------------ ------------------------------------------------------ The Center for Online Learning, Inc. Florida - ------------------------------------------ ------------------------------------------------------ Symmetrical Holdings, Inc. Florida (f/k/a Symmetrical Resources Corporation) - ------------------------------------------ ------------------------------------------------------

1. 138 SCHEDULE 10.02 EURODOLLAR AND DOMESTIC LENDING OFFICES, ADDRESSES FOR NOTICES CERIDIAN CORPORATION Arbitron Company 9705 Patuxent Woods Drive Columbia, MD 21046 Attention: James Dwyer, Controller Telephone: (410) 312-8295 Facsimile: 410-312-8625 Electronic Mail: jim.dwyer@arbitron.com Website: www.arbitron.com BANK OF AMERICA, as Administrative Agent Administrative Agent--Lending and Administrative Notices (for payments and Requests for Credit Extensions): Bank of America, N.A. Credit Services Mail Code: NC1-001-15-04 One Independence Center 101 North Tryon Street Charlotte, NC 28255-0001 Acct. No. 1366212250600 ABA #: 053000196 Attention: Barry Flynn Telephone: 704-388-2374 Facsimile: 704-409-0015 Email: barry.m.flynn@bankofamerica.com With copy to: Bank of America, N.A. 6610 Rockledge Drive, Suite 602 Bethesda, MD 20817 Attention: Chitt Swamidasan Telephone: 301-571-0716 Facsimile: 301-571-0719 Email: chitt.swamidasan@bankofamerica.com 1. 139 L/C Issuer: - ---------- Bank of America, N.A. Trade Operations-Los Angeles #22621 333 S. Beaudry Avenue, 19th Floor Mail Code: CA9-703-19-23 Los Angeles, CA 90017-1466 Attention: Sandra Leon Telephone: 213.345.5231 Facsimile: 213.345.6694 Email: sandra.leon@bankofamerica.com Other Notices as a Lender: - ------------------------- Bank of America, N.A. 6610 Rockledge Drive, Suite 602 Bethesda, MD 20817 Attention: Chitt Swamidasan Telephone: 301-571-0716 Facsimile: 301-571-0719 Email: chitt.swamidasan@bankofamerica.com THE BANK OF NEW YORK Requests for Credit Extensions: - ------------------------------ The Bank of New York One Wall Street New York, NY 10286 Attention: Dorothy Fowler Telephone: 212-635-7294 Facsimile: 212-635-8679/8634 Email: None Notices (other than Requests for Credit Extensions): - -------------------------------------------------- The Bank of New York One Wall Street New York, NY 10286 Attention: Kristen Talaber Telephone: 212-635-8692 Facsimile: 212-635-8593 Email: ktalaber@bankofny.com 2. 140 BEAR STEARNS CORPORATE LENDING INC. Requests for Credit Extensions: - ------------------------------ Bear, Stearns & Co. Inc. 245 Park Avenue, 4th Floor New York, NY 10167 Attention: Victor F. Bulzacchelli Telephone: (212) 272-3042 Facsimile: (212) 272-9184 Email: vbulzacchelli@bear.com Notices (other than Requests for Credit Extensions): - -------------------------------------------------- Bear, Stearns & Co. Inc. 245 Park Avenue, 4th Floor New York, NY 10167 Attention: Gloria Dombrowski Telephone: (212) 272-6043 Facsimile: (212) 272-4844 Email: gdombrowski@bear.com With copy to: Bear, Stearns & Co. Inc. 245 Park Avenue, 4th Floor New York, NY 10167 Attention: Patrick Marsh Telephone: (212) 272-7959 Facsimile: (212) 272-9184 Email: patrickmarsh@bear.com BNP PARIBAS Requests for Credit Extensions: - ------------------------------ BNP Paribas 919 Third Avenue New York, NY 10022 Attention: Anthony Garcia Telephone: (212) 471-6652 Facsimile: (212) 471-6697 Email: anthony.garcia@americas.bnpparibas.com 3. 141 Notices (other than Requests for Credit Extensions): - -------------------------------------------------- BNP Paribas 787 Seventh Avenue, 33rd Floor New York, NY 10019 Attention: Ted Koerner Telephone: (212) 841-2968 Facsimile: (212) 841-2996 Email: theodore.koerner@americas.bnpparibas.com 4. 142 THE CHASE MANHATTAN BANK Requests for Credit Extensions: - ------------------------------ The Chase Manhattan Bank 1166 Avenue of the Americas 15th Floor New York, NY 10036 Attention: Andrea Kennedy Telephone: (212) 899-1412 Facsimile: (212) 899-2906 E-mail: Andrea.Kennedy@chase.com Notices (other than Requests for Credit Extensions): - --------------------------------------------------- The Chase Manhattan Bank 1166 Avenue of the Americas 15th Floor New York, NY 10036 Attention: Carol A. Kornbluth Telephone: (212) 899-1418 Facsimile: (212) 899-2908 E-mail: Carol.Kornbluth@chase.com With a copy to: - -------------- The Chase Manhattan Bank 270 Park Avenue, 40 New York, NY 10017 Attention: Cris Kako Telephone: (212) 270-2074 Facsimile: (212) 270-7481 E-mail: Cris.Kako@chase.com CITIZENS BANK OF MASSACHUSETTS Requests for Credit Extensions: - ------------------------------ Citizens Bank of Massachusetts 53 State Street, 8th Floor Boston, MA 02109 Attention: Monique Laurina Telephone: (617) 994-7052 Facsimile: (617) 227-2035 5. 143 Notices (other than Requests for Credit Extensions): - -------------------------------------------------- Citizens Bank of Massachusetts 53 State Street, 8th Floor Boston, MA 02109 Attention: Errin Siagel Telephone: (617) 994-7055 Facsimile: (617) 227-8854 Email: errin.siagel@citizensbank.com FLEET NATIONAL BANK, as Syndication Agent Requests for Credit Extensions: Fleet National Bank 100 Federal Street Mailcode: MADE 10009B Boston, MA 02110 Attention: Anita Hoffmann Telephone: (617) 434-8212 Facsimile: (617) 434-8277 Notices (other than Requests for Credit Extensions): - --------------------------------------------------- Fleet National Bank 100 Federal Street Mailcode: MADE 10009D Boston, MA 02110 Attention: Michael D. Elwell Telephone: (617) 434-8290 Facsimile: (617) 434-8426 E-mail: Michael_D_Elwell@Fleet.com 6. 144 THE ROYAL BANK OF SCOTLAND PLC Requests for Credit Extensions: - ------------------------------ The Royal Bank of Scotland plc 65 East 55th Street, 21st Floor New York, NY 10022 Attention: Helaine Griffith Telephone: 212-401-1338 Facsimile: 212-401-1336 Email: None Notices (other than Requests for Credit Extensions): - -------------------------------------------------- The Royal Bank of Scotland plc 101 Park Avenue, 10th Floor New York, NY 10016 Attention: Lee Morse Telephone: 212-401-3765 Facsimile: 212-401-3456 Email: lee.morse@rbos.com U.S. BANK NATIONAL ASSOCIATION Requests for Credit Extensions: - ------------------------------ U.S. Bank National Association 601 2nd Avenue South MPFP0702 Minneapolis, MN 55402-4302 Attention: Karen Johnson Telephone: 612-973-0546 Facsimile: 612-973-0825 Email: None 7. 145 Notices (other than Requests for Credit Extensions): - -------------------------------------------------- U.S. Bank National Association 601 2nd Avenue South MPFP0702 Minneapolis, MN 55402-4302 Attention: Elliot J. Jaffee Telephone: 612-973-0543 Facsimile: 612-973-0825 Email: None 8. 146 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. CERIDIAN CORPORATION, as Borrower By: /s/ WILLIAM J. WALSH -------------------------------------- Name: William J. Walsh ------------------------------------- Title: Executive Vice President of Finance ------------------------------------ and Planning of Arbitron and Vice President of Ceridian S-1. 147 BANK OF AMERICA, N.A., as Administrative Agent, a Lender and L/C Issuer By: /s/ CHITT SWAMIDASAN -------------------------------------- Name: CHITT SWAMIDASAN ------------------------------------- Title: Principal ------------------------------------- S-2. 148 FLEET NATIONAL BANK, AS A LENDER By: /s/ MICHAEL D. ELWELL -------------------------------------- Name: Michael D. Elwell ------------------------------------- Title: Assistant Vice President ------------------------------------ S-3. 149 U.S. BANK NATIONAL ASSOCIATION, AS A LENDER By: [SIG] -------------------------------------- Name: Elliot J. Jaffee ------------------------------------- Title: Senior Vice President ------------------------------------ S-5. 150 THE CHASE MANHATTAN BANK, AS A LENDER By: /s/ CAROL A. KORUBLUTH -------------------------------------- Name: Carol A. Korubluth ------------------------------------- Title: Vice President ------------------------------------ S-4. 151 THE BANK OF NEW YORK, AS A LENDER By: [SIG] -------------------------------------- Name: Kristen E. Talaber ------------------------------------- Title: Vice President ------------------------------------ S-6. 152 BNP PARIBAS, AS A LENDER By: [SIG] -------------------------------------- Name: Serge Desrayaud ------------------------------------- Title: Head of Asset Management ------------------------------------ By: [SIG] -------------------------------------- Name: Gregg Bonardi ------------------------------------- Title: Director ------------------------------------ S-7. 153 BEAR STEARNS CORPORATE LENDING INC., AS A LENDER By: [SIG] -------------------------------------- Name: Donald Mullen ------------------------------------- Title: Sr. Managing Director ------------------------------------ S-8. 154 THE ROYAL BANK OF SCOTLAND PLC, AS A LENDER By: [SIG] -------------------------------------- Name: Jayne Seaford ------------------------------------- Title: Vice President ------------------------------------ S-10. 155 CITIZENS BANK OF MASSACHUSETTS, AS A LENDER By: [SIG] -------------------------------------- Name: JAYNE SEAFORD ------------------------------------- Title: V.P. ------------------------------------ S-9. 156 EXHIBIT A FORM OF LOAN NOTICE Date: ___________, _____ To: BANK OF AMERICA, N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that certain Credit Agreement, dated as of January 31, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Credit Agreement;" the terms defined therein being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders from time to time party thereto, and Bank of America, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"). The undersigned hereby requests (select one): [ ] A Borrowing of Loans [ ] A conversion or continuation of Loans 1. On (a Business Day). ----------------------------------------- 2. In the amount of $ . ----------------------------------- 3. Comprised of . ---------------------------------------- [Type of Loan requested] 4. For Eurodollar Rate Loans: with an Interest Period of ____ months. The foregoing request complies with the requirements of Section 2.01 of the Credit Agreement. Other than in connection with a conversion or continuation of Loans, the undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the above date, before and after giving effect to the Borrowing or conversion or continuation of Loans requested above: (a) The representations and warranties made by the Borrower in the Credit Agreement, or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection therewith, are and will be correct on and as of the date of the Borrowing or conversion or continuation of Loans requested above, except to the extent that such representations and warranties specifically refer to any earlier date; and A-1 157 (b) no Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to the Borrowing or conversion or continuation of Loans requested above. CERIDIAN CORPORATION By: ----------------------------------------------- Name: --------------------------------------------- Title: -------------------------------------------- A-2 158 EXHIBIT B FORM OF LOAN NOTE $ ----------------------- ----------------------- FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to the order of _____________________________ (the "Lender"), on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of __________________Dollars ($____________), or such lesser principal amount of Loans (as defined in such Credit Agreement) due and payable by the Borrower to the Lender on the Maturity Date under that certain Credit Agreement, dated as of January 31, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Credit Agreement;" the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"). The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates, and at such times as are specified in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement. This Loan Note is one of the Loan Notes referred to in the Credit Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein. This Loan Note is also entitled to the benefits of the Guaranty. Upon the occurrence of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Loan Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Loan Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Loan Note. B-1 159 THIS LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. CERIDIAN CORPORATION By: ------------------------------------------------ Name: --------------------------------------------- Title: -------------------------------------------- B-2 160 LOANS AND PAYMENTS WITH RESPECT THERETO

AMOUNT OF OUTSTANDING TYPE OF PRINCIPAL PRINCIPAL LOAN AMOUNT OF END OF OR INTEREST BALANCE NOTATION DATE MADE LOAN MADE INTEREST PAID THIS THIS DATE MADE BY PERIOD DATE - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- -------- - -------- -------- -------- --------- -------- -------- --------

B-3 161 EXHIBIT C FORM OF COMPLIANCE CERTIFICATE Financial Statement Date: , ---------- To: Bank of America, N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that certain Credit Agreement, dated as of January 31, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Credit Agreement;" the terms defined therein being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders from time to time party thereto, and BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"). The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the _______________________________________________ of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that: [Use following for fiscal year-end financial statements] 1. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section. [Use following for fiscal quarter-end financial statements] 1. Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes. 2. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements. 3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and C-1 162 [select one:] [to the best knowledge of the undersigned during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it.] --or-- [the following covenants or conditions have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and status:] 4. The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of _____________, _________. CERIDIAN CORPORATION By: --------------------------------------------- Name: ------------------------------------------- Title: ------------------------------------------ C-2 163 For The Quarter/Year Ended _________________________________(Statement Date") SCHEDULE 2 to the Compliance Certificate ($ in 000's) I. SECTION 7.10 - LEVERAGE RATIO A. Consolidated Funded Indebtedness of the Borrower and its Subsidiaries as of the Statement Date: 1. All obligations for borrowed money of the Borrower and its Subsidiaries on a consolidated basis at the Statement Date: $ ------------------------- 2. All obligations of the Borrower and its Subsidiaries as evidenced by bonds, debentures, notes and loan agreements on a consolidated basis at the Statement Date: $ ------------------------- 3. All obligations of the Borrower and its Subsidiaries in respect of letters of credit, surety bonds, bankers' acceptances or similar instruments on a consolidated basis at the Statement Date: $ ------------------------- 4. All obligations of the Borrower and its Subsidiaries to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time) on a consolidated basis at the Statement Date: $ ------------------------- 5. The capitalized amount of all Capital Leases of the Borrower and its Subsidiaries that would appear on a balance sheet of such Persons prepared as of the Statement Date in accordance with GAAP and the capitalized amount of the remaining lease payments under any Synthetic Lease Obligations incurred by the Borrower or any of its Subsidiaries which would appear on a balance sheet of such Persons prepared as of the Statement Date in accordance with GAAP if such lease were accounted for as a Capital Lease: $ ------------------------- Schedule 2-1 164 6. All guaranty obligations of the Borrower and its Subsidiaries in respect of obligations of any Person in the nature of the obligations referenced in Lines I.A.1 through I.A.4 above: $ ------------------------- 7. Consolidated Funded Indebtedness as of the Statement Date [Line I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 + I.A.6]: $ ------------------------- B. Consolidated EBITDA of the Borrower and its Subsidiaries for the period of the four fiscal quarters ending on the Statement Date ("Test Period"): 1. Net income of the Borrower and its Subsidiaries on a consolidated basis for the Test Period, as determined in accordance with GAAP: $ ------------------------- 2. All extraordinary non-cash losses and non-cash gains, and non-cash losses and non-cash gains from discontinued operations of the Borrower and its Subsidiaries on a consolidated basis for the Test Period: $ ------------------------- 3. All cash payments made by the Borrower and its Subsidiaries during the Test Period in respect of non-cash charges listed on Line I.B.2 of Schedule 2 attached to any Compliance Certificate delivered to the Administrative Agent prior to the Statement Date hereof: $ ------------------------- 4. All interest, premium payments, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP for the Test Period, but excluding any fees, charges and expenses of the Borrower and its Subsidiaries arising from the negotiation, execution, closing and consummation of the Spin-Off Documents, the Loan Documents, the Private Placement Documents and any Specified Swap Contracts: $ ------------------------- Schedule 2-2 165 5. The portion of all rent expense of the Borrower and its Subsidiaries for the Test Period under Capital Leases that is treated as interest in accordance with GAAP on a consolidated basis: $ ------------------------- 6. The amount of taxes of the Borrower and its Subsidiaries on a consolidated basis for the Test Period, based on or measured by income used or included in the determination of Line I.B.1: $ ------------------------- 7. All depreciation expense and amortization expense of the Borrower and its Subsidiaries on a consolidated basis for the Test Period: $ ------------------------- 8. All interest income of the Borrower and its Subsidiaries on a consolidated basis for the Test Period: $ ------------------------- 9. Consolidated EBITDA for the Test Period [Line I.B.1 +/- I.B.2 (if the amount in Line I.B.2 constitutes a loss, it should be added; if it constitutes a gain, it should be subtracted) - I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 - I.B.8]: $ ------------------------- C. Leverage Ratio [Line I.A.7 / I.B.9]: _________ to 1 D. Maximum permitted Leverage Ratio at the Statement Date (See Section 7.10 of the Agreement for ratio applicable to the Statement Date): _________ to 1 COMPLIANCE WITH COVENANT (YES / NO) II. SECTION 7.11 - FIXED CHARGE COVERAGE RATIO A. Consolidated EBITDA for the Test Period [Line I.B.9]: $ ------------------------- B. Taxes actually paid by the Borrower and its Subsidiaries on a consolidated basis in cash or Cash Equivalents for the Test Period: $ ------------------------- C. Capital expenditures plus (without duplication) PPM Expenditures of the Borrower and its Subsidiaries on a consolidated basis for the Test Period: $ ------------------------- Schedule 2-3 166 D. Consolidated Interest Expense of the Borrower and its Subsidiaries on a consolidated basis for the Test Period [Line I.B.4 + I.B.5]: $ ------------------------- E. Current Portion of Long-Term Debt for the Test Period of the Borrower and its Subsidiaries on a consolidated basis: $ ------------------------- F. Fixed Charge Coverage Ratio [(Line II.A - II.B - II.C) /(Line II.D + II.E)]: __________ to 1 G. Minimum permitted Fixed Charge Ratio (See Section 7.11 of the Agreement for ratio applicable to the Statement Date): ___________to 1 COMPLIANCE WITH COVENANT (YES / NO) Schedule 2-4 167 EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to that certain Credit Agreement, dated as of January 31, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Credit Agreement;" the terms defined therein being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders from time to time party thereto, and BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"). The assignor identified on the signature page hereto (the "Assignor") and the assignee identified on the signature page hereto (the "Assignee") agree as follows: 1. (a) Subject to paragraph 11, effective as of the date specified on Schedule 1 hereto (the "Effective Date"), the Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, the interest described on Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement. (b) From and after the Effective Date, (i) the Assignee shall be a party under the Credit Agreement and will have all the rights and obligations of a Lender for all purposes under the Loan Documents to the extent of the Assigned Interest and be bound by the provisions thereof, and (ii) the Assignor shall relinquish its rights and be released from its obligations under the Credit Agreement to the extent of the Assigned Interest. The Assignor and/or the Assignee, as agreed by the Assignor and the Assignee, shall deliver, in immediately available funds, any applicable assignment fee required under Section 10.07(b) of the Credit Agreement. 2. On the Effective Date, the Assignee shall pay to the Assignor, in immediately available funds, an amount equal to the purchase price of the Assigned Interest as agreed upon by the Assignor and the Assignee. 3. From and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement and the Loan Notes, if any, in respect of the Assigned Interest (including all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments under the Credit Agreement and such Loan Notes, if any, for periods prior to the Effective Date directly between themselves. 4. The Assignor represents and warrants to the Assignee that: (a) The Assignor is the legal and beneficial owner of the Assigned Interest, and the Assigned Interest is free and clear of any adverse claim; D-1 168 (b) the Assigned Interest listed on Schedule 1 accurately and completely sets forth the Outstanding Amount of all Loans and L/C Obligations relating to the Assigned Interest as of the Effective Date; (c) it has the power and authority and the legal right to make, deliver and perform, and has taken all necessary action, to authorize the execution, delivery and performance of this Assignment and Acceptance, and any and all other documents delivered by it in connection herewith and to fulfill its obligations under, and to consummate the transactions contemplated by, this Assignment and Acceptance and the Loan Documents, and no consent or authorization of, filing with, or other act by or in respect of any Governmental Authority, is required in connection in connection herewith or therewith; and (d) this Assignment and Acceptance constitutes the legal, valid and binding obligation of the Assignor. The Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any of its Affiliates or the performance by the Borrower or any of its Affiliates of their respective obligations under the Loan Documents, and assumes no responsibility with respect to any statements, warranties or representations made under or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document other than as expressly set forth above. 5. The Assignee represents and warrants to the Assignor and the Administrative Agent that: (a) it is an Eligible Assignee; (b) it has the full power and authority and the legal right to make, deliver and perform, and has taken all necessary action, to authorize the execution, delivery and performance of this Assignment and Acceptance, and any and all other documents delivered by it in connection herewith and to fulfill its obligations under, and to consummate the transactions contemplated by, this Assignment and Acceptance and the Loan Documents, and no consent or authorization of, filing with, or other act by or in respect of any Governmental Authority, is required in connection in connection herewith or therewith; (c) this Assignment and Acceptance constitutes the legal, valid and binding obligation of the Assignee; (d) under applicable Laws no tax will be required to be withheld by the Administrative Agent or the Borrower with respect to any payments to be made to the Assignee hereunder or under any Loan Document, and unless otherwise indicated in the space opposite the Assignee's signature below, no tax forms described in Section 10.15 of the Credit Agreement are required to be delivered by the Assignee; and (e) the Assignee has received a copy of the Credit Agreement, together with copies of the most recent financial statements of the Borrower delivered pursuant thereto, and such other D-2 169 documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance. The Assignee has independently and without reliance upon the Assignor or the Administrative Agent and based on such information as the Assignee has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Acceptance. The Assignee will, independently and without reliance upon the Administrative Agent or any Lender, and based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement. 6. The Assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto. 7. If either the Assignee or the Assignor desires a Loan Note to evidence its Loans, it shall request the Administrative Agent to procure a Loan Note from the Borrower. 8. The Assignor and the Assignee agree to execute and deliver such other instruments, and take such other action, as either party may reasonably request in connection with the transactions contemplated by this Assignment and Acceptance. 9. This Assignment and Acceptance shall be binding upon and inure to the benefit of the parties and their respective successors and assigns; provided, however, that the Assignee shall not assign its rights or obligations hereunder without the prior written consent of the Assignor and any purported assignment, absent such consent, shall be void. 10. This Assignment and Acceptance may be executed by facsimile signatures with the same force and effect as if manually signed and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the state specified in the Section of the Credit Agreement entitled "Governing Law." 11. The effectiveness of the assignment described herein is subject to: (a) if such consent is required by the Credit Agreement, receipt by the Assignor and the Assignee of the consent of the Administrative Agent and/or the Borrower to the assignment described herein. By delivering a duly executed and delivered copy of this Assignment and Acceptance to the Administrative Agent, the Assignor and the Assignee hereby request any such required consent and request that the Administrative Agent register the Assignee as a Lender under the Credit Agreement effective as of the Effective Date; and (b) receipt by the Administrative Agent of (or other arrangements acceptable to the Administrative Agent with respect to) any applicable assignment fee referred to in Section 10.07(b) of the Agreement and any tax forms required by Section 10.15 of the Credit Agreement. D-3 170 By signing below, the Administrative Agent agrees to register the Assignee as a Lender under the Credit Agreement, effective as of the Effective Date with respect to the Assigned Interest, and will adjust the registered Pro Rata Share of the Assignor under the Credit Agreement to reflect the assignment of the Assigned Interest. 12. Attached hereto as Schedule 2 is all contact, address, account and other administrative information relating to the Assignee. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers. ASSIGNOR: [NAME OF ASSIGNOR] By: ----------------------------- Name: --------------------------- Title: -------------------------- [ ] Tax forms required by ASSIGNEE: Section 10.15 of the [NAME OF ASSIGNEE] Credit Agreement included By: ----------------------------- Name: --------------------------- Title: -------------------------- (Signatures continue) D-4 171 In accordance with and 10.07 of the Credit Agreement, the undersigned consent to the foregoing assignment as of the Effective Date: CERIDIAN CORPORATION By: ----------------------------- Name: --------------------------- Title: -------------------------- BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer By: ----------------------------- Title: -------------------------- D-5 172 SCHEDULE 1 to Assignment and Acceptance The Assigned Interest Effective Date: ----------------------

TYPE AND AMOUNT OF OUTSTANDING OBLIGATIONS ASSIGNED PRO RATA ASSIGNED COMMITMENT ASSIGNED SHARE $ [type] $ % --------------------------- ---------------------------------- -------------------------

Schedule 1-1 173 SCHEDULE 2 to Assignment and Acceptance Administrative Details (Assignee to list names of credit contacts, addresses, phone and facsimile numbers, electronic mail addresses and account and payment information) Schedule 2-1 174 EXHIBIT E FORM OF NEW CERIDIAN GUARANTY THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by NEW CERIDIAN CORPORATION, a Delaware corporation (the "Guarantor"), in favor of (a) the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders and BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap Provider" (as defined herein), and (c) the Note Holders party from time to time to the Note Purchase Agreement (collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed Party"). RECITALS WHEREAS, it is a requirement under the Credit Agreement and the Note Purchase Agreement that Guarantor shall be bound by the terms and conditions of this Guaranty pending the Spin-Off Consummation Date; and WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the credit extensions to the Borrower pursuant to the Credit Agreement and the Note Purchase Agreement together with the amendments, restatements, extensions and continuations contemplated therein, and from the Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor; WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the Borrower being party to the Specified Swap Contracts, which benefits are hereby acknowledged; NOW, THEREFORE, in consideration of the Administrative Agent and Lenders entering into the Credit Agreement, the Guarantor hereby agrees as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. (b) Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings: "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or such replacement Collateral Agent as may be appointed from time to time pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its capacity as Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the E-1 175 Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Documents" means, collectively, the Loan Documents, the Swap Documents, and the Note Purchase Documents. "Guaranteed Obligations" has the meaning set forth in Section 2(a). "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to them in the first paragraph hereof. "Guarantor Documents" means this Guaranty, and all other certificates, documents, agreements and instruments delivered to the Guaranteed Parties under or in connection with this Guaranty. "Indemnified Liabilities" has the meaning set forth in Section 15(b). "Indemnified Person" has the meaning set forth in Section 15(b). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders. "Note Holder Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders), (b) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (c) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower and the Note Holders party thereto. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities E-2 176 evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Borrower and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Borrower and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Subordinated Debt" has the meaning set forth in Section 7(a). "Subordinated Debt Payments" has the meaning set forth in Section 7(b). "Swap Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider), (ii) all Account Control Agreements executed by any Loan Party under any Swap Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Swap Documents" means, collectively, (a) any Specified Swap Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. (c) Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and are incorporated herein by this reference. SECTION 2 Guaranty. E-3 177 (a) Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to each of the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the full and prompt payment when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Borrower to each such Guaranteed Party, whether created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement); and any obligations under any Specified Swap Agreement to the extent arising out of any one or more Specified Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter becomes unenforceable or shall be an allowed or disallowed claim under the Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 15), shall hereinafter be collectively referred to as the "Guaranteed Obligations." (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including the New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor's liability with respect to any of the Guaranteed Obligations which any of the Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof accept such limitation on the amount of the Guarantor's liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable. SECTION 3 Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows: (i) the Guarantor's liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it may have against the Borrower or any other Person, or against any collateral now or hereafter securing any of the Guaranteed Obligations; (ii) this Guaranty is a guaranty of payment when due and not merely of collectibility; (iii) the Guarantor's payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor's liability for any portion of the Guaranteed Obligations remaining unsatisfied; and E-4 178 (iv) the Guarantor's liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: (A) any proceeding under any Debtor Relief Laws with respect to the Borrower, any other guarantor or any other Person; (B) any limitation, discharge, or cessation of the liability of the Borrower, any other guarantor or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan Documents; (C) subject to Section 24 hereof, any merger, acquisition, consolidation or change in structure of the Borrower, the Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Borrower, the Guarantor, any other guarantor or other Person; (D) any assignment or other transfer, in whole or in part, of any of the Guaranteed Parties' interests in and rights under this Guaranty or the other Credit Documents, including the Guaranteed Parties' right to receive payment of the Guaranteed Obligations; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Borrower, the Guarantor, any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Credit Documents; (F) the Guaranteed Parties' or any Lender's amendment, modification, renewal, extension, cancellation or surrender of any Credit Document; (G) the Guaranteed Parties' vote, claim, distribution, election, acceptance, action or inaction in any proceeding under any Debtor Relief Laws related to the Guaranteed Obligations; (H) any impairment or invalidity of any collateral securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the Guaranteed Parties thereon or therein; and (I) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties. SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor: (i) the principal or other amount of the Guaranteed Obligations in respect of any of the Guaranteed Parties may be increased or decreased as to such Guaranteed Parties and additional indebtedness or obligations of the Borrower under the Credit Documents may be E-5 179 incurred, by one or more amendments, modifications, renewals or extensions of any such Credit Documents; (ii) the time, manner, place or terms of any payment under any of the Credit Documents may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or any fee or other amount payable under such Credit Documents, by an amendment, modification or renewal of any Credit Documents or otherwise; (iii) the time for the Borrower's (or any other Person's) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Credit Documents may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as any of the Guaranteed Parties may deem proper; (iv) any of the Guaranteed Parties may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations owing to such Guaranteed Parties, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize on any collateral therefor; (v) the Guaranteed Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (vi) the Guaranteed Parties may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and (vii) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any Loan and any power of sale) granted by any Credit Document or other security document or agreement, or otherwise available to the Guaranteed Parties, with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Borrower; all as the Guaranteed Parties (or the Collateral Agent on their behalf) may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty. SECTION 5 Guarantor's Waivers. E-6 180 (a) Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require any of the Guaranteed Parties to marshal assets in favor of the Borrower, the Guarantor, any other guarantor or any other Person, to proceed against the Borrower, any other guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Guaranteed Obligations or comply with any other provisions of Section 9-504 of the New York UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Guaranteed Parties whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, the Guarantor or any other Person; (iv) any defense based upon the Guaranteed Parties' errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Borrower or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty, including any and all benefits that otherwise might be available to the Guarantor under New York Laws. This means, among other things: (A) the Guaranteed Parties may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by the Borrower; and (B) if the Guaranteed Parties forecloses on any real property collateral pledged by the Borrower: (1) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Parties may collect from the Guarantor even if the Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from the Borrower. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because the Borrower's debt is secured by real property. (b) Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and E-7 181 permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Borrower, the Guarantor or any other Person with respect to the Guaranteed Obligations. (c) Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Borrower and any other guarantor. Upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Borrower or any such other guarantor is joined therein or a separate action or actions are brought against the Borrower or any such other guarantor. (d) Financial Condition of Borrower. The Guarantor shall not have any right to require the Guaranteed Parties to obtain or disclose any information with respect to: (i) the financial condition or character of the Borrower or the ability of the Borrower to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (iv) any action or inaction on the part of the Guaranteed Parties or any other Person; or (v) any other matter, fact or occurrence whatsoever. SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full and the Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Guaranteed Parties as against the Borrower or other guarantors, whether in connection with this Guaranty, any of the other Credit Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the Collateral Agent on their behalf) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents and subject to the Intercreditor Agreement. SECTION 7 Subordination. (a) Subordination to Payment of Guaranteed Obligations. All payments on account of all indebtedness, liabilities and other obligations of the Borrower to the Guarantor, whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Borrower or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and all other amounts payable by the Borrower to the Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the "Subordinated Debt") shall be subject, subordinate and junior in right of E-8 182 payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations. (b) No Payments. Other than arising out of the consummation of the Spin-Off Transaction, as long as any of the Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not accept or receive any payment or distribution by or on behalf of the Borrower, directly or indirectly, of assets of the Borrower of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other disposition of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of Default exists and no notice described below has been received by the Guarantor, the Guarantor shall be entitled to accept and receive any and all payments. During the existence of an Event of Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt Payment), and upon receipt by the Borrower of notice from the Guaranteed Parties (or the Collateral Agent on their behalf) of such Default, and until such Event of Default is cured or waived, pursuant to the terms of the applicable Credit Documents, the Borrower shall not make, accept or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this Section 7, any Subordinated Debt Payments shall be received in contravention of this Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the Guaranteed Parties and shall be paid over or delivered to the Guaranteed Parties (or the Collateral Agent on their behalf) for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent necessary to give effect to this Section 7, after giving effect to any concurrent payments or distributions to the Guaranteed Parties in respect of the Guaranteed Obligations. (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not, without the prior written consent of the Guaranteed Parties (or the Collateral Agent on their behalf): (i) accelerate or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Debt; (ii) exercise any rights under or with respect to (A) any guaranties of the Subordinated Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Borrower or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing; (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of the Guarantor to the Borrower against any of the Subordinated Debt; or E-9 183 (iv) commence, or cause to be commenced, or join with any creditor other than the Guaranteed Parties in commencing, any proceeding under any Debtor Relief Laws as against Borrower. (d) Subordination Upon Any Distribution of Assets of the Borrower. In the event of any payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, upon any proceeding under any Debtor Relief Laws with respect to or involving the Borrower, (i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Debt Payment to which the Guarantor would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to the Guaranteed Parties (or the Collateral Agent acting on their behalf) for application to the payment of the Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Guaranteed Parties in respect of such Guaranteed Obligations. (e) Authorization to Guaranteed Parties. If, while any Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is commenced by or against the Borrower or its property: (i) the Guaranteed Parties are hereby irrevocably authorized and empowered (in the name of the Guaranteed Parties, in the name of the Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Debt and give acquittance therefor and to file claims and proofs of claim and take such other action (including voting the Subordinated Debt) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and (ii) the Guarantor shall promptly take such action as any of the Guaranteed Parties may reasonably request (A) to collect the Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such powers of attorney, assignments and other instruments as they may request to enable them to enforce any and all claims with respect to the Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt Payments. SECTION 8 Continuing Guaranty; Reinstatement. (a) Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon the Guarantor until the payment and performance in full of all Guaranteed Obligations. E-10 184 (b) Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Borrower (or receipt of any proceeds of collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Borrower, its estate, trustee, receiver or any other Person (including under any Debtor Relief Laws or other state or federal law), or must otherwise be restored by the Guaranteed Parties, whether as a result of proceedings under any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Guaranteed Parties may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Guaranteed Parties contained in Section 15. SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Guaranteed Parties or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral Agent on their behalf) an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any proceeding under any Debtor Relief Laws with respect to the Borrower, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Borrower for such interest in any such proceeding under any Debtor Relief Laws). The Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any Taxes, on the day when due in Dollars and in same day or immediately available funds, to the Collateral Agent at such office or account of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All such payments shall be promptly applied from time to time by the Guaranteed Parties as provided in the Credit Documents. SECTION 10 Representations and Warranties. The Guarantor represents and warrants to the Guaranteed Parties that: (a) Organization and Powers. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority: (i) to own its assets and carry on its business, and (ii) to execute, deliver and perform its obligations under the Guarantor Documents and Spin-Off Documents. (b) Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and all other Guarantor Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized by all necessary corporate action of the Guarantor, and do not and will not: (i) contravene the terms of the Guarantor's organization documents or (ii) conflict with or result in any breach or contravention of, or the creation of any E-11 185 Lien under, any document evidencing any material Contractual Obligation to which the Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which the Guarantor or its property is subject, or (iii) violate any Laws. (c) Binding Obligation. This Guaranty and the other Guarantor Documents constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, except as have been obtained on or before the Closing Date, is required for (i) the due execution, delivery or performance by, or enforcement against, the Guarantor of the Guarantor Documents, (ii) the execution, delivery or performance by or enforcement against the Guarantor of the Spin-Off Documents or (iii) the consummation of the Spin-Off Transaction. (e) No Prior Assignment. The Guarantor has not previously assigned any interest in the Subordinated Debt or any collateral relating thereto, no Person other than the Guarantor owns an interest in the Subordinated Debt or any such collateral (whether as joint holders of the Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to the Guarantor. (f) Solvency. Immediately prior to and after and giving effect to (i) the incurrence of the Guarantor's obligations under this Guaranty, and (ii) the Spin-Off Transaction, the Guarantor will be Solvent. (g) Consideration. The Guarantor has received at least "reasonably equivalent value" (as such phrase is used in Section 548 of the Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272 of the New York Debtor & Creditor Laws and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations to which it is a party. (h) Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Borrower and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Guaranteed Parties with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Credit Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Borrower and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon or expecting the Guaranteed Parties to furnish to the Guarantor any information now or hereafter in the Guaranteed Parties' possession concerning the financial condition of the Borrower or any other matter. SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that it shall E-12 186 furnish to the Guaranteed Parties such information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as any of the Guaranteed Parties may from time to time reasonably request. SECTION 12 Additional Covenants. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that: (a) Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal existence and (ii) its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties, except in the case of this clause (ii) where the non-preservation could not reasonably be expected to have a Material Adverse Effect. (b) Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as any of the Guaranteed Parties shall deem reasonably necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Guaranteed Parties with evidence of the foregoing satisfactory in form and substance to the Guaranteed Parties. SECTION 13 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; except that (a) any notices to the Swap Provider shall be delivered to Fleet National Bank (or to such replacement Swap Provider may be appointed from time to time consistent with the Intercreditor Agreement), according to the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any notice to the Note Holders shall be delivered to the address specified for such Persons in the Note Purchase Agreement (or to such replacement Note Holders as may be appointed from time to time consistent with the Intercreditor Agreement). Notices to the Guarantor shall be sent or delivered to the address set forth in the Credit Agreement for the Borrower. All such notices, requested and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of any Guaranteed Party to exercise, and no delay in exercising on the part of any Guaranteed Party, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. SECTION 15 Costs and Expenses; Indemnification. (a) Costs and Expenses. The Guarantor shall: E-13 187 (i) whether or not the transactions contemplated hereby are consummated, pay or reimburse each of the Guaranteed Parties for all costs and expenses incurred by them in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Guaranty, any other Guarantor Document and any other documents prepared in connection herewith or therewith and the consummation of the transactions contemplated hereby and thereby; and (ii) pay or reimburse the Guaranteed Parties for all costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Guaranty or any other Guarantor Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any proceeding under any Debtor Relief Laws or appellate proceeding). (b) Indemnification. The Borrower shall indemnify, defend and hold each of the Guaranteed Parties and each Lender and Note Holder and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suites, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Guaranty or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any proceeding under any Debtor Relief Laws or appellate proceeding) related to or arising out of this Guaranty or relating to the Collateral, whether or not any Indemnified Person is a party thereto (the "Indemnified Liabilities"); provided that the Guarantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person. (c) Defense. At the election of any Indemnified Person, the Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person's sole discretion, at the sole cost and expense of the Guarantor. (d) Interest. Any amounts payable to the Guaranteed Parties under this Section 15 if not paid upon demand shall bear interest from the date of such demand until paid in full, at the Default Rate. SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Guaranteed Parties and the Lenders provided by law, if an Event of Default exists or any reimbursement or payment obligation under any of the Credit Documents has been accelerated, each of the Guaranteed Parties and Lenders is hereby authorized at any time and from time to time, upon notice to the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but without notice to the Guarantor (any such notice being expressly waived by the Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Person to or for the credit or E-14 188 the account of the Guarantor against any and all of the obligations of the Guarantor then due and owing, irrespective of whether or not such Person shall have made any demand upon the Borrower or the Guarantor under any of the Credit Documents. Each Lender and the Guaranteed Parties shall promptly notify the Guarantor (through the Collateral Agent) after any such set-off and application made by it; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lenders and Guaranteed Parties under this Section 16 are in addition to other rights and remedies (including other rights of set-off) which such Persons may have. SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the Note Holders, or the Guaranteed Parties shall be under any obligation to marshal any assets in favor of the Guarantor or any other Person or against or in payment of any or all of the Guaranteed Obligations. To the extent that the Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Collateral Agent upon demand its pro rata share of any amount so recovered from or repaid by the Collateral Agent. SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lenders, the Note Holders, the Guaranteed Parties, and their respective successors and assigns, and no other Person (other than any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein. SECTION 19 Binding Effect; Assignment. (a) Successors and Assigns. The provisions of this Guaranty shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. (b) Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Required Lenders. Each of the Guaranteed Parties, the Note Holders and the Lenders may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of such Person's rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by such Person in accordance with Section 10.07 of the Credit Agreement or in its rights and obligations thereunder and under any of the other Credit Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by any Lender, such Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. E-15 189 SECTION 20 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 22 Entire Agreement; Amendments. This Guaranty, together with the other Guarantor Documents, embodies the entire agreement of the Guarantor with respect to the matters set forth herein for the benefit of each Guaranteed Party, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended only by written agreement between the Guarantor and the Guaranteed Party to whom such E-16 190 amendment relates. Any such amendment shall not effect any guaranty of the Guarantor granted hereunder to any other Guaranteed Party. SECTION 23 Independence. This Guaranty sets forth independent and separate guaranties of the Guarantor in favor of each Guaranteed Party in respect of the Guaranteed Obligations owing to each such Guaranteed Party. The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement required hereunder with respect to any Guaranteed Party shall not in any way affect or impair the legality or enforceability of that or any other provision of this Guaranty or any instrument or agreement required hereunder in respect of any other Guaranteed Party. The parties acknowledge that this Guaranty has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as thought the Guarantor had executed separate guaranties, in favor of each Guaranteed Party. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 24 Termination. This Guaranty shall terminate in all respects on the Spin-Off Consummation Date, provided, that (i) as of the Spin-Off Consummation Date, there exists no Default or Event of Default, and (ii) all of the representations and warranties of the Borrower contained in Article V of the Credit Agreement, or which were contained in any Loan Document or Spin-Off Documents furnished prior to the Spin-Off Consummation Date are true and correct on and as of the Spin-Off Consummation Date, except to the extent that such representations and warranties specifically refer to any earlier date, in which case they shall be true and correct as of such earlier date, and (iii) the Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower, dated as of the Spin-Off Consummation Date, certifying that (A) the Spin-Off Consummation Date has occurred, (B) as of the Spin-Off Consummation Date there exists no Default or Event of Default, and (C) all of the representations and warranties of the Borrower contained in Article V of the Credit Agreement, or which were contained in any Loan Documents or Spin-Off Documents furnished prior to the Spin-Off Consummation Date, are true and correct on and as of the Spin-Off Consummation Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be certified as being true and correct as of such earlier date. E-17 191 IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written. NEW CERIDIAN CORPORATION By: ------------------------ Title: --------------------- Address: New Ceridian Corporation 3311 East Old Shakopee Road Minneapolis, MN 55425-1640 Attn: John H. Grierson Fax No.: (952) 853-3932 E-18 192 EXHIBIT F FORM OF SUBSIDIARY GUARANTY THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by each of the Subsidiaries listed on Schedule 1 hereto (collectively, the "Guarantor"), in favor (a) of the financial institutions (each a "Lender" and, collectively, the "Lenders") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders and BANK OF AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c) the Note Holders (as defined herein) (collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed Party"). RECITALS WHEREAS, it is a requirement under of the Credit Agreement and the Note Purchase Agreement that Guarantor shall be bound by the terms and conditions of this Guaranty pending the Spin-Off Consummation Date; and WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the credit extensions to the Borrower pursuant to the Credit Agreement and the Note Purchase Agreement together with the amendments, restatements, extensions and continuations contemplated therein, and from the Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor; WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the Borrower being party to the Specified Swap Contracts, which benefits are hereby acknowledged; NOW, THEREFORE, in consideration of the Administrative Agent and Lenders entering into the Credit Agreement, the Guarantor hereby agrees as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. (b) Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings: "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or such replacement Collateral Agent as may be appointed from time to time pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its capacity as Administrative Agent for the benefit of itself and F-1 193 the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders for the benefit of itself and the other Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Documents" means, collectively, the Loan Documents, the Swap Documents, and the Note Purchase Documents. "Guaranteed Obligations" has the meaning set forth in Section 2(a). "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to them in the first paragraph hereof. "Guarantor Documents" means this Guaranty, and all other certificates, documents, agreements and instruments delivered to the Guaranteed Parties under or in connection with this Guaranty. "Indemnified Liabilities" has the meaning set forth in Section 15(b). "Indemnified Person" has the meaning set forth in Section 15(b). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders Agent. "Note Holder Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders), (b) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (c) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower, the Note Holders and the other Note Holders party thereto. F-2 194 "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Borrower and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Borrower and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Subordinated Debt" has the meaning set forth in Section 7(a). "Subordinated Debt Payments" has the meaning set forth in Section 7(b). "Swap Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider), (ii) all Account Control Agreements executed by any Loan Party under any Swap Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Swap Documents" means, collectively, (a) any Specified Swap Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. (c) Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and are incorporated herein by this reference. F-3 195 SECTION 2 Guaranty. (a) Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the full and prompt payment when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Borrower to each such Guaranteed Party, whether created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement); and any obligations under any Specified Swap Agreement to the extent arising out of any one or more Specified Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter becomes unenforceable or shall be an allowed or disallowed claim under the Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 15), shall hereinafter be collectively referred to as the "Guaranteed Obligations." (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including the New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor's liability with respect to any of the Guaranteed Obligations which any of the Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof accept such limitation on the amount of the Guarantor's liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable. SECTION 3 Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows: (i) the Guarantor's liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it may have against the Borrower or any other Person, or against any collateral now or hereafter securing any of the Guaranteed Obligations; (ii) this Guaranty is a guaranty of payment when due and not merely of collectibility; F-4 196 (iii) the Guarantor's payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor's liability for any portion of the Guaranteed Obligations remaining unsatisfied; and (iv) the Guarantor's liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: (A) any proceeding under any Debtor Relief Laws with respect to the Borrower, any other guarantor or any other Person; (B) any limitation, discharge, or cessation of the liability of the Borrower, any other guarantor or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan Documents; (C) any merger, acquisition, consolidation or change in structure of the Borrower, the Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Borrower, the Guarantor, any other guarantor or other Person; (D) any assignment or other transfer, in whole or in part, of any of the Guaranteed Parties' interests in and rights under this Guaranty or the other Credit Documents, including the Guaranteed Parties' right to receive payment of the Guaranteed Obligations; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Borrower, the Guarantor, any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Credit Documents; (F) the Guaranteed Parties' amendment, modification, renewal, extension, cancellation or surrender of any Credit Document; (G) the Guaranteed Parties' vote, claim, distribution, election, acceptance, action or inaction in any proceeding under any Debtor Relief Laws related to the Guaranteed Obligations; (H) any impairment or invalidity of any collateral securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the Guaranteed Parties thereon or therein; and (I) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties. SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor: F-5 197 (i) the principal amount of the Guaranteed Obligations in respect of any of the Guaranteed Parties may be increased or decreased as to such Guaranteed Party and additional indebtedness or obligations of the Borrower under the Credit Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any such Credit Document; (ii) the time, manner, place or terms of any payment under any Credit Documents may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or any fee or other amount payable under such Credit Documents, by an amendment, modification or renewal of any Credit Documents or otherwise; (iii) the time for the Borrower's (or any other Person's) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Credit Documents may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as any of the Guaranteed Parties may deem proper; (iv) any of the Guaranteed Parties may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations owing to such Guaranteed Parties, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize on any collateral therefor; (v) the Guaranteed Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (vi) the Guaranteed Parties may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and (vii) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any Loan and any power of sale) granted by any Credit Document or other security document or agreement, or otherwise available to the Guaranteed Parties, with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Borrower; F-6 198 all as the Guaranteed Parties (or the Collateral Agent on their behalf) may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty. SECTION 5 Guarantor's Waivers. (a) Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require any of the Guaranteed Parties to marshal assets in favor of the Borrower, the Guarantor, any other guarantor or any other Person, to proceed against the Borrower, any other guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Guaranteed Obligations or comply with any other provisions of Section 9-504 of the New York UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Guaranteed Parties whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, the Guarantor or any other Person; (iv) any defense based upon the Guaranteed Parties' or any Lender's errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Borrower or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty, including any and all benefits that otherwise might be available to the Guarantor under New York Laws. This means, among other things: (A) the Guaranteed Parties may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by the Borrower; and (B) if the Guaranteed Parties forecloses on any real property collateral pledged by the Borrower: (1) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Parties may collect from the Guarantor even if the Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from the Borrower. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because the Borrower's debt is secured by real property. F-7 199 (b) Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Borrower, the Guarantor or any other Person with respect to the Guaranteed Obligations. (c) Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Borrower and any other guarantor. Upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Borrower or any such other guarantor is joined therein or a separate action or actions are brought against the Borrower or any such other guarantor. (d) Financial Condition of Borrower. The Guarantor shall not have any right to require the Guaranteed Parties to obtain or disclose any information with respect to: (i) the financial condition or character of the Borrower or the ability of the Borrower to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (iv) any action or inaction on the part of the Guaranteed Parties or any other Person; or (v) any other matter, fact or occurrence whatsoever. SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full and the Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Guaranteed Parties as against the Borrower or other guarantors, whether in connection with this Guaranty, any of the other Credit Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the Collateral Agent on their behalf) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents (and subject to the Intercreditor Agreement). SECTION 7 Subordination. (a) Subordination to Payment of Guaranteed Obligations. All payments on account of all indebtedness, liabilities and other obligations of the Borrower to the Guarantor, whether created under, arising out of or in connection with any documents or instruments F-8 200 evidencing any credit extensions to the Borrower or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and all other amounts payable by the Borrower to the Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the "Subordinated Debt") shall be subject, subordinate and junior in right of payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations. (b) No Payments. As long as any of the Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not accept or receive any payment or distribution by or on behalf of the Borrower, directly or indirectly, of assets of the Borrower of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other disposition of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of Default exists and no notice described below has been received by the Guarantor, the Guarantor shall be entitled to accept and receive any and all payments. During the existence of an Event of Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt Payment), and upon receipt by the Borrower of notice from the Guaranteed Parties (or the Collateral Agent on their behalf) of such Default, and until such Event of Default is cured or waived, pursuant to the terms of the applicable Credit Documents, the Borrower shall not make, accept or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this Section 7, any Subordinated Debt Payments shall be received in contravention of this Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the Guaranteed Parties and shall be paid over or delivered to the Guaranteed Parties (or the Collateral Agent on their behalf) for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent necessary to give effect to this Section 7, after giving effect to any concurrent payments or distributions to the Guaranteed Parties in respect of the Guaranteed Obligations. (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not, without the prior written consent of the Guaranteed Parties (or the Collateral Agent on their behalf): (i) accelerate or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Debt; (ii) exercise any rights under or with respect to (A) any guaranties of the Subordinated Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Borrower or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing; F-9 201 (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of the Guarantor to the Borrower against any of the Subordinated Debt; or (iv) commence, or cause to be commenced, or join with any creditor other than the Guaranteed Parties in commencing, any proceeding under any Debtor Relief Laws as against Borrower. (d) Subordination Upon Any Distribution of Assets of the Borrower. In the event of any payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, upon any proceeding under any Debtor Relief Laws with respect to or involving the Borrower, (i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Debt Payment to which the Guarantor would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to the Guaranteed Parties (or the Collateral Agent acting on their behalf) for application to the payment of the Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Guaranteed Parties in respect of such Guaranteed Obligations. (e) Authorization to Guaranteed Parties. If, while any Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is commenced by or against the Borrower or its property: (i) the Guaranteed Parties are hereby irrevocably authorized and empowered (in the name of the Guaranteed Parties, in the name of the Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Debt and give acquittance therefor and to file claims and proofs of claim and take such other action (including voting the Subordinated Debt) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and (ii) the Guarantor shall promptly take such action as any of the Guaranteed Parties may reasonably request (A) to collect the Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such powers of attorney, assignments and other instruments as they may request to enable them to enforce any and all claims with respect to the Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt Payments. SECTION 8 Continuing Guaranty; Reinstatement. F-10 202 (a) Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon the Guarantor until the payment and performance in full of all Guaranteed Obligations. (b) Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Borrower (or receipt of any proceeds of collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Borrower, its estate, trustee, receiver or any other Person (including under any Debtor Relief Laws or other state or federal law), or must otherwise be restored by the Guaranteed Parties, whether as a result of proceedings under any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Guaranteed Parties may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Guaranteed Parties contained in Section 15. SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Guaranteed Parties or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral Agent on their behalf) an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any proceeding under any Debtor Relief Laws with respect to the Borrower, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Borrower for such interest in any such proceeding under any Debtor Relief Laws). The Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any Taxes, on the day when due in Dollars and in same day or immediately available funds, to the Collateral Agent at such office or account of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All such payments shall be promptly applied from time to time by the Guaranteed Parties as provided in the Intercreditor Documents. SECTION 10 Representations and Warranties. The Guarantor represents and warrants to the Guaranteed Parties that: (a) Organization and Powers. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority: (i) to own its assets and carry on its business, and (ii) to execute, deliver and perform its obligations under the Guarantor Documents and Spin-Off Documents. F-11 203 (b) Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and all other Guarantor Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized by all necessary corporate action of the Guarantor, and do not and will not: (i) contravene the terms of the Guarantor's organization documents or (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation to which the Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which the Guarantor or its property is subject, or (iii) violate any Laws. (c) Binding Obligation. This Guaranty and the other Guarantor Documents constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, except as have been obtained on or before the Closing Date, is required for (i) the due execution, delivery or performance by, or enforcement against, the Guarantor of the Guarantor Documents, (ii) the execution, delivery or performance by or enforcement against the Guarantor of the Spin-Off Documents or (iii) the consummation of the Spin-Off Transaction. (e) The Guarantor has not previously assigned any interest in the Subordinated Debt or any collateral relating thereto, no Person other than the Guarantor owns an interest in the Subordinated Debt or any such collateral (whether as joint holders of the Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to the Guarantor. (f) Solvency. Immediately prior to and after and giving effect to (i) the incurrence of the Guarantor's obligations under this Guaranty, and (ii) the Spin-Off Transaction, the Guarantor will be Solvent. (g) Consideration. The Guarantor has received at least "reasonably equivalent value" (as such phrase is used in Section 548 of the Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272 of the New York Debtor & Creditor Laws and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations to which it is a party. (h) Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Borrower and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Guaranteed Parties with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Credit Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Borrower and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon F-12 204 or expecting the Guaranteed Parties to furnish to the Guarantor any information now or hereafter in the Guaranteed Parties' possession concerning the financial condition of the Borrower or any other matter. SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that it shall furnish to the Guaranteed Parties such information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as any of the Guaranteed Parties may from time to time reasonably request. SECTION 12 Additional Covenants. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that: (a) Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal existence and (ii) its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties, except in the case of this clause (ii) where the non-preservation could not reasonably be expected to have a Material Adverse Effect. (b) Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as any of the Guaranteed Parties shall deem reasonably necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Guaranteed Parties with evidence of the foregoing satisfactory in form and substance to the Guaranteed Parties. SECTION 13 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; except that (a) any notices to the Swap Provider shall be delivered to Fleet National Bank (or such replacement Swap Provider as the Swap Provider may direct in writing), according to the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any notice to the Note Holders be delivered to the address specified for such Persons in the Note Purchase Agreement (or to such replacement Note Holders as may be appointed from time to time consistent with the Intercreditor Agreement). Notices to the Guarantor shall be sent or delivered to the address set forth in the Credit Agreement for the Borrower. All such notices, requested and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of any Guaranteed Parties to exercise, and no delay in exercising on the part of any Guaranteed Parties, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other F-13 205 right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. SECTION 15 Costs and Expenses; Indemnification. (a) Costs and Expenses. The Guarantor shall: (i) whether or not the transactions contemplated hereby are consummated, pay or reimburse each of the Guaranteed Parties for all costs and expenses incurred by them in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Guaranty, any other Guarantor Document and any other documents prepared in connection herewith or therewith and the consummation of the transactions contemplated hereby and thereby; and (ii) pay or reimburse the Guaranteed Parties for all costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Guaranty or any other Guarantor Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any proceeding under any Debtor Relief Laws or appellate proceeding). (b) Indemnification. The Borrower shall indemnify, defend and hold each of the Guaranteed Parties, and each Lender and Note Holder and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suites, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Guaranty or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any proceeding under any Debtor Relief Laws or appellate proceeding) related to or arising out of this Guaranty or relating to the Collateral, whether or not any Indemnified Person is a party thereto (the "Indemnified Liabilities"); provided that the Guarantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person. (c) Defense. At the election of any Indemnified Person, the Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person's sole discretion, at the sole cost and expense of the Guarantor. (d) Interest. Any amounts payable to the Guaranteed Parties under this Section 15 if not paid upon demand shall bear interest from the date of such demand until paid in full, at the Default Rate. F-14 206 (e) Survival. The agreements in this Section shall survive payment of all other Guaranteed Obligations. SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Guaranteed Parties and the Lenders provided by law, if an Event of Default exists or any reimbursement or payment obligation under any of the Credit Documents has been accelerated, each Guaranteed Parties and Lenders is hereby authorized at any time and from time to time, upon notice to the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but without notice to the Guarantor (any such notice being expressly waived by the Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Person to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor then due and owing, irrespective of whether or not such Person shall have made any demand upon the Borrower or the Guarantor under any of the Credit Documents. Each Lender and the Guaranteed Parties shall promptly notify the Guarantor (through the Collateral Agent) after any such set-off and application made by it; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lenders and Guaranteed Parties under this Section 16 are in addition to other rights and remedies (including other rights of set-off) which the such parties may have. SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the Note Holders, or the Guaranteed Parties shall be under any obligation to marshal any assets in favor of the Guarantor or any other Person or against or in payment of any or all of the Guaranteed Obligations. To the extent that the Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Collateral Agent upon demand its pro rata share of any amount so recovered from or repaid by the Collateral Agent. SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lenders, the Note Holders, the Guaranteed Parties, and their respective successors and assigns, and no other Person (other than the Collateral Agent and any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein. SECTION 19 Binding Effect; Assignment. F-15 207 (a) Successors and Assigns. The provisions of this Guaranty shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. (b) Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Required Lenders. Each of the Guaranteed Parties, the Note Holders, and the Lenders may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of such Person's rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by such Person in accordance with Section 10.07 of the Credit Agreement in its rights and obligations thereunder and under any of the Credit Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by any Lender, such Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. SECTION 20 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO F-16 208 THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 22 Entire Agreement; Amendments. This Guaranty, together with the other Guarantor Documents, embodies the entire agreement of the Guarantor with respect to the matters set forth herein for the benefit of each Guaranteed Party, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended only by written agreement between the Guarantor and the Guaranteed Party to whom such amendment relates. Any such amendment shall not effect any guaranty of the Guarantor granted hereunder to any other Guaranteed Party. SECTION 23 Independence. This Guaranty sets forth independent and separate guaranties of the Guarantor in favor of each Guaranteed Party in respect of the Guaranteed Obligations owing to each such Guaranteed Party. The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement required hereunder with respect to any Guaranteed Party shall not in any way affect or impair the legality or enforceability of that or any other provision of this Guaranty or any instrument or agreement required hereunder in respect of any other Guaranteed Party. The parties acknowledge that this Guaranty has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as thought the Guarantor had executed separate guaranties, in favor of each Guaranteed Party. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 24 Multiple Guarantors; Joint and Several Liability. When this Guaranty is executed by more than one Guarantor, the word "Guarantor" shall mean all and any one or more of them, and the obligations of all Persons signing this Guaranty shall be joint and several. [remainder of page intentionally left blank] F-17 209 IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written. [NAME OF SUBSIDIARY] By: -------------------------- Title Address: [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: -------------------------- Title Address: [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: -------------------------- Title Address: [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: -------------------------- Title Address: [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ F-18 210 SCHEDULE 1 to the Subsidiary Guaranty SUBSIDIARIES Schedule 1-1 211 EXHIBIT G [BORROWER] SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __, 2001, is made by and among CERIDIAN CORPORATION, a Delaware corporation (the "Grantor") in favor of the "Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined herein); and (c) the Note Holders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a condition precedent to the borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent, for the ratable benefit of the Credit Agents, the security interests hereinafter provided to secure the obligations of the Grantor described below. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit account for purposes of Article 9 of the UCC or applicable law. "Accounts" means any and all accounts of Grantor, whether now existing or hereafter acquired or arising, and in any event includes all accounts receivable, contract rights, royalties, Rights to Payment and other obligations of any kind owed to Grantor arising out of or in connection with the sale, lease, license or other transfer of Intellectual Property, merchandise, goods or commodities or the rendering of services or arising from any other transaction, however evidenced, and whether or not earned by performance, all guaranties, indemnities and security with respect to the foregoing, and all letters of credit relating thereto, in each case whether now existing or hereafter acquired or arising. G-1 212 "Arbitron Databases" means any and all of Grantor's collections or compilations of data, stored in such a way as to permit selective search and retrieval using electronic, electromagnetic, manual or mechanical methods, which relate to Grantor's business, and wherever maintained, collected or accessed. "Books" means all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including: (i) ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets (including Inventory and Rights to Payment), business operations or financial condition; (iii) computer programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and output of whatever kind; (vi) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (vii) any and all other rights now or hereafter arising out of any contract or agreement between Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of Grantor's books or records or with credit reporting, including with regard to Grantor's Accounts. "Chattel Paper" means all writings of whatever sort which evidence a monetary obligation and a security interest in or lease of specific goods, whether now existing or hereafter arising. "Collateral" has the meaning set forth in Section 2. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Copyright Office" means the United States Copyright Office. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Documents" means, collectively, the Loan Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Database Copyright Filing" has the meaning specified in Section 5(q)(v)(A). "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. G-2 213 "Deposit Account" means any demand, time, savings, passbook or like account now or hereafter maintained by or for the benefit of Grantor with a bank, savings and loan association, credit union or like organization (including Bank of America) and all funds and amounts therein, whether or not restricted or designated for a particular purpose. "Documents" means any and all documents of title, bills of lading, dock warrants, dock receipts, warehouse receipts and other documents of Grantor, whether or not negotiable, and includes all other documents which purport to be issued by a bailee or agent and purport to cover goods in any bailee's or agent's possession which are either identified or are fungible portions of an identified mass, including such documents of title made available to Grantor for the purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in a manner preliminary to their sale or exchange, in each case whether now existing or hereafter acquired or arising. "Equipment" means all now existing or hereafter acquired equipment of Grantor in all of its forms, wherever located, and in any event includes any and all machinery, furniture, equipment, furnishings and fixtures in which Grantor now or hereafter acquires any right, and all other goods and tangible personal property (other than Inventory), including tools, parts and supplies, automobiles, trucks, tractors and other vehicles, computer and other electronic data processing equipment and other office equipment, computer programs and related data processing software, and all additions, substitutions, replacements, parts, accessories, and accessions to and for the foregoing, now owned or hereafter acquired, and including any of the foregoing which are or are to become fixtures on real property. "Filing Offices" has the meaning set forth in Section 3(a). "General Intangibles" means all general intangibles of Grantor, now existing or hereafter acquired or arising, and in any event includes: (i) all tax and other refunds, rebates or credits of every kind and nature to which Grantor is now or hereafter may become entitled; (ii) all good will, choses in action and causes of action, whether legal or equitable, whether in contract or tort and however arising; (iii) all Intellectual Property; (iv) all rights of stoppage in transit, replevin and reclamation; (v) all licenses, permits, consents, indulgences and rights of whatever kind issued in favor of or otherwise recognized as belonging to Grantor by any Governmental Authority; (vi) all indemnity agreements, guaranties, insurance policies and other contractual, equitable and legal rights of whatever kind or nature; and (vii) all rights to receive payment and other rights arising under any Swap Contracts; in each case whether now existing or hereafter acquired or arising. "Grantor" has the meaning set forth in the first paragraph hereof. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Instruments" means any and all negotiable instruments and every other writing which evidences a right to the payment of money, wherever located and whether now existing or hereafter acquired. G-3 214 "Intellectual Property" means the following properties and assets owned or held by Grantor or in which Grantor otherwise has any interest, now existing or hereafter acquired or arising: (i) all patents and patent applications, domestic or foreign, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such patents, patent applications and patent licenses as described in Schedule 2), all rights to sue for past, present or future infringement thereof, all rights arising in connection with any of the foregoing and pertaining thereto and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof; all copyrights and applications for copyright (including with respect to the Arbitron Databases and the Material Arbitron Software), domestic or foreign, together with the underlying works of authorship (including titles), whether or not the underlying works of authorship have been published and whether said copyrights are statutory or arise under the common law, and all other rights and works of authorship (including the copyrights and copyright applications described in Schedule 2), all rights, claims and demands in any way relating to any such copyrights or works, including royalties and rights to sue for past, present or future infringement, and all rights of renewal and extension of copyright; (ii) all state (including common law), federal and foreign trademarks, service marks and trade names, and applications for registration of such trademarks, service marks and trade names, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such marks, names, applications and licenses as described in Schedule 2), whether registered or unregistered and wherever registered, all rights to sue for past, present or future infringement or unconsented use thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and renewals thereof; (iii) all trade secrets, trade dress, trade styles, logos, other source of business identifiers, mask-works, mask-work registrations, mask-work applications, software (including all Material Arbitron Software and Material Software Additions), confidential information, customer lists, license rights, advertising materials, operating manuals, methods, processes, know-how, algorithms, formulae, databases (including all Arbitron Databases), quality control procedures, product, service and technical specifications, operating, production and quality control manuals, sales literature, drawings, specifications, blue prints, descriptions, inventions, name plates and catalogs; (iv) the entire goodwill of or associated with the businesses now or hereafter conducted by Grantor connected with and symbolized by any of the aforementioned properties and assets; and (v) all intellectual property rights and property of the Grantor now existing or hereafter arising, covered by any Supplemental IP Security Agreement executed by Grantor from time to time in accordance with Section 3(c). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January _____, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the "Note Holders" (as defined therein). G-4 215 "Inventory" means any and all of Grantor's inventory in all of its forms, wherever located, whether now owned or hereafter acquired, and in any event includes all goods (including goods in transit) which are held for sale, lease or other disposition, including those held for display or demonstration or out on lease or consignment or to be furnished under a contract of service, or which are raw materials, work in process, finished goods or materials used or consumed in Grantor's business, and the resulting product or mass, and all repossessed, returned, rejected, reclaimed and replevied goods, together with all parts, components, supplies packing, and other materials used or usable in connection with the manufacture, production, packing, shipping, advertising, selling or furnishing of such goods; and all other items hereafter acquired by Grantor by way of substitution, replacement, return, repossession or otherwise, and all additions and accessions thereto, and any Document representing or relating to any of the foregoing at any time. "Investment Property" means any and all investment property of Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, and whether now existing or hereafter acquired or arising. "Letter of Credit Proceeds" means any and all proceeds of written letters of credit. "Material Arbitron Software" means all computer operation and application programs of Grantor listed on Schedule 2. "Material Software Addition" means any update, release, version, patch, debugging program, compilation, or beta in respect of Material Arbitron Software, and any and all computer operation and application programs, including all object and source code and all copies and encodings thereof, purchased, created or otherwise acquired by Grantor after the Closing Date. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. G-5 216 "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower, the Note Holders party thereto. "Partnership Collateral" means any and all limited and general partnership interests and limited liability company interests of any type or nature, whether now existing or hereafter acquired or arising. "Patent and Trademark Office" means the United States Patent and Trademark Office. "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Collateral or other assets of Grantor, including "proceeds" as defined at UCC Section 9306, any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Grantor from time to time with respect to any of the Collateral, any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), any and all other amounts from time to time paid or payable under or in connection with any of the Collateral or for or on account of any damage or injury to or conversion of any Collateral by any Person, any and all other tangible or intangible property received upon the sale or disposition of Collateral, and all proceeds of proceeds. "Rights to Payment" means all Accounts and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Instruments, Investment Property and Proceeds. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent, any of the Credit Agents and any Debt Participant, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or hereafter created under, arising out of, or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase agreement), and any obligations under any of the Swap Documents. "Software Copyright Filing" has the meaning specified in Section 5(q)(v)(B). "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Grantor and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Grantor and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. G-6 217 "Supplemental IP Security Agreement" means a Supplemental IP Security Agreement substantially in the form of Exhibit I of the Credit Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit Agreement, and the terms and conditions of which may derive from, and be incorporated by reference to, this Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Loan Party under any Swap Document, (c) any documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. "UCC Financing Statements" has the meaning specified in Section 4(f). (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Agents, and each of them), and hereby G-7 218 grants to the Collateral Agent (for the benefit of the Credit Agents, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the following property, wherever located and whether now existing or owned or hereafter acquired or arising (collectively, the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; (iii) all Deposit Accounts; (iv) all Documents; (v) all Equipment; (vi) all General Intangibles; (vii) all Inventory; (viii) all Books; (ix) all products and Proceeds of any and all of the foregoing; and (x) all Letter of Credit Proceeds. Notwithstanding the foregoing provisions of this Section 2(a), such grant of security interest shall not extend to, and the term "Collateral" shall not include, any Intellectual Property which is now held or hereafter held by Grantor as licensee, lessee or otherwise, to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. (b) Grantor Remains Liable. Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of the rights hereunder shall not release Grantor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall any such Person be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder. (c) Continuing Security Interest. Grantor agrees that this Agreement shall create continuing security interests in the Collateral which shall remain in effect until terminated in accordance with Section 23. G-8 219 SECTION 3 Perfection Procedures. Grantor shall duly complete, execute and deliver to the Collateral Agent and each of the Credit Agents concurrently with the execution of this Agreement, and at any time and from time to time, all Supplemental IP Security Agreements, financing statements, continuation statements, termination statements, security agreements, chattel mortgages, assignments, patent, copyright and trademark collateral assignments, fixture filings, warehouse receipts, Account Control Agreements, documents of title, affidavits, reports, notices, schedules of account, letters of authority and all other documents and instruments, in form satisfactory to the Administrative Agent, and take all other action, as the Collateral Agent (upon instruction of the Instructing Group) may request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interests in the Collateral for the benefit of each of the Credit Agents and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Grantor shall from time to time take the following actions: (a) Filing of Security Agreements; Financing Statements. On or prior to the Closing Date Grantor shall execute, notarize and deliver (i) an original of this Agreement, (ii) such original UCC Financing Statements and (iii) such original Supplemental IP Security Agreements as the Collateral Agent at the instruction of the Instructing Group may reasonably request; all duly completed and in final form for recordation at the offices described in Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor shall execute, notarize and deliver original completed UCC Financing Statements for filing or recording in the appropriate filing office or offices in any state identified by a Grantor in a notice delivered pursuant to Section 5(e). (b) Deposit Accounts. On or prior to the Closing Date Grantor shall execute such Account Control Agreements, notices, and shall take such other action, as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interests in Collateral for the benefit of each of the Credit Agents consisting of Deposit Accounts and to accomplish the purposes of this Agreement. (c) Intellectual Property Collateral. (i) Patents; etc. Promptly following any submission, filing or recordation required pursuant to subsection (iv) of Section 5(q) (except as provided in subsection (c)(ii) with respect to certain copyrights), record such duly completed, signed and notarized Supplemental IP Security Agreement with the Patent and Trademark Office or Copyright Office, as applicable, and take such other action as may be necessary, or as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect or protect the Collateral Agent's security interests in such Intellectual Property for the benefit of each of the Credit Agents. Grantor shall promptly, but in any event not later than ten days after any such recordation, deliver to the Collateral Agent and each Credit Agent true and complete copies of all file-stamped applications, disclosure documents and amendments, and all file-stamped Supplemental IP Security Agreements recorded at the Patent and Trademark Office. (ii) Copyrights. Grantor shall: G-9 220 (A) Promptly following any submission, filing or recordation required pursuant to subsection (v) of Section 5(q), duly complete, execute, notarize and record a Supplemental IP Security Agreement at the Copyright Office and take such other actions as may be necessary or appropriate in the discretion of the Collateral Agent at the instruction of the Instructing Group to perfect or protect the Collateral Agent's security interests in (I) all Database Copyright Filings for such quarter, and (II) all Software Copyright Filings made since the most recently filed Supplemental IP Security Agreement; and (B) take such other action as may be necessary, or the Collateral Agent may reasonably request, to perfect or protect the Collateral Agent's security interests in the Intellectual Property. (iii) The Grantor hereby authorizes the Collateral Agent to modify, amend or supplement the Schedules hereto and to reexecute this Agreement and any Supplemental IP Security Agreement from time to time on the Grantor's behalf and as its attorney-in-fact to include any such future Collateral and to cause to such reexecuted Agreement, Supplemental IP Security Agreement or such modified, amended or supplemented Schedules to be filed with the Copyright Office or the Patent and Trademark Office. (d) Documents, Etc. Within five calendar days after receipt, Grantor shall deliver to the Collateral Agent, or an agent designated by it, for the benefit of the Credit Agents, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Documents and Chattel Paper, and all other Rights to Payment at any time evidenced by promissory notes, trade acceptances or other instruments, not already delivered hereunder pursuant to this Section 3; provided, however, that unless an Event of Default shall have occurred and be continuing, Grantor shall not be required to deliver any Document, Chattel Paper, promissory note, trade acceptance or other instrument having a face amount not in excess of $100,000. Upon the request of the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with such legends as the Collateral Agent shall reasonably specify. SECTION 4 Representations and Warranties. In addition to the representations and warranties of the Grantor set forth in the Credit Agreement, which are incorporated and restated herein by this reference, and which are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, Grantor further represents and warrants to each Credit Party that: (a) Location of Chief Executive Office and Collateral. Grantor's chief executive office and principal place of business is located at the address set forth in Schedule 1, and all other locations where Grantor conducts business or Collateral is kept are set forth in Schedule 1. (b) Locations of Books. All locations where Books pertaining to the Rights to Payment are kept, including all equipment necessary for accessing such Books and the names and addresses of all service bureaus, computer or data processing companies and other Persons keeping any Books or collecting Rights to Payment for Grantor, are set forth in Schedule 1. G-10 221 (c) Trade Names and Trade Styles. All trade names and trade styles under which Grantor presently conducts the Arbitron Business operations are set forth in Schedule 1, and, except as set forth in Schedule 1 and in connection with the Transaction, Grantor has not, at any time in the past year: (i) been known as or used any other corporate, trade or fictitious name; (ii) changed its name; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv) acquired through asset purchase or otherwise any business of any Person. (d) Ownership of Collateral. Grantor is, and, subject to Section 5(i), will continue to be, the sole and complete owner of the Collateral, or has a valid and enforceable leasehold or licensee's interest in such Collateral as set forth in Schedule 2 and in accordance with subsection (i) of this Section 4 (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in such Collateral, will be the sole and complete owner thereof, or will have a valid and enforceable leasehold or licensee's interest in such Collateral, to the extent permitted hereunder or under the Credit Agreement), free from any Lien other than Permitted Liens. (e) Enforceability; Priority of Security Interest. (i) This Agreement together with such Supplemental IP Security Agreements as have been executed by Grantor and filed at the Copyright Office or Patent and Trademark Office in respect of the Intellectual Property create security interests which are enforceable against the Collateral in which Grantor now has rights and will create security interests which are enforceable against any Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights. (ii) The Collateral Agent has a perfected and first priority security interest in the Collateral in which Grantor now has rights, and will have a perfected and first priority security interest in the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights, in each case for the Credit Agent's benefit and, subject only to Permitted Liens, securing the payment and performance of the Secured Obligations. (f) Other Financing Statements. Other than (i) financing statements or other filings naming the owner of the asset to which such Lien relates as debtor, under the UCC, copyright, patent, or trademark or any comparable law ("UCC Financing Statements") disclosed to the Administrative Agent prior to the Effective Date and listed on Schedule 5.17 of the Credit Agreement, and (ii) UCC Financing Statements in favor of the Collateral Agent for itself and the Credit Agents pursuant to the Credit Documents, no effective UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like or covering all or any part of the Collateral is on file in any filing or recording office in any jurisdiction, except in connection with Permitted Liens. (g) Rights to Payment. (i) The Rights to Payment represent valid, binding and enforceable obligations of the account debtors or other Persons obligated thereon, representing undisputed, bona fide transactions completed in accordance with the terms and provisions contained in any documents related thereto, and are and will be genuine, free from Liens, and not subject to any adverse claims, counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages, holdbacks or conditions precedent of any kind of character, except to the extent reflected by the G-11 222 Grantor's reserves for uncollectible Rights to Payment or to the extent, if any, that such account debtors or other Persons may be entitled to normal and ordinary course trade discounts, returns, adjustments and allowances in accordance with Section 5(m), or as otherwise disclosed to the Credit Agents in writing or occurring in the ordinary course of business; (ii) to the best of Grantor's knowledge, all account debtors and other obligors on Rights to Payment are solvent and generally paying their debts as they come due, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (iii) all Rights to Payment comply in all material respects with all applicable laws concerning form, content and manner of preparation and execution, including where applicable any federal or state consumer credit laws; (iv) Grantor has not assigned any of its rights under the Rights to Payment except as provided in this Agreement or as set forth in the other Credit Documents; (v) all statements made, all unpaid balances and all other information in the Books and other documentation relating to the Rights to Payment in all material respects are true and correct and what they purport to be; and (vi) Grantor has no knowledge of any fact or circumstance which would materially impair the validity or collectibility of any of such Rights to Payment, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (h) Inventory. No Inventory is stored with any bailee, warehouseman or similar Person or on any premises leased to Grantor, nor has any Inventory been consigned to Grantor or consigned by Grantor to any Person or is held by Grantor for any Person under any "bill and hold" or other arrangement, except at locations listed in Schedule 1. (i) Intellectual Property. (i) As of the Closing Date, except as set forth in Schedule 2, (A) Grantor (directly or through any Subsidiary) does not own, possess or use under any licensing arrangement (other than ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business) Intellectual Property materially related to the Arbitron Business, and (B) Grantor (directly or through any Subsidiary) has no registrations or applications therefor pending before any Governmental Authority, that are or may be materially related to the Arbitron Business, for any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron Software, Material Software Additions or Arbitron Databases for which any such application was submitted after December 31, 1998, (III) copyrights in respect of "Radio Market Reports" of Grantor for which any such application was submitted after December 1, 2000, or (IV) any other copyrights for which such application was submitted after December 31, 1999. (ii) All Grantor's Intellectual Property is subsisting and has not been adjudged invalid or unenforceable in whole or in part. G-12 223 (iii) All maintenance fees required to be paid by Grantor on account of any of its patents have been timely paid for maintaining such patents in force, and, to the best of Grantor's knowledge, each of such patents is valid and enforceable. (iv) To the best of Grantor's knowledge, no infringement or unauthorized use presently is being made of any Intellectual Property by any Person that could reasonably be expected to have a Material Adverse Effect. (v) Grantor is the owner or licensee of its Intellectual Property and the past, present and contemplated future use of such Intellectual Property by Grantor has not, does not and will not infringe or violate any right, privilege or license agreement of or with any other Person in any material respect. (vi) Grantor owns, has material rights under, is a party to, or an assignee of a party to all Intellectual Property necessary and appropriate to continue to conduct the Arbitron Business. (vii) The Arbitron Databases purchased developed or otherwise acquired by Grantor since December 31, 1998 are protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (viii) The Material Arbitron Software is protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (ix) Grantor's Intellectual Property consisting of patents are protected under current, valid and enforceable patents or applications therefor issued by the Patent and Trademark Office and under the U.S. patent laws (except with respect to such patents that have expired of their own terms, and not as the result of any abandonment, dispute or settlement). (j) Equipment. As of the Closing Date, none of the Equipment is leased from any Person, except as set forth in UCC record searches delivered to the Collateral Agent or as otherwise disclosed to the Administrative Agent and the other Credit Agents. (k) Deposit Accounts. The names and addresses of all financial institutions at which Grantor maintains its Deposit Accounts, and the account numbers and account names of such Deposit Accounts, are set forth in Schedule 1. No Deposit Account Control Agreements exist with respect to any Investment Property other than any Deposit Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. (l) Instruments. (i) Grantor has not previously assigned any interest in any Instruments (other than such interests as will be released on or before the date hereof), (ii) no Person other than Grantor owns an interest in the Instruments (whether as joint holders, participants or otherwise), (iii) all Instruments are owing only to Grantor, and (iv) no material default exists under or in respect of the Instruments. G-13 224 (m) Other Investment Property. All securities accounts of the Grantor and other Investment Property of the Grantor are set forth in Schedule 1. No Account Control Agreements exist with respect to any Investment Property other than any Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. SECTION 5 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied, Grantor agrees that: (a) Defense of Collateral. Grantor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or the Collateral Agent's rights or interest in, the Collateral. (b) Preservation of Collateral. Grantor shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral. (c) Compliance with Laws, Etc. Grantor shall comply in all material respects with all laws, regulations and ordinances (including with respect to the Fair Labor Standards Act), and with all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral. (d) Location of Books and Chief Executive Office. Grantor shall: (i) keep all Books pertaining to the Rights to Payment at the locations set forth in Schedule 1; and (ii) give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (A) any changes in any such location where Books pertaining to the Rights to Payment are kept, including any change of name or address of any service bureau, computer or data processing company or other Person preparing or maintaining any Books or collecting Rights to Payment for Grantor or (B) any changes in the location of Grantor's chief executive office or principal place of business. (e) Location of Collateral. If any Collateral of Grantor shall be physically relocated to, or otherwise be physically located in, a state of the United States in which a financing statement has not already been filed with respect to such Collateral, Grantor shall give the Collateral Agent and each Credit Agent prompt notice thereof (and in any event not later than one Business Day after becoming aware thereof). (f) Change in Name, Identity or Structure. Grantor shall give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (i) any change in its name, (ii) any change of its jurisdiction of incorporation or the location of its chief executive offices, (iii) any changes in, additions to or other modifications of its trade names used as the name of Grantor set forth in Schedule 1, and (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (g) Maintenance of Records. Grantor shall keep accurate and complete Books with respect to the Collateral, disclosing the Collateral Agent's security interests hereunder for the benefit of the Credit Agents. G-14 225 (h) Invoicing of Sales. The Grantor will invoice all of its sales upon forms customary in the industry and to maintain proof of delivery and customer acceptance of goods. (i) Disposition of Collateral. Grantor shall not surrender or lose possession of (other than to a Credit Agent), sell, lease, rent, or otherwise dispose of or transfer any of the Collateral or any right or interest therein, except to the extent expressly permitted by the Credit Agreement. (j) Liens. (i) Grantor shall keep the Collateral free of all Liens except Permitted Liens. (ii) Notwithstanding any other provision contained herein or in the Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a transfer of goods free of the Collateral Agent's security interests under Section 9307 UCC, except that Dispositions expressly permitted by Sections 7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j) thereof shall be free of such security interests. Accordingly, all non-excluded Dispositions shall be subject at all times to the Liens of the Collateral Agent. (k) Expenses. The Grantor will pay all expenses of protecting, storing, warehousing, insuring, handling and shipping the Collateral. (l) Leased Premises. At the Collateral Agent's request, Grantor shall obtain from each Person from whom Grantor leases any premises at which any Collateral is at any time present such subordination, waiver, consent and estoppel agreements as the Administrative Agent may reasonably require, in form and substance satisfactory to the Administrative Agent. (m) Rights to Payment. Grantor shall: (i) with such frequency as the Collateral Agent may reasonably require, furnish to the Collateral Agent (A) master customer listings, including all names and addresses, together with copies or originals (as requested by the Administrative Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts; (B) accurate records and summaries of Accounts, including detailed agings specifying the name, face value and date of each invoice, and listings of Accounts that are disputed or have been cancelled; and (C) such other information relating to the Accounts as the Collateral Agent shall from time to time reasonably request; (ii) give only normal discounts, allowances and credits as to Accounts and other Rights to Payment, in the Ordinary Course of Business, according to normal trade practices, and enforce all Accounts and other Rights to Payment strictly in accordance with their terms or pursuant to Grantor's Ordinary Course of Business, and during the existence of an Event of Default, take all such action to such end as may from time to time be reasonably requested by the Collateral Agent, except that Grantor may at any time grant any extension of the time for payment or enter into any agreement to make a rebate or otherwise to reduce the amount owing on or with respect to, or compromise or settle for less than the full amount thereof, any Account or other Right to Payment, in the Ordinary Course of Business, according to normal trade practices; G-15 226 (iii) if any discount, allowance, credit, extension of time for payment, agreement to make a rebate or otherwise to reduce the amount owing on, or compromise or settle, an Account or other Right to Payment exists or occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to an Account or other Right to Payment, disclose such fact to the Collateral Agent in the Books relating to such Account or other Right to Payment when such Books are requested for inspection by the Collateral Agent, and in connection with any invoice or report furnished by Grantor to the Collateral Agent relating to such Account or other Right to Payment; (iv) if Accounts in an amount in excess of $500,000 for any and all such Accounts arise from contracts with the United States or any department, agency or instrumentality thereof, promptly notify the Collateral Agent thereof and execute any documents and instruments and take any other steps reasonably requested by the Collateral Agent in order that all monies due and to become due thereunder shall be assigned to the Collateral Agent and notice thereof given to the federal authorities under the Federal Assignment of Claims Act (provided that such assignment and notice shall not be required if the applicable contract prohibits assignment); (v) in accordance with its sound business judgment perform and comply in all material respects with its obligations in respect of the Accounts and other Rights to Payment; (vi) subject to Section 7, upon the request of the Collateral Agent (A) at any time, notify all or any designated portion of the account debtors and other obligors on the Rights to Payment of the security interests hereunder, and (B) if there exists any Default or Event of Default, notify the account debtors and other obligors on the Rights to Payment or any designated portion thereof that payment shall be made directly to the Collateral Agent or to such other Person or location as the Collateral Agent shall specify; and (vii) if there exists any Default or Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts and other Rights to Payment as the Administrative Agent shall require. (n) Deposit Accounts and Securities Accounts. Grantor shall give the Collateral Agent immediate notice of the establishment of any new Deposit Account and any new securities account with respect to any Investment Property. (o) Inventory. Grantor shall: (i) at such times as the Collateral Agent shall reasonably request, prepare and deliver to the Collateral Agent a report of all Inventory, in form and substance reasonably satisfactory to the Collateral Agent ; (ii) upon the request of the Collateral Agent, take a physical listing of the Inventory and promptly deliver a copy of such physical listing to the Collateral Agent; and (iii) not store any Inventory with a bailee, warehouseman or similar Person or on premises leased to Grantor, nor dispose of any Inventory on a bill-and-hold, guaranteed sale, G-16 227 sale and return, sale on approval, consignment or similar basis, nor acquire any Inventory from any Person on any such basis, except in the ordinary course of business and in accordance with its normal practices. (p) Equipment. Grantor shall, upon the Collateral Agent's request, deliver to the Collateral Agent a report of each item of Equipment, in form and substance reasonably satisfactory to the Collateral Agent. (q) Intellectual Property Collateral. Grantor shall: (i) not allow or suffer any Intellectual Property to become abandoned, nor any registration thereof to be terminated, forfeited, expired or dedicated to the public, except for Intellectual Property having negligible commercial value; (ii) not enter into any agreements or transactions (including any license, sublicense or royalty agreement) pertaining to any Intellectual Property outside of the ordinary course of business, or enter into any exclusive license or sublicense of any Intellectual Property, except in a transaction permitted under the Credit Documents; (iii) promptly give the Collateral Agent notice of any rights Grantor may obtain to any new patentable inventions, copyrightable works or other new Intellectual Property, prior to the registration or recordation thereof (including pursuant to this Section 5(q)) as to which Grantor (a) has received gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during any of the five fiscal years preceding such time or (b) reasonably projects that it will receive gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during the any of the subsequent five fiscal years; provided that Grantor shall have no obligation to provide notice under this subsection (iii) to the extent that Grantor has satisfied, or within the immediately following three calendar months will satisfy, subsection (iv) or (v), as applicable, of this Section 5(q); (iv) not less frequently than once every three calendar months and, additionally, upon the purchase, creation or other acquisition of any Material Software Addition, diligently record, register or prosecute, as applicable, all applications for patents, copyrights and trademarks, and diligently record, register and prosecute, as applicable, any and all continuations, continuations-in-part, applications for reissue, applications for certificate of correction and like matters in respect of Grantor's Intellectual Property as shall be reasonable and appropriate in accordance with prudent business practice, and promptly and timely pay any and all maintenance, license, registration and other fees, taxes and expenses incurred in connection with any Intellectual Property; and, without limiting the generality of the foregoing, (v) (A) not less frequently than once every three calendar months, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws any and all additions, modifications or other changes to the Arbitron Databases (each, a "Database Copyright Filing") since the Closing Date; and (B) not less frequently than once every three calendar months and, additionally, promptly after any purchase, creation or other acquisition of any Material Software Addition, submit such duly completed, signed and notarized copyright G-17 228 registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws each Material Software Addition (each, a "Software Copyright Filing"); and (vi) not less frequently than once ever three calendar months, and promptly but in any event not later than ten days after any and all recordations described in subsections (iv) and (v) of this Section 5(q), and after any and all recordations described in Section 3(c), deliver to the Collateral Agent and each Credit Agent all such duly completed, file-stamped (or otherwise certificated or acknowledged) and recorded documents together with such other documents and information as the Collateral Agent or any Credit Agent may reasonably request. (r) Notices, Reports and Information. Subject to Section 3(c), Grantor shall (i) notify the Collateral Agent and each Credit Agent of any material claim made or asserted against the Collateral by any Person and of any change in the composition of the Collateral or other event which could materially adversely affect the value of the Collateral or the Lien thereon in favor of the Collateral Agent (for the benefit of the Credit Agents); (ii) furnish to the Collateral Agent and each Credit Agent such statements and schedules further identifying and describing the Collateral and such other reports and other information in connection with the Collateral as the Collateral Agent at the instruction of the Instructing Group may reasonably request, all in reasonable detail; and (iii) upon reasonable request of the Collateral Agent or any Credit Agent make such demands and requests for information and reports as Grantor is entitled to make in respect of the Collateral. (s) Insurance. (i) Grantor shall carry and maintain in full force and effect, at the expense of the Grantor and with financially sound and reputable insurance companies, insurance for itself and the Collateral Agent for the benefit of the Credit Agents, with respect to the Collateral in such amounts, with such deductibles and covering such risks as shall be specified in the Credit Agreement. Upon the request of the Collateral Agent, at the instruction of the Instructing Group, and in any event not less often than annually, Grantor shall furnish the Collateral Agent and each Credit Agent with full information as to the insurance carried by it and, if so requested, copies of all such insurance policies. All insurance policies required under this subsection (s) shall provide that they shall not be terminated or cancelled nor shall any such policy be materially changed without at least 30 days' prior written notice to the Grantor and the Collateral Agent (or 10 days' prior written notice if the Collateral Agent consents to such shorter notice). Receipt of notice of termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder shall entitle the Collateral Agent to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to the first sentence of this subsection (s) or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Grantor. (ii) If Collateral of Grantor with a value exceeding $1,000,000 (the "Settlement Consent Threshold") shall be materially damaged or destroyed, in whole or in part, by fire or other casualty, Grantor shall give prompt notice thereof to the Collateral Agent and each Credit Agent. No settlement on account of any loss on any Collateral covered by insurance shall be made for less than insured value without the consent of the Collateral Agent (with the consent of the Instructing Group), unless, so long as there exists no Default or Event of Default, the total value of each such loss or series of related losses so compromised does not exceed the G-18 229 Settlement Consent Threshold. Unless there exists any Default or Event of Default, the Collateral Agent (upon instruction of the Instructing Group) shall promptly execute such necessary consents, waivers and endorsements to permit Grantor to settle losses the total aggregate value of which is in an amount less than the Settlement Consent Threshold, and to receive payment therefor, as reasonably requested by Grantor. After the occurrence and during the continuance of an Event of Default, or as otherwise required under any of the Credit Documents, all sums payable to Grantor by any insurer with respect to a casualty relating to all or any part of the Collateral shall be paid to the Collateral Agent (upon instruction of the Instructing Group). If Grantor shall receive any insurance proceeds which are to be paid to the Collateral Agent pursuant to the previous sentence, Grantor shall hold such proceeds in trust for the Collateral Agent and shall segregate such proceeds from other funds of Grantor, and shall immediately forward such proceeds in the form received to the Collateral Agent (appropriately indorsed by Grantor to the order of the Collateral Agent or in such other manner as shall be satisfactory to the Collateral Agent, upon instruction of the Instructing Group). All such insurance proceeds may be retained by the Collateral Agent as part of Collateral hereunder and held in the Proceeds Account, applied by the Collateral Agent toward payment of all or part of the Secured Obligations in such order as is provided herein, or released to Grantor upon its request with the consent of the Instructing Group. (t) Other Swap Obligations. Grantor shall not enter into any swap contract under or subject to a Specified Swap Agreement, other than a Specified Swap Contract. SECTION 6 Administration of the Rights to Payment. (a) Collection of Rights to Payment. Until the Collateral Agent exercises its rights hereunder to collect Rights to Payment, Grantor shall endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the Rights to Payment. At the request of the Collateral Agent, upon instruction of the Instructing Group, if there exists at such time any Event of Default, all remittances received by Grantor shall be held in trust for the Collateral Agent and, in accordance with the Collateral Agent's instructions, remitted to the Collateral Agent or deposited to an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). (b) Investment Property and Instruments. At the request of the Collateral Agent, upon instruction of the Instructing Group, if there exists at such time any Event of Default, the Collateral Agent shall be entitled, subject to the Intercreditor Agreement, to receive all distributions and payments of any nature with respect to any Investment Property or Instruments, and all such distributions or payments received by Grantor shall be held in trust for the Collateral Agent and, in accordance with any of the its instructions (with the consent of the Instructing Group), remitted to the Collateral Agent or deposited to an account with the Administrative Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). If there exists any Default or Event of Default any such distributions and payments with respect to any Investment Property held in any securities account shall be held and retained in such securities account, in each case as part of the Collateral hereunder. Additionally, the Collateral Agent shall have the right, if there exists any Default or Event of Default, following prior written notice to Grantor, to vote and to give consents, ratifications and waivers with respect to any Investment Property and Instruments, and to exercise all rights of G-19 230 conversion, exchange, subscription or any other rights, privileges or options pertaining thereto, as if the Collateral Agent was the absolute owner thereof; provided that the Collateral Agent shall have no duty to exercise any of the foregoing rights afforded to it and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. (e) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of this Section 6 shall be held in trust for the benefit of the Collateral Agent and be segregated from the other property or funds of Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. SECTION 7 Authorization; Appointment as Attorney-in-Fact. The Collateral Agent shall have the right to, in the name of Grantor, or in the name of any of the Credit Parties or otherwise, without notice to or assent by Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and any officers or employees or agents designated by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with full power and authority to: (i) sign any of the financing statements and Supplemental IP Security Agreements which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of the security interests in the Collateral of the Collateral Agent (for the benefit of the Credit Agents) and file any such financing statements and Supplemental IP Security Agreements by electronic means with or without a signature as authorized or required by applicable law or filing procedures; (ii) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds of any Collateral; (iii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors; (iv) notify the U.S. Postal Service and other postal authorities to change the address for delivery of mail addressed to Grantor to such address as Collateral Agent may designate (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment; (v) receive, open and dispose of all mail addressed to Grantor (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); (vi) send requests for verification of Rights to Payment to the customers or other obligors of Grantor; G-20 231 (vii) contact, or direct Grantor to contact, all account debtors and other obligors on the Rights to Payment and instruct such account debtors and other obligors to make all payments directly to the Collateral Agent; (viii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (ix) exercise dominion and control over, and refuse to permit further withdrawals from, Deposit Accounts maintained with Bank of America or any other bank, financial institution or other Person; (x) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Collateral Agent; (xi) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Collateral Agent with respect to the Collateral; (xii) execute any and all applications, documents, papers and instruments necessary for the Collateral Agent to use the Intellectual Property and grant or issue any exclusive or non-exclusive license or sublicense with respect to any Intellectual Property; (xiii) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; (xiv) execute and deliver to any securities intermediary or other Person any entitlement order, Account Control Agreement or other notice, document or instrument which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Investment Property and the security interest of the Collateral therein; and (xv) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Grantor, which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Collateral and security interests of the Collateral Agent therein and to accomplish the purposes of this Agreement. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent pursuant to clauses G-21 232 (ii) through (xiii), (xiv)(A) and (xv)(A). The foregoing power of attorney is coupled with an interest and irrevocable so long as any of the Secured Obligations has not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, any and all acts that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 7. SECTION 8 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which Grantor has agreed to perform or pay under or in connection with this Agreement, and which Grantor has failed to perform or pay as and when due, and Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 8. SECTION 9 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. SECTION 10. Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to in this Agreement, the Credit Agreement or any other Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, Grantor agrees that: (i) The Collateral Agent may peaceably and without notice enter any premises of Grantor; take possession of any Collateral; remove, prohibit access to or use of, or dispose of all or part of the Collateral on any premises of Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may determine. (ii) The Collateral Agent may require Grantor to assemble all or any part of the Collateral and make it available to the Collateral Agent, at any place and time designated by the Collateral Agent. (iii) The Collateral Agent may use or transfer any of Grantor's rights and interests in any Intellectual Property, by license, by sublicense (to the extent permitted by an applicable license) or otherwise, on such conditions and in such manner as the Collateral Agent (upon instruction of the Instructing Group) may determine. G-22 233 (iv) The Collateral Agent may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law). (v) The Collateral Agent may withdraw (or cause to be withdrawn) any and all funds from any Deposit Accounts or securities accounts. (vi) The Collateral Agent may sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Grantor's assets, without charge or liability to the Collateral agent or any of the Credit Parties therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit or for future delivery without assumption of any credit risk, all as the Collateral Agent (upon instruction of the Instructing Group) deem advisable; provided, however, that Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Collateral Agent shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. (b) License. For the purpose of enabling the Collateral Agent to exercise its rights and remedies under this Section 10 or otherwise in connection with this Agreement, Grantor hereby grants to Collateral Agent for the benefit of the Credit Agents an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense any Intellectual Property. (c) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated at such time as there may exist an Event of Default (including with respect to undrawn amounts under any Letter of Credit or contingent amounts due under any Specified Swap Agreement arising from any Specified Swap Contract), the Collateral Agent, at its election, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for the benefit of the Credit Agents for such purpose (which shall constitute a Deposit Account included within the Collateral hereunder) until such time as the Collateral Agent may elect to apply such proceeds to the Secured Obligations, and Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. Grantor agrees that the G-23 234 Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives until the termination of the security interests granted under this Agreement in accordance with Section 23 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent or any of the Credit Parties to honor drafts against the Proceeds Account. (d) Application of Proceeds. Subject to subsection (c), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 11 Certain Waivers. Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent, or any of the Credit Parties (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands against the Collateral Agent, or any of the Credit Parties arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral. SECTION 12 Notices. All notices or other communications hereunder shall be given in the manner and to the addresses specified in, and shall be effective as provided in, the Credit Agreement; provided, however, that notices hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender or such replacement Swap Provider as may be appointed from time to time pursuant to the terms of the Intercreditor Agreement, and (b) the Note Holders shall be delivered to such Persons at the address specified in the Note Purchase Agreement, or to such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement. SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent, or any of the Credit Parties to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent, or any of the Credit Parties. SECTION 14 Indemnification; Other Charges. G-24 235 (a) Indemnification. The Grantor hereby agrees to indemnify the Collateral Agent and the Credit Parties, and the other Lenders, and their respective directors, officers, employees, agents, counsel and other advisors (each an "Indemnified Person") against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any Indemnified Person, in any way relating to or arising out of this Agreement or the transactions contemplated hereby or any action taken or omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not be liable to any Indemnified Person with respect to Indemnified Liabilities resulting from such Indemnified Person's gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (b) Other Charges. The Grantor agrees to indemnify the Collateral Agent and the Credit Parties against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (c) Interest. Any amounts payable to the any Indemnified Person under this Section 14 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate, (a) for the Administrative Agent and any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for the Note Holders as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 15 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Grantor, each Indemnified Person referred to in Section 14 and their respective successors and assigns. SECTION 16 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT G-25 236 PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 18 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent (for the benefit of the Credit Agents), and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 19, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 19 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision G-26 237 of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 20 Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Each of the parties hereto understands and agrees that this Agreement may be delivered by any party hereto or thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Collateral Agent or any Credit Agent of a facsimile transmitted document purportedly bearing the signature of a Grantor shall bind Grantor with the same force and effect as the delivery of a hard copy original. Any failure by the Collateral Agent or any Credit Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Collateral Agent or such Credit Party. SECTION 21 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Credit Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this Agreement and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 23 Termination; Releases. (i) Upon the termination of the Commitments of the Lenders, the surrender of any Letters of Credit issued for the account of Grantor under the Credit Agreement and payment and performance in full of all Secured Obligations, the security interests granted under this Agreement shall terminate and the Collateral Agent and all Credit Agents shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence termination of all security interests given by Grantor to the Collateral Agent hereunder; provided, however, that the obligations of Grantor under Section 14 shall survive such termination. (ii) Concurrently with any permitted disposition of Collateral under the Credit Documents, the security interests hereunder shall automatically be released from the Collateral so disposed of, subject to Section 5(j); provided, however, that the security interests shall continue in the Proceeds thereof. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent and all Credit Agents shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Collateral provided by this Section. Any such release shall specifically describe the portion of the Collateral to be released, shall be G-27 238 expressed to be unconditional and shall be without recourse or warranty (other than a warranty that the Collateral Agent and the Credit Agents have not assigned their rights and interests to any other Person). SECTION 24 Assumption. Upon execution and delivery to the Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the effective date of such Subsidiary Security Agreement, such Subsidiary shall be deemed a Grantor party hereto, and this Agreement shall be deemed amended to include any amendments to the Schedules provided by such Subsidiary in connection therewith. SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] G-28 239 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. CERIDIAN CORPORATION Grantor By: ------------------------------- Name: Title: BANK OF AMERICA, N.A., as Collateral By: ------------------------------- Name: Title: G-29 240 SCHEDULE 1 to the Security Agreement 1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF COLLATERAL a. Chief Executive Office and Principal Place of Business: b. Other locations where Grantor conducts business or Collateral is kept: 2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT 3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES; ETC. 4. DEPOSIT ACCOUNTS SCHEDULE 1-1 241 5. INVESTMENT PROPERTY 6. INSTRUMENTS 7. LEASED EQUIPMENT 8. MATERIAL SOFTWARE SCHEDULE 1-2 Exhibits to Arbitron Credit Agreement 242 SCHEDULE 2 to the Security Agreement (a) ISSUED PATENTS OF GRANTOR

Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- -----

(b) PENDING PATENT APPLICATIONS OF GRANTOR

Grantor Application No. Filing Date Inventors Title - ------- --------------- ----------- --------- -----

(c) TRADEMARKS OF GRANTOR

Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ----

(d) PENDING TRADEMARK APPLICATIONS OF GRANTOR

Application Grantor No. Filing Date Applicant Mark ------- --- ----------- --------- ----

(e) COPYRIGHTS OF GRANTOR

Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- -------------

SCHEDULE 2-1 Exhibits to Arbitron Credit Agreement 243 (f) COPYRIGHT APPLICATIONS OF GRANTOR

Grantor Title Date of Application ------- ----- -------------------

(g) COPYRIGHT LICENSES OF GRANTOR

Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- -------------

SCHEDULE 2-2 Exhibits to Arbitron Credit Agreement 244 SCHEDULE 3 to the Security Agreement FILING OFFICES SCHEDULE 3-1 Exhibits to Arbitron Credit Agreement 245 EXHIBIT H [SUBSIDIARY] SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __, 2001, is made by and among _____________ (the "Grantor") in favor of the "Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined in herein); and (c) the Note Holders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a condition precedent to the borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent, for the ratable benefit of the Credit Agents, the security interests hereinafter provided to secure the obligations of the Grantor described below. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit accounts for purposes of Article 9 of the UCC or applicable law. "Accounts" means any and all accounts of Grantor, whether now existing or hereafter acquired or arising, and in any event includes all accounts receivable, contract rights, royalties, Rights to Payment and other obligations of any kind owed to Grantor arising out of or in connection with the sale, lease, license or other transfer of Intellectual Property, merchandise, goods or commodities or the rendering of services or arising from any other transaction, however evidenced, and whether or not earned by performance, all guaranties, indemnities and security with respect to the foregoing, and all letters of credit relating thereto, in each case whether now existing or hereafter acquired or arising. "Arbitron Databases" means any and all of Grantor's collections or compilations of data, stored in such way as to permit selective search and retrieval using electronic, H-1 Exhibits to Arbitron Credit Agreement 246 electromagnetic, manual or mechanical methods, which relate to Grantor's business, and wherever maintained, collected or accessed. "Books" means all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including: (i) ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets (including Inventory and Rights to Payment), business operations or financial condition; (iii) computer programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and output of whatever kind; (vi) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (vii) any and all other rights now or hereafter arising out of any contract or agreement between Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of Grantor's books or records or with credit reporting, including with regard to Grantor's Accounts. "Borrower" has the meaning specified in the Credit Agreement. "Chattel Paper" means all writings of whatever sort which evidence a monetary obligation and a security interest in or lease of specific goods, whether now existing or hereafter arising. "Collateral" has the meaning set forth in Section 2. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Documents" means, collectively, the Loan Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Database Copyright Filing" has the meaning set forth in Section 5(q)(v)(A). "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Deposit Account" means any demand, time, savings, passbook or like account now or hereafter maintained by or for the benefit of Grantor with a bank, savings and loan H-2 Exhibits to Arbitron Credit Agreement 247 association, credit union or like organization (including Bank of America) and all funds and amounts therein, whether or not restricted or designated for a particular purpose. "Documents" means any and all documents of title, bills of lading, dock warrants, dock receipts, warehouse receipts and other documents of Grantor, whether or not negotiable, and includes all other documents which purport to be issued by a bailee or agent and purport to cover goods in any bailee's or agent's possession which are either identified or are fungible portions of an identified mass, including such documents of title made available to Grantor for the purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in a manner preliminary to their sale or exchange, in each case whether now existing or hereafter acquired or arising. "Equipment" means all now existing or hereafter acquired equipment of Grantor in all of its forms, wherever located, and in any event includes any and all machinery, furniture, equipment, furnishings and fixtures in which Grantor now or hereafter acquires any right, and all other goods and tangible personal property (other than Inventory), including tools, parts and supplies, automobiles, trucks, tractors and other vehicles, computer and other electronic data processing equipment and other office equipment, computer programs and related data processing software, and all additions, substitutions, replacements, parts, accessories, and accessions to and for the foregoing, now owned or hereafter acquired, and including any of the foregoing which are or are to become fixtures on real property. "Filing Offices" has the meaning set forth in Section 3(a). "General Intangibles" means all general intangibles of Grantor, now existing or hereafter acquired or arising, and in any event includes: (i) all tax and other refunds, rebates or credits of every kind and nature to which Grantor is now or hereafter may become entitled; (ii) all good will, choses in action and causes of action, whether legal or equitable, whether in contract or tort and however arising; (iii) all Intellectual Property; (iv) all rights of stoppage in transit, replevin and reclamation; (v) all licenses, permits, consents, indulgences and rights of whatever kind issued in favor of or otherwise recognized as belonging to Grantor by any Governmental Authority; (vi) all indemnity agreements, guaranties, insurance policies and other contractual, equitable and legal rights of whatever kind or nature; and (vii) all rights to receive payment and other rights under any Swap Contracts; in each case whether now existing or hereafter acquired or arising. "Grantor" has the meaning set forth in the first paragraph hereof. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Instruments" means any and all negotiable instruments and every other writing which evidences a right to the payment of money, wherever located and whether now existing or hereafter acquired. H-3 Exhibits to Arbitron Credit Agreement 248 "Intellectual Property" means the following properties and assets owned or held by Grantor or in which Grantor otherwise has any interest, now existing or hereafter acquired or arising: (i) all patents and patent applications, domestic or foreign, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such patents, patent applications and patent licenses as described in Schedule 2), all rights to sue for past, present or future infringement thereof, all rights arising in connection with any of the foregoing and pertaining thereto and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof; all copyrights and applications for copyright (including with respect to the Arbitron Databases and the Material Arbitron Software), domestic or foreign, together with the underlying works of authorship (including titles), whether or not the underlying works of authorship have been published and whether said copyrights are statutory or arise under the common law, and all other rights and works of authorship (including the copyrights and copyright applications described in Schedule 2), all rights, claims and demands in any way relating to any such copyrights or works, including royalties and rights to sue for past, present or future infringement, and all rights of renewal and extension of copyright; (ii) all state (including common law), federal and foreign trademarks, service marks and trade names, and applications for registration of such trademarks, service marks and trade names, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such marks, names, applications and licenses as described in Schedule 2), whether registered or unregistered and wherever registered, all rights to sue for past, present or future infringement or unconsented use thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and renewals thereof; (iii) all trade secrets, trade dress, trade styles, logos, other source of business identifiers, mask-works, mask-work registrations, mask-work applications, software (including all Material Arbitron Software and all Material Software Additions), confidential information, customer lists, license rights, advertising materials, operating manuals, methods, processes, know-how, algorithms, formulae, databases (including all Arbitron Databases), quality control procedures, product, service and technical specifications, operating, production and quality control manuals, sales literature, drawings, specifications, blue prints, descriptions, inventions, name plates and catalogs; and (iv) the entire goodwill of or associated with the businesses now or hereafter conducted by Grantor connected with and symbolized by any of the aforementioned properties and assets; and (v) all intellectual property rights and property of the Grantor now existing or hereafter arising, covered by any Supplemental IP Security Agreement executed by Grantor from time to time in accordance with Section 3(c). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the "Note Holders" (as defined therein). H-4 Exhibits to Arbitron Credit Agreement 249 "Inventory" means any and all of Grantor's inventory in all of its forms, wherever located, whether now owned or hereafter acquired, and in any event includes all goods (including goods in transit) which are held for sale, lease or other disposition, including those held for display or demonstration or out on lease or consignment or to be furnished under a contract of service, or which are raw materials, work in process, finished goods or materials used or consumed in Grantor's business, and the resulting product or mass, and all repossessed, returned, rejected, reclaimed and replevied goods, together with all parts, components, supplies packing, and other materials used or usable in connection with the manufacture, production, packing, shipping, advertising, selling or furnishing of such goods; and all other items hereafter acquired by Grantor by way of substitution, replacement, return, repossession or otherwise, and all additions and accessions thereto, and any Document representing or relating to any of the foregoing at any time. "Investment Property" means any and all investment property of Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, and whether now existing or hereafter acquired or arising. "Letter of Credit Proceeds" means any and all proceeds of written letters of credit. "Material Arbitron Software" means all computer operation and application programs of Grantor listed on Schedule 2. "Material Software Addition" means any update, release, version, patch, debugging program, compilation, or beta in respect of Material Arbitron Software, and any and all computer operation and application programs, including all object and source code and all copies and encodings thereof, purchased, created or otherwise acquired by Grantor after the Closing Date. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. H-5 Exhibits to Arbitron Credit Agreement 250 "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower, the Note Holders party thereto. "Partnership Collateral" means any and all limited and general partnership interests and limited liability company interests of any type or nature, whether now existing or hereafter acquired or arising. "Patent and Trademark Office" means the United States Patent and Trademark Office. "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Collateral or other assets of Grantor, including "proceeds" as defined at UCC Section 9306, any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Grantor from time to time with respect to any of the Collateral, any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), any and all other amounts from time to time paid or payable under or in connection with any of the Collateral or for or on account of any damage or injury to or conversion of any Collateral by any Person, any and all other tangible or intangible property received upon the sale or disposition of Collateral, and all proceeds of proceeds. "Rights to Payment" means all Accounts and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Instruments, Investment Property and Proceeds. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent, any of the Credit Agents and any Debt Participant whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or hereafter created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any obligations under any of the Swap Documents. "Software Copyright Filing" has the meaning set forth in Section 5(q)(v)(B). "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Borrower and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Borrower and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. H-6 Exhibits to Arbitron Credit Agreement 251 "Supplemental IP Security Agreement" means a Supplemental IP Security Agreement substantially in the form of Exhibit I of the Credit Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit Agreement, and the terms and conditions of which may derive from, and be incorporated by reference to, this Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Loan Party under any Swap Document, (c) any documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. "UCC Financing Statements" has the meaning specified in Section 4(f). (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Agents, and each of them), and hereby H-7 Exhibits to Arbitron Credit Agreement 252 grants to the Collateral Agent (for the benefit of the Credit Agents, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the following property, wherever located and whether now existing or owned or hereafter acquired or arising (collectively, the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; (iii) all Deposit Accounts; (iv) all Documents; (v) all Equipment; (vi) all General Intangibles; (vii) all Inventory; (viii) all Books; (ix) all products and Proceeds of any and all of the foregoing; and (x) all Letter of Credit Proceeds. Notwithstanding the foregoing provisions of this Section 2(a), such grant of security interest shall not extend to, and the term "Collateral" shall not include, Intellectual Property which is now or hereafter held by Grantor as licensee, lessee or otherwise, to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. (b) Grantor Remains Liable. Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of the rights hereunder shall not release Grantor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall any such Person be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder. (c) Continuing Security Interest. Grantor agrees that this Agreement shall create continuing security interests in the Collateral which shall remain in effect until terminated in accordance with Section 23. H-8 Exhibits to Arbitron Credit Agreement 253 SECTION 3 Perfection Procedures. Grantor shall duly complete, execute and deliver to the Collateral Agent and each of the Credit Agents concurrently with the execution of this Agreement, and at any time and from time to time, all Supplemental IP Security Agreements, financing statements, continuation statements, termination statements, security agreements, chattel mortgages, assignments, patent, copyright and trademark collateral assignments, fixture filings, warehouse receipts, Account Control Agreements, documents of title, affidavits, reports, notices, schedules of account, letters of authority and all other documents and instruments, in form satisfactory to the Administrative Agent, and take all other action, as the Collateral Agent may request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interest in the Collateral for the benefit of each of the Credit Agents and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Grantor shall from time to time take the following actions: (a) Filing of Security Agreements; Financing Statements. On or prior to the Closing Date Grantor shall execute, notarize and deliver (i) an original of this Agreement; (ii) such original UCC Financing Statements and (iii) such original Supplemental IP Security Agreements as the Collateral Agent at the instruction of the Instructing Group may reasonably request; all duly completed and in final form for recordation at the offices described in Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor shall execute, notarize and deliver completed UCC Financing Statements for filing or recording in the appropriate filing or recording office or offices in any state identified by a Grantor in a notice delivered to the Administrative Agent pursuant Section 5(e). (b) Deposit Accounts. On or prior to the Closing Date, Grantor shall execute such Account Control Agreements, notices, and shall take such other action, as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interests in Collateral for the benefit of each of the Credit Agents consisting of Deposit Accounts and to accomplish the purposes of this Agreement. (c) Intellectual Property Collateral. (i) Patents, Etc. Promptly following any submission, filing or recordation required pursuant to subsection (iv) of Section 5(q) (except as provided in subsection (c)(ii) with respect to certain copyrights), record such duly completed, signed and notarized Supplemental IP Security Agreement with the Patent and Trademark Office or Copyright Office, as applicable, and take such other action as may be necessary, or as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect or protect the Collateral Agent's security interests in such Intellectual Property for the benefit of each of the Credit Agents. Grantor shall promptly, but in any event not later than ten days after any such recordation, deliver to the Collateral Agent and each Credit Agent true and complete copies of all file-stamped applications, disclosure documents and amendments, and all file-stamped Supplemental IP Security Agreements recorded at the Patent and Trademark Office. (ii) Copyrights. Grantor shall: H-9 Exhibits to Arbitron Credit Agreement 254 (A) Promptly following any submission, filing or recordation required pursuant to subsection (v) of Section 5(q), duly complete, execute, notarize and record a Supplemental IP Security Agreement at the Copyright Office and take such other actions as may be necessary or appropriate in the discretion of the Collateral Agent at the instruction of the Instructing Group to perfect or protect the Collateral Agent's security interests in (I) all Database Copyright Filings for such quarter, and (II) all Software Copyright Filings made since the most recently filed Supplemental IP Security Agreement; and (B) take such other action as may be necessary, or as the Collateral Agent may reasonably request, to perfect or protect the Collateral Agent's security interests in the Intellectual Property for the benefit of the Credit Agents. (iii) The Grantor hereby authorizes the Collateral Agent to modify, amend or supplement the Schedules hereto and to reexecute this Agreement and any Supplemental IP Security Agreement from time to time on the Grantor's behalf and as its attorney-in-fact to include any such future Collateral and to cause to such reexecuted Agreement, Supplemental IP Security Agreement or such modified, amended or supplemented Schedules to be filed with the Copyright Office or the Patent and Trademark Office. (d) Documents, Etc. Within five calendar days after receipt, Grant shall deliver to the Collateral Agent, or an agent designated by it, for the benefit of the Credit Agents, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Documents and Chattel Paper, and all other Rights to Payment at any time evidenced by promissory notes, trade acceptances or other instruments, not already delivered hereunder pursuant to this Section 3; provided, however, that unless an Event of Default shall have occurred and be continuing, Grantor shall not be required to deliver any Document, Chattel Paper, promissory note, trade acceptance or other instrument having a face amount not in excess of $100,000. Upon the request of the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with such legends as the Collateral Agent shall reasonably specify. SECTION 4 Representations and Warranties. In addition to the representations and warranties of the Grantor set forth in the Credit Agreement, which are incorporated and restated herein by this reference, and which are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, Grantor further represents and warrants to each Credit Party that: (a) Location of Chief Executive Office and Collateral. Grantor's chief executive office and principal place of business is located at the address set forth in Schedule 1, and all other locations where Grantor conducts business or Collateral is kept are set forth in Schedule 1. (b) Locations of Books. All locations where Books pertaining to the Rights to Payment are kept, including all equipment necessary for accessing such Books and the names and addresses of all service bureaus, computer or data processing companies and other Persons keeping any Books or collecting Rights to Payment for Grantor, are set forth in Schedule 1. H-10 Exhibits to Arbitron Credit Agreement 255 (c) Trade Names and Trade Styles. All trade names and trade styles under which Grantor presently conducts the Arbitron Business operations are set forth in Schedule 1, and, except as set forth in Schedule 1 and in connection with the Transaction, Grantor has not, at any time in the past year: (i) been known as or used any other corporate, trade or fictitious name; (ii) changed its name; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv) acquired through asset purchase or otherwise any business of any Person. (d) Ownership of Collateral. Grantor is, and, subject to Section 5(i), will continue to be, the sole and complete owner of the Collateral, or has a valid and enforceable leasehold or licensee's interest in such Collateral as set forth in Schedule 2 and in accordance with subsection (i) of this Section 4 (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in such Collateral, will be the sole and complete owner thereof, or will have a valid and enforceable leasehold or licensee's interest in such Collateral, to the extent permitted hereunder or under the Credit Agreement), free from any Lien other than Permitted Liens. (e) Enforceability; Priority of Security Interest. (i) This Agreement together with such Supplemental IP Security Agreements as have been executed by Grantor and filed at the Copyright Office or the Patent and Trademark Office in respect of the Intellectual Property create security interests which are enforceable against the Collateral in which Grantor now has rights and will create security interests which are enforceable against the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights. (ii) The Collateral Agent has a perfected and first priority security interest in the Collateral in which Grantor now has rights, and will have a perfected and first priority security interest in the Collateral in which Grantor now has rights and will create a security interest in any Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights, in each case for the Credit Agents' benefit and, subject only to Permitted Liens, securing the payment and performance of the Secured Obligations. (f) Other Financing Statements. Other than (i) financing statements or similar filings naming the owner of the asset to which such Lien relates as debtor, under the UCC, copyright, patent, trademark or any comparable law ("UCC Financing Statements") disclosed to the Administrative Agent prior to the Effective Date and (i) UCC Financing Statements in favor of the Collateral Agent for itself and the Credit Agents pursuant to the Credit Documents, no effective UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like or covering all or any part of the Collateral is on file in any filing or recording office in any jurisdiction, except in connection with Permitted Liens. (g) Rights to Payment. (i) The Rights to Payment represent valid, binding and enforceable obligations of the account debtors or other Persons obligated thereon, representing undisputed, bona fide transactions completed in accordance with the terms and provisions contained in any documents related thereto, and are and will be genuine, free from Liens, and not subject to any H-11 Exhibits to Arbitron Credit Agreement 256 adverse claims, counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages, holdbacks or conditions precedent of any kind of character, except to the extent reflected by the Grantor's reserves for uncollectible Rights to Payment or to the extent, if any, that such account debtors or other Persons may be entitled to normal and ordinary course trade discounts, returns, adjustments and allowances in accordance with Section 5(m), or as otherwise disclosed to the Credit Agents in writing or occurring in the ordinary course of business; (ii) to the best of Grantor's knowledge, all account debtors and other obligors on Rights to Payment are solvent and generally paying their debts as they come due, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (iii) all Rights to Payment comply in all material respects with all applicable laws concerning form, content and manner of preparation and execution, including where applicable any federal or state consumer credit laws; (iv) Grantor has not assigned any of its rights under the Rights to Payment except as provided in this Agreement or as set forth in the other Credit Documents; (v) all statements made, all unpaid balances and all other information in the Books and other documentation relating to the Rights to Payment in all material respects are true and correct and what they purport to be; and (vi) Grantor has not any knowledge of any fact or circumstance which would materially impair the validity or collectibility of any of such Rights to Payment, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (h) Inventory. No Inventory is stored with any bailee, warehouseman or similar Person or on any premises leased to Grantor, nor has any Inventory been consigned to Grantor or consigned by Grantor to any Person or is held by Grantor for any Person under any "bill and hold" or other arrangement, except at locations listed in Schedule 1. (i) Intellectual Property. (i) As of the Closing Date, except as set forth in Schedule 2, (A) Grantor (directly or through any Subsidiary) does not own, possess or use under any licensing arrangement (other than ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business) Intellectual Property materially related to the Arbitron Business, and (B) Grantor (directly or through any Subsidiary) has no registrations or applications therefor pending before any Governmental Authority, that are or may be materially related to the Arbitron Business, for any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron Software, Material Software Additions or Arbitron Databases for which any such application was submitted after December 31, 1998, (III) copyrights in respect of "Radio Market Reports" of Grantor for which any such application was submitted after December 1, 2000, or (IV) any other copyrights for which such application was submitted after December 31, 1999. H-12 Exhibits to Arbitron Credit Agreement 257 (ii) All Grantor's Intellectual Property is subsisting and has not been adjudged invalid or unenforceable in whole or in part. (iii) All maintenance fees required to be paid by Grantor on account of any of its patents have been timely paid for maintaining such patents in force, and, to the best of Grantor's knowledge, each of such patents is valid and enforceable. (iv) To the best of Grantor's knowledge, no infringement or unauthorized use presently is being made of any Intellectual Property by any Person that could reasonably be expected to have a Material Adverse Effect. (v) Grantor is the owner or licensee of its Intellectual Property and the past, present and contemplated future use of such Intellectual Property by Grantor has not, does not and will not infringe or violate any right, privilege or license agreement of or with any other Person in any material respect. (vi) Grantor owns, licenses, has material rights under, is a party to, or an assignee of a party to all other Intellectual Property necessary and appropriate to continue to conduct the Arbitron Business. (vii) The Arbitron Databases are protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (viii) The Material Arbitron Software is protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (ix) Grantor's Intellectual Property consisting of patents are protected under current, valid and enforceable patents or applications therefor issued by the Patent and Trademark Office and under the U.S. patent laws (except with respect to such patents that have expired of their own terms, and not as the result of any abandonment, dispute or settlement). (j) Equipment. As of the Closing Date, none of the Equipment is leased from any Person, except as set forth in UCC record searches delivered to the Collateral Agent or as otherwise disclosed to the Administrative Agent and the other Credit Agents. (k) Deposit Accounts. The names and addresses of all financial institutions at which Grantor maintains its Deposit Accounts, and the account numbers and account names of such Deposit Accounts, are set forth in Schedule 1. No Deposit Account Control Agreements exist with respect to any Investment Property other than any Deposit Account Control Agreements in favor of the Collateral Agent for the benefit of the Collateral Agent for the benefit of the Credit Agents. (l) Instruments. (i) Grantor has not previously assigned any interest in any Instruments (other than such interests as will be released on or before the date hereof), (ii) no Person other than Grantor owns an interest in the Instruments (whether as joint holders, H-13 Exhibits to Arbitron Credit Agreement 258 participants or otherwise), (iii) all Instruments are owing only to Grantor, and (iv) no material default exists under or in respect of the Instruments. (m) Other Investment Property. All securities accounts of the Grantor and other Investment Property of the Grantor are set forth in Schedule 1. No Account Control Agreements exist with respect to any Investment Property other than any Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. SECTION 5 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied, Grantor agrees that: (a) Defense of Collateral. Grantor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or the Collateral Agent's right or interest in, the Collateral. (b) Preservation of Collateral. Grantor shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral. (c) Compliance with Laws, Etc. Grantor shall comply in all material respects with all laws, regulations and ordinances (including with respect to the Fair Labor Standards Act), and with all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral. (d) Location of Books and Chief Executive Office. Grantor shall: (i) keep all Books pertaining to the Rights to Payment at the locations set forth in Schedule 1; and (ii) give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (A) any changes in any such location where Books pertaining to the Rights to Payment are kept, including any change of name or address of any service bureau, computer or data processing company or other Person preparing or maintaining any Books or collecting Rights to Payment for Grantor or (B) any changes in the location of Grantor's chief executive office or principal place of business. (e) Location of Collateral. If any Collateral of Grantor shall be physically relocated to, or otherwise be physically located in, a state of the United States in which a financing statement has not already been filed with respect to such Collateral, Grantor shall give the Collateral Agent and each Credit Agent prompt notice thereof (and in any event not later than one Business Day after becoming aware thereof). (f) Change in Name, Identity or Structure. Grantor shall give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (i) any change in its name, (ii) any change of its jurisdiction of incorporation or the location of its chief executive offices, (iii) any changes in, additions to or other modifications of its trade names used as the name of Grantor set forth in Schedule 1, and (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. H-14 Exhibits to Arbitron Credit Agreement 259 (g) Maintenance of Records. Grantor shall keep accurate and complete Books with respect to the Collateral, disclosing the Collateral Agent's security interests hereunder for the benefit of the Credit Agents. (h) Invoicing of Sales. The Grantor will invoice all of its sales upon forms customary in the industry and to maintain proof of delivery and customer acceptance of goods. (i) Disposition of Collateral. Grantor shall not surrender or lose possession of (other than to a Credit Agent), sell, lease, rent, or otherwise dispose of or transfer any of the Collateral or any right or interest therein, except to the extent expressly permitted by the Credit Documents. (j) Liens. (i) Grantor shall keep the Collateral free of all Liens except Permitted Liens. (ii) Notwithstanding any other provision contained herein or in the Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a transfer of goods free of the Collateral Agent's security interests under Section 9307 UCC, except that Dispositions expressly permitted by Sections 7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j) thereof shall be free of such security interests. Accordingly, all non-excluded Dispositions shall be subject at all times to the Liens of the Collateral Agent for the benefit of the Credit Agents. (k) Expenses. The Grantor will pay all expenses of protecting, storing, warehousing, insuring, handling and shipping the Collateral. (l) Leased Premises. At the Collateral Agent's request, Grantor shall obtain from each Person from whom Grantor leases any premises at which any Collateral is at any time present such subordination, waiver, consent and estoppel agreements as the Collateral Agent may reasonably require, in form and substance satisfactory to the Collateral Agent. (m) Rights to Payment. Grantor shall: (i) with such frequency as the Collateral Agent for the benefit of the Credit Agents may reasonably require, furnish to the Collateral Agent and each Credit Agent (A) master customer listings, including all names and addresses, together with copies or originals (as requested by the Collateral Agent or any Credit Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts; (B) accurate records and summaries of Accounts, including detailed agings specifying the name, face value and date of each invoice, and listings of Accounts that are disputed or have been cancelled; and (C) such other information relating to the Accounts as any of the Credit Agents shall from time to time reasonably request; (ii) give only normal discounts, allowances and credits as to Accounts and other Rights to Payment, in the Ordinary Course of Business, according to normal trade practices, and enforce all Accounts and other Rights to Payment strictly in accordance with their H-15 Exhibits to Arbitron Credit Agreement 260 terms or pursuant to Grantor's Ordinary Course of Business, and during the existence of an Event of Default, take all such action to such end as may from time to time be reasonably requested by Collateral Agent, except that Grantor may at any time grant any extension of the time for payment or enter into any agreement to make a rebate or otherwise to reduce the amount owing on or with respect to, or compromise or settle for less than the full amount thereof, any Account or other Right to Payment, in the Ordinary Course of Business, according to normal trade practices; (iii) if any discount, allowance, credit, extension of time for payment, agreement to make a rebate or otherwise to reduce the amount owing on, or compromise or settle, an Account or other Right to Payment exists or occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to an Account or other Right to Payment, disclose such fact to the Collateral Agent and the Credit Parties in the Books relating to such Account or other Right to Payment when such Books are requested for inspection by the Collateral Agent, and in connection with any invoice or report furnished by Grantor to the Collateral Agent relating to such Account or other Right to Payment; (iv) if Accounts in an amount in excess of $500,000 for any and all such Accounts arise from contracts with the United States or any department, agency or instrumentality thereof, promptly notify the Collateral Agent and the Credit Parties thereof and execute any documents and instruments and take any other steps reasonably requested by the Collateral Agent in order that all monies due and to become due thereunder shall be assigned to the Collateral Agent and notice thereof given to the federal authorities under the Federal Assignment of Claims Act (provided that such assignment and notice shall not be required if the applicable contract prohibits assignment); (v) in accordance with its sound business judgment perform and comply in all material respects with its obligations in respect of the Accounts and other Rights to Payment; (vi) subject to Section 7, upon the request of the Collateral Agent (A) at any time, notify all or any designated portion of the account debtors and other obligors on the Rights to Payment of the security interests hereunder, and (B) if there exists any Default or Event of Default, notify the account debtors and other obligors on the Rights to Payment or any designated portion thereof that payment shall be made directly to the Collateral Agent or to such other Person or location as the Collateral Agent shall specify; and (vii) if there exists any Default or Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts and other Rights to Payment as the Collateral Agent (upon instruction of the Instructing Group) shall require. (n) Deposit Accounts and Securities Accounts. Grantor shall give the Collateral Agent and the Credit Parties immediate notice of the establishment of any new Deposit Account and any new securities account with respect to any Investment Property. (o) Inventory. Grantor shall: H-16 Exhibits to Arbitron Credit Agreement 261 (i) at such times as the Collateral Agent or any Credit Agent shall reasonably request, prepare and deliver to the Collateral Agent and each Credit Agent a report of all Inventory, in form and substance reasonably satisfactory to the Collateral Agent and each Credit Agent; (ii) upon the request of the Collateral Agent or any Credit Agent, take a physical listing of the Inventory and promptly deliver a copy of such physical listing to the Collateral Agent and each Credit Agent; and (iii) not store any Inventory with a bailee, warehouseman or similar Person or on premises leased to Grantor, nor dispose of any Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment or similar basis, nor acquire any Inventory from any Person on any such basis, except in the ordinary course of business and in accordance with its normal practices. (p) Equipment. Grantor shall, upon the Collateral Agent or any Credit Agent request, deliver to the Collateral Agent and each Credit Agent a report of each item of Equipment, in form and substance reasonably satisfactory to the Collateral Agent and each Credit Agent. (q) Intellectual Property Collateral. Grantor shall: (i) not allow or suffer any Intellectual Property to become abandoned, nor any registration thereof to be terminated, forfeited, expired or dedicated to the public, except for Intellectual Property having negligible commercial value; (ii) not enter into any agreements or transactions (including any license, sublicense or royalty agreement) pertaining to any Intellectual Property outside of the ordinary course of business, or enter into any exclusive license or sublicense of any Intellectual Property, except in a transaction permitted under the Credit Documents; (iii) promptly give the Collateral Agent and each Credit Agent notice of any rights Grantor may obtain to any new patentable inventions, copyrightable works or other new Intellectual Property, prior to the registration or recordation thereof (including pursuant to this Section 5(q)) as to which Grantor (a) has received gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during any of the five fiscal years preceding such time or (b) reasonably projects that it will receive gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during the any of the subsequent five fiscal years; provided that Grantor shall have no obligation to provide notice under this subsection (iii) to the extent that Grantor has satisfied, or within the immediately following three calendar months will satisfy, subsection (iv) or (v), as applicable, of this Section 5(q); (iv) not less frequently than once every three calendar months and, additionally, upon the purchase, creation or other acquisition of any Material Software Addition, diligently record, register or prosecute, as applicable, all applications for patents, copyrights and trademarks, and diligently record, register and prosecute, as applicable, any and all H-17 Exhibits to Arbitron Credit Agreement 262 continuations, continuations-in-part, applications for reissue, applications for certificate of correction and like matters in respect of Grantor's Intellectual Property as shall be reasonable and appropriate in accordance with prudent business practice, and promptly and timely pay any and all maintenance, license, registration and other fees, taxes and expenses incurred in connection with any Intellectual Property; and, without limiting the generality of the foregoing, (v) (A) not less frequently than once every three calendar months, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws any and all additions, modifications or other changes to the Arbitron Databases (each, a "Database Copyright Filing") since the Closing Date; and (B) not less frequently than once every three calendar months and, additionally, promptly after any purchase, creation or other acquisition of any Material Software Addition, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws each Material Software Addition (each, a "Software Copyright Filing"); (vi) not less frequently than once every three calendar months, and promptly but in any event not later than ten days after any and all recordations described in subsections (iv) and (v) of this Section 5(q), and after any and all recordations described in Section 3(c), deliver to the Collateral Agent and each Credit Agent all such duly completed, file-stamped (other otherwise certificated or acknowledged) and recorded documents together with such other documents and information as the Collateral Agent or any Credit Agent may reasonably request. (r) Notices, Reports and Information. Subject to Section 3(c), Grantor shall (i) notify the Collateral Agent and each Credit Agent of any material claim made or asserted against the Collateral by any Person and of any change in the composition of the Collateral or other event which could materially adversely affect the value of the Collateral or the Lien thereon in favor of the Collateral Agent (for the benefit of the Credit Agents); (ii) furnish to the Collateral Agent and each Credit Agent such statements and schedules further identifying and describing the Collateral and such other reports and other information in connection with the Collateral as the Collateral Agent at the instruction of the Instructing Group may reasonably request, all in reasonable detail; and (iii) upon reasonable request of the Collateral Agent of any Credit Agent make such demands and requests for information and reports as Grantor is entitled to make in respect of the Collateral. (s) Insurance. (i) Grantor shall carry and maintain in full force and effect, at the expense of the Grantor and with financially sound and reputable insurance companies, insurance for itself and the Collateral Agent for the benefit of the Credit Agents, with respect to the Collateral in such amounts, with such deductibles and covering such risks as shall be specified in the Credit Agreement. Upon the request of any of the Credit Agents, and in any event not less often than annually, Grantor shall furnish the Collateral Agent and each Credit Agent with full information as to the insurance carried by it and, if so requested, copies of all such insurance policies. All insurance policies required under this subsection (s) shall provide that they shall not be terminated or cancelled nor shall any such policy be materially changed without at least 30 days' prior written notice to the Grantor and the Collateral Agent (or 10 days' prior written notice if the Collateral Agent consents to such shorter notice). Receipt of notice of H-18 Exhibits to Arbitron Credit Agreement 263 termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder shall entitle the Collateral Agent to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to the first sentence of this subsection (s) or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Grantor. (ii) If Collateral of Grantor with a value exceeding $1,000,000 (the "Settlement Consent Threshold") shall be materially damaged or destroyed, in whole or in part, by fire or other casualty, Grantor shall give prompt notice thereof to the Collateral Agent and each Credit Agent. No settlement on account of any loss on any Collateral covered by insurance shall be made for less than insured value without the consent of the Collateral Agent (with the consent of the Instructing Group), unless, so long as there exists no Default or Event of Default, the total value of each such loss or series of related losses so compromised does not exceed the Settlement Consent Threshold. Unless there exists any Default or Event of Default, the Collateral Agent (upon instruction of the Instructing Group) shall promptly execute such necessary consents, waivers and endorsements to permit Grantor to settle losses the total aggregate value of which is in an amount less than the Settlement Consent Threshold, and to receive payment therefor, as reasonably requested by Grantor. After the occurrence and during the continuance of an Event of Default, or as otherwise required under any of the Credit Documents, all sums payable to Grantor by any insurer with respect to a casualty relating to all or any part of the Collateral shall be paid to the Collateral Agent (upon instruction of the Instructing Group). If Grantor shall receive any insurance proceeds which are to be paid to the Collateral Agent pursuant to the previous sentence, Grantor shall hold such proceeds in trust for the Collateral Agent and shall segregate such proceeds from other funds of Grantor, and shall immediately forward such proceeds in the form received to the Collateral Agent (appropriately indorsed by Grantor to the order of the Collateral Agent or in such other manner as shall be satisfactory to the Collateral Agent, upon instruction of the Instructing Group). All such insurance proceeds may be retained by the Collateral Agent as part of Collateral hereunder and held in the Proceeds Account, applied by the Collateral Agent toward payment of all or part of the Secured Obligations in such order as is provided herein, or released to Grantor upon its request with the consent of the Instructing Group. SECTION 6 Administration of the Rights to Payment. (a) Collection of Rights to Payment. Until the Collateral Agent exercises its rights hereunder to collect Rights to Payment, Grantor shall endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the Rights to Payment. At the request of the Collateral Agent, if there exists at such time any Event of Default, all remittances received by Grantor shall be held in trust for the Collateral Agent and, in accordance with the Collateral Agent's instructions (upon instruction from the Instructing Group), remitted to the Collateral Agent or deposited in an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). (b) Investment Property and Instruments. At the request of the Collateral Agent (at the request of the Instructing Group), if there exists at such time any Event of Default, the Collateral Agent shall be entitled, subject to the Intercreditor Agreement, to receive all distributions and payments of any nature with respect to any Investment Property or Instruments, H-19 Exhibits to Arbitron Credit Agreement 264 and all such distributions or payments received by Grantor shall be held in trust for the Collateral Agent and, in accordance with its instructions (with the consent of the Instructing Group), remitted to the Collateral Agent or deposited to an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). If there exists any Default or Event of Default any such distributions and payments with respect to any Investment Property held in any securities account shall be held and retained in such securities account, in each case as part of the Collateral hereunder. Additionally, the Collateral Agent shall have the right, if there exists any Default or Event of Default, following prior written notice to Grantor, to vote and to give consents, ratifications and waivers with respect to any Investment Property and Instruments, and to exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining thereto, as if the Collateral Agent were the absolute owner thereof; provided that the Collateral Agent shall have no duty to exercise any of the foregoing rights afforded to it and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. (e) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of this Section 6 shall be held in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. SECTION 7 Authorization; Appointed Attorney-in-Fact. The Collateral Agent shall have the right to, in the name of Grantor, or in the name of the any of the Credit Parties or otherwise, without notice to or assent by Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and any of the officers or employees or agents designated by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with full power and authority to: (i) sign any of the financing statements and Supplemental IP Security Agreements which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of the security interests and in the Collateral of the Collateral Agent (for the benefit of the Credit Agents) and file any such financing statements and Supplemental IP Security Agreements by electronic means with or without a signature as authorized or required by applicable law or filing procedures; (ii) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds of any Collateral; (iii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors; (iv) notify the U.S. Postal Service and other postal authorities to change the address for delivery of mail addressed to Grantor to such address the Collateral Agent may designate (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment; H-20 Exhibits to Arbitron Credit Agreement 265 (v) receive, open and dispose of all mail addressed to Grantor (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); (vi) send requests for verification of Rights to Payment to the customers or other obligors of Grantor; (vii) contact, or direct Grantor to contact, all account debtors and other obligors on the Rights to Payment and instruct such account debtors and other obligors to make all payments directly to the Collateral Agent; (viii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (ix) exercise dominion and control over, and refuse to permit further withdrawals from, Deposit Accounts maintained with Bank of America or any other bank, financial institution or other Person; (x) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Collateral Agent; (xi) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Collateral Agent with respect to the Collateral; (xii) execute any and all applications, documents, papers and instruments necessary for the Collateral Agent to use the Intellectual Property and grant or issue any exclusive or non-exclusive license or sublicense with respect to any Intellectual Property; (xiii) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; (xiv) execute and deliver to any securities intermediary or other Person any entitlement order, Account Control Agreement or other notice, document or instrument which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Investment Property and the security interests of the Collateral Agent therein; and H-21 Exhibits to Arbitron Credit Agreement 266 (xv) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Grantor, which the Collateral Agent (upon instruction from the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Collateral and the security interests of the Collateral Agent therein and to accomplish the purposes of this Agreement. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to clauses (ii) through (xiii), (xiv)(A) and (xv)(A). The foregoing power of attorney is coupled with an interest and irrevocable so long as any of the Secured Obligations has not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, any and all acts that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 7. SECTION 8 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which Grantor has agreed to perform or pay under or in connection with this Agreement, and which Grantor has failed to perform or pay as and when due, and Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 8. SECTION 9 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. SECTION 10 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this Agreement, the Credit Agreement or any other Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, Grantor agrees that: (i) The Collateral Agent may peaceably and without notice enter any premises of Grantor, take possession of any Collateral, remove, prohibit access to or use of, or dispose of all or part of the Collateral on any premises of Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may determine. H-22 Exhibits to Arbitron Credit Agreement 267 (ii) The Collateral Agent may require Grantor to assemble all or any part of the Collateral and make it available to the Collateral Agent, at any place and time designated by the Collateral Agent. (iii) The Collateral Agent may use or transfer any of Grantor's rights and interests in any Intellectual Property, by license, by sublicense (to the extent permitted by an applicable license) or otherwise, on such conditions and in such manner as the Collateral Agent (upon instruction of the Instructing Group) may determine. (iv) The Collateral Agent may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law). (v) The Collateral Agent may withdraw (or cause to be withdrawn) any and all funds from any Deposit Accounts or securities accounts. (vi) The Collateral Agent may sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Grantor's assets, without charge or liability to the Collateral Agent or any of the Credit Parties therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit or for future delivery without assumption of any credit risk, all as the Collateral Agent (upon instruction of the Instructing Group) deem advisable; provided, however, that Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Collateral Agent shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. (b) License. For the purpose of enabling the Collateral Agent to exercise its rights and remedies under this Section 10 or otherwise in connection with this Agreement, Grantor hereby grants to the Collateral Agent for the benefit of the Credit Agents an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense any Intellectual Property. (c) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated at such time as there may exist an Event of Default (including with respect to undrawn amounts under any Letter of Credit or contingent amounts due under any Specified Swap Agreement arising from any Specified Swap Contract), the Collateral Agent for the benefit of the Credit Agents may, at their election, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion H-23 Exhibits to Arbitron Credit Agreement 268 thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for the benefit of the Credit Agents for such purpose (which shall constitute a Deposit Account included within the Collateral hereunder) until such time as the Collateral Agent may elect to apply such proceeds to the Secured Obligations, and Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives until the termination of the security interests granted under this Agreement in accordance with Section 23 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent, or any of the Credit Parties to honor drafts against the Proceeds Account. (d) Application of Proceeds. Subject to subsection (c), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 11 Certain Waivers. Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent, or any of the Credit Parties (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands against the Collateral Agent, or any of the Credit Parties arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral. SECTION 12 Notices. All notices or other communications hereunder shall be given in the manner and to the addresses specified in, and shall be effective as provided in, the Credit Agreement; provided, however, that notices hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender or such replacement Swap Provider as may be appointed from time to time pursuant to the terms of the Intercreditor Agreement, and (b) the Note Holders shall be delivered to such persons at the address specified in the Note Purchase Agreement, or to such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement. SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent, or any of the Credit Parties to exercise, and no delay in exercising, any right, H-24 Exhibits to Arbitron Credit Agreement 269 remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent, or any of the Credit Parties. SECTION 14 Indemnification; Other Charges. (a) Indemnification. The Grantor hereby agrees to indemnify the Collateral Agent and the Credit Parties, and their respective directors, officers, employees, agents, counsel and other advisors (each an "Indemnified Person") against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any Indemnified Person, in any way relating to or arising out of this Agreement or the transactions contemplated hereby or any action taken or omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not be liable to any Indemnified Person with respect to Indemnified Liabilities resulting from such Indemnified Person's gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (b) Other Charges. The Grantor agrees to indemnify the Collateral Agent and the Credit Parties against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (c) Interest. Any amounts payable to any Indemnified Person under this Section 14 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate, (a) for the Administrative Agent and any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for the Note Holders as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 15 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Grantor, each of the Credit Parties, the Collateral Agent, each Indemnified Person referred to in Section 14 and their respective successors and assigns. SECTION 16 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; H-25 Exhibits to Arbitron Credit Agreement 270 PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 18 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent (for the benefit of the Credit Agents), and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 19, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 19 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the H-26 Exhibits to Arbitron Credit Agreement 271 Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 20 Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Each of the parties hereto understands and agrees that this Agreement may be delivered by any party hereto or thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Collateral Agent or any Credit Agent of a facsimile transmitted document purportedly bearing the signature of a Grantor shall bind Grantor with the same force and effect as the delivery of a hard copy original. Any failure by the Collateral Agent or any Credit Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Collateral Agent or such Credit Party. SECTION 21 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Credit Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this Agreement and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 23 Termination; Releases. (i) Upon the termination of the Commitments of the Lenders, the surrender of any Letters of Credit issued for the account of Borrower under the Credit Agreement and payment and performance in full of all Secured Obligations, the security interests granted under this Agreement shall terminate and the Collateral Agent and all Credit Agents shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence termination of all security interests given by Grantor to the Collateral Agent hereunder; provided, however, that the obligations of Grantor under Section 14 shall survive such termination. H-27 Exhibits to Arbitron Credit Agreement 272 (ii) Concurrently with any permitted disposition of Collateral under the Credit Documents, the security interests hereunder shall automatically be released from the Collateral so disposed of, subject to Section 5(j); provided, however, that the security interests shall continue in the Proceeds thereof. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent and all Credit Agents shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Collateral provided by this Section. Any such release shall specifically describe the portion of the Collateral to be released, shall be expressed to be unconditional and shall be without recourse or warranty (other than a warranty that the Collateral Agent and the Credit Agents have not assigned their rights and interests to any other Person). SECTION 24 Assumption. Upon execution and delivery to the Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the effective date of such Subsidiary Security Agreement, such Guarantor shall be deemed a Grantor party hereto, and this Agreement shall be deemed amended to include any amendments to the Schedules provided by such Subsidiary in connection therewith. SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] H-28 Exhibits to Arbitron Credit Agreement 273 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. [_________________] CORPORATION Grantor By: --------------------------------------- Name: Title: BANK OF AMERICA, N.A., as Collateral Agent By: --------------------------------------- Name: Title: H-29 Exhibits to Arbitron Credit Agreement 274 SCHEDULE 1 to the Security Agreement 1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF COLLATERAL a. Chief Executive Office and Principal Place of Business: b. Other locations where Grantor conducts business or Collateral is kept: 2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT 3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES; ETC. 4. DEPOSIT ACCOUNTS Schedule 1-1 Exhibits to Arbitron Credit Agreement 275 5. INVESTMENT PROPERTY 6. INSTRUMENTS 7. LEASED EQUIPMENT Schedule 1-2 Exhibits to Arbitron Credit Agreement 276 SCHEDULE 2 to the Security Agreement (a) ISSUED PATENTS OF GRANTOR

Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- -----

(b) PENDING PATENT APPLICATIONS OF GRANTOR

Grantor Application No. Filing Date Inventors Title - ------- --------------- ----------- --------- -----

(c) TRADEMARKS OF GRANTOR

Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ----

(d) PENDING TRADEMARK APPLICATIONS OF GRANTOR

Application Grantor No. Filing Date Applicant Mark ------- --- ----------- --------- ----

(e) COPYRIGHTS OF GRANTOR

Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- -------------

Schedule 2-1 Exhibits to Arbitron Credit Agreement 277 (f) COPYRIGHT APPLICATIONS OF GRANTOR

Grantor Title Date of Application ------- ----- -------------------

(g) COPYRIGHT LICENSES OF GRANTOR

Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- -------------

Schedule 2-2 Exhibits to Arbitron Credit Agreement 278 SCHEDULE 3 to the Security Agreement FILING OFFICES Schedule 3-1 Exhibits to Arbitron Credit Agreement 279 EXHIBIT I SUPPLEMENTAL IP SECURITY AGREEMENT THIS SUPPLEMENTAL IP SECURITY AGREEMENT (this "Agreement"), dated as of _________ __, 2001, is made by and among [____________________], a [________] corporation (the "Grantor") in favor of BANK OF AMERICA, N.A., as the Collateral Agent for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"); (b) the "Swap Provider" (as defined in the Security Agreement); and (c) the Note Holders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a covenant the satisfaction of which permits borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent for the benefit of the Credit Parties the security interests hereinafter provided to secure the obligations of the Grantor described below. WHEREAS, the Grantor is party to that Security Agreement dated as of February __, 2001 by and among Grantor[, other Subsidiaries of the Borrower party thereto] and the Collateral Agent for the benefit of the Credit Parties (the "Security Agreement"). NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in subsections (a), (b) and (c) of Section 1 of the Security Agreement. The rules of interpretation set forth in subsection (d) of Section 1 of the Security Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Grant of Security Interest. (a) As a continuing security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Parties, and each of them), and hereby grants to the Collateral Agent (for the benefit of the Credit Parties, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the Intellectual Property, wherever located and whether now existing or owned or hereafter acquired or arising, including without limitation such Intellectual Property described and set forth on Schedule 1 hereto. (b) Notwithstanding the foregoing provisions of this Section 2, the grant of a security interest as provided herein shall not extend to, and the term "Intellectual Property" shall not include, Intellectual Property which is now or hereafter held by Grantor as licensee, lessee or otherwise to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses I-1 Exhibits to Arbitron Credit Agreement 280 governing software products that Grantor purchased in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. SECTION 3 Further Assurances; Appointment of Collateral Agent as Attorney-in-Fact. The Grantor at its expense shall execute and deliver, or cause to be executed and delivered, to the Collateral Agent any and all documents and instruments, in form and substance satisfactory to the Collateral Agent (upon instruction of the Instructing Group), and take any and all action, which the Collateral Agent (upon instruction of the Instructing Group) may request from time to time, to perfect and continue perfected, maintain the priority of or provide notice of the security interest of the Collateral Agent in the Intellectual Property Collateral and to accomplish the purposes of this Agreement. The Collateral Agent shall have the right, in the name of the Grantor, or in the name of the Collateral Agent or any of the Credit Parties or otherwise, upon notice to but without the requirement of assent by the Grantor, and the Grantor hereby constitutes and appoints the Collateral Agent (and any of the Collateral Agent's officers or employees or agents designated by the Collateral Agent) as the Grantor's true and lawful attorney-in-fact with full power and authority, to: (i) sign any financing statements and any other documents and instruments which the Collateral Agent (upon instruction of the Instructing Group) deems necessary or advisable to perfect or continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interest in the Intellectual Property; (ii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; and (iii) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable to maintain, protect, realize upon and preserve the Intellectual Property and the Collateral Agent's security interest therein and to accomplish the purposes of this Agreement, including (A) to defend, settle, adjust or institute any action, suit or proceeding with respect to the Intellectual Property, (B) to assert or retain any rights under any license agreement for any of the Intellectual Property, including without limitation any rights of the Grantor arising under Section 365(n) of the Bankruptcy Code, and (C) to execute any and all applications, documents, papers and instruments for the Collateral Agent to use the Intellectual Property, to grant or issue any exclusive or non-exclusive license or sub-license with respect to any Intellectual Property and to assign, convey or otherwise transfer title in or dispose of the Intellectual Property; provided, however, that the Collateral Agent agrees that, except upon and during the continuance of an Event of Default, it shall not exercise the power of attorney pursuant to clauses (ii) and (iii). The power of attorney set forth in this Section 3, being coupled with an interest, is irrevocable so long as this Agreement shall not have terminated. SECTION 4 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. I-2 Exhibits to Arbitron Credit Agreement 281 SECTION 5 Credit Parties' Rights and Remedies. (a) Upon and during the continuation of a Default, the Collateral Agent shall have all rights and remedies available to it under this Agreement, the Security Agreement and applicable law with respect to the security interests in any of the Intellectual Property. Grantor agrees that such rights and remedies include, but are not limited to, the right of the Collateral Agent as a secured party to sell or otherwise dispose of the Intellectual Property pursuant to the UCC. (b) The cash proceeds actually received from the sale or other disposition or collection of Intellectual Property, and any other amounts received in respect of the Intellectual Property Collateral the application of which is not otherwise provided for herein, shall be applied as provided in the Security Agreement. SECTION 6 Security Agreement. This Agreement is supplementary to and entered into in support of the Security Agreement. The terms and provisions of the Security Agreement are incorporated herein by reference and shall be applied as if fully set forth herein. The Grantor acknowledges that the rights and remedies of the Collateral Agent with respect to the security interests in the Intellectual Property granted hereby are more fully set forth in the Security Agreement and that all such rights and remedies are cumulative. SECTION 7 Independence. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable Laws (including the UCC, patent law, trademark law and copyright law) and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction. SECTION 8 Representations and Warranties. The representations and warranties of the Grantor set forth in the Section 4 of the Security Agreement and incorporated herein by Section 6 hereof are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct as of such earlier date. SECTION 9 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. I-3 Exhibits to Arbitron Credit Agreement 282 CERIDIAN CORPORATION Grantor By: --------------------------------------- Name: Title: BANK OF AMERICA, N.A., as Administrative Agent By: --------------------------------------- Name: Title: I-4 Exhibits to Arbitron Credit Agreement 283 SCHEDULE 1 to the Supplemental IP Security Agreement (a) NEW ISSUED PATENTS OF GRANTOR

Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- -----

(b) PENDING PATENT APPLICATIONS OF GRANTOR

Grantor Application No. Filing Date Inventors Title - ------- --------------- ----------- --------- -----

(c) NEW U.S. TRADEMARKS OF GRANTOR

Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ----

(d) PENDING TRADEMARK APPLICATIONS OF GRANTOR

Application Grantor No. Filing Date Applicant Mark ------- --- ----------- --------- ----

(e) NEW COPYRIGHTS OF GRANTOR

Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- -------------

Schedule 1-1 Exhibits to Arbitron Credit Agreement 284 (f) NEW COPYRIGHT APPLICATIONS OF GRANTOR

Grantor Title Application No. Date of Application ------- ----- --------------- -------------------

(g) NEW COPYRIGHT LICENSES OF GRANTOR

Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- -------------

Schedule 1-2 Exhibits to Arbitron Credit Agreement 285 EXHIBIT J FORM OF BORROWER PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __, 2001, is made among CERIDIAN CORPORATION, a Delaware corporation (the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent for the benefit of: (a) BANK OF AMERICA, N.A., in its capacity as administrative agent (in such capacity, the "Administrative Agent") for the Lenders from time to time party to the Credit Agreement, dated as of January 31, 2001 (the "Credit Agreement"), (b) the "Swap Provider" (as defined herein), and (c) the Note Holders party from time to time to the Note Purchase Agreement. It is a condition precedent to the borrowings under each of the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and pledge to the Collateral Agent the shares of the capital stock of each of the Subsidiaries set forth in Schedule 1 (collectively, the "Subsidiaries"), owned by the Grantor, to secure the obligations of the Grantor described below. Accordingly, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. The rules of interpretation set forth in the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Additional Collateral" means any and all (i) additional capital stock or other equity securities of the Subsidiaries, whether certificated or uncertificated, (ii) warrants, options or other rights entitling the Grantor to acquire any interest in the capital stock or other equity securities of the Subsidiaries, (iii) securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, the Pledged Shares or such additional capital stock or other equity securities, and (iv) cash and non-cash proceeds of the Pledged Shares and any of the foregoing, in each case from time to time received or receivable by, or otherwise paid or distributed to or acquired by, the Grantor. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. J-1 286 "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Documents" means, collectively, the Loan Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Exchange Act" means the Securities Exchange Act of 1934. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Intercreditor Agreement" means that Intercreditor Agreement dated as of January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders. "Investment Property" means any and all investment property of the Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts, commodity accounts and all financial assets held in any securities account or otherwise, wherever located and whether now existing or hereafter arising. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. J-2 287 "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower, the Note Holders party thereto. "Pledged Collateral" has the meaning set forth in Section 2(a). "Pledged Shares" means (a) all of the issued and outstanding shares of capital stock, whether certificated or uncertificated, of the Subsidiaries now owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as more specifically described in Schedule 2, provided, however, that 65% (but no more than 65%) of the issued and outstanding capital stock of any Subsidiary which is a Foreign Subsidiary, measured on a non-diluted basis) shall constitute Pledged Shares hereunder, and (b) all Investment Property. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent (for the benefit of the Credit Agents), whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any obligations under any Specified Swap Agreement to the extent arising out of any Specified Swap Contracts. "Securities Act" means the Securities Act of 1933. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Grantor and the Swap Provider as swap counterparties. "Specific Swap Contract" means any interest rate swap entered into between Grantor and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Loan Party under any Swap Document, (c) any documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. J-3 288 "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent, and hereby grants to the Collateral Agent, a security interest in, all of the Grantor's right, title and interest in, to and under (i) the Pledged Shares and the Additional Collateral and any certificates and instruments now or hereafter representing the Pledged Shares and the Additional Collateral, (ii) all rights, interests and claims with respect to the Pledged Shares and Additional Collateral, including under any and all related agreements, instruments and other documents, and (iii) all books, records and other documentation of the Grantor related to the Pledged Shares and Additional Collateral, in each case whether presently existing or owned or hereafter arising or acquired and wherever located (collectively, the "Pledged Collateral") provided, however, that Pledged Collateral shall not include any of the shares of capital stock of Ceridian Infotech (India) Private Limited, a Subsidiary of the Grantor organized and existing under the laws of India. (b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver to or for the account of the Collateral Agent, at the address and to the Person to be designated by theAdministrative Agent, the certificates representing the Pledged Shares, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with the consent of the Instructing Group). (c) Delivery of Additional Collateral. If the Grantor shall become entitled to receive or shall receive any Additional Collateral, the Grantor shall accept any such Additional Collateral as the agent for the Collateral Agent, shall hold it in trust for the Collateral Agent, shall segregate it from other property or funds of the Grantor, and shall deliver all Additional Collateral and all certificates, instruments and other writings representing such Additional Collateral forthwith to or for the account of the Collateral Agent, at the address and to the Person J-4 289 to be designated by the Collateral Agent upon instruction from the Instructing Group, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with consent of the Instructing Group), as the Collateral Agent shall request, to be held by the Collateral Agent subject to the terms hereof, as part of the Pledged Collateral. Upon accepting any such Additional Collateral hereunder, the Collateral Agent shall promptly send a notification to the Grantor describing the Additional Collateral accepted and held as part of the Pledged Collateral hereunder, which notification shall be deemed to be a Schedule to this Agreement and may be attached hereto. (d) Transfer of Security Interest Other Than by Delivery. If for any reason Pledged Collateral cannot be delivered to or for the account of the Collateral Agent as provided in subsections (b) and (c), the Grantor shall promptly take such other steps as shall be requested from time to time by the Collateral Agent (upon instruction of the Instructing Group) to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent practicable, the Grantor shall thereafter deliver the Pledged Collateral to or for the account of the Collateral Agent as provided in subsections (b) and (c). (e) Continuing Security Interest. The Grantor agrees that this Agreement shall create continuing security interests in and pledge of the Pledged Collateral which shall remain in effect until terminated in accordance with Section 22. SECTION 3 Representations and Warranties. In addition to the representations and warranties of the Grantor made in the Credit Agreement, which are incorporated, remade and reaffirmed herein by this reference, and which are true, complete and accurate as of the date hereof except to the extent such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, the Grantor represents and warrants to the Collateral Agent and each of the Credit Parties that: (a) Valid Issuance of Pledged Collateral. All the Pledged Shares have been, and upon issuance any Additional Collateral will be, duly and validly issued, and are and will be fully paid and non-assessable. (b) Ownership of Pledged Collateral. With respect to the Pledged Shares the Grantor is, and with respect to any Additional Collateral the Grantor will be, the legal record and beneficial owner thereof, and has and will have good and marketable title thereto, subject to no Lien except for the pledge and security interests created by this Agreement. (c) Capitalization of the Subsidiary. The Pledged Shares constitute 100% of the issued and outstanding shares of capital stock of the Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of the Grantor, the Pledged Shares constitute no less than 65% of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis. J-5 290 (d) Options, Warrants, Etc. Other than as set forth in Schedule 2, no securities convertible into or exchangeable for any shares of capital stock of the Subsidiary, or any options, warrants or other commitments entitling any Person to purchase or otherwise acquire any shares of capital stock of the Subsidiary, are issued and outstanding. (e) Transfer Restrictions. There are no restrictions on the transferability of the Pledged Collateral to the Collateral Agent or with respect to the foreclosure, transfer or disposition thereof by the Collateral Agent. (f) Shareholders Agreements. There are no shareholders agreements, voting trusts, proxy agreements or other agreements or understandings which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral. (g) No Violation of Securities Laws. None of the Pledged Shares has been transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such transfer may be subject. (h) Location of Chief Executive Office. The Grantor's chief executive office and principal place of business, and all books and records concerning the Pledged Collateral, are located at __________________, or such other address as to which the Grantor has notified the Collateral Agent in accordance with Section 4(e). (i) Other Financing Statements. Other than (i) financing statements disclosed to the Collateral Agent and (ii) financing statements in favor of the Collateral Agent, no effective financing statement naming the Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or any part of the Pledged Collateral is on file in any filing or recording office in any jurisdiction. (j) Enforceability; Priority of Security Interest. This Agreement (i) creates an enforceable perfected and first priority security interest in and pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b), and (ii) will create an enforceable perfected and first priority security interest in and pledge of the Additional Collateral upon delivery thereof pursuant to Section 2(c) (or upon the taking of such other action with respect thereto as may be requested by the Collateral Agent pursuant to Section 2(d)), in each case securing the payment and performance of the Secured Obligations. The Grantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on the date of each delivery of Pledged Collateral hereunder. SECTION 4 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied or unpaid, the Grantor agrees that: (a) Defense of Pledged Collateral. The Grantor will, at its own expense, appear in and defend any action, suit or proceeding which purports to affect its title to, or right or interest in, the Pledged Collateral or the security interests of the Collateral Agent therein and the pledge to the Collateral Agent thereof. J-6 291 (b) Preservation of Collateral. The Grantor will do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Pledged Collateral. (c) Compliance with Laws, Etc. The Grantor will comply with all laws, regulations and ordinances relating in a material way to the possession, maintenance and control of the Pledged Collateral. (d) Location of Books and Chief Executive Office. The Grantor will: (i) keep all books and records pertaining to the Pledged Collateral at the location set forth in Section 3(h); and (ii) give at least 30 days' prior written notice to the Collateral Agent of (A) any changes in any such location where books and records pertaining to the Pledged Collateral are kept, or (B) any change in the location of the Grantor's chief executive office or principal place of business. (e) Change in Name, Identity or Structure. The Grantor will give at least 30 days' prior written notice to the Collateral Agent of (i) any change in its name, (ii) any changes in, additions to or other modifications of its trade names used as the name of Grantor, and (iii) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (f) Disposition of Pledged Collateral. Except as permitted by the Credit Agreement, the Grantor will not surrender or lose possession of (other than to the Collateral Agent or, with the prior consent of the Collateral Agent, to a depositary or financial intermediary), exchange, sell, convey, assign or otherwise dispose of or transfer the Pledged Collateral or any right, title or interest therein. (g) Liens. Except for Permitted Liens, the Grantor will not create, incur or permit to exist any Liens upon or with respect to the Pledged Collateral, other than the security interests of and pledge to the Collateral Agent created by this Agreement for the benefit of the Credit Agents. (h) Shareholders Agreements. The Grantor will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Collateral. (i) Issuance of Additional Shares. The Grantor will not consent to or approve, or allow the Subsidiary to consent to or approve, the issuance to any Person of any additional shares of any class of capital stock of the Subsidiary, or of any securities convertible into or exchangeable for any such shares, or any warrants, options or other rights to purchase or otherwise acquire any such shares, except as permitted under the Credit Agreement. (j) Notices. The Grantor will deliver promptly to the Collateral Agent all reports and notices received by the Grantor from the Subsidiary in respect of any of the Pledged Collateral. J-7 292 (k) Further Assurances. The Grantor will promptly, upon the written request from time to time of the Collateral Agent, execute, acknowledge and deliver, and file and record, all such financing statements and other documents and instruments, and take all such action, as shall be reasonably necessary to carry out the purposes of this Agreement. SECTION 5 Administration of the Pledged Collateral. (a) Distributions and Voting Prior to an Event of Default. Unless there exists any Default or Event of Default: (i) the Grantor shall be entitled to receive and retain for its own account any cash dividend on or other cash distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor shall have the right to vote the Pledged Collateral and to retain the power to control the direction, management and policies of the Subsidiary to the same extent as the Grantor would if the Pledged Collateral were not pledged to the Collateral Agent pursuant to this Agreement; provided, however, that the Grantor shall not be entitled to receive (A) cash paid, payable or otherwise distributed in redemption of, or in exchange for or in substitution of, any Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction of capital, capital surplus or paid-in-surplus or any other type of recapitalization involving the Subsidiary; and provided further, however, that no vote shall be cast or consent, waiver or ratification given or action taken which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would alter the voting rights with respect to the stock of the Subsidiary or be inconsistent with or violate any provision of this Agreement and other Credit Documents. If applicable, the Grantor shall be deemed the beneficial owner of all Pledged Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to file all reports required to be filed by beneficial owners of securities thereunder. The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the Grantor all such proxies and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to this subsection (a) and to receive the distributions which it is authorized to receive and retain pursuant to this subsection (a). (b) General Authority upon an Event of Default. If there exists any Default or Event of Default: (i) the Collateral Agent shall be entitled to receive all distributions and payments of any nature with respect to the Pledged Collateral, to be held by the Collateral Agent as part of the Pledged Collateral; (ii) the Collateral Agent shall have the right following prior written notice to the Grantor to vote or consent to take any action with respect to the Pledged Shares and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Collateral Agent were the absolute owner thereof; and J-8 293 (iii) the Collateral Agent shall have the right, for and in the name, place and stead of the Grantor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral, to endorse any checks, drafts, money orders and other instruments relating thereto, to sue for, collect, receive and give acquittance for all moneys due or to become due in connection with the Pledged Collateral and otherwise to file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Pledged Collateral, execute any and all such other documents and instruments, and do any and all such acts and things, as the Collateral Agent may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes of this Agreement. (c) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of subsection (a) or (b) shall be held in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of the Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. (d) Certain Other Administrative Matters. At any time and from time to time, the Collateral Agent may cause any of the Pledged Collateral to be transferred into its name or into the name of its nominee or nominees (subject to the revocable rights specified in subsection (a)). The Collateral Agent shall at all times have the right to exchange uncertificated Pledged Collateral for certificated Pledged Collateral, and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement. (e) Appointment of Collateral Agent as Attorney-in-Fact. For the purpose of enabling the Collateral Agent to exercise its rights under this Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i) constitutes and appoints Collateral Agent (and any of the Collateral Agent's officers, employees or agents designated by the Collateral Agent ) Grantor's true and lawful attorney-in-fact, with full power and authority to execute any notice, assignment, endorsement or other instrument or document, and to do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent may deem necessary or desirable (with the consent of the Instructing Group) to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes hereof, and (ii) revokes all previous proxies with regard to the Pledged Collateral and appoints the Collateral Agent as its proxy holder with respect to the Pledged Collateral to attend and vote at any and all meetings of the shareholders of the Subsidiary held on or after the date of this proxy and prior to the termination hereof, with full power of substitution to do so and agrees, if so requested, to execute or cause to be executed appropriate proxies therefor. Each such appointment is coupled with an interest and irrevocable so long as any of the Secured Obligations have not been paid and performed in full. The Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to this J-9 294 subsection (e). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Secured Obligations have not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. SECTION 6 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which the Grantor has agreed to perform or pay under or in connection with this Agreement, and the Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 6. SECTION 7 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Collateral. SECTION 8 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this or any Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, the Grantor agrees that any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers' board or elsewhere, by public or private sale, and at such times and on such terms, as the Collateral Agent shall determine; provided, however, that the Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of the Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide the Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. The Grantor recognizes that the Collateral Agent may be unable to make a public sale of any or all of the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. The Collateral Agent and each Credit Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption the Grantor hereby releases to the extent permitted by law. J-10 295 (b) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated (including with respect to undrawn amounts under the Letters of Credit) at such time as there may exist an Event of Default, the Collateral Agent may, upon instruction by the Instructing Group, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Pledged Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for such purpose (as to which the Grantor hereby grants a security interest and which shall constitute part of the Pledged Collateral hereunder) until such time as the Collateral Agent may elect (with the consent of the Instructing Group) to apply such proceeds to the Secured Obligations, and the Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (with the consent of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Pledged Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. The Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, the Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, the Grantor irrevocably waives until the termination of this Agreement in accordance with Section 22 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent to honor drafts against the Proceeds Account. (c) Application of Proceeds. Subject to subsection (b), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 9 Registration Rights. (a) Registration of Pledged Collateral. If the Collateral Agent at the request of the Instructing Group shall determine to exercise its right to sell any or all of the Pledged Collateral pursuant to Section 8, and if the Collateral Agent shall determine (with the consent of the Instructing Group) that it is necessary or advisable to have the Pledged Collateral, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and the Grantor's and the Subsidiary's respective directors and officers to execute and deliver, all such instruments and documents, and to do or cause to be done all such other acts and things as may, in the view of the Collateral Agent, be advisable to register such Pledged Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the view of the Collateral Agent (with the consent of the Instructing Group), are necessary or be necessary or advisable, all in conformity with the requirements of the Securities and Exchange Commission applicable thereto. The Grantor agrees to comply, and to cause the Subsidiary to comply, with J-11 296 the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to cause the Subsidiary to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which shall satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall cause to be furnished to the Collateral Agent and each of the Credit Agents such number of copies of each preliminary prospectus and prospectus, shall promptly notify the Collateral Agent of the happening of any event (upon becoming aware thereof) as a result of which any then effective prospectus includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of then existing circumstances and shall cause the Collateral Agent and each Credit Agent to be furnished with such number of copies as any such Person may reasonably request of such supplement to or amendment of such prospectus as is necessary to eliminate such untrue statement or correct such omission. (b) No Obligation to Delay Private Sale. Neither the Collateral Agent nor the Credit Parties shall be under any obligation to delay a private sale of any of the Pledged Collateral (as contemplated by subsection (a)) for the period of time necessary to permit the issuer thereof to register such Pledged Collateral for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do so. (c) Further Acts. The Grantor further agrees to do or to use its best efforts to cause to be done all such other acts and things as may be necessary to make any sales of all or any portion of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding and in compliance with any and all applicable laws (including the Exchange Act), regulations, orders, writs, injunctions, decrees or awards of any and all Governmental Authorities having jurisdiction over any such sale or sales. (d) Equitable Relief. The Grantor acknowledges that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent and the Credit Parties, that the Collateral Agent and Credit Parties have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against the Grantor, and the Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the provisions of the Credit Agreement. (e) Costs and Expenses. The Grantor shall bear all costs and expenses of carrying out its obligations under this Section 9. SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Pledged Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy in the Collateral Agent's power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, J-12 297 notices of protests or notices of dishonor in connection with any of the Pledged Collateral; and (iii) all claims, damages, and demands against the Collateral Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Pledged Collateral. SECTION 11 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; provided, however, that notices hereunder (a) to the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such replacement Swap Provider as may be appointed from time to time consistent with the terms of the Intercreditor Agreement), and (b) to the Note Holders as set forth in the Note Purchase Agreement (or such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement). All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent or any Credit Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent or any Credit Party. SECTION 13 Costs and Expenses; Indemnification; Other Charges. (a) Costs and Expenses. The Grantor agrees to pay on demand: (i) the out-of-pocket costs and expenses of the Collateral Agent and any of the Credit Parties' attorney costs, in connection with the negotiation, preparation, execution, delivery and administration of this Agreement, and any amendments, modifications or waivers of the terms thereof, and the custody of the Pledged Collateral; (ii) all title, appraisal (including the allocated cost of internal appraisal services), survey, audit, consulting, search, recording, filing and similar costs, fees and expenses incurred or sustained by the Collateral Agent or any Credit Party in connection with this Agreement or the Pledged Collateral; and (iii) all costs and expenses of the Collateral Agent or any Credit Party, including Attorney Costs, in connection with the enforcement or attempted enforcement of, and preservation of any rights or interest under, this Agreement, any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Pledged Collateral, including any and all losses, costs and expenses sustained by the Collateral Agent and any Credit Party as a result of any failure by the Grantor to perform or observe its obligations contained herein. J-13 298 (b) Indemnification. The Grantor shall indemnify, defend and hold the Collateral Agent, Agent-Related Persons and each Credit Party and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including caused by, arising out of or by reason of any alleged untrue statement of a material fact contained in any registration statement (or any amendment thereto) or in any preliminary prospectus or prospectus (or any amendment or supplement thereto) contemplated by Section 9(a), or any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent that any such liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements are caused by, arise solely out of or by reason of any such alleged untrue statement made or such alleged omission to state a material fact included or excluded on the written direction of any of the Collateral Agent or any Credit Party (including information supplied by the Collateral Agent or any Credit Party), and including with respect to any investigation, litigation or proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or relating to the Collateral, whether or not any Indemnified Person is a party thereto (all of the foregoing, collectively, the "Indemnified Liabilities"); provided that the Grantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. If and to the extent that the foregoing indemnification is for any reason held unenforceable, the Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (c) Other Charges. The Grantor agrees to indemnify the Indemnified Persons against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (d) Interest. Any amounts payable to the Collateral Agent or any Credit Party under this Section 13 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate of interest (a) for the Administrative Agent or any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 14 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Grantor, the Collateral Agent and each Credit Party and their respective successors and assigns. J-14 299 SECTION 15 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. J-15 300 SECTION 17 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 18, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 18 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 19 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. SECTION 20 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Loan Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that this Agreement, and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 22 Termination. Upon termination of the Commitments of the Lenders, surrender of all Letters of Credit and payment and performance in full of all Secured Obligations, this Agreement shall terminate and the Collateral Agent shall (with the consent of the Instructing Group) promptly redeliver to the Grantor any of the Pledged Collateral in its possession and shall execute and deliver to the Grantor such documents and instruments J-16 301 reasonably requested by the Grantor as shall be necessary to evidence termination of all security interests given by the Grantor to the Collateral Agent hereunder; provided, however, that the obligations of the Grantor under Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Pledged Shares provided by this Section. SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] J-17 302 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. CERIDIAN CORPORATION THE GRANTOR By: ---------------------------------- Name: Title: BANK OF AMERICA, N.A. THE COLLATERAL AGENT By: ---------------------------------- Name: Title: J-18 303 SCHEDULE 1 to the Stock Pledge Agreement SUBSIDIARIES SCHEDULE 1-1 304 SCHEDULE 2 to the Stock Pledge Agreement PLEDGED SHARES _______ stock of _________________ being represented by stock certificates as follows: Certificate No. Certificate Date No. of Shares SCHEDULE 2-1 305 SCHEDULE 3 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARIES SCHEDULE 3-1 306 EXHIBIT K FORM OF SUBSIDIARY PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __, 2001, is made among ___________________, a _______________ corporation (the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent on behalf of, and for the benefit of, (a) BANK OF AMERICA, N.A. in its capacity as administrative agent (in such capacity, the "Administrative Agent") for the Lenders from time to time party to the Credit Agreement dated as of January 31, 2001 (as amended, modified, renewed or extended from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined herein), and (c) the "Note Holders" (as defined herein) party to the Note Purchase Agreement. It is a condition precedent to the borrowings under each of the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and pledge to the Collateral Agent the shares of the capital stock of ___________________________, a ____________ corporation (the "Subsidiary"), owned by the Grantor, to secure the obligations of the Borrower described below. Accordingly, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. The rules of interpretation set forth in the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Additional Collateral" means any and all (i) additional capital stock or other equity securities of the Subsidiary, whether certificated or uncertificated, (ii) warrants, options or other rights entitling the Grantor to acquire any interest in capital stock or other equity securities of the Subsidiary, (iii) securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, the Pledged Shares or such additional capital stock or other equity securities, and (iv) cash and non-cash proceeds of the Pledged Shares and any of the foregoing, in each case from time to time received or receivable by, or otherwise paid or distributed to or acquired by, the Grantor. "Borrower" means CERIDIAN CORPORATION, a Delaware corporation. "Credit Documents" means the Loan Documents together with the Swap Documents. K-1 307 "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Credit Documents" means, collectively, the Loan Documents, the Note Holder Documents and the Swap Documents. "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Exchange Act" means the Securities and Exchange Act of 1934. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider and the Note Holders. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Loan Party under any Note Holder Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. K-2 308 "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower and the Note Holders party thereto. "Intercreditor Agreement" means that Intercreditor Agreement dated as of __________ _____, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders. "Investment Property" means any and all investment property of the Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts, commodity accounts and all financial assets held in any securities account or otherwise, wherever located and whether now existing or hereafter arising. "Pledged Collateral" has the meaning set forth in Section 2(a). "Pledged Shares" mean (a) all of the issued and outstanding shares of capital stock, whether certificated or uncertificated, of the Subsidiary now owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as more specifically described in Schedule 1, provided, however, that if the Subsidiary is a Foreign Subsidiary of the Grantor, 65% (but no more than 65%) of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis, shall constitute Pledged Shares, and (b) all Investment Property. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Borrower to the Collateral Agent, whether now existing or hereafter arising, and whether due to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, nor or created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any of the obligations under any Swap Documents. "Securities Act" means the Securities Act of 1933. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Borrower and the Swap Provider as swap counterparties. "Specific Swap Contract" means any interest rate swap entered into between the Borrower and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Loan Party under any Swap Document, (c) any documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. K-3 309 "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York: provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Section 1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent, and hereby grants to the Collateral Agent, a security interest in, all of the Grantor's right, title and interest in, to and under (i) the Pledged Shares and the Additional Collateral and any certificates and instruments now or hereafter representing the Pledged Shares and the Additional Collateral, (ii) all rights, interests and claims with respect to the Pledged Shares and Additional Collateral, including under any and all related agreements, instruments and other documents, and (iii) all books, records and other documentation of the Grantor related to the Pledged Shares and Additional Collateral, in each case whether presently existing or owned or hereafter arising or acquired and wherever located (collectively, the "Pledged Collateral") provided, however, that Pledged Collateral shall not include any of the shares of capital stock of Ceridian Infotech (India) Private Limited, a Subsidiary of the Grantor organized and existing under the laws of India. (b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver to or for the account of the Collateral Agent, at the address and to the Person to be designated by theAdministrative Agent, the certificates representing the Pledged Shares, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of K-4 310 transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with the consent of the Instructing Group). (c) Delivery of Additional Collateral. If the Grantor shall become entitled to receive or shall receive any Additional Collateral, the Grantor shall accept any such Additional Collateral as the agent for the Collateral Agent, shall hold it in trust for the Collateral Agent, shall segregate it from other property or funds of the Grantor, and shall deliver all Additional Collateral and all certificates, instruments and other writings representing such Additional Collateral forthwith to or for the account of the Collateral Agent, at the address and to the Person to be designated by the Collateral Agent upon instruction from the Instructing Group, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with consent of the Instructing Group), as the Collateral Agent shall request, to be held by the Collateral Agent subject to the terms hereof, as part of the Pledged Collateral. Upon accepting any such Additional Collateral hereunder, the Collateral Agent shall promptly send a notification to the Grantor describing the Additional Collateral accepted and held as part of the Pledged Collateral hereunder, which notification shall be deemed to be a Schedule to this Agreement and may be attached hereto. (d) Transfer of Security Interest Other Than by Delivery. If for any reason Pledged Collateral cannot be delivered to or for the account of the Collateral Agent as provided in subsections (b) and (c), the Grantor shall promptly take such other steps as shall be requested from time to time by the Collateral Agent (upon instruction of the Instructing Group) to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent practicable, the Grantor shall thereafter deliver the Pledged Collateral to or for the account of the Collateral Agent as provided in subsections (b) and (c). (e) Continuing Security Interest. The Grantor agrees that this Agreement shall create continuing security interests in and pledge of the Pledged Collateral which shall remain in effect until terminated in accordance with Section 22. SECTION 3 Representations and Warranties. In addition to the representations and warranties of the Grantor made in the Credit Agreement, which are incorporated, remade and reaffirmed herein by this reference, and which are true, complete and accurate as of the date hereof except to the extent such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, the Grantor represents and warrants to the Collateral Agent and each of the Credit Parties that: (a) Valid Issuance of Pledged Collateral. All the Pledged Shares have been, and upon issuance any Additional Collateral will be, duly and validly issued, and are and will be fully paid and non-assessable. (b) Ownership of Pledged Collateral. With respect to the Pledged Shares the Grantor is, and with respect to any Additional Collateral the Grantor will be, the legal record and K-5 311 beneficial owner thereof, and has and will have good and marketable title thereto, subject to no Lien except for the pledge and security interests created by this Agreement. (c) Capitalization of the Subsidiary. The Pledged Shares constitute 100% of the issued and outstanding shares of capital stock of the Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of the Grantor, the Pledged Shares constitute no less than 65% of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis. (d) Options, Warrants, Etc. Other than as set forth in Schedule 2, no securities convertible into or exchangeable for any shares of capital stock of the Subsidiary, or any options, warrants or other commitments entitling any Person to purchase or otherwise acquire any shares of capital stock of the Subsidiary, are issued and outstanding. (e) Transfer Restrictions. There are no restrictions on the transferability of the Pledged Collateral to the Collateral Agent or with respect to the foreclosure, transfer or disposition thereof by the Collateral Agent. (f) Shareholders Agreements. There are no shareholders agreements, voting trusts, proxy agreements or other agreements or understandings which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral. (g) No Violation of Securities Laws. None of the Pledged Shares has been transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such transfer may be subject. (h) Location of Chief Executive Office. The Grantor's chief executive office and principal place of business, and all books and records concerning the Pledged Collateral, are located at __________________, or such other address as to which the Grantor has notified the Collateral Agent in accordance with Section 4(e). (i) Other Financing Statements. Other than (i) financing statements disclosed to the Collateral Agent and (ii) financing statements in favor of the Collateral Agent, no effective financing statement naming the Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or any part of the Pledged Collateral is on file in any filing or recording office in any jurisdiction. (j) Enforceability; Priority of Security Interest. This Agreement (i) creates an enforceable perfected and first priority security interest in and pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b), and (ii) will create an enforceable perfected and first priority security interest in and pledge of the Additional Collateral upon delivery thereof pursuant to Section 2(c) (or upon the taking of such other action with respect thereto as may be requested by the Collateral Agent pursuant to Section 2(d)), in each case securing the payment and performance of the Secured Obligations. The Grantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on the date of each delivery of Pledged Collateral hereunder. K-6 312 SECTION 4 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied or unpaid, the Grantor agrees that: (a) Defense of Pledged Collateral. The Grantor will, at its own expense, appear in and defend any action, suit or proceeding which purports to affect its title to, or right or interest in, the Pledged Collateral or the security interests of the Collateral Agent therein and the pledge to the Collateral Agent thereof. (b) Preservation of Collateral. The Grantor will do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Pledged Collateral. (c) Compliance with Laws, Etc. The Grantor will comply with all laws, regulations and ordinances relating in a material way to the possession, maintenance and control of the Pledged Collateral. (d) Location of Books and Chief Executive Office. The Grantor will: (i) keep all books and records pertaining to the Pledged Collateral at the location set forth in Section 3(h); and (ii) give at least 30 days' prior written notice to the Collateral Agent of (A) any changes in any such location where books and records pertaining to the Pledged Collateral are kept, or (B) any change in the location of the Grantor's chief executive office or principal place of business. (e) Change in Name, Identity or Structure. The Grantor will give at least 30 days' prior written notice to the Collateral Agent of (i) any change in its name, (ii) any changes in, additions to or other modifications of its trade names used as the name of Grantor, and (iii) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (f) Disposition of Pledged Collateral. Except as permitted by the Credit Agreement, the Grantor will not surrender or lose possession of (other than to the Collateral Agent or, with the prior consent of the Collateral Agent, to a depositary or financial intermediary), exchange, sell, convey, assign or otherwise dispose of or transfer the Pledged Collateral or any right, title or interest therein. (g) Liens. Except for Permitted Liens, the Grantor will not create, incur or permit to exist any Liens upon or with respect to the Pledged Collateral, other than the security interests of and pledge to the Collateral Agent created by this Agreement for the benefit of the Credit Agents. (h) Shareholders Agreements. The Grantor will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Collateral. K-7 313 (i) Issuance of Additional Shares. The Grantor will not consent to or approve, or allow the Subsidiary to consent to or approve, the issuance to any Person of any additional shares of any class of capital stock of the Subsidiary, or of any securities convertible into or exchangeable for any such shares, or any warrants, options or other rights to purchase or otherwise acquire any such shares, except as permitted under the Credit Agreement. (j) Notices. The Grantor will deliver promptly to the Collateral Agent all reports and notices received by the Grantor from the Subsidiary in respect of any of the Pledged Collateral. (k) Further Assurances. The Grantor will promptly, upon the written request from time to time of the Collateral Agent, execute, acknowledge and deliver, and file and record, all such financing statements and other documents and instruments, and take all such action, as shall be reasonably necessary to carry out the purposes of this Agreement. SECTION 5 Administration of the Pledged Collateral. (a) Distributions and Voting Prior to an Event of Default. Unless there exists any Default or Event of Default: (i) the Grantor shall be entitled to receive and retain for its own account any cash dividend on or other cash distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor shall have the right to vote the Pledged Collateral and to retain the power to control the direction, management and policies of the Subsidiary to the same extent as the Grantor would if the Pledged Collateral were not pledged to the Collateral Agent pursuant to this Agreement; provided, however, that the Grantor shall not be entitled to receive (A) cash paid, payable or otherwise distributed in redemption of, or in exchange for or in substitution of, any Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction of capital, capital surplus or paid-in-surplus or any other type of recapitalization involving the Subsidiary; and provided further, however, that no vote shall be cast or consent, waiver or ratification given or action taken which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would alter the voting rights with respect to the stock of the Subsidiary or be inconsistent with or violate any provision of this Agreement and other Credit Documents. If applicable, the Grantor shall be deemed the beneficial owner of all Pledged Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to file all reports required to be filed by beneficial owners of securities thereunder. The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the Grantor all such proxies and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to this subsection (a) and to receive the distributions which it is authorized to receive and retain pursuant to this subsection (a). (b) General Authority upon an Event of Default. If there exists any Default or Event of Default: K-8 314 (i) the Collateral Agent shall be entitled to receive all distributions and payments of any nature with respect to the Pledged Collateral, to be held by the Collateral Agent as part of the Pledged Collateral; (ii) the Collateral Agent shall have the right following prior written notice to the Grantor to vote or consent to take any action with respect to the Pledged Shares and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Collateral Agent were the absolute owner thereof; and (iii) the Collateral Agent shall have the right, for and in the name, place and stead of the Grantor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral, to endorse any checks, drafts, money orders and other instruments relating thereto, to sue for, collect, receive and give acquittance for all moneys due or to become due in connection with the Pledged Collateral and otherwise to file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Pledged Collateral, execute any and all such other documents and instruments, and do any and all such acts and things, as the Collateral Agent may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes of this Agreement. (c) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of subsection (a) or (b) shall be held in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of the Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. (d) Certain Other Administrative Matters. At any time and from time to time, the Collateral Agent may cause any of the Pledged Collateral to be transferred into its name or into the name of its nominee or nominees (subject to the revocable rights specified in subsection (a)). The Collateral Agent shall at all times have the right to exchange uncertificated Pledged Collateral for certificated Pledged Collateral, and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement. (e) Appointment of Collateral Agent as Attorney-in-Fact. For the purpose of enabling the Collateral Agent to exercise its rights under this Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i) constitutes and appoints Collateral Agent (and any of the Collateral Agent's officers, employees or agents designated by the Collateral Agent ) Grantor's true and lawful attorney-in-fact, with full power and authority to execute any notice, assignment, endorsement or other instrument or document, and to do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent may deem necessary or desirable (with the consent of the Instructing Group) to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes hereof, and (ii) revokes all previous proxies with K-9 315 regard to the Pledged Collateral and appoints the Collateral Agent as its proxy holder with respect to the Pledged Collateral to attend and vote at any and all meetings of the shareholders of the Subsidiary held on or after the date of this proxy and prior to the termination hereof, with full power of substitution to do so and agrees, if so requested, to execute or cause to be executed appropriate proxies therefor. Each such appointment is coupled with an interest and irrevocable so long as any of the Secured Obligations have not been paid and performed in full. The Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to this subsection (e). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Secured Obligations have not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. SECTION 6 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which the Grantor has agreed to perform or pay under or in connection with this Agreement, and the Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 6. SECTION 7 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Collateral. SECTION 8 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this or any Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, the Grantor agrees that any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers' board or elsewhere, by public or private sale, and at such times and on such terms, as the Collateral Agent shall determine; provided, however, that the Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of the Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide the Grantor shorter notice or no notice, to the extent permitted K-10 316 by the UCC or other applicable law. The Grantor recognizes that the Collateral Agent may be unable to make a public sale of any or all of the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. The Collateral Agent and each Credit Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption the Grantor hereby releases to the extent permitted by law. (b) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated (including with respect to undrawn amounts under the Letters of Credit) at such time as there may exist an Event of Default, the Collateral Agent may, upon instruction by the Instructing Group, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Pledged Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for such purpose (as to which the Grantor hereby grants a security interest and which shall constitute part of the Pledged Collateral hereunder) until such time as the Collateral Agent may elect (with the consent of the Instructing Group) to apply such proceeds to the Secured Obligations, and the Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (with the consent of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Pledged Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. The Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, the Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, the Grantor irrevocably waives until the termination of this Agreement in accordance with Section 22 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent to honor drafts against the Proceeds Account. (c) Application of Proceeds. Subject to subsection (b), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 9 Registration Rights. (a) Registration of Pledged Collateral. If the Collateral Agent at the request of the Instructing Group shall determine to exercise its right to sell any or all of the Pledged Collateral pursuant to Section 8, and if the Collateral Agent shall determine (with the consent of the Instructing Group) that it is necessary or advisable to have the Pledged Collateral, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Grantor shall K-11 317 execute and deliver, and shall cause the Subsidiary and the Grantor's and the Subsidiary's respective directors and officers to execute and deliver, all such instruments and documents, and to do or cause to be done all such other acts and things as may, in the view of the Collateral Agent, be advisable to register such Pledged Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the view of the Collateral Agent (with the consent of the Instructing Group), are necessary or be necessary or advisable, all in conformity with the requirements of the Securities and Exchange Commission applicable thereto. The Grantor agrees to comply, and to cause the Subsidiary to comply, with the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to cause the Subsidiary to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which shall satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall cause to be furnished to the Collateral Agent and each of the Credit Agents such number of copies of each preliminary prospectus and prospectus, shall promptly notify the Collateral Agent of the happening of any event (upon becoming aware thereof) as a result of which any then effective prospectus includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of then existing circumstances and shall cause the Collateral Agent and each Credit Agent to be furnished with such number of copies as any such Person may reasonably request of such supplement to or amendment of such prospectus as is necessary to eliminate such untrue statement or correct such omission. (b) No Obligation to Delay Private Sale. Neither the Collateral Agent nor the Credit Parties shall be under any obligation to delay a private sale of any of the Pledged Collateral (as contemplated by subsection (a)) for the period of time necessary to permit the issuer thereof to register such Pledged Collateral for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do so. (c) Further Acts. The Grantor further agrees to do or to use its best efforts to cause to be done all such other acts and things as may be necessary to make any sales of all or any portion of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding and in compliance with any and all applicable laws (including the Exchange Act), regulations, orders, writs, injunctions, decrees or awards of any and all Governmental Authorities having jurisdiction over any such sale or sales. (d) Equitable Relief. The Grantor acknowledges that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent and the Credit Parties, that the Collateral Agent and Credit Parties have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against the Grantor, and the Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the provisions of the Credit Agreement. K-12 318 (e) Costs and Expenses. The Grantor shall bear all costs and expenses of carrying out its obligations under this Section 9. SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Pledged Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy in Collateral Agent's power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Pledged Collateral; and (iii) all claims, damages, and demands against the Collateral Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Pledged Collateral. SECTION 11 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; provided, however, that notices hereunder (a) to the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such replacement Swap Provider as may be appointed from time to time consistent with the terms of the Intercreditor Agreement), and (b) to the Note Holders as set forth in the Note Purchase Agreement (or such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement). All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent or any Credit Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent or any Credit Party. SECTION 13 Costs and Expenses; Indemnification; Other Charges. (a) Costs and Expenses. The Grantor agrees to pay on demand: (i) the out-of-pocket costs and expenses of the Collateral Agent and any of the Credit Parties' attorney costs, in connection with the negotiation, preparation, execution, delivery and administration of this Agreement, and any amendments, modifications or waivers of the terms thereof, and the custody of the Pledged Collateral; (ii) all title, appraisal (including the allocated cost of internal appraisal services), survey, audit, consulting, search, recording, filing and similar costs, fees and expenses incurred or sustained by the Collateral Agent or any Credit Party in connection with this Agreement or the Pledged Collateral; and K-13 319 (iii) all costs and expenses of the Collateral Agent or any Credit Party, including Attorney Costs, in connection with the enforcement or attempted enforcement of, and preservation of any rights or interest under, this Agreement, any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Pledged Collateral, including any and all losses, costs and expenses sustained by the Collateral Agent and any Credit Party as a result of any failure by the Grantor to perform or observe its obligations contained herein. (b) Indemnification. The Grantor shall indemnify, defend and hold the Collateral Agent, Agent-Related Persons and each Credit Party and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including caused by, arising out of or by reason of any alleged untrue statement of a material fact contained in any registration statement (or any amendment thereto) or in any preliminary prospectus or prospectus (or any amendment or supplement thereto) contemplated by Section 9(a), or any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent that any such liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements are caused by, arise solely out of or by reason of any such alleged untrue statement made or such alleged omission to state a material fact included or excluded on the written direction of any of the Collateral Agent or any Credit Party (including information supplied by the Collateral Agent or any Credit Party), and including with respect to any investigation, litigation or proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or relating to the Collateral, whether or not any Indemnified Person is a party thereto (all of the foregoing, collectively, the "Indemnified Liabilities"); provided that the Grantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. If and to the extent that the foregoing indemnification is for any reason held unenforceable, the Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (c) Other Charges. The Grantor agrees to indemnify the Indemnified Persons against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (d) Interest. Any amounts payable to the Collateral Agent or any Credit Party under this Section 13 or otherwise under this Agreement if not paid upon demand shall bear K-14 320 interest from the date of such demand until paid in full, at the applicable rate of interest (a) for the Administrative Agent or any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 14 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Grantor, the Collateral Agent and each Credit Party and their respective successors and assigns. SECTION 15 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER K-15 321 ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 17 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 18, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 18 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 19 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. SECTION 20 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Loan Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that this Agreement, and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such K-16 322 covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 22 Termination. Upon termination of the Commitments of the Lenders, surrender of all Letters of Credit and payment and performance in full of all Secured Obligations, this Agreement shall terminate and the Collateral Agent shall (with the consent of the Instructing Group) promptly redeliver to the Grantor any of the Pledged Collateral in its possession and shall execute and deliver to the Grantor such documents and instruments reasonably requested by the Grantor as shall be necessary to evidence termination of all security interests given by the Grantor to the Collateral Agent hereunder; provided, however, that the obligations of the Grantor under Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Pledged Shares provided by this Section. SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] K-17 323 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. [ ] ------------------------------------ THE GRANTOR By: ----------------------------------- Name: Title: BANK OF AMERICA, N.A. THE COLLATERAL AGENT By: ----------------------------------- Name: Title: K-18 324 SCHEDULE 1 to the Stock Pledge Agreement PLEDGED SHARES _______ stock of _________________ being represented by stock certificates as follows: Certificate No. Certificate Date No. of Shares SCHEDULE 1-1 325 SCHEDULE 2 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARIES SCHEDULE 2-1 326 SCHEDULE 3 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARY SCHEDULE 3-1 327 EXHIBIT L FORM OF EFFECTIVENESS DATE OPINIONS OF COUNSEL (CONTENT SUMMARY) 1. Each Loan Party is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with the corporate power and authority and all material governmental licenses, authorizations, consents and approvals to own and operate (or lease, as the case may be) its properties and to carry on its business as it is now conducted. Each Loan Party is qualified as a foreign corporation, licensed and in good standing in each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except where the failure to be so qualified, licensed or in good standing would not adversely affect the business or operations of such Loan Party in any significant manner. 2. Each Loan Party has the corporate power and authority to enter into and perform the Loan Documents to which it is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of such Loan Documents. 3. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by, or enforcement against, any Loan Party of the Loan Documents to which it is a party. 4. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute the legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective terms. 5. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party will not (i) violate or be in conflict with any provision of the certificate or articles of incorporation, as the case may be, or by-laws of such Loan Party, (ii) violate or be in conflict with any law or regulation having applicability to such Loan Party, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over such Loan Party or such Loan Party's properties or by which such Loan Party may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any loan or credit agreement (including the Existing Credit Facility), or any other agreement for borrowed money or any other material agreement, lease or instrument to which such Loan Party is a party or by which it or such Loan Party's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of such Loan Party. 6. The provisions of the Borrower Security Agreement and the Subsidiary Security Agreement (collectively, the "Security Agreements") are in form sufficient to create, in favor of the Administrative Agent, as secured party, a valid security interest in and lien on the Collateral described in such Security Agreements and the financing statements related thereto. The financing statements filed with the ____________ (the "Filing Offices") are in appropriate form for filing in the Filing Offices, (ii) the Filing Offices are the appropriate filing offices in order to L-1 328 perfect a security interest in such Collateral, subject only to the provisions of the Intercreditor Agreement, (iii) the Administrative Agent has a perfected security interest in such Collateral, and (iv) no other action is necessary under the Uniform Commercial Code or other laws (including without limitation the U.S. copyright laws, the U.S. patent laws and the U.S. trademark laws) as in effect in ______________ to perfect a security interest in such Collateral. 7. The provisions of the Borrower Stock Pledge Agreement and the Subsidiary Stock Pledge Agreement (collectively, the "Stock Pledge Agreements") are in form sufficient to create, in favor of the Administrative Agent, as secured party, a valid security interest in and lien on the Pledged Collateral described therein. The security interest in the Pledged Collateral created under the Stock Pledge Agreements will become perfected upon delivery to and possession by the Administrative Agent of the certificates representing the Pledged Collateral, indorsed to the Administrative Agent or in blank by an effective indorsement. 8. Based solely on our review of the minute books and stock records of the Loan Parties, to our knowledge, the authorized, issued and outstanding capital stock of each Loan Party (other than Ceridian) as set forth on Schedule __ hereto constitutes all of the authorized, issued and outstanding capital stock of such Loan Party, and all of such issued and outstanding capital stock is owned of record by the Persons indicated on such Schedule __. 9. No filings, registrations, recordings, or other actions are necessary under the laws of _______________ to create, preserve, perfect, and protect the Administrative Agent's Lien in the Pledged Securities under the Stock Pledge Agreements, and no consent, approval, or authorization of any Person is required under the laws of _______________ in order for the Administrative Agent's Lien to be created, preserved, perfected, and protected. 10. The extension of credit under the Credit Agreement does not violate the provisions of Regulations T, U or X of the Federal Reserve Board. 11. No Loan Party is an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940. 12. No Loan Party 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 Public Utility Holding Company Act of 1935. L-2 329 EXHIBIT M FORM OF CLOSING DATE OPINIONS OF COUNSEL (CONTENT SUMMARY) 1. Each Loan Party has the corporate power and authority to enter into and perform the Spin-Off Transaction and each of the Spin-Off Documents to which it is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of each Spin-Off Document and to consummate the Spin-Off Transaction. 2. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by, or enforcement against, any Loan Party of any Spin-Off Document to which it is a party, or to consummate the Spin-Off Transaction, except as have been obtained prior to the Closing Date. 3. The Spin-Off Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute the legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective terms. 4. The execution, delivery and performance by each Loan Party of each Spin-Off Document to which it is a party, and the consummation of the Spin-Off Transaction, will not (i) violate or be in conflict with any provision of the certificate or articles of incorporation, as the case may be, or by-laws of such Loan Party, (ii) violate or be in conflict with any law or regulation having applicability to such Loan Party, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over such Loan Party or such Loan Party's properties or by which such Loan Party may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any loan or credit agreement, or any other agreement for borrowed money or any other material agreement, lease or instrument to which such Loan Party is a party or by which it or such Loan Party's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of such Loan Party. 5. The Distribution is legal under the Delaware General Corporation Law. M-1 330 EXHIBIT N FORM OF ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT Date: ______________ To each of the Lenders party to the Credit Agreement referred to below, and to Bank of America, N.A., as the Administrative Agent Ladies and Gentlemen: This agreement ("Additional Guarantor Assumption Agreement") is made and delivered pursuant to Section 6.14 of that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, amended or restated, the "Credit Agreement"), among CERIDIAN CORPORATION (the "Borrower"), the several financial institutions from time to time party thereto (each a "Lender" and together with the Assignor, the "Lenders") and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative Agent"). All capitalized terms used in this Additional Guarantor Assumption Agreement and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. _____________, a _____________ corporation (the "Subsidiary") hereby confirms, represents and warrants to the Administrative Agent and the Lenders that the Subsidiary is a Subsidiary of the Borrower effective as of ________________. [The Subsidiary further represents that it is a Foreign Subsidiary.] The documents, resolutions, incumbency and officer's certificates, opinions of counsel, UCC-1 financing statements, Supplemental IP Security Agreements and other documents and certificates required to be delivered to the Administrative Agent under subsections (b) and (c) of Section 6.14 and Section 6.16 of the Credit Agreement will be furnished to the Administrative Agent in accordance with the requirements of the Credit Agreement. The Subsidiary hereby confirms that with effect from the date hereof, the Subsidiary shall (i) be a party to the Guaranty, dated as of January 31, 2001 (the "Subsidiary Guaranty"), given by certain Subsidiaries of the Borrower, as Guarantor, in favor of the Administrative Agent, to the Security Agreement, dated as of January 31, 2001, (the "Subsidiary Security Agreement"), among certain Subsidiaries of the Borrower, as Grantors, and the Administrative Agent and to the Supplemental IP Security Agreements dated as of ______, ____, and ______; and (ii) shall have the same obligations, duties and liabilities towards the Administrative Agent and Lenders as those which the Subsidiary would have had if the Subsidiary had been an original party to the Subsidiary Guaranty, as a Guarantor, and the Subsidiary Security Agreement, as a Grantor (and pursuant to Section 2(a) of the Subsidiary N-1 331 Security Agreement, the Subsidiary hereby grants to the Administrative Agent a security interest in all its "Collateral" (as defined therein) as security for the payment and performance of the Secured Obligations (as defined therein)). The Subsidiary hereby confirms its acceptance of, and consents to, all representations and warranties, covenants, and other terms and provisions of the Subsidiary Guaranty applicable to Guarantors, and the Subsidiary Security Agreement applicable to Grantors, and to any other Loan Documents to which the Guarantors are parties. Without limiting the generality of the foregoing, the Subsidiary confirms that effective as of the date hereof it shall be liable as a Guarantor pursuant to Section 8.01(n) of the Credit Agreement. This Additional Guarantor Assumption Agreement shall constitute a Loan Document under the Credit Agreement. THIS ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the Subsidiary has caused this Additional Guarantor Assumption Agreement to be duly executed and delivered in _____________, ______________, by its proper and duly authorized officer as of the day and year first above written. [SUBSIDIARY] By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- N-2 332 EXHIBIT O FORM OF ADDITIONAL GUARANTOR OPINION OF COUNSEL (CONTENT SUMMARY) 1. The Additional Guarantor is a ___________ duly organized, validly existing and in good standing under the laws of [the State of __________] [the country of _________] with the power and authority to own and operate (or lease, as the case may be) its properties and to carry on its business as it is now conducted. The Additional Guarantor is qualified and in good standing in ___________________. 2. The Additional Guarantor has the power and authority to enter into and perform the Additional Guarantor Documents, and has taken all necessary action to authorize the execution, delivery and performance of the Additional Guarantor Documents. 3. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by the Additional Guarantor of the Additional Guarantor Documents[, except for recordings or filings in connection with the perfection of the Liens on the Collateral in favor of the Administrative Agent on behalf of the Lenders]. 4. The Additional Guarantor Documents have been duly executed and delivered by the Additional Guarantor and constitute the legal, valid and binding obligations of the Additional Guarantor enforceable against the Additional Guarantor in accordance with their respective terms. 5. The execution, delivery and performance by the Additional Guarantor of the Additional Guarantor Documents will not (i) violate or be in conflict with any provision of the _______________ [specify applicable Organization Documents reviewed] of the Additional Guarantor or any, (ii) violate or be in conflict with any law or regulation having applicability to the Additional Guarantor, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over the Additional Guarantor or the Additional Guarantor's properties or by which the Additional Guarantor may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any loan or credit agreement, or any other agreement for borrowed money or any other material Contractual Obligation to which the Additional Guarantor is a party or by which it or the Additional Guarantor's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of the Additional Guarantor. 6. The provisions of the Security Agreement [and Supplemental IP Security Agreement] are in form sufficient to create, in favor of the Administrative Agent on behalf of the Lenders, as secured party, a valid security interest in and lien on the Collateral of the Additional Guarantor described in the Security Agreement and the financing statements. Upon the filing of the financing statements with the filing offices and the delivery of the Pledged Collateral, the O-1 333 Administrative Agent will have a valid and perfected security interest in and lien on all of such Collateral described in the Security Agreement and the financing statements. 7. Except as specifically disclosed in __________________________, there are no actions, suits, proceedings, claims or disputes pending, or to the best of our knowledge, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Additional Guarantor or any of its properties which (i) purport to affect or pertain to the Additional Guarantor Documents, or any of the transactions contemplated thereby; or (ii) if determined adversely to the Additional Guarantor, would be likely to have a Material Adverse Effect. 8. Our opinion set forth in paragraph 4 above is subject to the qualification that the enforceability of the Additional Guarantor Documents may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general equity principles. O-2 EX-10.7 5 w46446ex10-7.txt NOTE PURCHASE AGREEMENT 1 EXHIBIT 10.7 ================================================================================ ================================================================================ CERIDIAN CORPORATION (DBA THE ARBITRON COMPANY) $50,000,000 Senior Secured Notes due January 31, 2008 ======================= NOTE PURCHASE AGREEMENT ======================= January 31, 2001 ================================================================================ ================================================================================ 2 TABLE OF CONTENTS

Section Page - ------- ---- ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................................1 1.01 Defined Terms...................................................1 1.02 Other Interpretive Provisions..................................20 1.03 Accounting Terms...............................................21 1.04 Rounding.......................................................21 1.05 References to Agreements and Laws..............................21 ARTICLE II AUTHORIZATION, SALE AND PURCHASE OF NOTES.........................22 2.01 Authorization of Notes.........................................22 2.02 Sale and Purchase of Notes.....................................22 2.03 Closing........................................................22 2.04 Optional Prepayments...........................................22 2.05 Mandatory Offers to Make Prepayments...........................22 2.06 General Provisions Concerning Prepayments......................24 2.07 Repayment of Notes.............................................25 2.08 Interest.......................................................25 2.09 Reserved.......................................................25 2.10 Computation of Interest........................................25 2.11 Reserved.......................................................25 2.12 Payments Generally.............................................25 2.13 Reserved.......................................................26 2.14 Security and Guaranties........................................26 ARTICLE III TAXES............................................................26 3.01 Taxes..........................................................26 3.02 Reserved.......................................................27 3.03 Reserved.......................................................27 3.04 Reserved.......................................................27 3.05 Reserved.......................................................27 3.06 Matters Applicable to all Requests for Compensation............27 3.07 Survival.......................................................28 ARTICLE IV CONDITIONS PRECEDENT..............................................28 4.01 Conditions to Effectiveness....................................28 4.02 Conditions to Purchase of Notes................................31 4.03 Reserved.......................................................33 ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................33 5.01 Corporate Existence and Power..................................33 5.02 Corporate Authorization; No Contravention......................34 5.03 Governmental Authorization.....................................34 5.04 Binding Effect.................................................35

-i- 3 5.05 Litigation.....................................................35 5.06 No Default.....................................................36 5.07 ERISA Compliance...............................................36 5.08 Title to Properties............................................37 5.09 Taxes..........................................................37 5.10 Financial Condition............................................37 5.11 Environmental Matters..........................................38 5.12 Regulated Entities.............................................39 5.13 Collateral Documents...........................................39 5.14 No Burdensome Restrictions.....................................39 5.15 Solvency.......................................................39 5.16 Labor Relations................................................39 5.17 Intellectual Property; Proprietary Information.................40 5.18 Insurance......................................................40 5.19 Employment Agreements..........................................41 5.20 Spin-Off Documents; Note Documents.............................41 5.21 Capitalization; Subsidiaries...................................41 5.22 Margin Regulations.............................................42 5.23 Brokers; Certain Expenses......................................42 5.24 Year End.......................................................42 5.25 Third Party Consents...........................................42 5.26 Existing Indebtedness..........................................42 5.27 New Ceridian Obligations.......................................43 5.28 Swap Contracts.................................................43 5.29 Full Disclosure................................................43 5.30 Offer of Notes; Investment Bankers.............................43 ARTICLE VI AFFIRMATIVE COVENANTS.............................................43 6.01 Financial Statements...........................................43 6.02 Certificates; Other Information................................44 6.03 Notices........................................................45 6.04 Preservation of Corporate Existence, Etc.......................47 6.05 Maintenance of Property........................................47 6.06 Insurance......................................................48 6.07 Payment of Obligations.........................................48 6.08 Compliance with Laws...........................................49 6.09 ERISA Compliance...............................................49 6.10 Interest Rate Protection.......................................49 6.11 Inspection of Property and Books and Records...................49 6.12 Environmental Laws.............................................49 6.13 Use of Proceeds................................................49 6.14 Additional Guarantors..........................................50 6.15 Additional Subsidiaries........................................50 6.16 Additional Intellectual Property...............................51 6.17 Licenses.......................................................51 6.18 Further Assurances.............................................52 -ii- 4 ARTICLE VII NEGATIVE COVENANTS...............................................52 7.01 Limitation on Liens............................................52 7.02 Mergers and Consolidations.....................................54 7.03 Indebtedness...................................................55 7.04 Disposition of Assets..........................................56 7.05 Contingent Obligations.........................................57 7.06 Notes and Investments..........................................58 7.07 Dividends and Payments.........................................59 7.08 Use of Proceeds................................................60 7.09 Hostile Acquisition............................................60 7.10 Leverage Ratio.................................................60 7.11 Fixed Charge Coverage Ratio....................................61 7.12 Foreign Subsidiaries...........................................61 7.13 Change in Business.............................................61 7.14 Accounting Changes.............................................62 7.15 Certain Contracts..............................................62 7.16 Transactions with Affiliates...................................62 7.17 Capital Expenditures...........................................63 7.18 Sales and Leasebacks...........................................63 7.19 Certain Tax Matters............................................63 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES..................................64 8.01 Events of Default..............................................64 8.02 Remedies Upon Event of Default.................................66 8.03 Rescission of Acceleration.....................................67 ARTICLE IX REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES.........68 9.01 Registration, Transfer and Exchange of Notes...................68 9.02 Replacement of Notes...........................................68 9.03 Transfer of Notes..............................................68 9.04 ERISA..........................................................69 ARTICLE X MISCELLANEOUS......................................................70 10.01 Amendments, Etc...............................................70 10.02 Notices and Other Communications; Facsimile Copies............71 10.03 No Waiver; Cumulative Remedies................................72 10.04 Attorney Costs, Expenses and Taxes............................72 10.05 Indemnification by the Company................................72 10.06 Payments Set Aside............................................73 10.07 Transferees, Successors and Assigns...........................73 10.08 Confidentiality...............................................73 10.09 Set-off.......................................................74 10.10 Interest Rate Limitation......................................74 10.11 Counterparts..................................................75 10.12 Integration...................................................75 -iii- 5 10.13 Survival of Representations and Warranties....................75 10.14 Severability..................................................75 10.15 Note Holders..................................................75 10.16 Reserved......................................................76 10.17 Governing Law.................................................76 10.18 Waiver of Right to Trial by Jury..............................77 10.19 Purchase for Investment.......................................77 SCHEDULES I Schedule of Note Holders 1.01(i) Initial Permitted Indebtedness 1.01(s) Spin-Off Documents 2.03 Wire Instructions 5.05 Litigation Affecting Note Parties 5.07 ERISA Compliance 5.10 Contingent Obligations 5.11 Environmental Matters 5.17 Intellectual Property; Proprietary Information 5.19 Employment Agreements 5.21 Capitalization; Subsidiaries 5.23 Brokers' Fees and Related Expenses 5.25 Third Party Consents 7.01 Permitted Liens 7.02(b) Permitted Mergers, Etc. 7.06(b) Permitted Investments 10.02 Addresses for Notices EXHIBITS A Form of Note B Compliance Certificate C Reserved D New Ceridian Guaranty E Subsidiary Guaranty F Company Security Agreement G Subsidiary Security Agreement H Supplemental IP Security Agreement I Company Pledge Agreement J Subsidiary Pledge Agreement K Effectiveness Date Opinion of Counsel (Content Summary) L Closing Date Opinion of Counsel (Content Summary) M Additional Guarantor Assumption Agreement N Additional Guarantor Opinion of Counsel O Form of Accession Agreement -iv- 6 NOTE PURCHASE AGREEMENT This NOTE PURCHASE AGREEMENT ("Agreement") is entered into as of January __, 2001, among CERIDIAN CORPORATION, a Delaware corporation that will change its name to Arbitron Inc. on or about the Closing Date (the "Company"), and each of the Note Holders named on Schedule I attached hereto. In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.01 DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings set forth below: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit account for purposes of Article 9 of the UCC or other applicable law. "Acquisition" means, as to the Company and each of its Subsidiaries, any transaction or series of related transactions for the purpose of or resulting directly or indirectly in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary). "Additional Guarantor Assumption Agreement" has the meaning specified in Section 6.14(a). "Administrative Agent" means the administrative agent or agents under any of the Note Documents, or any successor agent or agents. "Affiliate" means, as to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 15% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. "Aggregate Distributable Income" means an amount equal to 50% of Consolidated Net Income (positive or negative) calculated on a cumulative basis, based on the year-end financial statements delivered to the Note Holders pursuant to Section 6.01(a); provided that any and all amounts paid pursuant to Section 7.07(a)(iv) or pursuant to any equivalent provision in the Note -1- 7 Documents shall reduce the amount of Aggregate Distributable Income on a dollar for dollar basis. "Agreement" means this Note Purchase Agreement. "Arbitron Business" means collectively the businesses of: (a) providing media and marketing research services to broadcasters, advertising agencies, advertisers, on-line webcasters and cable television; (b) providing media audience and consumer retail behavior research services to cable systems, broadcasters, magazines, advertising agencies and newspapers; and (c) providing application software used to access and analyze media audience information and software applications to access and analyze consumer retail behavior and media usage. "Arbitron Subsidiaries" means, at all times prior to the Spin-Off Consummation Date, those Subsidiaries designated as Arbitron Subsidiaries on Schedule 5.21 and, at all times after the Spin-Off Consummation Date, all Subsidiaries of the Company. "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel and the non-duplicative allocated cost of internal legal services and all disbursements of internal counsel. "Attributable Indebtedness" means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease. "Audited Financial Statements" means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal years ended December 31, 1998 and December 31, 1999 (in each case, giving effect to the Spin-Off Transaction) and the related consolidated statements of income and cash flows for the fiscal years of the Company ended December 31, 1997, December 31, 1998 and December 31, 1999, each in the final form attached to the Form 10. "Bank of America" means Bank of America, N.A. "Business Day" means any day other than a Saturday, Sunday, or other day which shall be in Boston, Massachusetts or New York, New York, a legal holiday or a day on which banking institutions therein are authorized by law to close. "Capital Lease" means, as applied to any Person, any lease of property by such Person as lessee that is classified as a capital lease under GAAP. "Cash Equivalents" means: (a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof, having maturities of not more than six months from the date of acquisition; -2- 8 (b) certificates of deposit, time deposits, Eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers' acceptances, having in each case a tenor of not more than six months, issued by any Lender under the New Credit Facility, or by any U.S. commercial or investment bank or broker having combined capital and surplus of not less than $100,000,000 whose short term securities are rated at least A-1 by S&P and P-1 by Moody's; (c) commercial paper or promissory notes of an issuer rated at least A-1 by S&P or P-1 by Moody's and in either case having a tenor of not more than three months; and (d) money market funds that comply with all material provisions of Rule 2a-7 issued by the SEC under the Investment Company Act of 1940. "Change of Control" means, with respect to the Company, an event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of the Company or its Subsidiaries, or any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire (such rights, "option rights"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 30% or more of the equity interests of the Company on a partially diluted basis taking into account equity interests realizable upon the exercise of such person's or group's option rights; or (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. "Closing" has the meaning specified in Section 2.03. "Closing Date" means the first date all the conditions precedent in Section 4.02 are satisfied or waived in accordance with Section 4.02. "Code" means the Internal Revenue Code of 1986. -3- 9 "Collateral" means all property and interests in property and proceeds thereof now owned or hereafter acquired by the Company or any Guarantor and their respective Subsidiaries in or upon which a Lien now or hereafter exists in favor of the Note Holders, or any agent on behalf of or as bailee for the Note Holders, whether under this Agreement or under any of the Collateral Documents. "Collateral Agent" has the meaning specified in the Intercreditor Agreement. "Collateral Documents" means, collectively, (i) the Security Agreements, (ii) the Pledge Agreements, (iii) the Account Control Agreements, (iv) all documents executed by the Company to accomplish Cash Collateralization (as defined in the New Credit Facility) or pledges of deposit accounts and (v) all licenses, UCC financing statements, notices and other documents executed from time to time under or in connection with the foregoing. "Company" has the meaning set forth in the introductory paragraph hereto. "Company Pledge Agreement" means a Pledge Agreement executed by the Company, in substantially the form of Exhibit I. "Company Security Agreement" means a Security Agreement executed by the Company, in substantially the form of Exhibit F. "Compliance Certificate" means a certificate substantially in the form of Exhibit B. "Consolidated EBITDA" means, for any period, for the Company and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated Net Income, plus (d) the amount of all depreciation expense and amortization expense for such period, less (e) interest income for such period; provided, however, that Consolidated Net Income shall be computed for these purposes without giving effect to (i) extraordinary non-cash losses or non-cash gains, or (ii) non-cash losses or non-cash gains from discontinued operations, except that cash payments made in any current period in respect of non-cash charges incurred under clause (i) or (ii) in any previous period shall be deducted from Consolidated Net Income in such current period. "Consolidated Funded Indebtedness" means, as of any date of determination, for Company and its Subsidiaries on a consolidated basis, all (i) obligations for borrowed money, (ii) obligations evidenced by bonds, debentures, notes and Note agreements, (iii) obligations in respect of letters of credit, surety bonds, bankers' acceptances or similar instruments, (iv) obligations to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time), and (v) Attributable Indebtedness incurred by the Company or any of its Subsidiaries in connection with Synthetic Lease Obligations and Capital Leases; and (vi) Guaranty obligations of the Company and its Subsidiaries in respect of obligations of any Person in the nature of (i) through (v) above. -4- 10 "Consolidated Interest Expense" means, for any period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, but excluding any fees, charges and expenses of the Company and its Subsidiaries arising from the negotiation, execution, closing and consummation of the Spin-Off Documents and the "Facility Documents" (as such term is defined in the Intercreditor Agreement); and (b) the portion of rent expense of the Company and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP. "Consolidated Net Income" means, for any period, for the Company and its Subsidiaries on a consolidated basis, the net income of the Company and its Subsidiaries, as determined in accordance with GAAP. "Consolidated Net Worth" means, as of any date of determination, with respect to the Company and its Subsidiaries on a consolidated basis, shareholders' equity on the date of determination as determined in accordance with GAAP. "Consolidated Total Assets" means, as of any date of determination, the total consolidated assets of the Company and its Subsidiaries as determined in accordance with GAAP. "Contingent Obligation" means, as to the Company or any of its Subsidiaries, (a) any Guaranty Obligation of that Person; (b) any reimbursement obligation of that Person with respect to a standby letter of credit, surety bond, banker's acceptance, bank guaranty or similar instrument; (c) any obligation of that Person to purchase any materials, supplies or other property from, or to obtain the services of, another Person (other than the Company or one of its Subsidiaries) if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; and (d) all Indebtedness (other than that of the Company or any of its Subsidiaries) secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by the Company or any such Subsidiary. "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Current Portion of Long Term Debt" means, as of any date of determination, in respect of the Company and its Subsidiaries on a consolidated basis, (a) current portion of long term debt as determined on such date in accordance with GAAP (provided that, for purposes of Section 7.11 only, during the 365-day period immediately preceding the Maturity Date, the current portion of the Notes shall be deemed to be $10,000,000), plus (b) an amount equal to the amount, if any, by which the Outstanding Amount (as defined in the New Credit Facility) on such date exceeds (i) the Aggregate Commitments (as defined in the New Credit Facility) on such date less -5- 11 (ii) the amount of any mandatory reduction in Aggregate Commitments scheduled to occur within the four fiscal quarter period commencing on such date pursuant to Section 2.06(b)(i) of the New Credit Facility; provided, however, during the 365 days prior to the scheduled Maturity Date of the New Credit Facility (under clause (a) of the definition of Maturity Date in the New Credit Facility), "Current Portion of Long Term Debt" shall be calculated excluding the then-outstanding principal amount of the New Credit Facility. "Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. "Default" means any event that, with the giving of any notice, the passage of time, or both, would be an Event of Default. "Default Rate" means an interest rate equal to 11.96% per annum. "Disposition" or "Dispose" means the direct or indirect sale, assignment, conveyance, lease, transfer, license or other disposition (including any sale and leaseback transaction) of any property (other than cash or Cash Equivalents) by any Person, including any sale, assignment, transfer or other disposition, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. "Distribution" means the distribution by dividend of all stock of New Ceridian held by the Company to the Company's shareholders, pursuant to a tax-free transaction under Section 355 of the Code and undertaken pursuant to the Spin-Off Documents. "Dollar" and "$" means lawful money of the United States of America. "EBITDA" means, in respect of any Person, for any period as determined in accordance with GAAP, an amount equal to the sum of (a) net income, plus (b) interest expense, plus (c) the amount of taxes, based on or measured by income, used or included in the determination of such net income, plus (d) the amount of all depreciation expense and amortization expense for such period, less (e) interest income for such period; provided, however, that net income shall be computed for these purposes without giving effect to (i) extraordinary non-cash losses or non-cash gains, or (ii) non-cash losses or non-cash gains from discontinued operations, except that cash payments made in any current period in respect of non-cash charges incurred under clause (i) or (ii) in any previous period shall be deducted from consolidated net income in such current period. "Effectiveness Date" means the first day all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of Section 4.01(c), waived by the Person entitled to receive the applicable payment). "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any -6- 12 Environmental Law or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the alleged or actual presence, placement, migration, spillage, leakage, disposal, discharge, emission or release of any Hazardous Material at, in, or from property, whether or not owned by the Company, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations, registration requirements and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental and land use matters or health and safety matters involving Hazardous Materials. "ERISA" means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto. "ERISA Affiliate" means any trade or business (whether or not incorporated) that is currently or at any relevant time in the past was under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate. "Event of Default" means any of the events or circumstances specified in Article VIII. "Event of Loss" means with respect to any asset of any Person, any of the following: (i) any loss, destruction or damage of such asset; (ii) any sale or transfer of such asset in connection with any pending or threatened institution of any proceedings for the condemnation of or seizure of such asset or of any right of any eminent domain; or (iii) any actual condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such asset, or confiscation of such asset or requisition of the use of such asset. -7- 13 "Exchange Act" means the Securities Exchange Act of 1934. "Existing Credit Facility" means that certain Amended and Restated Credit Agreement dated as of July 31, 1997 among the Company, Bank of America, as agent, and a syndicate of lenders, and after giving effect to that certain "Waiver to Credit Agreement" dated as of December 20, 2000. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System of the United States of America. "Foreign Subsidiary" means any Subsidiary of the Company incorporated or organized, and existing, under the laws of any jurisdiction other than the United States or any state thereof. "Form 10" means until the Closing Date, that certain Form 10 filing prepared by New Ceridian and delivered to the SEC on or about December 6, 2000 in connection with the Spin-Off Transaction, as amended by that amendment filed with the SEC on or about December 22, 2000, and by that amendment filed with the SEC on or about January 22, 2001. From and after the Closing Date, the term "Form 10" also includes: (a) any amendments to the Form 10 filed with the SEC between the Effectiveness Date and the Closing Date to the extent permitted by Section 4.02(a)(i)(H), and (b) any amendments filed with the SEC after the Closing Date to the extent necessary to accommodate changes to the Spin-Off Documents permitted by Section 7.15(c). "Form 10 Financial Statements" means the Audited Financial Statements plus all related unaudited financial statements of the Company filed with the Form 10. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination, consistently applied. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. "Guarantor" means each Arbitron Subsidiary party to a Guaranty and, at all times prior to the Spin-Off Consummation Date, New Ceridian. "Guaranties" means the Subsidiary Guaranties and the New Ceridian Guaranty. "Guaranty Obligation" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guarantying or having the economic effect of guarantying any -8- 14 Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligees in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligees against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person; provided, however, that the term "Guaranty Obligation" shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guarantying Person in good faith. "Hazardous Materials" means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, hazardous chemicals, special waste, hazardous substance, hazardous material, regulated substance, or toxic substance, or petroleum or petroleum derived substance or waste. "Indebtedness" means, as to any Person at a particular time, all of the following: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, Note agreements or other similar instruments; (b) any fixed (non-contingent) obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations under any Swap Contract in an amount equal to (i) if such Swap Contract has been closed out, the Swap Termination Value, or (ii) if such Swap Contract has not been closed out, the mark-to-market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such Swap Contract; (d) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time), and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person -9- 15 (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; and (e) Capital Leases and Synthetic Lease Obligations. For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (that is not itself a corporation, limited liability company or limited liability partnership) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to the Required Note Holders. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. Without limiting the generality of the foregoing, any indebtedness of the Company to any of the Company's Wholly Owned Subsidiaries, or of any of the Company's Wholly Owned Subsidiaries to other of the Company's Wholly Owned Subsidiaries, shall not constitute Indebtedness hereunder. "Indemnified Liabilities" has the meaning set forth in Section 10.05. "Indemnitees" has the meaning set forth in Section 10.05. "Initial Permitted Indebtedness" means that Indebtedness set forth on Schedule 1.01(i). "Intellectual Property" means all trademarks, trademark rights, trade names, trade name rights, service marks, patents, pending patent applications, copyrights, franchises, authorizations, inventions, Proprietary Information and goodwill now existing or hereafter arising, and all other intellectual property rights held or used by the Company and its Subsidiaries. "Intercreditor Agreement" means that Intercreditor Agreement, dated as of the Closing Date, entered into among the Collateral Agent, the Administrative Agent, the Note Holders, and the "Swap Provider" (as defined therein) as counterparty to the Specified Swap Contracts, in form and substance satisfactory to the Required Note Holders, as amended or modified from time to time in accordance with the terms thereof. "Interest Payment Date" means the last day of each January, April, July and October, commencing April 30, 2001. "Investment" of a Person means (i) the outstanding principal amount of any Note, advance, extension of credit (other than Notes, advances or extensions of credit arising in the Ordinary Course of Business), or (ii) the amount (measured by the amount of cash expended or the then-current fair market value of other assets, including stock of such Person, utilized as consideration) of any contribution of capital by such Person to any other Person or any investment in, or purchase or other acquisition of, the stock, partnership or membership interests, notes, debentures or other securities of any other Person made by such Person, reduced by the amount of any distribution by such other Person constituting a return of capital, any payment of principal on such notes, debentures or other debt securities, or any proceeds from the sale of any equity or debt securities of such other Person. -10- 16 "IRS" means the United States Internal Revenue Service. "IRS Ruling Letter" means an affirmative private letter ruling by the IRS regarding the tax-free nature of the Spin-Off Transaction. "Laws" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. "Lender" means each lender from time to time party to the New Credit Facility. "Leverage Ratio" means, as of any date of determination, for Company and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters ending on such date. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable Laws of any jurisdiction), including the interest of a purchaser of accounts receivable, but excluding the interest of a lessor under an Operating Lease. "Note Documents" means the New Credit Facility, the Intercreditor Agreement and each note, security agreement, pledge agreement, control agreement, borrowing request, fee letter, certificate or other agreement, document or instrument executed or delivered in connection therewith. "Make Whole Amount" means, at any date, with respect to any prepayment or payment (whether on account of acceleration or otherwise) of any Notes, if the Treasury Rate plus 75 basis points at such date is lower than 9.96%, the excess of (x) the present value of the principal and interest payments on and in respect of the Notes being prepaid or paid, as the case may be, that would otherwise become due and payable (without giving effect to such prepayment or payment) (including the final payment on the maturity date of the Notes), discounted at a rate which is equal to the Treasury Rate plus 75 basis points over (y) the principal amount of the Notes being prepaid or paid, as the case may be, at par. If the Treasury Rate plus 75 basis points at the date of such prepayment or payment is equal to or higher than 9.96% per annum, the Make Whole Amount for purposes of such prepayment or payment is zero. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Company or the Company and its Subsidiaries taken as a whole and includes, at any time -11- 17 prior to the Spin-Off Consummation Date, New Ceridian and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Note Party to perform its obligations under any Note Document to which it is a party or, at any time prior to the Spin-Off Consummation Date, the ability of New Ceridian to perform its obligations under any Spin-Off Document to which it is party; or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against any Note Party or Subsidiary of any Note Document to which it is a party or, at any time prior to the Spin-Off Consummation Date, against New Ceridian of any Spin-Off Document to which it is a party, or (ii) the perfection or priority of any Lien granted under any of the Collateral Documents. "Material Software" means, at any time, any software program (including all releases, versions and modifications thereof) developed, acquired or used in connection with the Arbitron Business and as to which the Company or its Subsidiaries have received gross royalty or license payments from any and all third parties in an aggregate amount in excess of $1,000,000 during any of the five fiscal years preceding such time. "Material Subsidiary" means, at any time, any Arbitron Subsidiary: (a) the assets of which are either 5% or more of Consolidated Total Assets (or the equivalent thereof in another currency) or the gross revenues of which are 5% or more of consolidated gross revenue of the Company and its Subsidiaries, based on the most recent financial statements delivered to the Note Holders under Section 4.01(a), 4.02(a) or 6.01; or (b) designated by the Company as a Material Subsidiary pursuant to Section 6.15(b) and not de-designated pursuant to Section 6.15(c). "Maturity Date" means (a) January 31, 2008, or (b) such earlier date upon which the Notes and other Obligations may be accelerated in accordance with the terms hereof. "Maximum Rate" has the meaning specified in Section 10.10. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding three calendar years, has made or been obligated to make contributions. "Net Cash Proceeds" has the meaning specified in Section 2.05(a). "New Ceridian" means New Ceridian Corporation, a Delaware corporation. "New Ceridian Assets" means, at all times prior to the Spin-Off Consummation Date, all assets of the Company and its Subsidiaries intended (consistent with the Form 10) to be transferred to New Ceridian pursuant to the Separation and not including any assets necessary to conduct the Arbitron Business. "New Ceridian Credit Agreement" means that certain Credit Agreement dated as of January 31, 2001, among New Ceridian, the lenders from time to time party thereto and Bank of -12- 18 America, as the administrative agent, as amended or modified from time to time, and any agreement or agreements relating to extensions of credit which are a refinancing or replacement of such Credit Agreement. "New Ceridian Guaranty" means a Guaranty executed by New Ceridian, in substantially the form of Exhibit D. "New Credit Facility" means the Credit Agreement dated as of January 3, 2001 among the Company, Bank of America, as the Administrative Agent and Letter of Credit Issuer, and a syndicate of lenders, as amended or modified from time to time (subject to the Intercreditor Agreement), and any agreement or agreements relating to the refinancing or replacement of such Credit Agreement. "Nielsen" means Nielsen Media Research, Inc., a Delaware corporation. "Nielsen JV" means a joint venture that may be created upon the exercise of an option granted to Nielsen pursuant to the Nielsen JV Option Agreement. "Nielsen JV Option Agreement" means that Option Agreement between the Company and Nielsen dated as of May 31, 2000 and as in effect as of the Effectiveness Date. "Note Documents" means this Agreement, the Notes, the Intercreditor Agreement, the Collateral Documents, the Guaranties, each Additional Guarantor Assumption Agreement, each Compliance Certificate and other certificates delivered under any of the foregoing. "Note Holder-Related Persons" means each of the Note Holders and the Note Holder Representative (including any successor Note Holder Representative), together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Note Holder Representative" means John Hancock Life Insurance Company, and its successors and assigns. "Note Holders" means each of the Persons named on Schedule I attached hereto and their respective transferees, successors and assigns. "Note Parties" means, collectively, the Company and all other Persons from time to time party to a Note Document, other than any Note Holder, or the Administrative Agent or any Lender pursuant to the New Credit Facility who may be a party from time to time to the Intercreditor Agreement or any of the Collateral Documents. "Notes" has the meaning specified in Section 2.01. "Notice of Lien" means any "notice of lien" or similar document intended to be filed or recorded with any court, registry, recorder" office, central filing office, or other Governmental Authority for the purpose of evidencing, creating, perfecting or preserving the priority of a lien securing obligations owing to a Governmental Authority. -13- 19 "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Note Party arising under any Note Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest that accrues after the commencement by or against any Note Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. "Operating Lease" means, as applied to any Person, any lease of property which is not a Capital Lease. "Ordinary Course of Business" means, in respect of any transaction involving the Company or any Subsidiary, the ordinary course of such Person's business, as conducted by any such Person (or its predecessor) in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Note Document. "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the articles of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time. "Other Taxes" has the meaning specified in Section 3.01(b). "Outstanding Amount" means with respect to the Notes on any date, the aggregate outstanding principal amount thereof after giving effect to prepayments or repayments of the Notes occurring on such date. "PBGC" means the Pension Benefit Guaranty Corporation. "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Company or any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years. "Permitted Acquisition" means any Acquisition as to which all of the following conditions are satisfied: (a) total cash and non cash consideration (including any deferred payment) paid or required to be paid by the Company and its Subsidiaries in connection with such Acquisition does not exceed $30,000,000; (b) after giving effect to such Acquisition, total cash and non cash consideration (including any deferred payment) paid or required to be paid by the Company and its Subsidiaries in connection with all such Acquisitions in any fiscal year does not exceed $50,000,000; (c) after giving effect to such Acquisition, the Person, or business or division of such Person, so acquired shall be a Wholly Owned Subsidiary of the Company or one -14- 20 of its Subsidiaries; and (d) immediately after giving effect to such Acquisition, there shall exist no Default or Event of Default. "Permitted Indebtedness" has the meaning specified in Section 7.03(a). "Permitted Liens" has the meaning specified in Section 7.01. "Permitted Nielsen JV" means any Person that is a Nielsen JV, provided the following conditions are at all times satisfied: (i) such Person is an entity duly formed and existing under the Laws of its jurisdiction of incorporation or organization; (ii) no less than 50% of the beneficial ownership of such person is owned by the Company and such Person is not a Subsidiary of Nielsen or of any Affiliate of Nielsen; (iii) the assets and property of such Person consisting of Intellectual Property or Proprietary Information contributed by the Company or any Subsidiary of the Company are subject to no Liens in favor of any other Person other than Permitted Liens; (iv) such Person is authorized to use and license the Company's PPM Technology to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement; and (v) the Organization Documents and all material contracts and licenses of such Person entered into, directly or indirectly, with the Company or any Subsidiary, and other material contracts to be entered into by such Person substantially contemporaneously with its formation are in form and substance reasonably satisfactory to the Required Note Holders. "Permitted Swap Contract" means any Swap Contract entered into by the Company or any Subsidiary for which each of the following conditions is satisfied: (a) such contract is (or was) entered into by such Person in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated by such Person (including any Swap Contract entered into by the Company or any Subsidiary for the purpose of hedging interest rate risk arising in connection with the Obligations (a "Specified Swap Contract")), or with changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a "market view"; and (b) such Swap Contract does not contain: (i) any provision (a "walk-away" provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party, or (ii) with respect to any Swap Contract that it is not a Specified Swap Contract, any provision creating or permitting the declaration of an event of default, termination event, or similar event upon the occurrence of an Event of Default hereunder (other than an Event of Default under Section 8.01(a)). "Person" means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture or Governmental Authority. "Pledge Agreements" means the Company Pledge Agreement and the Subsidiary Pledge Agreements. "Pledged Collateral" has the meaning specified in the Pledge Agreements. "PPM Expenditures" means (a) at any time prior to the initial exercise of the option under the Nielsen JV Option Agreement to establish a Nielsen JV, all capital expenditures and -15- 21 capitalized expenditures (including in respect of software development and acquisition), made or incurred by the Company or its Subsidiaries in anticipation of a Nielsen JV or in furtherance of the development or Disposition of PPM Technology, and (b) at any time thereafter, the sum of the items specified in clause (a) plus all Investments made by the Company and its Subsidiaries, in any and all Nielsen JV's. "PPM Technology" means (a) all patent, copyright and other intellectual property rights and technology of the Company and its Subsidiaries in the Company's "Portable People Meter" and "Critical Band Encoding Technique," as such terms are defined in the Nielsen JV Option Agreement, together with all improvements and additions thereto, and (b) all other audio encoding patents held by the Company and subject to the Nielson JV Option Agreement. "Preliminary Opening Balance Sheet" has the meaning specified in Section 4.01(a)(viii). "premium" when used in conjunction with references to principal of and interest on the Notes, shall mean any amount due upon any payment or prepayment of any of the Notes, other than principal and interest, and shall include the Make Whole Amount. "Proprietary Information" means, as to the Company and each of its Subsidiaries, such Person's trade secrets, including know-how, computer programs, and technical data, used in the development, production and sale of products and services. "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived. "Required Note Holders" means, as of any date of determination, the holder or holders of more than 50% in interest of the Notes at the time outstanding (excluding all Notes at the time owned by the Company, any of its Subsidiaries or any of their respective Affiliates). "Responsible Officer" means the president, chief executive officer, chief financial officer, treasurer or controller of a Note Party, and also includes, in respect of the Company, the Executive Vice President of Finance and Planning of Arbitron. Any document delivered hereunder that is signed by a Responsible Officer of a Note Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Note Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Note Party. "Revocable" means, in relation to any license of Intellectual Property, that such license may be revoked or terminated by the licensor at any time or upon default or breach of condition by the licensee. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "Scarborough Partnership" means that New York general partnership created pursuant to the Scarborough Partnership Agreement. -16- 22 "Scarborough Partnership Agreement" means that Partnership Agreement between VNU Advertising Expenditure Corp. and the Company, dated as of December 31, 1994, as amended and in effect as of the Effectiveness Date. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same shall be in effect from time to time. "Security Agreements" means the Company Security Agreement, the Subsidiary Security Agreements and the Supplemental IP Security Agreements. "Senior Credit Ratable Amount" means, at any time, with reference to any mandatory prepayment hereunder pursuant to Section 2.05, an amount equal to the quotient of: (a) the Outstanding Amount divided by (b) the sum of (i) the Outstanding Amount, plus (ii) the Aggregate Commitments of the Lenders (but in no event greater than $225,000,000) under and as defined in the New Credit Facility at such time; provided, however, that if there exists at such time no mandatory prepayment requirement pursuant to the Note Documents in respect of such prepayment or if any such mandatory prepayment has been waived, the "Senior Credit Ratable Amount" shall equal 1.0. "Senior Note Indenture" means that Indenture dated as of June 10, 1999 between Ceridian Corporation, as Issuer, and the Bank of New York, as Trustee, relating to 7.25% Senior Notes due 2004. "Separation" means the consummation of (a) the transfer by way of absolute assignment and contribution by the Company to New Ceridian of all assets and businesses of the Company, other than the Arbitron Business, and (b) the corresponding allocation of liabilities of the Company as between the Company and New Ceridian, through means of novation or cross-indemnities, pursuant to the Spin-Off Documents. "Separation Date" means the date upon which all material aspects of the Separation have been completed. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the fair value of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the Uniform Fraudulent Conveyances Act (as enacted in the State of New York); (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such -17- 23 Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Contract" has the meaning specified in the definition of "Permitted Swap Contract". "Spin-Off Consummation Date" means the date upon which all material aspects of the Spin-Off Transaction have been consummated. "Spin-Off Deadline" means the earlier of (a) March 30, 2001 or (b) the date occurring three Business Days after the Closing Date. "Spin-Off Documents" means the documents set forth in Schedule 1.01(s), each substantially in the form attached to the Form 10 or delivered to the Note Holders pursuant to Article IV. "Spin-Off Transaction" means, collectively, (i) the Separation and (ii) the Distribution. "Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Company. "Subsidiary Guaranty" means a Guaranty executed by any Arbitron Subsidiary, in substantially the form of Exhibit E. "Subsidiary Pledge Agreement" means a Pledge Agreement executed by any Arbitron Subsidiary, in substantially the form of Exhibit J. "Subsidiary Security Agreement" means a Security Agreement executed by any Arbitron Subsidiary, in substantially the form of Exhibit G. "Supplemental Financial Statements" means the unaudited pro forma consolidated balance sheet of the Company and Arbitron Subsidiaries on a stand-alone basis for the fiscal quarter ended March 31, 2000 (giving effect to the Spin-Off Transaction) and the related pro forma consolidated income statement for such fiscal quarter. "Supplemental IP Security Agreement" means any Supplemental Intellectual Property Security Agreement, in substantially the form of Exhibit H, executed pursuant to Section 6.16. "Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index -18- 24 transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Lender under the New Credit Facility). "Synthetic Lease Obligation" means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). "Taxes" has the meaning specified in Section 3.01(a). "Test Period" means a period of four consecutive fiscal quarters. "Threshold Amount" means $5,000,000, except that in respect of Indebtedness under the Note Documents or any Swap Termination Value in respect of Specified Swap Contracts, "Threshold Amount" means $0. "Transaction Liens" means, collectively, all Liens from time to time existing in favor of the Collateral Agent, for the benefit of the Administrative Agent, the Note Holders and any Lender counterparty to a Specified Swap Contract, to the extent subject to the Intercreditor Agreement. "Treasury Rate" at any time with respect to any Notes being prepaid or paid (whether on account of acceleration or otherwise), as the case may be, shall mean and shall be determined by reference to the applicable display on Bloomberg Financial Markets Service as of 10:00 A.M., Boston time, on the second Business Day prior to the date fixed for such prepayment or payment (or, if such display is no longer available, any publicly available source of similar market data), and shall be the yield on actively traded United States Treasury securities adjusted to a maturity equal to the then remaining Weighted Average Life to Maturity of the Notes then being prepaid -19- 25 or paid (whether on account of acceleration or otherwise) (the "Remaining Life"). If the Remaining Life is not equal to the maturity of a United States Treasury security for which a yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of the two closest United States Treasury securities for which such yields are given, except that if the Remaining Life is less than one year, the average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year shall be used. The Treasury Rate shall be computed to the fifth decimal place (one-thousandth of a percentage point) and then rounded to the fourth decimal place (one-hundredth of a percentage point). "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that in the event that by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for the purposes of definitions related to such provisions. "Weighted Average Life to Maturity" of any Indebtedness or obligation shall mean, at any date, the number of years obtained by dividing the then Remaining Dollar-years of such Indebtedness or obligation by the then outstanding principal amount of such Indebtedness or obligation. For purposes of this definition, the "Remaining Dollar-years" of any Indebtedness or obligation shall mean, at any date, the total of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment. "Wholly Owned Subsidiary" means any Subsidiary in which (other than directors' qualifying shares required by law) 100% of the capital stock of each class having ordinary voting power, and 100% of the capital stock of every other class, in each case, at the time as of which any determination is being made, is owned, beneficially and of record, by the Company, or by one or more of the other Wholly Owned Subsidiaries of the Company, or both. 1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "herein" and "hereunder" and words of similar import when used in any Note Document shall refer to such Note Document as a whole and not to any particular provision thereof. (i) Unless otherwise specified herein, Article, Section, Exhibit and Schedule references are to this Agreement. (ii) The term "including" is by way of example and not limitation. -20- 26 (iii) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced. (c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." (d) Section headings herein and the other Note Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Note Document. 1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. (b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Note Document, and either the Company or the Required Note Holders shall so request, the Note Holders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Note Holders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Company shall provide to the Note Holders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. 1.04 ROUNDING. Any financial ratios required to be maintained by the Company pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number). 1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided herein, (a) references to agreements (including the Note Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Note Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law. -21- 27 ARTICLE II AUTHORIZATION, SALE AND PURCHASE OF NOTES 2.01 AUTHORIZATION OF NOTES. The Company has authorized the issue and sale of its Senior Secured Notes due January 31, 2008 (herein, together with any notes issued in exchange therefor or replacement thereof, called the "Notes") in the aggregate principal amount of $50,000,000. The Notes are to be substantially in the form of Exhibit A attached hereto. 2.02 SALE AND PURCHASE OF NOTES. The Company will issue and sell to each of the Note Holders listed on Schedule I and, subject to the terms and conditions hereof and in reliance upon the representations and warranties of the Company contained herein and in the other Note Documents, each of the Note Holders shall purchase from the Company, at the Closing, as specified in Section 2.03, such Notes as are specified on that portion of Schedule I attached hereto as is applicable to such Note Holder. The aggregate purchase price of the Notes shall be $50,000,000. 2.03 CLOSING. The closing of the sale and purchase of the Notes hereunder (the "Closing") shall take place at the office of Choate, Hall & Stewart or such other place as the Company and the Note Holder Representative may agree, on the Business Day on or before the Spin-Off Deadline specified by the Company to the Note Holder Representative on five (5) Business Days prior written notice (the "Closing Date"), not later than 11:00 A.M. Boston, Massachusetts time (the Note Holders' reinvestment deadline). At the Closing, the Company will deliver to the Note Holders the Notes to be issued to them at the Closing against payment of the purchase price thereof to (or for the benefit of) the Company in immediately available funds in accordance with the wire instructions set forth on Schedule 2.03. Delivery of the Notes to be issued to the Note Holders at the Closing shall be made in the form of one or more Notes, in such denominations and registered in such names as are specified on Schedule I and in each case dated and bearing interest from the Closing Date. If at the Closing the Company shall fail to tender the Notes to be delivered to the Note Holders thereat as provided herein, or if at the Closing any of the conditions specified in Article IV shall not have been fulfilled to the Note Holders' satisfaction, the Note Holders shall, at their election, be relieved of all further obligations under this Agreement and the other Note Documents, without thereby waiving any other rights the Note Holders may have by reason of such failure or non-fulfillment. 2.04 OPTIONAL PREPAYMENTS. At any time or from time to time, the Company may, at its option, upon notice as set forth in Section 2.06(b), prepay all or any part (in an integral multiple of $100,000 and a minimum of $5,000,000 or such lesser principal amount thereof as shall then be outstanding) of the Notes, together with all accrued and unpaid interest thereon, upon the concurrent payment of a premium equal to the Make-Whole Amount. 2.05 MANDATORY OFFERS TO MAKE PREPAYMENTS. (a) Asset Dispositions. If the Company or any Arbitron Subsidiary shall at any time or from time to time make or agree to make a Disposition, other than a Disposition specified in Section 7.04(b) (but subject to clause (D) of Section 7.04(b)(ii)) or shall suffer an Event of Loss (except to the extent the insurance or other third party recovery proceeds received in connection therewith are within 25 days of receipt applied to the purchase price of replacement assets -22- 28 substantially similar to those experiencing the Event of Loss), other than any Disposition or Event of Loss occurring prior to the Separation Date to the extent relating to New Ceridian Assets, then (i) the Company shall promptly notify the Note Holders of such proposed Disposition or such Event of Loss (including the amount of the estimated net cash or Cash Equivalents proceeds, calculated exclusive of (x) reasonable out-of-pocket expenses, (y) taxes actually paid and (z) the amount of Indebtedness secured solely or principally by such assets and actually repaid ("Net Cash Proceeds") to be received by the Company or such Subsidiary in respect thereof), which notice shall contain and constitute an offer to prepay without premium the Notes of each Note Holder, as further provided in Section 2.05(d), and (ii) promptly upon, and in no event later than 30 days after, receipt by the Company or the Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, the Company shall, subject to the provisions of Section 2.05(d), prepay the Notes of each Note Holder that shall have timely elected to accept such offer, provided that the aggregate amount to be paid to the Note Holders pursuant to this Section 2.05(a) shall not exceed an amount equal to the Senior Credit Ratable Amount times the amount of such Net Cash Proceeds (with each Note Holder being entitled to its pro rata share thereof in proportion to the outstanding principal amount of Notes then held by it); provided, however, that no prepayment shall be required under this subsection in connection with any Disposition that, alone or together with all related Dispositions to the same Person or Affiliate of such Person, involves Net Cash Proceeds of less than $1,000,000. (b) Equity or Debt Issuance. (i) If the Company shall issue new common or preferred equity, or, subject to Section 7.03, any debt securities, the Company shall promptly notify the Note Holders of the estimated proceeds of such issuance net of reasonable out-of-pocket expenses incurred by the Company ("Net Issuance Proceeds") to be received by the Company in respect thereof, which notice shall contain and constitute an offer to prepay without premium the Notes, as further provided in Section 2.05(d). Promptly upon, and in no event later than 30 days after, receipt by the Company of such Net Issuance Proceeds of such issuance, the Company shall, subject to the provisions of Section 2.05(d), prepay the Notes of each Note Holder that shall have timely elected to accept such offer, provided that the aggregate amount to be paid to the Note Holders pursuant to this Section 2.05(b) shall not exceed an amount equal to the Senior Credit Ratable Amount times the amount of such Net Issuance Proceeds (with each Note Holder being entitled to its pro rata share thereof in proportion to the outstanding principal amount of Notes then held by it). (ii) No prepayment shall be required under this subsection (b) in connection with (A) the issuance of equity securities pursuant to Section 7.07(a)(i), or (B) the Acquisition by the Company or any Subsidiary of cash or Cash Equivalents in any Permitted Acquisition, provided that the cash or Cash Equivalents so acquired is merely incidental to such Permitted Acquisition, or (C) the issuance of any debt instrument or incurrence of debt pursuant to the New Credit Facility. (c) Reserved. (d) Offers to Prepay; Acceptance, etc. (i) Each offer to prepay Notes pursuant to Sections 2.05(a) and (b) shall be an offer to prepay the Notes of each holder on the date required pursuant to such Section which date shall be specified in such offer (the "Proposed Prepayment Date"). -23- 29 (ii) A holder of Notes may accept an offer to prepay made pursuant to Section 2.05(a) or (b) by causing a notice of such acceptance to be given to the Company not later than 10 Business Days following the date upon which such offer shall have been given to such Note Holder. A failure by a Note Holder to respond to an offer to prepay made pursuant to Section 2.05(a) or (b) shall be deemed to constitute a rejection of the offer by such Note Holder. (iii) Prepayment of the Notes to be prepaid pursuant to this Section 2.05 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment. (iv) Each offer to prepay the Notes pursuant to this Section 2.05 shall be accompanied by a certificate, executed by a senior financial officer of the Company and dated the date of such offer, specifying: (A) the Proposed Prepayment Date; (B) that such offer is made pursuant to this Section 2.05; (C) the principal amount of each Note offered to be prepaid; (D) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; and (E) that the conditions of this Section 2.05 have been fulfilled. (e) Prepayments Under New Credit Facility. In no event shall the Company prepay any Notes under the New Credit Facility on account of any events of the kind referred to in Sections 2.05(a) or (b) without concurrently offering to prepay all Notes then and to the extent required pursuant to this Section 2.05. 2.06 GENERAL PROVISIONS CONCERNING PREPAYMENTS. (a) Allocation of Partial Prepayments of Notes. In the case of each partial prepayment of the Notes under Section 2.04 or 2.05, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding and then required to be prepaid (excluding any Notes at the time owned by the Company or any Affiliate of the Company) in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof, with adjustments, to the extent practicable, to compensate for any prior prepayments not made exactly in such proportion. (b) Notice of Prepayments of Notes. In the case of each prepayment under Section 2.04 or 2.05, the Company shall give written notice thereof to each holder of Notes not less than 30 (5 days in the case of any prepayment pursuant to Section 2.05) nor more than 60 days prior to the date fixed for such prepayment. Each such notice shall set forth: (i) the date fixed for prepayment; (ii) the aggregate principal amount of Notes to be prepaid on such date; and (iii) the aggregate principal amount of Notes held by such holder to be prepaid on such date and the amount of accrued interest and an estimation of the Make-Whole Amount, if any, to be paid to such holder on such date (together with the calculation of such Make-Whole Amount, which calculation shall be satisfactory to each holder of the Notes). (c) Maturity; Accrued Interest; Surrender, etc. of Notes. In the case of each prepayment of all or any part of any Note, the principal amount to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such -24- 30 principal amount accrued to such date and the premium, if any, due thereon. Any Note prepaid in full shall be surrendered to the Company at its principal place of business promptly following prepayment and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. (d) Purchase of Notes. The Company will not, and will not permit any of its Affiliates to, directly or indirectly, purchase or otherwise acquire, or offer to purchase or otherwise acquire, any outstanding Notes except by way of payment or prepayment in accordance with the provisions of the Notes and this Agreement. 2.07 REPAYMENT OF NOTES. The Company shall repay to the Note Holders on the Maturity Date the aggregate principal amount of the Notes outstanding on such date, together with all accrued and unpaid interest thereon. 2.08 INTEREST. (a) Subject to the provisions of subsection (b) below, the Notes shall bear interest at a per annum rate equal to 9.96%. (b) While any Event of Default exists or after acceleration, the Company shall pay interest on the Outstanding Amount of all Obligations at an interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand. (c) Interest on each Note shall be due and payable in arrears on each Interest Payment Date applicable thereto and at maturity and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. 2.09 RESERVED. 2.10 COMPUTATION OF INTEREST. Computation of interest on the Notes shall be calculated on the basis of a 360-day year of twelve-30 day months. 2.11 RESERVED. 2.12 PAYMENTS GENERALLY. (a) All payments to be made by the Company shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Company hereunder shall be made to the Note Holders by the method and at the address for such purpose specified in Schedule I attached hereto or by such other method or at such other address as a Note Holder may designate in writing, without requiring any presentation or surrender of such Note, except that if any Note shall be paid, prepaid and/or repurchased in full, such Note, at the Company's request, shall be surrendered to the Company promptly following such payment, prepayment or repurchase and cancelled. -25- 31 (b) If any payment to be made by the Company shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest. 2.13 RESERVED. 2.14 SECURITY AND GUARANTIES. (a) Subject to and in accordance with the Intercreditor Agreement and the Collateral Documents, the Obligations shall be secured at all times in accordance with the terms hereof and the Collateral Documents by a first priority perfected security interest in all of the properties and assets of the Company and its Subsidiaries (other than real property), whether now existing or hereafter acquired or created, except as expressly otherwise provided herein and in the Collateral Documents. (b) The Obligations of the Company under this Agreement, each of the Notes and all other Note Documents shall be unconditionally guaranteed by the Guarantors pursuant to the Guaranties. ARTICLE III TAXES 3.01 TAXES. (a) Any and all payments by the Company to or for the account of any of the Note Holders under any Note Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Note Holder, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such Note Holder is organized or maintains an office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If the Company shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Note Document to any Note Holder, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), such Note Holder receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions, (iii) the Company shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Company shall furnish to such Note Holder the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, the Company agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Note Document or from the execution, delivery, -26- 32 performance, enforcement or registration of, or otherwise with respect to, any Note Document (hereinafter referred to as "Other Taxes"). (c) If the Company shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Note Document to any Note Holder, the Company shall also pay to such Note Holder, at the time interest is paid, such additional amount that such Note Holder specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Note Holder would have received if such Taxes or Other Taxes had not been imposed. (d) The Company agrees to indemnify each Note Holder for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by such Note Holder, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within 30 days after the date any Note Holder makes a demand therefor. (e) The Company shall not be required to pay any additional amount in respect of United States federal income tax pursuant to Section 3.01(a) to any Note Holder: (i) if the obligation to pay such additional amounts would not have arisen but for a failure by such Note Holder to comply with its obligations under Section 10.15; or (ii) if any Note Holder shall have delivered to the Company the forms referred to in Section 10.15, and such Note Holder shall not at any time be entitled to exemption from deduction or withholding of United States federal income tax in respect of payments by the Company hereunder for the account of such Note Holder for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such forms. 3.02 RESERVED. 3.03 RESERVED. 3.04 RESERVED. 3.05 RESERVED. 3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. (a) A certificate of any Note Holder claiming compensation under this Article III and setting forth the calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Note Holder may use any reasonable averaging and attribution methods. -27- 33 (b) Reserved (c) The Company shall not be obligated to pay any amounts under Sections 3.01(d) which arose prior to the date that is 180 days preceding the date of the demand required by each such Section or that is attributable to periods prior to the date that is 180 days preceding the date of such demand. 3.07 SURVIVAL. All of the Company's obligations under this Article III shall survive termination of the Note Documents and payment in full of the Notes and all the other Obligations. ARTICLE IV CONDITIONS PRECEDENT 4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement is subject to satisfaction of the following conditions precedent; provided that at the election of the Required Note Holders any of the items required to be delivered pursuant to subsection (a)(iv), (a)(vi), (e) or (f) may be waived for purposes of this Section 4.01, provided that they shall be deemed added to Section 4.02 and delivered or accomplished by no later than the Closing Date. (a) Unless waived by all the Note Holders, the Note Holders' receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Note Party that is a party thereto, each dated the Effectiveness Date (or, in the case of certificates of governmental officials, a recent date before the Effectiveness Date) and each in form and substance satisfactory to the Required Note Holders: (i) executed counterparts of this Agreement and the Guaranties, sufficient in number for distribution to each Note Holder and the Company; (ii) the Notes issued to the Note Holders in accordance with Section 2.03; (iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Note Party as the Note Parties may require to establish the identities of and verify the authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Note Documents to which such Note Party is a party; (iv) such evidence as the Note Holders may reasonably require to verify that each Note Party is duly organized or formed, validly existing, in good standing and qualified to engage in business in each jurisdiction (a) in which it is incorporated, or has any headquarter function, or (b) in which it is required to be qualified to engage in business if the absence of such qualification could have a Material Adverse Effect; including certified copies of each Note Party's Organization Documents, certificates of good standing and/or qualification to engage in business and tax good standing certificates in such jurisdictions; -28- 34 (v) a certificate signed by a Responsible Officer of the Company certifying (A) that all representations and warranties contained in Article V are true and correct on and as of the Effectiveness Date and no Default or Event of Default exists on and as of such date; (B) that there has been no event or circumstance since the date of the most recent of the Audited Financial Statements which has or could be reasonably expected to have a Material Adverse Effect; and (C) that the Company's and New Ceridian's senior management are highly confident that the Spin-Off Consummation Date will occur by no later than the Spin-Off Deadline under the terms specified in the Spin-Off Documents delivered under subsection (a)(vii) below. (vi) one or more opinions of counsel to each Note Party with respect to those matters set forth listed at Exhibit K; (vii) a certificate signed by a Responsible Officer of the Company certifying the attachment of (A) true and complete draft or final copies of all material Spin-Off Documents, which shall be in form and substance reasonably satisfactory to the Note Holders; (B) true and complete copy of the Form 10 as submitted by the Company to and approved by the SEC in connection with the Spin-Off Transaction (together with and including all exhibits and attachments thereto), which shall be in form and substance satisfactory to the Required Note Holders; (C) true and complete copy of each of the Note Documents, which shall satisfy the following conditions: (I) a maturity date occurring five (5) years after the Closing Date of the New Credit Facility (subject to termination in accordance with the terms thereof), (II) representations and warranties, covenants and events of default not more restrictive than those contained in the Note Documents; (III) aggregate commitments of no less than $225,000,000 with scheduled reductions in such commitments or other amortization in form and substance satisfactory to the Required Note Holders; (IV) no collateral other than the Collateral, and (V) no guarantor other than the Guarantors; (D) a true and complete copy of the Scarborough Partnership Agreement; (E) a true and complete copy of the Nielsen J.V. Option Agreement; and (F) a solvency opinion provided by the Houlihan Lokey firm in respect of the Company and New Ceridian, respectively, addressed to the Note Holder Representative, dated as of the Effectiveness Date, and any and all certificates and other documents provided by the Company to the Houlihan Lokey firm in respect of such opinion. (viii) such other financial information and documentation as any Note Holder may reasonably request, in form and substance reasonably satisfactory to the Required Note Holders, including (A) five-year financial projections for the Company and its Arbitron Subsidiaries on a stand-alone basis, (B) a preliminary pro forma opening balance sheet of the Company and its Subsidiaries as of the Separation Date ("Preliminary Opening Balance Sheet"), prepared by the Company, and (C) a consolidated balance sheet of the Company and it Arbitron Subsidiaries on a stand-alone basis, as of December 31, 2000, as prepared by the Company consistent with GAAP, reflecting the consummation of the Spin-Off Transaction as of such date, but without giving effect to the refinancing of the Company's Existing Credit Facility and other Indebtedness pursuant to this Agreement, the New Ceridian Credit Agreement and the -29- 35 New Credit Facility, and in substantially similar form as the column captioned "Historical-Arbitron" in the balance sheet labeled as "Arbitron Unaudited Pro Forma Condensed Combined Balance Sheet Date" set forth in the Form 10; (ix) evidence of the Company's receipt of the IRS Ruling Letter; (x) evidence of a waiver or consent with respect to defaults otherwise arising under the Existing Credit Facility from the consummation of the Spin-Off Transaction and the financings contemplated thereby by the "Agent" and "Lenders" as defined in and party to the Existing Credit Facility; and (xi) such other assurances, certificates, documents, consents or opinions as the Required Note Holders or the Note Holder Representative reasonably may require. (b) The corporate, legal, capital, tax, contractual, and management structure and attributes of the Company and its Subsidiaries and of the Spin-Off Transaction shall be satisfactory to the Required Note Holders. (c) Any fees required to be paid on or before the Effectiveness Date shall have been paid, and unless waived by the Required Note Holders or the Note Holder Representative, as applicable, the Company shall have paid all Attorney Costs of the Note Holders and the Note Holder Representative to the extent invoiced prior to or on the Effectiveness Date, plus such additional amounts of Attorney Costs as shall constitute their reasonable estimate of Attorney Costs incurred or to be incurred by them through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Company and the Note Holders or the Note Holder Representative). (d) The Effectiveness Date shall occur no later than February 5, 2001. (e) The Collateral Documents shall be executed by each Note Party other than New Ceridian, in appropriate form for recording, where necessary, together with: (i) acknowledgment copies of all UCC-l financing statements filed, registered or recorded to perfect the security interests of the Collateral Agent for the benefit of the Note Holders, or other evidence reasonably satisfactory to the Required Note Holders that there has been filed, registered or recorded all financing statements and other filings, registrations and recordings (including filings at the U.S. Copyright Office, the U.S. Patent and Trademark Office or other applicable Governmental Authority in respect of Intellectual Property and Proprietary Information) necessary and advisable to perfect or protect the Liens of the Collateral Agent for the benefit of the Note Holders in accordance with applicable law, with such exceptions as the Required Note Holders may permit in their discretion; (ii) true and complete copies of copyright filings of the Company and its Subsidiaries at the U.S. Copyright Office in respect of computer databases registered during the years 1999 and 2000 and of the Material Software, as more fully required pursuant to the Security Agreements; -30- 36 (iii) written advice relating to such Lien and judgment searches as the Note Holders shall have requested, and such termination statements or other documents as may be necessary to confirm that the Collateral is subject to no other Liens in favor of any Persons (other than Permitted Liens); (iv) all certificates and instruments representing the Pledged Collateral, stock transfer powers executed in blank with signatures guaranteed as the Collateral Agent or any Note Holder or the Note Holder Representative may specify; provided that in no event shall more than 65% of the capital stock of any Foreign Subsidiary be required to be so pledged; (v) Account Control Agreements, executed by all parties thereto, relating to (a) any deposit accounts maintained by the Company in relation to the Arbitron Business with Bank of America or any of its Affiliates, and (b) any securities accounts maintained by the Company in relation to the Arbitron Business; (vi) such consents, estoppels, subordination agreements and other documents and instruments executed by landlords, tenants and other Persons party to material contracts relating to any Collateral as to which the Collateral Agent, for the benefit of the Note Holders, shall be granted a Lien, as requested by the any Note Holder; and (vii) evidence that all other actions necessary or, in the reasonable opinion of the Required Note Holders or the Note Holder Representative, desirable to perfect and protect the first priority Lien created by the Collateral Documents and to enhance the ability of the Note Holders or the Note Holder Representative to preserve and protect their interests in and access to the Collateral, have been taken. (f) Insurance Policies. The Company shall provide evidence in form and substance satisfactory to the Required Note Holders that the Note Holders (or the Note Holder Representative on their behalf) have (or has) been named as loss payees/mortgagees and as additional insured(s), as their interests may appear, as required in accordance with Section 6.06 and the Collateral Documents, together with a certificate of insurance as to all insurance coverage on the properties of the Company and its Subsidiaries. 4.02 CONDITIONS TO PURCHASE OF NOTES. The obligation of each Note Holder to purchase and pay for the Notes to be issued hereunder is subject to satisfaction of the following conditions precedent: (a) Unless waived by the Required Note Holders, the Note Holders' receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Note Party, each dated the Closing Date and each in form and substance satisfactory to the Required Note Holders: (i) a certificate signed by a Responsible Officer of the Company certifying (A) that all representations and warranties of the Company contained in Article V are true and correct on and as of the Closing Date, (B) that there exists as of such date no Default -31- 37 or Event of Default, (C) that there has been no event or circumstance since the date of the most recent Audited Financial Statements which has or could reasonably be expected to have a Material Adverse Effect, (D) that the Separation Date has occurred pursuant to the Spin-Off Documents, which are in full force and effect and in substantially the form delivered in connection with the Effectiveness Date (or otherwise in form and substance satisfactory to the Note Holders), (E) that the Company's and New Ceridian's senior management are highly confident that the Spin-Off Consummation Date will occur by no later than the Spin-Off Deadline; (F) that the Company has obtained stockholder approval to effect a reverse stock split of the Company's shares of common stock at a ratio not to exceed 1-for-5, which shall occur promptly but in any event not more than 60 days after the Spin-Off Consummation Date; (G) that the Board of Directors of the Company has authorized and approved the final terms of the Spin-Off Transaction (including declaration of a dividend of shares of New Ceridian's common stock to Company's shareholders); (H) that the SEC has approved the form of the Form 10, as it may have been amended since the Effectiveness Date to reflect (I) revisions made to conform the Spin-Off Documents filed with the Form 10 to those delivered to the Note Holders pursuant to Section 4.01(a)(vii), (II) the inclusion of the opinions described in Section 4.02(a)(iv), (III) any required date revisions not inconsistent with the terms hereof, (IV) ministerial revisions necessary to address administrative issues or facial ambiguities, and (V) other amendments satisfactory to the Required Note Holders, (I) that all conditions precedent pursuant to the New Credit Facility have been satisfied and that the New Credit Facility has been, or is contemporaneously with the initial funding hereunder being, fully funded; and (J) such other matters relating to the Spin-Off Transaction as the Required Note Holders may request; (ii) a pro forma Compliance Certificate of the Company and its Subsidiaries, signed by a Responsible Officer of the Company; (iii) a certificate signed by a Responsible Officer of the Company certifying the attachment of (A) a true and complete copy of the final pro forma opening balance sheet of the Company and its Subsidiaries as of the Separation Date, by the Company, which shall contain in the opinion of the Note Holders no material adverse discrepancies from the Preliminary Opening Balance Sheet, (B) a true and complete copy of the Supplemental Financial Statements, and (C) an audited balance sheet of the Company and its Arbitron Subsidiaries as of December 31, 2000, which balance sheet shall contain in the opinion of the Required Note Holders no material adverse discrepancies from the balance sheet delivered by the Company under Section 4.01(a)(viii)(C), accompanied by the opinion of KPMG Peat Marwick LLP or another nationally-recognized independent public accounting firm, which report shall state that such balance sheet presents fairly in all material respects the financial position of the Company and the Arbitron Subsidiaries on a stand-alone basis as of such date and such opinion shall not be qualified or limited for any reason; (iv) a certificate signed by a Responsible Officer of the Company certifying the Company's receipt, and attaching a true and complete copy, of (A) a solvency opinion provided by the Houlihan Lokey firm in respect of the Company and New Ceridian, -32- 38 respectively, addressed to the Note Holder Representative, dated as of the Closing Date, and including any and all certificates and other documents provided by the Company to the Houlihan Lokey firm in respect of such opinion; (B) a fairness, financial viability, and "fair value" opinion addressed to the Company (or its Board of Directors) and relating to the Spin-Off Transaction, provided by the Company's financial advisors, Bear Stearns & Co., and including any and all certificates and other documents provided by the Company to Bear Stearns & Co. in respect of such opinion; (v) evidence: (A) of payment (prior to or upon the initial funding) of all funded Indebtedness of the Company existing immediately prior to the Closing Date and termination of all credit commitments, including the Existing Credit Facility together with evidence of the release of all Liens securing obligations in connection therewith, but excluding the Initial Permitted Indebtedness, and (B) of the allocation, which shall be satisfactory to the Note Holders, of all contingent and other liabilities of the Company as between the Company and New Ceridian, with such third party acknowledgments or consents relating thereto as the Note Holders may request; (vi) one or more opinions of counsel to the Company regarding the matters specified in Exhibit L; and (vii) such other assurances, certificates, documents, consents or opinions as the Required Note Holders or the Note Holder Representative reasonably may require. (b) The Closing Date shall occur no later than March 30, 2001. (c) The corporate, legal, capital, tax, contractual, and management structure and attributes of the Company and its Subsidiaries and of the Spin-Off Transaction shall conform to those deemed satisfactory by the Required Note Holders as a condition to the Effectiveness Date, or shall otherwise be satisfactory to the Required Note Holders. 4.03 RESERVED. ARTICLE V REPRESENTATIONS AND WARRANTIES The Company represents and warrants to each Note Holder as follows: 5.01 CORPORATE EXISTENCE AND POWER. (a) Each of the Company and each Material Subsidiary: (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (ii) has the power and authority and all material governmental licenses, authorizations, consents and approvals to own its assets and carry on its business and to execute, deliver, and perform its obligations under the Note Documents; -33- 39 (iii) is duly qualified as a foreign corporation, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except where the failure to be so qualified, licensed or in good standing would not adversely affect the business or operations of the Company or such Subsidiary in any significant manner; and (iv) is in compliance with all material Laws applicable to it. (b) Each Subsidiary of the Company which is not a Material Subsidiary: (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (ii) has the power and authority and all governmental licenses, authorizations, consents and approvals to own its assets and carry on its business; (iii) is duly qualified as a foreign corporation, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification; and (iv) is in compliance with all material Laws applicable to it; except where any failure to comply with the requirements of this subsection (b) would not, individually or in the aggregate, result in a Material Adverse Effect. (c) As of the Closing Date, the Company does not have any material place of business other than in the State of New York and the State of Maryland. 5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and performance by each Note Party of this Agreement and each other Note Document and each Spin-Off Document, and the consummation of the Spin-Off Transaction, have been duly authorized by all necessary corporate action by or on behalf of such Note Party, and do not and will not: (a) contravene the terms of such Note Party's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any Contractual Obligation (other than the Senior Note Indenture, provided that any such conflict with or breach or contravention of the Senior Note Indenture shall be of no further effect after giving effect to the transactions that will occur on the Closing Date) to which such Note Party is a party or any order, injunction, writ or decree of any Governmental Authority to which such Note Party or its property is subject; or (c) violate any Law applicable to such Note Party. 5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (except for recordings or filings in connection with the Liens granted under the Collateral Documents) is -34- 40 necessary or required in connection (a) with the execution, delivery or performance by, or enforcement against, the Company or any other Note Party of this Agreement or any other Note Document or (b) the execution, delivery or performance by or enforcement against the Company or any other Person party thereto of the Spin-Off Documents, or (c) the consummation of the Spin-Off Transaction, except in each case as have been obtained on or before the Closing Date. 5.04 BINDING EFFECT. (a) This Agreement and each other Note Document to which the Company or any of its Subsidiaries is a party, when executed and delivered, will constitute the legal, valid and binding obligations of the Company and any of its Subsidiaries to the extent it is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (b) From and after the Closing Date, each Spin-Off Document constitutes the legal, valid and binding obligation of each Person party thereto, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. As of the Closing Date, all conditions precedent to the effectiveness of the Spin-Off Documents have been satisfied. 5.05 LITIGATION. Attached hereto as Schedule 5.05 is a list of all material litigation in which the Company or any Subsidiary of the Company is a plaintiff or a defendant as of the Effectiveness Date. There are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of the Company, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Company or its Subsidiaries or their respective properties which: (a) purport to affect or pertain to this Agreement, or any other Note Document, or any of the transactions contemplated hereby or thereby; or (b) challenge in any respect the legality or validity of any material aspect of the Spin-Off Transaction; or (c) except as provided in Schedule 5.05, would reasonably be expected to have a Material Adverse Effect (and assuming for this purpose the reasonable likelihood of an adverse decision). No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Note Document, or the consummation of any material aspect of the Spin-Off Transaction, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. Since the Effectiveness Date, there has been no change in the status of any of the matters set forth in Schedule 5.05 that would reasonably be expected to result in a Material Adverse Effect. All amounts potentially payable by the Company or any Arbitron Subsidiary (including upon judgment or settlement) in connection with any matter set forth in Schedule 5.05 not relating to -35- 41 the Arbitron Business are subject from and after the Separation Date to a binding indemnification obligation by New Ceridian in favor of the Company or such Arbitron Subsidiary. 5.06 NO DEFAULT. No Default or Event of Default exists or would result from the incurring of any Obligations by the Company or any other Note Party or from the grant or perfection of the Transaction Liens on the Collateral. As of the Effectiveness Date and the Closing Date, neither the Company nor any of its Subsidiaries, (a) is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect, or (b) is in default under or with respect to any Spin-Off Document. As of the Effectiveness Date, there exists no "Default" or "Event of Default," and as of the Closing Date, there exists no "Event of Default," under and as defined in (i) the Existing Credit Facility (ii) the Senior Note Indenture or (iii) the Note Documents. 5.07 ERISA COMPLIANCE. Except as referenced or provided for in either Schedule 5.05 or Schedule 5.07 attached hereto: (a) To the best knowledge of the Company, no facts or circumstances exist which would reasonably be expected to have a Material Adverse Effect in connection with the failure of any Plan, or the failure of the Company, an ERISA Affiliate or any Person with regard to the Plan, to comply with the applicable provisions of ERISA, the Code and other Federal or state law. The Company and each ERISA Affiliate have made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. (b) There are no pending or, to the best knowledge of the Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or would, if determined adversely to the Company or any Plan, reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or would reasonably be expected to result in a Material Adverse Effect. (c) To the best knowledge of the Company (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) neither the Company nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) neither the Company nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the Company nor any ERISA Affiliate has engaged in a transaction that would reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA. (d) The consummation of the transactions contemplated by the Note Documents will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the -36- 42 Code. The Company's representation in the immediately preceding sentence is made in reliance upon and subject to the accuracy of the representation of the Note Holders in Section 9.04 as to the source of funds used to pay the purchase price of the Notes to be purchased by the Note Holders. 5.08 TITLE TO PROPERTIES. As of the Effectiveness Date and the Closing Date, the property of the Company and its Subsidiaries is subject to no Liens, other than Permitted Liens. As of the Closing Date, the Company has retained and has title to, or a valid and enforceable leasehold or licensee's interest in, all assets necessary to and appropriate for conducting the Arbitron Business, and such assets are subject to no Liens, claims or interest of third parties other than Permitted Liens, and the interests of lessors and licensors not otherwise prohibited under any Note Document or Note Document. 5.09 TAXES. (a) The Company and its Subsidiaries have filed all Federal and other material tax returns and reports required to be filed, and have paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP and no Notice of Lien has been filed or recorded. There is no proposed tax assessment against the Company or any of its Subsidiaries which would, if the assessment were made, have a Material Adverse Effect. (b) None of the representations and warranties made by the Company, New Ceridian or any of their Subsidiaries to the IRS in connection with the Spin-Off Transaction (including with respect to the tax-free nature of the Spin-Off Transaction and in connection with the Company's request for the IRS Ruling Letter) as of the date such representations and warranties are made or deemed made, and none of the statements contained in any report, exhibit, statement or certificate furnished by or on behalf of the Company, New Ceridian or any of their Subsidiaries to the IRS in connection with the Spin-Off Transaction as of the date such statements are made or deemed made, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading. (c) As of the Effectiveness Date, the Closing Date and Spin-Off Consummation Date, there is no "plan or series of related transactions" of the type described in Section 355(e) of the Code. 5.10 FINANCIAL CONDITION. (a) The Form 10 Financial Statements and the Supplemental Financial Statements: (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject to ordinary, good faith year-end audit adjustments and the absence of footnotes in the case of quarterly financial statements, -37- 43 (ii) are complete, accurate and fairly present the financial condition of the Company and its Subsidiaries as of the date thereof, and results of operation for the period covered thereby, in each case based upon the assumed consummation of the Spin-Off Transaction on such date, and (iii) comply with all applicable Laws relating to spin-off transactions. (b) Except as disclosed in filings by the Company with the Securities and Exchange Commission on Form 10-Q for the quarter ended June 30, 2000, or the Form 10, since December 31, 1999 there has been no Material Adverse Effect. (c) As of the Effectiveness Date and the Closing Date, the Company and its consolidated Subsidiaries have not incurred any material Contingent Obligations except for those specified in Schedule 5.10, which Schedule also specifies which Contingent Obligations pertain to the Arbitron Business, and those specified in Section 7.05(a), Section 7.05(d)(i) or Section 7.05(f). Except as expressly otherwise stated in Schedule 5.10, New Ceridian is subject, from and after the Separation Date, to a binding obligation to fully indemnify the Company in respect of all Contingent Obligations specified in such Schedule 5.10 not relating to the Arbitron Business. The projections delivered pursuant to Section 4.01(a)(viii) have been reasonably prepared, in good faith, based upon reasonable assumptions, and are consistent with the prepayment requirements set forth in this Agreement and the New Credit Facility. (d) The Preliminary Opening Balance Sheet delivered by the Company to the Note Holders pursuant to Section 4.01(a)(viii) and the pro forma operating balance sheet delivered by the Company to the Note Holders pursuant to Section 4.02(a)(iii): (i) were prepared on a basis consistent with GAAP as applied to the Company's financial statements, (ii) have been reasonably prepared on bases reflecting the currently available estimates and judgments of the senior management of the Company and New Ceridian as to the future expected performance of the Company, (iii) accurately reflect all material adjustments required to be made to give effect to the Spin-Off Transaction, and (iv) present fairly on a pro forma basis the estimated consolidated financial position of the Company and its Arbitron Subsidiaries as of the date thereof, assuming consummation of the Spin-Off Transaction. 5.11 ENVIRONMENTAL MATTERS. (a) The ongoing operations of the Company and each of its Subsidiaries comply in all respects with all Environmental Laws, except such non-compliance which would not (if enforced in accordance with applicable law) result in liability that would reasonably be expected to have a Material Adverse Effect. (b) As of the Effectiveness Date and the Closing Date, except as specifically disclosed on Schedule 5.11, neither the Company nor any of its Subsidiaries, nor any of their respective present property or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material. -38- 44 (c) Except as specifically disclosed on Schedule 5.11, there are no Hazardous Materials or other conditions or circumstances existing with respect to any property, or arising from operations of the Company or any of its Subsidiaries that would reasonably be expected to give rise to Environmental Claims with a potential liability of the Company and its Subsidiaries that in the aggregate for any such condition, circumstance or property would reasonably be expected to have a Material Adverse Effect. (d) Except as expressly otherwise stated in Schedule 5.11, New Ceridian is subject from and after the Separation Date to a binding obligation to fully indemnify the Company in respect of all matters referenced in such Schedule 5.11 not relating to the Arbitron Business. 5.12 REGULATED ENTITIES. None of the Company, any Person controlling the Company, or any Subsidiary of the Company, is (a) an "investment company" within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness, except that certain Persons who may be deemed to control the Company are registered investment companies within the meaning of the Investment Company Act of 1940. 5.13 COLLATERAL DOCUMENTS. The Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Note Holders, a legal, valid and enforceable first priority security interest, subject to the term of the Intercreditor Agreement, in all right, title and interest of the Note Parties in the Collateral described therein; and UCC-1 financing statements have been filed in the offices in all of the jurisdictions listed in the schedules to the Security Agreements. 5.14 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its Subsidiaries is a party to or bound by any Contractual Obligation, or subject to any charter or corporate restriction, or any Law, which could reasonably be expected to have a Material Adverse Effect. As of the Effectiveness Date and the Closing Date, no Subsidiary (other than New Ceridian and Subsidiaries that are not Arbitron Subsidiaries) is party to or bound by any Contractual Obligation restricting the ability of such Subsidiary to pay dividends or make Notes to the Company. 5.15 SOLVENCY. The Company and each of its Material Subsidiaries are Solvent. Both immediately before and after the Separation Date and the Spin-Off Consummation Date, New Ceridian is Solvent. All statements contained in any certificate delivered to the Note Holders pursuant to Section 4.01(a)(viii) and Section 4.02(a)(iv) are true and accurate in all materials respects and not materially misleading and do not contain any material omissions of fact. 5.16 LABOR RELATIONS. There are no strikes, lockouts or other labor disputes against the Company or any of its Subsidiaries, or, to the best of the Company's knowledge, threatened against or affecting the Company or any of its Subsidiaries, and no significant unfair labor practice complaint is pending against the Company or any of its Subsidiaries or, to the best knowledge of the Company, threatened against any of them before any Governmental Authority which, in any case, could reasonably be expected to have a Material Adverse Effect. -39- 45 5.17 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION. Except as specifically set forth on Schedule 5.17: (a) The Company owns (directly or through the Arbitron Subsidiaries) all of the Intellectual Property and Proprietary Information that is material to the Arbitron Business (including that in relation to the "Portable People Meter" and "Critical Band Encoding Technique"), free of any right, claim or interest of any Person, except for Permitted Liens. (b) To the best knowledge of the Company, no Intellectual Property or Proprietary Information now employed by the Company or its Subsidiaries and relating to the Arbitron Business infringes upon any rights held by any other Person. (c) As of the Closing Date and Spin-Off Consummation Date, except as specifically disclosed on Schedule 5.05 attached hereto, no claim or litigation regarding any Intellectual Property or Proprietary Information relating to the Arbitron Business is pending against the Company or any of its Subsidiaries or, to the Company's knowledge, threatened, against any of such Persons. (d) As of the Closing Date and Spin-Off Consummation Date, neither the Company nor any of its Subsidiaries uses pursuant to a license agreement with any third party (except for ordinary shrinkwrap licenses for software products that the Company and its Subsidiaries use in the Ordinary Course of Business and licenses specified on Schedule 5.17) any patents, trademarks, service marks, trade names, copyrights, trade secrets or franchises material to the conduct of the Arbitron Business. (e) As of the Closing Date and Spin-Off Consummation Date, in relation to the Arbitron Business, each of the Company's and its Subsidiaries' respective employees who, either alone or in concert with others, developed, invented, discovered, derived, programmed or designed Intellectual Property or Proprietary Information, or who has knowledge of or access to information about Intellectual Property or Proprietary Information, has entered into one or more effective assignment of rights agreements in favor of the Company or its Subsidiaries, as applicable, no material exceptions have been taken by any such employee to the terms of any such agreements, and neither the Company nor any of its Subsidiaries is aware that any of its respective employees is in violation thereof. (f) As of the Closing Date and Spin-Off Consummation Date, neither the Company nor its Subsidiaries believes it is or will be necessary in relation to the Arbitron Business to utilize any inventions of any of their respective employees (or people they currently intend to hire or retain) that were invented prior to such employment, except those inventions formally assigned or transferred to the Company or the Arbitron Subsidiaries, as applicable, by such employees. (g) As of the Effectiveness Date, neither the Company nor any Arbitron Subsidiary owns, licenses or sub-licenses any Material Software in connection with the Arbitron Business. 5.18 INSURANCE. As of the Closing Date and Spin-Off Consummation Date, the properties of the Company and its Subsidiaries are insured with financially sound and reputable -40- 46 insurance companies, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or such Subsidiary operates. 5.19 EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 5.19, as of the Effectiveness Date, Closing Date and Spin-Off Consummation Date in relation to the Arbitron Business, neither the Company nor any of its Subsidiaries is (a) party to or bound by any employment contract or agreement, agency, independent contractor or sales representative agreement involving annual compensation at a base rate equal to or exceeding $200,000, golden parachute agreement, or change of control agreement; or (b) obligated to make any payments on account of any severance, golden-parachute, or change of control agreement. 5.20 SPIN-OFF DOCUMENTS; NOTE DOCUMENTS. (a) The representations and warranties of the Company contained in the Spin-Off Documents and in any other document filed or delivered to the SEC in connection with the Spin-Off Transaction are true and correct in all material respects as of the Effectiveness Date and the Closing Date and as of any other date specified in such documents. There are no material documents or agreements to be entered into by the Company or the Arbitron Subsidiaries in connection with the Spin-Off Transaction, other than the Spin-Off Documents. (b) The representations and warranties of the Company contained in the Note Documents, and in any other documents delivered to the Administrative Agent in connection therewith, are true and correct in all material respects as of the Effectiveness Date and the Closing Date and as of any other date specified in such documents. 5.21 CAPITALIZATION; SUBSIDIARIES. (a) As of the Effectiveness Date, the Closing Date, and the Spin-Off Consummation Date, Schedule 5.21 sets forth: (i) a true, correct and reasonably detailed description of all Subsidiaries, and specifying which Subsidiaries are (A) Arbitron Subsidiaries and (B) Material Subsidiaries; and (ii) all authorized shares of capital stock of the Company and all the Arbitron Subsidiaries, and the number of shares of each class of capital stock of such Subsidiaries that are issued and outstanding. All of the issued and outstanding shares of capital stock of the Company and the Subsidiaries have been duly authorized and are validly issued, fully paid and non-assessable, and are free and clear of any Liens and other restrictions (including any restrictions on the right to vote, sell or otherwise dispose of such capital stock) and of any preemptive or other similar rights to subscribe for or to purchase any such capital stock. (b) Except as set forth on Schedule 5.21 (which Schedule sets forth a true, correct and complete description of, with respect to each security, title, name of the holder or Person, as applicable, the number of shares of capital stock underlying such security, exercise price, expiration date and percentage of shares of such capital stock on a fully diluted basis), as of the Effectiveness Date and Closing Date, there are: (i) no outstanding rights to acquire equity in any Subsidiary; (ii) no voting trusts of other agreements or undertakings with respect to the voting of the capital stock of any Subsidiary; (iii) no obligations or rights (whether fixed or contingent) on the part of any Subsidiary, any of its directors or officers, or any other Person to purchase, -41- 47 repurchase, redeem or "put" any outstanding shares of the capital stock of such Persons; and (iv) no agreements to which any Subsidiary, any of its directors or officers, or any other Person is a party granting any other Person any rights of first offer or first refusal, registration rights or "drag-along" "tag-along" or similar rights with respect to any transfer of any capital stock or equity rights of any Subsidiary. (c) As of the Effectiveness Date, the Closing Date and the Spin-Off Consummation Date, all shares of capital stock and equity rights of the Company or any Subsidiary that have been issued have been issued and offered in compliance with all applicable federal and state securities laws. Except as set forth on Schedule 5.21 no additional shares of capital stock of any Arbitron Subsidiary will become issuable to any Person pursuant to any "anti-dilution" provisions of any such issued and outstanding securities of any Subsidiary on account of the issuance of any securities. 5.22 MARGIN REGULATIONS. Neither the Company, New Ceridian, nor any Subsidiary is engaged in the business of extending credit for the purpose of purchasing or carrying "margin stock" (within the meaning of Regulation U of the Federal Reserve Board). No part of the proceeds of the sale of the Notes is being or will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. 5.23 BROKERS; CERTAIN EXPENSES. No Note Party or Affiliate has paid or is obligated to pay any fee or commission to any broker, finder, investment bank or other intermediary, in connection with this Agreement, the Note Documents or any of the Spin-Off Documents or the transactions contemplated hereby or thereby, other than as set forth on Schedule 5.23. No Note Party or Affiliate is bound by any agreement or commitment for the provision of investment banking or financial advisory services with respect to any recapitalization, issuance of debt or equity securities or other capital or financing transactions involving the Note Parties that would operate to restrict or prevent the occurrence of the Closing Date or the Spin-Off Consummation Date. 5.24 YEAR END. As of the Effectiveness Date, the Company's and New Ceridian's fiscal year ends on December 31 of each year. 5.25 THIRD PARTY CONSENTS. Other than as set forth in Schedule 5.25, and except as have been obtained before the Closing Date, no approval, consent, exemption, authorization, amendment or waiver, or other action by, or notice to, or filing with, any Person is necessary or required in connection with (a) the execution, delivery or performance by or enforcement against the Company or New Ceridian of the Spin-Off Documents, (b) the consummation of the Spin-Off Transaction or (c) the conduct of the Arbitron Business from and after the Closing Date and the Spin-Off Consummation Date. 5.26 EXISTING INDEBTEDNESS. As of the Closing Date, neither the Company nor any of the Arbitron Subsidiaries is indebted on account of any Indebtedness, except Initial Permitted Indebtedness. The allocation of Indebtedness and other obligations existing as of the Closing Date, as between the Company and New Ceridian, has been undertaken in a fair and reasonable fashion. -42- 48 5.27 NEW CERIDIAN OBLIGATIONS. From and after the Closing Date, New Ceridian is legally obligated, under the Spin-Off Documents, to indemnify the Company and hold the Company harmless from all material obligations of the Company and its Arbitron Subsidiaries other than those incurred pursuant to or in furtherance of the Arbitron Business, and New Ceridian has neither repudiated nor breached in any material respect such obligation. 5.28 SWAP CONTRACTS. As of the Closing Date, neither the Company nor any Subsidiary is party to any Swap Contracts other than Permitted Swap Contracts. 5.29 FULL DISCLOSURE. None of the representations or warranties made by the Company, New Ceridian or any of their respective Subsidiaries in the Note Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of the Company or any Subsidiary in connection with the Note Documents as of the date such statements are made or deemed made, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading. The Form 10 (including all Exhibits thereto) does not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were or are made, not misleading. 5.30 OFFER OF NOTES; INVESTMENT BANKERS. Neither the Company nor any Person acting on its behalf (a) has directly or indirectly offered the Notes or any part thereof or any similar securities for issue or sale to, or solicited any offer to buy any of the same from, anyone other than the Note Holders, (b) has taken or will take any action which would bring the issuance, exchange or sale of the Notes within the provisions of Section 5 of the Securities Act or the registration or qualification provisions of any applicable blue sky or other securities laws, (c) has dealt with any broker, finder, commission agent or other similar Person in connection with the sale of the Notes and the other transactions contemplated by the Note Documents, other than Banc of America Securities, LLC (the "Placement Agent"), or (d) is under any obligation to pay any broker's fee, finder's fee or commission in connection with such transactions, other than a fee to the Placement Agent which fee is the obligation solely of the Company. ARTICLE VI AFFIRMATIVE COVENANTS The Company covenants and agrees that, so long as any of the Notes shall remain outstanding or any other Obligation shall remain unpaid or unsatisfied, unless the Required Note Holders waive compliance in writing: 6.01 FINANCIAL STATEMENTS. The Company shall deliver to the each Note Holder in form and detail satisfactory to the Required Note Holders: (a) as soon as available, but not later than 90 days after the end of each fiscal year commencing with the fiscal year ending December 31, 2000, a copy of the audited consolidated financial statements of the Company as of the end of such fiscal year, setting forth in each case -43- 49 in comparative form the figures for the previous year (based on the Audited Financial Statements, if applicable), and accompanied by the opinion of KPMG Peat Marwick LLP or another nationally-recognized independent public accounting firm, which report shall state that such consolidated financial statements present fairly in all material respects the financial position of the Company and its Subsidiaries as of the dates indicated (on a stand-alone basis reflecting the consummation of the Spin-Off Transaction, in the case of the December 31, 2000 statements) and the results of their operations and their cash flows for the periods indicated in conformity with GAAP; such opinion shall not be qualified or limited for any reason, including because of a restricted or limited examination by such accountant of any material portion of the Company's or any Subsidiary's records; (b) (i) as soon as available, but not later than 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, (A) a copy of the Company 's quarterly report on Form 10-Q filed with the SEC with respect to such fiscal quarter, and (B) an operating report summarizing the Company's consolidated year-to-date profit and loss, revenue, operating profit, invested capital, and cash flow information, and (ii) if the Company at such time is not required to file such Form 10-Q with the SEC under the Exchange Act, as soon as available, but in any event within 60 days after the end of each fiscal quarter, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows for such fiscal quarter and for the portion of the Company's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year, and the corresponding portion of the previous fiscal year (based on the Audited Financial Statements or the Supplemental Financial Statements, if applicable), together with the items described in clause (i)(B) of this subsection; all in reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the financial condition, results of operations, and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes. (c) promptly upon receipt thereof, copies of all reports submitted to the Company or any of its Subsidiaries by its independent certified public accountants in connection with each annual, interim or special audit examination of the Company or any of its Subsidiaries made by such accountants, including the "management letter" submitted by such accountants to the Company or any of its Subsidiaries in connection with their annual audit; and (d) as soon as available and in any event not less than 30 days prior to the start of each fiscal year, a consolidated financial forecast for the Company and its Subsidiaries for the following fiscal year, including forecasted consolidated balance sheets, consolidated statements of income, shareholders' equity and cash flows of the Company and its Subsidiaries, which forecast shall (A) state the assumptions used in the preparation thereof, (B) contain such other information as reasonably requested by any Note Holder and (C) be in form reasonably satisfactory to the Required Note Holders. 6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to each Note Holder: -44- 50 (a) as soon as available, but in any event not later than 15 days after the delivery of the financial statements referred to in Section 6.01(a) and (b) above, a Compliance Certificate, signed by a Responsible Officer; (b) copies of each registration statement (or prospectus contained therein) of the Company other than with respect to employee benefit plans, each periodic report regarding the Company required pursuant to Section 13 of the Exchange Act, each annual report, each proxy statement and any amendments to any of the above filed or reported by the Company with or to any securities exchange or the SEC, copies of each communication from the Company or any Subsidiary to the Company's shareholders generally, promptly upon the filing or making thereof and copies of such other filings, reports and communications with the Company's shareholders as the Note Holders may from time to time request; (c) upon release, copies of all financially material press releases by the Company or any Material Subsidiary; (d) promptly after the creation or Acquisition of any Material Subsidiary, the name of such Subsidiary, a description of its business, the price paid for the stock or assets of such Subsidiary, its net worth and the value of its assets; (e) promptly after the execution and filing thereof, copies of all patent, trademark and copyright filing certificates of the Company and any Subsidiary as required more fully under the Security Agreements; and (f) promptly, such additional business, financial, corporate affairs and other information as any Note Holder, may from time to time reasonably request. Reports required to be delivered pursuant to Sections 6.01 or 6.02(b) shall be deemed to have been delivered on the date on which Company posts such reports on the Company's website on the Internet at the website address listed on Schedule 10.02 hereof or when such report is posted on the Securities and Exchange Commission's website at www.sec.gov.; provided that (x) Company shall deliver paper copies of such reports to any Note Holder who requests the Company to deliver such paper copies until written request to cease delivering paper copies is given by such Note Holder, (y) the Company shall notify by facsimile each Note Holder of the posting of any such reports, and (z) in every instance the Company shall provide paper copies of the Compliance Certificates required by Section 6.02(a) to each of the Note Holders. 6.03 NOTICES. The Company shall promptly notify the Note Holders upon a Responsible Officer of the Company obtaining knowledge: (a) of the occurrence of any Default or Event of Default and, until the Spin-Off Consummation Date, the occurrence of any "Default" or "Event of Default" under and as defined in the New Ceridian Credit Agreement; (b) of (i) any breach or non-performance of, or any default under, any Contractual Obligation of the Company or any of its Subsidiaries which would reasonably be expected to result in a Material Adverse Effect; and (ii) any dispute, litigation, investigation, proceeding or -45- 51 suspension by an Governmental Authority that may exist or come to exist at any time in which the Company or any of its Subsidiaries is a party which would reasonably be expected to result in a Material Adverse Effect (and assuming for this purpose the reasonable likelihood of an adverse decision); (c) of the commencement of, or any material development in, any litigation or proceeding affecting the Company or any Subsidiary which would reasonably be expected to: (i) have a Material Adverse Effect (and taking into account the reasonable likelihood of an adverse decision), (ii) if adversely resolved against such Person, result in the imposition of an injunction or other stay of the performance of this Agreement or any Note Document or the consummation of the Spin-Off Transaction, or (iii) involve an aggregate liability of $1,000,000 (or its equivalent in another currency) or more; (d) of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions affecting the Company or any of its Subsidiaries or any of their respective properties pursuant to any applicable Environmental Laws, (ii) all other Environmental Claims, and (iii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of the Company or any Subsidiary that could reasonably be anticipated to cause the property of the Company or any of its Subsidiaries or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws, if, individually or in the aggregate, the events or conditions described or the amount claimed in clauses (i), (ii) and (iii) would reasonably be expected to result in a Material Adverse Effect; (e) of the occurrence of any ERISA Event affecting the Company or any ERISA Affiliate, and deliver to each Note Holder a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Company or any ERISA Affiliate with respect to such event; (f) of any Material Adverse Effect subsequent to the date of the most recent audited financial statements of the Company delivered to the Note Holders pursuant to Section 6.01(a); (g) of any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving the Company or any of its Subsidiaries; (h) of the creation, purchase, or acquisition of any Subsidiary (including its jurisdiction of incorporation); (i) of: (i) any Subsidiary being or becoming a Material Subsidiary, and (ii) of any Material Subsidiary ceasing to be a Material Subsidiary; (j) of the occurrence of the Separation Date and the Spin-Off Consummation Date; (k) of (i) the exercise or termination of any option under the Nielsen JV Option Agreement, (ii) the formation of the Nielsen JV, (iii) any decision by the Company not to commercially deploy the PPM Technology, and (iv) the occurrence of any material breach or -46- 52 default under the terms of the Nielsen JV Option Agreement or the Scarborough Partnership Agreement; (l) of any material breach or default under, or any material waiver or consent granted pursuant to, any Spin-Off Document; (m) of the occurrence of any Event of Loss or Disposition with respect to any assets of the Company or any Material Subsidiary (other than New Ceridian), where the fair value of the assets exceed on an aggregate basis, for each such occurrence, $250,000; and (n) of the occurrence of any "Default" or "Event of Default" (or comparable term) under, and as defined in, the Note Documents. Each notice pursuant to this Section 6.03 shall be accompanied by a certificate by a Responsible Officer of the Company setting forth details of the occurrence referred to therein, and stating what action, if any, the Company proposes to take with respect thereto and at what time. Each notice under this Section 6.03 shall describe with particularity any and all clauses or provisions of this Agreement or other Note Document that have been breached or violated. 6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and shall cause each of its Subsidiaries to: (a) except as permitted in Section 7.02, preserve and maintain in full force and effect its corporate existence and good standing under the laws of its state or jurisdiction of incorporation; (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business except in connection with transactions permitted by Sections 7.02 and 7.04; (c) use its reasonable efforts, in the Ordinary Course of Business, to preserve its business organization and preserve the goodwill and business of the customers, suppliers and others having material business relations with it; and (d) preserve or renew all of its registered trademarks, trade names and service marks, the non-preservation of which would reasonably be expected to have a Material Adverse Effect, provided, however, that the Company shall not be deemed to be in default under this Section 6.04 if a Subsidiary (other than a Material Subsidiary) fails to comply herewith so long as such failure is not material. On or before the Spin-Off Consummation Date, the Company shall file with appropriate Governmental Authorities all necessary filings in order to change its name to "Arbitron Inc." 6.05 MAINTENANCE OF PROPERTY. The Company shall, and shall cause each of its Subsidiaries, to maintain and preserve all its property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted, make all necessary repairs thereto and renewals and replacements thereof, except as permitted by Section 7.04, and to keep -47- 53 such property free of any Hazardous Materials. The Company shall use at least the standard of care typical in the industry in the operation of its facilities. 6.06 INSURANCE. The Company shall, and shall cause each of its Material Subsidiaries to, maintain with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons; including workers' compensation insurance, public liability and property and casualty insurance. All such policies, to the extent consisting of comprehensive general liability or property or casualty policies, shall name the Administrative Agent as loss payee/mortgagee and as additional insured, for the benefit of the Note Holders, as their interests may appear. Upon request of or any Note Holder, the Company shall furnish each Note Holder, at reasonable intervals (but not more than once per calendar year) a certificate of a Responsible Officer of the Company (and, if requested by any Note Holder, any insurance broker of the Company) setting forth the nature and extent of all insurance maintained by the Company and its Material Subsidiaries in accordance with this Section 6.06 (and which, in the case of a certificate of a broker, were placed through such broker). 6.07 PAYMENT OF OBLIGATIONS. (a) The Company shall, and shall cause its Subsidiaries to, pay and discharge as the same shall become due and payable, all their respective obligations and liabilities, including: (i) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (ii) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (iii) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; provided, however, that the Company and its Subsidiaries shall not be deemed to be in default under this Section 6.07 if failure to comply herewith would not result in a Material Adverse Effect. (b) The Company shall use commercially reasonable efforts to cause, on or prior to the Spin-Off Consummation Date or as soon as practicable thereafter, the Company and all Arbitron Subsidiaries to be released as guarantors of or obligors for any liability described in Schedule 5.10 and allocated to New Ceridian pursuant to the Distribution Agreement between the Company and New Ceridian dated on or before the Separation Date. -48- 54 6.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause each of its Subsidiaries to comply, in all material respects with all material Laws applicable to it or its business (including the Federal Fair Labor Standards Act), except such as may be contested in good faith or as to which a bona fide dispute may exist. 6.09 ERISA COMPLIANCE. The Company shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with ERISA, the Code and other applicable Laws; (b) cause each Pension Plan that is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Pension Plan subject to Section 412 of the Code. 6.10 INTEREST RATE PROTECTION. Within 90 days of the Closing Date, the Company shall enter into and maintain in effect one or more Specified Swap Contracts providing protection against fluctuations in interest rates with respect to at least 50% of the difference between the Outstanding Amount under the New Credit Facility from time to time, and the aggregate outstanding amount of the Notes from time to time; on such terms and with such financial institutions as shall be satisfactory to the Required Note Holders. 6.11 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall maintain and shall cause each of its Material Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiaries. The Company shall permit, and shall cause each of its Material Subsidiaries to permit, representatives and independent contractors of any Note Holder to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided, however, when a Default exists, (i) any Note Holder may do any of the foregoing with respect to the Company or any Subsidiary at any time during normal business hours and without advance notice and (ii) such inspection, examination and meetings shall be at the Company's expense. 6.12 ENVIRONMENTAL LAWS. (a) The Company shall, and shall cause each of its Subsidiaries to, conduct its operations and keep and maintain its property in compliance in all material respects with all Environmental Laws. (b) Upon the written request of any Note Holder, the Company shall submit to the Note Holder, at the Company's sole cost and expense, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report required pursuant to Section 6.03(d). 6.13 USE OF PROCEEDS. The Company may use the proceeds of the sale of the Notes (a) to provide all or a portion of the funds necessary to repay in full all of the Indebtedness of the Company that is outstanding as of the Closing Date, to the extent otherwise permitted or required -49- 55 hereunder, and to replace any letters of credit outstanding under the Existing Credit Facility, (b) to the extent otherwise permitted or required hereunder, to repurchase or redeem securities of the Company, and (c) for working capital and other general corporate purposes (including Permitted Acquisitions). 6.14 ADDITIONAL GUARANTORS. If any Arbitron Subsidiary, other than a Foreign Subsidiary, shall at any time become a Material Subsidiary, or if the Company or any Subsidiary otherwise shall incorporate, create or acquire any Material Subsidiary, other than a Foreign Subsidiary, the Company shall cause such Material Subsidiary to furnish promptly, but in no event more than 30 days thereafter, each of the following to the Administrative Agent, in sufficient quantities for each Note Holder: (a) if such Subsidiary is the first such Subsidiary, a duly executed Subsidiary Guaranty and for each such succeeding Subsidiary, a duly executed notice and agreement in substantially the form of Exhibit M (an "Additional Guarantor Assumption Agreement"); (b) a duly executed Subsidiary Security Agreement, in substantially the form of Exhibit G, together with such other Collateral Documents as the Administrative Agent or any Note Holder may request; and (c) (i) copies of the resolutions of the board of directors (or equivalent governing body) of such Subsidiary approving and authorizing the execution, delivery and performance by such Subsidiary of its Subsidiary Guaranty or Additional Guarantor Assumption Agreement, its Subsidiary Security Agreement, this Agreement, and the other Note Documents, including all Collateral Documents to which it is a party), certified as of the effective date of such Additional Guarantor Assumption Agreement and Subsidiary Security Agreement by the Secretary or an Assistant Secretary (or other appropriate officer) of such Subsidiary; (ii) a certificate of the Secretary or Assistant Secretary (or other appropriate officer) of such Subsidiary certifying the names and true signatures of the officers of such Subsidiary authorized to execute and deliver and perform, as applicable, its Additional Guarantor Assumption Agreement, its Subsidiary Security Agreement, this Agreement and all other Note Documents and Collateral Documents to be delivered hereunder; (iii) copies of the articles or certificate of incorporation and bylaws (or other applicable Organization Documents) of such Subsidiary as in effect on the effective date of such Additional Guarantor Assumption Agreement and Subsidiary Security Agreement, certified by the Secretary or Assistant Secretary (or other appropriate officer) of such Subsidiary as of such date; and (iv) an opinion of counsel to such Subsidiary and addressed to the Administrative Agent and the Note Holders, satisfactory to the Required Note Holders and addressing the matters set forth in Exhibit N 6.15 ADDITIONAL SUBSIDIARIES. (a) If the Company directly or indirectly incorporates, creates or acquires any additional Subsidiary, then within 10 days thereafter, the Company (for the benefit of the Note Holders) shall (i) (A) pledge the capital stock of such additional Subsidiary to the Note Holders (or the Collateral Agent on their behalf) pursuant to the Company Pledge Agreement, if such stock is directly owned by the Company, or (B) if such stock is owned by a Subsidiary, cause such Subsidiary to pledge the capital stock of such additional Subsidiary to the Note Holders (or -50- 56 the Collateral Agent on their behalf) pursuant to a Subsidiary Pledge Agreement, (ii) execute and deliver, or cause such Subsidiary to have executed and delivered, to the Note Holders (or their bailee) (or the Collateral Agent on their behalf) stock transfer powers executed in blank with signatures guaranteed as any Note Holder shall request, such Subsidiary Security Agreements and UCC-1 financing statements (as furnished by the Note Holders) for filing in each jurisdiction in which such filing is necessary to establish and perfect the first priority security interest of the Collateral Agent for the benefit of the Note Holders (subject to the terms of the Intercreditor Agreement) in the Collateral with respect to the Company or such Subsidiary, and (iii) deliver such other items as reasonably requested by the Required Note Holders in connection with the foregoing, including resolutions, incumbency and officers' certificates, opinions of counsel, search reports and other certificates and documents; provided, however, that if any additional Subsidiary so incorporated, created or acquired is a Foreign Subsidiary, in no event shall more than 65% of the capital stock of any such Foreign Subsidiary be required to be so pledged. (b) If the combined EBITDA of all Arbitron Subsidiaries that are not Material Subsidiaries is greater than or equal to 10% of Consolidated EBITDA, based on the Company's quarterly financial statements for the most recent calendar quarter delivered to the Note Holders pursuant to Section 6.01, the Company shall designate one or more such Subsidiaries as a Material Subsidiary, such that after giving effect to all such designations the combined EBITDA of all remaining Arbitron Subsidiaries that are not Material Subsidiaries is less than 10% of Consolidated EBITDA. Within 10 days of the date of any such designation, the Company and any Subsidiary designated as a Material Subsidiary shall take all actions required under Section 6.14. (c) Following the delivery of Company's quarterly financial statements pursuant to Section 6.01, the Company may de-designate any Subsidiary previously designated as a Material Subsidiary under subsection (b) of this Section 6.15 so that such Subsidiary shall no longer be treated as a Material Subsidiary, effective as of the date on which such de-designation is made, provided that: (i) such Subsidiary is not independently a Material Subsidiary under subsection (a) of the definition thereof and (ii) after giving effect to such de-designation the combined EBITDA of all Subsidiaries that are not Material Subsidiaries (including the EBITDA of the Subsidiary that has been de-designated) shall be less than 10% of Consolidated EBITDA. Notwithstanding any such de-designation, all Collateral Documents and Subsidiary Guaranties executed by each such Subsidiary pursuant to Section 6.14 shall continue in full force and effect according to their respective terms, and subject to the terms of the Intercreditor Agreement. 6.16 ADDITIONAL INTELLECTUAL PROPERTY. The Company and each Arbitron Subsidiary shall execute such Supplemental IP Security Agreements and shall undertake such other filings, recordations, registrations and actions from time to time with respect to Intellectual Property created, purchased or otherwise acquired by the Company or such Subsidiary after the Effectiveness Date, as more fully set forth in the Company Security Agreement and Subsidiary Security Agreement or as reasonably requested by the Required Note Holders. 6.17 LICENSES. The Company shall, and shall cause each of its Subsidiaries to, obtain and maintain all material licenses, authorizations, consents, filings, exemptions, registrations and other governmental approvals necessary in connection with the execution, delivery and -51- 57 performance of the Note Documents, the consummation of the transactions therein contemplated or the operation and conduct of its business and ownership of their properties. 6.18 FURTHER ASSURANCES. (a) The Company shall ensure that all written information, exhibits and reports furnished to the Note Holders do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Note Holders and correct any defect or error that may be discovered therein or in any Note Document or in the execution, acknowledgment or recordation thereof. (b) Promptly upon request by the Required Note Holders, the Company shall (and shall cause any of its Subsidiaries to) do, execute, acknowledge and deliver any and all such further acts, certificates, security agreements, assignments, estoppel certificates, financing statements, and continuations or amendments thereof, termination statements, notices of assignment, transfers, assurances and other instruments as the Required Note Holders, as the case may be, may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Note Document, (ii) to subject to the Liens created by any of the Collateral Documents any of the properties, rights or interests covered by any of the Collateral Documents, (iii) to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Note Holders the rights granted or now or hereafter intended to be granted to the Note Holders under any Note Document or under any other document executed in connection therewith. ARTICLE VII NEGATIVE COVENANTS The Company hereby covenants and agrees that, so long as any of the Notes shall remain outstanding, or any other Obligation shall remain unpaid or unsatisfied, unless the Required Note Holders waive compliance in writing: 7.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its property (including Intellectual Property, Proprietary Information and accounts and notes receivable, with or without recourse), whether now owned or hereafter acquired, other than the following ("Permitted Liens"): (a) any Lien created under any Note Document; (b) (i) Liens existing on the Closing Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(a)(iii); and (ii) at any time prior to the Spin-Off Consummation Date, Liens on New -52- 58 Ceridian Assets that would, if such assets were at such time owned or held by New Ceridian, constitute "Permitted Liens" under and as defined in the New Ceridian Credit Agreement. (c) Liens for taxes, fees, assessments or other governmental charges or statutory obligations which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.07, provided that no Notice of Lien has been filed or recorded under the Code; (d) Liens arising in the Ordinary Course of Business in connection with obligations (other than obligations for borrowed money) that are not overdue or which are being contested in good faith and by appropriate proceedings, including, but not limited to Liens under bid, performance and other surety bonds, supersedeas and appeal bonds, Liens on advance or progress payments received from customers under contracts for the sale, lease or license of goods, software, services or real estate and upon the products being sold or licensed, in each case securing performance of the underlying contract or the repayment of such advances in the event final acceptance of performance under such contracts does not occur; and Liens upon funds collected temporarily from others pending payment or remittance on their behalf; provided that the aggregate value of all collateral pledged by the Company together with its Subsidiaries to secure Liens arising under this subsection and subsection (e) of this Section do not exceed on an aggregate, consolidated basis at any time outstanding the amount of $2,500,000; (e) Liens (other than any Lien imposed by ERISA) required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation; provided that the aggregate value of all collateral pledged by the Company together with its Subsidiaries to secure Liens arising under this subsection and subsection (d) of this Section do not exceed on an aggregate, consolidated basis at any time outstanding the amount of $2,500,000; (f) easements, rights-of-way, restrictions and other similar encumbrances incurred in the Ordinary Course of Business which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businesses of the Company and its Subsidiaries; (g) purchase money security interests on any property acquired or held by the Company or its Subsidiaries in the Ordinary Course of Business securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such property to the extent permitted under Section 7.03; provided, however, that (i) any such Lien attaches to such property concurrently with or within 20 days after the acquisition thereof, (ii) such Lien attaches solely to the property so acquired in such transaction, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such property; (h) Liens securing the property of any Person that is acquired by the Company or any of its Subsidiaries after the Effectiveness Date; provided that (a) such Liens existed prior to the date of such acquisition and were not created in contemplation thereof or for purposes of circumventing this Agreement; -53- 59 (i) Liens consisting of pledges of cash collateral or government securities to secure on a mark-to-market basis Permitted Swap Contracts, provided that the aggregate value of such collateral so pledged by the Company and all Subsidiaries in favor of all counterparties thereunder does not at any time exceed $1,000,000; (j) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (ii) such deposit account is not intended by the Company or any of its Subsidiaries to provide collateral to the depository institution; and (k) Liens existing pursuant to the Note Documents or pursuant to collateral documents securing any Specified Swap Contract, and in each case, subject to the Intercreditor Agreement. 7.02 MERGERS AND CONSOLIDATIONS. (a) The Company shall not, and shall not permit any of its Arbitron Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one or a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except as provided in subsection (b) of this Section. (b) Section 7.02(a) shall not prohibit: (i) Permitted Acquisitions; (ii) the merger or consolidation of any Subsidiary (except New Ceridian) into the Company, or with or into any other Subsidiary, provided that if any such transaction is between a Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned Subsidiary is the continuing or surviving corporation; and (iii) dispositions of assets pursuant to a dissolution or liquidation otherwise permitted under this Agreement of a Subsidiary; (iv) the sale or other disposition of all or substantially all of the assets of a Subsidiary of the Company to the Company or to a Wholly-Owned Subsidiary of the Company; or (v) the mergers, consolidations or transfers of assets listed on Schedule 7.02(b) attached hereto. -54- 60 7.03 INDEBTEDNESS. (a) Company and Subsidiaries. The Company shall not, and shall not permit any Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness other than the following (collectively referred to herein as "Permitted Indebtedness"): (i) the Obligations; (ii) Indebtedness arising from taxes, fees, assessments or other governmental charges or statutory obligations which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.07; (iii) (A) Initial Permitted Indebtedness of the Company or any Subsidiary of the Company existing on the Closing Date or extensions, renewals and refinancings of such Indebtedness, provided that the principal amount of such Indebtedness being extended, renewed or refinanced does not increase; and (B) at all times prior to the Spin-Off Consummation Date, Indebtedness constituting "Initial Permitted Indebtedness" under and as defined in the New Ceridian Credit Agreement; (iv) accounts payable of the Company or its Subsidiaries to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the Ordinary Course of Business in accordance with customary terms and paid within the specified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP; (v) obligations in respect of Permitted Swap Contracts; (vi) Indebtedness of the Company or any Subsidiary of the Company secured by Permitted Liens of the type referred to in Section 7.01(g), in a principal amount (including imputed principal for Capital Leases) not to exceed $5,000,000, in the aggregate for the Company and all Subsidiaries of the Company, at any time outstanding; (vii) Indebtedness not secured by any Lien, in an outstanding principal amount not to exceed, together with the principal amount of Indebtedness outstanding at such time under clause (vi), $10,000,000 at any time in the aggregate for the Company and all Subsidiaries; (viii) unsecured Indebtedness not to exceed $14,000,000 incurred prior to December 31, 2001 in favor of the seller of certain assets relating to a Person known as "Coventry", as partial consideration for the Company's acquisition of such assets; provided the sum of all payments (including principal, interest, fees and other amounts) required to be made thereunder over the scheduled term thereof does not exceed $16,000,000; (ix) Indebtedness arising in connection with the Note Documents (or any extensions, renewals, refinancings or replacements thereof), provided that the aggregate outstanding principal amount of such Indebtedness does not exceed at any time -55- 61 $225,000,000 (plus the amount of any Protective Advances (as defined in the Intercreditor Agreement) made in accordance with the terms of the Intercreditor Agreement); (x) prior to the Closing Date, Indebtedness required to be repaid on or before the Closing Date pursuant to Section 4.02(a)(v); and (xi) Indebtedness of Wholly-Owned Subsidiaries incurred pursuant to transactions permitted under Section 7.06(f). (b) Subsidiaries. The Company shall not permit any of its Subsidiaries to incur, assume or suffer to exist any Indebtedness if the aggregate principal amount of all Indebtedness of such Subsidiaries at any time would exceed 10% of such Subsidiary's net worth. 7.04 DISPOSITION OF ASSETS. (a) The Company shall not, and shall not permit any of its Subsidiaries, to Dispose of any assets (including Intellectual Property, Proprietary Information, accounts and rights to payment), whether now owned or hereafter acquired, or enter into any agreement to make any Disposition of such assets, except as permitted under subsection (b). (b) Section 7.04(a) shall not apply to or restrict: (i) (A) the Spin-Off Transaction; or (B) at any time prior to the Spin-Off Consummation Date, Dispositions of New Ceridian Assets that would be permitted under the New Ceridian Credit Agreement if such assets were at such time assets of New Ceridian; (ii) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are reasonably promptly, but in no event more than 30 days, applied to the purchase price of such replacement equipment; provided, however, that: (A) the replacement equipment has comparable value and is of the same type, and used for the same purpose, as the equipment sold; (B) the Person selling equipment under this subsection is the same Person that purchases any replacement equipment; (C) any such sale is conducted at arm's length and under commercially reasonable terms; and (D) to the extent there exists more than $1,000,000 of Net Cash Proceeds from all such equipment sold which have not yet been invested in replacement equipment, such amount shall be promptly applied under Section 2.05(a); (iii) the transfer of assets by the Company (A) to any of its Material Subsidiaries if such transfer is a sale for fair market value and the consideration received by the Company is cash; or (B) to any Wholly-Owned Subsidiary; (iv) Revocable Licenses in the Ordinary Course of Business of Intellectual Property of the Company or its Subsidiaries to third parties (other than Nielsen JV) upon -56- 62 commercially reasonable terms and that do not, singly or in the aggregate result in a Material Adverse Effect; (v) (A) assignments and sales to a Permitted Nielsen JV of software used or usable for the compilation of data solely derived from PPM Technology, and to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement; and (B) Revocable, non-exclusive licenses of software and other Intellectual Property to a Permitted Nielsen JV in the Ordinary Course of Business upon commercially reasonable terms that do not, singly or in the aggregate, result in a Material Adverse Effect; (vi) the license by the Company of its PPM Technology, solely for the purpose of audience measurement, to a Permitted Nielsen JV to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance satisfactory to the Required Note Holders; (vii) the non-transferable, exclusive U.S.-license by the Company of its "Critical Band Encoding Technology" to Nielsen and the license to a Permitted Nielsen JV of encoding patents, to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance reasonably satisfactory to the Required Note Holders; (viii) the Disposition of assets or stock of Ceridian Info Tech (India) Private Limited and CSW Research Limited; provided that no Intellectual Property or Proprietary Information is Disposed of as part of any such Disposition, other than Intellectual Property and Proprietary Information that is not materially related to the Arbitron Business; and further provided that the total aggregate value of all assets and stock transferred pursuant to this clause does not exceed $3,500,000; (ix) the transfer by any Subsidiary of the Company of assets (upon voluntary liquidation or otherwise) to the Company or a Wholly Owned Subsidiary of the Company that is a Material Subsidiary; and (x) transfers by the Company or its Subsidiaries totaling on a consolidated, aggregate basis for all such transfers in any fiscal year an amount not in excess of $1,000,000; provided that (A) each such transfer is otherwise permitted pursuant to the Note Documents, (B) the consideration paid to the Company or its Subsidiaries in connection with each such transfer is exclusively in the form of cash or Cash Equivalents, (C) unused transfers permitted by this subsection (b)(x) shall not accrue to the following year, and (D) after giving effect to each such transfer there shall exist no Default or Event of Default. 7.05 CONTINGENT OBLIGATIONS. The Company shall not, and shall not suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations, except: (a) Contingent Obligations set forth in Schedule 5.10, or incurred pursuant to any Note Document or any Specified Swap Contract; -57- 63 (b) Contingent Obligations arising in connection with supersedeas or appeal bonds in respect of litigation to which the Company or any of its Subsidiaries is a party or a real party in interest, in an amount for all such obligations on an aggregate consolidated basis not to exceed $1,000,000 at any time outstanding; provided that after giving effect to each such obligation there shall exist no Default or Event of Default; (c) endorsements for collection or deposit in the Ordinary Course of Business; (d) until the Spin-Off Consummation Date, (i) Contingent Obligations incurred in connection with the guaranty, of near or even date herewith, made by the Company in favor of the administrative agent under (and as defined in) the New Ceridian Credit Agreement to guarantee the obligations of New Ceridian under the New Ceridian Credit Agreement; and (ii) Contingent Obligations not incurred pursuant to or in furtherance of the Arbitron Business; (e) Contingent Obligations incurred pursuant to the Note Documents; (f) Contingent Obligations consisting of Guaranty Obligations of (i) the Company in respect of Indebtedness of any Wholly-Owned Subsidiary or (ii) any Subsidiary in respect of Indebtedness of the Company or any Wholly-Owned Subsidiary; and (g) other Contingent Obligations of the Company and its Subsidiaries in an aggregate amount not in excess of $1,000,000 at any time outstanding. 7.06 NOTES AND INVESTMENTS. The Company shall not, nor shall it permit any of its Subsidiaries to, purchase, acquire, hold or maintain the capital stock, assets (constituting a business unit), obligations or other securities of or any interest in any Person, or otherwise extend any credit to, make any Guaranty Obligation with respect to or make any additional investments in any Person, other than: (a) Investments listed on Schedule 7.06(b) and held by the Company or any Subsidiary as of the Closing Date; (b) Investments in the form of Cash Equivalents or investment grade marketable securities; (c) extensions of credit in the nature of accounts receivable or notes receivable arising from the sales of goods or services or franchising activities in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; (d) Investments resulting in Permitted Acquisitions; (e) advances to officers, directors and employees of the Company and its Subsidiaries in an aggregate amount for all such advances by the Company and its Subsidiaries not to exceed in the aggregate $1,000,000 at any time outstanding, for travel, entertainment, relocation and analogous purposes arising in the Ordinary Course of Business; -58- 64 (f) extensions of credit by the Company to any of its Wholly Owned Subsidiaries or by any of its Wholly Owned Subsidiaries to another of its Wholly Owned Subsidiaries or the Company, in each case in the Ordinary Course of Business; (g) Contingent Obligations permitted by Section 7.05; (h) Investments permitted by Section 7.02; (i) Investments resulting from Dispositions permitted under Section 7.04(b) (iii), (vi), (vii) or (ix); (j) Investments consisting of PPM Expenditures in an amount not to exceed: (i) $5,000,000 for all such Investments in respect of all Nielsen JV's on an aggregate basis in any fiscal year ending on or before December 31, 2005; or (ii) $10,000,000 for all such Investments in respect of all Nielsen JV's in any fiscal year ending after December 31, 2005. (k) Investments existing or entered into prior to the Separation Date to the extent constituting New Ceridian Assets; or (l) additional Investments otherwise permitted hereunder in Persons that are not, and will not be after giving effect to each such Investment, a Subsidiary, in an amount not to exceed $3,500,000 in the aggregate for all such Investments in any fiscal year; provided that this subsection shall not permit Investments in either the Scarborough Partnership or any Nielsen JV . 7.07 DIVIDENDS AND PAYMENTS. (a) The Company shall not, and shall not suffer or permit any of its Subsidiaries to, declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of its capital stock, or purchase, redeem, or otherwise acquire for value any shares of its capital stock or any warrants, rights or options to acquire such shares, now or hereafter outstanding, except that the Company may: (i) declare and make (A) the Distribution, or (B) dividend payments or other distributions payable solely in shares of its common stock (and, solely in respect of fractional shares, cash of a de minimis amount); (ii) purchase, redeem or otherwise acquire shares of its common stock or warrants or options to acquire any such shares out of proceeds received from the substantially concurrent issue of new shares of its common stock, after taking into account (a) any prepayment made under Section 2.05 of the Credit Agreement as a result of any reduction in the Aggregate Commitments under Section 2.06(b)(iii) of the Credit Agreement in relation to such issuance and (b) any prepayment made or required to be made under the Note Documents in relation to such issuance; (iii) make payments in the Ordinary Course of Business in connection with its Pension Plan or in connection with the employment, termination or compensation of its employees, officers or directors; and -59- 65 (iv) from and after that date on which the Company's 2002 year end financial statements are received by the Note Holders pursuant to Section 6.01, declare or pay cash dividends to its stockholders out of (and in an aggregate amount not exceeding) Aggregate Distributable Income; provided, however, that immediately after giving effect to any such proposed declaration or payment there exists no Default or Event of Default. (b) The Company shall not suffer or permit any Subsidiary of the Company (other than New Ceridian) to grant or otherwise agree to or suffer to exist any consensual restrictions on the ability of such Subsidiary to pay dividends and make other distributions to the Company, or to pay any Indebtedness owed to the Company or transfer properties and assets to the Company. (c) After the Spin-Off Consummation Date, the Subsidiaries may declare and make dividend payments in the Ordinary Course of Business to the Company and to Wholly Owned Subsidiaries (and, in the case of a dividend payment by a non-Wholly Owned Subsidiary, to the Company and any Subsidiary and to each other owner of capital stock of such Subsidiary on a pro rata basis based on their relative ownership interests). 7.08 USE OF PROCEEDS. The Company shall not and shall not suffer or permit any of its Subsidiaries to use any portion of the proceeds of the sale of the Notes, directly or indirectly, in violation of Regulation T, U or X of the Federal Reserve Board. 7.09 HOSTILE ACQUISITION. The Company shall not, and shall not permit any of its Subsidiaries to, make any Acquisition unless: (a) the Acquisition complies with applicable Laws, (b) the board of directors or equivalent governing body of the Person to be so acquired provides written consent or approval of such Acquisition prior to its commencement; and (c) such Acquisition is otherwise permitted hereunder. 7.10 LEVERAGE RATIO. The Company shall not permit its Leverage Ratio for any fiscal quarter, beginning with the fiscal quarter ended December 31, 2000, calculated as of the last date of such quarter, to exceed, for the Test Period ending on such date (including Test Period fiscal quarters ending prior to the Effectiveness Date, and using for this purpose the Form 10 Financial Statements and the Supplemental Financial Statements), the following amounts:

------------------------------------------ ------------------------------------ FISCAL QUARTER ENDING: MAXIMUM LEVERAGE RATIO ------------------------------------------ ------------------------------------ December 31, 2000 through 3.75 to 1.00 September 30, 2001 ------------------------------------------ ------------------------------------ December 31, 2001 through 3.25 to 1.00 September 30, 2002 ------------------------------------------ ------------------------------------ December 31, 2002 through 3.00 to 1.00 September 30, 2003 ------------------------------------------ ------------------------------------ December 31, 2003 and 2.75 to 1.00 thereafter ------------------------------------------ ------------------------------------

-60- 66 7.11 FIXED CHARGE COVERAGE RATIO. The Company shall not permit as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2000: (a) the sum of (i) the Company's Consolidated EBITDA for the Test Period ending on such day, less (ii) taxes actually paid in cash or Cash Equivalents for the Test Period ending on such day, less (iii) capital expenditures plus (without duplication) PPM Expenditures for the Test Period ending on such day, (b) divided by the sum of (i) Consolidated Interest Expense for the Test Period ending on such day plus (ii) the Current Portion of Long-Term Debt as of such day; for the Company and its Subsidiaries on a consolidated basis (including in respect of Test Period fiscal quarters ending prior to the Effectiveness Date, and using for this purpose the Form 10 Financial Statements and the Supplemental Financial Statements), to be less than the following amounts:

------------------------------------------ ------------------------------------ FISCAL QUARTER ENDING MINIMUM RATIO ------------------------------------------ ------------------------------------ December 31, 2000 through 2.00 to 1.00 September 30, 2001 ------------------------------------------ ------------------------------------ December 31, 2001 through 2.25 to 1.00 September 30, 2002 ------------------------------------------ ------------------------------------ December 31, 2002 through 2.50 to 1.00 September 30, 2003 ------------------------------------------ ------------------------------------ December 31, 2003 and 2.75 to 1.00 thereafter ------------------------------------------ ------------------------------------

7.12 FOREIGN SUBSIDIARIES. The Company shall not, and shall not suffer or permit any Subsidiary to, (a) make any Disposition of, or make any Investment of, any of its property, business or assets (including Intellectual Property, Proprietary Information, accounts and rights to payment), whether now owned or hereafter acquired, to or in any Foreign Subsidiary, except Dispositions or Investments that, individually or in the aggregate, (i) are otherwise permitted hereunder and (ii) would not reasonably be expected to have a Material Adverse Effect on the business, results of operation or financial condition of the Company together with those of its Subsidiaries that are not Foreign Subsidiaries, taken as a whole, or (b) make any Investment in, or any Disposition to, Ceridian Info Tech (India) Private Limited in an aggregate amount, for all such Investments and Dispositions in respect of the Company and all Subsidiaries of the Company together from and after the Effectiveness Date, in excess of $200,000. 7.13 CHANGE IN BUSINESS. The Company shall not, and shall not permit any of its Subsidiaries to, (i) engage in any material line of business substantially different from those lines of business carried on by the Company and its Subsidiaries on the Closing Date; (ii) extend any material amount of Indebtedness to or make any material equity Investment in any Person which engages in one or more lines of business all of which are substantially different from those lines of business carried on by the Company and its Subsidiaries on the Effectiveness Date; or (iii) enter into any joint venture which engages in a material line of business substantially different from those lines of business carried on by the Company and its Subsidiaries on the Effectiveness Date. -61- 67 7.14 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or permit any of its Subsidiaries to, make any significant change in accounting treatment or reporting practices, except as required or permitted by GAAP, or change the fiscal year of the Company or of any of its consolidated Subsidiaries. 7.15 CERTAIN CONTRACTS. (a) The Company shall not permit any of its Arbitron Subsidiaries (other than New Ceridian) to enter into any Contractual Obligation restricting the ability of such Subsidiary to pay dividends or make Notes to the Company or Arbitron Subsidiaries of the Company. (b) The Company shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any amendment, restatement, extension, supplement or other modification of the Note Documents if the effect of any such action would be to render any of the conditions set forth in Section 4.01(a)(vii)(C) inaccurate or unsatisfied in any respect. (c) Unless consented to by the Required Note Holders, the Company shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any amendment, revision, supplement or modification to any of the Spin-Off Documents after the Closing Date, other than (i) ministerial changes necessary to address administrative issues, or (ii) changes necessary to address facial ambiguities. 7.16 TRANSACTIONS WITH AFFILIATES. (a) The Company shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any material transaction of any kind with any Affiliate of the Company (other than a Subsidiary), or with the New Ceridian and any of its Subsidiaries, other than arm's-length transactions with such Persons that are otherwise permitted hereunder. (b) The Company shall not suffer or permit any Nielsen JV or the Scarborough Partnership to Dispose of, or grant any Lien upon, Intellectual Property or Proprietary Information licensed to either such Person by the Company, provided, however, that the Scarborough Partnership may grant licenses of such Intellectual Property (i) to the Company, and (ii) to third Persons in the Ordinary Course of Business upon commercially reasonable terms, and provided further that a Permitted Nielsen JV may grant licenses in such Intellectual Property (A) to the Company, (B) to Nielsen to the extent, but only to the extent, consistent with the Nielsen JV Option Agreement, and otherwise in form and substance satisfactory to the Required Note Holders and (C) which are non-exclusive, non-transferable and Revocable to other Persons on commercially reasonable terms in the Ordinary Course of Business and consistent with the Nielsen JV Option Agreement. (c) Except as consented to in writing by the Required Note Holders, the Company shall not make or permit any amendment, modification, extension, renewal, restatement or assignment of the Nielsen JV Option Agreement or the Scarborough Partnership Agreement that would, directly or indirectly, (i) increase the amount of cash contributions or payments required to be made by the Company or any of its Subsidiaries to Nielsen, any Nielsen JV, or he Scarborough Partnership (ii) require the license or other Disposition of Intellectual Property of -62- 68 the Company or its Subsidiaries other than the property previously contemplated or alter the license or other transfer arrangements such that they involve longer terms, or less consideration than previously contemplated or (iii) include products, applications or markets other than as previously contemplated, (iv) cause any such Nielsen JV to no longer satisfy the requirements of a Permitted Nielsen JV, or (v) forseeably be detrimental to the Company or its Subsidiaries or to the interests of the Note Holders. 7.17 CAPITAL EXPENDITURES. The Company shall not, nor shall it permit any of its Subsidiaries to, make any expenditures for fixed or capital assets of the Company or its Subsidiaries, including obligations under Capital Leases, in excess of: (i) $5,000,000 in the aggregate for all such Persons, on a consolidated basis, in any fiscal year ending on or before December 31, 2005, or (ii) $10,000,000 in the aggregate for all such Persons, on a consolidated basis, in any fiscal year ending after December 31, 2005 (not including, in any case, equipment and real estate subject to a sale-leaseback transaction that is consented to by the Required Note Holders and that is completed no later than 90 days after the date on which such property is sold by the Company or Subsidiary pursuant to such sale-leaseback transaction); provided, however, that this Section shall not restrict the incurrence of capital expenditures in respect of New Ceridian Assets prior to the Spin-Off Consummation Date, provided that any lease or other obligation (other than obligations in respect of trade payables entered into in the Ordinary Course of Business on customary payment terms) of the Company or any Arbitron Subsidiary related to such New Ceridian Assets shall be released or terminated on or before the Spin-Off Consummation Date. 7.18 SALES AND LEASEBACKS. The Company shall not, nor shall it permit any of its Subsidiaries to, become liable, directly or indirectly, with respect to any lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which the Company or such Subsidiary has sold or transferred or is to sell or transfer to any other Person, or (b) which the Company or such Subsidiary intends to use for substantially the same purposes as any other property which has been or is to be sold or transferred by the Company or such Subsidiary to any other Person in connection with such lease. 7.19 CERTAIN TAX MATTERS. The Company shall not, (a) during the two year period following the Closing Date, cease to be engaged in the active trade or business relied upon for purposes of satisfying the requirements of Section 355(b) of the Code and obtaining, and staying in conformity with, the IRS Ruling Letter; or (b) during the applicable period provided by Section 355(e)(2)(B) of the Code with respect to the Distribution, enter into any transaction or make any change to its equity structure (including stock issuance, pursuant to the exercise of options, option grants or otherwise, capital contributions or acquisitions, but not including the Distribution) that may cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly capital stock of the Company representing a "50 percent or greater interest" within the meaning of Section 355(e) of the Code; provided that, in each case, the Company may take such actions if (i) the Company obtains an private letter ruling from the IRS to the effect that such actions should not result in the Distribution being taxable to New Ceridian or its shareholders, or (ii) the Company delivers to the Note Holders an opinion of -63- 69 independent counsel addressed to the Note Holders to the same effect, provided, that such opinion is reasonably acceptable in form and substance to the Required Note Holders. ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES 8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of Default: (a) Non-Payment. The Company fails to pay (i) when and as required to be paid herein, any amount of principal of, or the Make-Whole Amount in respect of, any Note or (ii) within three days after the same becomes due, any interest on any Note or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Note Document; or (b) Specific Covenants. The Company fails to perform or observe any term, covenant, or agreement contained in Section 6.03(a), (b), (c), (d), or (f), Section 6.09, Section 6.13 or in Article VII; or the Company fails to perform or observe any term, covenant or agreement contained in Section 6.01 or Section 6.02 or in Section 6.03 (other than subsections (a), (b), (c), (d) or (f) thereof) and such failure continues unremedied for a period of 10 days; or (c) Other Defaults. The Company fails to perform or observe any other term or covenant contained in this Agreement or any other Note Document, and such default continues unremedied for a period of 20 days; or (d) Representations and Warranties. Any representation or warranty made or deemed made by the Company or any other Note Party herein, in any other Note Document, or in any document delivered in connection herewith or therewith proves to have been incorrect in any material respect when made or deemed made; or (e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty Obligation (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guaranty Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guaranty Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated maturity, or such Guaranty Obligation to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs (A) under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (I) any event of default under such Swap Contract as to which the Company or any Subsidiary is the Defaulting -64- 70 Party (as defined in such Swap Contract) or (II) any Termination Event (as so defined) under such Swap Contract as to which the Company or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Company or such Subsidiary as a result thereof is greater than the Threshold Amount; or (f) Insolvency Proceedings, Etc. Any Note Party, any of its Subsidiaries, the Scarborough Partnership or the Nielsen JV institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; provided, however, that it shall not be an Event of Default under this subsection (f) if any Subsidiary of the Company to which this subsection applies does not have annual revenues in excess of 1% of the consolidated revenues of the Company or net worth which constitutes more than 5% of the Consolidated Net Worth of the Company in the fiscal year immediately preceding the date this subsection first becomes applicable to such Subsidiary; or (g) Inability to Pay Debts; Attachment. (i) The Company or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; provided, however, that it shall not be an Event of Default under this subsection (g) if any Subsidiary of the Company to which this subsection applies does not have annual revenues in excess of 1% of the consolidated revenues of the Company or net worth which constitutes more than 5% of the Consolidated Net Worth of the Company in the fiscal year immediately preceding the date this subsection first becomes applicable to such Subsidiary; or (h) Judgments. There is entered against the Company or any Subsidiary (i) a final judgment, order or decree for the payment of money in an aggregate amount exceeding $5,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any non-monetary final judgment, order or decree that has, or would reasonably be expected to have, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment, order or decree, or (B) there shall be any period of 10 consecutive days during which such judgment, order or decree continues unsatisfied and during which a stay of enforcement of such judgment, order or decree, by reason of a pending appeal or otherwise, shall not be in effect; or (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or would reasonably be expected to result in liability of the Company under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount that would reasonably be expected to result in a Material Adverse Effect, or (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any -65- 71 applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount that would reasonably be expected to result in a Material Adverse Effect; or (j) Invalidity of Note Documents. Any Note Document, at any time after its execution and delivery and for any reason other than the agreement of all the Note Holders or satisfaction in full of all the Obligations, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any material respect; or any Note Party denies that it has any or further liability or obligation under any Note Document, or purports to revoke, terminate or rescind any Note Document; or (k) Invalidity of Spin-Off Documents. Any Spin-Off Document, at any time after its execution and delivery and for any reason other than the satisfaction in full of all the obligations therein, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect; or any party thereto denies that it has any or further liability or obligation under any Spin-Off Document, or purports to revoke, terminate or rescind any Spin-Off Document; or (l) Change of Control. There occurs any Change of Control; or (m) Collateral. (i) Any provision of any Collateral Document shall for any reason cease to be valid and binding on or enforceable against the Company or any Subsidiary party thereto, or the Company or any Subsidiary shall so state in writing or bring an action to limit its obligations or liabilities thereunder, or (ii) any Collateral Document shall for any reason (other than pursuant to the terms thereof) cease to create a valid security interest in the Collateral purported to be covered thereby, or such security interest shall for any reason cease to be a perfected and first priority security interest subject only to Permitted Liens; or (n) Guarantor Defaults. Any Guarantor fails in any material respect to perform or observe any term, covenant or agreement in its Guaranty; or any Guaranty is for any reason partially (including with respect to future advances) or wholly revoked or invalidated, or otherwise ceases to be in full force and effect, or any Guarantor or any other Person contests in any manner the validity or enforceability thereof or denies that it has any further liability or obligation thereunder; or any event described at subsections (f) or (g) of this Section occurs with respect to any Guarantor; or (o) Spin-Off Consummation. The Spin-Off Consummation Date does not occur on or before the Spin-Off Deadline. 8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the Required Note Holders may (or may direct the Note Holder Representative to): -66- 72 (a) declare the unpaid principal amount of all outstanding Notes, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or thereunder or under any other Note Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company; and (b) exercise all rights and remedies available to them or the Note Holder Representative under the Note Documents or applicable law; provided, however, that (x) upon the occurrence of any event specified in subsection (a) of Section 8.01, any Note Holder may declare the unpaid principal amount of all outstanding Notes held by such Note Holder, all interest accrued and unpaid thereon, and all other amounts owing or payable to such Note Holder hereunder or thereunder or under any other Note Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company and (y) upon the occurrence of any event specified in subsection (f) of Section 8.01, the unpaid principal amount of all outstanding Notes and all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or thereunder or under any other Note Document shall automatically become due and payable without further act of any Note Holder. Upon any acceleration of the Notes or any Note pursuant to this Section 8.02 or otherwise, in addition to the unpaid principal amount of and accrued and unpaid interest on such Notes or Note, to the extent permitted by law, as liquidated damages and not as a penalty, the Make-Whole Amount, calculated as of the date of such acceleration, shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Company. 8.03 RESCISSION OF ACCELERATION. Notwithstanding the provisions of Section 8.02, at any time after the occurrence of any Event of Default and of notice thereof, if any, by any Note Holder or Note Holders and before any judgment, decree or order for payment of the money due has been obtained by or on behalf of any Note Holder or Note Holders, the Required Note Holders by written notice to the Company, may rescind and annul such Event of Default and/or notice of such Event of Default and the consequences thereof with respect to all of the Notes (excluding any Notes which were accelerated pursuant to clause (x) of the proviso in Section 8.02 by any holder or holders on account of an Event of Default of the character described in subsection (a) of Section 8.01) if: (1) the Company has paid a sum sufficient to pay (A) all overdue interest on all Notes at the rate specified in the Notes; (B) the principal of (and premium, if any, on) any Notes which have become due otherwise than by such Event of Default or notice thereof and interest thereon; and -67- 73 (C) interest on such overdue principal (and premium, if any) and, to the extent that payment of such interest is lawful, interest upon overdue interest; and (2) all Defaults and Events of Default, other than the non-payment of the principal of Notes which have become due solely by such acceleration, have been cured or waived as provided in Section 10.01. No such rescission shall affect any subsequent default or impair any right consequent thereon. ARTICLE IX REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES 9.01 REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Notes issued hereunder shall be issued in registered form. The Company shall keep at its principal executive office (which at Closing shall be located at the address set forth in Schedule 10.02) a register in which the Company shall provide for the registration and transfer of the Notes. The name and address of each Note Holder shall be registered in such register. The Company shall give to any Note Holder promptly (but in any event within 10 days) following request therefor, a complete and correct copy of the names and addresses of all registered Note Holders and the amount of Notes held by each. Subject to Section 9.03, whenever any Note or Notes shall be surrendered for transfer or exchange, the Company, at its expense, will execute and deliver in exchange therefor a new Note or Notes (in such denominations and registered in such name or names as may be requested by the holder of the surrendered Note or Notes), in the same aggregate unpaid principal amount as that of the Note or Notes so surrendered and dated so as not to result in any loss of interest. The Company may treat the Person in whose name any Note is registered as the owner of such Note for all purposes. 9.02 REPLACEMENT OF NOTES. Upon receipt by the Company of reasonably satisfactory evidence of the loss, theft, destruction or mutilation of any Note and (in the case of loss, theft or destruction) of reasonably satisfactory indemnity, and (in the case of mutilation) upon surrender of such Note, the Company, at its expense, will execute and deliver in lieu of such Note a new Note of like tenor and dated so as not to result in any loss of interest. An agreement to indemnify and/or affidavit from any institutional Note Holder shall constitute satisfactory indemnity and/or satisfactory evidence of loss, theft or destruction for the purpose of this Section 9.02. 9.03 TRANSFER OF NOTES. (a) Upon the transfer of any Notes by any Note Holder or the registration of any transferee, successor or assign of any Note Holder, such transferee, successor or assign shall, by its acceptance of such Notes, be deemed to have become a party to the Intercreditor Agreement and to have agreed with each other party to the Intercreditor Agreement to be bound by the applicable provisions thereof, and promptly following a request thereof by any party to the -68- 74 Intercreditor Agreement, such transferee, successor or assign shall further evidence the same by executing an Accession Agreement in a form substantially identical to Exhibit O. (b) In no event may any Notes be transferred by any Note Holder to any Person other than a: (i) bank, (ii) financial institution, (iii) insurance company, (iv) other institutional investor or (v) any entity for which any of the foregoing acts as investment advisor or investment manager that, in each of cases (i) through (v), has assets of greater than $75,000,000 (each, a "Permitted Transferee") including any agent or trustee for, and any Person formed by or on behalf of Permitted Transferee provided that if any agent or trustee or any such Person so formed having assets of less than $75,000,000 is the transferee, the Permitted Transferee shall guarantee the indemnification obligations of the transferee under the Intercreditor Agreement. (c) The Company shall not issue to any Person any Note (i) in a denomination of less than $500,000, unless such Person is acquiring all of the Notes held by any other Person, or (ii) if such issuance would result in there being more than fifteen (15) Note Holders. 9.04 ERISA. Each of the Note Holders represents that at least one of the following statements is an accurate representation as to each source of funds (a "Source") to be used by such Note Holder to pay the purchase price of the Notes to be purchased hereunder: (a) the Source is an "insurance company general account" as defined in Section V(e) of Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and, except as disclosed to the Company in writing the amount of reserves and liabilities for the general account contract(s) held by or on behalf of any employee benefit plan or group of plans maintained by the same employer (or an "affiliate" thereof as defined in Section V(a)(1) of PTE 95-60) or employee organization do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with the state of domicile of the insurer; or (b) the Source is a separate account of an insurance company maintained by such Note Holder in which an employee benefit plan (or its related trust) has an interest, which separate account is maintained solely in connection with fixed contractual obligations under which the amounts payable, or credited, to such plan and to any participant or beneficiary of such plan (including any annuitant) are not affected in any manner by the investment performance of the separate account; or (c) the Source is either (A) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990) with respect to which the insurance company satisfies the record maintenance requirements in Section III(b) of PTE 90-1, or (B) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) with respect to which the bank satisfies the record maintenance requirements in Section III(b) of PTE 91-38 and, except as disclosed to the Company in writing, no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (d) the Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset manager" or "QPAM" -69- 75 (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (A) the identity of such QPAM and (B) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing; or (e) the Source is a governmental plan; or (f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing; or (g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. As used in this Section 9.04, the terms "employee benefit plan", "governmental plan", "party in interest" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA, and the term "QPAM Exemption" means PTE 84-14 (issued March 13, 1984). ARTICLE X MISCELLANEOUS 10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this Agreement or any other Note Document, and no consent to any departure by the Company or any other Note Party therefrom, shall be effective unless in writing signed by the Required Note Holders and the Company or the applicable Note Party, as the case may be, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall, unless in writing and signed by each of the Note Holders directly affected thereby and by the Company, do any of the following: (a) amend Section 2.04 or 2.05; (b) postpone any date fixed by this Agreement or any other Note Document for any payment of principal, interest, fees or other amounts due to the Note Holders (or any of them) hereunder or under any other Note Document; (c) reduce the principal of, or the rate of interest specified herein on, any Note or any other amounts payable hereunder or under any other Note Document; provided, however, that only the consent of the Required Note Holders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Company to pay interest at the Default Rate; -70- 76 (d) change the percentage of the aggregate unpaid principal amount of Notes which is required for the Note Holders or any of them to take any action hereunder; (e) Reserved (f) amend this Section, or any provision herein providing for consent or other action by all the Note Holders; (g) amend Section 4.01 or 4.02 or waive any condition precedent specified therein (subject to the first proviso in the introductory clause to Section 4.01); or (h) discharge any Guarantor, or release all or substantially all of the Collateral except as otherwise may be provided herein or in the Collateral Documents. 10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES. (a) General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered, to the address, facsimile number or (subject to subsection (c) below) electronic mail address specified for notices on Schedule 10.02; or, to such other address as shall be designated in a notice to the other parties. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when signed for by the intended recipient; (B) if delivered by first class mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered. (b) Effectiveness of Facsimile Documents and Signatures. Note Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Note Parties and Note Holders. The Note Holders may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) Limited Use of Electronic Mail. Electronic mail and internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information, and to distribute Note Documents for execution by the parties thereto, and may not be used for any other purpose. (d) Reliance by Note Holders. The Note Holders shall be entitled to rely and act upon any notices even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Company shall indemnify each Note Holder - Related Person from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on -71- 77 behalf of the Company. All telephonic notices to and other communications with any Note Holder may be recorded by such Note Holder and each of the parties hereto hereby consents to such recording. 10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Note Holder or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein or therein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Company agrees (a) to pay or reimburse the Note Holders and the Note Holder Representative for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Note Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Note Holders and the Note Holder Representative for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Note Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Note Holders and the Note Holder Representative and the cost of independent public accountants and other outside experts retained by the Note Holders and the Note Holder Representative. The agreements in this Section shall survive the repayment of the Notes and all other Obligations. At the election of any Indemnitee, the Company shall defend such Indemnitee using legal counsel satisfactory to such Indemnitee in such Person's sole discretion, at the sole cost and expense of the Company; provided, however, that the Company shall only be obligated to hire one counsel to represent all of the Note Holders unless any Note Holder advises the Company that its legal counsel has advised it that its interest is materially different from that of the other Note Holders and it would not be adequately represented without its own separate counsel, in which case the Company shall hire separate counsel for such Note Holder, satisfactory to such Note Holder. All amounts owing under this Section 10.04 shall be paid within 30 days after demand. 10.05 INDEMNIFICATION BY THE COMPANY. Whether or not the transactions contemplated hereby are consummated, the Company agrees to indemnify, save and hold harmless each Note Holder - Related Person and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against: (a) any and all claims, demands, actions or causes of action that are asserted against any Indemnitee by any Person (other than the Note Holders) relating directly or indirectly to a claim, demand, action or cause of action that such Person asserts or may assert against any Note Party, -72- 78 any Affiliate of any Note Party or any of their respective officers or directors; (b) any and all claims, demands, actions or causes of action that may at any time (including at any time following repayment of the Obligations) be asserted or imposed against any Indemnitee, arising out of or relating to, the Note Documents, any predecessor Note documents, the use or contemplated use of the proceeds of the sale of the Notes, or the relationship of any Note Party, and the Note Holders under this Agreement or any other Note Document; (c) any administrative or investigative proceeding by any Governmental Authority arising out of or related to a claim, demand, action or cause of action described in subsection (a) or (b) above; and (d) any and all liabilities (including liabilities under indemnities), losses, costs or expenses (including Attorney Costs) that any Indemnitee suffers or incurs as a result of the assertion of any foregoing claim, demand, action, cause of action or proceeding, or as a result of the preparation of any defense in connection with any foregoing claim, demand, action, cause of action or proceeding, in all cases, and whether or not an Indemnitee is a party to such claim, demand, action, cause of action or proceeding (all the foregoing, collectively, the "Indemnified Liabilities"); provided that no Indemnitee shall be entitled to indemnification for any claim caused by its own gross negligence or willful misconduct or for any loss asserted against it by another Indemnitee. The agreements in this Section shall survive the repayment of the Notes and of all the other Obligations. 10.06 PAYMENTS SET ASIDE. To the extent that the Company makes a payment to any Note Holder, or any Note Holder exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Note Holder in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred. 10.07 TRANSFEREES, SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective transferees, successors and assigns permitted hereby, except that the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Note Holder (and any attempted assignment or transfer by the Company without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective transferees, successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. 10.08 CONFIDENTIALITY. Each of the Note Holders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; -73- 79 (f) subject to an agreement containing provisions substantially the same as those of this Section, to any transferee or prospective transferee of any Notes; (g) with the consent of the Company; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Note Holder on a nonconfidential basis from a source other than the Company; (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Note Holder's or its Affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates; or (j) to any Person from time to time party (directly or through any agent or trustee) to the Intercreditor Agreement. For the purposes of this Section, "Information" means all information received from the Company relating to the Company or its business, other than any such information that is available to any Note Holder on a nonconfidential basis prior to disclosure by the Company; provided that, in the case of information received from the Company after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 10.09 SET-OFF. In addition to any rights and remedies of the Note Holders provided by law, upon the occurrence and during the continuance of any Event of Default, each Note Holder is authorized at any time and from time to time, without prior notice to the Company or any other Note Party, any such notice being waived by the Company (on its own behalf and on behalf of each Note Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Note Holder to or for the credit or the account of the respective Note Parties against any and all Obligations owing to such Note Holder, now or hereafter existing, irrespective of whether or not such Note Holder shall have made demand under this Agreement or any other Note Document and although such Obligations may be contingent or unmatured. Each Note Holder agrees promptly to notify the Company after any such set-off and application made by such Note Holder; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. 10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary contained in any Note Document, the interest paid or agreed to be paid under the Note Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum Rate"). If any Note Holder shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Notes or, if it exceeds such unpaid principal, refunded to the Company. In determining whether the interest contracted for, charged, or received by a Note Holder exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations. -74- 80 10.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 10.12 INTEGRATION. This Agreement, together with the other Note Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Note Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Note Holders in any other Note Document shall not be deemed a conflict with this Agreement. Each Note Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any other Note Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by each Note Holder, regardless of any investigation made by any Note Holder or on their behalf and notwithstanding that any Note Holder may have had notice or knowledge of any Default or Event of Default, and shall continue in full force and effect as long as any Note shall remain unpaid or unsatisfied. 10.14 SEVERABILITY. Any provision of this Agreement and the other Note Documents to which the Company is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.15 NOTE HOLDERS. (a) Each Note Holder that is a citizen or resident of the United States or a United States corporation, partnership or trust ("a U.S. Note Holder") shall deliver, upon request, to the Company, prior to receipt of any payment made to such Person by the Company pursuant to this Agreement (or after accepting an assignment of an interest herein), two duly signed completed copies of IRS Form W-9 or any successor (providing such Person's taxpayer identification number and certifying that such Person is not subject to backup withholding) or such other evidence satisfactory to the Company that such Person is entitled to an exemption from U.S. backup withholding tax. (b) Each Note Holder that is a "non-resident alien individual" or a "foreign corporation, partnership or trust" within the meaning of the Code (a "Foreign Note Holder") shall deliver, upon request, to the Company, prior to receipt of any payment made to such Person by the Company pursuant to this Agreement (or after accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (establishing that such Person is a foreign person and, if applicable, entitling it to an exemption -75- 81 from, or reduction of, withholding tax on all payments to be made to such Person by the Company pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by the Company pursuant to this Agreement and representing that the income with which that Form is associated is not subject to withholding because it is effectively connected with the conduct of a United States trade or business) or such other evidence satisfactory to the Company that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax. (c) Following the delivery of the form described in subsections (a) and (b) of this Section 10.15 and from time to time, each such Person shall (a) promptly submit to the Company such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Company of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by the Company pursuant to this Agreement, (b) promptly notify the Company of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (c) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Note Holder, and as may be reasonably necessary to avoid any requirement of applicable Laws that the Company make any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other documentation, then the Company may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Section 3406 or Sections 1441 and 1442 of the Code, without reduction. If any Governmental Authority asserts that the Company did not properly withhold any tax or other amount from payments made in respect to such Person, such Person shall indemnify the Company therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Company under this Section, and costs and expenses (including Attorney Costs) of the Company. The obligation of the Note Holders under this Section shall survive the payment of all Obligations. 10.16 RESERVED. 10.17 GOVERNING LAW. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH NOTEHOLDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND EACH NOTE HOLDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE -76- 82 JURISDICTION OF THOSE COURTS. THE COMPANY AND EACH NOTE HOLDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE COMPANY AND EACH NOTE HOLDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY NOTE DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 10.19 PURCHASE FOR INVESTMENT. Each Note Holder represents and warrants that (i) it will acquire the Notes to be issued to it pursuant hereto for its own account for investment and not for distribution in any manner that would violate applicable securities laws, but without prejudice to its rights to dispose of such Notes or a portion thereof to a transferee or transferees, in accordance with such laws if at some future time a Note Holder deems it advisable to do so and (ii) it is an "accredited investor", as defined in Regulation D of the SEC under the Securities Act. The acquisition of such Notes at the Closing shall constitute the confirmation of the foregoing representations and warranties. Each Note Holder understands that the Notes are being sold to the Note Holders in a transaction which is exempt from the registration requirements of the Securities Act, and that, in making the representations and warranties contained in Section 5.30, the Company is relying, to the extent applicable, upon the representations and warranties contained herein. [The remainder of this page is left blank intentionally.] -77- 83 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. CERIDIAN CORPORATION By: /s/ William J. Walsh --------------------- Name: William J. Walsh Title: Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian JOHN HANCOCK LIFE INSURANCE COMPANY By: /s/ Daniel C. Budde Name: Daniel C. Budde Title: Managing Director JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY By: /s/ Daniel C. Budde Name: Daniel C. Budde Title: Authorized Signatory COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM BY JOHN HANCOCK LIFE INSURANCE COMPANY, AS INVESTMENT ADVISOR By: /s/ Daniel C. Budde Name: Daniel C. Budde Title: Managing Director -78- 84 SIGNATURE 4 LIMITED BY JOHN HANCOCK LIFE INSURANCE COMPANY, AS PORTFOLIO ADVISOR By: /s/ Daniel C. Budde Name: Daniel C. Budde Title: Managing Director SIGNATURE 5 LIMITED BY JOHN HANCOCK LIFE INSURANCE COMPANY, AS PORTFOLIO ADVISOR By: /s/ Daniel C. Budde Name: Daniel C. Budde Title: Managing Director -79- 85 SCHEDULE I JOHN HANCOCK LIFE INSURANCE COMPANY 1. All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: BankBoston ABA No. 011000390 Boston, Massachusetts 02110 Account of: John Hancock Life Insurance Company Private Placement Collection Account Account Number: 541-55417 On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due January 31, 2008 (PPN 156779 A* 1) 2. Contemporaneous with the above wire transfer, advice setting forth: (1) the full name, interest rate and maturity date of the Notes or other obligations; (2) allocation of payment between principal and interest and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Manager, Investment Accounting Division, B-3 Fax: (617) 572-0628 3. All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company and: John Hancock Life Insurance Company 200 Clarendon Street 200 Clarendon Street Boston, MA 02117 Boston, MA 02117 Attention: Manager, Investment Attention: Investment Law Division, T-50 Accounting Division, B-3 Fax: (617) 572-9269 Fax: (617) 572-0628 4. All other communications which shall include, but not be limited to, financial statements and certificates of compliance with financial covenants, shall be delivered or faxed AND mailed to: 86 John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Group, T-57 Fax: (617) 572-1605 5. A copy of any notices relating to change in issuer's name, address or principal place of business or location of collateral and a copy of any legal opinions shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Investment Law Division, T-50 Fax: (617) 572-9269 6. All securities shall be registered in the name of: JOHN HANCOCK LIFE INSURANCE COMPANY 7. Tax I.D. No. 04-1414660 8. Securities to be Purchased: (a) $31,500,000 9.96% Senior Secured Note (No. R-1) (b) $ 4,500,000 9.96% Senior Secured Note (No. R-2) 87 JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY 1. All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: BankBoston ABA No. 011000390 Boston, Massachusetts 02110 Account of: John Hancock Life Insurance Company Private Placement Collection Account Account Number: 541-55417 On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due January 31, 2008 (PPN 156779 A* 1) 2. Contemporaneous with the above wire transfer, advice setting forth: (1) the full name, interest rate and maturity date of the Notes or other obligations; (2) allocation of payment between principal and interest and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or faxed AND mailed to: John Hancock Variable Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Manager, Investment Accounting Division, B-3 Fax: (617) 572-0628 3. All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or faxed AND mailed to: John Hancock Variable Life Insurance Company and: John Hancock Life Insurance Company 200 Clarendon Street 200 Clarendon Street Boston, MA 02117 Boston, MA 02117 Attention: Manager, Investment Attention: Investment Law Division, T-50 Accounting Division, B-3 Fax: (617) 572-9269 Fax: (617) 572-0628 88 4. All other communications which shall include, but not be limited to, financial statements and certificates of compliance with financial covenants, shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Group, T-57 Fax: (617) 572-1605 5. A copy of any notices relating to change in issuer's name, address or principal place of business or location of collateral and a copy of any legal opinions shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Investment Law Division, T-50 Fax: (617) 572-9269 6. All securities shall be registered in the name of: JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY 7. Tax I.D. No. 04-2664016 8. Securities to be Purchased: $2,000,000 9.96% Senior Secured Note (No. R-3) 89 COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM 1. All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer of immediately available funds for credit, not later than 11:30 a.m., Boston time, to: Federal Reserve Bank of Boston A/C Boston Safe Deposit & Trust Company ABA No. 011001234 DDA: 125261 Ref: CPZFFD01302 On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due January 31, 2008 (PPN 156779 A* 1) 2. Contemporaneous with the above wire transfer, advice setting forth (1) the full name, interest rate and maturity date of the Notes or other obligations; (2) allocation of payment between principal and interest and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered or faxed AND mailed to: Mellon Bank, N.A. Three Mellon Bank Center, Room 153-3610 Pittsburgh, Pennsylvania 15259-0001 Attn: Principal & Interest Unit Fax: 412-236-0120 3. All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or faxed AND mailed to: Mellon Bank, N.A. Three Mellon Bank Center, Room 153-3610 Pittsburgh, Pennsylvania 15259-0001 Attn: Principal & Interest Unit Fax: 412-236-0120 4. All other communications shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, Massachusetts 02117 90 Attention: Scott Hartz, Bond and Corporate Finance Group, T-57 Fax: 617-572-1605 5. A copy of any notices relating to change in issuer's name, address or principal place of business or location of collateral and a copy of any legal opinions shall be delivered or faxed AND mailed to John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Investment Law Division, T-50 Fax: 617-572-9269 6. Execution documents shall be executed as follows: COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM By: John Hancock Life Insurance Company, as Investment Advisor By: Daniel C. Budde Managing Director 7. All securities shall be registered in the name of SERS & CO. 8. Tax I.D. No. 23-1732438 9. Securities to be Purchased: $3,000,000 9.96% Senior Secured Note (No. R-4) 91 SIGNATURE 4 LIMITED 1. All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: HARE & CO. c/o The Bank of New York ABA No. 021-000-018 BNF: IOC566 On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due January 31, 2008 (PPN 156779 A* 1) 2. Contemporaneous with the above wire transfer, advice setting forth: (1) the full name, interest rate and maturity date of the Notes or other obligations; (2) allocation of payment between principal and interest and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or faxed AND mailed to: Investors Bank & Trust Company and: HARE & CO. 200 Clarendon Street c/o The Bank of New York Boston, MA 02116 P.O. Box 19266 Attn: Mike DeVelis Newark, NJ 07195 Fax: (617) 927-8302 3. All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or faxed AND mailed to: Investors Bank & Trust Company and: HARE & CO. 200 Clarendon Street c/o The Bank of New York Boston, MA 02116 P.O. Box 19266 Attn.: Michael DeVelis Newark, NJ 07195 Fax: (617) 927-8302 and: John Hancock Life Insurance Company John Hancock Life Insurance 200 Clarendon Street Company 92 Boston, MA 02117 200 Clarendon Street Attention: Investment Law Division, T-50 Boston, MA 02117 Attention: Bond and Corporate Fax: (617) 572-9269 Finance Group, T-57 Fax: (617) 572-1650 4. All other communications which shall include, but not be limited to, financial statements and certificates of compliance with financial covenants, shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Group, T-57 Fax: (617)-572-1605 5. A copy of any notices relating to change in issuer's name, address or principal place of business or location of collateral and a copy of any legal opinions shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Investment Law Division, T-50 Fax: (617)-572-9269 6. Execution documents shall be executed as follows: Signature 4 Limited By: John Hancock Life Insurance Company, as Portfolio Advisor By: Daniel C. Budde Managing Director 7. All securities shall be registered in the name of: HARE & CO. 8. Securities to be Purchased: $2,000,000 9.96% Senior Secured Note (No. R-5) 93 SIGNATURE 5 L.P. 1. All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: HARE & CO. c/o The Bank of New York ABA No. 021-000-018 BNF: IOC566 On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due January 31, 2008 (PPN 156779 A* 1) 2. Contemporaneous with the above wire transfer, advice setting forth: (1) the full name, interest rate and maturity date of the Notes or other obligations; (2) allocation of payment between principal and interest and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or faxed AND mailed to: Investors Bank & Trust Company and: HARE & CO. 200 Clarendon Street c/o The Bank of New York Boston, MA 02116 P.O. Box 19266 Attn: Mike DeVelis Newark, NJ 07195 Fax: (617) 927-8302 3. All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or faxed AND mailed to: Investors Bank & Trust Company and: HARE & CO. 200 Clarendon Street c/o The Bank of New York Boston, MA 02116 P.O. Box 19266 Attn.: Michael DeVelis Newark, NJ 07195 Fax: (617) 927-8302 and: John Hancock Life Insurance Company and: John Hancock Life Insurance 200 Clarendon Street Company 94 Boston, MA 02117 200 Clarendon Street Attention: Investment Law Division, T-50 Boston, MA 02117 Attention: Bond and Corporate Fax: (617) 572-9269 Finance Group, T-57 Fax: (617) 572-1605 4. All other communications which shall include, but not be limited to, financial statements and certificates of compliance with financial covenants, shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Group, T-57 Fax: (617)-572-1605 5. A copy of any notices relating to change in issuer's name, address or principal place of business or location of collateral and a copy of any legal opinions shall be delivered or faxed AND mailed to: John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Investment Law Division, T-50 Fax: (617)-572-9269 6. Execution documents shall be executed as follows: Signature 5 L.P. By: John Hancock Life Insurance Company, as Portfolio Advisor By: Daniel C. Budde Managing Director 7. All securities shall be registered in the name of: HARE & CO. 8. Securities to be Purchased: $7,000,000 9.96% Senior Secured Note (No. R-6) 95 SCHEDULE 1.01(i) INITIAL PERMITTED INDEBTEDNESS 1. Repayment obligations pursuant to the Letters of Credit described in Schedule 1.01(e) under the New Credit Facility. 2. There are no existing capital leases. 3. Final payment in the amount of three million dollars ($3,000,000) to Tapscan Inc. due on May 4, 2001 under the Asset Purchase Agreement dated May 4, 1998. 96 SCHEDULE 1.01(s) SPIN-OFF DOCUMENTS 1. The Form 10 2. Amended and Restated Certificate of Incorporation of the Company 3. Amended and Restated Bylaws of the Company 4. Distribution Agreement dated on or before the Separation Date between the Company and New Ceridian (see Schedules below)

Schedule Description of Schedule -------- ------------------------ 1.1(o) Conveyancing and Assumption Instruments 1.1(g) Debt Realignment Plan 1.1(ff) List of Divested Business Entities Relating to Arbitron Business 1.1(gg) December 31, 1999 Media Information Balance Sheet 1.1 (ii)(iii) Government Contracts Exclusively Relating to Media Information Business 1.1 (ii)(iv) Lease Agreements Relating to Media Information Business 1.1(ll) List of Certain Liabilities to remain with the Corporation after Spin-Off 1.1(ll) A List of Certain Liabilities to be Assumed by New Ceridian 2.8(a) Guarantees where Corporation (Arbitron Inc.) is to be removed as a Guarantor 2.8(b) Guarantees where New Ceridian is to be removed as a guarantor of a Media Information Liability 7.3(b) Allocation of deductibles with respect to Shared Insurance Policies 7.3(e) Allocation of deductible for Workers' Compensation, General Liability and Automotive Liability Claims 8.5 Allocation of Expenses

5. Personnel Agreement dated on or before the Separation Date between Arbitron and New Ceridian 97 6. Tax Matters Agreement dated on or before the Separation Date between Arbitron and New Ceridian 7. Transition Services Agreement dated on or before the Separation Date between Arbitron and New Ceridian 8. Information Statement dated December 6, 2000 attached as Annex A to the Form 10 9. Bill of Sale and Assumption Agreement, dated on or before the Separation Date, between the Company and the Parent. 10. Real Estate Sublease Agreement, dated on or before the Separation Date, between the Company, as sub-lessor, and the Parent, as sub-lessee, related to the facilities located at 142 W. 57th Street, New York, New York. 98 SCHEDULE 5.05 LITIGATION AFFECTING NOTE PARTIES The following information is provided regarding various matters in litigation involving the Company and the Subsidiaries of the Company. The information provided includes matters where the plaintiff has alleged damages in an amount that exceeds $5,000,000 or where such damages are currently unknown, but could potentially exceed $5,000,000, and excludes threatened litigation where the threatening party or parties specified no Dollar threshold. Inclusion of any matter on the lists provided below shall not be deemed a conclusion on the part of the Company or its Subsidiaries that an adverse determination in connection with such matter is likely or expected, or that such a determination would necessarily result in a Material Adverse Effect. Terms not otherwise defined in this Schedule are used herein as defined in the Agreement. 1. Flying J, Inc. v. Comdata Network, Inc. and Trendar Corporation, et. al. In July 1996, Comdata was sued in the U.S. District Court for the Northern District of Utah by Flying J, an operator of a large chain of truck stops and formerly a significant Comdata customer. The complaint alleges violations of various antitrust laws, tortious interference with contract and unfair competition. Specifically, Flying J alleges that Comdata's market position in the transportation industry caused Flying J's agreement(s) with another truck stop chain to deploy point-of-sale authorization devices and truck driver service kiosks to unravel. Comdata filed a motion to dismiss, stay or transfer this case to the U.S. District Court for the Eastern District of Tennessee where Comdata had previously filed suit against Flying J in April 1996, seeking a temporary restraining order and, later, a permanent injunction to prevent Flying J from misappropriating certain confidential and proprietary information of Comdata, including misuse of Comdata's Comchek card numbers. Although the temporary restraining order was granted by the Tennessee court and remained in place through mid-December 1996, the Tennessee court declined to issue a permanent injunction and the Tennessee case, accordingly, was dismissed. The plaintiff filed an amended complaint in the Utah case in mid-January 1997. In January 1999, plaintiffs filed a second and third amended complaint seeking to add claims for interference with contractual relations with NCR and NTS, Inc. Plaintiffs' expert report has been filed under seal. A motion is pending to have the court reconsider its denial of plaintiffs' motion the Company as a party. Similar motions have been denied twice previously. Meanwhile, plaintiffs have sued the Company separately, repeating the same allegations made against Comdata. The complaint was accompanied with a motion to stay following the Company's answer. Ceridian has answered and is pursuing dispositive motions to dismiss. Ceridian believes that the separate suit filed against it is subject to various affirmative defenses, including, without limitation, lack of standing, laches, unclean hands, no damages as a result of conduct of the Company and statute of limitation defenses, and in addition the Company does not believe that suit reaches the damages thresholds specified above. The suit is disclosed only to provide a complete description of the current circumstances. The lawsuit against Comdata is currently scheduled for a four-week trial beginning in June 2001. 2. Fortune Funding LLC, et al. v. Ceridian Corporation. On July 28, 2000 the owner of the Company's former headquarters building sued the Company in the United States District Court for the District of Minnesota. The complaint alleges breach of contract, violation of Minn. Stat. 99 561.17, common law waste, intentional and negligent misrepresentation, and violation of the consumer fraud act. 3. The Huntington National Bank v. ABR Benefits Services, Inc. The Huntington National Bank sued ABR Benefits Services in Circuit Court, Pinellas County, Florida. Plaintiff terminated their contract with ABR and claims breach of contract and wrongful retention of hardware and software. ABR's professional liability carrier is paying costs. The matter is currently in the discovery phase. 100 SCHEDULE 5.07 ERISA COMPLIANCE Not Applicable. 101 SCHEDULE 5.10 CONTINGENT OBLIGATIONS 1. Reimbursement obligations relating to letters of credit set forth in Schedule 1.01(e) of the New Credit Facility. 2. Contingent Obligations arising in connection with the Company's guarantee of the obligations of New Ceridian under the New Ceridian Credit Agreement. 3. The Company's obligations to pay certain obligations as expressly set forth in the Spin-Off Documents. 4. Existing Contingent Obligations relating to a $1,200,000 letter of credit required by Liberty Sites, Ltd., the landlord of the Montreal, Canada facilities, and Contingent Obligations related to a guaranty of the account party's obligations in respect thereto, given to the issuing bank (CIBC) by the Company as of the Effectiveness Date, and by New Ceridian on the Closing Date. 5. Existing Contingent Obligations of $100,000 relating to the obligations of Resumix (a divested subsidiary) under a switchboard lease/purchase. 6. Existing Contingent Obligations of $18,900,000 under surety bonds primarily relating to various licensing or permitting requirements of Comdata (and its subsidiaries) for fuel tax, ATM, check cashing and related matters. 7. Existing Contingent Obligations of $900,000 under performance guarantees of Empros (a divested business operation) in Mexico, as to which the Company has a "back-up" indemnity from Siemens, the acquiror of Empros. 8. Existing Guarantees by the Company as of the Effectiveness Date, as described in Schedule 1.01(i) of the New Credit Facility, by New Ceridian as of the Closing Date, in substantially the form of Exhibit E, and by the Company's domestic Material Subsidiaries, in substantially the form of Exhibit F. 9. Contingent Obligations relating to a $2,000,000 Letter of Credit (the amount subject to rescission) issued under the Existing Credit Facility and to be reissued under the New Ceridian Credit Agreement. 10. Contingent Obligations arising in connection with the Company's guarantee to landlords in respect of 5 sales office locations leased by CCL (no sum certain), which guarantees were executed on March 10, 1998. 11. Contingent Obligations arising in connection with the Company's guarantee in the amount of $1,103,170 to IBM Canada, LTd of obligations of CCL, which guarantee was executed on December 7, 1998 and expires on January 1, 2003. 102 12. Contingent Obligations arising in connection with the Company's guarantee in the amount of $3,000,000 to CIBC of obligations of Pernicom, which guarantee was executed on August 27, 1999. 13. Contingent Obligations arising in connection with the Company's customer guarantee for no sum certain to Asda of obligations of Centre-File, which guarantee was executed on September 5, 1997. 14. Contingent Obligations arising in connection with the Company's overdraft guarantee for no sum certain to National Westminster of obligations of Centre-File, which guarantee was executed on August 18, 1997. 15. Contingent Obligations arising in connection with the Company's landlord guarantee in the amount of $34,000 to Kingsway Group PLC of obligations of CCP, which guarantee was executed on July 1, 2000 and expires on December 24, 2002. 16. Contingent Obligations arising in connection with the Company's customer guarantee for no sum certain to Exxon Card Services of obligations of LAES/Comdata, which guarantee was executed on September 24, 1997 and expires on September 24, 2002. 17. Contingent Obligations arising in connection with the Company's customer guarantee for no sum certain to Exxon Card Services of obligations of SVS/Comdata, which guarantee was executed on March 1, 1999 and expires on March 1, 2004. 18. Contingent Obligations arising in connection with the Company's guarantee for no sum certain to IBM of obligations of Comdata, which guarantee was executed on June 30, 1998. 19. Contingent Obligations arising in connection with the Company's landlord guarantee for no sum certain to Norwestern Mutual Insurance of obligations of Comdata. 20. Contingent Obligations arising in connection with the Company's guarantee in the amount of $0 to AmSouth (1st American) of obligations of Comdata, which guarantee was executed on September 4, 1998. 21. Contingent Obligations arising in connection with the Company's guarantee in the amount of $0 to Chase Manhattan Bank of obligations of PowerPay.com, which guarantee was executed on October 1, 1999. 22. Contingent Obligations arising in connection with the Company's guarantee in the amount of $575,000 to Amplicon of obligations of Usertech, which guarantee was executed on November 3, 2000 and expires on November 1, 2003. 103 SCHEDULE 5.11 ENVIRONMENTAL MATTERS The following information is provided regarding various matters relating to Environmental Laws, Environmental Claims and Hazardous Materials involving the Company and its Subsidiaries. Inclusion of any matter on the lists provided below shall not be deemed a conclusion on the part of the Company that such matter would or could reasonably be expected to result in a Material Adverse Effect. Terms not otherwise defined in this Schedule are used herein as defined in the Agreement. 1. Printed Circuits Operations, St. Louis Park, Minnesota. Groundwater contamination was discovered at the printed circuits facility formerly operated by the Company's Computer Products division in St. Louis Park. Despite the sale of the printed circuits business and the transfer of the St. Louis Park real estate to CD Systems in connection with the spin-off of CD Systems, the Company remains responsible for environmental matters related to this site. A consent order was signed with the Minnesota Pollution Control Agency ("MPCA") which obligates the Company to perform MPCA-approved remedial actions. The MPCA has accepted the Company's proposed remedial alternative involving the treatment and discharge of contaminated groundwater, and has issued a record of decision setting the recommended cleanup levels for the groundwater. A response action plan was submitted and approved and remediation facilities have been in operation since July 1990. Groundwater clean up has progressed to the point where the site is expected to start the closure and delisting process within the next 1-2 years. CD Systems is pursuing a sale of this property. The remaining cost of implementing remedial actions was most recently estimated by management to be under $500,000. 2. Imprimis/Seagate Environmental Matters. The Company has agreed to indemnify Seagate against a portion of environmental liabilities relating the Imprimis facilities and sites where Imprimis may have disposed of hazardous materials, to the extent such liabilities relate to occurrences that predate the sale of Imprimis to Seagate, and to the extent such liabilities exceed the amount of applicable reserves on the closing balance sheet of Imprimis. Because those reserves have been exhausted, the Company is responsible for up to $8.2 million of the next $9.2 million of such liabilities, and for 50 percent of such liabilities beyond that amount, with a maximum indemnification obligation of $15.7 million. The Company has paid approximately $8.2 million to Seagate pursuant to this indemnity through mid-2000. The Company has established reserves for the full amount of its remaining liability with respect to this indemnification undertaking. 3. Chemical Marketing Corporation of America. In April and May 1999, MPCA has requested information, under the Minnesota Environmental Response and Liability Act regarding the possible release of hazardous substances or pollutants of contaminants at the Chemical Marketing Company of America Site, previously located at 180 Humboldt Avenue North, Hennepin County, Minneapolis. The Company's initial review of its documents shows that it had shipped hazardous waste from its former VTC subsidiary's location at 2800 E. Old Shakopee Road, Bloomington, MN back in the early 1980's. The Company has responded to the requests and is in discussion with MPCA and other PRPs regarding site clean up. Total clean up 104 costs are estimated by management to be between $660,000 to $1,400,000. The Company has adequate reserves available to cover anticipated clean up costs. 4. Spring Grove, Minnesota. After detecting low levels of contamination in two municipal wells in Spring Grove, the MPCA requested information from the Company and Northern Engraving Corporation ("NEC") regarding a facility in Spring Grove operated by the Company from 1965 to 1971 and since that time by NEC. The Company and NEC subsequently entered into a consent order with the MPCA pursuant to which the Company and NEC are implementing certain remedial actions and have reimbursed the MPCA for 75% of its past costs in connection with this matter. Estimated future costs for the Company under the consent order may be as much as $500,000 over a period of as much as thirty years. 5. Freeway Sanitary Landfill, Burnsville, Minnesota. In April 1994, the Company received a request for information from the MPCA regarding the Company's connection with this landfill. Apparently groundwater contamination has been discovered in connection with this facility. The Company's investigation to date suggests that some waste materials generated by the Company were disposed of at this landfill during the relevant time period (1969-1990) in accordance with applicable law. In 1996, the State of Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Company to preserve its rights to insurance coverage for cleanup costs at the site. 6. Oak Grove Landfill, Anoka County, Minnesota. This landfill in Anoka County, Minnesota, closed in 1984, was the subject of an investigation by the EPA and MPCA for several years. The Company's involvement with the site, allegedly as a result of utilizing a transporter who disposed of waste at the landfill, was relatively small. Nevertheless, the Company joined an Oak Grove PRP group, which has negotiated a consent decree with the EPA. The Company contributed approximately $250,000 to the PRP group and does not expect to make any significant future payments with respect to this site. In 1996, the State of Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Company to preserve its rights to insurance coverage for cleanup costs at the site. The State of Minnesota has recently brought a lawsuit against the insurance companies and has subpoenaed all applicable records from PRP. 7. Isanti County, Minnesota. In the 1991 settlement of a civil action filed in the U.S. District Court for Minnesota, the Company and nine other parties agreed to reimburse the EPA and the MPCA for costs incurred in the surface cleanup of five waste disposal sites in Isanti County, and to create a remediation fund to conduct remedial activities at the sites for a period of 12 years, at which time the State of Minnesota would take over the sites. The Company has paid its share of these amounts. The settlement agreement also provides that unless new information is discovered during the 12 year period that indicates the seven settling PRPs have in the past been responsible for any additional contamination at these sites, the settling PRPs would obtain a full release from the State at the conclusion of the 12 year period. 8. Ecolotech, Minneapolis and St. Paul, Minnesota. Prior to 1987, the Company shipped wastes to Ecolotech, which operated facilities in Minneapolis and St. Paul. Soil and groundwater contamination where discovered at the sites and a consent order was entered into by the generators (including the Company) with the MPCA in 1987. Remedial efforts specified for the 105 sites have been completed. The Company is awaiting termination of the consent order by the MPCA. 9. Hopkins Landfill, Hopkins, Minnesota. In March 1994, the Company received a letter from the City of Hopkins identifying the Company as having used the Hopkins Landfill for disposal of waste and seeking reimbursement of methane remediation costs. The City then placed a "hold" on its reimbursement request until the state legislature passed the Landfill Cleanup Law. In July 1996, the Company received a request from MPCA for information regarding the Company's connection with this landfill. The records search to date has not uncovered any disposal records for the Hopkins Landfill. The State of Minnesota, under the Minnesota Landfill Cleanup Law, has assumed responsibility for all further response actions at the site. The Landfill Cleanup Law requires the Company to preserve its rights to insurance coverage for cleanup costs at the site. 10. Other. The Company has identified certain of its facilities that contain asbestos containing materials ("ACM"). As to such facilities, it is the Company's policy and practice, in accordance with applicable Environmental Laws, to manage ACM in place or remove it when necessary. The Company is also aware of underground storage tanks located in its Comdata subsidiary facilities in Brentwood, Tennessee and Newberry, South Carolina which are being utilized in accordance with applicable Environmental Laws. 106 SCHEDULE 5.17 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION (a) (i) TVScan software and trademark license dated May 1, 1998 from Tapscan Inc. to Arbitron for its exclusive use in the radio, agency and advertising industries worldwide and the television and cable industries outside the U.S. TVScan processes and provides custom analysis reports of television viewing data. (ii) Software used for internal business: See 4(d) below. (iii) License agreement between Arbitron and Claritas Inc. for PRIZM/Clusters (population) data. (iv) License agreement between Arbitron and Market Statistics for demographic and economic data. (v) Software license agreement dated July 17, 2000 between Ceridian and Lariat Software, Inc. for software to be used in Company's services or processes. (vi) Software license agreement between CSW Research Ltd., and outside third parties. The licensed software is used in connection with survey research, including questionnaire design, automated telephone dialing, and data analysis. All agreements listed are for a one year term and are auto renewing for a like term. (b) None. (c) See Schedule 5.05, Item 3. (d) See the list below. ACT Add Strip Adobe Acrobat 4 ADOBE ACROBAT FULL Adobe After Effects 4 Adobe Illustrator 6 Adobe Illustrator 7 Adobe PageMaker 6.5 Adobe Photoshop 5.5, 6 and 5LE Adobe Type Manager Deluxe and Lite 4.6 Alladin StuffIt Deluxe 5.5 Allaire Cold Fusion 4 Apple OS 8.6 and 9.0.4 ARCSERVE 107 ASPChart Charting Component ATAMAN TELNET ATLAS GIS AUDIX VOICEPOWER BackupEXEC BARSPOOL C++/DEC CAS FOR WINDOWS CDR CLIENTS & PROFITS Clients & Profits 4.0 CODE1+ COLD FUSION COMPARERITE Corel Draw 6 CRYSTAL INFO CUTEFTP DATAJET DB BRZ DBASE IV DEFINITY G1 Deltagraph 4.5 DESIGNER DEVELOPER DOC1/DEC DOC1/NT DTC MANAGER EDIFY EXCEED6 Extensis Portfolio 5 Extensis Suitcase 8 and 9 EZCASE EZFLOW Fetch 3.03 FileMaker Pro 3, 4 and 5 FOREHELP FREELANCE GRAPHICS GEMBASE GEOCODER GHOST GOLDMINE HELPDESK HP UNIX HYPERION IMAGE PRO 108 IMAGEBASIC IMAGEKEY JAVA/DEC Kai's Power Tools 3 KAWA LAN WORKGROUP LAN WORKPLACE LAWSON INSIGHT LEAD TOOLS LEXMARK TOOLKIT LISTCONV LOTUS 1-2-3 V4.0 LOTUS 1-2-3 V5.0 LWP PRO 95/NT MacLink Plus 9.7.1 through 11 Macromedia Dreamweaver 3 and 4 Macromedia Fireworks 3 Macromedia Flash 4 and 5 Macromedia Fontographer 4.1.5 Macromedia Freehand 8.01 and 9 MAILSTREAM MCAFEE VIRUS SCAN MEDIAMAX MICRO FOCUS COBOL MICRO FOCUS COBOL\DEC MICROSOFT ACCESS MICROSOFT EXCEL MICROSOFT FOXPRO MICROSOFT FRONTPAGE Microsoft Internet Explorer 5 MICROSOFT OFFICE 2000 Microsoft Office 98 for Mac MICROSOFT OFFICE PRO MICROSOFT OFFICE97 MICROSOFT OFFICE97 Microsoft Outlook Exchange 8.2.1 Microsoft Outlook Express 5 MICROSOFT PROJECT MICROSOFT PUBLISHER MICROSOFT VB MICROSOFT VFOXPRO MICROSOFT VISSTUDIO MICROSOFT WIN 2000 Microsoft Windows Media Player MICROSOFT WORD MICRPSOFT POWERPNT 109 MITEK ICR/OCR MS IIS MS INTERNET EXPLORER Netscape Communicator 4.7 and 6 NETWARE NFS Maestro Norton AntiVirus 5 and 6 Norton Utilities 4 and 5 ODBC FOR OS/2 ODBC FOR WINDOWS ORACLE/NT ORACLE/DEC OS/2 LAN REQUESTER OS/2 LAN SERVER PAGEMAKER PARADOX PcAnywhere PHOTOSHOP PIXTOOLS/EZ PIXTOOLS/IMAGE PROC PKZIP/PKUNZIP Pocket Ethernet AdapterIII PowerBuilder Desktop PowerBuilder Professional PowerPoint PPI Modem Utilities Project PROMIX ProtoView PROXY PVCS DEC PVCS TRAKKER PVCS Version Manager PVCS\PC Columbia PVCS\PC New York QA Plus QA Plus QBAL Quark Express 3.32 Quick Xpense Quicken ExpensAble QuickLink II Fax QuickLink II Windows and DOS Quancept CATI Quanquest Quantum 110 Quanvert Quanvert DBA Quicktime Quinput Quinput DOS REELBACKUP REELIBRARIAN REFLECTIONS FOR HP ReFox Removable Cartridge Disk Utilities Roadmap to Developer Products and Services ROBO HELP ROBOT ROLM CBXII ROLM PHONEMAIL RTPatch for InstallShield Professional SALES TAX Sanyo Boot Floppy SAS SAVEU2 SCO Unix Driver for AHA SCSI Interface Kit SCSI Network Manager SCSI Pro! SDK's, DDK's, and Operating Systems SEAGATE CRYSTAL REPT Serv-U FTP Server Sheridan Developer's Toolkit SideBar Try-n-Buy Sidekick SMARTGATE SmartSuite 97 SmartSuite ATM Program Disk SMAX Solutions Development Kit Sound Blaster 16 Software Special Enhancements R410 Spread SPSS SQLNET SQLNET FOR OS/2 SQLPLUS SQZ! Stacker Stacker Stacker 111 Stacker Stealth 64 Stealth 64 DRAM Stealth 64 Video Stealth II S220 Stealth II S220 Game Sampler CD Stealth VRAM Stonefield Database Toolkit Superdisk for EtherCard SYLVAN MAPS SYNCSORT SYSTEM COMMANDER T4900 Reference Manual Tab Pro TCP/IP TCP/IP DOS TCP/IP OS2 Tech Net TELEMATE TELETHENA Test TEXTPAD ThinkPad Bundle Tools and Systems TOTAL ACCESS STATS Track for Windows TrackMate TRU64 UNIX DEC TRUE DB GRID PRO 5.0 True DBGrid Pro True DBGrid Pro VC++ UNIFACE VBAssist Vibra 16 Video for Windows Runtime View for Windows Viper V330 Viper VLB VISIO VISIO NETWORK EQ 2000 Visio Professional Visio2000 Professional Vistacom VISUAL BASIC Visual Basic Professional Visual C++ 112 Visual C++ Power Tools Visual C++ Subscription Visual Components Visual FoxPro Visual FoxPro Professional Edition Visual FoxPro Professional Training Series Visual FoxPro Windows Professional Visual FoxPro Windows Standard Visual J++ Technology Preview 2 Visual Studio 97 Service Pack 3 Visual Studio Enterprise Edition Visual Studio MSDN Library Visual Studio Professional Edition Visual Studio Professional Edition Licenses Visual Test VSFlexGrid Pro VS-OCX WEBBASE Windows WINDOWS 3.51 WINDOWS 95 Windows 95 Windows 95, Win32 SDK Windows 95, Win32 SDK and Windows NT Windows 95, Win32 SDK, Backoffice 1.5 SDK Windows 98 Windows for Workgroups/DOS WINDOWS NT 4.0 Clients WINDOWS NT 4.0 Servers WINDOWS NT 4.0 W/S Windows NT Server Windows NT Server Windows NT Workstation Windows NT Workstation, Win32 SDK, Windows NT DDK Windows Sound System Winfax Lite Winfax Pro Winfax Pro Patch WinLib Wizard WinList for Windows Winstone 94 Winzip Wordperfect Workgroup Add-On for Windows 113 XTree Gold XTree Gold zip Install zip tools 100 (e) None. (f) None. (g) Material Software owned and used by Arbitron: (i) Maximi$er/MediaProfessional (owned by Arbitron); performs research and sales analysis using respondent-level radio audience estimate data. (ii) Tapscan (owned by Arbitron); processes respondent-level and summary-level radio audience estimate data. (iii) Qualitap (owned by Arbitron); processes qualitative data. (iv) TV Qualitap (owned by Arbitron and licensed to Tapscan Inc. for its exclusive use in the television and cable industries in the U.S.); processes qualitative data. (v) TVScan software (owned by Tapscan Inc. and licensed to Arbitron for its exclusive use in the radio, agency and advertising industries worldwide and the television and cable industries outside the U.S.) NOTE: COPYRIGHT REGISTRATION APPLICATIONS WERE FILED ON FORM TX IN THE U.S. COPYRIGHT OFFICE FOR MAXIMI$ER (A/K/A MEDIAPROFESSIONAL), TAPSCAN, TVSCAN AND QUALITAP ON DECEMBER 18, 2000. COPYRIGHT REGISTRATION APPLICATIONS WERE FILED ON DECEMBER 28, 2000 FOR COMPANY'S INTERNAL SOFTWARE USED TO PRODUCE ITS RATINGS DATA. 114 SCHEDULE 5.19 EMPLOYMENT AGREEMENTS There is currently an employment agreement with Stephen B. Morris. Company's policy for its Arbitron division prior to the Spin-Off Consummation Date is that members of the Arbitron Executive Staff are generally eligible to receive up to one year's salary as severance in the event of termination of employment for reasons other than for cause. It is expected that change of control agreements will be entered into with members of the Executive Staff of Arbitron Inc. after the Spin-Off Consummation Date. 115 SCHEDULE 5.21 CAPITALIZATION; SUBSIDIARIES Information as of the Effectiveness Date 1. Company's capitalization as of the Effectiveness Date: No. shares authorized: 500,000,000 No. shares issued: 161,685,596 No. shares outstanding: 145,681,462 Please note that the shares listed above are subject to a reverse stock split at a ratio of one-for-five. The reverse stock split will be effective immediately after the Spin-Off Consummation Date. 2. Following is a list of Company's Subsidiaries as of the Effectiveness Date:

- -------------------------------------------------------------------------------------------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - ---------- ------------ ------ ----------- - -------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. (First Tier Delaware 100% 1000/1000 Arbitron subsidiary) formed in October 2000 - -------------------------------------------------------------------------------------------------- CSW Research Ltd. (Second Tier United Kingdom 100% 410,000/ Subsidiary of Arbitron Holdings, Inc.) 405,000 - -------------------------------------------------------------------------------------------------- Euro-Fieldswork Ltd. (First Tier United Kingdom 100% No shares Arbitron Subsidiary) yet authorized nor issued - -------------------------------------------------------------------------------------------------- Ceridian Infotech (India) Private 8,400,000/ Limited (First Tier Arbitron Subsidiary) India 100% 1,712,374 - -------------------------------------------------------------------------------------------------- ABR Information Services, Inc. Florida 100% N/A - -------------------------------------------------------------------------------------------------- ABR Employer Services, Inc. Florida 100% N/A - -------------------------------------------------------------------------------------------------- ABR Properties, Inc. Florida 100% N/A - -------------------------------------------------------------------------------------------------- BMC Consultants, Inc. Colorado 100% N/A - --------------------------------------------------------------------------------------------------

116

- -------------------------------------------------------------------------------------------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - ---------- ------------ ------ ----------- - -------------------------------------------------------------------------------------------------- Ceridian Benefits Services, Inc. Florida 100% N/A (f/k/a ABR Benefits Services, Inc.) - -------------------------------------------------------------------------------------------------- Ceridian Retirement Plan Florida 100% N/A Services, Inc. (f/k/a ABR Retirement Plan Services, Inc.) - -------------------------------------------------------------------------------------------------- Charing Company, Inc. Wisconsin 100% N/A - -------------------------------------------------------------------------------------------------- Chowning, Ltd. Wisconsin 100% N/A - -------------------------------------------------------------------------------------------------- The Barrington Group Wisconsin 100% N/A - -------------------------------------------------------------------------------------------------- Matthews, Malone & Associates, Arizona 100% N/A Ltd. - -------------------------------------------------------------------------------------------------- MidAtlantic 401(k) Services, Inc. Virginia 100% N/A - -------------------------------------------------------------------------------------------------- Western Pension Service California 100% N/A Corporation - -------------------------------------------------------------------------------------------------- Ceridian Investors Advisors, Florida 100% N/A Inc. (f/k/a ABR Investment Advisors, Inc.) - -------------------------------------------------------------------------------------------------- Arbat Middle East E.C. (held in Bahrain 100% N/A trust) (inactive) - -------------------------------------------------------------------------------------------------- Ceridian Canada Holdings, Inc. Delaware 100% N/A - -------------------------------------------------------------------------------------------------- Ceridian Canada Ltd. Canada 100% N/A - -------------------------------------------------------------------------------------------------- 33444651 Canada Ltd. Canada 100% N/A - -------------------------------------------------------------------------------------------------- Ceridian Performance Partners Canada 100% N/A Ltd. - -------------------------------------------------------------------------------------------------- Ceridian Holdings U.K. Limited United Kingdom 100% N/A - -------------------------------------------------------------------------------------------------- Centrefile Limited United Kingdom 100% N/A - -------------------------------------------------------------------------------------------------- Centrefile APS Limited United Kingdom 100% N/A - -------------------------------------------------------------------------------------------------- Centrefile (Mauritius) Ltd. Mauritius 100% N/A - -------------------------------------------------------------------------------------------------- Ceridian Performance Partners United Kingdom 100% N/A Limited - -------------------------------------------------------------------------------------------------- Usertech UK Limited United Kingdom 100% N/A - --------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------- NO. OF PERCENTAGE OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - ---------- ------------ ------ ----------- - -------------------------------------------------------------------------------------------------- Ceridian Tax Services, Inc. California 100% N/A - -------------------------------------------------------------------------------------------------- Comdata Network, Inc. Maryland 100% N/A - -------------------------------------------------------------------------------------------------- Comdata Network Inc. of California 100% N/A California - -------------------------------------------------------------------------------------------------- Comdata Telecommunications Delaware 100% N/A Services, Inc. - -------------------------------------------------------------------------------------------------- International Automated Energy Florida 100% N/A Systems, Inc. - -------------------------------------------------------------------------------------------------- Permicom Permits Services, Inc. Canada 100% N/A - -------------------------------------------------------------------------------------------------- Stored Value Systems, Inc. Delaware 100% N/A - -------------------------------------------------------------------------------------------------- Computing Devices International Delaware 100% N/A Satellite Services, Inc. - -------------------------------------------------------------------------------------------------- Partnership Group, Inc., The Pennsylvania 100% N/A - -------------------------------------------------------------------------------------------------- Plan Ware Inc. (inactive) Pennsylvania 100% N/A - -------------------------------------------------------------------------------------------------- POWERPAY.COM INC. New Jersey 100% N/A (f/k/a Ceridian Small Business Solutions, Inc.) - -------------------------------------------------------------------------------------------------- User Technology Services, Inc. New York 100% N/A - --------------------------------------------------------------------------------------------------

117 3. Following is a list of Company's Arbitron Subsidiaries as of the Effectiveness Date:

- -------------------------------------------------------------------------------------------------- SUBSIDIARY STATE OR OTHER JURISDICTION OF ORGANIZATION - ----------- ---------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. Delaware - -------------------------------------------------------------------------------------------------- CSW Research Limited United Kingdom - -------------------------------------------------------------------------------------------------- Euro-Fieldwork Limited United Kingdom - -------------------------------------------------------------------------------------------------- Ceridian Infotech (India) Private Limited India - --------------------------------------------------------------------------------------------------

4. Following is a list of Company's Material Subsidiaries as of the Effectiveness Date:

- -------------------------------------------------------------------------------------------------- MATERIAL SUBSIDIARIES STATE OR OTHER JURISDICTION OF ORGANIZATION - ---------------------- -------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- ABR Information Services, Inc. Florida - -------------------------------------------------------------------------------------------------- Comdata Network, Inc. Maryland - --------------------------------------------------------------------------------------------------

Information as of the Spin-Off Consummation Date 1. Following is a list of Company's Arbitron Subsidiaries after the Spin- Off Consummation Date:

- -------------------------------------------------------------------------------------------------- PERCENTAGE OF NO. OF SHARES STATE OR OTHER VOTING SECURITIES AUTHORIZED/ JURISDICTION OF OWNED BY IMMEDIATE ISSUED & SUBSIDIARY ORGANIZATION PARENT OUTSTANDING - ---------- ------------ ------ ----------- - -------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. Delaware 100% 1000/1000 - -------------------------------------------------------------------------------------------------- CSW Research Limited United Kingdom 100% 410,000/ 405,000 - -------------------------------------------------------------------------------------------------- Euro-Fieldwork Limited United Kingdom 100% No shares yet authorized nor issued - -------------------------------------------------------------------------------------------------- Ceridian Infotech (India) India 100 8,400,000/ Private Limited 1,712,374 - --------------------------------------------------------------------------------------------------

2. THERE WILL NOT BE ANY MATERIAL SUBSIDIARIES OF THE COMPANY AS OF THE SPIN-OFF CONSUMMATION DATE. 118 SCHEDULE 5.23 BROKERS' FEES AND RELATED EXPENSES None. 119 SCHEDULE 5.25 THIRD PARTY CONSENTS None. 120 SCHEDULE 7.01 PERMITTED LIENS None. 121 SCHEDULE 7.02(b) TRANSFERABLE ASSETS 1. Sale of assets of Ceridian Infotech (India) Private, Limited 2. Sale of assets of CSW Research Limited 3. Dissolution of Euro-Fieldword Limited 3. Separation ("Spin-off") of Ceridian Corporation into two publicly traded companies to be known as Ceridian Corporation and Arbitron Inc., respectively, pursuant to Spin-off documents. 122 SCHEDULE 7.06(b) PERMITTED INVESTMENTS 1. The following is a list of the Investments of the Company and its Subsidiaries (other than Investments in Subsidiaries) as of the Effectiveness Date:

- ---------------------------------------------------------------------------------------------------- STATE OR OTHER JURISDICTION OF PERCENTAGE OF VOTING COMPANY INCORPORATION SECURITIES OWNED ARBITRON INVESTMENT ------- ------------- ---------------- ------------------- - ---------------------------------------------------------------------------------------------------- Barrios Technology, Inc. Texas 9.9% 0 - ---------------------------------------------------------------------------------------------------- Buyers' Health Care Action Minnesota 9.3% 0 Group, Inc. - ---------------------------------------------------------------------------------------------------- HotJobs.com, Ltd. Delaware 1.4% 0 - ---------------------------------------------------------------------------------------------------- Revelation Technologies, Inc. Delaware 7.4% 0 - ---------------------------------------------------------------------------------------------------- TruckersB2B, Inc. Delaware 800,000 shares 0 - ---------------------------------------------------------------------------------------------------- ADcom Information Services, Delaware 13.75% 1994: Inc. $2,000,000 1995: $1,000,000 1996: ----- $1,585,000 ---------- Total: $4,585,000 - --------------------------------------------------------------------------------------------------- The Center for Online Florida 2.8% 2000: $2,000 Learning, Inc. - --------------------------------------------------------------------------------------------------- Symmetrical Holdings, Inc. Florida 7.5% 1997: $900,000 (f/k/a Symmetrical Resources 1998: $500,000 Corporation) ------------------ Total: $1,400,000 - ---------------------------------------------------------------------------------------------------

2. The following is a list of the Investments of the Company and its Subsidiaries (other than Investments in Subsidiaries) as of the Spin-Off Consummation Date:

- ---------------------------------------------------------------------------------------------- COMPANY STATE OR OTHER JURISDICTION OF INCORPORATION - ---------- -------------------------------------------- - ------------------------------------------------------------------------------------------------- ADcom Information Services, Inc. Delaware - ------------------------------------------------------------------------------------------------- The Center for Online Learning, Inc. Florida - -------------------------------------------------------------------------------------------------

123 - ------------------------------------------------------------------------------------------------- Symmetrical Holdings, Inc. Florida f/k/a Symmetrical Resources Corporation) - ------------------------------------------------------------------------------------------------- 124 SCHEDULE 10.02 ADDRESSES FOR NOTICES CERIDIAN CORPORATION Arbitron Corporation 9705 Patuxnet Woods Dr. Columbia, MD 20146 Attention: Dolores Cody, Vice President Telephone: (410) 312-8276 Facsimile: (410) 312-8613 Electronic Mail: dolores.cody@arbitron.com Website: www.arbitron.com cc: Christopher M. Scotti Oppenheimer Wolff & Donnelly LLP Plaza VII Suite 3400 Minneapolis, MN 55402 Telephone: 612-607-7396 Facsimile: 612-607-7100 Electronic Mail: cscotti@oppenheimer.com NOTE HOLDERS John Hancock Life Insurance Company 200 Clarendon Street, 57th Floor Boston, Massachusetts 02117 Attention: Daniel C. Budde Telephone: (617) 572-9644 Facsimile: (617) 572-5068 Electronic Mail: DBudde@JHancock.com Website: www.jhancock.com cc: Brewster W. Lee Choate, Hall & Stewart Exchange Place, 53 State Street Boston, MA 02109 Telephone: (617) 248-5051 Facsimile: (617) 248-4000 Electronic Mail: Blee@Choate.com 125 EXHIBIT A FORM OF NOTE THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, __________________, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-___ $___________ January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to _________________________________, or registered assigns, the principal amount of ___________________________________ DOLLARS ($_______________) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for purposes 126 hereof if not made on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] 127 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By -------------------------- (Title) 128 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ................................................ (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... 129 EXHIBIT B FORM OF COMPLIANCE CERTIFICATE Financial Statement Date: , ---------- To: John Hancock Life Insurance Company as Note Holder Representative Ladies and Gentlemen: Reference is made to that certain Credit Agreement, dated as of January 31, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Note Agreement;" the terms defined therein being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware corporation (the "Company"), the Note Holders from time to time party thereto, and John Hancock Life Insurance Company as the Note Holder Representative for such Note Holders (in such capacity, the "Note Holder Representative"). The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the _______________________________________________ of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Company, and that: [Use following for fiscal year-end financial statements] 1. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Credit Agreement for the fiscal year of the Company ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section. [Use following for fiscal quarter-end financial statements] 1. Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes. 2. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Company during the accounting period covered by the attached financial statements. 130 3. A review of the activities of the Company during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Company performed and observed all its Obligations under the Note Documents, and [select one:] [to the best knowledge of the undersigned during such fiscal period, the Company performed and observed each covenant and condition of the Note Documents applicable to it.] --or-- [the following covenants or conditions have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and status:] 4. The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of - -------------, ---------. CERIDIAN CORPORATION By: ------------------------ Name: ---------------------- Title: --------------------- 131 For the Quarter/Year ended ___________________("Statement Date") SCHEDULE 2 to the Compliance Certificate ($ in 000's) ARTICLE XISECTION 7.10 - LEVERAGE RATIO --------------------------------------- 11.01 Consolidated Funded Indebtedness of the Company and its Subsidiaries as of the Statement Date: (a) All obligations for borrowed money of the Company and its Subsidiaries on a consolidated basis at the Statement Date: $ (b) All obligations of the Company and its Subsidiaries as evidenced by bonds, debentures, notes and Note agreements on a consolidated basis at the Statement Date: $ (c) All obligations of the Company and its Subsidiaries in respect of letters of credit, surety bonds, bankers' acceptances or similar instruments on a consolidated basis at the Statement Date: $ (d) ___________________________________________________All obligations of the Company and its Subsidiaries to pay the deferred purchase price of property or services (other than trade payables entered into in the Ordinary Course of Business pursuant to ordinary terms and paid within the specified time) on a consolidated basis at the Statement (e) The capitalized amount of all Capital Leases of the Company and its Subsidiaries that would appear on a balance sheet of such Persons prepared as of the Statement Date in accordance with GAAP and the capitalized amount of the remaining lease payments under any Synthetic Lease Obligations incurred by the Company or any of its Subsidiaries which would appear on a balance sheet of such Persons prepared as of the Statement Date in accordance with GAAP if such lease were accounted for as a Capital Lease: (f) All guaranty obligations of the Company and its Subsidiaries in respect of obligations of any Person in the nature of the obligations referenced in Lines I.A.1 through I.A.4 above: (g) Consolidated Funded Indebtedness as of the Statement Date [Line I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 + I.A.6]: Statement Date: 132 11.02 Consolidated EBITDA of the Company and its Subsidiaries for the period of the four fiscal quarters ending on the Statement Date ("Test Period"): 133 (a) Net income of the Company and its Subsidiaries on a consolidated basis for the Test Period, as determined in accordance with GAAP: (b) All extraordinary non-cash losses and non-cash gains, and non-cash losses and non-cash gains from discontinued operations of the Company and its Subsidiaries on a consolidated basis for the Test Period: $_____________ _______________________________________ (c) All cash payments made by the Company and its Subsidiaries during the Test Period in respect of non-cash charges listed on Line I.B.2 of Schedule 2 attached to any Compliance Certificate delivered to the Administrative Agent prior to the Statement Date hereof:_________________________________$ (d) All interest, premium payments, fees, charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP for the Test Period, but excluding any fees, charges and expenses of the Company and its Subsidiaries arising from the negotiation, execution, closing and consummation of the Spin-Off Documents, the Note Documents, the Private Placement Documents and any Specified Swap Contracts: $ (e) The portion of all rent expense of the Company and its Subsidiaries for the Test Period under Capital Leases that is treated as interest in accordance with GAAP on a consolidated basis: (f) The amount of taxes of the Company and its Subsidiaries on a consolidated basis for the Test Period, based on or measured by income used or included in the determination of Line I.B.1: (g) All depreciation expense and amortization expense of the Company and its Subsidiaries on a consolidated basis for the Test Period: (h) All interest income of the Company and its Subsidiaries on a consolidated basis for the Test Period: (i) Consolidated EBITDA for the Test Period [Line I.B.1 +/- I.B.2 (if the amount in Line I.B.2 constitutes a loss, it should be added; if it constitutes a gain, it should be subtracted) - I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 - I.B.8]: $ 134 11.03 Leverage Ratio [Line I.A.7 / I.B.9]: _________ to 1 11.04 Maximum permitted Leverage Ratio at the Statement Date (See Section 7.10 of the Agreement for ratio applicable to the Statement Date): _________ to 1 COMPLIANCE WITH COVENANT (YES / NO) ARTICLE XIISECTION 7.11 - FIXED CHARGE COVERAGE ----------------------------------------------------- RATIO ----- 12.01 Consolidated EBITDA for the Test Period [Line I.B.9]: $_________ 12.02 Taxes actually paid by the Company and its Subsidiaries on a consolidated basis in cash or Cash Equivalents for the Test Period: $___________ 12.03 Capital expenditures plus (without duplication) PPM Expenditures of the Company and its Subsidiaries on a consolidated basis for the Test Period: $_______________________ 12.04 Consolidated Interest Expense of the Company and its Subsidiaries on a consolidated basis for the Test Period [Line I.B.4 + I.B.5]: $__________________ 12.05 Current Portion of Long-Term Debt for the Test Period of the Company and its Subsidiaries on a consolidated basis: $_______________ 12.06 Fixed Charge Coverage Ratio [(Line II.A - II.B - II.C) /(Line II.D + II.E)]: __________ to 1 12.07 Minimum permitted Fixed Charge Ratio (See Section 7.11 of the Agreement for ratio applicable to the Statement Date): ___________to 1 COMPLIANCE WITH COVENANT (YES / NO) 135 EXHIBIT D FORM OF NEW CERIDIAN GUARANTY THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by NEW CERIDIAN CORPORATION, a Delaware corporation (the "Guarantor"), in favor of (a) the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the "Company"), the Lenders and BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap Provider" (as defined herein), and (c) the Lenders party from time to time to the Note Purchase Agreement (collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed Party"). RECITALS WHEREAS, it is a requirement under the Credit Agreement and the Note Purchase Agreement that Guarantor shall be bound by the terms and conditions of this Guaranty pending the Spin-Off Consummation Date; and WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the credit extensions to the Company pursuant to the Credit Agreement and the Note Purchase Agreement together with the amendments, restatements, extensions and continuations contemplated therein, and from the Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor; WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the Company being party to the Specified Swap Contracts, which benefits are hereby acknowledged; NOW, THEREFORE, in consideration of the Administrative Agent and Lenders entering into the Credit Agreement, the Guarantor hereby agrees as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. (b) Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings: "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or such replacement Collateral Agent as may be appointed from time to time pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its capacity as Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. 136 "Credit Documents" means, collectively, the Note Documents, the Swap Documents, and the Note Purchase Documents. "Guaranteed Obligations" has the meaning set forth in Section 2(a). "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to them in the first paragraph hereof. "Guarantor Documents" means this Guaranty, and all other certificates, documents, agreements and instruments delivered to the Guaranteed Parties under or in connection with this Guaranty. "Indemnified Liabilities" has the meaning set forth in Section 15(b). "Indemnified Person" has the meaning set forth in Section 15(b). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Lenders. "Note Holder Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Lenders), (b) all Account Control Agreements executed by any Note Party under any Note Holder Document, (c) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Lenders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company and the Lenders party thereto. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such 137 Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Company and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Company and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Subordinated Debt" has the meaning set forth in Section 7(a). "Subordinated Debt Payments" has the meaning set forth in Section 7(b). "Swap Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider), (ii) all Account Control Agreements executed by any Note Party under any Swap Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Swap Documents" means, collectively, (a) any Specified Swap Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. (c) Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and are incorporated herein by this reference. SECTION 2 Guaranty. (a) Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to each of the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the full and prompt payment when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Company to each such Guaranteed Party, 138 whether created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement); and any obligations under any Specified Swap Agreement to the extent arising out of any one or more Specified Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter becomes unenforceable or shall be an allowed or disallowed claim under the Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Company, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 15), shall hereinafter be collectively referred to as the "Guaranteed Obligations." (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including the New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor's liability with respect to any of the Guaranteed Obligations which any of the Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof accept such limitation on the amount of the Guarantor's liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable. SECTION 3 Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows: (i) the Guarantor's liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it may have against the Company or any other Person, or against any collateral now or hereafter securing any of the Guaranteed Obligations; (ii) this Guaranty is a guaranty of payment when due and not merely of collectibility; (iii) the Guarantor's payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor's liability for any portion of the Guaranteed Obligations remaining unsatisfied; and (iv) the Guarantor's liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: (A) any proceeding under any Debtor Relief Laws with respect to the Company, any other guarantor or any other Person; 139 (B) any limitation, discharge, or cessation of the liability of the Company, any other guarantor or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Note Documents; (C) subject to Section 24 hereof, any merger, acquisition, consolidation or change in structure of the Company, the Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Company, the Guarantor, any other guarantor or other Person; (D) any assignment or other transfer, in whole or in part, of any of the Guaranteed Parties' interests in and rights under this Guaranty or the other Credit Documents, including the Guaranteed Parties' right to receive payment of the Guaranteed Obligations; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Company, the Guarantor, any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Credit Documents; (F) the Guaranteed Parties' or any Lender's amendment, modification, renewal, extension, cancellation or surrender of any Credit Document; (G) the Guaranteed Parties' vote, claim, distribution, election, acceptance, action or inaction in any proceeding under any Debtor Relief Laws related to the Guaranteed Obligations; (H) any impairment or invalidity of any collateral securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the Guaranteed Parties thereon or therein; and (I) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Company to the Guaranteed Parties. SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor: (i) the principal or other amount of the Guaranteed Obligations in respect of any of the Guaranteed Parties may be increased or decreased as to such Guaranteed Parties and additional indebtedness or obligations of the Company under the Credit Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any such Credit Documents; (ii) the time, manner, place or terms of any payment under any of the Credit Documents may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or any fee or other amount payable under such Credit Documents, by an amendment, modification or renewal of any Credit Documents or otherwise; 140 (iii) the time for the Company's (or any other Person's) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Credit Documents may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as any of the Guaranteed Parties may deem proper; (iv) any of the Guaranteed Parties may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations owing to such Guaranteed Parties, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize on any collateral therefor; (v) the Guaranteed Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (vi) the Guaranteed Parties may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Company to the Guaranteed Parties and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and (vii) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any Note and any power of sale) granted by any Credit Document or other security document or agreement, or otherwise available to the Guaranteed Parties, with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Company; all as the Guaranteed Parties (or the Collateral Agent on their behalf) may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty. SECTION 5 Guarantor's Waivers. (a) Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require any of the Guaranteed Parties to marshal assets in favor of the Company, the Guarantor, any other guarantor or any other Person, to proceed against the Company, any other guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Guaranteed Obligations or comply with any other provisions of Section 9-504 of the New York UCC (or any 141 equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Guaranteed Parties whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Company, the Guarantor or any other Person; (iv) any defense based upon the Guaranteed Parties' errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Company or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty, including any and all benefits that otherwise might be available to the Guarantor under New York Laws. This means, among other things: (A) the Guaranteed Parties may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by the Company; and (B) if the Guaranteed Parties forecloses on any real property collateral pledged by the Company: (1) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Parties may collect from the Guarantor even if the Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from the Company. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because the Company's debt is secured by real property. (b) Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Company, the Guarantor or any other Person with respect to the Guaranteed Obligations. (c) Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Company and any other guarantor. Upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Company or any such other guarantor 142 is joined therein or a separate action or actions are brought against the Company or any such other guarantor. (d) Financial Condition of Company. The Guarantor shall not have any right to require the Guaranteed Parties to obtain or disclose any information with respect to: (i) the financial condition or character of the Company or the ability of the Company to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (iv) any action or inaction on the part of the Guaranteed Parties or any other Person; or (v) any other matter, fact or occurrence whatsoever. SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full and the Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Guaranteed Parties as against the Company or other guarantors, whether in connection with this Guaranty, any of the other Credit Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the Collateral Agent on their behalf) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents and subject to the Intercreditor Agreement. SECTION 7 Subordination. (a) Subordination to Payment of Guaranteed Obligations. All payments on account of all indebtedness, liabilities and other obligations of the Company to the Guarantor, whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Company or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and all other amounts payable by the Company to the Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the "Subordinated Debt") shall be subject, subordinate and junior in right of payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations. (b) No Payments. Other than arising out of the consummation of the Spin-Off Transaction, as long as any of the Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not accept or receive any payment or distribution by or on behalf of the Company, directly or indirectly, of assets of the Company of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other disposition of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of Default exists and no notice 143 described below has been received by the Guarantor, the Guarantor shall be entitled to accept and receive any and all payments. During the existence of an Event of Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt Payment), and upon receipt by the Company of notice from the Guaranteed Parties (or the Collateral Agent on their behalf) of such Default, and until such Event of Default is cured or waived, pursuant to the terms of the applicable Credit Documents, the Company shall not make, accept or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this Section 7, any Subordinated Debt Payments shall be received in contravention of this Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the Guaranteed Parties and shall be paid over or delivered to the Guaranteed Parties (or the Collateral Agent on their behalf) for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent necessary to give effect to this Section 7, after giving effect to any concurrent payments or distributions to the Guaranteed Parties in respect of the Guaranteed Obligations. (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not, without the prior written consent of the Guaranteed Parties (or the Collateral Agent on their behalf): (i) accelerate or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Debt; (ii) exercise any rights under or with respect to (A) any guaranties of the Subordinated Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Company or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing; (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of the Guarantor to the Company against any of the Subordinated Debt; or (iv) commence, or cause to be commenced, or join with any creditor other than the Guaranteed Parties in commencing, any proceeding under any Debtor Relief Laws as against Company. (d) Subordination Upon Any Distribution of Assets of the Company. In the event of any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, upon any proceeding under any Debtor Relief Laws with respect to or involving the Company, (i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Debt Payment to which the Guarantor would be entitled except for the provisions hereof, shall be paid 144 or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to the Guaranteed Parties (or the Collateral Agent acting on their behalf) for application to the payment of the Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Guaranteed Parties in respect of such Guaranteed Obligations. (e) Authorization to Guaranteed Parties. If, while any Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is commenced by or against the Company or its property: (i) the Guaranteed Parties are hereby irrevocably authorized and empowered (in the name of the Guaranteed Parties, in the name of the Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Debt and give acquittance therefor and to file claims and proofs of claim and take such other action (including voting the Subordinated Debt) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and (ii) the Guarantor shall promptly take such action as any of the Guaranteed Parties may reasonably request (A) to collect the Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such powers of attorney, assignments and other instruments as they may request to enable them to enforce any and all claims with respect to the Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt Payments. SECTION 8 Continuing Guaranty; Reinstatement. (a) Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon the Guarantor until the payment and performance in full of all Guaranteed Obligations. (b) Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Company (or receipt of any proceeds of collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Company, its estate, trustee, receiver or any other Person (including under any Debtor Relief Laws or other state or federal law), or must otherwise be restored by the Guaranteed Parties, whether as a result of proceedings under any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Guaranteed Parties may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Guaranteed Parties contained in Section 15. 145 SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Guaranteed Parties or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Company to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral Agent on their behalf) an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any proceeding under any Debtor Relief Laws with respect to the Company, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Company for such interest in any such proceeding under any Debtor Relief Laws). The Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any Taxes, on the day when due in Dollars and in same day or immediately available funds, to the Collateral Agent at such office or account of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All such payments shall be promptly applied from time to time by the Guaranteed Parties as provided in the Credit Documents. SECTION 10 Representations and Warranties. The Guarantor represents and warrants to the Guaranteed Parties that: (a) Organization and Powers. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority: (i) to own its assets and carry on its business, and (ii) to execute, deliver and perform its obligations under the Guarantor Documents and Spin-Off Documents. (b) Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and all other Guarantor Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized by all necessary corporate action of the Guarantor, and do not and will not: (i) contravene the terms of the Guarantor's organization documents or (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation to which the Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which the Guarantor or its property is subject, or (iii) violate any Laws. (c) Binding Obligation. This Guaranty and the other Guarantor Documents constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, except as have been obtained on or before the Closing Date, is required for (i) the 146 due execution, delivery or performance by, or enforcement against, the Guarantor of the Guarantor Documents, (ii) the execution, delivery or performance by or enforcement against the Guarantor of the Spin-Off Documents or (iii) the consummation of the Spin-Off Transaction. (e) No Prior Assignment. The Guarantor has not previously assigned any interest in the Subordinated Debt or any collateral relating thereto, no Person other than the Guarantor owns an interest in the Subordinated Debt or any such collateral (whether as joint holders of the Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to the Guarantor. (f) Solvency. Immediately prior to and after and giving effect to (i) the incurrence of the Guarantor's obligations under this Guaranty, and (ii) the Spin-Off Transaction, the Guarantor will be Solvent. (g) Consideration. The Guarantor has received at least "reasonably equivalent value" (as such phrase is used in Section 548 of the Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272 of the New York Debtor & Creditor Laws and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations to which it is a party. (h) Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Company and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Guaranteed Parties with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Credit Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Company and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon or expecting the Guaranteed Parties to furnish to the Guarantor any information now or hereafter in the Guaranteed Parties' possession concerning the financial condition of the Company or any other matter. SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that it shall furnish to the Guaranteed Parties such information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as any of the Guaranteed Parties may from time to time reasonably request. SECTION 12 Additional Covenants. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that: (a) Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal existence and (ii) its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties, except in the case of this clause (ii) where the non-preservation could not reasonably be expected to have a Material Adverse Effect. 147 (b) Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as any of the Guaranteed Parties shall deem reasonably necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Guaranteed Parties with evidence of the foregoing satisfactory in form and substance to the Guaranteed Parties. SECTION 13 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; except that (a) any notices to the Swap Provider shall be delivered to Fleet National Bank (or to such replacement Swap Provider may be appointed from time to time consistent with the Intercreditor Agreement), according to the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any notice to the Lenders shall be delivered to the address specified for such Persons in the Note Purchase Agreement (or to such replacement Lenders as may be appointed from time to time consistent with the Intercreditor Agreement). Notices to the Guarantor shall be sent or delivered to the address set forth in the Credit Agreement for the Company. All such notices, requested and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of any Guaranteed Party to exercise, and no delay in exercising on the part of any Guaranteed Party, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. SECTION 15 Costs and Expenses; Indemnification. (a) Costs and Expenses. The Guarantor shall: (i) whether or not the transactions contemplated hereby are consummated, pay or reimburse each of the Guaranteed Parties for all costs and expenses incurred by them in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Guaranty, any other Guarantor Document and any other documents prepared in connection herewith or therewith and the consummation of the transactions contemplated hereby and thereby; and (ii) pay or reimburse the Guaranteed Parties for all costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Guaranty or any other Guarantor Document during the existence of an Event of Default or after acceleration of the Notes (including in connection with any "workout" or restructuring regarding the Notes, and including in any proceeding under any Debtor Relief Laws or appellate proceeding). 148 (b) Indemnification. The Company shall indemnify, defend and hold each of the Guaranteed Parties and each Lender and Note Holder and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suites, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Guaranty or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any proceeding under any Debtor Relief Laws or appellate proceeding) related to or arising out of this Guaranty or relating to the Collateral, whether or not any Indemnified Person is a party thereto (the "Indemnified Liabilities"); provided that the Guarantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person. (c) Defense. At the election of any Indemnified Person, the Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person's sole discretion, at the sole cost and expense of the Guarantor. (d) Interest. Any amounts payable to the Guaranteed Parties under this Section 15 if not paid upon demand shall bear interest from the date of such demand until paid in full, at the Default Rate. SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Guaranteed Parties and the Lenders provided by law, if an Event of Default exists or any reimbursement or payment obligation under any of the Credit Documents has been accelerated, each of the Guaranteed Parties and Lenders is hereby authorized at any time and from time to time, upon notice to the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but without notice to the Guarantor (any such notice being expressly waived by the Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Person to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor then due and owing, irrespective of whether or not such Person shall have made any demand upon the Company or the Guarantor under any of the Credit Documents. Each Lender and the Guaranteed Parties shall promptly notify the Guarantor (through the Collateral Agent) after any such set-off and application made by it; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lenders and Guaranteed Parties under this Section 16 are in addition to other rights and remedies (including other rights of set-off) which such Persons may have. SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the Lenders, or the Guaranteed Parties shall be under any obligation to marshal any assets in favor of the Guarantor or any other Person or against or in payment of any or all of the Guaranteed Obligations. To the extent that the Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set 149 aside or required (including pursuant to any settlement entered into by the Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Collateral Agent upon demand its pro rata share of any amount so recovered from or repaid by the Collateral Agent. SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lenders, the Lenders, the Guaranteed Parties, and their respective successors and assigns, and no other Person (other than any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein. SECTION 19 Binding Effect; Assignment. (a) Successors and Assigns. The provisions of this Guaranty shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. (b) Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Required Lenders. Each of the Guaranteed Parties, the Lenders and the Lenders may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of such Person's rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by such Person in accordance with Section 10.07 of the Credit Agreement or in its rights and obligations thereunder and under any of the other Credit Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by any Lender, such Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. SECTION 20 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES 150 CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 22 Entire Agreement; Amendments. This Guaranty, together with the other Guarantor Documents, embodies the entire agreement of the Guarantor with respect to the matters set forth herein for the benefit of each Guaranteed Party, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended only by written agreement between the Guarantor and the Guaranteed Party to whom such amendment relates. Any such amendment shall not effect any guaranty of the Guarantor granted hereunder to any other Guaranteed Party. SECTION 23 Independence. This Guaranty sets forth independent and separate guaranties of the Guarantor in favor of each Guaranteed Party in respect of the Guaranteed Obligations owing to each such Guaranteed Party. The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement required hereunder with respect to any Guaranteed Party shall not in any way affect or impair the legality or enforceability of that or any other provision of this Guaranty or any instrument or agreement required hereunder in respect of any other Guaranteed Party. The parties acknowledge that this Guaranty has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as thought the Guarantor had executed separate guaranties, in favor of each Guaranteed Party. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such 151 jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 24 Termination. This Guaranty shall terminate in all respects on the Spin-Off Consummation Date, provided, that (i) as of the Spin-Off Consummation Date, there exists no Default or Event of Default, and (ii) all of the representations and warranties of the Company contained in Article V of the Credit Agreement, or which were contained in any Note Document or Spin-Off Documents furnished prior to the Spin-Off Consummation Date are true and correct on and as of the Spin-Off Consummation Date, except to the extent that such representations and warranties specifically refer to any earlier date, in which case they shall be true and correct as of such earlier date, and (iii) the Administrative Agent shall have received a certificate of a Responsible Officer of the Company, dated as of the Spin-Off Consummation Date, certifying that (A) the Spin-Off Consummation Date has occurred, (B) as of the Spin-Off Consummation Date there exists no Default or Event of Default, and (C) all of the representations and warranties of the Company contained in Article V of the Credit Agreement, or which were contained in any Note Documents or Spin-Off Documents furnished prior to the Spin-Off Consummation Date, are true and correct on and as of the Spin-Off Consummation Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be certified as being true and correct as of such earlier date. 152 IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written. NEW CERIDIAN CORPORATION By: ------------------------- Title: ---------------------- Address: New Ceridian Corporation 3311 East Old Shakopee Road Minneapolis, MN 55425-1640 Attn: John H. Grierson Fax No.: (952) 853-3932 153 EXHIBIT E FORM OF SUBSIDIARY GUARANTY THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by each of the Subsidiaries listed on Schedule 1 hereto (collectively, the "Guarantor"), in favor (a) of the financial institutions (each a "Lender" and, collectively, the "Lenders") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the "Company"), the Lenders and BANK OF AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c) the Lenders (as defined herein) (collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed Party"). RECITALS WHEREAS, it is a requirement under of the Credit Agreement and the Note Purchase Agreement that Guarantor shall be bound by the terms and conditions of this Guaranty pending the Spin-Off Consummation Date; and WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the credit extensions to the Company pursuant to the Credit Agreement and the Note Purchase Agreement together with the amendments, restatements, extensions and continuations contemplated therein, and from the Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor; WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the Company being party to the Specified Swap Contracts, which benefits are hereby acknowledged; NOW, THEREFORE, in consideration of the Administrative Agent and Lenders entering into the Credit Agreement, the Guarantor hereby agrees as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. (b) Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings: "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or such replacement Collateral Agent as may be appointed from time to time pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its capacity as Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders for 154 the benefit of itself and the other Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Documents" means, collectively, the Note Documents, the Swap Documents, and the Note Purchase Documents. "Guaranteed Obligations" has the meaning set forth in Section 2(a). "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to them in the first paragraph hereof. "Guarantor Documents" means this Guaranty, and all other certificates, documents, agreements and instruments delivered to the Guaranteed Parties under or in connection with this Guaranty. "Indemnified Liabilities" has the meaning set forth in Section 15(b). "Indemnified Person" has the meaning set forth in Section 15(b). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Lenders Agent. "Note Holder Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Lenders), (b) all Account Control Agreements executed by any Note Party under any Note Holder Document, (c) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Lenders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company, the Lenders and the other Lenders party thereto. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of 155 Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Company and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Company and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Subordinated Debt" has the meaning set forth in Section 7(a). "Subordinated Debt Payments" has the meaning set forth in Section 7(b). "Swap Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider), (ii) all Account Control Agreements executed by any Note Party under any Swap Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Swap Documents" means, collectively, (a) any Specified Swap Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. (c) Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and are incorporated herein by this reference. SECTION 2 Guaranty. (a) Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the 156 full and prompt payment when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Company to each such Guaranteed Party, whether created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement); and any obligations under any Specified Swap Agreement to the extent arising out of any one or more Specified Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter becomes unenforceable or shall be an allowed or disallowed claim under the Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Company, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 15), shall hereinafter be collectively referred to as the "Guaranteed Obligations." (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including the New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor's liability with respect to any of the Guaranteed Obligations which any of the Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof accept such limitation on the amount of the Guarantor's liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable. SECTION 3 Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows: (i) the Guarantor's liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it may have against the Company or any other Person, or against any collateral now or hereafter securing any of the Guaranteed Obligations; (ii) this Guaranty is a guaranty of payment when due and not merely of collectibility; (iii) the Guarantor's payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor's liability for any portion of the Guaranteed Obligations remaining unsatisfied; and (iv) the Guarantor's liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: 157 (A) any proceeding under any Debtor Relief Laws with respect to the Company, any other guarantor or any other Person; (B) any limitation, discharge, or cessation of the liability of the Company, any other guarantor or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Note Documents; (C) any merger, acquisition, consolidation or change in structure of the Company, the Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Company, the Guarantor, any other guarantor or other Person; (D) any assignment or other transfer, in whole or in part, of any of the Guaranteed Parties' interests in and rights under this Guaranty or the other Credit Documents, including the Guaranteed Parties' right to receive payment of the Guaranteed Obligations; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Company, the Guarantor, any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Credit Documents; (F) the Guaranteed Parties' amendment, modification, renewal, extension, cancellation or surrender of any Credit Document; (G) the Guaranteed Parties' vote, claim, distribution, election, acceptance, action or inaction in any proceeding under any Debtor Relief Laws related to the Guaranteed Obligations; (H) any impairment or invalidity of any collateral securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the Guaranteed Parties thereon or therein; and (I) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Company to the Guaranteed Parties. SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor: (i) the principal amount of the Guaranteed Obligations in respect of any of the Guaranteed Parties may be increased or decreased as to such Guaranteed Party and additional indebtedness or obligations of the Company under the Credit Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any such Credit Document; (ii) the time, manner, place or terms of any payment under any Credit Documents may be extended or changed, including by an increase or decrease in the interest rate on any 158 Guaranteed Obligation or any fee or other amount payable under such Credit Documents, by an amendment, modification or renewal of any Credit Documents or otherwise; (iii) the time for the Company's (or any other Person's) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Credit Documents may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as any of the Guaranteed Parties may deem proper; (iv) any of the Guaranteed Parties may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations owing to such Guaranteed Parties, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize on any collateral therefor; (v) the Guaranteed Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (vi) the Guaranteed Parties may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Company to the Guaranteed Parties and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and (vii) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any Note and any power of sale) granted by any Credit Document or other security document or agreement, or otherwise available to the Guaranteed Parties, with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Company; all as the Guaranteed Parties (or the Collateral Agent on their behalf) may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty. SECTION 5 Guarantor's Waivers. (a) Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require any of the Guaranteed Parties to marshal assets in favor of the Company, the Guarantor, any other guarantor or any other Person, to proceed against the Company, any other guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of 159 personal property security constituting the Collateral or other collateral for the Guaranteed Obligations or comply with any other provisions of Section 9-504 of the New York UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Guaranteed Parties whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Company, the Guarantor or any other Person; (iv) any defense based upon the Guaranteed Parties' or any Lender's errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Company or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty, including any and all benefits that otherwise might be available to the Guarantor under New York Laws. This means, among other things: (A) the Guaranteed Parties may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by the Company; and (B) if the Guaranteed Parties forecloses on any real property collateral pledged by the Company: (1) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Parties may collect from the Guarantor even if the Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from the Company. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because the Company's debt is secured by real property. (b) Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Company, the Guarantor or any other Person with respect to the Guaranteed Obligations. (c) Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Company and any other guarantor. Upon 160 the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Company or any such other guarantor is joined therein or a separate action or actions are brought against the Company or any such other guarantor. (d) Financial Condition of Company. The Guarantor shall not have any right to require the Guaranteed Parties to obtain or disclose any information with respect to: (i) the financial condition or character of the Company or the ability of the Company to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (iv) any action or inaction on the part of the Guaranteed Parties or any other Person; or (v) any other matter, fact or occurrence whatsoever. SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full and the Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Guaranteed Parties as against the Company or other guarantors, whether in connection with this Guaranty, any of the other Credit Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the Collateral Agent on their behalf) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents (and subject to the Intercreditor Agreement). SECTION 7 Subordination. (a) Subordination to Payment of Guaranteed Obligations. All payments on account of all indebtedness, liabilities and other obligations of the Company to the Guarantor, whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Company or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and all other amounts payable by the Company to the Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the "Subordinated Debt") shall be subject, subordinate and junior in right of payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations. (b) No Payments. As long as any of the Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not accept or receive any payment or distribution by or on behalf of the Company, directly or indirectly, of assets of the Company of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other disposition of collateral, or by setoff, exchange or in any other manner, for or on account of the 161 Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of Default exists and no notice described below has been received by the Guarantor, the Guarantor shall be entitled to accept and receive any and all payments. During the existence of an Event of Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt Payment), and upon receipt by the Company of notice from the Guaranteed Parties (or the Collateral Agent on their behalf) of such Default, and until such Event of Default is cured or waived, pursuant to the terms of the applicable Credit Documents, the Company shall not make, accept or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this Section 7, any Subordinated Debt Payments shall be received in contravention of this Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the Guaranteed Parties and shall be paid over or delivered to the Guaranteed Parties (or the Collateral Agent on their behalf) for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent necessary to give effect to this Section 7, after giving effect to any concurrent payments or distributions to the Guaranteed Parties in respect of the Guaranteed Obligations. (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not, without the prior written consent of the Guaranteed Parties (or the Collateral Agent on their behalf): (i) accelerate or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Debt; (ii) exercise any rights under or with respect to (A) any guaranties of the Subordinated Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Company or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing; (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of the Guarantor to the Company against any of the Subordinated Debt; or (iv) commence, or cause to be commenced, or join with any creditor other than the Guaranteed Parties in commencing, any proceeding under any Debtor Relief Laws as against Company. (d) Subordination Upon Any Distribution of Assets of the Company. In the event of any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, upon any proceeding under any Debtor Relief Laws with respect to or involving the Company, (i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Debt 162 Payment to which the Guarantor would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to the Guaranteed Parties (or the Collateral Agent acting on their behalf) for application to the payment of the Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Guaranteed Parties in respect of such Guaranteed Obligations. (e) Authorization to Guaranteed Parties. If, while any Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is commenced by or against the Company or its property: (i) the Guaranteed Parties are hereby irrevocably authorized and empowered (in the name of the Guaranteed Parties, in the name of the Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Debt and give acquittance therefor and to file claims and proofs of claim and take such other action (including voting the Subordinated Debt) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and (ii) the Guarantor shall promptly take such action as any of the Guaranteed Parties may reasonably request (A) to collect the Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such powers of attorney, assignments and other instruments as they may request to enable them to enforce any and all claims with respect to the Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt Payments. SECTION 8 Continuing Guaranty; Reinstatement. (a) Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon the Guarantor until the payment and performance in full of all Guaranteed Obligations. (b) Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Company (or receipt of any proceeds of collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Company, its estate, trustee, receiver or any other Person (including under any Debtor Relief Laws or other state or federal law), or must otherwise be restored by the Guaranteed Parties, whether as a result of proceedings under any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Guaranteed Parties may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Guaranteed Parties contained in Section 15. 163 SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Guaranteed Parties or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Company to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral Agent on their behalf) an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any proceeding under any Debtor Relief Laws with respect to the Company, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Company for such interest in any such proceeding under any Debtor Relief Laws). The Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any Taxes, on the day when due in Dollars and in same day or immediately available funds, to the Collateral Agent at such office or account of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All such payments shall be promptly applied from time to time by the Guaranteed Parties as provided in the Intercreditor Documents. SECTION 10 Representations and Warranties. The Guarantor represents and warrants to the Guaranteed Parties that: (a) Organization and Powers. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority: (i) to own its assets and carry on its business, and (ii) to execute, deliver and perform its obligations under the Guarantor Documents and Spin-Off Documents. (b) Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and all other Guarantor Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized by all necessary corporate action of the Guarantor, and do not and will not: (i) contravene the terms of the Guarantor's organization documents or (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation to which the Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which the Guarantor or its property is subject, or (iii) violate any Laws. (c) Binding Obligation. This Guaranty and the other Guarantor Documents constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, except as have been obtained on or before the Closing Date, is required for (i) the 164 due execution, delivery or performance by, or enforcement against, the Guarantor of the Guarantor Documents, (ii) the execution, delivery or performance by or enforcement against the Guarantor of the Spin-Off Documents or (iii) the consummation of the Spin-Off Transaction. (e) The Guarantor has not previously assigned any interest in the Subordinated Debt or any collateral relating thereto, no Person other than the Guarantor owns an interest in the Subordinated Debt or any such collateral (whether as joint holders of the Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to the Guarantor. (f) Solvency. Immediately prior to and after and giving effect to (i) the incurrence of the Guarantor's obligations under this Guaranty, and (ii) the Spin-Off Transaction, the Guarantor will be Solvent. (g) Consideration. The Guarantor has received at least "reasonably equivalent value" (as such phrase is used in Section 548 of the Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272 of the New York Debtor & Creditor Laws and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations to which it is a party. (h) Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Company and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Guaranteed Parties with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Credit Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Company and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon or expecting the Guaranteed Parties to furnish to the Guarantor any information now or hereafter in the Guaranteed Parties' possession concerning the financial condition of the Company or any other matter. SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that it shall furnish to the Guaranteed Parties such information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as any of the Guaranteed Parties may from time to time reasonably request. SECTION 12 Additional Covenants. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that: (a) Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal existence and (ii) its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties, except in the case of this clause (ii) where the non-preservation could not reasonably be expected to have a Material Adverse Effect. (b) Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, 165 instruments, certificates, documents and assurances and perform such acts as any of the Guaranteed Parties shall deem reasonably necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Guaranteed Parties with evidence of the foregoing satisfactory in form and substance to the Guaranteed Parties. SECTION 13 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; except that (a) any notices to the Swap Provider shall be delivered to Fleet National Bank (or such replacement Swap Provider as the Swap Provider may direct in writing), according to the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any notice to the Lenders be delivered to the address specified for such Persons in the Note Purchase Agreement (or to such replacement Lenders as may be appointed from time to time consistent with the Intercreditor Agreement). Notices to the Guarantor shall be sent or delivered to the address set forth in the Credit Agreement for the Company. All such notices, requested and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of any Guaranteed Parties to exercise, and no delay in exercising on the part of any Guaranteed Parties, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. SECTION 15 Costs and Expenses; Indemnification. (a) Costs and Expenses. The Guarantor shall: (i) whether or not the transactions contemplated hereby are consummated, pay or reimburse each of the Guaranteed Parties for all costs and expenses incurred by them in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Guaranty, any other Guarantor Document and any other documents prepared in connection herewith or therewith and the consummation of the transactions contemplated hereby and thereby; and (ii) pay or reimburse the Guaranteed Parties for all costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Guaranty or any other Guarantor Document during the existence of an Event of Default or after acceleration of the Notes (including in connection with any "workout" or restructuring regarding the Notes, and including in any proceeding under any Debtor Relief Laws or appellate proceeding). (b) Indemnification. The Company shall indemnify, defend and hold each of the Guaranteed Parties, and each Lender and Note Holder and each of its respective officers, 166 directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suites, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Guaranty or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any proceeding under any Debtor Relief Laws or appellate proceeding) related to or arising out of this Guaranty or relating to the Collateral, whether or not any Indemnified Person is a party thereto (the "Indemnified Liabilities"); provided that the Guarantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person. (c) Defense. At the election of any Indemnified Person, the Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person's sole discretion, at the sole cost and expense of the Guarantor. (d) Interest. Any amounts payable to the Guaranteed Parties under this Section 15 if not paid upon demand shall bear interest from the date of such demand until paid in full, at the Default Rate. (e) Survival. The agreements in this Section shall survive payment of all other Guaranteed Obligations. SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Guaranteed Parties and the Lenders provided by law, if an Event of Default exists or any reimbursement or payment obligation under any of the Credit Documents has been accelerated, each Guaranteed Parties and Lenders is hereby authorized at any time and from time to time, upon notice to the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but without notice to the Guarantor (any such notice being expressly waived by the Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Person to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor then due and owing, irrespective of whether or not such Person shall have made any demand upon the Company or the Guarantor under any of the Credit Documents. Each Lender and the Guaranteed Parties shall promptly notify the Guarantor (through the Collateral Agent) after any such set-off and application made by it; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lenders and Guaranteed Parties under this Section 16 are in addition to other rights and remedies (including other rights of set-off) which the such parties may have. SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the Lenders, or the Guaranteed Parties shall be under any obligation to marshal any assets in favor of the Guarantor or any other Person or against or in payment of any or all of the Guaranteed Obligations. To the extent that the Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties exercise their right of set-off, and such payment or the proceeds of such set- 167 off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Collateral Agent upon demand its pro rata share of any amount so recovered from or repaid by the Collateral Agent. SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lenders, the Lenders, the Guaranteed Parties, and their respective successors and assigns, and no other Person (other than the Collateral Agent and any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein. SECTION 19 Binding Effect; Assignment. (a) Successors and Assigns. The provisions of this Guaranty shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. (b) Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Required Lenders. Each of the Guaranteed Parties, the Lenders, and the Lenders may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of such Person's rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by such Person in accordance with Section 10.07 of the Credit Agreement in its rights and obligations thereunder and under any of the Credit Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by any Lender, such Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. SECTION 20 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF 168 THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 22 Entire Agreement; Amendments. This Guaranty, together with the other Guarantor Documents, embodies the entire agreement of the Guarantor with respect to the matters set forth herein for the benefit of each Guaranteed Party, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended only by written agreement between the Guarantor and the Guaranteed Party to whom such amendment relates. Any such amendment shall not effect any guaranty of the Guarantor granted hereunder to any other Guaranteed Party. SECTION 23 Independence. This Guaranty sets forth independent and separate guaranties of the Guarantor in favor of each Guaranteed Party in respect of the Guaranteed Obligations owing to each such Guaranteed Party. The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement required hereunder with respect to any Guaranteed Party shall not in any way affect or impair the legality or enforceability of that or any other provision of this Guaranty or any instrument or agreement required hereunder in respect of any other Guaranteed Party. The parties acknowledge that this Guaranty has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as thought the Guarantor had executed separate guaranties, in favor of each Guaranteed Party. Any provision of this Agreement and the other Credit Documents to which 169 the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 24 Multiple Guarantors; Joint and Several Liability. When this Guaranty is executed by more than one Guarantor, the word "Guarantor" shall mean all and any one or more of them, and the obligations of all Persons signing this Guaranty shall be joint and several. [remainder of page intentionally left blank] 170 IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written. [NAME OF SUBSIDIARY] By: ------------------------- Title Address: -------- [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: ------------------- Title Address: -------- [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: ------------------- Title Address: -------- [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ [NAME OF SUBSIDIARY] By: ------------------- Title Address: -------- [ ] ------------- Attn: [ ] -------- Fax No. [ ] ------ 171 SCHEDULE 1 to the Subsidiary Guaranty SUBSIDIARIES 172 EXHIBIT F [COMPANY] SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __, 2001, is made by and among CERIDIAN CORPORATION, a Delaware corporation (the "Grantor") in favor of the "Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined herein); and (c) the Lenders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a condition precedent to the borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent, for the ratable benefit of the Credit Agents, the security interests hereinafter provided to secure the obligations of the Grantor described below. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit account for purposes of Article 9 of the UCC or applicable law. "Accounts" means any and all accounts of Grantor, whether now existing or hereafter acquired or arising, and in any event includes all accounts receivable, contract rights, royalties, Rights to Payment and other obligations of any kind owed to Grantor arising out of or in connection with the sale, lease, license or other transfer of Intellectual Property, merchandise, goods or commodities or the rendering of services or arising from any other transaction, however evidenced, and whether or not earned by performance, all guaranties, indemnities and security with respect to the foregoing, and all letters of credit relating thereto, in each case whether now existing or hereafter acquired or arising. "Arbitron Databases" means any and all of Grantor's collections or compilations of data, stored in such a way as to permit selective search and retrieval using electronic, electromagnetic, 173 manual or mechanical methods, which relate to Grantor's business, and wherever maintained, collected or accessed. "Books" means all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including: (i) ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets (including Inventory and Rights to Payment), business operations or financial condition; (iii) computer programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and output of whatever kind; (vi) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (vii) any and all other rights now or hereafter arising out of any contract or agreement between Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of Grantor's books or records or with credit reporting, including with regard to Grantor's Accounts. "Chattel Paper" means all writings of whatever sort which evidence a monetary obligation and a security interest in or lease of specific goods, whether now existing or hereafter arising. "Collateral" has the meaning set forth in Section 2. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Copyright Office" means the United States Copyright Office. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Lenders and (c) the Swap Provider. "Credit Documents" means, collectively, the Note Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Database Copyright Filing" has the meaning specified in Section 5(q)(v)(A). "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Deposit Account" means any demand, time, savings, passbook or like account now or hereafter maintained by or for the benefit of Grantor with a bank, savings and Note association, 174 credit union or like organization (including Bank of America) and all funds and amounts therein, whether or not restricted or designated for a particular purpose. "Documents" means any and all documents of title, bills of lading, dock warrants, dock receipts, warehouse receipts and other documents of Grantor, whether or not negotiable, and includes all other documents which purport to be issued by a bailee or agent and purport to cover goods in any bailee's or agent's possession which are either identified or are fungible portions of an identified mass, including such documents of title made available to Grantor for the purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in a manner preliminary to their sale or exchange, in each case whether now existing or hereafter acquired or arising. "Equipment" means all now existing or hereafter acquired equipment of Grantor in all of its forms, wherever located, and in any event includes any and all machinery, furniture, equipment, furnishings and fixtures in which Grantor now or hereafter acquires any right, and all other goods and tangible personal property (other than Inventory), including tools, parts and supplies, automobiles, trucks, tractors and other vehicles, computer and other electronic data processing equipment and other office equipment, computer programs and related data processing software, and all additions, substitutions, replacements, parts, accessories, and accessions to and for the foregoing, now owned or hereafter acquired, and including any of the foregoing which are or are to become fixtures on real property. "Filing Offices" has the meaning set forth in Section 3(a). "General Intangibles" means all general intangibles of Grantor, now existing or hereafter acquired or arising, and in any event includes: (i) all tax and other refunds, rebates or credits of every kind and nature to which Grantor is now or hereafter may become entitled; (ii) all good will, choses in action and causes of action, whether legal or equitable, whether in contract or tort and however arising; (iii) all Intellectual Property; (iv) all rights of stoppage in transit, replevin and reclamation; (v) all licenses, permits, consents, indulgences and rights of whatever kind issued in favor of or otherwise recognized as belonging to Grantor by any Governmental Authority; (vi) all indemnity agreements, guaranties, insurance policies and other contractual, equitable and legal rights of whatever kind or nature; and (vii) all rights to receive payment and other rights arising under any Swap Contracts; in each case whether now existing or hereafter acquired or arising. "Grantor" has the meaning set forth in the first paragraph hereof. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Instruments" means any and all negotiable instruments and every other writing which evidences a right to the payment of money, wherever located and whether now existing or hereafter acquired. 175 "Intellectual Property" means the following properties and assets owned or held by Grantor or in which Grantor otherwise has any interest, now existing or hereafter acquired or arising: (i) all patents and patent applications, domestic or foreign, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such patents, patent applications and patent licenses as described in Schedule 2), all rights to sue for past, present or future infringement thereof, all rights arising in connection with any of the foregoing and pertaining thereto and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof; all copyrights and applications for copyright (including with respect to the Arbitron Databases and the Material Arbitron Software), domestic or foreign, together with the underlying works of authorship (including titles), whether or not the underlying works of authorship have been published and whether said copyrights are statutory or arise under the common law, and all other rights and works of authorship (including the copyrights and copyright applications described in Schedule 2), all rights, claims and demands in any way relating to any such copyrights or works, including royalties and rights to sue for past, present or future infringement, and all rights of renewal and extension of copyright; (ii) all state (including common law), federal and foreign trademarks, service marks and trade names, and applications for registration of such trademarks, service marks and trade names, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such marks, names, applications and licenses as described in Schedule 2), whether registered or unregistered and wherever registered, all rights to sue for past, present or future infringement or unconsented use thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and renewals thereof; (iii) all trade secrets, trade dress, trade styles, logos, other source of business identifiers, mask-works, mask-work registrations, mask-work applications, software (including all Material Arbitron Software and Material Software Additions), confidential information, customer lists, license rights, advertising materials, operating manuals, methods, processes, know-how, algorithms, formulae, databases (including all Arbitron Databases), quality control procedures, product, service and technical specifications, operating, production and quality control manuals, sales literature, drawings, specifications, blue prints, descriptions, inventions, name plates and catalogs; (iv) the entire goodwill of or associated with the businesses now or hereafter conducted by Grantor connected with and symbolized by any of the aforementioned properties and assets; and (v) all intellectual property rights and property of the Grantor now existing or hereafter arising, covered by any Supplemental IP Security Agreement executed by Grantor from time to time in accordance with Section 3(c). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January _____, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the "Lenders" (as defined therein). 176 "Inventory" means any and all of Grantor's inventory in all of its forms, wherever located, whether now owned or hereafter acquired, and in any event includes all goods (including goods in transit) which are held for sale, lease or other disposition, including those held for display or demonstration or out on lease or consignment or to be furnished under a contract of service, or which are raw materials, work in process, finished goods or materials used or consumed in Grantor's business, and the resulting product or mass, and all repossessed, returned, rejected, reclaimed and replevied goods, together with all parts, components, supplies packing, and other materials used or usable in connection with the manufacture, production, packing, shipping, advertising, selling or furnishing of such goods; and all other items hereafter acquired by Grantor by way of substitution, replacement, return, repossession or otherwise, and all additions and accessions thereto, and any Document representing or relating to any of the foregoing at any time. "Investment Property" means any and all investment property of Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, and whether now existing or hereafter acquired or arising. "Letter of Credit Proceeds" means any and all proceeds of written letters of credit. "Material Arbitron Software" means all computer operation and application programs of Grantor listed on Schedule 2. "Material Software Addition" means any update, release, version, patch, debugging program, compilation, or beta in respect of Material Arbitron Software, and any and all computer operation and application programs, including all object and source code and all copies and encodings thereof, purchased, created or otherwise acquired by Grantor after the Closing Date. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Lenders), (ii) all Account Control Agreements executed by any Note Party under any Note Holder Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Lenders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. 177 "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company, the Lenders party thereto. "Partnership Collateral" means any and all limited and general partnership interests and limited liability company interests of any type or nature, whether now existing or hereafter acquired or arising. "Patent and Trademark Office" means the United States Patent and Trademark Office. "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Collateral or other assets of Grantor, including "proceeds" as defined at UCC Section 9306, any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Grantor from time to time with respect to any of the Collateral, any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), any and all other amounts from time to time paid or payable under or in connection with any of the Collateral or for or on account of any damage or injury to or conversion of any Collateral by any Person, any and all other tangible or intangible property received upon the sale or disposition of Collateral, and all proceeds of proceeds. "Rights to Payment" means all Accounts and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Instruments, Investment Property and Proceeds. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent, any of the Credit Agents and any Debt Participant, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or hereafter created under, arising out of, or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase agreement), and any obligations under any of the Swap Documents. "Software Copyright Filing" has the meaning specified in Section 5(q)(v)(B). "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Grantor and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Grantor and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Supplemental IP Security Agreement" means a Supplemental IP Security Agreement substantially in the form of Exhibit I of the Credit Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit Agreement, and the terms and conditions of which may derive from, and be incorporated by reference to, this Agreement. 178 "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Note Party under any Swap Document, (c) any documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. "UCC Financing Statements" has the meaning specified in Section 4(f). (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Agents, and each of them), and hereby grants to the Collateral Agent (for the benefit of the Credit Agents, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the following property, wherever located and whether now existing or owned or hereafter acquired or arising (collectively, the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; 179 (iii) all Deposit Accounts; (iv) all Documents; (v) all Equipment; (vi) all General Intangibles; (vii) all Inventory; (viii) all Books; (ix) all products and Proceeds of any and all of the foregoing; and (x) all Letter of Credit Proceeds. Notwithstanding the foregoing provisions of this Section 2(a), such grant of security interest shall not extend to, and the term "Collateral" shall not include, any Intellectual Property which is now held or hereafter held by Grantor as licensee, lessee or otherwise, to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. (b) Grantor Remains Liable. Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of the rights hereunder shall not release Grantor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall any such Person be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder. (c) Continuing Security Interest. Grantor agrees that this Agreement shall create continuing security interests in the Collateral which shall remain in effect until terminated in accordance with Section 23. SECTION 3 Perfection Procedures. Grantor shall duly complete, execute and deliver to the Collateral Agent and each of the Credit Agents concurrently with the execution of this Agreement, and at any time and from time to time, all Supplemental IP Security Agreements, financing statements, continuation statements, termination statements, security agreements, chattel mortgages, assignments, patent, copyright and trademark collateral assignments, fixture filings, warehouse receipts, Account Control Agreements, documents of title, affidavits, reports, notices, schedules of account, letters of authority and all other documents and instruments, in form satisfactory to the Administrative Agent, and take all other action, as the Collateral Agent (upon instruction of the Instructing Group) may request, to perfect and continue perfected, 180 maintain the priority of or provide notice of the Collateral Agent's security interests in the Collateral for the benefit of each of the Credit Agents and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Grantor shall from time to time take the following actions: (a) Filing of Security Agreements; Financing Statements. On or prior to the Closing Date Grantor shall execute, notarize and deliver (i) an original of this Agreement, (ii) such original UCC Financing Statements and (iii) such original Supplemental IP Security Agreements as the Collateral Agent at the instruction of the Instructing Group may reasonably request; all duly completed and in final form for recordation at the offices described in Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor shall execute, notarize and deliver original completed UCC Financing Statements for filing or recording in the appropriate filing office or offices in any state identified by a Grantor in a notice delivered pursuant to Section 5(e). (b) Deposit Accounts. On or prior to the Closing Date Grantor shall execute such Account Control Agreements, notices, and shall take such other action, as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interests in Collateral for the benefit of each of the Credit Agents consisting of Deposit Accounts and to accomplish the purposes of this Agreement. (c) Intellectual Property Collateral. (i) Patents; etc. Promptly following any submission, filing or recordation required pursuant to subsection (iv) of Section 5(q) (except as provided in subsection (c)(ii) with respect to certain copyrights), record such duly completed, signed and notarized Supplemental IP Security Agreement with the Patent and Trademark Office or Copyright Office, as applicable, and take such other action as may be necessary, or as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect or protect the Collateral Agent's security interests in such Intellectual Property for the benefit of each of the Credit Agents. Grantor shall promptly, but in any event not later than ten days after any such recordation, deliver to the Collateral Agent and each Credit Agent true and complete copies of all file-stamped applications, disclosure documents and amendments, and all file-stamped Supplemental IP Security Agreements recorded at the Patent and Trademark Office. (ii) Copyrights. Grantor shall: (A) Promptly following any submission, filing or recordation required pursuant to subsection (v) of Section 5(q), duly complete, execute, notarize and record a Supplemental IP Security Agreement at the Copyright Office and take such other actions as may be necessary or appropriate in the discretion of the Collateral Agent at the instruction of the Instructing Group to perfect or protect the Collateral Agent's security interests in (I) all Database Copyright Filings for such quarter, and (II) all Software Copyright Filings made since the most recently filed Supplemental IP Security Agreement; and 181 (B) take such other action as may be necessary, or the Collateral Agent may reasonably request, to perfect or protect the Collateral Agent's security interests in the Intellectual Property. (iii) The Grantor hereby authorizes the Collateral Agent to modify, amend or supplement the Schedules hereto and to reexecute this Agreement and any Supplemental IP Security Agreement from time to time on the Grantor's behalf and as its attorney-in-fact to include any such future Collateral and to cause to such reexecuted Agreement, Supplemental IP Security Agreement or such modified, amended or supplemented Schedules to be filed with the Copyright Office or the Patent and Trademark Office. (d) Documents, Etc. Within five calendar days after receipt, Grantor shall deliver to the Collateral Agent, or an agent designated by it, for the benefit of the Credit Agents, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Documents and Chattel Paper, and all other Rights to Payment at any time evidenced by promissory notes, trade acceptances or other instruments, not already delivered hereunder pursuant to this Section 3; provided, however, that unless an Event of Default shall have occurred and be continuing, Grantor shall not be required to deliver any Document, Chattel Paper, promissory note, trade acceptance or other instrument having a face amount not in excess of $100,000. Upon the request of the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with such legends as the Collateral Agent shall reasonably specify. SECTION 4 Representations and Warranties. In addition to the representations and warranties of the Grantor set forth in the Credit Agreement, which are incorporated and restated herein by this reference, and which are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, Grantor further represents and warrants to each Credit Party that: (a) Location of Chief Executive Office and Collateral. Grantor's chief executive office and principal place of business is located at the address set forth in Schedule 1, and all other locations where Grantor conducts business or Collateral is kept are set forth in Schedule 1. (b) Locations of Books. All locations where Books pertaining to the Rights to Payment are kept, including all equipment necessary for accessing such Books and the names and addresses of all service bureaus, computer or data processing companies and other Persons keeping any Books or collecting Rights to Payment for Grantor, are set forth in Schedule 1. (c) Trade Names and Trade Styles. All trade names and trade styles under which Grantor presently conducts the Arbitron Business operations are set forth in Schedule 1, and, except as set forth in Schedule 1 and in connection with the Transaction, Grantor has not, at any time in the past year: (i) been known as or used any other corporate, trade or fictitious name; (ii) changed its name; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv) acquired through asset purchase or otherwise any business of any Person. (d) Ownership of Collateral. Grantor is, and, subject to Section 5(i), will continue to be, the sole and complete owner of the Collateral, or has a valid and enforceable leasehold or licensee's interest in such Collateral as set forth in Schedule 2 and in accordance with subsection 182 (i) of this Section 4 (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in such Collateral, will be the sole and complete owner thereof, or will have a valid and enforceable leasehold or licensee's interest in such Collateral, to the extent permitted hereunder or under the Credit Agreement), free from any Lien other than Permitted Liens. (e) Enforceability; Priority of Security Interest. (i) This Agreement together with such Supplemental IP Security Agreements as have been executed by Grantor and filed at the Copyright Office or Patent and Trademark Office in respect of the Intellectual Property create security interests which are enforceable against the Collateral in which Grantor now has rights and will create security interests which are enforceable against any Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights. (ii) The Collateral Agent has a perfected and first priority security interest in the Collateral in which Grantor now has rights, and will have a perfected and first priority security interest in the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights, in each case for the Credit Agent's benefit and, subject only to Permitted Liens, securing the payment and performance of the Secured Obligations. (f) Other Financing Statements. Other than (i) financing statements or other filings naming the owner of the asset to which such Lien relates as debtor, under the UCC, copyright, patent, or trademark or any comparable law ("UCC Financing Statements") disclosed to the Administrative Agent prior to the Effective Date and listed on Schedule 5.17 of the Credit Agreement, and (ii) UCC Financing Statements in favor of the Collateral Agent for itself and the Credit Agents pursuant to the Credit Documents, no effective UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like or covering all or any part of the Collateral is on file in any filing or recording office in any jurisdiction, except in connection with Permitted Liens. (g) Rights to Payment. (i) The Rights to Payment represent valid, binding and enforceable obligations of the account debtors or other Persons obligated thereon, representing undisputed, bona fide transactions completed in accordance with the terms and provisions contained in any documents related thereto, and are and will be genuine, free from Liens, and not subject to any adverse claims, counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages, holdbacks or conditions precedent of any kind of character, except to the extent reflected by the Grantor's reserves for uncollectible Rights to Payment or to the extent, if any, that such account debtors or other Persons may be entitled to normal and ordinary course trade discounts, returns, adjustments and allowances in accordance with Section 5(m), or as otherwise disclosed to the Credit Agents in writing or occurring in the ordinary course of business; (ii) to the best of Grantor's knowledge, all account debtors and other obligors on Rights to Payment are solvent and generally paying their debts as they come due, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; 183 (iii) all Rights to Payment comply in all material respects with all applicable laws concerning form, content and manner of preparation and execution, including where applicable any federal or state consumer credit laws; (iv) Grantor has not assigned any of its rights under the Rights to Payment except as provided in this Agreement or as set forth in the other Credit Documents; (v) all statements made, all unpaid balances and all other information in the Books and other documentation relating to the Rights to Payment in all material respects are true and correct and what they purport to be; and (vi) Grantor has no knowledge of any fact or circumstance which would materially impair the validity or collectibility of any of such Rights to Payment, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (h) Inventory. No Inventory is stored with any bailee, warehouseman or similar Person or on any premises leased to Grantor, nor has any Inventory been consigned to Grantor or consigned by Grantor to any Person or is held by Grantor for any Person under any "bill and hold" or other arrangement, except at locations listed in Schedule 1. (i) Intellectual Property. (i) As of the Closing Date, except as set forth in Schedule 2, (A) Grantor (directly or through any Subsidiary) does not own, possess or use under any licensing arrangement (other than ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business) Intellectual Property materially related to the Arbitron Business, and (B) Grantor (directly or through any Subsidiary) has no registrations or applications therefor pending before any Governmental Authority, that are or may be materially related to the Arbitron Business, for any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron Software, Material Software Additions or Arbitron Databases for which any such application was submitted after December 31, 1998, (III) copyrights in respect of "Radio Market Reports" of Grantor for which any such application was submitted after December 1, 2000, or (IV) any other copyrights for which such application was submitted after December 31, 1999. (ii) All Grantor's Intellectual Property is subsisting and has not been adjudged invalid or unenforceable in whole or in part. (iii) All maintenance fees required to be paid by Grantor on account of any of its patents have been timely paid for maintaining such patents in force, and, to the best of Grantor's knowledge, each of such patents is valid and enforceable. (iv) To the best of Grantor's knowledge, no infringement or unauthorized use presently is being made of any Intellectual Property by any Person that could reasonably be expected to have a Material Adverse Effect. (v) Grantor is the owner or licensee of its Intellectual Property and the past, present and contemplated future use of such Intellectual Property by Grantor has not, does not and will 184 not infringe or violate any right, privilege or license agreement of or with any other Person in any material respect. (vi) Grantor owns, has material rights under, is a party to, or an assignee of a party to all Intellectual Property necessary and appropriate to continue to conduct the Arbitron Business. (vii) The Arbitron Databases purchased developed or otherwise acquired by Grantor since December 31, 1998 are protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (viii) The Material Arbitron Software is protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (ix) Grantor's Intellectual Property consisting of patents are protected under current, valid and enforceable patents or applications therefor issued by the Patent and Trademark Office and under the U.S. patent laws (except with respect to such patents that have expired of their own terms, and not as the result of any abandonment, dispute or settlement). (j) Equipment. As of the Closing Date, none of the Equipment is leased from any Person, except as set forth in UCC record searches delivered to the Collateral Agent or as otherwise disclosed to the Administrative Agent and the other Credit Agents. (k) Deposit Accounts. The names and addresses of all financial institutions at which Grantor maintains its Deposit Accounts, and the account numbers and account names of such Deposit Accounts, are set forth in Schedule 1. No Deposit Account Control Agreements exist with respect to any Investment Property other than any Deposit Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. (l) Instruments. (i) Grantor has not previously assigned any interest in any Instruments (other than such interests as will be released on or before the date hereof), (ii) no Person other than Grantor owns an interest in the Instruments (whether as joint holders, participants or otherwise), (iii) all Instruments are owing only to Grantor, and (iv) no material default exists under or in respect of the Instruments. (m) Other Investment Property. All securities accounts of the Grantor and other Investment Property of the Grantor are set forth in Schedule 1. No Account Control Agreements exist with respect to any Investment Property other than any Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. SECTION 5 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied, Grantor agrees that: (a) Defense of Collateral. Grantor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or the Collateral Agent's rights or interest in, the Collateral. 185 (b) Preservation of Collateral. Grantor shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral. (c) Compliance with Laws, Etc. Grantor shall comply in all material respects with all laws, regulations and ordinances (including with respect to the Fair Labor Standards Act), and with all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral. (d) Location of Books and Chief Executive Office. Grantor shall: (i) keep all Books pertaining to the Rights to Payment at the locations set forth in Schedule 1; and (ii) give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (A) any changes in any such location where Books pertaining to the Rights to Payment are kept, including any change of name or address of any service bureau, computer or data processing company or other Person preparing or maintaining any Books or collecting Rights to Payment for Grantor or (B) any changes in the location of Grantor's chief executive office or principal place of business. (e) Location of Collateral. If any Collateral of Grantor shall be physically relocated to, or otherwise be physically located in, a state of the United States in which a financing statement has not already been filed with respect to such Collateral, Grantor shall give the Collateral Agent and each Credit Agent prompt notice thereof (and in any event not later than one Business Day after becoming aware thereof). (f) Change in Name, Identity or Structure. Grantor shall give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (i) any change in its name, (ii) any change of its jurisdiction of incorporation or the location of its chief executive offices, (iii) any changes in, additions to or other modifications of its trade names used as the name of Grantor set forth in Schedule 1, and (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (g) Maintenance of Records. Grantor shall keep accurate and complete Books with respect to the Collateral, disclosing the Collateral Agent's security interests hereunder for the benefit of the Credit Agents. (h) Invoicing of Sales. The Grantor will invoice all of its sales upon forms customary in the industry and to maintain proof of delivery and customer acceptance of goods. (i) Disposition of Collateral. Grantor shall not surrender or lose possession of (other than to a Credit Agent), sell, lease, rent, or otherwise dispose of or transfer any of the Collateral or any right or interest therein, except to the extent expressly permitted by the Credit Agreement. (j) Liens. (i) Grantor shall keep the Collateral free of all Liens except Permitted Liens. (ii) Notwithstanding any other provision contained herein or in the Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a transfer of goods free of the Collateral Agent's security interests under Section 9307 UCC, except that Dispositions expressly permitted by Sections 7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j) 186 thereof shall be free of such security interests. Accordingly, all non-excluded Dispositions shall be subject at all times to the Liens of the Collateral Agent. (k) Expenses. The Grantor will pay all expenses of protecting, storing, warehousing, insuring, handling and shipping the Collateral. (l) Leased Premises. At the Collateral Agent's request, Grantor shall obtain from each Person from whom Grantor leases any premises at which any Collateral is at any time present such subordination, waiver, consent and estoppel agreements as the Administrative Agent may reasonably require, in form and substance satisfactory to the Administrative Agent. (m) Rights to Payment. Grantor shall: (i) with such frequency as the Collateral Agent may reasonably require, furnish to the Collateral Agent (A) master customer listings, including all names and addresses, together with copies or originals (as requested by the Administrative Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts; (B) accurate records and summaries of Accounts, including detailed agings specifying the name, face value and date of each invoice, and listings of Accounts that are disputed or have been cancelled; and (C) such other information relating to the Accounts as the Collateral Agent shall from time to time reasonably request; (ii) give only normal discounts, allowances and credits as to Accounts and other Rights to Payment, in the Ordinary Course of Business, according to normal trade practices, and enforce all Accounts and other Rights to Payment strictly in accordance with their terms or pursuant to Grantor's Ordinary Course of Business, and during the existence of an Event of Default, take all such action to such end as may from time to time be reasonably requested by the Collateral Agent, except that Grantor may at any time grant any extension of the time for payment or enter into any agreement to make a rebate or otherwise to reduce the amount owing on or with respect to, or compromise or settle for less than the full amount thereof, any Account or other Right to Payment, in the Ordinary Course of Business, according to normal trade practices; (iii) if any discount, allowance, credit, extension of time for payment, agreement to make a rebate or otherwise to reduce the amount owing on, or compromise or settle, an Account or other Right to Payment exists or occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to an Account or other Right to Payment, disclose such fact to the Collateral Agent in the Books relating to such Account or other Right to Payment when such Books are requested for inspection by the Collateral Agent, and in connection with any invoice or report furnished by Grantor to the Collateral Agent relating to such Account or other Right to Payment; (iv) if Accounts in an amount in excess of $500,000 for any and all such Accounts arise from contracts with the United States or any department, agency or instrumentality thereof, promptly notify the Collateral Agent thereof and execute any documents and instruments and take any other steps reasonably requested by the Collateral Agent in order that all monies due and to become due thereunder shall be assigned to the Collateral Agent and notice thereof given 187 to the federal authorities under the Federal Assignment of Claims Act (provided that such assignment and notice shall not be required if the applicable contract prohibits assignment); (v) in accordance with its sound business judgment perform and comply in all material respects with its obligations in respect of the Accounts and other Rights to Payment; (vi) subject to Section 7, upon the request of the Collateral Agent (A) at any time, notify all or any designated portion of the account debtors and other obligors on the Rights to Payment of the security interests hereunder, and (B) if there exists any Default or Event of Default, notify the account debtors and other obligors on the Rights to Payment or any designated portion thereof that payment shall be made directly to the Collateral Agent or to such other Person or location as the Collateral Agent shall specify; and (vii) if there exists any Default or Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts and other Rights to Payment as the Administrative Agent shall require. (n) Deposit Accounts and Securities Accounts. Grantor shall give the Collateral Agent immediate notice of the establishment of any new Deposit Account and any new securities account with respect to any Investment Property. (o) Inventory. Grantor shall: (i) at such times as the Collateral Agent shall reasonably request, prepare and deliver to the Collateral Agent a report of all Inventory, in form and substance reasonably satisfactory to the Collateral Agent ; (ii) upon the request of the Collateral Agent, take a physical listing of the Inventory and promptly deliver a copy of such physical listing to the Collateral Agent; and (iii) not store any Inventory with a bailee, warehouseman or similar Person or on premises leased to Grantor, nor dispose of any Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment or similar basis, nor acquire any Inventory from any Person on any such basis, except in the ordinary course of business and in accordance with its normal practices. (p) Equipment. Grantor shall, upon the Collateral Agent's request, deliver to the Collateral Agent a report of each item of Equipment, in form and substance reasonably satisfactory to the Collateral Agent. (q) Intellectual Property Collateral. Grantor shall: (i) not allow or suffer any Intellectual Property to become abandoned, nor any registration thereof to be terminated, forfeited, expired or dedicated to the public, except for Intellectual Property having negligible commercial value; (ii) not enter into any agreements or transactions (including any license, sublicense or royalty agreement) pertaining to any Intellectual Property outside of the ordinary course of 188 business, or enter into any exclusive license or sublicense of any Intellectual Property, except in a transaction permitted under the Credit Documents; (iii) promptly give the Collateral Agent notice of any rights Grantor may obtain to any new patentable inventions, copyrightable works or other new Intellectual Property, prior to the registration or recordation thereof (including pursuant to this Section 5(q)) as to which Grantor (a) has received gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during any of the five fiscal years preceding such time or (b) reasonably projects that it will receive gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during the any of the subsequent five fiscal years; provided that Grantor shall have no obligation to provide notice under this subsection (iii) to the extent that Grantor has satisfied, or within the immediately following three calendar months will satisfy, subsection (iv) or (v), as applicable, of this Section 5(q); (iv) not less frequently than once every three calendar months and, additionally, upon the purchase, creation or other acquisition of any Material Software Addition, diligently record, register or prosecute, as applicable, all applications for patents, copyrights and trademarks, and diligently record, register and prosecute, as applicable, any and all continuations, continuations-in-part, applications for reissue, applications for certificate of correction and like matters in respect of Grantor's Intellectual Property as shall be reasonable and appropriate in accordance with prudent business practice, and promptly and timely pay any and all maintenance, license, registration and other fees, taxes and expenses incurred in connection with any Intellectual Property; and, without limiting the generality of the foregoing, (v) (A) not less frequently than once every three calendar months, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws any and all additions, modifications or other changes to the Arbitron Databases (each, a "Database Copyright Filing") since the Closing Date; and (B) not less frequently than once every three calendar months and, additionally, promptly after any purchase, creation or other acquisition of any Material Software Addition, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws each Material Software Addition (each, a "Software Copyright Filing"); and (vi) not less frequently than once ever three calendar months, and promptly but in any event not later than ten days after any and all recordations described in subsections (iv) and (v) of this Section 5(q), and after any and all recordations described in Section 3(c), deliver to the Collateral Agent and each Credit Agent all such duly completed, file-stamped (or otherwise certificated or acknowledged) and recorded documents together with such other documents and information as the Collateral Agent or any Credit Agent may reasonably request. (r) Notices, Reports and Information. Subject to Section 3(c), Grantor shall (i) notify the Collateral Agent and each Credit Agent of any material claim made or asserted against the Collateral by any Person and of any change in the composition of the Collateral or other event which could materially adversely affect the value of the Collateral or the Lien thereon in favor of the Collateral Agent (for the benefit of the Credit Agents); (ii) furnish to the Collateral Agent and each Credit Agent such statements and schedules further identifying and describing the 189 Collateral and such other reports and other information in connection with the Collateral as the Collateral Agent at the instruction of the Instructing Group may reasonably request, all in reasonable detail; and (iii) upon reasonable request of the Collateral Agent or any Credit Agent make such demands and requests for information and reports as Grantor is entitled to make in respect of the Collateral. (s) Insurance. (i) Grantor shall carry and maintain in full force and effect, at the expense of the Grantor and with financially sound and reputable insurance companies, insurance for itself and the Collateral Agent for the benefit of the Credit Agents, with respect to the Collateral in such amounts, with such deductibles and covering such risks as shall be specified in the Credit Agreement. Upon the request of the Collateral Agent, at the instruction of the Instructing Group, and in any event not less often than annually, Grantor shall furnish the Collateral Agent and each Credit Agent with full information as to the insurance carried by it and, if so requested, copies of all such insurance policies. All insurance policies required under this subsection (s) shall provide that they shall not be terminated or cancelled nor shall any such policy be materially changed without at least 30 days' prior written notice to the Grantor and the Collateral Agent (or 10 days' prior written notice if the Collateral Agent consents to such shorter notice). Receipt of notice of termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder shall entitle the Collateral Agent to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to the first sentence of this subsection (s) or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Grantor. (ii) If Collateral of Grantor with a value exceeding $1,000,000 (the "Settlement Consent Threshold") shall be materially damaged or destroyed, in whole or in part, by fire or other casualty, Grantor shall give prompt notice thereof to the Collateral Agent and each Credit Agent. No settlement on account of any loss on any Collateral covered by insurance shall be made for less than insured value without the consent of the Collateral Agent (with the consent of the Instructing Group), unless, so long as there exists no Default or Event of Default, the total value of each such loss or series of related losses so compromised does not exceed the Settlement Consent Threshold. Unless there exists any Default or Event of Default, the Collateral Agent (upon instruction of the Instructing Group) shall promptly execute such necessary consents, waivers and endorsements to permit Grantor to settle losses the total aggregate value of which is in an amount less than the Settlement Consent Threshold, and to receive payment therefor, as reasonably requested by Grantor. After the occurrence and during the continuance of an Event of Default, or as otherwise required under any of the Credit Documents, all sums payable to Grantor by any insurer with respect to a casualty relating to all or any part of the Collateral shall be paid to the Collateral Agent (upon instruction of the Instructing Group). If Grantor shall receive any insurance proceeds which are to be paid to the Collateral Agent pursuant to the previous sentence, Grantor shall hold such proceeds in trust for the Collateral Agent and shall segregate such proceeds from other funds of Grantor, and shall immediately forward such proceeds in the form received to the Collateral Agent (appropriately indorsed by Grantor to the order of the Collateral Agent or in such other manner as shall be satisfactory to the Collateral Agent, upon instruction of the Instructing Group). All such insurance proceeds may be retained by the Collateral Agent as part of Collateral hereunder and held in the Proceeds Account, applied by the Collateral Agent toward payment of all or part of the Secured Obligations in such order as 190 is provided herein, or released to Grantor upon its request with the consent of the Instructing Group. (t) Other Swap Obligations. Grantor shall not enter into any swap contract under or subject to a Specified Swap Agreement, other than a Specified Swap Contract. SECTION 6 Administration of the Rights to Payment. (a) Collection of Rights to Payment. Until the Collateral Agent exercises its rights hereunder to collect Rights to Payment, Grantor shall endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the Rights to Payment. At the request of the Collateral Agent, upon instruction of the Instructing Group, if there exists at such time any Event of Default, all remittances received by Grantor shall be held in trust for the Collateral Agent and, in accordance with the Collateral Agent's instructions, remitted to the Collateral Agent or deposited to an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). (b) Investment Property and Instruments. At the request of the Collateral Agent, upon instruction of the Instructing Group, if there exists at such time any Event of Default, the Collateral Agent shall be entitled, subject to the Intercreditor Agreement, to receive all distributions and payments of any nature with respect to any Investment Property or Instruments, and all such distributions or payments received by Grantor shall be held in trust for the Collateral Agent and, in accordance with any of the its instructions (with the consent of the Instructing Group), remitted to the Collateral Agent or deposited to an account with the Administrative Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). If there exists any Default or Event of Default any such distributions and payments with respect to any Investment Property held in any securities account shall be held and retained in such securities account, in each case as part of the Collateral hereunder. Additionally, the Collateral Agent shall have the right, if there exists any Default or Event of Default, following prior written notice to Grantor, to vote and to give consents, ratifications and waivers with respect to any Investment Property and Instruments, and to exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining thereto, as if the Collateral Agent was the absolute owner thereof; provided that the Collateral Agent shall have no duty to exercise any of the foregoing rights afforded to it and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. (e) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of this Section 6 shall be held in trust for the benefit of the Collateral Agent and be segregated from the other property or funds of Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. SECTION 7 Authorization; Appointment as Attorney-in-Fact. The Collateral Agent shall have the right to, in the name of Grantor, or in the name of any of the Credit Parties or otherwise, without notice to or assent by Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and any officers or employees or agents designated by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with full power and authority to: 191 (i) sign any of the financing statements and Supplemental IP Security Agreements which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of the security interests in the Collateral of the Collateral Agent (for the benefit of the Credit Agents) and file any such financing statements and Supplemental IP Security Agreements by electronic means with or without a signature as authorized or required by applicable law or filing procedures; (ii) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds of any Collateral; (iii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors; (iv) notify the U.S. Postal Service and other postal authorities to change the address for delivery of mail addressed to Grantor to such address as Collateral Agent may designate (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment; (v) receive, open and dispose of all mail addressed to Grantor (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); (vi) send requests for verification of Rights to Payment to the customers or other obligors of Grantor; (vii) contact, or direct Grantor to contact, all account debtors and other obligors on the Rights to Payment and instruct such account debtors and other obligors to make all payments directly to the Collateral Agent; (viii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (ix) exercise dominion and control over, and refuse to permit further withdrawals from, Deposit Accounts maintained with Bank of America or any other bank, financial institution or other Person; (x) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Collateral Agent; (xi) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Collateral Agent (upon instruction of the 192 Instructing Group) may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Collateral Agent with respect to the Collateral; (xii) execute any and all applications, documents, papers and instruments necessary for the Collateral Agent to use the Intellectual Property and grant or issue any exclusive or non-exclusive license or sublicense with respect to any Intellectual Property; (xiii) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; (xiv) execute and deliver to any securities intermediary or other Person any entitlement order, Account Control Agreement or other notice, document or instrument which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Investment Property and the security interest of the Collateral therein; and (xv) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Grantor, which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Collateral and security interests of the Collateral Agent therein and to accomplish the purposes of this Agreement. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent pursuant to clauses (ii) through (xiii), (xiv)(A) and (xv)(A). The foregoing power of attorney is coupled with an interest and irrevocable so long as any of the Secured Obligations has not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, any and all acts that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 7. SECTION 8 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which Grantor has agreed to perform or pay under or in connection with this Agreement, and which Grantor has failed to perform or pay as and when due, and Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 8. SECTION 9 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. SECTION 10. Remedies. 193 (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to in this Agreement, the Credit Agreement or any other Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, Grantor agrees that: (i) The Collateral Agent may peaceably and without notice enter any premises of Grantor; take possession of any Collateral; remove, prohibit access to or use of, or dispose of all or part of the Collateral on any premises of Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may determine. (ii) The Collateral Agent may require Grantor to assemble all or any part of the Collateral and make it available to the Collateral Agent, at any place and time designated by the Collateral Agent. (iii) The Collateral Agent may use or transfer any of Grantor's rights and interests in any Intellectual Property, by license, by sublicense (to the extent permitted by an applicable license) or otherwise, on such conditions and in such manner as the Collateral Agent (upon instruction of the Instructing Group) may determine. (iv) The Collateral Agent may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law). (v) The Collateral Agent may withdraw (or cause to be withdrawn) any and all funds from any Deposit Accounts or securities accounts. (vi) The Collateral Agent may sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Grantor's assets, without charge or liability to the Collateral agent or any of the Credit Parties therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit or for future delivery without assumption of any credit risk, all as the Collateral Agent (upon instruction of the Instructing Group) deem advisable; provided, however, that Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Collateral Agent shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent 194 may provide Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. (b) License. For the purpose of enabling the Collateral Agent to exercise its rights and remedies under this Section 10 or otherwise in connection with this Agreement, Grantor hereby grants to Collateral Agent for the benefit of the Credit Agents an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense any Intellectual Property. (c) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated at such time as there may exist an Event of Default (including with respect to undrawn amounts under any Letter of Credit or contingent amounts due under any Specified Swap Agreement arising from any Specified Swap Contract), the Collateral Agent, at its election, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for the benefit of the Credit Agents for such purpose (which shall constitute a Deposit Account included within the Collateral hereunder) until such time as the Collateral Agent may elect to apply such proceeds to the Secured Obligations, and Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives until the termination of the security interests granted under this Agreement in accordance with Section 23 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent or any of the Credit Parties to honor drafts against the Proceeds Account. (d) Application of Proceeds. Subject to subsection (c), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 11 Certain Waivers. Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent, or any of the Credit Parties (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands 195 against the Collateral Agent, or any of the Credit Parties arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral. SECTION 12 Notices. All notices or other communications hereunder shall be given in the manner and to the addresses specified in, and shall be effective as provided in, the Credit Agreement; provided, however, that notices hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender or such replacement Swap Provider as may be appointed from time to time pursuant to the terms of the Intercreditor Agreement, and (b) the Lenders shall be delivered to such Persons at the address specified in the Note Purchase Agreement, or to such replacement Lenders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement. SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent, or any of the Credit Parties to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent, or any of the Credit Parties. SECTION 14 Indemnification; Other Charges. (a) Indemnification. The Grantor hereby agrees to indemnify the Collateral Agent and the Credit Parties, and the other Lenders, and their respective directors, officers, employees, agents, counsel and other advisors (each an "Indemnified Person") against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any Indemnified Person, in any way relating to or arising out of this Agreement or the transactions contemplated hereby or any action taken or omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not be liable to any Indemnified Person with respect to Indemnified Liabilities resulting from such Indemnified Person's gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (b) Other Charges. The Grantor agrees to indemnify the Collateral Agent and the Credit Parties against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (c) Interest. Any amounts payable to the any Indemnified Person under this Section 14 or otherwise under this Agreement if not paid upon demand shall bear interest from 196 the date of such demand until paid in full, at the applicable rate, (a) for the Administrative Agent and any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for the Lenders as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 15 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Grantor, each Indemnified Person referred to in Section 14 and their respective successors and assigns. SECTION 16 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN 197 EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 18 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent (for the benefit of the Credit Agents), and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 19, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 19 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 20 Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Each of the parties hereto understands and agrees that this Agreement may be delivered by any party hereto or thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Collateral Agent or any Credit Agent of a facsimile transmitted document purportedly bearing the signature of a Grantor shall bind Grantor with the same force and effect as the delivery of a hard copy original. Any failure by the Collateral Agent or any Credit Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Collateral Agent or such Credit Party. SECTION 21 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Credit Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. 198 SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this Agreement and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 23 Termination; Releases. (i) Upon the termination of the Commitments of the Lenders, the surrender of any Letters of Credit issued for the account of Grantor under the Credit Agreement and payment and performance in full of all Secured Obligations, the security interests granted under this Agreement shall terminate and the Collateral Agent and all Credit Agents shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence termination of all security interests given by Grantor to the Collateral Agent hereunder; provided, however, that the obligations of Grantor under Section 14 shall survive such termination. (ii) Concurrently with any permitted disposition of Collateral under the Credit Documents, the security interests hereunder shall automatically be released from the Collateral so disposed of, subject to Section 5(j); provided, however, that the security interests shall continue in the Proceeds thereof. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent and all Credit Agents shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Collateral provided by this Section. Any such release shall specifically describe the portion of the Collateral to be released, shall be expressed to be unconditional and shall be without recourse or warranty (other than a warranty that the Collateral Agent and the Credit Agents have not assigned their rights and interests to any other Person). SECTION 24 Assumption. Upon execution and delivery to the Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the effective date of such Subsidiary Security Agreement, such Subsidiary shall be deemed a Grantor party hereto, and this Agreement shall be deemed amended to include any amendments to the Schedules provided by such Subsidiary in connection therewith. SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] 199 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. CERIDIAN CORPORATION Grantor By: -------------------------------- Name: Title: BANK OF AMERICA, N.A., as Collateral By: -------------------------------- Name: Title: 200 SCHEDULE 1 to the Security Agreement 1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF COLLATERAL a. Chief Executive Office and Principal Place of Business: Other locations where Grantor conducts business or Collateral is kept: 2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT 3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES; ETC. 4. DEPOSIT ACCOUNTS 201 5. INVESTMENT PROPERTY 6. INSTRUMENTS 7. LEASED EQUIPMENT 8. MATERIAL SOFTWARE 202 SCHEDULE 2 to the Security Agreement (a) ISSUED PATENTS OF GRANTOR Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- ----- (b) PENDING PATENT APPLICATIONS OF GRANTOR Grantor Application No. Filing Date Inventors Title - ------- --------------- ----------- --------- ----- (c) TRADEMARKS OF GRANTOR Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ---- (d) PENDING TRADEMARK APPLICATIONS OF GRANTOR Application Grantor No. Filing Date Applicant Mark ------- --- ----------- --------- ---- (e) COPYRIGHTS OF GRANTOR Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- ------------- 203 (f) COPYRIGHT APPLICATIONS OF GRANTOR Grantor Title Date of Application ------- ----- ------------------- (g) COPYRIGHT LICENSES OF GRANTOR Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- ------------- 204 SCHEDULE 3 to the Security Agreement FILING OFFICES 205 EXHIBIT G [SUBSIDIARY] SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __, 2001, is made by and among _____________ (the "Grantor") in favor of the "Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined in herein); and (c) the Lenders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a condition precedent to the borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent, for the ratable benefit of the Credit Agents, the security interests hereinafter provided to secure the obligations of the Grantor described below. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Account Control Agreement" means any account control agreement, deposit account control agreement, lockbox or other agreement with any securities intermediary or depository granting control with respect to any investment property or deposit accounts for purposes of Article 9 of the UCC or applicable law. "Accounts" means any and all accounts of Grantor, whether now existing or hereafter acquired or arising, and in any event includes all accounts receivable, contract rights, royalties, Rights to Payment and other obligations of any kind owed to Grantor arising out of or in connection with the sale, lease, license or other transfer of Intellectual Property, merchandise, goods or commodities or the rendering of services or arising from any other transaction, however evidenced, and whether or not earned by performance, all guaranties, indemnities and security with respect to the foregoing, and all letters of credit relating thereto, in each case whether now existing or hereafter acquired or arising. "Arbitron Databases" means any and all of Grantor's collections or compilations of data, stored in such way as to permit selective search and retrieval using electronic, electromagnetic, 206 manual or mechanical methods, which relate to Grantor's business, and wherever maintained, collected or accessed. "Books" means all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including: (i) ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets (including Inventory and Rights to Payment), business operations or financial condition; (iii) computer programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and output of whatever kind; (vi) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (vii) any and all other rights now or hereafter arising out of any contract or agreement between Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of Grantor's books or records or with credit reporting, including with regard to Grantor's Accounts. "Company" has the meaning specified in the Credit Agreement. "Chattel Paper" means all writings of whatever sort which evidence a monetary obligation and a security interest in or lease of specific goods, whether now existing or hereafter arising. "Collateral" has the meaning set forth in Section 2. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Lenders and (c) the Swap Provider. "Credit Documents" means, collectively, the Note Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Database Copyright Filing" has the meaning set forth in Section 5(q)(v)(A). "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Deposit Account" means any demand, time, savings, passbook or like account now or hereafter maintained by or for the benefit of Grantor with a bank, savings and Note association, 207 credit union or like organization (including Bank of America) and all funds and amounts therein, whether or not restricted or designated for a particular purpose. "Documents" means any and all documents of title, bills of lading, dock warrants, dock receipts, warehouse receipts and other documents of Grantor, whether or not negotiable, and includes all other documents which purport to be issued by a bailee or agent and purport to cover goods in any bailee's or agent's possession which are either identified or are fungible portions of an identified mass, including such documents of title made available to Grantor for the purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in a manner preliminary to their sale or exchange, in each case whether now existing or hereafter acquired or arising. "Equipment" means all now existing or hereafter acquired equipment of Grantor in all of its forms, wherever located, and in any event includes any and all machinery, furniture, equipment, furnishings and fixtures in which Grantor now or hereafter acquires any right, and all other goods and tangible personal property (other than Inventory), including tools, parts and supplies, automobiles, trucks, tractors and other vehicles, computer and other electronic data processing equipment and other office equipment, computer programs and related data processing software, and all additions, substitutions, replacements, parts, accessories, and accessions to and for the foregoing, now owned or hereafter acquired, and including any of the foregoing which are or are to become fixtures on real property. "Filing Offices" has the meaning set forth in Section 3(a). "General Intangibles" means all general intangibles of Grantor, now existing or hereafter acquired or arising, and in any event includes: (i) all tax and other refunds, rebates or credits of every kind and nature to which Grantor is now or hereafter may become entitled; (ii) all good will, choses in action and causes of action, whether legal or equitable, whether in contract or tort and however arising; (iii) all Intellectual Property; (iv) all rights of stoppage in transit, replevin and reclamation; (v) all licenses, permits, consents, indulgences and rights of whatever kind issued in favor of or otherwise recognized as belonging to Grantor by any Governmental Authority; (vi) all indemnity agreements, guaranties, insurance policies and other contractual, equitable and legal rights of whatever kind or nature; and (vii) all rights to receive payment and other rights under any Swap Contracts; in each case whether now existing or hereafter acquired or arising. "Grantor" has the meaning set forth in the first paragraph hereof. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Instruments" means any and all negotiable instruments and every other writing which evidences a right to the payment of money, wherever located and whether now existing or hereafter acquired. 208 "Intellectual Property" means the following properties and assets owned or held by Grantor or in which Grantor otherwise has any interest, now existing or hereafter acquired or arising: (i) all patents and patent applications, domestic or foreign, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such patents, patent applications and patent licenses as described in Schedule 2), all rights to sue for past, present or future infringement thereof, all rights arising in connection with any of the foregoing and pertaining thereto and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof; all copyrights and applications for copyright (including with respect to the Arbitron Databases and the Material Arbitron Software), domestic or foreign, together with the underlying works of authorship (including titles), whether or not the underlying works of authorship have been published and whether said copyrights are statutory or arise under the common law, and all other rights and works of authorship (including the copyrights and copyright applications described in Schedule 2), all rights, claims and demands in any way relating to any such copyrights or works, including royalties and rights to sue for past, present or future infringement, and all rights of renewal and extension of copyright; (ii) all state (including common law), federal and foreign trademarks, service marks and trade names, and applications for registration of such trademarks, service marks and trade names, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses (including such marks, names, applications and licenses as described in Schedule 2), whether registered or unregistered and wherever registered, all rights to sue for past, present or future infringement or unconsented use thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and renewals thereof; (iii) all trade secrets, trade dress, trade styles, logos, other source of business identifiers, mask-works, mask-work registrations, mask-work applications, software (including all Material Arbitron Software and all Material Software Additions), confidential information, customer lists, license rights, advertising materials, operating manuals, methods, processes, know-how, algorithms, formulae, databases (including all Arbitron Databases), quality control procedures, product, service and technical specifications, operating, production and quality control manuals, sales literature, drawings, specifications, blue prints, descriptions, inventions, name plates and catalogs; and (iv) the entire goodwill of or associated with the businesses now or hereafter conducted by Grantor connected with and symbolized by any of the aforementioned properties and assets; and (v) all intellectual property rights and property of the Grantor now existing or hereafter arising, covered by any Supplemental IP Security Agreement executed by Grantor from time to time in accordance with Section 3(c). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the "Lenders" (as defined therein). 209 "Inventory" means any and all of Grantor's inventory in all of its forms, wherever located, whether now owned or hereafter acquired, and in any event includes all goods (including goods in transit) which are held for sale, lease or other disposition, including those held for display or demonstration or out on lease or consignment or to be furnished under a contract of service, or which are raw materials, work in process, finished goods or materials used or consumed in Grantor's business, and the resulting product or mass, and all repossessed, returned, rejected, reclaimed and replevied goods, together with all parts, components, supplies packing, and other materials used or usable in connection with the manufacture, production, packing, shipping, advertising, selling or furnishing of such goods; and all other items hereafter acquired by Grantor by way of substitution, replacement, return, repossession or otherwise, and all additions and accessions thereto, and any Document representing or relating to any of the foregoing at any time. "Investment Property" means any and all investment property of Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, and whether now existing or hereafter acquired or arising. "Letter of Credit Proceeds" means any and all proceeds of written letters of credit. "Material Arbitron Software" means all computer operation and application programs of Grantor listed on Schedule 2. "Material Software Addition" means any update, release, version, patch, debugging program, compilation, or beta in respect of Material Arbitron Software, and any and all computer operation and application programs, including all object and source code and all copies and encodings thereof, purchased, created or otherwise acquired by Grantor after the Closing Date. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Note Party under any Note Holder Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. 210 "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company, the Note Holders party thereto. "Partnership Collateral" means any and all limited and general partnership interests and limited liability company interests of any type or nature, whether now existing or hereafter acquired or arising. "Patent and Trademark Office" means the United States Patent and Trademark Office. "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Collateral or other assets of Grantor, including "proceeds" as defined at UCC Section 9306, any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Grantor from time to time with respect to any of the Collateral, any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), any and all other amounts from time to time paid or payable under or in connection with any of the Collateral or for or on account of any damage or injury to or conversion of any Collateral by any Person, any and all other tangible or intangible property received upon the sale or disposition of Collateral, and all proceeds of proceeds. "Rights to Payment" means all Accounts and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Instruments, Investment Property and Proceeds. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent, any of the Credit Agents and any Debt Participant whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or hereafter created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any obligations under any of the Swap Documents. "Software Copyright Filing" has the meaning set forth in Section 5(q)(v)(B). "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Company and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Company and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Supplemental IP Security Agreement" means a Supplemental IP Security Agreement substantially in the form of Exhibit I of the Credit Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit Agreement, and the terms and conditions of which may derive from, and be incorporated by reference to, this Agreement. 211 "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Note Party under any Swap Document, (c) any documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. "UCC Financing Statements" has the meaning specified in Section 4(f). (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Agents, and each of them), and hereby grants to the Collateral Agent (for the benefit of the Credit Agents, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the following property, wherever located and whether now existing or owned or hereafter acquired or arising (collectively, the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; 212 (iii) all Deposit Accounts; (iv) all Documents; (v) all Equipment; (vi) all General Intangibles; (vii) all Inventory; (viii) all Books; (ix) all products and Proceeds of any and all of the foregoing; and (x) all Letter of Credit Proceeds. Notwithstanding the foregoing provisions of this Section 2(a), such grant of security interest shall not extend to, and the term "Collateral" shall not include, Intellectual Property which is now or hereafter held by Grantor as licensee, lessee or otherwise, to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. (b) Grantor Remains Liable. Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of the rights hereunder shall not release Grantor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall any such Person be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder. (c) Continuing Security Interest. Grantor agrees that this Agreement shall create continuing security interests in the Collateral which shall remain in effect until terminated in accordance with Section 23. SECTION 3 Perfection Procedures. Grantor shall duly complete, execute and deliver to the Collateral Agent and each of the Credit Agents concurrently with the execution of this Agreement, and at any time and from time to time, all Supplemental IP Security Agreements, financing statements, continuation statements, termination statements, security agreements, chattel mortgages, assignments, patent, copyright and trademark collateral assignments, fixture filings, warehouse receipts, Account Control Agreements, documents of title, affidavits, reports, notices, schedules of account, letters of authority and all other documents and instruments, in form satisfactory to the Administrative Agent, and take all other action, as the Collateral Agent may request, to perfect and continue perfected, maintain the priority of or provide notice of the 213 Collateral Agent's security interest in the Collateral for the benefit of each of the Credit Agents and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Grantor shall from time to time take the following actions: (a) Filing of Security Agreements; Financing Statements. On or prior to the Closing Date Grantor shall execute, notarize and deliver (i) an original of this Agreement; (ii) such original UCC Financing Statements and (iii) such original Supplemental IP Security Agreements as the Collateral Agent at the instruction of the Instructing Group may reasonably request; all duly completed and in final form for recordation at the offices described in Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor shall execute, notarize and deliver completed UCC Financing Statements for filing or recording in the appropriate filing or recording office or offices in any state identified by a Grantor in a notice delivered to the Administrative Agent pursuant Section 5(e). (b) Deposit Accounts. On or prior to the Closing Date, Grantor shall execute such Account Control Agreements, notices, and shall take such other action, as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interests in Collateral for the benefit of each of the Credit Agents consisting of Deposit Accounts and to accomplish the purposes of this Agreement. (c) Intellectual Property Collateral. (i) Patents, Etc. Promptly following any submission, filing or recordation required pursuant to subsection (iv) of Section 5(q) (except as provided in subsection (c)(ii) with respect to certain copyrights), record such duly completed, signed and notarized Supplemental IP Security Agreement with the Patent and Trademark Office or Copyright Office, as applicable, and take such other action as may be necessary, or as the Collateral Agent at the instruction of the Instructing Group may reasonably request, to perfect or protect the Collateral Agent's security interests in such Intellectual Property for the benefit of each of the Credit Agents. Grantor shall promptly, but in any event not later than ten days after any such recordation, deliver to the Collateral Agent and each Credit Agent true and complete copies of all file-stamped applications, disclosure documents and amendments, and all file-stamped Supplemental IP Security Agreements recorded at the Patent and Trademark Office. (ii) Copyrights. Grantor shall: (A) Promptly following any submission, filing or recordation required pursuant to subsection (v) of Section 5(q), duly complete, execute, notarize and record a Supplemental IP Security Agreement at the Copyright Office and take such other actions as may be necessary or appropriate in the discretion of the Collateral Agent at the instruction of the Instructing Group to perfect or protect the Collateral Agent's security interests in (I) all Database Copyright Filings for such quarter, and (II) all Software Copyright Filings made since the most recently filed Supplemental IP Security Agreement; and 214 (B) take such other action as may be necessary, or as the Collateral Agent may reasonably request, to perfect or protect the Collateral Agent's security interests in the Intellectual Property for the benefit of the Credit Agents. (iii) The Grantor hereby authorizes the Collateral Agent to modify, amend or supplement the Schedules hereto and to reexecute this Agreement and any Supplemental IP Security Agreement from time to time on the Grantor's behalf and as its attorney-in-fact to include any such future Collateral and to cause to such reexecuted Agreement, Supplemental IP Security Agreement or such modified, amended or supplemented Schedules to be filed with the Copyright Office or the Patent and Trademark Office. (d) Documents, Etc. Within five calendar days after receipt, Grant shall deliver to the Collateral Agent, or an agent designated by it, for the benefit of the Credit Agents, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Documents and Chattel Paper, and all other Rights to Payment at any time evidenced by promissory notes, trade acceptances or other instruments, not already delivered hereunder pursuant to this Section 3; provided, however, that unless an Event of Default shall have occurred and be continuing, Grantor shall not be required to deliver any Document, Chattel Paper, promissory note, trade acceptance or other instrument having a face amount not in excess of $100,000. Upon the request of the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with such legends as the Collateral Agent shall reasonably specify. SECTION 4 Representations and Warranties. In addition to the representations and warranties of the Grantor set forth in the Credit Agreement, which are incorporated and restated herein by this reference, and which are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, Grantor further represents and warrants to each Credit Party that: (a) Location of Chief Executive Office and Collateral. Grantor's chief executive office and principal place of business is located at the address set forth in Schedule 1, and all other locations where Grantor conducts business or Collateral is kept are set forth in Schedule 1. (b) Locations of Books. All locations where Books pertaining to the Rights to Payment are kept, including all equipment necessary for accessing such Books and the names and addresses of all service bureaus, computer or data processing companies and other Persons keeping any Books or collecting Rights to Payment for Grantor, are set forth in Schedule 1. (c) Trade Names and Trade Styles. All trade names and trade styles under which Grantor presently conducts the Arbitron Business operations are set forth in Schedule 1, and, except as set forth in Schedule 1 and in connection with the Transaction, Grantor has not, at any time in the past year: (i) been known as or used any other corporate, trade or fictitious name; (ii) changed its name; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv) acquired through asset purchase or otherwise any business of any Person. (d) Ownership of Collateral. Grantor is, and, subject to Section 5(i), will continue to be, the sole and complete owner of the Collateral, or has a valid and enforceable leasehold or 215 licensee's interest in such Collateral as set forth in Schedule 2 and in accordance with subsection (i) of this Section 4 (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in such Collateral, will be the sole and complete owner thereof, or will have a valid and enforceable leasehold or licensee's interest in such Collateral, to the extent permitted hereunder or under the Credit Agreement), free from any Lien other than Permitted Liens. (e) Enforceability; Priority of Security Interest. (i) This Agreement together with such Supplemental IP Security Agreements as have been executed by Grantor and filed at the Copyright Office or the Patent and Trademark Office in respect of the Intellectual Property create security interests which are enforceable against the Collateral in which Grantor now has rights and will create security interests which are enforceable against the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights. (ii) The Collateral Agent has a perfected and first priority security interest in the Collateral in which Grantor now has rights, and will have a perfected and first priority security interest in the Collateral in which Grantor now has rights and will create a security interest in any Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights, in each case for the Credit Agents' benefit and, subject only to Permitted Liens, securing the payment and performance of the Secured Obligations. (f) Other Financing Statements. Other than (i) financing statements or similar filings naming the owner of the asset to which such Lien relates as debtor, under the UCC, copyright, patent, trademark or any comparable law ("UCC Financing Statements") disclosed to the Administrative Agent prior to the Effective Date and (i) UCC Financing Statements in favor of the Collateral Agent for itself and the Credit Agents pursuant to the Credit Documents, no effective UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like or covering all or any part of the Collateral is on file in any filing or recording office in any jurisdiction, except in connection with Permitted Liens. (g) Rights to Payment. (i) The Rights to Payment represent valid, binding and enforceable obligations of the account debtors or other Persons obligated thereon, representing undisputed, bona fide transactions completed in accordance with the terms and provisions contained in any documents related thereto, and are and will be genuine, free from Liens, and not subject to any adverse claims, counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages, holdbacks or conditions precedent of any kind of character, except to the extent reflected by the Grantor's reserves for uncollectible Rights to Payment or to the extent, if any, that such account debtors or other Persons may be entitled to normal and ordinary course trade discounts, returns, adjustments and allowances in accordance with Section 5(m), or as otherwise disclosed to the Credit Agents in writing or occurring in the ordinary course of business; (ii) to the best of Grantor's knowledge, all account debtors and other obligors on Rights to Payment are solvent and generally paying their debts as they come due, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; 216 (iii) all Rights to Payment comply in all material respects with all applicable laws concerning form, content and manner of preparation and execution, including where applicable any federal or state consumer credit laws; (iv) Grantor has not assigned any of its rights under the Rights to Payment except as provided in this Agreement or as set forth in the other Credit Documents; (v) all statements made, all unpaid balances and all other information in the Books and other documentation relating to the Rights to Payment in all material respects are true and correct and what they purport to be; and (vi) Grantor has not any knowledge of any fact or circumstance which would materially impair the validity or collectibility of any of such Rights to Payment, except to the extent that Grantor has established adequate reserves therefor in accordance with GAAP; (h) Inventory. No Inventory is stored with any bailee, warehouseman or similar Person or on any premises leased to Grantor, nor has any Inventory been consigned to Grantor or consigned by Grantor to any Person or is held by Grantor for any Person under any "bill and hold" or other arrangement, except at locations listed in Schedule 1. (i) Intellectual Property. (i) As of the Closing Date, except as set forth in Schedule 2, (A) Grantor (directly or through any Subsidiary) does not own, possess or use under any licensing arrangement (other than ordinary shrinkwrap licenses governing software products that Grantor purchased for use in the Ordinary Course of Business) Intellectual Property materially related to the Arbitron Business, and (B) Grantor (directly or through any Subsidiary) has no registrations or applications therefor pending before any Governmental Authority, that are or may be materially related to the Arbitron Business, for any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron Software, Material Software Additions or Arbitron Databases for which any such application was submitted after December 31, 1998, (III) copyrights in respect of "Radio Market Reports" of Grantor for which any such application was submitted after December 1, 2000, or (IV) any other copyrights for which such application was submitted after December 31, 1999. (ii) All Grantor's Intellectual Property is subsisting and has not been adjudged invalid or unenforceable in whole or in part. (iii) All maintenance fees required to be paid by Grantor on account of any of its patents have been timely paid for maintaining such patents in force, and, to the best of Grantor's knowledge, each of such patents is valid and enforceable. (iv) To the best of Grantor's knowledge, no infringement or unauthorized use presently is being made of any Intellectual Property by any Person that could reasonably be expected to have a Material Adverse Effect. (v) Grantor is the owner or licensee of its Intellectual Property and the past, present and contemplated future use of such Intellectual Property by Grantor has not, does not and will 217 not infringe or violate any right, privilege or license agreement of or with any other Person in any material respect. (vi) Grantor owns, licenses, has material rights under, is a party to, or an assignee of a party to all other Intellectual Property necessary and appropriate to continue to conduct the Arbitron Business. (vii) The Arbitron Databases are protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (viii) The Material Arbitron Software is protected under current, valid and enforceable copyright registrations (or applications therefor) at the Copyright Office and under the U.S. copyright laws. (ix) Grantor's Intellectual Property consisting of patents are protected under current, valid and enforceable patents or applications therefor issued by the Patent and Trademark Office and under the U.S. patent laws (except with respect to such patents that have expired of their own terms, and not as the result of any abandonment, dispute or settlement). (j) Equipment. As of the Closing Date, none of the Equipment is leased from any Person, except as set forth in UCC record searches delivered to the Collateral Agent or as otherwise disclosed to the Administrative Agent and the other Credit Agents. (k) Deposit Accounts. The names and addresses of all financial institutions at which Grantor maintains its Deposit Accounts, and the account numbers and account names of such Deposit Accounts, are set forth in Schedule 1. No Deposit Account Control Agreements exist with respect to any Investment Property other than any Deposit Account Control Agreements in favor of the Collateral Agent for the benefit of the Collateral Agent for the benefit of the Credit Agents. (l) Instruments. (i) Grantor has not previously assigned any interest in any Instruments (other than such interests as will be released on or before the date hereof), (ii) no Person other than Grantor owns an interest in the Instruments (whether as joint holders, participants or otherwise), (iii) all Instruments are owing only to Grantor, and (iv) no material default exists under or in respect of the Instruments. (m) Other Investment Property. All securities accounts of the Grantor and other Investment Property of the Grantor are set forth in Schedule 1. No Account Control Agreements exist with respect to any Investment Property other than any Account Control Agreements in favor of the Collateral Agent for the benefit of the Credit Agents. SECTION 5 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied, Grantor agrees that: 218 (a) Defense of Collateral. Grantor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or the Collateral Agent's right or interest in, the Collateral. (b) Preservation of Collateral. Grantor shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral. (c) Compliance with Laws, Etc. Grantor shall comply in all material respects with all laws, regulations and ordinances (including with respect to the Fair Labor Standards Act), and with all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral. (d) Location of Books and Chief Executive Office. Grantor shall: (i) keep all Books pertaining to the Rights to Payment at the locations set forth in Schedule 1; and (ii) give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (A) any changes in any such location where Books pertaining to the Rights to Payment are kept, including any change of name or address of any service bureau, computer or data processing company or other Person preparing or maintaining any Books or collecting Rights to Payment for Grantor or (B) any changes in the location of Grantor's chief executive office or principal place of business. (e) Location of Collateral. If any Collateral of Grantor shall be physically relocated to, or otherwise be physically located in, a state of the United States in which a financing statement has not already been filed with respect to such Collateral, Grantor shall give the Collateral Agent and each Credit Agent prompt notice thereof (and in any event not later than one Business Day after becoming aware thereof). (f) Change in Name, Identity or Structure. Grantor shall give at least 30 days' prior written notice to the Collateral Agent and each Credit Agent of (i) any change in its name, (ii) any change of its jurisdiction of incorporation or the location of its chief executive offices, (iii) any changes in, additions to or other modifications of its trade names used as the name of Grantor set forth in Schedule 1, and (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (g) Maintenance of Records. Grantor shall keep accurate and complete Books with respect to the Collateral, disclosing the Collateral Agent's security interests hereunder for the benefit of the Credit Agents. (h) Invoicing of Sales. The Grantor will invoice all of its sales upon forms customary in the industry and to maintain proof of delivery and customer acceptance of goods. (i) Disposition of Collateral. Grantor shall not surrender or lose possession of (other than to a Credit Agent), sell, lease, rent, or otherwise dispose of or transfer any of the Collateral or any right or interest therein, except to the extent expressly permitted by the Credit Documents. (j) Liens. (i) Grantor shall keep the Collateral free of all Liens except Permitted Liens. 219 (ii) Notwithstanding any other provision contained herein or in the Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a transfer of goods free of the Collateral Agent's security interests under Section 9307 UCC, except that Dispositions expressly permitted by Sections 7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j) thereof shall be free of such security interests. Accordingly, all non-excluded Dispositions shall be subject at all times to the Liens of the Collateral Agent for the benefit of the Credit Agents. (k) Expenses. The Grantor will pay all expenses of protecting, storing, warehousing, insuring, handling and shipping the Collateral. (l) Leased Premises. At the Collateral Agent's request, Grantor shall obtain from each Person from whom Grantor leases any premises at which any Collateral is at any time present such subordination, waiver, consent and estoppel agreements as the Collateral Agent may reasonably require, in form and substance satisfactory to the Collateral Agent. (m) Rights to Payment. Grantor shall: (i) with such frequency as the Collateral Agent for the benefit of the Credit Agents may reasonably require, furnish to the Collateral Agent and each Credit Agent (A) master customer listings, including all names and addresses, together with copies or originals (as requested by the Collateral Agent or any Credit Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts; (B) accurate records and summaries of Accounts, including detailed agings specifying the name, face value and date of each invoice, and listings of Accounts that are disputed or have been cancelled; and (C) such other information relating to the Accounts as any of the Credit Agents shall from time to time reasonably request; (ii) give only normal discounts, allowances and credits as to Accounts and other Rights to Payment, in the Ordinary Course of Business, according to normal trade practices, and enforce all Accounts and other Rights to Payment strictly in accordance with their terms or pursuant to Grantor's Ordinary Course of Business, and during the existence of an Event of Default, take all such action to such end as may from time to time be reasonably requested by Collateral Agent, except that Grantor may at any time grant any extension of the time for payment or enter into any agreement to make a rebate or otherwise to reduce the amount owing on or with respect to, or compromise or settle for less than the full amount thereof, any Account or other Right to Payment, in the Ordinary Course of Business, according to normal trade practices; (iii) if any discount, allowance, credit, extension of time for payment, agreement to make a rebate or otherwise to reduce the amount owing on, or compromise or settle, an Account or other Right to Payment exists or occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to an Account or other Right to Payment, disclose such fact to the Collateral Agent and the Credit Parties in the Books relating to such Account or other Right to Payment when such Books are requested for inspection by the Collateral Agent, and in connection with any invoice or report furnished by Grantor to the Collateral Agent relating to such Account or other Right to Payment; 220 (iv) if Accounts in an amount in excess of $500,000 for any and all such Accounts arise from contracts with the United States or any department, agency or instrumentality thereof, promptly notify the Collateral Agent and the Credit Parties thereof and execute any documents and instruments and take any other steps reasonably requested by the Collateral Agent in order that all monies due and to become due thereunder shall be assigned to the Collateral Agent and notice thereof given to the federal authorities under the Federal Assignment of Claims Act (provided that such assignment and notice shall not be required if the applicable contract prohibits assignment); (v) in accordance with its sound business judgment perform and comply in all material respects with its obligations in respect of the Accounts and other Rights to Payment; (vi) subject to Section 7, upon the request of the Collateral Agent (A) at any time, notify all or any designated portion of the account debtors and other obligors on the Rights to Payment of the security interests hereunder, and (B) if there exists any Default or Event of Default, notify the account debtors and other obligors on the Rights to Payment or any designated portion thereof that payment shall be made directly to the Collateral Agent or to such other Person or location as the Collateral Agent shall specify; and (vii) if there exists any Default or Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts and other Rights to Payment as the Collateral Agent (upon instruction of the Instructing Group) shall require. (n) Deposit Accounts and Securities Accounts. Grantor shall give the Collateral Agent and the Credit Parties immediate notice of the establishment of any new Deposit Account and any new securities account with respect to any Investment Property. (o) Inventory. Grantor shall: (i) at such times as the Collateral Agent or any Credit Agent shall reasonably request, prepare and deliver to the Collateral Agent and each Credit Agent a report of all Inventory, in form and substance reasonably satisfactory to the Collateral Agent and each Credit Agent; (ii) upon the request of the Collateral Agent or any Credit Agent, take a physical listing of the Inventory and promptly deliver a copy of such physical listing to the Collateral Agent and each Credit Agent; and (iii) not store any Inventory with a bailee, warehouseman or similar Person or on premises leased to Grantor, nor dispose of any Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment or similar basis, nor acquire any Inventory from any Person on any such basis, except in the ordinary course of business and in accordance with its normal practices. (p) Equipment. Grantor shall, upon the Collateral Agent or any Credit Agent request, deliver to the Collateral Agent and each Credit Agent a report of each item of Equipment, in form and substance reasonably satisfactory to the Collateral Agent and each Credit Agent. (q) Intellectual Property Collateral. Grantor shall: 221 (i) not allow or suffer any Intellectual Property to become abandoned, nor any registration thereof to be terminated, forfeited, expired or dedicated to the public, except for Intellectual Property having negligible commercial value; (ii) not enter into any agreements or transactions (including any license, sublicense or royalty agreement) pertaining to any Intellectual Property outside of the ordinary course of business, or enter into any exclusive license or sublicense of any Intellectual Property, except in a transaction permitted under the Credit Documents; (iii) promptly give the Collateral Agent and each Credit Agent notice of any rights Grantor may obtain to any new patentable inventions, copyrightable works or other new Intellectual Property, prior to the registration or recordation thereof (including pursuant to this Section 5(q)) as to which Grantor (a) has received gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during any of the five fiscal years preceding such time or (b) reasonably projects that it will receive gross royalty or license payments from any and all third parties in an aggregate amount excess of $1,000,000 during the any of the subsequent five fiscal years; provided that Grantor shall have no obligation to provide notice under this subsection (iii) to the extent that Grantor has satisfied, or within the immediately following three calendar months will satisfy, subsection (iv) or (v), as applicable, of this Section 5(q); (iv) not less frequently than once every three calendar months and, additionally, upon the purchase, creation or other acquisition of any Material Software Addition, diligently record, register or prosecute, as applicable, all applications for patents, copyrights and trademarks, and diligently record, register and prosecute, as applicable, any and all continuations, continuations-in-part, applications for reissue, applications for certificate of correction and like matters in respect of Grantor's Intellectual Property as shall be reasonable and appropriate in accordance with prudent business practice, and promptly and timely pay any and all maintenance, license, registration and other fees, taxes and expenses incurred in connection with any Intellectual Property; and, without limiting the generality of the foregoing, (v) (A) not less frequently than once every three calendar months, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws any and all additions, modifications or other changes to the Arbitron Databases (each, a "Database Copyright Filing") since the Closing Date; and (B) not less frequently than once every three calendar months and, additionally, promptly after any purchase, creation or other acquisition of any Material Software Addition, submit such duly completed, signed and notarized copyright registration forms to the Copyright Office and take such other actions as necessary to register under the U.S. copyright laws each Material Software Addition (each, a "Software Copyright Filing"); (vi) not less frequently than once every three calendar months, and promptly but in any event not later than ten days after any and all recordations described in subsections (iv) and (v) of this Section 5(q), and after any and all recordations described in Section 3(c), deliver to the Collateral Agent and each Credit Agent all such duly completed, file-stamped (other otherwise certificated or acknowledged) and recorded documents together with such other documents and information as the Collateral Agent or any Credit Agent may reasonably request. 222 (r) Notices, Reports and Information. Subject to Section 3(c), Grantor shall (i) notify the Collateral Agent and each Credit Agent of any material claim made or asserted against the Collateral by any Person and of any change in the composition of the Collateral or other event which could materially adversely affect the value of the Collateral or the Lien thereon in favor of the Collateral Agent (for the benefit of the Credit Agents); (ii) furnish to the Collateral Agent and each Credit Agent such statements and schedules further identifying and describing the Collateral and such other reports and other information in connection with the Collateral as the Collateral Agent at the instruction of the Instructing Group may reasonably request, all in reasonable detail; and (iii) upon reasonable request of the Collateral Agent of any Credit Agent make such demands and requests for information and reports as Grantor is entitled to make in respect of the Collateral. (s) Insurance. (i) Grantor shall carry and maintain in full force and effect, at the expense of the Grantor and with financially sound and reputable insurance companies, insurance for itself and the Collateral Agent for the benefit of the Credit Agents, with respect to the Collateral in such amounts, with such deductibles and covering such risks as shall be specified in the Credit Agreement. Upon the request of any of the Credit Agents, and in any event not less often than annually, Grantor shall furnish the Collateral Agent and each Credit Agent with full information as to the insurance carried by it and, if so requested, copies of all such insurance policies. All insurance policies required under this subsection (s) shall provide that they shall not be terminated or cancelled nor shall any such policy be materially changed without at least 30 days' prior written notice to the Grantor and the Collateral Agent (or 10 days' prior written notice if the Collateral Agent consents to such shorter notice). Receipt of notice of termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder shall entitle the Collateral Agent to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to the first sentence of this subsection (s) or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Grantor. (ii) If Collateral of Grantor with a value exceeding $1,000,000 (the "Settlement Consent Threshold") shall be materially damaged or destroyed, in whole or in part, by fire or other casualty, Grantor shall give prompt notice thereof to the Collateral Agent and each Credit Agent. No settlement on account of any loss on any Collateral covered by insurance shall be made for less than insured value without the consent of the Collateral Agent (with the consent of the Instructing Group), unless, so long as there exists no Default or Event of Default, the total value of each such loss or series of related losses so compromised does not exceed the Settlement Consent Threshold. Unless there exists any Default or Event of Default, the Collateral Agent (upon instruction of the Instructing Group) shall promptly execute such necessary consents, waivers and endorsements to permit Grantor to settle losses the total aggregate value of which is in an amount less than the Settlement Consent Threshold, and to receive payment therefor, as reasonably requested by Grantor. After the occurrence and during the continuance of an Event of Default, or as otherwise required under any of the Credit Documents, all sums payable to Grantor by any insurer with respect to a casualty relating to all or any part of the Collateral shall be paid to the Collateral Agent (upon instruction of the Instructing Group). If Grantor shall receive any insurance proceeds which are to be paid to the Collateral Agent pursuant to the previous sentence, Grantor shall hold such proceeds in trust for the Collateral Agent and shall segregate such proceeds from other funds of Grantor, and shall immediately forward such 223 proceeds in the form received to the Collateral Agent (appropriately indorsed by Grantor to the order of the Collateral Agent or in such other manner as shall be satisfactory to the Collateral Agent, upon instruction of the Instructing Group). All such insurance proceeds may be retained by the Collateral Agent as part of Collateral hereunder and held in the Proceeds Account, applied by the Collateral Agent toward payment of all or part of the Secured Obligations in such order as is provided herein, or released to Grantor upon its request with the consent of the Instructing Group. SECTION 6 Administration of the Rights to Payment. (a) Collection of Rights to Payment. Until the Collateral Agent exercises its rights hereunder to collect Rights to Payment, Grantor shall endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the Rights to Payment. At the request of the Collateral Agent, if there exists at such time any Event of Default, all remittances received by Grantor shall be held in trust for the Collateral Agent and, in accordance with the Collateral Agent's instructions (upon instruction from the Instructing Group), remitted to the Collateral Agent or deposited in an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). (b) Investment Property and Instruments. At the request of the Collateral Agent (at the request of the Instructing Group), if there exists at such time any Event of Default, the Collateral Agent shall be entitled, subject to the Intercreditor Agreement, to receive all distributions and payments of any nature with respect to any Investment Property or Instruments, and all such distributions or payments received by Grantor shall be held in trust for the Collateral Agent and, in accordance with its instructions (with the consent of the Instructing Group), remitted to the Collateral Agent or deposited to an account with the Collateral Agent in the form received (with any necessary endorsements or instruments of assignment or transfer). If there exists any Default or Event of Default any such distributions and payments with respect to any Investment Property held in any securities account shall be held and retained in such securities account, in each case as part of the Collateral hereunder. Additionally, the Collateral Agent shall have the right, if there exists any Default or Event of Default, following prior written notice to Grantor, to vote and to give consents, ratifications and waivers with respect to any Investment Property and Instruments, and to exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining thereto, as if the Collateral Agent were the absolute owner thereof; provided that the Collateral Agent shall have no duty to exercise any of the foregoing rights afforded to it and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. (e) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of this Section 6 shall be held in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. SECTION 7 Authorization; Appointed Attorney-in-Fact. The Collateral Agent shall have the right to, in the name of Grantor, or in the name of the any of the Credit Parties or otherwise, without notice to or assent by Grantor, and Grantor hereby constitutes and appoints 224 the Collateral Agent (and any of the officers or employees or agents designated by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with full power and authority to: (i) sign any of the financing statements and Supplemental IP Security Agreements which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of the security interests and in the Collateral of the Collateral Agent (for the benefit of the Credit Agents) and file any such financing statements and Supplemental IP Security Agreements by electronic means with or without a signature as authorized or required by applicable law or filing procedures; (ii) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds of any Collateral; (iii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors; (iv) notify the U.S. Postal Service and other postal authorities to change the address for delivery of mail addressed to Grantor to such address the Collateral Agent may designate (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment; (v) receive, open and dispose of all mail addressed to Grantor (provided that the Collateral Agent agrees it will promptly deliver over to Grantor any mail that does not relate to the Collateral); (vi) send requests for verification of Rights to Payment to the customers or other obligors of Grantor; (vii) contact, or direct Grantor to contact, all account debtors and other obligors on the Rights to Payment and instruct such account debtors and other obligors to make all payments directly to the Collateral Agent; (viii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (ix) exercise dominion and control over, and refuse to permit further withdrawals from, Deposit Accounts maintained with Bank of America or any other bank, financial institution or other Person; (x) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Collateral Agent; (xi) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the 225 agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Collateral Agent with respect to the Collateral; (xii) execute any and all applications, documents, papers and instruments necessary for the Collateral Agent to use the Intellectual Property and grant or issue any exclusive or non-exclusive license or sublicense with respect to any Intellectual Property; (xiii) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; (xiv) execute and deliver to any securities intermediary or other Person any entitlement order, Account Control Agreement or other notice, document or instrument which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Investment Property and the security interests of the Collateral Agent therein; and (xv) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Grantor, which the Collateral Agent (upon instruction from the Instructing Group) may deem necessary or advisable (A) to realize upon the Collateral, and (B) to maintain, protect and preserve the Collateral and the security interests of the Collateral Agent therein and to accomplish the purposes of this Agreement. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to clauses (ii) through (xiii), (xiv)(A) and (xv)(A). The foregoing power of attorney is coupled with an interest and irrevocable so long as any of the Secured Obligations has not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, any and all acts that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 7. SECTION 8 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which Grantor has agreed to perform or pay under or in connection with this Agreement, and which Grantor has failed to perform or pay as and when due, and Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 8. SECTION 9 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys 226 actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. SECTION 10 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this Agreement, the Credit Agreement or any other Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, Grantor agrees that: (i) The Collateral Agent may peaceably and without notice enter any premises of Grantor, take possession of any Collateral, remove, prohibit access to or use of, or dispose of all or part of the Collateral on any premises of Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Collateral Agent (upon instruction of the Instructing Group) may determine. (ii) The Collateral Agent may require Grantor to assemble all or any part of the Collateral and make it available to the Collateral Agent, at any place and time designated by the Collateral Agent. (iii) The Collateral Agent may use or transfer any of Grantor's rights and interests in any Intellectual Property, by license, by sublicense (to the extent permitted by an applicable license) or otherwise, on such conditions and in such manner as the Collateral Agent (upon instruction of the Instructing Group) may determine. (iv) The Collateral Agent may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law). (v) The Collateral Agent may withdraw (or cause to be withdrawn) any and all funds from any Deposit Accounts or securities accounts. (vi) The Collateral Agent may sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Grantor's assets, without charge or liability to the Collateral Agent or any of the Credit Parties therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit or for future delivery without assumption of any credit risk, all as the Collateral Agent (upon instruction of the Instructing Group) deem advisable; provided, however, that Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Collateral Agent shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which 227 such sale or other disposition may occur, provided that the Collateral Agent may provide Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. (b) License. For the purpose of enabling the Collateral Agent to exercise its rights and remedies under this Section 10 or otherwise in connection with this Agreement, Grantor hereby grants to the Collateral Agent for the benefit of the Credit Agents an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense any Intellectual Property. (c) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated at such time as there may exist an Event of Default (including with respect to undrawn amounts under any Letter of Credit or contingent amounts due under any Specified Swap Agreement arising from any Specified Swap Contract), the Collateral Agent for the benefit of the Credit Agents may, at their election, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for the benefit of the Credit Agents for such purpose (which shall constitute a Deposit Account included within the Collateral hereunder) until such time as the Collateral Agent may elect to apply such proceeds to the Secured Obligations, and Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives until the termination of the security interests granted under this Agreement in accordance with Section 23 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent, or any of the Credit Parties to honor drafts against the Proceeds Account. (d) Application of Proceeds. Subject to subsection (c), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 11 Certain Waivers. Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent, or any of the Credit Parties (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the 228 Secured Obligations, (C) to pursue any remedy, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands against the Collateral Agent, or any of the Credit Parties arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral. SECTION 12 Notices. All notices or other communications hereunder shall be given in the manner and to the addresses specified in, and shall be effective as provided in, the Credit Agreement; provided, however, that notices hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender or such replacement Swap Provider as may be appointed from time to time pursuant to the terms of the Intercreditor Agreement, and (b) the Note Holders shall be delivered to such persons at the address specified in the Note Purchase Agreement, or to such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement. SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent, or any of the Credit Parties to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent, or any of the Credit Parties. SECTION 14 Indemnification; Other Charges. (a) Indemnification. The Grantor hereby agrees to indemnify the Collateral Agent and the Credit Parties, and their respective directors, officers, employees, agents, counsel and other advisors (each an "Indemnified Person") against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any Indemnified Person, in any way relating to or arising out of this Agreement or the transactions contemplated hereby or any action taken or omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not be liable to any Indemnified Person with respect to Indemnified Liabilities resulting from such Indemnified Person's gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (b) Other Charges. The Grantor agrees to indemnify the Collateral Agent and the Credit Parties against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. 229 (c) Interest. Any amounts payable to any Indemnified Person under this Section 14 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate, (a) for the Administrative Agent and any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for the Note Holders as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 15 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Grantor, each of the Credit Parties, the Collateral Agent, each Indemnified Person referred to in Section 14 and their respective successors and assigns. SECTION 16 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A 230 JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 18 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent (for the benefit of the Credit Agents), and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 19, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 19 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 20 Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Each of the parties hereto understands and agrees that this Agreement may be delivered by any party hereto or thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Collateral Agent or any Credit Agent of a facsimile transmitted document purportedly bearing the signature of a Grantor shall bind Grantor with the same force and effect as the delivery of a hard copy original. Any failure by the Collateral Agent or any Credit Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Collateral Agent or such Credit Party. SECTION 21 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Credit Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. 231 SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this Agreement and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 23 Termination; Releases. (i) Upon the termination of the Commitments of the Lenders, the surrender of any Letters of Credit issued for the account of Company under the Credit Agreement and payment and performance in full of all Secured Obligations, the security interests granted under this Agreement shall terminate and the Collateral Agent and all Credit Agents shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence termination of all security interests given by Grantor to the Collateral Agent hereunder; provided, however, that the obligations of Grantor under Section 14 shall survive such termination. (ii) Concurrently with any permitted disposition of Collateral under the Credit Documents, the security interests hereunder shall automatically be released from the Collateral so disposed of, subject to Section 5(j); provided, however, that the security interests shall continue in the Proceeds thereof. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent and all Credit Agents shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Collateral provided by this Section. Any such release shall specifically describe the portion of the Collateral to be released, shall be expressed to be unconditional and shall be without recourse or warranty (other than a warranty that the Collateral Agent and the Credit Agents have not assigned their rights and interests to any other Person). SECTION 24 Assumption. Upon execution and delivery to the Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the effective date of such Subsidiary Security Agreement, such Guarantor shall be deemed a Grantor party hereto, and this Agreement shall be deemed amended to include any amendments to the Schedules provided by such Subsidiary in connection therewith. SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] 232 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. [_________________] CORPORATION Grantor By: -------------------------------- Name: Title: BANK OF AMERICA, N.A., as Collateral Agent ` By: -------------------------------- Name: Title: 233 SCHEDULE 1 to the Security Agreement 1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF COLLATERAL a. Chief Executive Office and Principal Place of Business: Other locations where Grantor conducts business or Collateral is kept: 2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT 3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES; ETC. 4. DEPOSIT ACCOUNTS 234 5. INVESTMENT PROPERTY 6. INSTRUMENTS 7. LEASED EQUIPMENT 235 SCHEDULE 2 to the Security Agreement (A) ISSUED PATENTS OF GRANTOR Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- ----- (B) PENDING PATENT APPLICATIONS OF GRANTOR Grantor Application No. Filing Date Inventors Title - ------- --------------- ----------- --------- ----- (C) TRADEMARKS OF GRANTOR Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ---- (D) PENDING TRADEMARK APPLICATIONS OF GRANTOR Application Grantor No. Filing Date Applicant Mark ------- --- ----------- --------- ---- (E) COPYRIGHTS OF GRANTOR Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- ------------- 236 (F) COPYRIGHT APPLICATIONS OF GRANTOR Grantor Title Date of Application ------- ----- ------------------- (G) COPYRIGHT LICENSES OF GRANTOR Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- ------------- 237 SCHEDULE 3 to the Security Agreement FILING OFFICES 238 EXHIBIT H SUPPLEMENTAL IP SECURITY AGREEMENT THIS SUPPLEMENTAL IP SECURITY AGREEMENT (this "Agreement"), dated as of _________ __, 2001, is made by and among [____________________], a [________] corporation (the "Grantor") in favor of BANK OF AMERICA, N.A., as the Collateral Agent for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such capacity, the "Administrative Agent") for itself and the financial institutions (the "Lenders" and, individually, a "Lender") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"); (b) the "Swap Provider" (as defined in the Security Agreement); and (c) the Note Holders party from time to time to the Note Purchase Agreement. RECITALS WHEREAS, it is a covenant the satisfaction of which permits borrowings under the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and grant to the Collateral Agent for the benefit of the Credit Parties the security interests hereinafter provided to secure the obligations of the Grantor described below. WHEREAS, the Grantor is party to that Security Agreement dated as of February __, 2001 by and among Grantor[, other Subsidiaries of the Company party thereto] and the Collateral Agent for the benefit of the Credit Parties (the "Security Agreement"). NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in subsections (a), (b) and (c) of Section 1 of the Security Agreement. The rules of interpretation set forth in subsection (d) of Section 1 of the Security Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Grant of Security Interest. (a) As a continuing security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent (for the benefit of the Credit Parties, and each of them), and hereby grants to the Collateral Agent (for the benefit of the Credit Parties, and each of them), a security interest in all of Grantor's right, title and interest in, to and under the Intellectual Property, wherever located and whether now existing or owned or hereafter acquired or arising, including without limitation such Intellectual Property described and set forth on Schedule 1 hereto. (b) Notwithstanding the foregoing provisions of this Section 2, the grant of a security interest as provided herein shall not extend to, and the term "Intellectual Property" shall not include, Intellectual Property which is now or hereafter held by Grantor as licensee, lessee or otherwise to the extent such Intellectual Property consists of: (i) ordinary shrinkwrap licenses 239 governing software products that Grantor purchased in the Ordinary Course of Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement. SECTION 3 Further Assurances; Appointment of Collateral Agent as Attorney-in-Fact. The Grantor at its expense shall execute and deliver, or cause to be executed and delivered, to the Collateral Agent any and all documents and instruments, in form and substance satisfactory to the Collateral Agent (upon instruction of the Instructing Group), and take any and all action, which the Collateral Agent (upon instruction of the Instructing Group) may request from time to time, to perfect and continue perfected, maintain the priority of or provide notice of the security interest of the Collateral Agent in the Intellectual Property Collateral and to accomplish the purposes of this Agreement. The Collateral Agent shall have the right, in the name of the Grantor, or in the name of the Collateral Agent or any of the Credit Parties or otherwise, upon notice to but without the requirement of assent by the Grantor, and the Grantor hereby constitutes and appoints the Collateral Agent (and any of the Collateral Agent's officers or employees or agents designated by the Collateral Agent) as the Grantor's true and lawful attorney-in-fact with full power and authority, to: (i) sign any financing statements and any other documents and instruments which the Collateral Agent (upon instruction of the Instructing Group) deems necessary or advisable to perfect or continue perfected, maintain the priority of or provide notice of the Collateral Agent's security interest in the Intellectual Property; (ii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; and (iii) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent (upon instruction of the Instructing Group) may deem necessary or advisable to maintain, protect, realize upon and preserve the Intellectual Property and the Collateral Agent's security interest therein and to accomplish the purposes of this Agreement, including (A) to defend, settle, adjust or institute any action, suit or proceeding with respect to the Intellectual Property, (B) to assert or retain any rights under any license agreement for any of the Intellectual Property, including without limitation any rights of the Grantor arising under Section 365(n) of the Bankruptcy Code, and (C) to execute any and all applications, documents, papers and instruments for the Collateral Agent to use the Intellectual Property, to grant or issue any exclusive or non-exclusive license or sub-license with respect to any Intellectual Property and to assign, convey or otherwise transfer title in or dispose of the Intellectual Property; provided, however, that the Collateral Agent agrees that, except upon and during the continuance of an Event of Default, it shall not exercise the power of attorney pursuant to clauses (ii) and (iii). The power of attorney set forth in this Section 3, being coupled with an interest, is irrevocable so long as this Agreement shall not have terminated. SECTION 4 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to such party and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of Collateral in the Collateral Agent's possession, and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. SECTION 5 Credit Parties' Rights and Remedies. 240 (a) Upon and during the continuation of a Default, the Collateral Agent shall have all rights and remedies available to it under this Agreement, the Security Agreement and applicable law with respect to the security interests in any of the Intellectual Property. Grantor agrees that such rights and remedies include, but are not limited to, the right of the Collateral Agent as a secured party to sell or otherwise dispose of the Intellectual Property pursuant to the UCC. (b) The cash proceeds actually received from the sale or other disposition or collection of Intellectual Property, and any other amounts received in respect of the Intellectual Property Collateral the application of which is not otherwise provided for herein, shall be applied as provided in the Security Agreement. SECTION 6 Security Agreement. This Agreement is supplementary to and entered into in support of the Security Agreement. The terms and provisions of the Security Agreement are incorporated herein by reference and shall be applied as if fully set forth herein. The Grantor acknowledges that the rights and remedies of the Collateral Agent with respect to the security interests in the Intellectual Property granted hereby are more fully set forth in the Security Agreement and that all such rights and remedies are cumulative. SECTION 7 Independence. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable Laws (including the UCC, patent law, trademark law and copyright law) and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction. SECTION 8 Representations and Warranties. The representations and warranties of the Grantor set forth in the Section 4 of the Security Agreement and incorporated herein by Section 6 hereof are true and correct as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct as of such earlier date. SECTION 9 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in San Francisco, California by their proper and duly authorized officers as of the day and year first above written. 241 CERIDIAN CORPORATION Grantor By: ----------------------------------- Name: Title: BANK OF AMERICA, N.A., as Administrative Agent By: ----------------------------------- Name: Title: 242 SCHEDULE 1 to the Supplemental IP Security Agreement (A) NEW ISSUED PATENTS OF GRANTOR Grantor Patent No. Issue Date Inventors Title Agent ------- ---------- ---------- --------- ----- ----- (B) PENDING PATENT APPLICATIONS OF GRANTOR Grantor Application No. Filing Date Inventors Title - ------- -------------- ----------- ---------- ----- (C) NEW U.S. TRADEMARKS OF GRANTOR Registration Registration Registered Grantor No. Date Filing Date Owner Mark ------- --- ---- ----------- ----- ---- (D) PENDING TRADEMARK APPLICATIONS OF GRANTOR Grantor Application No. Filing Date Applicant Mark ------- --------------- ----------- --------- ---- (E) NEW COPYRIGHTS OF GRANTOR Grantor Copyright Title Reg. No. Date of Issue ------- --------------- -------- ------------- 243 (F) NEW COPYRIGHT APPLICATIONS OF GRANTOR Grantor Title Application No. Date of Application ------- ----- --------------- ------------------- (G) NEW COPYRIGHT LICENSES OF GRANTOR Grantor Title Copyright Owner Reg. No. Date of Issue ------- ----- --------------- -------- ------------- 244 EXHIBIT I FORM OF COMPANY PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __, 2001, is made among CERIDIAN CORPORATION, a Delaware corporation (the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent for the benefit of: (a) BANK OF AMERICA, N.A., in its capacity as administrative agent (in such capacity, the "Administrative Agent") for the Lenders from time to time party to the Credit Agreement, dated as of January 31, 2001 (the "Credit Agreement"), (b) the "Swap Provider" (as defined herein), and (c) the Note Holders party from time to time to the Note Purchase Agreement. It is a condition precedent to the borrowings under each of the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and pledge to the Collateral Agent the shares of the capital stock of each of the Subsidiaries set forth in Schedule 1 (collectively, the "Subsidiaries"), owned by the Grantor, to secure the obligations of the Grantor described below. Accordingly, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. The rules of interpretation set forth in the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Additional Collateral" means any and all (i) additional capital stock or other equity securities of the Subsidiaries, whether certificated or uncertificated, (ii) warrants, options or other rights entitling the Grantor to acquire any interest in the capital stock or other equity securities of the Subsidiaries, (iii) securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, the Pledged Shares or such additional capital stock or other equity securities, and (iv) cash and non-cash proceeds of the Pledged Shares and any of the foregoing, in each case from time to time received or receivable by, or otherwise paid or distributed to or acquired by, the Grantor. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. 245 "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Documents" means, collectively, the Note Documents, the Note Holder Documents and the Swap Documents. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Exchange Act" means the Securities Exchange Act of 1934. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Intercreditor Agreement" means that Intercreditor Agreement dated as of January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders. "Investment Property" means any and all investment property of the Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts, commodity accounts and all financial assets held in any securities account or otherwise, wherever located and whether now existing or hereafter arising. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Note Party under any Note Holder Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company, the Note Holders party thereto. 246 "Pledged Collateral" has the meaning set forth in Section 2(a). "Pledged Shares" means (a) all of the issued and outstanding shares of capital stock, whether certificated or uncertificated, of the Subsidiaries now owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as more specifically described in Schedule 2, provided, however, that 65% (but no more than 65%) of the issued and outstanding capital stock of any Subsidiary which is a Foreign Subsidiary, measured on a non-diluted basis) shall constitute Pledged Shares hereunder, and (b) all Investment Property. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Grantor to the Collateral Agent (for the benefit of the Credit Agents), whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, now or created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any obligations under any Specified Swap Agreement to the extent arising out of any Specified Swap Contracts. "Securities Act" means the Securities Act of 1933. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Grantor and the Swap Provider as swap counterparties. "Specific Swap Contract" means any interest rate swap entered into between Grantor and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Note Party under any Swap Document, (c) any documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in 247 any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent, and hereby grants to the Collateral Agent, a security interest in, all of the Grantor's right, title and interest in, to and under (i) the Pledged Shares and the Additional Collateral and any certificates and instruments now or hereafter representing the Pledged Shares and the Additional Collateral, (ii) all rights, interests and claims with respect to the Pledged Shares and Additional Collateral, including under any and all related agreements, instruments and other documents, and (iii) all books, records and other documentation of the Grantor related to the Pledged Shares and Additional Collateral, in each case whether presently existing or owned or hereafter arising or acquired and wherever located (collectively, the "Pledged Collateral") provided, however, that Pledged Collateral shall not include any of the shares of capital stock of Ceridian Infotech (India) Private Limited, a Subsidiary of the Grantor organized and existing under the laws of India. (b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver to or for the account of the Collateral Agent, at the address and to the Person to be designated by theAdministrative Agent, the certificates representing the Pledged Shares, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with the consent of the Instructing Group). (c) Delivery of Additional Collateral. If the Grantor shall become entitled to receive or shall receive any Additional Collateral, the Grantor shall accept any such Additional Collateral as the agent for the Collateral Agent, shall hold it in trust for the Collateral Agent, shall segregate it from other property or funds of the Grantor, and shall deliver all Additional Collateral and all certificates, instruments and other writings representing such Additional Collateral forthwith to or for the account of the Collateral Agent, at the address and to the Person to be designated by the Collateral Agent upon instruction from the Instructing Group, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with consent of the Instructing Group), as the Collateral Agent shall request, to be held by the Collateral Agent subject to the terms hereof, as part of the Pledged Collateral. 248 Upon accepting any such Additional Collateral hereunder, the Collateral Agent shall promptly send a notification to the Grantor describing the Additional Collateral accepted and held as part of the Pledged Collateral hereunder, which notification shall be deemed to be a Schedule to this Agreement and may be attached hereto. (d) Transfer of Security Interest Other Than by Delivery. If for any reason Pledged Collateral cannot be delivered to or for the account of the Collateral Agent as provided in subsections (b) and (c), the Grantor shall promptly take such other steps as shall be requested from time to time by the Collateral Agent (upon instruction of the Instructing Group) to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent practicable, the Grantor shall thereafter deliver the Pledged Collateral to or for the account of the Collateral Agent as provided in subsections (b) and (c). (e) Continuing Security Interest. The Grantor agrees that this Agreement shall create continuing security interests in and pledge of the Pledged Collateral which shall remain in effect until terminated in accordance with Section 22. SECTION 3 Representations and Warranties. In addition to the representations and warranties of the Grantor made in the Credit Agreement, which are incorporated, remade and reaffirmed herein by this reference, and which are true, complete and accurate as of the date hereof except to the extent such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, the Grantor represents and warrants to the Collateral Agent and each of the Credit Parties that: (a) Valid Issuance of Pledged Collateral. All the Pledged Shares have been, and upon issuance any Additional Collateral will be, duly and validly issued, and are and will be fully paid and non-assessable. (b) Ownership of Pledged Collateral. With respect to the Pledged Shares the Grantor is, and with respect to any Additional Collateral the Grantor will be, the legal record and beneficial owner thereof, and has and will have good and marketable title thereto, subject to no Lien except for the pledge and security interests created by this Agreement. (c) Capitalization of the Subsidiary. The Pledged Shares constitute 100% of the issued and outstanding shares of capital stock of the Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of the Grantor, the Pledged Shares constitute no less than 65% of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis. (d) Options, Warrants, Etc. Other than as set forth in Schedule 2, no securities convertible into or exchangeable for any shares of capital stock of the Subsidiary, or any options, warrants or other commitments entitling any Person to purchase or otherwise acquire any shares of capital stock of the Subsidiary, are issued and outstanding. (e) Transfer Restrictions. There are no restrictions on the transferability of the Pledged Collateral to the Collateral Agent or with respect to the foreclosure, transfer or disposition thereof by the Collateral Agent . 249 (f) Shareholders Agreements. There are no shareholders agreements, voting trusts, proxy agreements or other agreements or understandings which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral. (g) No Violation of Securities Laws. None of the Pledged Shares has been transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such transfer may be subject. (h) Location of Chief Executive Office. The Grantor's chief executive office and principal place of business, and all books and records concerning the Pledged Collateral, are located at __________________, or such other address as to which the Grantor has notified the Collateral Agent in accordance with Section 4(e). (i) Other Financing Statements. Other than (i) financing statements disclosed to the Collateral Agent and (ii) financing statements in favor of the Collateral Agent, no effective financing statement naming the Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or any part of the Pledged Collateral is on file in any filing or recording office in any jurisdiction. (j) Enforceability; Priority of Security Interest. This Agreement (i) creates an enforceable perfected and first priority security interest in and pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b), and (ii) will create an enforceable perfected and first priority security interest in and pledge of the Additional Collateral upon delivery thereof pursuant to Section 2(c) (or upon the taking of such other action with respect thereto as may be requested by the Collateral Agent pursuant to Section 2(d)), in each case securing the payment and performance of the Secured Obligations. The Grantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on the date of each delivery of Pledged Collateral hereunder. SECTION 4 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied or unpaid, the Grantor agrees that: (a) Defense of Pledged Collateral. The Grantor will, at its own expense, appear in and defend any action, suit or proceeding which purports to affect its title to, or right or interest in, the Pledged Collateral or the security interests of the Collateral Agent therein and the pledge to the Collateral Agent thereof. (b) Preservation of Collateral. The Grantor will do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Pledged Collateral. (c) Compliance with Laws, Etc. The Grantor will comply with all laws, regulations and ordinances relating in a material way to the possession, maintenance and control of the Pledged Collateral. (d) Location of Books and Chief Executive Office. The Grantor will: (i) keep all books and records pertaining to the Pledged Collateral at the location set forth in Section 3(h); 250 and (ii) give at least 30 days' prior written notice to the Collateral Agent of (A) any changes in any such location where books and records pertaining to the Pledged Collateral are kept, or (B) any change in the location of the Grantor's chief executive office or principal place of business. (e) Change in Name, Identity or Structure. The Grantor will give at least 30 days' prior written notice to the Collateral Agent of (i) any change in its name, (ii) any changes in, additions to or other modifications of its trade names used as the name of Grantor, and (iii) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (f) Disposition of Pledged Collateral. Except as permitted by the Credit Agreement, the Grantor will not surrender or lose possession of (other than to the Collateral Agent or, with the prior consent of the Collateral Agent, to a depositary or financial intermediary), exchange, sell, convey, assign or otherwise dispose of or transfer the Pledged Collateral or any right, title or interest therein. (g) Liens. Except for Permitted Liens, the Grantor will not create, incur or permit to exist any Liens upon or with respect to the Pledged Collateral, other than the security interests of and pledge to the Collateral Agent created by this Agreement for the benefit of the Credit Agents. (h) Shareholders Agreements. The Grantor will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Collateral. (i) Issuance of Additional Shares. The Grantor will not consent to or approve, or allow the Subsidiary to consent to or approve, the issuance to any Person of any additional shares of any class of capital stock of the Subsidiary, or of any securities convertible into or exchangeable for any such shares, or any warrants, options or other rights to purchase or otherwise acquire any such shares, except as permitted under the Credit Agreement. (j) Notices. The Grantor will deliver promptly to the Collateral Agent all reports and notices received by the Grantor from the Subsidiary in respect of any of the Pledged Collateral. (k) Further Assurances. The Grantor will promptly, upon the written request from time to time of the Collateral Agent, execute, acknowledge and deliver, and file and record, all such financing statements and other documents and instruments, and take all such action, as shall be reasonably necessary to carry out the purposes of this Agreement. SECTION 5 Administration of the Pledged Collateral. (a) Distributions and Voting Prior to an Event of Default. Unless there exists any Default or Event of Default: (i) the Grantor shall be entitled to receive and retain for its own account any cash dividend on or other cash distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor shall have the right to vote the Pledged Collateral and to retain the power to control the direction, management and policies of the Subsidiary to the same extent as the Grantor would if the Pledged Collateral were not pledged to the Collateral Agent pursuant to 251 this Agreement; provided, however, that the Grantor shall not be entitled to receive (A) cash paid, payable or otherwise distributed in redemption of, or in exchange for or in substitution of, any Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction of capital, capital surplus or paid-in-surplus or any other type of recapitalization involving the Subsidiary; and provided further, however, that no vote shall be cast or consent, waiver or ratification given or action taken which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would alter the voting rights with respect to the stock of the Subsidiary or be inconsistent with or violate any provision of this Agreement and other Credit Documents. If applicable, the Grantor shall be deemed the beneficial owner of all Pledged Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to file all reports required to be filed by beneficial owners of securities thereunder. The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the Grantor all such proxies and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to this subsection (a) and to receive the distributions which it is authorized to receive and retain pursuant to this subsection (a). (b) General Authority upon an Event of Default. If there exists any Default or Event of Default: (i) the Collateral Agent shall be entitled to receive all distributions and payments of any nature with respect to the Pledged Collateral, to be held by the Collateral Agent as part of the Pledged Collateral; (ii) the Collateral Agent shall have the right following prior written notice to the Grantor to vote or consent to take any action with respect to the Pledged Shares and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Collateral Agent were the absolute owner thereof; and (iii) the Collateral Agent shall have the right, for and in the name, place and stead of the Grantor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral, to endorse any checks, drafts, money orders and other instruments relating thereto, to sue for, collect, receive and give acquittance for all moneys due or to become due in connection with the Pledged Collateral and otherwise to file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Pledged Collateral, execute any and all such other documents and instruments, and do any and all such acts and things, as the Collateral Agent may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes of this Agreement. (c) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of subsection (a) or (b) shall be held in trust for the benefit of the Collateral Agent, be 252 segregated from the other property or funds of the Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. (d) Certain Other Administrative Matters. At any time and from time to time, the Collateral Agent may cause any of the Pledged Collateral to be transferred into its name or into the name of its nominee or nominees (subject to the revocable rights specified in subsection (a)). The Collateral Agent shall at all times have the right to exchange uncertificated Pledged Collateral for certificated Pledged Collateral, and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement. (e) Appointment of Collateral Agent as Attorney-in-Fact. For the purpose of enabling the Collateral Agent to exercise its rights under this Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i) constitutes and appoints Collateral Agent (and any of the Collateral Agent's officers, employees or agents designated by the Collateral Agent ) Grantor's true and lawful attorney-in-fact, with full power and authority to execute any notice, assignment, endorsement or other instrument or document, and to do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent may deem necessary or desirable (with the consent of the Instructing Group) to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes hereof, and (ii) revokes all previous proxies with regard to the Pledged Collateral and appoints the Collateral Agent as its proxy holder with respect to the Pledged Collateral to attend and vote at any and all meetings of the shareholders of the Subsidiary held on or after the date of this proxy and prior to the termination hereof, with full power of substitution to do so and agrees, if so requested, to execute or cause to be executed appropriate proxies therefor. Each such appointment is coupled with an interest and irrevocable so long as any of the Secured Obligations have not been paid and performed in full. The Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to this subsection (e). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Secured Obligations have not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. SECTION 6 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which the Grantor has agreed to perform or pay under or in connection with this Agreement, and the Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 6. SECTION 7 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Collateral. 253 SECTION 8 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this or any Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, the Grantor agrees that any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers' board or elsewhere, by public or private sale, and at such times and on such terms, as the Collateral Agent shall determine; provided, however, that the Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of the Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide the Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. The Grantor recognizes that the Collateral Agent may be unable to make a public sale of any or all of the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. The Collateral Agent and each Credit Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption the Grantor hereby releases to the extent permitted by law. (b) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated (including with respect to undrawn amounts under the Letters of Credit) at such time as there may exist an Event of Default, the Collateral Agent may, upon instruction by the Instructing Group, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Pledged Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for such purpose (as to which the Grantor hereby grants a security interest and which shall constitute part of the Pledged Collateral hereunder) until such time as the Collateral Agent may elect (with the consent of the Instructing Group) to apply such proceeds to the Secured Obligations, and the Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (with the consent of the Instructing Group), estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Pledged Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. The Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, the Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, the Grantor irrevocably waives until the termination of this Agreement in accordance with Section 22 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent to honor drafts against the Proceeds Account. 254 (c) Application of Proceeds. Subject to subsection (b), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 9 Registration Rights. (a) Registration of Pledged Collateral. If the Collateral Agent at the request of the Instructing Group shall determine to exercise its right to sell any or all of the Pledged Collateral pursuant to Section 8, and if the Collateral Agent shall determine (with the consent of the Instructing Group) that it is necessary or advisable to have the Pledged Collateral, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and the Grantor's and the Subsidiary's respective directors and officers to execute and deliver, all such instruments and documents, and to do or cause to be done all such other acts and things as may, in the view of the Collateral Agent, be advisable to register such Pledged Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the view of the Collateral Agent (with the consent of the Instructing Group), are necessary or be necessary or advisable, all in conformity with the requirements of the Securities and Exchange Commission applicable thereto. The Grantor agrees to comply, and to cause the Subsidiary to comply, with the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to cause the Subsidiary to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which shall satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall cause to be furnished to the Collateral Agent and each of the Credit Agents such number of copies of each preliminary prospectus and prospectus, shall promptly notify the Collateral Agent of the happening of any event (upon becoming aware thereof) as a result of which any then effective prospectus includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of then existing circumstances and shall cause the Collateral Agent and each Credit Agent to be furnished with such number of copies as any such Person may reasonably request of such supplement to or amendment of such prospectus as is necessary to eliminate such untrue statement or correct such omission. (b) No Obligation to Delay Private Sale. Neither the Collateral Agent nor the Credit Parties shall be under any obligation to delay a private sale of any of the Pledged Collateral (as contemplated by subsection (a)) for the period of time necessary to permit the issuer thereof to register such Pledged Collateral for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do so. (c) Further Acts. The Grantor further agrees to do or to use its best efforts to cause to be done all such other acts and things as may be necessary to make any sales of all or any portion 255 of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding and in compliance with any and all applicable laws (including the Exchange Act), regulations, orders, writs, injunctions, decrees or awards of any and all Governmental Authorities having jurisdiction over any such sale or sales. (d) Equitable Relief. The Grantor acknowledges that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent and the Credit Parties, that the Collateral Agent and Credit Parties have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against the Grantor, and the Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the provisions of the Credit Agreement. (e) Costs and Expenses. The Grantor shall bear all costs and expenses of carrying out its obligations under this Section 9. SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Pledged Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy in the Collateral Agent's power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Pledged Collateral; and (iii) all claims, damages, and demands against the Collateral Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Pledged Collateral. SECTION 11 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; provided, however, that notices hereunder (a) to the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such replacement Swap Provider as may be appointed from time to time consistent with the terms of the Intercreditor Agreement), and (b) to the Note Holders as set forth in the Note Purchase Agreement (or such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement). All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent or any Credit Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent or any Credit Party. 256 SECTION 13 Costs and Expenses; Indemnification; Other Charges. (a) Costs and Expenses. The Grantor agrees to pay on demand: (i) the out-of-pocket costs and expenses of the Collateral Agent and any of the Credit Parties' attorney costs, in connection with the negotiation, preparation, execution, delivery and administration of this Agreement, and any amendments, modifications or waivers of the terms thereof, and the custody of the Pledged Collateral; (ii) all title, appraisal (including the allocated cost of internal appraisal services), survey, audit, consulting, search, recording, filing and similar costs, fees and expenses incurred or sustained by the Collateral Agent or any Credit Party in connection with this Agreement or the Pledged Collateral; and (iii) all costs and expenses of the Collateral Agent or any Credit Party, including Attorney Costs, in connection with the enforcement or attempted enforcement of, and preservation of any rights or interest under, this Agreement, any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Pledged Collateral, including any and all losses, costs and expenses sustained by the Collateral Agent and any Credit Party as a result of any failure by the Grantor to perform or observe its obligations contained herein. (b) Indemnification. The Grantor shall indemnify, defend and hold the Collateral Agent, Agent-Related Persons and each Credit Party and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including caused by, arising out of or by reason of any alleged untrue statement of a material fact contained in any registration statement (or any amendment thereto) or in any preliminary prospectus or prospectus (or any amendment or supplement thereto) contemplated by Section 9(a), or any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent that any such liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements are caused by, arise solely out of or by reason of any such alleged untrue statement made or such alleged omission to state a material fact included or excluded on the written direction of any of the Collateral Agent or any Credit Party (including information supplied by the Collateral Agent or any Credit Party), and including with respect to any investigation, litigation or proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or relating to the Collateral, whether or not any Indemnified Person is a party thereto (all of the foregoing, collectively, the "Indemnified Liabilities"); provided that the Grantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted solely from the gross negligence or willful 257 misconduct of such Indemnified Person. If and to the extent that the foregoing indemnification is for any reason held unenforceable, the Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (c) Other Charges. The Grantor agrees to indemnify the Indemnified Persons against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (d) Interest. Any amounts payable to the Collateral Agent or any Credit Party under this Section 13 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate of interest (a) for the Administrative Agent or any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 14 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Grantor, the Collateral Agent and each Credit Party and their respective successors and assigns. SECTION 15 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE 258 COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 17 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 18, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 18 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 19 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so 259 executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. SECTION 20 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Note Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that this Agreement, and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 22 Termination. Upon termination of the Commitments of the Lenders, surrender of all Letters of Credit and payment and performance in full of all Secured Obligations, this Agreement shall terminate and the Collateral Agent shall (with the consent of the Instructing Group) promptly redeliver to the Grantor any of the Pledged Collateral in its possession and shall execute and deliver to the Grantor such documents and instruments reasonably requested by the Grantor as shall be necessary to evidence termination of all security interests given by the Grantor to the Collateral Agent hereunder; provided, however, that the obligations of the Grantor under Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Pledged Shares provided by this Section. SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] 260 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. CERIDIAN CORPORATION THE GRANTOR By: ------------------------------ Name: Title: BANK OF AMERICA, N.A. THE COLLATERAL AGENT By: ------------------------------ Name: Title: 261 SCHEDULE 1 to the Stock Pledge Agreement SUBSIDIARIES 262 SCHEDULE 2 to the Stock Pledge Agreement PLEDGED SHARES _______ stock of _________________ being represented by stock certificates as follows: Certificate No. Certificate Date No. of Shares - --------------- ---------------- ------------- 263 SCHEDULE 3 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARIES 264 EXHIBIT J FORM OF SUBSIDIARY PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __, 2001, is made among ___________________, a _______________ corporation (the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent on behalf of, and for the benefit of, (a) BANK OF AMERICA, N.A. in its capacity as administrative agent (in such capacity, the "Administrative Agent") for the Lenders from time to time party to the Credit Agreement dated as of January 31, 2001 (as amended, modified, renewed or extended from time to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined herein), and (c) the "Note Holders" (as defined herein) party to the Note Purchase Agreement. It is a condition precedent to the borrowings under each of the Credit Agreement and the Note Purchase Agreement that the Grantor enter into this Agreement and pledge to the Collateral Agent the shares of the capital stock of ___________________________, a ____________ corporation (the "Subsidiary"), owned by the Grantor, to secure the obligations of the Company described below. Accordingly, the parties hereto agree as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them, respectively, in the Credit Agreement. The rules of interpretation set forth in the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Additional Collateral" means any and all (i) additional capital stock or other equity securities of the Subsidiary, whether certificated or uncertificated, (ii) warrants, options or other rights entitling the Grantor to acquire any interest in capital stock or other equity securities of the Subsidiary, (iii) securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, the Pledged Shares or such additional capital stock or other equity securities, and (iv) cash and non-cash proceeds of the Pledged Shares and any of the foregoing, in each case from time to time received or receivable by, or otherwise paid or distributed to or acquired by, the Grantor. "Company" means CERIDIAN CORPORATION, a Delaware corporation. "Credit Documents" means the Note Documents together with the Swap Documents. "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" (as defined in the Intercreditor Agreement; or such replacement Collateral Agent as may be 265 appointed from time to time thereunder) on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as the Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. "Credit Agents" and each, individually, a "Credit Agent" means (a) the Administrative Agent (for the benefit of itself and the other Lenders, and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider. "Credit Parties" and each, individually, a "Credit Party" means the Credit Agents and the Debt Participants. "Credit Documents" means, collectively, the Note Documents, the Note Holder Documents and the Swap Documents. "Debt Participant" means a "Debt Participant" under, and as defined in, the Intercreditor Agreement. "Exchange Act" means the Securities and Exchange Act of 1934. "Instructing Group" means "Instructing Group" under, and as defined in, the Intercreditor Agreement. "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider and the Note Holders. "Note Holder Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or other wise changed in respect of, the Note Holders), (ii) all Account Control Agreements executed by any Note Party under any Note Holder Document, (iii) all documents executed by any Note Party to accomplish cash collateralization pursuant to any Note Holder Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Company and the Note Holders party thereto. 266 "Intercreditor Agreement" means that Intercreditor Agreement dated as of __________ _____, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders. "Investment Property" means any and all investment property of the Grantor, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts, commodity accounts and all financial assets held in any securities account or otherwise, wherever located and whether now existing or hereafter arising. "Pledged Collateral" has the meaning set forth in Section 2(a). "Pledged Shares" mean (a) all of the issued and outstanding shares of capital stock, whether certificated or uncertificated, of the Subsidiary now owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as more specifically described in Schedule 1, provided, however, that if the Subsidiary is a Foreign Subsidiary of the Grantor, 65% (but no more than 65%) of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis, shall constitute Pledged Shares, and (b) all Investment Property. "Secured Obligations" means all indebtedness, liabilities and other obligations of the Company to the Collateral Agent, whether now existing or hereafter arising, and whether due to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, nor or created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement), and any of the obligations under any Swap Documents. "Securities Act" means the Securities Act of 1933. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Company and the Swap Provider as swap counterparties. "Specific Swap Contract" means any interest rate swap entered into between the Company and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Swap Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider, (b) all Account Control Agreements executed by any Note Party under any Swap Document, (c) any documents executed by any Note Party to accomplish cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time in connection with any of the foregoing. "Swap Documents" means, collectively, any Specified Swap Agreement, the Swap Collateral Documents and the Swap Guaranties. 267 "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York: provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. (c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. (d) Interpretation. The rules of interpretation set forth in Section 1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference. SECTION 2 Security Interest. (a) Grant of Security Interest. As security for the payment and performance of the Secured Obligations, the Grantor hereby pledges, assigns, transfers, hypothecates and sets over to the Collateral Agent, and hereby grants to the Collateral Agent, a security interest in, all of the Grantor's right, title and interest in, to and under (i) the Pledged Shares and the Additional Collateral and any certificates and instruments now or hereafter representing the Pledged Shares and the Additional Collateral, (ii) all rights, interests and claims with respect to the Pledged Shares and Additional Collateral, including under any and all related agreements, instruments and other documents, and (iii) all books, records and other documentation of the Grantor related to the Pledged Shares and Additional Collateral, in each case whether presently existing or owned or hereafter arising or acquired and wherever located (collectively, the "Pledged Collateral") provided, however, that Pledged Collateral shall not include any of the shares of capital stock of Ceridian Infotech (India) Private Limited, a Subsidiary of the Grantor organized and existing under the laws of India. (b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver to or for the account of the Collateral Agent, at the address and to the Person to be designated by theAdministrative Agent, the certificates representing the Pledged Shares, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with the consent of the Instructing Group). (c) Delivery of Additional Collateral. If the Grantor shall become entitled to receive or shall receive any Additional Collateral, the Grantor shall accept any such Additional Collateral as the agent for the Collateral Agent, shall hold it in trust for the Collateral Agent, 268 shall segregate it from other property or funds of the Grantor, and shall deliver all Additional Collateral and all certificates, instruments and other writings representing such Additional Collateral forthwith to or for the account of the Collateral Agent, at the address and to the Person to be designated by the Collateral Agent upon instruction from the Instructing Group, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent (with consent of the Instructing Group), as the Collateral Agent shall request, to be held by the Collateral Agent subject to the terms hereof, as part of the Pledged Collateral. Upon accepting any such Additional Collateral hereunder, the Collateral Agent shall promptly send a notification to the Grantor describing the Additional Collateral accepted and held as part of the Pledged Collateral hereunder, which notification shall be deemed to be a Schedule to this Agreement and may be attached hereto. (d) Transfer of Security Interest Other Than by Delivery. If for any reason Pledged Collateral cannot be delivered to or for the account of the Collateral Agent as provided in subsections (b) and (c), the Grantor shall promptly take such other steps as shall be requested from time to time by the Collateral Agent (upon instruction of the Instructing Group) to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent practicable, the Grantor shall thereafter deliver the Pledged Collateral to or for the account of the Collateral Agent as provided in subsections (b) and (c). (e) Continuing Security Interest. The Grantor agrees that this Agreement shall create continuing security interests in and pledge of the Pledged Collateral which shall remain in effect until terminated in accordance with Section 22. SECTION 3 Representations and Warranties. In addition to the representations and warranties of the Grantor made in the Credit Agreement, which are incorporated, remade and reaffirmed herein by this reference, and which are true, complete and accurate as of the date hereof except to the extent such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, the Grantor represents and warrants to the Collateral Agent and each of the Credit Parties that: (a) Valid Issuance of Pledged Collateral. All the Pledged Shares have been, and upon issuance any Additional Collateral will be, duly and validly issued, and are and will be fully paid and non-assessable. (b) Ownership of Pledged Collateral. With respect to the Pledged Shares the Grantor is, and with respect to any Additional Collateral the Grantor will be, the legal record and beneficial owner thereof, and has and will have good and marketable title thereto, subject to no Lien except for the pledge and security interests created by this Agreement. (c) Capitalization of the Subsidiary. The Pledged Shares constitute 100% of the issued and outstanding shares of capital stock of the Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of the Grantor, the Pledged Shares constitute no less than 65% of the issued and outstanding capital stock of the Subsidiary, measured on a non-diluted basis. 269 (d) Options, Warrants, Etc. Other than as set forth in Schedule 2, no securities convertible into or exchangeable for any shares of capital stock of the Subsidiary, or any options, warrants or other commitments entitling any Person to purchase or otherwise acquire any shares of capital stock of the Subsidiary, are issued and outstanding. (e) Transfer Restrictions. There are no restrictions on the transferability of the Pledged Collateral to the Collateral Agent or with respect to the foreclosure, transfer or disposition thereof by the Collateral Agent . (f) Shareholders Agreements. There are no shareholders agreements, voting trusts, proxy agreements or other agreements or understandings which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral. (g) No Violation of Securities Laws. None of the Pledged Shares has been transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such transfer may be subject. (h) Location of Chief Executive Office. The Grantor's chief executive office and principal place of business, and all books and records concerning the Pledged Collateral, are located at __________________, or such other address as to which the Grantor has notified the Collateral Agent in accordance with Section 4(e). (i) Other Financing Statements. Other than (i) financing statements disclosed to the Collateral Agent and (ii) financing statements in favor of the Collateral Agent, no effective financing statement naming the Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or any part of the Pledged Collateral is on file in any filing or recording office in any jurisdiction. (j) Enforceability; Priority of Security Interest. This Agreement (i) creates an enforceable perfected and first priority security interest in and pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b), and (ii) will create an enforceable perfected and first priority security interest in and pledge of the Additional Collateral upon delivery thereof pursuant to Section 2(c) (or upon the taking of such other action with respect thereto as may be requested by the Collateral Agent pursuant to Section 2(d)), in each case securing the payment and performance of the Secured Obligations. The Grantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on the date of each delivery of Pledged Collateral hereunder. SECTION 4 Covenants. In addition to the covenants of the Grantor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied or unpaid, the Grantor agrees that: (a) Defense of Pledged Collateral. The Grantor will, at its own expense, appear in and defend any action, suit or proceeding which purports to affect its title to, or right or interest in, the Pledged Collateral or the security interests of the Collateral Agent therein and the pledge to the Collateral Agent thereof. 270 (b) Preservation of Collateral. The Grantor will do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Pledged Collateral. (c) Compliance with Laws, Etc. The Grantor will comply with all laws, regulations and ordinances relating in a material way to the possession, maintenance and control of the Pledged Collateral. (d) Location of Books and Chief Executive Office. The Grantor will: (i) keep all books and records pertaining to the Pledged Collateral at the location set forth in Section 3(h); and (ii) give at least 30 days' prior written notice to the Collateral Agent of (A) any changes in any such location where books and records pertaining to the Pledged Collateral are kept, or (B) any change in the location of the Grantor's chief executive office or principal place of business. (e) Change in Name, Identity or Structure. The Grantor will give at least 30 days' prior written notice to the Collateral Agent of (i) any change in its name, (ii) any changes in, additions to or other modifications of its trade names used as the name of Grantor, and (iii) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading. (f) Disposition of Pledged Collateral. Except as permitted by the Credit Agreement, the Grantor will not surrender or lose possession of (other than to the Collateral Agent or, with the prior consent of the Collateral Agent, to a depositary or financial intermediary), exchange, sell, convey, assign or otherwise dispose of or transfer the Pledged Collateral or any right, title or interest therein. (g) Liens. Except for Permitted Liens, the Grantor will not create, incur or permit to exist any Liens upon or with respect to the Pledged Collateral, other than the security interests of and pledge to the Collateral Agent created by this Agreement for the benefit of the Credit Agents. (h) Shareholders Agreements. The Grantor will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Collateral. (i) Issuance of Additional Shares. The Grantor will not consent to or approve, or allow the Subsidiary to consent to or approve, the issuance to any Person of any additional shares of any class of capital stock of the Subsidiary, or of any securities convertible into or exchangeable for any such shares, or any warrants, options or other rights to purchase or otherwise acquire any such shares, except as permitted under the Credit Agreement. (j) Notices. The Grantor will deliver promptly to the Collateral Agent all reports and notices received by the Grantor from the Subsidiary in respect of any of the Pledged Collateral. (k) Further Assurances. The Grantor will promptly, upon the written request from time to time of the Collateral Agent, execute, acknowledge and deliver, and file and record, all such financing statements and other documents and instruments, and take all such action, as shall be reasonably necessary to carry out the purposes of this Agreement. 271 SECTION 5 Administration of the Pledged Collateral. (a) Distributions and Voting Prior to an Event of Default. Unless there exists any Default or Event of Default: (i) the Grantor shall be entitled to receive and retain for its own account any cash dividend on or other cash distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor shall have the right to vote the Pledged Collateral and to retain the power to control the direction, management and policies of the Subsidiary to the same extent as the Grantor would if the Pledged Collateral were not pledged to the Collateral Agent pursuant to this Agreement; provided, however, that the Grantor shall not be entitled to receive (A) cash paid, payable or otherwise distributed in redemption of, or in exchange for or in substitution of, any Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction of capital, capital surplus or paid-in-surplus or any other type of recapitalization involving the Subsidiary; and provided further, however, that no vote shall be cast or consent, waiver or ratification given or action taken which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would alter the voting rights with respect to the stock of the Subsidiary or be inconsistent with or violate any provision of this Agreement and other Credit Documents. If applicable, the Grantor shall be deemed the beneficial owner of all Pledged Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to file all reports required to be filed by beneficial owners of securities thereunder. The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the Grantor all such proxies and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to this subsection (a) and to receive the distributions which it is authorized to receive and retain pursuant to this subsection (a). (b) General Authority upon an Event of Default. If there exists any Default or Event of Default: (i) the Collateral Agent shall be entitled to receive all distributions and payments of any nature with respect to the Pledged Collateral, to be held by the Collateral Agent as part of the Pledged Collateral; (ii) the Collateral Agent shall have the right following prior written notice to the Grantor to vote or consent to take any action with respect to the Pledged Shares and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Collateral Agent were the absolute owner thereof; and (iii) the Collateral Agent shall have the right, for and in the name, place and stead of the Grantor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral, to endorse any checks, drafts, money orders and other instruments relating thereto, to sue for, collect, receive and give acquittance for all moneys due or to become due in connection with the Pledged Collateral and otherwise to file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Pledged Collateral, execute any and all such 272 other documents and instruments, and do any and all such acts and things, as the Collateral Agent may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes of this Agreement. (c) Distributions to Be Held for Administrative Agent. Distributions and other payments which are received by the Grantor but which it is not entitled to retain as a result of the operation of subsection (a) or (b) shall be held in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of the Grantor, and be forthwith paid over or delivered to the Collateral Agent in the same form as so received. (d) Certain Other Administrative Matters. At any time and from time to time, the Collateral Agent may cause any of the Pledged Collateral to be transferred into its name or into the name of its nominee or nominees (subject to the revocable rights specified in subsection (a)). The Collateral Agent shall at all times have the right to exchange uncertificated Pledged Collateral for certificated Pledged Collateral, and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement. (e) Appointment of Collateral Agent as Attorney-in-Fact. For the purpose of enabling the Collateral Agent to exercise its rights under this Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i) constitutes and appoints Collateral Agent (and any of the Collateral Agent's officers, employees or agents designated by the Collateral Agent ) Grantor's true and lawful attorney-in-fact, with full power and authority to execute any notice, assignment, endorsement or other instrument or document, and to do any and all acts and things for and on behalf of the Grantor, which the Collateral Agent may deem necessary or desirable (with the consent of the Instructing Group) to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Collateral Agent's rights with respect to the Pledged Collateral and to accomplish the purposes hereof, and (ii) revokes all previous proxies with regard to the Pledged Collateral and appoints the Collateral Agent as its proxy holder with respect to the Pledged Collateral to attend and vote at any and all meetings of the shareholders of the Subsidiary held on or after the date of this proxy and prior to the termination hereof, with full power of substitution to do so and agrees, if so requested, to execute or cause to be executed appropriate proxies therefor. Each such appointment is coupled with an interest and irrevocable so long as any of the Secured Obligations have not been paid and performed in full. The Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. The Collateral Agent agrees that, unless there exists any Default or Event of Default, it shall not exercise the power of attorney, or any rights granted to the Collateral Agent, pursuant to this subsection (e). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Secured Obligations have not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by law, all that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5. SECTION 6 Performance of Grantor Obligations. The Collateral Agent may perform or pay any obligation which the Grantor has agreed to perform or pay under or in connection with this Agreement, and the Grantor shall reimburse the Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant to this Section 6. 273 SECTION 7 Collateral Agent's Duties. Notwithstanding any provision contained in this Agreement, the Collateral Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Grantor or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder and the accounting for moneys actually received by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Collateral. SECTION 8 Remedies. (a) Remedies. If there exists any Default or Event of Default, the Collateral Agent shall have, in addition to all other rights and remedies granted to it in this or any Credit Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, the Grantor agrees that any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers' board or elsewhere, by public or private sale, and at such times and on such terms, as the Collateral Agent shall determine; provided, however, that the Grantor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Collateral Agent. The Grantor hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of the Grantor set forth in the Credit Agreement, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur, provided that the Collateral Agent may provide the Grantor shorter notice or no notice, to the extent permitted by the UCC or other applicable law. The Grantor recognizes that the Collateral Agent may be unable to make a public sale of any or all of the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. The Collateral Agent and each Credit Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption the Grantor hereby releases to the extent permitted by law. (b) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated (including with respect to undrawn amounts under the Letters of Credit) at such time as there may exist an Event of Default, the Collateral Agent may, upon instruction by the Instructing Group, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Pledged Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the "Proceeds Account") created and maintained by the Collateral Agent for such purpose (as to which the Grantor hereby grants a security interest and which shall constitute part of the Pledged Collateral hereunder) until such time as the Collateral Agent may elect (with the consent of the Instructing Group) to apply such proceeds to the Secured Obligations, and the Grantor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any manner elected by the Collateral Agent (with the consent of the Instructing Group), estimate the 274 liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Pledged Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable law. The Grantor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, the Grantor shall not have any right of withdrawal with respect to such funds. Accordingly, the Grantor irrevocably waives until the termination of this Agreement in accordance with Section 22 the right to make any withdrawal from the Proceeds Account and the right to instruct the Collateral Agent to honor drafts against the Proceeds Account. (c) Application of Proceeds. Subject to subsection (b), cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied (after payment of any amounts payable to the applicable Credit Parties or the Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the applicable Credit Parties or the Collateral Agent against all or any part of the Secured Obligations in the manner and to the extent set forth in the Intercreditor Agreement. SECTION 9 Registration Rights. (a) Registration of Pledged Collateral. If the Collateral Agent at the request of the Instructing Group shall determine to exercise its right to sell any or all of the Pledged Collateral pursuant to Section 8, and if the Collateral Agent shall determine (with the consent of the Instructing Group) that it is necessary or advisable to have the Pledged Collateral, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and the Grantor's and the Subsidiary's respective directors and officers to execute and deliver, all such instruments and documents, and to do or cause to be done all such other acts and things as may, in the view of the Collateral Agent, be advisable to register such Pledged Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the view of the Collateral Agent (with the consent of the Instructing Group), are necessary or be necessary or advisable, all in conformity with the requirements of the Securities and Exchange Commission applicable thereto. The Grantor agrees to comply, and to cause the Subsidiary to comply, with the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to cause the Subsidiary to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which shall satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall cause to be furnished to the Collateral Agent and each of the Credit Agents such number of copies of each preliminary prospectus and prospectus, shall promptly notify the Collateral Agent of the happening of any event (upon becoming aware thereof) as a result of which any then effective prospectus includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of then existing circumstances and shall cause the Collateral Agent and each Credit Agent to be furnished with such number of copies as any such Person may reasonably request of such supplement to or amendment of such prospectus as is necessary to eliminate such untrue statement or correct such omission. 275 (b) No Obligation to Delay Private Sale. Neither the Collateral Agent nor the Credit Parties shall be under any obligation to delay a private sale of any of the Pledged Collateral (as contemplated by subsection (a)) for the period of time necessary to permit the issuer thereof to register such Pledged Collateral for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do so. (c) Further Acts. The Grantor further agrees to do or to use its best efforts to cause to be done all such other acts and things as may be necessary to make any sales of all or any portion of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding and in compliance with any and all applicable laws (including the Exchange Act), regulations, orders, writs, injunctions, decrees or awards of any and all Governmental Authorities having jurisdiction over any such sale or sales. (d) Equitable Relief. The Grantor acknowledges that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent and the Credit Parties, that the Collateral Agent and Credit Parties have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against the Grantor, and the Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the provisions of the Credit Agreement. (e) Costs and Expenses. The Grantor shall bear all costs and expenses of carrying out its obligations under this Section 9. SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Pledged Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Collateral Agent (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy in Collateral Agent's power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Pledged Collateral; and (iii) all claims, damages, and demands against the Collateral Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Pledged Collateral. SECTION 11 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; provided, however, that notices hereunder (a) to the Swap Provider shall be delivered to Fleet National Bank using the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such replacement Swap Provider as may be appointed from time to time consistent with the terms of the Intercreditor Agreement), and (b) to the Note Holders as set forth in the Note Purchase Agreement (or such replacement Note Holders as may be appointed from time to time consistent with the terms of the Intercreditor Agreement). All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. 276 SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the Collateral Agent or any Credit Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Collateral Agent or any Credit Party. SECTION 13 Costs and Expenses; Indemnification; Other Charges. (a) Costs and Expenses. The Grantor agrees to pay on demand: (i) the out-of-pocket costs and expenses of the Collateral Agent and any of the Credit Parties' attorney costs, in connection with the negotiation, preparation, execution, delivery and administration of this Agreement, and any amendments, modifications or waivers of the terms thereof, and the custody of the Pledged Collateral; (ii) all title, appraisal (including the allocated cost of internal appraisal services), survey, audit, consulting, search, recording, filing and similar costs, fees and expenses incurred or sustained by the Collateral Agent or any Credit Party in connection with this Agreement or the Pledged Collateral; and (iii) all costs and expenses of the Collateral Agent or any Credit Party, including Attorney Costs, in connection with the enforcement or attempted enforcement of, and preservation of any rights or interest under, this Agreement, any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Pledged Collateral, including any and all losses, costs and expenses sustained by the Collateral Agent and any Credit Party as a result of any failure by the Grantor to perform or observe its obligations contained herein. (b) Indemnification. The Grantor shall indemnify, defend and hold the Collateral Agent, Agent-Related Persons and each Credit Party and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including caused by, arising out of or by reason of any alleged untrue statement of a material fact contained in any registration statement (or any amendment thereto) or in any preliminary prospectus or prospectus (or any amendment or supplement thereto) contemplated by Section 9(a), or any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent that any such liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements are caused by, arise solely out of or by reason of any such alleged untrue statement made or such alleged omission to state a material fact included or excluded on 277 the written direction of any of the Collateral Agent or any Credit Party (including information supplied by the Collateral Agent or any Credit Party), and including with respect to any investigation, litigation or proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or relating to the Collateral, whether or not any Indemnified Person is a party thereto (all of the foregoing, collectively, the "Indemnified Liabilities"); provided that the Grantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. If and to the extent that the foregoing indemnification is for any reason held unenforceable, the Grantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. (c) Other Charges. The Grantor agrees to indemnify the Indemnified Persons against and hold each of them harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Agreement. (d) Interest. Any amounts payable to the Collateral Agent or any Credit Party under this Section 13 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the applicable rate of interest (a) for the Administrative Agent or any Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement. SECTION 14 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Grantor, the Collateral Agent and each Credit Party and their respective successors and assigns. SECTION 15 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT 278 PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 17 Entire Agreement; Amendment. This Agreement, together with the other Credit Documents, embodies the entire agreement and understanding among the Grantor and the Collateral, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 18, this Agreement shall be amended only by written agreement with the written consent of the Instructing Group; provided, however, that any amendment having the effect of causing a release of all or substantially all of the Collateral must be consented to in writing by the Collateral Agent and each of the Credit Agents. SECTION 18 Independence. This Agreement sets forth independent and separate security interests of the Grantor in favor of the Collateral Agent in respect of the Secured Obligations owing to the Collateral Agent for the benefit of each Credit Agent. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder with respect to any Credit Agent shall not in any way affect or impair the legality or enforceability of that or any other provision of this Agreement or any instrument or agreement required hereunder in respect to any other Credit Agent. The parties acknowledge that this Agreement has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as though the Grantor had executed separate security interests, for the benefit of each of the Credit Agents. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or 279 unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 19 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. SECTION 20 Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Note Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference. SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that this Agreement, and the other Credit Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. SECTION 22 Termination. Upon termination of the Commitments of the Lenders, surrender of all Letters of Credit and payment and performance in full of all Secured Obligations, this Agreement shall terminate and the Collateral Agent shall (with the consent of the Instructing Group) promptly redeliver to the Grantor any of the Pledged Collateral in its possession and shall execute and deliver to the Grantor such documents and instruments reasonably requested by the Grantor as shall be necessary to evidence termination of all security interests given by the Grantor to the Collateral Agent hereunder; provided, however, that the obligations of the Grantor under Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all conditions precedent to any permitted disposition set forth herein or in the other Credit Documents, the Collateral Agent shall execute and deliver any releases or other documents reasonably requested by the relevant Grantor to accomplish or confirm the release of Pledged Shares provided by this Section. SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth in this Agreement, any inconsistency between this Agreement and the Intercreditor Agreement in respect of the rights and obligations of the Collateral Agent and the Credit Agents owing to and among each other (but not including in respect of the obligations of the Grantor to the Collateral Agent or Credit Agents hereunder) shall be resolved in favor of the Intercreditor Agreement. [remainder of page intentionally left blank] 280 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. [ ] ----------------------------------- THE GRANTOR By: --------------------------------- Name: Title: BANK OF AMERICA, N.A. THE COLLATERAL AGENT By: --------------------------------- Name: Title: 281 SCHEDULE 1 to the Stock Pledge Agreement PLEDGED SHARES _______ stock of _________________ being represented by stock certificates as follows: Certificate No. Certificate Date No. of Shares - -------------- ---------------- ------------- 282 SCHEDULE 2 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARIES 283 SCHEDULE 3 to the Stock Pledge Agreement SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE SUBSIDIARY 284 EXHIBIT K FORM OF EFFECTIVENESS DATE OPINIONS OF COUNSEL (CONTENT SUMMARY) 1. Each Note Party is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with the corporate power and authority and all material governmental licenses, authorizations, consents and approvals to own and operate (or lease, as the case may be) its properties and to carry on its business as it is now conducted. Each Note Party is qualified as a foreign corporation, licensed and in good standing in each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except where the failure to be so qualified, licensed or in good standing would not adversely affect the business or operations of such Note Party in any significant manner. 2. Each Note Party has the corporate power and authority to enter into and perform the Note Documents to which it is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of such Note Documents. 3. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by, or enforcement against, any Note Party of the Note Documents to which it is a party. 4. The Note Documents to which each Note Party is a party have been duly executed and delivered by such Note Party and constitute the legal, valid and binding obligations of such Note Party, enforceable against such Note Party in accordance with their respective terms. 5. The execution, delivery and performance by each Note Party of the Note Documents to which it is a party will not (i) violate or be in conflict with any provision of the certificate or articles of incorporation, as the case may be, or by-laws of such Note Party, (ii) violate or be in conflict with any law or regulation having applicability to such Note Party, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over such Note Party or such Note Party's properties or by which such Note Party may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any Note or credit agreement (including the Existing Credit Facility), or any other agreement for borrowed money or any other material agreement, lease or instrument to which such Note Party is a party or by which it or such Note Party's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of such Note Party. 6. The provisions of the Company Security Agreement and the Subsidiary Security Agreement (collectively, the "Security Agreements") are in form sufficient to create, in favor of the Administrative Agent, as secured party, a valid security interest in and lien on the Collateral described in such Security Agreements and the financing statements related thereto. The financing statements filed with the ____________ (the "Filing Offices") are in appropriate form for filing in the Filing Offices, (ii) the Filing Offices are the appropriate filing offices in order to 285 perfect a security interest in such Collateral, subject only to the provisions of the Intercreditor Agreement, (iii) the Administrative Agent has a perfected security interest in such Collateral, and (iv) no other action is necessary under the Uniform Commercial Code or other laws (including without limitation the U.S. copyright laws, the U.S. patent laws and the U.S. trademark laws) as in effect in ______________ to perfect a security interest in such Collateral. 7. The provisions of the Company Stock Pledge Agreement and the Subsidiary Stock Pledge Agreement (collectively, the "Stock Pledge Agreements") are in form sufficient to create, in favor of the Administrative Agent, as secured party, a valid security interest in and lien on the Pledged Collateral described therein. The security interest in the Pledged Collateral created under the Stock Pledge Agreements will become perfected upon delivery to and possession by the Administrative Agent of the certificates representing the Pledged Collateral, indorsed to the Administrative Agent or in blank by an effective indorsement. 8. Based solely on our review of the minute books and stock records of the Note Parties, to our knowledge, the authorized, issued and outstanding capital stock of each Note Party (other than Ceridian) as set forth on Schedule __ hereto constitutes all of the authorized, issued and outstanding capital stock of such Note Party, and all of such issued and outstanding capital stock is owned of record by the Persons indicated on such Schedule __. 9. No filings, registrations, recordings, or other actions are necessary under the laws of _______________ to create, preserve, perfect, and protect the Administrative Agent's Lien in the Pledged Securities under the Stock Pledge Agreements, and no consent, approval, or authorization of any Person is required under the laws of _______________ in order for the Administrative Agent's Lien to be created, preserved, perfected, and protected. 10. The extension of credit under the Credit Agreement does not violate the provisions of Regulations T, U or X of the Federal Reserve Board. 11. No Note Party is an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940. 12. No Note Party 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 Public Utility Holding Company Act of 1935. 13. The offer, issue, sale and delivery of the Notes under the circumstances contemplated by the Note Purchase Agreement constitute exempted transactions under the Securities Act of 1933 (the "1933 Act"), as amended, and neither the registration thereunder nor the qualification of an indenture in respect of the Notes under the Trust Indenture Act of 1939, as amended, is required in connection with such offer, issue, sale or delivery. 286 EXHIBIT L FORM OF CLOSING DATE OPINIONS OF COUNSEL (CONTENT SUMMARY) 1. Each Note Party has the corporate power and authority to enter into and perform the Spin-Off Transaction and each of the Spin-Off Documents to which it is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of each Spin-Off Document and to consummate the Spin-Off Transaction. 2. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by, or enforcement against, any Note Party of any Spin-Off Document to which it is a party, or to consummate the Spin-Off Transaction, except as have been obtained prior to the Closing Date. 3. The Spin-Off Documents to which each Note Party is a party have been duly executed and delivered by such Note Party and constitute the legal, valid and binding obligations of such Note Party, enforceable against such Note Party in accordance with their respective terms. 4. The execution, delivery and performance by each Note Party of each Spin-Off Document to which it is a party, and the consummation of the Spin-Off Transaction, will not (i) violate or be in conflict with any provision of the certificate or articles of incorporation, as the case may be, or by-laws of such Note Party, (ii) violate or be in conflict with any law or regulation having applicability to such Note Party, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over such Note Party or such Note Party's properties or by which such Note Party may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any Note or credit agreement, or any other agreement for borrowed money or any other material agreement, lease or instrument to which such Note Party is a party or by which it or such Note Party's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of such Note Party. 5. The Distribution is legal under the Delaware General Corporation Law. 287 EXHIBIT M FORM OF ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT Date: ______________ To each of the Lenders party to the Credit Agreement referred to below, and to Bank of America, N.A., as the Administrative Agent Ladies and Gentlemen: This agreement ("Additional Guarantor Assumption Agreement") is made and delivered pursuant to Section 6.14 of that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, amended or restated, the "Credit Agreement"), among CERIDIAN CORPORATION (the "Company"), the several financial institutions from time to time party thereto (each a "Lender" and together with the Assignor, the "Lenders") and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative Agent"). All capitalized terms used in this Additional Guarantor Assumption Agreement and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. _____________, a _____________ corporation (the "Subsidiary") hereby confirms, represents and warrants to the Administrative Agent and the Lenders that the Subsidiary is a Subsidiary of the Company effective as of ________________. [The Subsidiary further represents that it is a Foreign Subsidiary.] The documents, resolutions, incumbency and officer's certificates, opinions of counsel, UCC-1 financing statements, Supplemental IP Security Agreements and other documents and certificates required to be delivered to the Administrative Agent under subsections (b) and (c) of Section 6.14 and Section 6.16 of the Credit Agreement will be furnished to the Administrative Agent in accordance with the requirements of the Credit Agreement. The Subsidiary hereby confirms that with effect from the date hereof, the Subsidiary shall (i) be a party to the Guaranty, dated as of January 31, 2001 (the "Subsidiary Guaranty"), given by certain Subsidiaries of the Company, as Guarantor, in favor of the Administrative Agent, to the Security Agreement, dated as of January 31, 2001, (the "Subsidiary Security Agreement"), among certain Subsidiaries of the Company, as Grantors, and the Administrative Agent and to the Supplemental IP Security Agreements dated as of ______, ____, and ______; and (ii) shall have the same obligations, duties and liabilities towards the Administrative Agent and Lenders as those which the Subsidiary would have had if the Subsidiary had been an original party to the Subsidiary Guaranty, as a Guarantor, and the Subsidiary Security Agreement, as a Grantor (and pursuant to Section 2(a) of the Subsidiary Security Agreement, the Subsidiary hereby grants to the Administrative Agent a security interest in all its "Collateral" (as defined therein) as security 288 for the payment and performance of the Secured Obligations (as defined therein)). The Subsidiary hereby confirms its acceptance of, and consents to, all representations and warranties, covenants, and other terms and provisions of the Subsidiary Guaranty applicable to Guarantors, and the Subsidiary Security Agreement applicable to Grantors, and to any other Note Documents to which the Guarantors are parties. Without limiting the generality of the foregoing, the Subsidiary confirms that effective as of the date hereof it shall be liable as a Guarantor pursuant to Section 8.01(n) of the Credit Agreement. This Additional Guarantor Assumption Agreement shall constitute a Note Document under the Credit Agreement. THIS ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the Subsidiary has caused this Additional Guarantor Assumption Agreement to be duly executed and delivered in _____________, ______________, by its proper and duly authorized officer as of the day and year first above written. [SUBSIDIARY] By: ---------------------------------- Name: ------------------------------- Title: ------------------------------ 289 EXHIBIT N FORM OF ADDITIONAL GUARANTOR OPINION OF COUNSEL (CONTENT SUMMARY) 1. The Additional Guarantor is a ___________ duly organized, validly existing and in good standing under the laws of [the State of __________] [the country of _________] with the power and authority to own and operate (or lease, as the case may be) its properties and to carry on its business as it is now conducted. The Additional Guarantor is qualified and in good standing in ___________________. 2. The Additional Guarantor has the power and authority to enter into and perform the Additional Guarantor Documents, and has taken all necessary action to authorize the execution, delivery and performance of the Additional Guarantor Documents. 3. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by the Additional Guarantor of the Additional Guarantor Documents[, except for recordings or filings in connection with the perfection of the Liens on the Collateral in favor of the Administrative Agent on behalf of the Lenders]. 4. The Additional Guarantor Documents have been duly executed and delivered by the Additional Guarantor and constitute the legal, valid and binding obligations of the Additional Guarantor enforceable against the Additional Guarantor in accordance with their respective terms. 5. The execution, delivery and performance by the Additional Guarantor of the Additional Guarantor Documents will not (i) violate or be in conflict with any provision of the _______________ [specify applicable Organization Documents reviewed] of the Additional Guarantor or any, (ii) violate or be in conflict with any law or regulation having applicability to the Additional Guarantor, (iii) violate or contravene any judgment, decree, injunction, writ or order of any court, or any arbitrator or other Governmental Authority, having jurisdiction over the Additional Guarantor or the Additional Guarantor's properties or by which the Additional Guarantor may be bound, or (iv) violate or conflict with, or constitute a default under or result in the termination of, or accelerate the performance required by, any indenture, any Note or credit agreement, or any other agreement for borrowed money or any other material Contractual Obligation to which the Additional Guarantor is a party or by which it or the Additional Guarantor's properties may be bound, or result in the creation of any Lien upon any of the assets or properties of the Additional Guarantor. 6. The provisions of the Security Agreement [and Supplemental IP Security Agreement] are in form sufficient to create, in favor of the Administrative Agent on behalf of the Lenders, as secured party, a valid security interest in and lien on the Collateral of the Additional Guarantor described in the Security Agreement and the financing statements. Upon the filing of the financing statements with the filing offices and the delivery of the Pledged Collateral, the 290 Administrative Agent will have a valid and perfected security interest in and lien on all of such Collateral described in the Security Agreement and the financing statements. 7. Except as specifically disclosed in __________________________, there are no actions, suits, proceedings, claims or disputes pending, or to the best of our knowledge, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Additional Guarantor or any of its properties which (i) purport to affect or pertain to the Additional Guarantor Documents, or any of the transactions contemplated thereby; or (ii) if determined adversely to the Additional Guarantor, would be likely to have a Material Adverse Effect. 8. Our opinion set forth in paragraph 4 above is subject to the qualification that the enforceability of the Additional Guarantor Documents may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general equity principles. EX-10.8 6 w46446ex10-8.txt SECURED SUBORDINATED PROMISSORY NOTE 1 EXHIBIT 10.8 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, JOHN HANCOCK LIFE INSURANCE COMPANY, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-1 $31,500,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to JOHN HANCOCK LIFE INSURANCE COMPANY, or registered assigns, the principal amount of THIRTY ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($31,500,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for purposes hereof if not made on the originally scheduled date of payment therefor, without -1- 2 giving effect to any applicable grace period. This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 3 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By /s/ William J. Walsh ----------------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 4 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ...................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- 5 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, JOHN HANCOCK LIFE INSURANCE COMPANY, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-2 $4,500,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to JOHN HANCOCK LIFE INSURANCE COMPANY, or registered assigns, the principal amount of FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($4,500,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for -1- 6 purposes hereof if not made on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 7 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By /s/ William J. Walsh --------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 8 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ..................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- 9 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-3 $2,000,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, or registered assigns, the principal amount of TWO MILLION DOLLARS ($2,000,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for purposes hereof if not made -1- 10 on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 11 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. By /s/ William J. Walsh -------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 12 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ..................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- 13 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-4 $3,000,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM, or registered assigns, the principal amount of THREE MILLION DOLLARS ($3,000,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for -1- 14 purposes hereof if not made on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 15 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By /s/ William J. Walsh -------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 16 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ....................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- 17 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, SIGNATURE 4 LIMITED, THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-5 $2,000,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to SIGNATURE 4 LIMITED, or registered assigns, the principal amount of TWO MILLION DOLLARS ($2,000,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for purposes hereof if not made on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. -1- 18 This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 19 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By /s/ William J. Walsh -------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 20 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ...................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- 21 THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION, SIGNATURE 5 L.P., THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. CERIDIAN CORPORATION 9.96% Senior Secured Note due January 31, 2008 No. R-6 $7,000,000 January 31, 2001 CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to SIGNATURE 5 L.P., or registered assigns, the principal amount of SEVEN MILLION DOLLARS ($7,000,000) on January 31, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance of such principal amount at a rate per annum equal to 9.96%, from the date hereof, payable quarterly on the last day of each January, April, July and October after the date hereof, commencing on April 30, 2001, until the principal hereof shall have become due and payable (whether at maturity or at a date fixed for prepayment or by declaration or otherwise), and with interest on any overdue principal (including any overdue prepayment of principal) and (to the extent permitted by applicable law) premium, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of the holder hereof, on demand, and, upon acceleration of this Note, together with the Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred to, as liquidated damages and not as a penalty; provided that in no event shall the amount payable by the Company as interest on this Note exceed the highest lawful rate permissible under any law applicable hereto. Payments of principal, premium, if any, and interest hereon shall be made in lawful money of the United States of America by the method and at the address for such purpose specified in the Note Purchase Agreement hereinafter referred to, and such payments shall be overdue for purposes hereof if not made on the originally scheduled date of payment therefor, without giving effect to any applicable grace period. -1- 22 This Note is one of the Company's 9.96% Senior Secured Notes due January 31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as amended, modified and supplemented from time to time, the "Note Purchase Agreement") among the Company and the institutional investors named therein, and the holder hereof is entitled to the benefits of the Note Purchase Agreement and the other Note Documents referred to in the Note Purchase Agreement, including, without limitation, the Collateral Documents, and may enforce the agreements contained therein and exercise the remedies provided for thereby or otherwise available in respect thereof, all in accordance with the terms thereof. This Note is subject to prepayment only as specified in the Note Purchase Agreement. Capitalized terms used herein without definition have the meanings ascribed to them in the Note Purchase Agreement. This Note is in registered form and is transferable only by surrender hereof at the principal executive office of the Company as provided in the Note Purchase Agreement. The Company may treat the person in whose name this Note is registered on the Note register maintained at such office pursuant to the Note Purchase Agreement as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be continuing, the unpaid balance of the principal of this Note may be declared and become due and payable in the manner and with the effect provided in the Note Purchase Agreement. The parties hereto, including the makers and all guarantors and endorsers of this Note, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. This Note shall be construed in accordance with and governed by the domestic substantive laws of The State of New York without giving effect to any choice of law or conflicts of law provision or rule that would cause the application of domestic substantive laws of any other jurisdiction. [The remainder of this page is intentionally left blank.] -2- 23 IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the date first above written. CERIDIAN CORPORATION By /s/ William J. Walsh -------------------- (Title) William J. Walsh Executive Vice President of Finance and Planning of Arbitron and Vice President of Ceridian -3- 24 FORM OF ASSIGNMENT [To be signed only upon transfer of Note] For value received, the undersigned hereby sells, assigns and transfers unto the within Note, and appoints Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full power of substitution in the premises. Date: , . ..................................................... (Signature must conform in all respects to name of Holder as specified on the face of the Note) Signed in the presence of ......................... -4- EX-10.9 7 w46446ex10-9.txt SUBSIDIARY GUARANTY 1 EXHIBIT 10.9 SUBSIDIARY GUARANTY THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by ARBITRON HOLDINGS INC. (the "Guarantor"), in favor (a) of the financial institutions (each a "Lender" and, collectively, the "Lenders") from time to time party to that certain Credit Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended or restated from time to time, the "Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), the Lenders and BANK OF AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c) the Note Holders (as defined herein) (collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed Party"). RECITALS WHEREAS, it is a requirement under of the Credit Agreement and the Note Purchase Agreement that Guarantor shall be bound by the terms and conditions of this Guaranty pending the Spin-Off Consummation Date; and WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the credit extensions to the Borrower pursuant to the Credit Agreement and the Note Purchase Agreement together with the amendments, restatements, extensions and continuations contemplated therein, and from the Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor; WHEREAS, the Guarantor will derive substantial direct and indirect benefits from the Borrower being party to the Specified Swap Contracts, which benefits are hereby acknowledged; NOW, THEREFORE, in consideration of the Administrative Agent and Lenders entering into the Credit Agreement, the Guarantor hereby agrees as follows: SECTION 1 Definitions; Interpretation. (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. (b) Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings: "Collateral Agent" means Bank of America, N.A. in its capacity as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or such replacement Collateral Agent as may be appointed from time to time pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its capacity as Administrative Agent for the benefit of itself and the other Lenders from time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note Holders for the benefit of itself and the other Note Holders from time to time party to the Note Purchase Agreement; and (c) the Swap Provider. 1 2 "Credit Documents" means, collectively, the Loan Documents, the Swap Documents, and the Note Purchase Documents. "Guaranteed Obligations" has the meaning set forth in Section 2(a). "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to them in the first paragraph hereof. "Guarantor Documents" means this Guaranty, and all other certificates, documents, agreements and instruments delivered to the Guaranteed Parties under or in connection with this Guaranty. "Indemnified Liabilities" has the meaning set forth in Section 15(b). "Indemnified Person" has the meaning set forth in Section 15(b). "Intercreditor Agreement" means that Intercreditor Agreement dated as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap Provider, and the Note Holders Agent. "Note Holder Collateral Documents" means, collectively, (a) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders, (b) all Account Control Agreements executed by any Loan Party under any Note Document, (c) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Note Document, and (d) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Note Holder Documents" means, collectively, the Note Purchase Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties. "Note Holder Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Note Holders. "Note Holder" means a "Note Holder" under, and as defined in, the Note Purchase Agreement. "Note Purchase Agreement" means that Note Purchase Agreement dated as of January 31, 2001 among the Borrower, the Note Holders and the other Note Holders party thereto. "Solvent" means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable 2 3 value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Specified Swap Agreement" means any ISDA(R) Master Agreement (including any schedule and confirmation relating thereto) entered into between the Borrower and the Swap Provider as swap counterparties. "Specified Swap Contract" means any interest rate swap entered into between the Borrower and the Swap Provider as swap counterparties constituting a "Specified Swap Contract" as defined in the Credit Agreement. "Subordinated Debt" has the meaning set forth in Section 7(a). "Subordinated Debt Payments" has the meaning set forth in Section 7(b). "Swap Collateral Documents" means, collectively, (i) the Security Agreements and the Pledge Agreements (as such terms are defined in the Credit Agreement, but to the extent entered into by the parties thereto for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider), (ii) all Account Control Agreements executed by any Loan Party under any Swap Document, (iii) all documents executed by any Loan Party to accomplish cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC financing statements, notices and other documents executed from time to time or in connection with any of the foregoing. "Swap Documents" means, collectively, (a) any Specified Swap Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties. "Swap Guaranties" means the Guaranties under and as defined in the Credit Agreement, but to the extent entered into by the Guarantors thereunder for the benefit of, and as modified, extended or otherwise changed in respect of, the Swap Provider. "Swap Provider" has the meaning specified in the Intercreditor Agreement. (c) Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and are incorporated herein by this reference. SECTION 2 Guaranty. (a) Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the full and prompt payment when due (whether at stated maturity, by required 3 4 prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Borrower to each such Guaranteed Party, whether created under, arising out of or in connection with any of the Credit Documents, including all Obligations (as independently defined in each of the Credit Agreement and the Note Purchase Agreement); and any obligations under any Specified Swap Agreement to the extent arising out of any one or more Specified Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter becomes unenforceable or shall be an allowed or disallowed claim under the Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 15), shall hereinafter be collectively referred to as the "Guaranteed Obligations." (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including the New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor's liability with respect to any of the Guaranteed Obligations which any of the Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof accept such limitation on the amount of the Guarantor's liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable. SECTION 3 Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows: (i) the Guarantor's liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it may have against the Borrower or any other Person, or against any collateral now or hereafter securing any of the Guaranteed Obligations; (ii) this Guaranty is a guaranty of payment when due and not merely of collectibility; (iii) the Guarantor's payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor's liability for any portion of the Guaranteed Obligations remaining unsatisfied; and 4 5 (iv) the Guarantor's liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: (A) any proceeding under any Debtor Relief Laws with respect to the Borrower, any other guarantor or any other Person; (B) any limitation, discharge, or cessation of the liability of the Borrower, any other guarantor or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan Documents; (C) any merger, acquisition, consolidation or change in structure of the Borrower, the Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Borrower, the Guarantor, any other guarantor or other Person; (D) any assignment or other transfer, in whole or in part, of any of the Guaranteed Parties' interests in and rights under this Guaranty or the other Credit Documents, including the Guaranteed Parties' right to receive payment of the Guaranteed Obligations; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Borrower, the Guarantor, any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Credit Documents; (F) the Guaranteed Parties' amendment, modification, renewal, extension, cancellation or surrender of any Credit Document; (G) the Guaranteed Parties' vote, claim, distribution, election, acceptance, action or inaction in any proceeding under any Debtor Relief Laws related to the Guaranteed Obligations; (H) any impairment or invalidity of any collateral securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the Guaranteed Parties thereon or therein; and (I) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties. SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor: (i) the principal amount of the Guaranteed Obligations in respect of any of the Guaranteed Parties may be increased or decreased as to such Guaranteed Party and additional indebtedness or obligations of the Borrower under the Credit Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any such Credit Document; 5 6 (ii) the time, manner, place or terms of any payment under any Credit Documents may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or any fee or other amount payable under such Credit Documents, by an amendment, modification or renewal of any Credit Documents or otherwise; (iii) the time for the Borrower's (or any other Person's) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Credit Documents may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as any of the Guaranteed Parties may deem proper; (iv) any of the Guaranteed Parties may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations owing to such Guaranteed Parties, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize on any collateral therefor; (v) the Guaranteed Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (vi) the Guaranteed Parties may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Borrower to the Guaranteed Parties and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and (vii) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any Loan and any power of sale) granted by any Credit Document or other security document or agreement, or otherwise available to the Guaranteed Parties, with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Borrower; all as the Guaranteed Parties (or the Collateral Agent on their behalf) may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty. 6 7 SECTION 5 Guarantor's Waivers. (a) Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require any of the Guaranteed Parties to marshal assets in favor of the Borrower, the Guarantor, any other guarantor or any other Person, to proceed against the Borrower, any other guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Guaranteed Obligations or comply with any other provisions of Section 9-504 of the New York UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Guaranteed Parties whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, the Guarantor or any other Person; (iv) any defense based upon the Guaranteed Parties' or any Lender's errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Borrower or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty, including any and all benefits that otherwise might be available to the Guarantor under New York Laws. This means, among other things: (A) the Guaranteed Parties may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by the Borrower; and (B) if the Guaranteed Parties forecloses on any real property collateral pledged by the Borrower: (1) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Parties may collect from the Guarantor even if the Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from the Borrower. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because the Borrower's debt is secured by real property. (b) Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed 7 8 Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Borrower, the Guarantor or any other Person with respect to the Guaranteed Obligations. (c) Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Borrower and any other guarantor. Upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Borrower or any such other guarantor is joined therein or a separate action or actions are brought against the Borrower or any such other guarantor. (d) Financial Condition of Borrower. The Guarantor shall not have any right to require the Guaranteed Parties to obtain or disclose any information with respect to: (i) the financial condition or character of the Borrower or the ability of the Borrower to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (iv) any action or inaction on the part of the Guaranteed Parties or any other Person; or (v) any other matter, fact or occurrence whatsoever. SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full and the Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Guaranteed Parties as against the Borrower or other guarantors, whether in connection with this Guaranty, any of the other Credit Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the Collateral Agent on their behalf) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Documents (and subject to the Intercreditor Agreement). SECTION 7 Subordination. (a) Subordination to Payment of Guaranteed Obligations. All payments on account of all indebtedness, liabilities and other obligations of the Borrower to the Guarantor, whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Borrower or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and all other amounts payable by the Borrower to the Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the "Subordinated Debt") shall be subject, subordinate and junior in right of 8 9 payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations. (b) No Payments. As long as any of the Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not accept or receive any payment or distribution by or on behalf of the Borrower, directly or indirectly, of assets of the Borrower of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other disposition of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of Default exists and no notice described below has been received by the Guarantor, the Guarantor shall be entitled to accept and receive any and all payments. During the existence of an Event of Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt Payment), and upon receipt by the Borrower of notice from the Guaranteed Parties (or the Collateral Agent on their behalf) of such Default, and until such Event of Default is cured or waived, pursuant to the terms of the applicable Credit Documents, the Borrower shall not make, accept or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this Section 7, any Subordinated Debt Payments shall be received in contravention of this Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the Guaranteed Parties and shall be paid over or delivered to the Guaranteed Parties (or the Collateral Agent on their behalf) for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent necessary to give effect to this Section 7, after giving effect to any concurrent payments or distributions to the Guaranteed Parties in respect of the Guaranteed Obligations. (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain outstanding and unpaid, the Guarantor shall not, without the prior written consent of the Guaranteed Parties (or the Collateral Agent on their behalf): (i) accelerate or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Debt; (ii) exercise any rights under or with respect to (A) any guaranties of the Subordinated Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Borrower or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing; (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of the Guarantor to the Borrower against any of the Subordinated Debt; or (iv) commence, or cause to be commenced, or join with any creditor other than the Guaranteed Parties in commencing, any proceeding under any Debtor Relief Laws as against Borrower. 9 10 (d) Subordination Upon Any Distribution of Assets of the Borrower. In the event of any payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, upon any proceeding under any Debtor Relief Laws with respect to or involving the Borrower, (i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Debt Payment to which the Guarantor would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to the Guaranteed Parties (or the Collateral Agent acting on their behalf) for application to the payment of the Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Guaranteed Parties in respect of such Guaranteed Obligations. (e) Authorization to Guaranteed Parties. If, while any Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is commenced by or against the Borrower or its property: (i) the Guaranteed Parties are hereby irrevocably authorized and empowered (in the name of the Guaranteed Parties, in the name of the Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Debt and give acquittance therefor and to file claims and proofs of claim and take such other action (including voting the Subordinated Debt) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and (ii) the Guarantor shall promptly take such action as any of the Guaranteed Parties may reasonably request (A) to collect the Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such powers of attorney, assignments and other instruments as they may request to enable them to enforce any and all claims with respect to the Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt Payments. SECTION 8 Continuing Guaranty; Reinstatement. (a) Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon the Guarantor until the payment and performance in full of all Guaranteed Obligations. (b) Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Borrower (or receipt of any proceeds of collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Borrower, its estate, trustee, receiver or any other Person (including 10 11 under any Debtor Relief Laws or other state or federal law), or must otherwise be restored by the Guaranteed Parties, whether as a result of proceedings under any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Guaranteed Parties may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Guaranteed Parties contained in Section 15. SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Guaranteed Parties or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral Agent on their behalf) an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any proceeding under any Debtor Relief Laws with respect to the Borrower, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Borrower for such interest in any such proceeding under any Debtor Relief Laws). The Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any Taxes, on the day when due in Dollars and in same day or immediately available funds, to the Collateral Agent at such office or account of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All such payments shall be promptly applied from time to time by the Guaranteed Parties as provided in the Intercreditor Documents. SECTION 10 Representations and Warranties. The Guarantor represents and warrants to the Guaranteed Parties that: (a) Organization and Powers. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority: (i) to own its assets and carry on its business, and (ii) to execute, deliver and perform its obligations under the Guarantor Documents and Spin-Off Documents. (b) Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and all other Guarantor Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized by all necessary corporate action of the Guarantor, and do not and will not: (i) contravene the terms of the Guarantor's organization documents or (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation to which the Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which the Guarantor or its property is subject, or (iii) violate any Laws. 11 12 (c) Binding Obligation. This Guaranty and the other Guarantor Documents constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, except as have been obtained on or before the Closing Date, is required for (i) the due execution, delivery or performance by, or enforcement against, the Guarantor of the Guarantor Documents, (ii) the execution, delivery or performance by or enforcement against the Guarantor of the Spin-Off Documents or (iii) the consummation of the Spin-Off Transaction. (e) The Guarantor has not previously assigned any interest in the Subordinated Debt or any collateral relating thereto, no Person other than the Guarantor owns an interest in the Subordinated Debt or any such collateral (whether as joint holders of the Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to the Guarantor. (f) Solvency. Immediately prior to and after and giving effect to (i) the incurrence of the Guarantor's obligations under this Guaranty, and (ii) the Spin-Off Transaction, the Guarantor will be Solvent. (g) Consideration. The Guarantor has received at least "reasonably equivalent value" (as such phrase is used in Section 548 of the Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272 of the New York Debtor & Creditor Laws and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations to which it is a party. (h) Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Borrower and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Guaranteed Parties with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Credit Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Borrower and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon or expecting the Guaranteed Parties to furnish to the Guarantor any information now or hereafter in the Guaranteed Parties' possession concerning the financial condition of the Borrower or any other matter. SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that it shall furnish to the Guaranteed Parties such information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as any of the Guaranteed Parties may from time to time reasonably request. 12 13 SECTION 12 Additional Covenants. So long as any Guaranteed Obligations shall remain unsatisfied or any Lender shall have any Commitment, the Guarantor agrees that: (a) Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal existence and (ii) its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties, except in the case of this clause (ii) where the non-preservation could not reasonably be expected to have a Material Adverse Effect. (b) Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as any of the Guaranteed Parties shall deem reasonably necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Guaranteed Parties with evidence of the foregoing satisfactory in form and substance to the Guaranteed Parties. SECTION 13 Notices. All notices, requests or other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement; except that (a) any notices to the Swap Provider shall be delivered to Fleet National Bank (or such replacement Swap Provider as the Swap Provider may direct in writing), according to the information listed in Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any notice to the Note Holders be delivered to the address specified for such Persons in the Note Purchase Agreement (or to such replacement Note Holders as may be appointed from time to time consistent with the Intercreditor Agreement). Notices to the Guarantor shall be sent or delivered to the address set forth in the Credit Agreement for the Borrower. All such notices, requested and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon receipt by the addressee, or if delivered, upon delivery. SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of any Guaranteed Parties to exercise, and no delay in exercising on the part of any Guaranteed Parties, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. SECTION 15 Costs and Expenses; Indemnification. (a) Costs and Expenses. The Guarantor shall: (i) whether or not the transactions contemplated hereby are consummated, pay or reimburse each of the Guaranteed Parties for all costs and expenses incurred by them in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether 13 14 or not consummated), this Guaranty, any other Guarantor Document and any other documents prepared in connection herewith or therewith and the consummation of the transactions contemplated hereby and thereby; and (ii) pay or reimburse the Guaranteed Parties for all costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Guaranty or any other Guarantor Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any proceeding under any Debtor Relief Laws or appellate proceeding). (b) Indemnification. The Borrower shall indemnify, defend and hold each of the Guaranteed Parties, and each Lender and Note Holder and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suites, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Person in favor of any third-party in any way relating to or arising out of this Guaranty or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any proceeding under any Debtor Relief Laws or appellate proceeding) related to or arising out of this Guaranty or relating to the Collateral, whether or not any Indemnified Person is a party thereto (the "Indemnified Liabilities"); provided that the Guarantor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person. (c) Defense. At the election of any Indemnified Person, the Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person's sole discretion, at the sole cost and expense of the Guarantor. (d) Interest. Any amounts payable to the Guaranteed Parties under this Section 15 if not paid upon demand shall bear interest from the date of such demand until paid in full, at the Default Rate. (e) Survival. The agreements in this Section shall survive payment of all other Guaranteed Obligations. SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Guaranteed Parties and the Lenders provided by law, if an Event of Default exists or any reimbursement or payment obligation under any of the Credit Documents has been accelerated, each Guaranteed Parties and Lenders is hereby authorized at any time and from time to time, upon notice to the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but without notice to the Guarantor (any such notice being expressly waived by the Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Person to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor then due and 14 15 owing, irrespective of whether or not such Person shall have made any demand upon the Borrower or the Guarantor under any of the Credit Documents. Each Lender and the Guaranteed Parties shall promptly notify the Guarantor (through the Collateral Agent) after any such set-off and application made by it; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lenders and Guaranteed Parties under this Section 16 are in addition to other rights and remedies (including other rights of set-off) which the such parties may have. SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the Note Holders, or the Guaranteed Parties shall be under any obligation to marshal any assets in favor of the Guarantor or any other Person or against or in payment of any or all of the Guaranteed Obligations. To the extent that the Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Collateral Agent upon demand its pro rata share of any amount so recovered from or repaid by the Collateral Agent. SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lenders, the Note Holders, the Guaranteed Parties, and their respective successors and assigns, and no other Person (other than the Collateral Agent and any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein. SECTION 19 Binding Effect; Assignment. (a) Successors and Assigns. The provisions of this Guaranty shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. (b) Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Required Lenders. Each of the Guaranteed Parties, the Note Holders, and the Lenders may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of such Person's rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by such Person in accordance with Section 10.07 of the Credit Agreement in its rights and obligations thereunder and under any of the Credit Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by any Lender, such Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. 15 16 SECTION 20 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. SECTION 22 Entire Agreement; Amendments. This Guaranty, together with the other Guarantor Documents, embodies the entire agreement of the Guarantor with respect to the matters set forth herein for the benefit of each Guaranteed Party, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended only by written agreement between the Guarantor and the Guaranteed Party to whom such 16 17 amendment relates. Any such amendment shall not effect any guaranty of the Guarantor granted hereunder to any other Guaranteed Party. SECTION 23 Independence. This Guaranty sets forth independent and separate guaranties of the Guarantor in favor of each Guaranteed Party in respect of the Guaranteed Obligations owing to each such Guaranteed Party. The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement required hereunder with respect to any Guaranteed Party shall not in any way affect or impair the legality or enforceability of that or any other provision of this Guaranty or any instrument or agreement required hereunder in respect of any other Guaranteed Party. The parties acknowledge that this Guaranty has, solely for reasons of convenience, been prepared and executed as a single document, but that the legal effect shall be in all respects as thought the Guarantor had executed separate guaranties, in favor of each Guaranteed Party. Any provision of this Agreement and the other Credit Documents to which the Grantor is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 24 Multiple Guarantors; Joint and Several Liability. When this Guaranty is executed by more than one Guarantor, the word "Guarantor" shall mean all and any one or more of them, and the obligations of all Persons signing this Guaranty shall be joint and several. [remainder of page intentionally left blank] 17 18 IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written. ARBITRON HOLDINGS INC., as Guarantor By: /s/ JOHN H. GRIERSON ------------------------------------------- Name: John H. Grierson ----------------------------------------- Title: Vice President & Treasurer ------------------------------------------ 18 EX-10.10 8 w46446ex10-10.htm ARBITRON INC. 1999 STOCK INCENTIVE PLAN

EXHIBIT 10.10

ARBITRON INC.
1999 STOCK INCENTIVE PLAN
(Amended and Restated as of March 30, 2001)

1.    Purpose of Plan.

      The purpose of the Arbitron Inc. 1999 Stock Incentive Plan (the “Plan”) is to advance the interests of Arbitron Inc. (the “Company”) and its stockholders by enabling the Company and its Subsidiaries to attract and retain persons of ability to perform services for the Company and its Subsidiaries by providing an incentive to such individuals through equity participation in the Company and by rewarding such individuals who contribute to the achievement by the Company of its economic objectives.

2.    Definitions.

      The following terms will have the meanings set forth below, unless the context clearly otherwise requires:

      2.1     “Board” means the Board of Directors of the Company.

      2.2     “Broker Exercise Notice” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer.

      2.3     “Change of Control” means an event described in Section 12.1 of the Plan or such other definition as may be adopted by the Committee from time to time in its sole discretion.

      2.4     “Code” means the Internal Revenue Code of 1986, as amended.

      2.5     “Committee” means the group of individuals administering the Plan, as provided in Section 3 of the Plan.

      2.6     “Common Stock” means the common stock of the Company, par value $0.50 per share, or the number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.4 of the Plan.

      2.7     “Disability” means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code.

      2.8     “Eligible Recipients” means all employees (including, without limitation, officers and directors who are also employees) of the Company or any Subsidiary and any non-employee directors, consultants and independent contractors of the Company or any Subsidiary.

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      2.9     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

      2.10     “Fair Market Value” means, with respect to the Common Stock as of any date, the closing market price per share of the Common Stock at the end of the regular way trading session, which as of the effective date of this Plan is 4:00 p.m., New York City time, as reported on the New York Stock Exchange Composite Tape on that date (or, if no shares were traded or quoted on such date, as of the next preceding date on which there was such a trade or quote).

      2.11     “Incentive Award” means an Option, Restricted Stock Award or Performance Unit granted to an Eligible Recipient pursuant to the Plan.

      2.12     “Incentive Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.

      2.13     “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock Option.

      2.14     “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.

      2.15     “Participant” means an Eligible Recipient who receives one or more Incentive Awards under the Plan.

      2.16     “Performance Goal” means one or more of the following performance goals, either individually, alternatively or in any combination, applied on a corporate, subsidiary or business unit basis: cash flow, earnings (including one or more of gross profit, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share, individually, margins (including one or more of gross, operating and net income margins), returns (including one or more of return on assets, equity, investment, capital and revenue and total stockholder return), stock price, economic value added, working capital, market share, cost reductions and strategic plan development and implementation. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria. The Committee may appropriately adjust any evaluation of performance under such goals to exclude any of the following events: asset write-downs, litigation or claim judgments or settlements, the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, accruals for reorganization and restructuring programs, uninsured catastrophic losses, and any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 or in management’s discussion and analysis of financial performance appearing in the Company’s annual report to stockholders for the applicable year.

      2.17     “Performance Unit” means a right granted to an Eligible Recipient pursuant to Section 8 of the Plan to receive a payment from the Company, in the form of Common Stock, cash, Stock Units or a combination of the foregoing, upon the achievement of established performance criteria.

      2.18     “Previously Acquired Shares” means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant, exercise or vesting of such Incentive Award.

2

      2.19     “Prior Plans” mean the Ceridian Corporation 1993 Long-Term Incentive Plan and the Ceridian Corporation 1990 Long-Term Incentive Plan.

      2.20     “Restricted Stock Award” means an award of Common Stock or Stock Units granted to an Eligible Recipient pursuant to Section 7 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 7.

      2.21     “Retirement” means the termination (other than for Cause or by reason of death or Disability) of a Participant’s employment or other service on or after the date on which the Participant has attained the age of 55 and has completed 10 years of continuous service to the Company or any Subsidiary (such period of service to be determined in accordance with the retirement/pension plan or practice of the Company or Subsidiary then covering the Participant, provided that if the Participant is not covered by any such plan or practice, the Participant will be deemed to be covered by the Company’s plan or practice for purposes of this determination).

      2.22     “Section 162(m)” means Section 162(m) of the Code and the applicable Treasury Regulations promulgated thereunder.

      2.23     “Securities Act” means the Securities Act of 1933, as amended.

      2.24     “Stock Unit” means a bookkeeping entry representing the equivalent of one share of Common Stock that is payable in the form of Common Stock, cash or any combination of the foregoing.

      2.25     “Subsidiary” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee.

      2.26     “Tax Date” means the date any withholding tax obligation arises under the Code for a Participant with respect to an Incentive Award.

3.     Plan Administration.

      3.1     The Committee. So long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, the Plan will be administered by a committee (the “Committee”) consisting solely of not less than two members of the Board who are “Non-Employee Directors” within the meaning of Rule 16b-3 under the Exchange Act and, if the Board so determines in its sole discretion, who are “outside directors” within the meaning of Section 162(m). To the extent consistent with corporate law, the Committee may delegate to any directors or officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section 16 of the Exchange Act and Section 162(m). Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan.

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            3.2   Authority of the Committee.

      (a)     In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award; (iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock, Stock Units or any combination of the foregoing.

      (b)     Except as otherwise provided in the remainder of this Section 3.2(b), the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an Incentive Award, extend the term of an Incentive Award or accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification. Without prior approval of the Company’s stockholders, the Committee shall not have the authority under the Plan to (i) amend or modify the terms of any pre-existing Option awards to lower the Option exercise price or (ii) authorize the grant of replacement Option awards in substitution for pre-existing Option awards that have been or are to be surrendered and canceled at any time when the Fair Market Value of the Common Stock is less than the exercise price applicable to such surrendered and canceled Option awards.

      (c)     In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other similar change in corporate structure or shares, (ii) any purchase, acquisition, sale or disposition of a significant amount of assets or a significant business, (iii) any change in accounting principles or practices, or (iv) any other similar change, in each case with respect to the Company (or any Subsidiary or division thereof) or any other entity whose performance is relevant to the grant or vesting of an Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may, without the consent of any affected Participant, amend or modify the grant or vesting criteria of any outstanding Incentive Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee or the board of

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directors of the surviving corporation) following such event as prior to such event; provided, however, that the amended or modified terms are permitted by the Plan as then in effect.

      (d)     The Committee may permit or require the deferral of any payment, issuance or other settlement of an Incentive Award subject to such rules and procedures as the Committee may establish, including the conversion of such payment, issuance or other settlement into Options or Stock Units and the payment or crediting of interest, dividends or dividend equivalents.

4.   Shares Available for Issuance.

      4.1     Maximum Number of Shares Available. Subject to adjustment as provided in Section 4.4 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be 2,539,009 shares (reflecting the one-for-five reverse stock split effected on March 30, 2001). The Committee may use shares available for issuance under the Plan as the form of payment for compensation, awards or rights earned or due under deferred or any other compensation plans or arrangements of the Company or any Subsidiary. The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

      4.2     Calculation of Shares Available. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan. To the extent that any shares of Common Stock that are subject to an Incentive Award under the Plan or the Prior Plan (a) are not issued to a Participant due to the fact that such Incentive Award lapses, expires, is forfeited or for any reason is terminated unexercised or unvested, or is settled or paid in cash or (b) are used to satisfy any exercise price or withholding obligations, such shares will automatically again become available for issuance under the Plan. In addition, to the extent that a Participant tenders (either by actual delivery or by attestation) shares of Common Stock already owned by the Participant to the Company in satisfaction of any exercise price or withholding tax obligations, such shares will automatically again become available for issuance under the Plan.

      4.3     Additional Limitations. Notwithstanding any other provisions of the Plan to the contrary and subject, in each case, to adjustment as provided in Section 4.4 of the Plan, (a) no more than 2,000,000 shares of Common Stock may be issued under the Plan with respect to Incentive Stock Options, (b) no more than 700,000 shares of Common Stock may be issued under the Plan with respect to Restricted Stock Awards that are not granted in lieu of cash compensation that would otherwise be payable to Participants, and (c) no Participant in the Plan may be granted Incentive Awards relating to more than 150,000 shares of Common Stock in the aggregate during any period of three consecutive fiscal years of the Company.

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      4.4     Adjustments to Shares and Incentive Awards. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustments (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, (a) the number and kind of securities or other property (including cash) subject to outstanding Options, and (b) the exercise price of outstanding Options.

5.     Participation.

      Participants in the Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the date of any related agreement with the Participant.

6.     Options.

      6.1     Grant. An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Option. The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any Incentive Stock Option granted under the Plan ceases for any reason to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will continue to be outstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock Option.

      6.2     Exercise Price. The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant or, with respect to an Incentive Stock Option (110% of the Fair Market Value if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

      6.3     Exercisability and Duration. An Option will become exercisable at such times and in such installments as may be determined by the Committee in its sole discretion at the time of grant; provided, however, that no Option may be exercisable prior to six months from its date of grant (other than in connection with a Participant’s death or Disability or in connection with a Change of Control of the Company) and no Incentive Stock Option may be exercisable after 10 years from its date of grant (five years from its date of grant if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

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      6.4     Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, Previously Acquired Shares (including through delivery of a written attestation of ownership of such Previously Acquired Shares if permitted, and on terms acceptable, to the Committee in its sole discretion), a full recourse promissory note (on terms acceptable to the Committee in its sole discretion) or by a combination of such methods.

      6.5     Manner of Exercise. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company, Attention: Corporate Treasury, at its principal executive office in Minneapolis, Minnesota and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan.

      6.6     Aggregate Limitation of Stock Subject to Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of the shares of Common Stock with respect to which incentive stock options (within the meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any calendar year (under the Plan and any other incentive stock option plans of the Company or any subsidiary or parent corporation of the Company (within the meaning of the Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code from time to time), such excess Options will be treated as Non-Statutory Stock Options. The determination will be made by taking incentive stock options into account in the order in which they were granted. If such excess only applies to a portion of an Incentive Stock Option, the Committee, in its discretion, will designate which shares will be treated as shares to be acquired upon exercise of an Incentive Stock Option.

7.     Restricted Stock Awards.

      7.1     Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Restricted Stock Award. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate, including, without limitation, that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance criteria; provided, however, that no Restricted Stock Award may vest prior to six months from its date of grant (other than in connection with a Participant’s death or Disability or in connection with a Change of Control of the Company). Notwithstanding the foregoing and except as result of a Participant’s death or Disability or in connection with a Change of Control of the Company, Restricted Stock Awards that provide for (a) vesting upon the satisfaction of certain performance criteria shall vest over a period of not less than one year from its date of grant and (b) time based vesting shall vest over a period of not less than three years from its date of grant; provided, however, that Restricted Stock Awards granted in lieu of some other form of compensation to an Eligible Recipient would be permitted without such vesting restrictions.

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      7.2     Rights as a Stockholder; Transferability. Except as provided in Sections 7.1, 7.3 and 13.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under this Section 7 upon the Participant becoming the holder of record of such shares as if such Participant were a holder of record of shares of unrestricted Common Stock.

      7.3     Dividends and Distributions. Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions (including regular quarterly cash dividends) paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will not be subject to the same restrictions as the shares to which such dividends or distributions relate and will be paid currently to the Participant. In the event the Committee determines not to pay such dividends or distributions currently, the Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions. In addition, the Committee, in its sole discretion, may require such dividends and distributions to be reinvested (and in such case the Participants consent to such reinvestment) in shares of Common Stock that will be subject to the same restrictions as the shares to which such dividends or distributions relate.

      7.4     Enforcement of Restrictions. To enforce the restrictions referred to in this Section 7, the Committee may (a) place a legend on the stock certificates referring to such restrictions and may require Participants, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or (b) maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s transfer agent for its Common Stock.

8.     Performance Units.

      An Eligible Recipient may be granted one or more Performance Units under the Plan, and such Performance Units will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Performance Units as it deems appropriate, including, without limitation, that the Participant remain in the continuous employ or service of the Company or any Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance goals or criteria. The Committee will have the sole discretion to determine the form in which payment of the economic value of Performance Units will be made to a Participant (i.e., cash, Common Stock, Stock Units or any combination of the foregoing) or to consent to or disapprove the election by a Participant of the form of such payment. Notwithstanding the foregoing, Performance Units that provide for vesting upon the satisfaction of certain performance criteria shall vest over a period of not less than three years from its date of grant; provided, however, that Performance Units granted in lieu of some other form of compensation to an Eligible Recipient would be permitted without such vesting restrictions.

9.     Performance-Based Compensation Provisions.

      The Committee, when it is comprised solely of two or more outside directors meeting the requirements of Section 162(m), in its sole discretion, may designate whether any Incentive Awards are intended to be “performance-based compensation” within the meaning of Section 162(m). Any

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Incentive Awards so designated will, to the extent required by Section 162(m), be conditioned on the achievement of one or more Performance Goals, and such Performance Goals will be established by the Committee within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m) giving due regard to the disparate treatment under Section 162(m) of the stock options and stock appreciation rights where compensation is determined based solely on an increase in the value of the underlying stock after the date of grant or award, as compared to other forms of compensation, including restricted stock awards. The maximum dollar value payable to any Participant with respect to Incentive Awards that are designated as such “performance-based compensation” and that are valued with reference to property other than shares of Common Stock may not exceed $5,000,000 in the aggregate during any period of three consecutive fiscal years of the Company. Such Committee shall also certify in writing that such performance goals have been met prior to payment of compensation to the extent required by Section 162(m).

10.     Effect of Termination of Employment or Other Service.

      10.1     Rights Upon Termination. The Committee will have the authority, in its sole discretion, to determine the effect that termination of a Participant’s employment or other service with the Company and all Subsidiaries, whether due to death, Disability, Retirement or any other reason, will have on outstanding Incentive Awards then held by such Participant.

      10.2     Modification of Rights Upon Termination. Notwithstanding the other provisions of this Section 10, upon a Participant’s termination of employment or other service with the Company and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time on or after the date of grant, including following such termination), cause Options (or any part thereof) then held by such Participant to become or continue to become exercisable and/or remain exercisable following such termination of employment or service and Restricted Stock Awards and Performance Units then held by such Participant to vest and/or continue to vest or become free of restrictions following such termination of employment or service, in each case in the manner determined by the Committee; provided, however, that no Option or Restricted Stock Award may become exercisable or vest prior to six months from its date of grant (other than in connection with a Participant’s death or Disability or in connection with a Change of Control of the Company) or remain exercisable or continue to vest beyond its expiration date.

      10.3     Date of Termination of Employment or Other Service. Unless the Committee otherwise determines in its sole discretion, a Participant’s employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the Subsidiary for which the Participant provides employment or other service, as determined by the Committee in its sole discretion based upon such records.

11.     Payment of Withholding Taxes.

      11.1     General Rules. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts which may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action with respect to an Incentive Award.

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      11.2     Special Rules. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 11.1 of the Plan (up to the minimum statutory rate) by electing to tender Previously Acquired Shares, a Broker Exercise Notice or a promissory note (on terms acceptable to the Committee in its sole discretion), or by a combination of such methods.

12.     Change of Control.

      12.1     Definitions. For purposes of this Section 12, the following definitions will apply:

      (a)     “Benefit Plan” means any formal or informal plan, program or other arrangement heretofore or hereafter adopted by the Company or any Subsidiary for the direct or indirect provision of compensation to the Participant (including groups or classes of participants or beneficiaries of which the Participant is a member), whether or not such compensation is deferred, is in the form of cash or other property or rights, or is in the form of a benefit to or for the Participant.

      (b)     “Change of Control” means any of the following events:

      (1)     a merger or consolidation to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power for election of directors of the surviving corporation immediately following the effective date of such merger or consolidation;

      (2)     the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) in the aggregate of securities of the Company representing 25% or more of the total combined voting power of the Company’s then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert;

      (3)     the sale of the properties and assets of the Company, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of the Company;

      (4)     the stockholders of the Company approve any plan or proposal for the liquidation of the Company; or

      (5)     a change in the composition of the Board at any time during any consecutive 24 month period such that the “Continuity Directors” cease for any reason to constitute at least a 70% majority of the Board. For purposes of this clause, “Continuity Directors” means those members of the Board who either (1) were directors at the beginning of such consecutive 24 month period, or (2) were elected by, or on the nomination or

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recommendation of, at least a two-thirds majority of the then-existing Board of Directors.

      12.2     Effect of a Change of Control. The Committee will have the authority, in its sole discretion, to determine the effect that a Change of Control of the Company will have on outstanding Incentive Awards then held by such Participant.

      12.3     Authority to Modify Change of Control Provisions. Prior to a Change of Control of the Company, unless otherwise provided in the agreement evidencing the Incentive Award, the Participant will have no rights under this Section 12, and the Committee will have the authority, in its sole discretion, to rescind, modify or amend the provisions of this Section 12 without the consent of any Participant.

13.     Rights of Eligible Recipients and Participants; Transferability.

      13.1     Employment or Service. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary.

      13.2     Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its discretion.

      13.3     Restrictions on Transfer.

      (a)     Except pursuant to testamentary will or the laws of descent and distribution and except as expressly permitted by Section 13.3(b) of the Plan, no right or interest of any Participant in an Incentive Award prior to the exercise or vesting of such Incentive Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. A Participant will, however, be entitled to designate a beneficiary to receive an Incentive Award upon such Participant’s death. In the event of a Participant’s death, payment of any amounts due under the Plan will be made to, and exercise of any Options (to the extent permitted pursuant to Section 10 of the Plan) will be made by, the Participant’s designated beneficiary. For purposes of the Plan, a “designated beneficiary” will be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee will require in its sole discretion. If a Participant fails to designate a beneficiary, or if the designated beneficiary does not survive the Participant or dies before the designated beneficiary’s exercise of all rights under the Plan, payment of any amounts due under the Plan will be made to, and exercise of any Options (to the extent permitted pursuant to Section 10 of the Plan) may be made by, the Participant’s personal representative.

      (b)     The Committee may, in its discretion, authorize all or a portion of the Options to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, ex-spouse, children, step-children or grandchildren of the Participant (the “Family

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Members”), (ii) a trust or trusts for the exclusive benefit of such Family Members, (iii) a partnership in which such Family Members are the only partners, or (iv) such other persons or entities as the Committee, in its discretion, may permit, provided that (1) there may be no consideration for such a transfer (other than the possible receipt of an ownership interest in an entity to which such a transfer is made), (2) the award agreement pursuant to which such Options are granted must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section 13.3(b), (3) timely written notice of the transfer must be provided to the Company by the Participant, and (4) subsequent transfers of the transferred Options shall be prohibited except for those in accordance with Section 13.3(a). Following transfer, any such Option and the rights of any transferee with respect thereto will continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer, including that the events of termination of employment or other service as provided in the Plan and in any applicable award agreement will continue to be applied with respect to the original Participant, with the transferee bound by the consequences of any such termination of employment or service as specified in the Plan and the applicable award agreement. The Company will be under no obligation to provide notice of termination of a Participant’s employment or other service to any transferee of such Participant’s Options. Notwithstanding any Option transfer pursuant to this Section 13.3(b), the Participant will remain subject to and liable for any employment-related taxes in connection with the exercise of such Option.

      13.4     Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

14.     Securities Law and Other Restrictions.

      Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws or an exemption from such registration under the Securities Act and applicable state securities laws, and (b) there has been obtained any other consent, approval or permit from any other regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

15.     Plan Amendment, Modification and Termination.

      The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no Material Amendment of the Plan shall be made without approval of the stockholders of the Company. For the purposes hereof, a “Material Amendment of the Plan” shall mean any amendment that (a) requires stockholder approval pursuant to Section 422 of the Code or the rules of the New York Stock Exchange or (b) increases the authorized shares, the benefits to Participants, or the class

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of Participants under the Plan. No termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Section 4.4 and Section 12 of the Plan.

16.     Effective Date and Duration of the Plan.

      The Plan is effective as of February 3, 1999, the date it was adopted by the Board. The Plan will terminate at midnight on February 2, 2009, and may be terminated prior thereto by Board action, and no Incentive Award will be granted after such termination. Incentive Awards outstanding upon termination of the Plan may continue to vest, or become free of restrictions, in accordance with their terms.

17.     Miscellaneous.

      17.1     Governing Law. The validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Delaware.

      17.2     Successors and Assigns. The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Participants.

As Amended: May 19, 1999, November 28, 2000 and March 30, 2001

13 EX-10.11 9 w46446ex10-11.txt FORM OF STOCK OPTION AWARD AGREEMENT 1 EXHIBIT 10.11 (March 2001 Form) ARBITRON INC. 1999 STOCK INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT is entered into and effective as of APRIL __, 2001 (the "Date of Grant"), by and between Ceridian Corporation (the "Company") and [NAME] (the "Optionee"). A. The Company has adopted the Arbitron Inc. 1999 Stock Incentive Plan (as may be amended or supplemented, the "Plan") authorizing the Board of Directors of the Company, or a committee as provided for in the Plan (the Board or such a committee to be referred to as the "Committee"), to grant stock options to employees of the Company and its Subsidiaries (as defined in the Plan). B. The Company desires to give the Optionee an inducement to acquire a proprietary interest in the Company and an added incentive to advance the interests of the Company by granting to the Optionee an option to purchase shares of common stock of the Company pursuant to the Plan. Accordingly, the parties agree as follows: 1. Grant of Option. The Company hereby grants to the Optionee the right, privilege and option (the "Option") to purchase [SHARES] shares (the "Option Shares") of the Company's common stock, $0.50 par value (the "Common Stock"), according to the terms and subject to the conditions hereinafter set forth and as set forth in the Plan. The Option granted hereunder shall not be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Option Exercise Price. The per share price to be paid by Optionee in the event of an exercise of the Option will be $______. 3. Duration of Option and Time of Exercise. 3.1 Initial Period of Exercisability. Except as provided in Sections 3.2 and 3.3 hereof, the Option shall become exercisable with respect to one-third of the Option Shares on each of the first, second and third anniversaries of the Date of Grant. The foregoing rights to exercise the Option will be cumulative with respect to the Option Shares becoming exercisable on each such date, but in no event will the Option be exercisable after, and the Option will become void and expire as to all unexercised Option Shares at, 5:00 p.m. (New York City time) on the fifth anniversary of the Date of Grant (the "Time of Option Termination"). 3.2 Termination of Employment. (a) Termination Due to Death, Disability or Retirement. In the event the Optionee's employment with the Company and all Subsidiaries is terminated by reason of death, Disability (as defined in the Plan) or Retirement (as defined in the Plan), the Option will become immediately exercisable in full and remain exercisable until the Time of Option Termination. 2 (b) Termination for Reasons Other Than Death, Disability or Retirement. In the event that the Optionee's employment with the Company and all Subsidiaries is terminated for any reason other than death, Disability or Retirement, or the Optionee is in the employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Optionee continues in the employ of the Company or another Subsidiary), all rights of the Optionee under the Plan and this Agreement will immediately terminate without notice of any kind, and the Option will no longer be exercisable; provided, however, that, if such termination is due to any reason other than termination by the Company or any Subsidiary for Cause (as defined in Section 9 of this Agreement), the Option will remain exercisable to the extent exercisable as of such termination for a period of three months after such termination (but in no event after the Time of Option Termination). 3.3 Change in Control. (a) Impact of Change in Control. If a Change in Control (as defined in Section 9 of this Agreement) of the Company occurs, and the Option has been outstanding for at least two months, the Option will become immediately exercisable in full and will remain exercisable until the Time of Option Termination, regardless of whether the Optionee remains in the employ of the Company or any Subsidiary. In addition, if a Change in Control of the Company occurs, the Committee, in its sole discretion and without the consent of the Optionee, may determine that the Optionee will receive, with respect to some or all of the Option Shares, as of the effective date of any such Change in Control of the Company, cash in an amount equal to the excess of the Fair Market Value (as defined in the Plan) of such Option Shares immediately prior to the effective date of such Change in Control of the Company over the option exercise price per share of the Option. (b) Authority to Modify Change of Control Provisions. Prior to a Change of Control, the Optionee will have no rights under this Section 3.3, and the Committee will have the authority, in its sole discretion, to rescind, modify or amend this Section 3.3 without the consent of the Optionee. 4. Manner of Option Exercise. 4.1 Notice. This Option may be exercised by the Optionee in whole or in part from time to time, subject to the conditions contained in the Plan and in this Agreement, by delivery, in person, by facsimile or electronic transmission or through the mail, to the Company at its principal executive office in New York, New York (Attention: Corporate Secretary), of a written notice of exercise. Such notice must be in a form satisfactory to the Committee, must identify the Option, must specify the number of Option Shares with respect to which the Option is being exercised, and must be signed by the person or persons so exercising the Option. Such notice must be accompanied by payment in full of the total exercise price for the Option Shares to be purchased. In the event that the Option is being exercised, as provided by the Plan and Section 3.2 of this Agreement, by any person or persons other than the Optionee, the notice must be accompanied by appropriate proof of right of such person or persons to exercise the Option. If the Optionee retains the Option Shares purchased, as soon as practicable after the effective exercise of the Option, the Optionee will be recorded on the stock transfer books of the Company as the owner of the Option Shares purchased, and the Company will deliver to the Optionee one or more duly issued stock certificates evidencing such ownership. 4.2 Payment. At the time of exercise of the Option, the Optionee must pay the total exercise price of the Option Shares to be purchased entirely in cash (including a check, bank draft or money order, 2 3 payable to the order of the Company); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payment to be made, in whole or in part, by tender of a full recourse promissory note or a Broker Exercise Notice (as such terms are defined in the Plan), or by a combination of such methods. 5. Rights and Restrictions of Optionee; Transferability. 5.1 Employment. Nothing in this Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time, nor confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary at any particular position or rate of pay or for any particular period of time. 5.2 Rights as a Stockholder. The Optionee will have no rights as a stockholder unless and until all conditions to the effective exercise of the Option (including, without limitation, the conditions set forth in Sections 4 and 6 of this Agreement) have been satisfied and the Optionee has become the holder of record of such shares. No adjustment will be made for dividends or distributions with respect to the Option Shares as to which there is a record date preceding the date the Optionee becomes the holder of record of such Option Shares, except as may otherwise be provided in the Plan or determined by the Committee in its sole discretion. 5.3 Restrictions on Transfer. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Optionee in the Option prior to exercise may be assigned or transferred, or subjected to any lien, during the lifetime of the Optionee, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. The Optionee will, however, subject to applicable laws be entitled to designate a beneficiary to receive the Option upon such Optionee's death in the manner provided by the Plan, and, in the event of the Optionee's death, exercise of the Option (to the extent permitted pursuant to Section 3.2(a) of this Agreement) may be made by the Optionee's designated beneficiary. 5.4 Restrictions Regarding Employment. (a) The Optionee agrees that he or she will not take any Adverse Actions (as defined below) against the Company or any Subsidiary at any time during the period that the Option is or may yet become exercisable in whole or in part or at any time before one year following the Optionee's termination of employment with the Company or any Subsidiary, whichever is later (the "Restricted Period"). The Optionee acknowledges that damages which may arise from a breach of this Section 5.4 may be impossible to ascertain or prove with certainty. Notwithstanding anything in this Agreement or the Plan to the contrary, in the event that the Company determines in its sole discretion that the Optionee has taken Adverse Actions against the Company or any Subsidiary at any time during the Restricted Period, in addition to other legal remedies which may be available, (i) the Company will be entitled to an immediate injunction from a court of competent jurisdiction to end such Adverse Action, without further proof of damage, (ii) the Committee will have the authority in its sole discretion to terminate immediately all rights of the Optionee under the Plan and this Agreement without notice of any kind, and (iii) the Committee will have the authority in its sole discretion to rescind the exercise of all or any portion of the Option to the extent that such exercise occurred within six months prior to the date the Optionee first commences any such Adverse Actions and require the Optionee to disgorge any profits (however defined by the Committee) realized by the Optionee relating to such exercised portion of the Option or any Option Shares issued or issuable upon such exercise. Such disgorged profits paid to the Company must be 3 4 made in cash (including check, bank draft or money order) or, with the Committee's consent, shares of Common Stock with a Fair Market Value on the date of payment equal to the amount of such payment. The Company will be entitled to withhold and deduct from future wages of the Optionee (or from other amounts that may be due and owing to the Optionee from the Company or a Subsidiary) or make other arrangements for the collection of all amounts necessary to satisfy such payment obligation. (b) For purposes of this Agreement, an "Adverse Action" will mean any of the following: (i) engaging in any commercial activity in competition with any part of the business of the Company or any Subsidiary as conducted during the Restricted Period for which the Optionee has or had access to trade secrets and/or confidential information; (ii) diverting or attempting to divert from the Company or any Subsidiary any business of any kind, including, without limitation, interference with any business relationships with suppliers, customers, licensees, licensors, clients or contractors; (iii) participate in the ownership, operation or control of, be employed by, or connected in any manner with any person or entity which solicits, offers or provides any services or products similar to those which the Company or any Subsidiary offers to its customers or prospective customers, (iv) making, or causing or attempting to cause any other person or entity to make, any statement, either written or oral, or convey any information about the Company or any Subsidiary that is disparaging or that in any way reflects negatively on the Company or any Subsidiary; or (v) engaging in any other activity that is hostile, contrary or harmful to the interests of the Company or any Subsidiary, including, without limitation, influencing or advising any person who is employed by or in the service of the Company or any Subsidiary to leave such employment or service to compete with the Company or any Subsidiary or to enter into the employment or service of any actual or prospective competitor of the Company or any Subsidiary, influencing or advising any competitor of the Company or any Subsidiary to employ to otherwise engage the services of any person who is employed by or in the service of the Company or any Subsidiary, or improperly disclosing or otherwise misusing any trade secrets or confidential information regarding the Company or any Subsidiary. (c) Should any provision of this Section 5.4 of the Agreement be held invalid or illegal, such illegality shall not invalidate the whole of this Section 5.4 of the Agreement, but, rather, the Agreement shall be construed as if it did not contain the illegal part or narrowed to permit its enforcement, and the rights and obligations of the parties shall be construed and enforced accordingly. In furtherance of and not in limitation of the foregoing, the Optionee expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Optionee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. This Section 5.4 of the Agreement does not replace and is in addition to any other agreements the Optionee may have with the Company or any of its Subsidiaries on the matters addressed herein. 6. Securities Law and Other Restrictions. Notwithstanding any other provision of the Plan or this Agreement, the Company will not be required to issue, and the Optionee may not sell, assign, transfer or otherwise dispose of, any Option 4 5 Shares, unless (a) there is in effect with respect to the Option Shares a registration statement under the Securities Act of 1933, as amended, and any applicable state or foreign securities laws or an exemption from such registration, and (b) there has been obtained any other consent, approval or permit from any other regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing Option Shares, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions. 7. Withholding Taxes. The Company is entitled to (a) withhold and deduct from future wages of the Optionee (or from other amounts that may be due and owing to the Optionee from the Company), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any federal or provincial withholding tax requirements attributable to the Option, or (b) require the Optionee promptly to remit the amount of such withholding to the Company before acting on the Optionee's notice of exercise of the Option. In the event that the Company is unable to withhold such amounts, for whatever reason, the Optionee agrees to pay to the Company an amount equal to the amount the Company would otherwise be required to withhold under federal, state or local law. 8. Adjustments. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off), or any other change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation), in order to prevent dilution or enlargement of the rights of the Optionee, will make appropriate adjustment (which determination will be conclusive) as to the number and kind of securities or other property (including cash) subject to, and the exercise price of, the Option. 9. Certain Definitions. For purposes of this Agreement, the following additional definitions will apply: (a) "Benefit Plan" means any formal or informal plan, program or other arrangement heretofore or hereafter adopted by the Company or any Subsidiary for the direct or indirect provision of compensation to the Optionee (including groups or classes of participants or beneficiaries of which the Optionee is a member), whether or not such compensation is deferred, is in the form of cash or other property or rights, or is in the form of a benefit to or for the Optionee. (b) "Cause" will have the meaning set forth in any employment or other agreement or policy applicable to the Optionee or, if no such agreement or policy exists, will mean (i) dishonesty, fraud, misrepresentation, theft, embezzlement or injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii) any breach of duty, habitual neglect of duty or unreasonable job performance, or (iv) any material breach of any employment, service, confidentiality or noncompete agreement entered into with the Company or any Subsidiary. (c) "Change of Control" will have the meaning set forth in the Plan plus such other event or transaction as the Board shall determine constitutes a Change of Control, or such other meaning as may be adopted by the Committee from time to time in its sole discretion. 5 6 10. Subject to Plan. The Option and the Option Shares granted and issued pursuant to this Agreement have been granted and issued under, and are subject to the terms of, the Plan. The terms of the Plan are incorporated by reference in this Agreement in their entirety, and the Optionee, by execution of this Agreement, acknowledges having received a copy of the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will prevail. 11. Miscellaneous. 11.1 Binding Effect. This Agreement will be binding upon the heirs, executors, administrators and successors of the parties to this Agreement. 11.2 Governing Law. This Agreement and all rights and obligations under this Agreement will be construed in accordance with the Plan and governed by the laws of the State of Delaware, without regard to conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive laws of another jurisdiction. 11.3 Entire Agreement. This Agreement and the Plan set forth the entire agreement and understanding of the parties to this Agreement with respect to the grant and exercise of the Option and the administration of the Plan and supersede all prior agreements, arrangements, plans and understandings relating to the grant and exercise of the Option and the administration of the Plan. 11.4 Amendment and Waiver. Other than as provided in the Plan, this Agreement may be amended, waived, modified or canceled only by a written instrument executed by the parties to this Agreement or, in the case of a waiver, by the party waiving compliance. 6 7 The parties to this Agreement have executed this Agreement effective the day and year first above written. ARBITRON INC. By -------------------------------------- Name ----------------------------------- Title ---------------------------------- By execution of this Agreement, OPTIONEE the Optionee acknowledges having received a copy of the Plan. ---------------------------------------- Print Name: ---------------------------- Address: ------------------------------ ---------------------------------------- ---------------------------------------- Social Security Number: ---------------- Arbitron Stock Option Identifier: ----- 7 EX-10.16 10 w46446ex10-16.txt FORM OF CUSTOMER CONTRACT 1 EXHIBIT 10.16 STATION LICENSE AGREEMENT TO RECEIVE AND USE ARBITRON RADIO LISTENING ESTIMATES Date of Proposal: November 20, 1998 ---------------------- THIS AGREEMENT is between The Arbitron Company, a division of Ceridian Corporation, ("Arbitron") and the undersigned radio broadcaster ("Station"), a Nevada Corporation. Arbitron hereby grants to Station, for the radio stations listed below, a limited license to receive and use Arbitron data and listening estimates ("Arbitron Data" or "Data") for the survey(s) and for the geographic area ("Market") described in Section 1. This license is personal, nontransferable and nonexclusive. Such Arbitron Data may be furnished to Station in printed or other form ("Reports"), at Arbitron's option, but title thereto will remain with Arbitron at all times. 1. SERVICES PROVIDED; TERM: This Agreement shall become effective when countersigned by Arbitron's Contract Manager and shall be for a period of * years beginning and ending on the dates described below (the "Term"). This Agreement will continue without regard to Station's ownership of the radio station(s) licensed hereunder absent a valid Assignment pursuant to Section 11 of this Agreement. Broadcaster ("Station"): Clear Channel Radio, Inc. ------------------------------------------------------ - ------------------------------------------------------------------------------ For use only by radio station(s): SEE ATTACHMENT "A" --------------------------------------------- - ------------------------------------------------------------------------------ Arbitron Radio Geographic Area ("Market"): ------------------------------------ SEE ATTACHMENT "A" - ------------------------------------------------------------------------------ Term Begins January 1, 1999 ; ends * . ------------------------------ ------------------------------ Number of surveys currently provided during first Term year: * . ------------------ Number of copies currently provided per survey: * . ------------------------------- Reports currently shall be titled: [ ]Spring [ ]Fall [ ]Winter [ ]Summer First Report: See ATTACHMENT "A" -------------------------------------------------------------- All representations in this Section regarding number of surveys, number of printed copies and Report titles are subject to qualifications set forth in Section 6(a) herein. 2. ANNUAL RATE: A License Charge in the form of a Net Annual Rate for each year of the Term, which may be subject to adjustments and discounts pursuant to Sections 3, 4, 6, 11 and 16 of this Agreement, shall be paid by Station; with payments due Monthly (the "Periodic Charge" or "Charge"). The Gross Annual Rate for the first Term year is $ * . Subject to Sections 3, 4, 6 and 11 hereof, neither the Gross nor the Net Annual Rate will change during a Term year. For each succeeding Term year, the Gross Annual Rate shall be the Gross Annual Rate for the previous Term year increased by a factor of * percent. Any applicable discounts or other adjustments will be applied thereafter to the Annual Rate so derived. 3. DISCOUNTS: (a) Continuous Service Discount: A discount of ten percent (10%) in calculating the Periodic Charge shall be allowed for each month in excess of 12 consecutive months that Station is continuously licensed to use the Arbitron Data for this Market, provided that such discount shall no longer apply if Station fails to sign and return this Agreement to Arbitron within 45 days after the termination of a prior Arbitron Radio License Agreement. (b) Group Discount: If Station owns two or more radio stations located in different markets and such radio stations are under common ownership as defined by Arbitron, Station may be entitled to a Group Discount based on the number of subscribing radio stations owned at the time this Agreement is executed, which discount may vary and be adjusted during the Term of this Agreement in accordance with Arbitron's Group Discount Schedule should the number of subscribing commonly owned radio stations change. (c) Long-Term Discount: A discount of 20 % in months 1-12, 20 % in months 13-24, ------ ------- % in months 25-36, % in months 37-48, ------ ------- % in months 49-60, % in months 61-72, ------ ------- % in months 73-84 ------ shall be allowed in calculating the Net Annual Rate charged during the applicable months. 4. PERIODIC CHARGE: The Periodic Charge, due and payable by Station on the first day of each billing period, shall be: (a) the Gross Annual Rate plus any adjustments; (b) less any applicable Continuous Service Discount; (c) less, from the amount thereby derived, any applicable Group Discount; (d) less, from the amount thereby derived, any applicable Long-Term Discount; (e) with such amount prorated equally between the number of payments for the Term year. In addition to and together with the above payments, Station shall pay to Arbitron any sales, excise, gross-receipts, service, use or other taxes, however designated, now or hereafter imposed upon or required to be collected by Arbitron by any authority having jurisdiction over the Market being surveyed or over any location to which Station directs Arbitron to deliver Data, or by any other taxing jurisdiction, and such obligation shall survive the termination of this Agreement. 5. LATE PAYMENT CHARGE AND RIGHT TO SUSPEND REPORT DELIVERY OR TERMINATE AGREEMENT: A late payment charge of one and one-half percent (1.5%) per month will be charged on all Periodic Charges, as adjusted, which are not paid within 60 days after due hereunder, but in no event will the applicable per-month late payment charge exceed one-twelfth of the maximum annual percentage allowed to be charged by applicable state usury law. Any failure to impose a late payment charge shall not prejudice Arbitron's right to do so should the default continue or should a subsequent payment not be made when due. In addition, Arbitron may, without terminating, breaching or committing a default under this Agreement: (a) accelerate or modify in any way the payment schedule of Periodic Charges for the duration of this Agreement to a number of installments to be determined by Arbitron in its discretion; and/or (b) suspend delivery to Station of any Data or Report(s), in any form, due under this Agreement until such time as Station is current in its payments of all sums due hereunder; and/or (c) send Station written notice that Station's license hereunder is suspended, in which case Station further expressly agrees that it thereafter shall not use Arbitron Data and/or Reports previously received by Station until such time as Station becomes current in its payments of all sums due under this Agreement. Arbitron's suspension hereunder of delivery of Data and/or Reports to Station, and of this License, shall not relieve Station of any of its obligations hereunder. Station further agrees to reimburse Arbitron for all collection costs and expenses (including reasonable attorneys' fees) incurred hereunder. This Agreement may be terminated immediately by Arbitron should Station default in payment of any sum due or should Station default in any other condition or obligation of this Agreement. 6. CHANGES IN RADIO MARKET SERVICE: Modification of Rates, Surveys, Report Content or Report Format: (a) While Arbitron will use professional research efforts to conduct its surveys and produce its Data in accordance with its Description of Methodology, and the Minimum Standards for Broadcast Rating Research of the Electronic Media Rating Council, Arbitron reserves the right to change at any time the geographical territory comprising the Market, its policies and procedures, survey dates, survey length, survey frequency, sampling procedures, methodology, method of Data delivery, number of printed copies of Reports, Report content, Report titles, Report format, and to cancel surveys and the preparation of Arbitron Data, or any other aspect of the Data services supplied. Arbitron need not produce any Data or Reports whenever, in its judgment, insufficient data are available to meet its minimum research standards or any event has jeopardized the reliability of the data. In the event that Data and/or Reports are not produced, Station shall receive credit reflecting the pro rata value of the Net Annual Rate for said Data and/or Report(s). Without limiting the foregoing, Station expressly understands and agrees that Arbitron may, at any time /s/GLS [ARBITRON LOGO] -------------- Initials here * = See ATTACHMENT "A" 2 during the Term of this Agreement, reduce the number of surveys conducted and/or Reports published for this Market and consequently reduce the number of Reports provided to Station and that, in the event such reduction occurs, Station is not relieved of any of its obligations under this Agreement. (b) In the event that any cause(s) prevents Arbitron from conducting any survey in accordance with its Description of Methodology, schedules or other publications, Arbitron reserves the right to produce abbreviated Report(s). Station hereby consents to publication of such abbreviated Report(s) under such circumstances. In the event that such an abbreviated Report covers a substantially decreased geographic area, or deletes twenty-five percent (25%) or more of the survey days from the aggregate number of days scheduled, Station shall be entitled to either a proportionate refund for the abbreviated Report, or a full refund for the abbreviated Report, upon return of the abbreviated Report within 10 days, at Station's option. Further, Arbitron reserves the right in its sole discretion to augment available data by means of expanded or extended samples and Station agrees it shall not be entitled to any refund in such event. (c) Arbitron may increase the Gross Annual Rate hereunder at any time. If Arbitron increases the Rate for a reason other than as permitted elsewhere in this Agreement, it shall give prior written notice to Station. Station may, within a 30-day period following such notice, cancel the unexpired Term of the Agreement, by written notice pursuant to Section 15(a), without cancellation charge or other cost, effective on the date the new Gross Annual Rate would have become effective. In the absence of such timely cancellation, this Agreement shall continue and the new Gross Annual Rate shall become payable in the month stated in Arbitron's notice and thereafter. 7. PERMITTED USES AND CONFIDENTIALITY: Subject to the limitations stated herein, Station agrees to limit its uses of the Arbitron Data and Report(s) to such uses as are necessary in the ordinary course of Station's broadcasting business for programming and media selling. Station understands and agrees that this use is limited exclusively to the radio station(s) specified in Section 1 of this Agreement and only for the Term of this Agreement. In this connection, Station agrees that the Arbitron Data and Report(s) will only be disclosed: (a) directly or through its Station representatives to advertisers, prospective advertisers and their agencies for the purpose of obtaining and retaining advertising accounts; and (b) through advertising or other promotional literature. All such disclosures shall identify Arbitron as the source of the disclosed Arbitron Data and Report(s) and should identify the Market, survey period and type of audience estimate, daypart and survey area and shall state that the Arbitron Data and Report(s) quoted therein are copyrighted by Arbitron and are subject to all limitations and qualifications disclosed in the Data and Report(s) ("Sourcing").* At all times during the Term of this Agreement and thereafter, Station agrees to keep the Arbitron Data and Report(s) supplied by Arbitron confidential and not to disclose the same except as permitted by this Agreement. Station agrees to use its best efforts to prevent the unauthorized disclosure of Arbitron Data and Report(s) by Station's employees and/or its radio station(s)'s employees and agents, by its radio station(s)'s representatives, by its advertisers and their advertising agencies, by data processing firms, and by all other persons who obtain the Arbitron Data from Station or its radio station(s)'s employees or agents. For Station or its radio station(s) to divulge any Arbitron Data and/or Report(s) to a nonsubscribing station or to lend and/or give an original copy or any reproduction of any part of any Data and/or Report(s) or any Arbitron estimates or data to any nonsubscriber, not authorized by this Agreement, constitutes a breach of this Agreement and an infringement of Arbitron's copyright. In the event that a Report listed in Section 1 of this Agreement is delivered after the expiration of the Term of this License Agreement, Licensee's license to use that Report shall continue under the terms and conditions of this License until the release of the next Survey Report in this Market. Subject to the following conditions, Station may authorize a third party to process the Arbitron data and estimates licensed hereunder on Station's behalf. Station understands and agrees that it may do so only on condition: 1) that said third party is a then current Arbitron licensee in good standing who is authorized to process Arbitron data and estimates; and 2) that all restrictions concerning the use of the data and estimates provided under this Agreement shall apply with full force and effect to any data, estimates, reports or other output, in any form, containing or derived from the Arbitron data and estimates, produced by said third party for Station. 8. CONFIDENTIALITY OF ARBITRON RESPONDENTS: Station agrees that it will not try either before, during or after a survey, or in connection with any litigation, to determine or discover the identity or location of any Arbitron survey participant. Station will under no circumstances directly or indirectly attempt to contact any such persons. Station agrees to promptly report to Arbitron any evidence or indication that has come to Station's attention regarding the identity or location of any such persons. Station agrees to abide by Minimum Standard A9 (or any successor provision concerning confidentiality of survey respondents) of the Electronic Media Rating Council and shall abide by any determination of the Electronic Media Rating Council concerning respondent confidentiality. Station further agrees that Arbitron may enjoin any breach of the above-stated obligations and shall have the right to damages or other remedies (including costs, expenses and reasonable attorneys' fees) available to it at law or hereunder. 9. METHODOLOGY ARBITRON MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, CONCERNING: (A) DATA GATHERED OR OBTAINED BY ARBITRON FROM ANY SOURCE; (B) THE PRESENT OR FUTURE METHODOLOGY EMPLOYED BY ARBITRON IN PRODUCING ARBITRON DATA AND REPORT(S); OR (C) THE ARBITRON DATA AND REPORT(S) LICENSED HEREUNDER. ALL ARBITRON DATA AND REPORT(S) REPRESENT ONLY THE OPINION OF ARBITRON. RELIANCE THEREON AND USE THEREOF BY STATION IS AT STATION'S OWN RISK. 10. LIABILITIES AND LIMITATIONS OF REMEDIES: THE SOLE AND EXCLUSIVE REMEDY, AT LAW OR IN EQUITY, FOR ARBITRON'S BREACH OF ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, AND THE SOLE AND EXCLUSIVE REMEDY FOR ARBITRON'S LIABILITY OF ANY KIND, INCLUDING WITHOUT LIMITATION LIABILITY FOR NEGLIGENCE OR DELAY WITH RESPECT TO THE ARBITRON DATA AND REPORTS AND ALL PERFORMANCE PURSUANT TO THIS AGREEMENT, SHALL BE LIMITED TO A CREDIT (FOR EACH REPORT MATERIALLY AFFECTED BY ANY SUCH BREACH) TO STATION OF AN AMOUNT EQUAL TO THE NET ANNUAL CHARGES PAYABLE HEREUNDER BY STATION DIVIDED BY THE NUMBER OF REPORTS PRODUCED ANNUALLY BY ARBITRON FOR THE MARKET. IN NO EVENT SHALL ARBITRON BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, NOR SHALL IT BE SUBJECT TO INJUNCTIVE RELIEF WITH RESPECT TO THE PUBLICATION OF ANY DATA OR REPORT. STATION UNDERSTANDS THAT THE DATA AND REPORTS EITHER WOULD NOT BE PREPARED OR WOULD BE AVAILABLE ONLY AT A SUBSTANTIALLY INCREASED LICENSE FEE WERE IT NOT FOR THE LIMITATIONS OF LIABILITIES AND REMEDIES AS SET FORTH IN THIS SECTION. Station agrees that it will notify Arbitron in writing of any alleged defect in any Data or Report within thirty (30) days after Station learns of said alleged defect. In the event that Station does not timely notify Arbitron, - ---------------------------- * Station(s) should refer to current regulations and guidelines of the federal government for further requirements concerning the manner of quoting audience estimates. /s/GLS KPER-UNI 6/97 2 -------------- Initial here 3 then Station waives all rights with regard to said alleged defect. Station further agrees that any action to be brought by it concerning any Data or Report shall be brought not more than one (1) year after such Data or Report was originally published by Arbitron. In the event that either party commences litigation against the other party and fails to ultimately prevail on the merits of such litigation, the commencing party shall reimburse and indemnify the other party from any and all costs and expenses incurred with respect to such litigation, including reasonable attorneys' fees. 11. ASSIGNMENTS AND CHANGES IN STATION STATUS: Station may not assign either its rights or obligations under this Agreement without the prior written consent of Arbitron, which consent will not be unreasonably withheld. Subject to Arbitron's consent, which consent will not be unreasonably withheld, a successor-in-interest by merger, operation of law, assignment, purchase or otherwise of the entire business of Station shall acquire all rights and be subject to all obligations of such party hereunder. In the event that Arbitron consents to the assignment of this Agreement, Arbitron reserves the right to redetermine the rate to be charged to the assignee. Arbitron shall be entitled to assign any of its rights or obligations under this Agreement, including the right to receive License Charges payable hereunder. Station acknowledges and agrees that the Charges due and the adjustments and discounts applied hereunder are based on Station's group ownership status and/or any joint operating agreement with one or more other radio stations and/or Station's ownership of radio stations in this Market or other Markets. In the event Station conveys any one of its radio stations, Station remains fully obligated for the Charges specified for any radio station covered by the terms of this Agreement. Station may only be released from such obligations upon valid assignment of this Agreement and subject to the terms thereof. Station agrees that if at any time it changes or has changed its ownership, operating or sales policy, frequency, broadcasting arrangements, group or business relationships of the station(s) licensed under this Agreement, or if it enters or has entered into any management or other business relationship with another radio station in this Market or an adjacent Market, or if it enters or has entered into any joint operating agreement with one or more other radio stations, or if it is or was purchased or controlled by an entity owning or otherwise controlling other radio stations in this Market or an adjacent Market, or if it purchases, or an entity which is in any manner controlled by it purchases, at any time, another radio station in this Market or an adjacent Market, Station and its radio station(s) will report the change and the effective date thereof to Arbitron within thirty (30) days of such change. Station further agrees that if the parent company or other controlling entity of Station, or any entity in any manner related to Station, purchases or otherwise acquires a controlling interest in a radio station in Station's Market that is not licensed by Arbitron for the same Data and Reports as that licensed hereunder, as well as any Supplementary Services, then Arbitron may redetermine Station's Gross Annual Rate based on such occurrence as described in this Section 11. 12. SPECIAL SERVICES AND REPORTS: If, during the Term of this Agreement, Station orders any Special Services or Report(s) not licensed through any other Arbitron Agreement ("Specials"), Station hereby agrees that this Agreement shall be applicable with respect to all such Services with the same force and effect as if printed out at length in a separate agreement executed by Station; provided, however, that any credit required when applying Section 10 to any such services shall be limited to the license fee actually paid for such services. 13. RATINGS DISTORTION ACTIVITY: (a) Station agrees that it shall not engage in any activities which are determined by Arbitron to be ratings distortion. Such prohibited activities may include, but are not limited to, activities which could: (i) cause any survey participant to record erroneous listening information in his or her Arbitron diary; or (ii) cause any survey participant to utilize an Arbitron diary for a contest or promotion conducted by Station or its radio station(s). (b) Station further agrees that Arbitron may delete all estimates of listening to Station and/or its radio station(s) from any Report, computer tape or other Arbitron service or method of delivery where, in its judgment it has deemed that Station or its radio station(s) has engaged in such activities. Arbitron shall: (i) first give Station and its radio station(s) notice setting forth what activities it deems Station and its radio station(s) has engaged in which allegedly could cause or have caused ratings distortion; (ii) present evidence to substantiate the allegations set forth in (i) above; and (iii)give Station and its radio station(s) reasonable opportunity (in light of Arbitron's publication schedule for any Report) to present its position both in writing and orally. In the event that Station or its radio station(s) is notified by Arbitron that allegations of ratings distortion have been made against Station or its radio station(s), then Station or its radio station(s) shall submit a written response to Arbitron's inquiry concerning the allegations within seven (7) days from the receipt of Arbitron's notice, which time may be shortened by Arbitron for reasons relating to the Report publication schedule. Arbitron shall then advise Station or its radio station(s) of its decision or reason for delay within seven (7) days following its receipt of Station's or its radio station(s)' written response or oral presentation, whichever is later. All such writings shall be addressed and sent to the respective party by facsimile, overnight courier service, or certified mail with return receipt requested. In the event that estimates of listening to Station and/or its radio station(s) are deleted from a Report(s) (and/or other Arbitron services) following the procedure set forth above, Station and its radio station(s) agree that the only remedy for such deletion shall be a credit of the fee paid by Station for such Report(s) or other affected services and that in no event shall Arbitron be liable for incidental or consequential damages or be subject to injunctive relief with respect to any such deletion of estimates of listening to station and/or its radio station(s). In the event that estimates of listening to Station and/or its radio stations are deleted from a Report pursuant to this Section, Arbitron agrees that it will give Station and its radio station(s) an opportunity to submit to Arbitron a written statement (not exceeding 200 words) of Station and/or its radio station(s) views concerning its alleged activities, with such written statement to be published in the Report subject to such reasonable editing deemed necessary by Arbitron. In addition, Station and its radio station(s) agree to abide by the Arbitron policies and procedures governing various Special Station Activities, including, but not limited to, ratings bias. 14. INFORMATION TO BE PROVIDED BY STATION AND ITS RADIO STATION(s): Station and its radio station(s) agree to provide to Arbitron, within ten (10) days of receipt of Arbitron's request, such information which Arbitron deems necessary for the publication of a Report, including, but not limited to, accurate descriptions of the following information for Station and its radio station(s): (a) facilities; (b) broadcast station names; (c) broadcast hours; (d) simulcast hours; (e) radio frequency; (f) operating power; (g) format; (h) height of antenna above average terrain, and (i) programming schedule and information. Station and its radio station(s) further understand and agree to notify Arbitron of any changes to the above-referenced information. Station and its radio station(s) hereby hold Arbitron harmless and agree to indemnify Arbitron from and against any and all loss, cost or expense (including reasonable attorneys' fees) arising out of any omission or error in information provided to Arbitron by Station and its radio station(s) pursuant to this Section. 15. GENERAL: (a) All notices to either party shall be in writing and shall be directed to the addresses stated hereafter (unless notice of an address change has previously been given). (b) This Agreement shall be deemed to be an agreement made under, and to be construed and governed by, the laws of the State of New York, exclusive of its choice of law rules. The parties expressly agree that /s/GLS KPER-UNI 6/97 3 -------------- Initial here 4 any and all disputes arising out of or concerning this Agreement or the Arbitron Data or Reports licensed hereunder shall be litigated and adjudicated exclusively in State and/or Federal Courts located in either the State of New York or the State of Maryland, at Arbitron's option, and each party consents to and submits to both such jurisdictions. (c) This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof, notwithstanding any previous discussions and understandings; and shall not be deemed to have been modified in whole or in part except by written instruments signed hereafter by officers of all of the parties or other persons to whom the parties have delegated such authority. (d) Any litigated question regarding the legality, enforceability or validity of any section or part hereof shall not affect any other section, and if any section or part hereof is ultimately determined illegal, invalid, unconstitutional or unenforceable, that section or part hereof shall be severed from this Agreement and the balance of the Agreement shall thereafter remain in full force and effect for the remainder of the Term. (e) In addition to the rights of termination stated elsewhere in this Agreement, this Agreement, and the license provided hereunder, may be terminated by Arbitron, for any reason, on thirty (30) days' written notice to Station. 16. CALCULATION OF LICENSE CHARGES: First Term Year Gross Annual Rate (Combined) $ SEE ATTACHMENT A ----------------- Combination Rate Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- Station $ [ ] YES [ ] NO --------------- ------------------- LESS DISCOUNTS: [X] Continuous Service (10%): $ * [X] Group (at beginning of Term) ----------------------- [X]10% [ ]7.5% [ ]5% [ ]2.5% $ * ----------------------- [X] Long-Term Discount: 20% in months 1-12 (see Section 3(c) above) $ * ----------------------- FIRST TERM YEAR NET ANNUAL RATE: $ [ * ] ---------------------- Station further understands and agrees that the Net Annual Rate payable during any Term year subsequent to the first Term year will vary in accordance with an applicable Group Discount, any other applicable discount, or any adjustment as specified in Sections 2, 3, 4, 6 and 11 of this Agreement. * = See ATTACHMENT "A" ============================================================================== AGREED TO Clear Channel Radio, Inc. - -------------------------------------------------------------------------------- BROADCASTER ("STATION") See ATTACHMENT "A" - -------------------------------------------------------------------------------- FOR USE ONLY BY STATION(S) 200 Concord Plaza - Suite 600 - -------------------------------------------------------------------------------- ADDRESS San Antonio TX 78216 - -------------------------------------------------- ------- -------------- CITY STATE ZIP - -------------------------------------------------- /s/ GEORGE L. SOSSON - -------------------------------------------------------------------------------- BY (AUTHORIZED SIGNATURE) George L. Sosson - -------------------------------------------------------------------------------- NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE) Senior Vice President, Operations 11/30/98 - -------------------------------------------------------------------------------- TITLE DATE =============================================================================== ACCEPTED BY /s/ BARRY BARTH - -------------------------------------------------------------------------------- CONTRACT MANAGER 12/8/98 - -------------------------------------------------------------------------------- DATE The Arbitron Company 9705 Patuxent Woods Drive Columbia, Maryland 21046-1572 A division of Ceridian Corporation EXTRA SAMPLE CHARGES INCLUDED AS DETAILED ON ATTACHMENT "A" KPER-UNI 6/97 4 EX-10.17 11 w46446ex10-17.txt FORM OF CUSTOMER CONTRACT 1 EXHIBIT 10.17 STATION LICENSE AGREEMENT TO RECEIVE AND USE ARBITRON RADIO LISTENING ESTIMATES Date of Proposal: June 10, 1997 ---------------------- THIS AGREEMENT is between The Arbitron Company, a division of Ceridian Corporation, ("Arbitron") and the undersigned radio broadcaster ("Station"), a Pennsylvania Corporation. Arbitron hereby grants to Station, for the radio stations listed below, a limited license to receive and use Arbitron data and listening estimates ("Arbitron Data" or "Data") for the survey(s) and for the geographic area ("Market") described in Section 1. This license is personal, nontransferable and nonexclusive. Such Arbitron Data may be furnished to Station in printed or other form ("Reports"), at Arbitron's option, but title thereto will remain with Arbitron at all times. 1. SERVICES PROVIDED; TERM: This Agreement shall become effective when countersigned by Arbitron's Contract Manager and shall be for a period of 5 years beginning and ending on the dates described below (the "Term"). This Agreement will continue without regard to Station's ownership of the radio station(s) licensed hereunder absent a valid Assignment pursuant to Section 11 of this Agreement. Broadcaster ("Station"): CBS Radio; a division of ------------------------------------------------------- Westinghouse Electric Corporation - ------------------------------------------------------------------------------- For use only by radio station(s): ---------------------------------------------- See Attachment A - ------------------------------------------------------------------------------- Arbitron Radio Geographic Area: --------------------------- See Attachment A ("Market") - ------------------------------------------------------------------------------- Term Begins January 1, 1997 ends December 31, 2001 . ------------------------------- ------------------------------- Number of surveys currently provided during first Term year: 4 . ------------------- Number of copies currently provided per survey: 30 . -------------------------------- Reports currently shall be titled: Spring, Fall, Winter, Summer. First Report: See Attachment A ----------------------------------------------------------------- All representations in this Section regarding number of surveys, number of printed copies and Report titles are subject to qualifications set forth in Section 6(a) herein. 2. ANNUAL RATE: A License Charge in the form of a Net Annual Rate for each year of the Term, which may be subject to adjustments and discounts pursuant to Sections 3, 4, 6, 11 and 16 of this Agreement, shall be paid by Station; with the first of 60 payments due on January 1, 1997 (the "Periodic Charge" or "Charge"). The Gross Annual Rate for the first Term year is $ See Attachment A. Subject to Sections 3, 4, 6 and 11 hereof, neither the Gross nor the Net Annual Rate will change during a Term year. For each succeeding Term year, the Gross Annual Rate shall be the Gross Annual Rate for the previous Term year increased by a factor of N/A percent. Any applicable discounts or other adjustments will be applied thereafter to the Annual Rate so derived. 3. DISCOUNTS: (a) Continuous Service Discount: A discount of ten percent (10%) in calculating the Periodic Charge shall be allowed for each month in excess of 12 consecutive months that Station is continuously licensed to use the Arbitron Data for this Market. (b) Group Discount: If Station owns two or more radio stations located in different markets and such radio stations are under common ownership as defined by Arbitron, Station may be entitled to a Group Discount based on the number of subscribing radio stations owned at the time this Agreement is executed, which discount may vary and be adjusted during the Term of this Agreement in accordance with Arbitron's Group Discount Schedule should the number of subscribing commonly owned radio stations change. (c) Long-Term Discount: A discount of 20% in months 1-12, 20 % in months 13-24, 20 % in months 25-36, ------ ------ 20 % in months 37-48, 20 % in months 49-60, ------ ------ N/A % in months 61-72, and N/A % in months 73-84, ------ ------ shall be allowed in calculating the Net Annual Rate charged during the applicable months. 4. PERIODIC CHARGE: The Periodic Charge, due and payable by Station on the first day of each billing period, shall be: (a) the Gross Annual Rate plus any adjustments; (b) less any applicable Continuous Service Discount; (c) less, from the amount thereby derived, any applicable Group Discount; (d) less, from the amount thereby derived, any applicable Long-Term Discount; (e) with such amount prorated equally between the number of payments for the Term year. In addition to and together with the above payments, excluding taxes imposed upon Arbitron's net income, gross receipts, capital or similar taxes, Station shall pay to Arbitron any sales, excise, service, use or other taxes, however designated, now or hereafter imposed upon or required to be collected by Arbitron by any authority having jurisdiction over the Market being surveyed or over any location to which Station directs Arbitron to deliver Data, or by any other taxing jurisdiction, and such obligation shall survive the termination of this Agreement. 5. LATE PAYMENT CHARGE AND RIGHT TO SUSPEND REPORT DELIVERY OR TERMINATE AGREEMENT: In addition, Arbitron may, without terminating, breaching or committing a default under this Agreement: suspend delivery to Station of any Data or Report(s), in any form, due under this Agreement until such time as Station is current in its payments of all sums due hereunder with respect to periodic charges due and owing at the time of such suspension. Arbitron's suspension hereunder of delivery of Data and/or Reports to Station, and of this License, shall not relieve Station of any of its obligations hereunder. This Agreement may be terminated immediately by Arbitron should Station default in payment of any sum due or should Station default in any other condition or obligation of this Agreement for the market or markets so affected if not cured within 90 days of notice. 6. CHANGES IN RADIO MARKET SERVICE: Modification of Rates, Surveys, Report Content or Report Format: (a) While Arbitron will use professional research efforts to conduct its surveys and produce its Data in accordance with its Description of Methodology, and the Minimum Standards for Broadcast Rating Research of the Electronic Media Rating Council, Arbitron reserves the right to change at any time the geographical territory comprising the Market, its policies and procedures, survey dates, survey length, survey frequency, sampling procedures, methodology, method of Data delivery, number of printed copies of Reports, Report content, Report titles, Report format, and to cancel surveys and the preparation of Arbitron Data, or any other aspect of the Data services supplied. [ARBITRON LOGO] KPER-UNI 6/97 2 Arbitron need not produce any Data or Reports whenever, in its judgment, insufficient data are available to meet its minimum research standards or any event has jeopardized the reliability of the data. In the event that Data and/or Reports are not produced, Station shall receive refund reflecting the pro rata value of the Net Annual Rate for said Data and/or Report(s). Without limiting the foregoing, Station expressly understands and agrees that Arbitron may, at any time during the Term of this Agreement, reduce the number of surveys conducted and/or Reports published for this Market and consequently reduce the number of Reports provided to Station and that, in the event such reduction occurs, Station is not relieved of any of its obligations under this Agreement except that Licensee's Annual Licensee Fee will be reduced by the pro rata amount equal to such reduction in service. (b) In the event that any cause(s) prevents Arbitron from conducting any survey in accordance with its Description of Methodology, schedules or other publications, Arbitron reserves the right to produce abbreviated Report(s). Station hereby consents to publication of such abbreviated Report(s) under such circumstances. In the event that such an abbreviated Report covers a substantially decreased geographic area, or deletes twenty-five percent (25%) or more of the survey days from the aggregate number of days scheduled, Station shall be entitled to either a proportionate refund for the abbreviated Report, or a full refund for the abbreviated Report, upon return of the abbreviated Report within 10 days, at Station's option. Further, Arbitron reserves the right in its sole discretion to augment available data by means of expanded or extended samples and Station agrees it shall not be entitled to any refund in such event. 7. PERMITTED USES AND CONFIDENTIALITY: Subject to the limitations stated herein, Station agrees to limit its uses of the Arbitron Data and Report(s) to such uses as are necessary in the ordinary course of Station's broadcasting business for programming and media selling. Station understands and agrees that this use is limited exclusively to the radio station(s) specified in Section 1 of this Agreement and only for the Term of this Agreement. In this connection, Station agrees that the Arbitron Data and Report(s) will only be disclosed: (a) directly or through its Station representatives to advertisers, prospective advertisers and their agencies for the purpose of obtaining and retaining advertising accounts; and (b) through advertising or other promotional literature. (c) Station may disclose such information to the investment community including bankers, potential purchaser of Station, in which case Station will inform such party of the confidentiality of the information. All such disclosures shall identify Arbitron as the source of the disclosed Arbitron Data and Report(s) and should identify the Market, survey period and type of audience estimate, daypart and survey area and shall state that the Arbitron Data and Report(s) quoted therein are copyrighted by Arbitron and are subject to all limitations and qualifications disclosed in the Data and Report(s) ("Sourcing").* At all times during the Term of this Agreement and thereafter, Station agrees to keep the Arbitron Data and Report(s) supplied by Arbitron confidential and not to disclose the same except as permitted by this Agreement. Station agrees to use its best efforts to prevent the unauthorized disclosure of Arbitron Data and Report(s) by Station's employees and/or its radio station(s)'s employees and agents, by its radio station(s)'s representatives, by its advertisers and their advertising agencies, by data processing firms, and by all other persons who obtain the Arbitron Data from Station or its radio station(s)'s employees or agents. For Station or its radio station(s) to divulge any Arbitron Data and/or Report(s) to a nonsubscribing station or to lend and/or give an original copy or any reproduction of any part of any Data and/or Report(s) or any Arbitron estimates or data to any nonsubscriber, not authorized by this Agreement, constitutes a breach of this Agreement and an infringement of Arbitron's copyright. In the event that a Report listed in Section 1 of this Agreement is delivered after the expiration of the Term of this License Agreement, Licensee's license to use all Report shall continue under the terms and conditions of this License until the release of the next Survey Report in this Market. Subject to the following conditions, Station may authorize a third party to process the Arbitron data and estimates licensed hereunder on Station's behalf. Station understands and agrees that it may do so only on condition: 1) that to the best of Station's knowledge said third party excluding custom in house processing of data by Station consultant is a then current Arbitron licensee in good standing who is authorized to process Arbitron data and estimates; and 2) that all restrictions concerning the use of the data and estimates provided under this Agreement shall apply with full force and effect to any data, estimates, reports or other output, in any form, containing or derived from the Arbitron data and estimates, produced by said third party for Station. 8. CONFIDENTIALITY OF ARBITRON RESPONDENTS: Station agrees that it will not try either before, during or after a survey, or in connection with any litigation, to determine or discover the identity or location of any Arbitron survey participant. Station will under no circumstances directly or indirectly attempt to contact any such persons. Station agrees to promptly report to Arbitron any evidence or indication that has come to Station's attention regarding the identity or location of any such persons. Station agrees to abide by Minimum Standard A9 (or any successor provision concerning confidentiality of survey respondents) of the Electronic Media Rating Council and shall abide by any determination of the Electronic Media Rating Council concerning respondent confidentiality. Station further agrees that Arbitron may enjoin any breach of the above-stated obligations and shall have the right to seek damages or other remedies (including costs, expenses and reasonable attorneys' fees) available to it at law or hereunder. 9. METHODOLOGY ARBITRON MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, CONCERNING: (A) DATA GATHERED OR OBTAINED BY ARBITRON FROM ANY SOURCE; (B) THE PRESENT OR FUTURE METHODOLOGY EMPLOYED BY ARBITRON IN PRODUCING ARBITRON DATA AND REPORT(S); OR (C) THE ARBITRON DATA AND REPORT(S) LICENSED HEREUNDER. ALL ARBITRON DATA AND REPORT(S) REPRESENT ONLY THE OPINION OF ARBITRON. RELIANCE THEREON AND USE THEREOF BY STATION IS AT STATION'S OWN RISK. 10. LIABILITIES AND LIMITATIONS OF REMEDIES: THE SOLE AND EXCLUSIVE REMEDY, AT LAW OR IN EQUITY, FOR ARBITRON'S BREACH OF ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, AND THE SOLE AND EXCLUSIVE REMEDY FOR ARBITRON'S LIABILITY OF ANY KIND, - --------------------- * STATION(s) SHOULD REFER TO CURRENT REGULATIONS AND GUIDELINES OF THE FEDERAL GOVERNMENT FOR FURTHER REQUIREMENTS CONCERNING THE MANNER OF QUOTING AUDIENCE ESTIMATES. (C)The Arbitron Company 2 KPER-UNI 6/97 3 INCLUDING WITHOUT LIMITATION LIABILITY FOR NEGLIGENCE OR DELAY WITH RESPECT TO THE ARBITRON DATA AND REPORTS AND ALL PERFORMANCE PURSUANT TO THIS AGREEMENT, SHALL BE LIMITED TO A CREDIT (FOR EACH REPORT MATERIALLY AFFECTED BY ANY SUCH BREACH) TO STATION OF AN AMOUNT EQUAL TO THE NET ANNUAL CHARGES PAYABLE HEREUNDER BY STATION DIVIDED BY THE NUMBER OF REPORTS PRODUCED ANNUALLY BY ARBITRON FOR THE MARKET. IN NO EVENT SHALL ARBITRON BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, NOR SHALL IT BE SUBJECT TO INJUNCTIVE RELIEF WITH RESPECT TO THE PUBLICATION OF ANY DATA OR REPORT. STATION UNDERSTANDS THAT THE DATA AND REPORTS EITHER WOULD NOT BE PREPARED OR WOULD BE AVAILABLE ONLY AT A SUBSTANTIALLY INCREASED LICENSE FEE WERE IT NOT FOR THE LIMITATIONS OF LIABILITIES AND REMEDIES AS SET FORTH IN THIS SECTION. Station agrees that it will notify Arbitron in writing of any alleged defect in any Data or Report within ninety (90) days after Station learns of said alleged defect. In the event that Station does not timely notify Arbitron, then Station waives all rights with regard to said alleged defect. Station further agrees that any action to be brought by it concerning any Data or Report shall be brought not more than one (1) year after such Data or Report was originally published by Arbitron. 11. ASSIGNMENTS AND CHANGES IN STATION STATUS: Station acknowledges and agrees that the Charges due and the adjustments and discounts applied hereunder are based on Station's group ownership status and/or any joint operating agreement with one or more other radio stations and/or Station's ownership of radio stations in this Market or other Markets. In the event Station conveys any one of its radio stations, Station remains fully obligated for the Charges specified for any radio station covered by the terms of this Agreement. Station may only be released from such obligations upon valid assignment of this Agreement and subject to the terms thereof. 12. SPECIAL SERVICES AND REPORTS: If, during the Term of this Agreement, Station orders any Special Services or Report(s) not licensed through any other Arbitron Agreement ("Specials"), Station hereby agrees that this Agreement shall be applicable with respect to all such Services with the same force and effect as if printed out at length in a separate agreement executed by Station; provided, however, that any credit required when applying Section 10 to any such services shall be limited to the license fee actually paid for such services. 13. RATINGS DISTORTION ACTIVITY: (a) Station agrees that it shall not engage in any activities which are determined by Arbitron to be ratings distortion. Such prohibited activities may include, but are not limited to, activities which could: (i) cause any survey participant to record erroneous listening information in his or her Arbitron diary; or (ii) cause any survey participant to utilize an Arbitron diary for a contest or promotion conducted by Station or its radio station(s). (b) Station further agrees that Arbitron may delete all estimates of listening to Station and/or its radio station(s) from any Report, computer tape or other Arbitron service or method of delivery where, in its judgment it has deemed that Station or its radio station(s) has engaged in such activities. Arbitron shall: (i) first give Station and its radio station(s) notice setting forth what activities it deems Station and its radio station(s) has engaged in which allegedly could cause or have caused ratings distortion; (ii) present evidence to substantiate the allegations set forth in (i) above; and (iii)give Station and its radio station(s) reasonable opportunity (in light of Arbitron's publication schedule for any Report) to present its position both in writing and orally. In the event that Station or its radio station(s) is notified by Arbitron that allegations of ratings distortion have been made against Station or its radio station(s), then Station or its radio station(s) shall submit a written response to Arbitron's inquiry concerning the allegations within seven (7) days from the receipt of Arbitron's notice, which time may be shortened by Arbitron for reasons relating to the Report publication schedule. Arbitron shall then advise Station or its radio station(s) of its decision or reason for delay within seven (7) days following its receipt of Station's or its radio station(s)' written response or oral presentation, whichever is later. All such writings shall be addressed and sent to the respective party by facsimile, overnight courier service, or certified mail with return receipt requested. In the event that estimates of listening to Station and/or its radio station(s) are deleted from a Report(s) (and/or other Arbitron services) following the procedure set forth above, Station and its radio station(s) agree that the only remedy for such deletion shall be a credit of the fee paid by Station for such Report(s) or other affected services and that in no event shall Arbitron be liable for incidental or consequential damages or be subject to injunctive relief with respect to any such deletion of estimates of listening to station and/or its radio station(s). In the event that estimates of listening to Station and/or its radio stations are deleted from a Report pursuant to this Section, Arbitron agrees that it will give Station and its radio station(s) an opportunity to submit to Arbitron a written statement (not exceeding 200 words) of Station and/or its radio station(s) views concerning its alleged activities, with such written statement to be published in the Report subject to such reasonable editing deemed necessary by Arbitron. In addition, Station and its radio station(s) agree to abide by the Arbitron policies and procedures governing various Special Station Activities, including, but not limited to, ratings bias. 14. INFORMATION TO BE PROVIDED BY STATION AND ITS RADIO STATION(s): Station and its radio station(s) agree to provide to Arbitron, consistent with past requests within ten (10) days of receipt of Arbitron's request, such information consistent with past requests which Arbitron deems necessary for the publication of a Report, including, but not limited to, accurate descriptions of the following information for Station and its radio station(s): (a) facilities; (b) broadcast station names; (c) broadcast hours; (d) simulcast hours; (e) radio frequency; (f) operating power; (g) format; (h) height of antenna above average terrain, and (i) programming schedule and information. Station and its radio station(s) further understand and agree to notify Arbitron of any changes to the above-referenced information. Station and its radio station(s) hereby hold Arbitron harmless and agree to indemnify Arbitron from and against any and all loss, cost or expense (including reasonable attorneys' fees) arising out of any omission or error in information provided to Arbitron by Station and its radio station(s) pursuant to this Section. 15. GENERAL: (a) All notices to either party shall be in writing and shall be directed to the addresses stated hereafter (unless notice of an address change has previously been given). (b) This Agreement shall be deemed to be an agreement made under, and to be construed and governed by, the laws of the State of New York, exclusive of its choice of law rules. The parties expressly agree that any and all disputes arising out of or concerning this Agreement or the Arbitron Data or Reports licensed hereunder shall be litigated and adjudicated exclusively in State and/or Federal Courts located in the State of New York, and each party consents to and submits to both such jurisdiction. (C) The Arbitron Company 3 KPER-UNI 6/97 4 (c) This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof, notwithstanding any previous discussions and understandings; and shall not be deemed to have been modified in whole or in part except by written instruments signed hereafter by officers of all of the parties or other persons to whom the parties have delegated such authority. (d) Any litigated question regarding the legality, enforceability or validity of any section or part hereof shall not affect any other section, and if any section or part hereof is ultimately determined illegal, invalid, unconstitutional or unenforceable, that section or part hereof shall be severed from this Agreement and the balance of the Agreement shall thereafter remain in full force and effect for the remainder of the Term. 16. CALCULATION OF LICENSE CHARGES: SEE First Term Year Gross Annual Rate (Combined) $ SEE ATTACHMENT A ----------------- Combination Rate Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ Station $ [ ] YES [ ] NO ------------------ ------------------ LESS DISCOUNTS: [ ] Continuous Service (10%): $ ------------------------------ [ ] Group [ ] 10% [ ] 7.5% [ ] 5% [ ] 2.5% [ ] 2.5% at beginning of Term $ ------------------------------ [ ] Long-Term Discount: % in months 1-12 --- --- (see Section 3(c) above) $ ------------------------------ FIRST TERM YEAR NET ANNUAL RATE: $ [ SEE ATTACHMENT A ] * ============================================================================= AGREED TO CBS RADIO; A DIVISION OF WESTINGHOUSE ELECTRIC CORPORATION - -------------------------------------------------------------------------------- BROADCASTER ("STATION") SEE ATTACHMENT A - -------------------------------------------------------------------------------- FOR USE ONLY BY STATION(S) 51 West 52nd Street - -------------------------------------------------------------------------------- ADDRESS New York NY 10019 - -------------------------------------------------- ------- -------------- CITY STATE ZIP - -------------------------------------------------- /S/ PATRICIA STRATFORD - ------------------------------------------------------------------------------- BY (AUTHORIZED SIGNATURE) Patricia Stratford - ------------------------------------------------------------------------------- NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE) Attorney - ------------------------------------------------------------------------------- TITLE DATE =============================================================================== ACCEPTED BY /S/ BARRY BARTH - -------------------------------------------------------------------------------- CONTRACT MANAGER 3/20/98 - -------------------------------------------------------------------------------- DATE The Arbitron Company 9705 Patuxent Woods Drive Columbia, Maryland 21046-1572 A division of Ceridian Corporation (C) The Arbitron Company 4 KPER-UNI 6/97 5

ARBITRON LOCAL MARKET REPORT SERVICES LICENSE AGREEMENT - ------------------------------------------------------- ATTACHMENT "A" TO LICENSE DATED JUNE 10, 1997: GRAND TOTALS $68,642,698 $44,537,329

AGREED TO AND ACCEPTED BY: /s/ Patricia Stratford -------------------------- Patricia Stratford print name of signatory Attorney Title of signatory CBS RADIO, a Division of Westinghouse Electric Corporation 3/17/98 (date) -------------------------- EX-21 12 w46446ex21.htm SUBSIDIARIES

EXHIBIT 21

ARBITRON INC.

SUBSIDIARIES

	State or
	Other Jurisdiction
Subsidiaries and Their Affiliates:	of Incorporation
Arbitron Holdings Inc.	Delaware
CSW Research Limited (1)	United Kingdom
Euro Fieldwork Limited (2)	United Kingdom
Ceridian Infotech (India) Private Limited	India
(1)    CSW Research Limited is a subsidiary of Arbitron Holdings, Inc.
(1)    Euro Fieldwork Limited is a subsidiary of CSW Research Limited.

EX-23.1 13 w46446ex23-1.txt CONSENT OF KPMG LLP 1 Exhibit 23.1 Consent of Independent Auditors The Board of Directors Arbitron Inc.: We consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 33-49601, 33-61551, 33-34035, 2-9757, 33-56833, 33-54379, 33-56325, 33-62319, 33-64913, 333-01793, 333-01887, 333-03661, 333-28069, 333-58143, 333-58145, 333-66643, 333-50757, 333-83455, 333-89565, 333-39384, 333-56296 and 333-56826) of Arbitron Inc. (formerly known as Ceridian Corporation) of our report dated February 9, 2001, relating to the combined balance sheets of Arbitron (as defined in Note 2 to the combined financial statements), a division of Ceridian Corporation, as of December 31, 2000 and 1999 and the related combined statements of income, changes in divisional equity (deficit) and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2000 and the related combined financial statement schedule which report appears in the December 31, 2000 annual report on Form 10-K of Arbitron Inc. /s/ KPMG LLP Baltimore, Maryland March 30, 2001 EX-24 14 w46446ex24.txt POWER OF ATTORNEY 1 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 23, 2001. /s/ Erica Farber -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 2 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 27, 2001. -------------------------------------------- Erica Farber /s/ Kenneth F. Gorman ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 3 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 23, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman /s/ Philip Guarascio ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 4 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 27, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio /s/ Larry E. Kittelberger ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 5 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 30, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger /s/ Luis G. Nogales ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 6 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 30, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales /s/ Lawrence Perlman ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 7 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 30, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman /s/ Richard A. Post ------------------------------------ Richard A. Post ------------------------------------ Stephen B. Morris 8 EXHIBIT 24 POWER OF ATTORNEY The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES L. CODY, and each of them, to be my attorney-in-fact for three months from the date hereof, with full power and authority to execute for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney-in-fact, and his/her name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. I have signed this Power of Attorney as of March 30, 2001. -------------------------------------------- Erica Farber ------------------------------------ Kenneth F. Gorman ------------------------------------ Philip Guarascio ------------------------------------ Larry E. Kittelberger ------------------------------------ Luis G. Nogales ------------------------------------ Lawrence Perlman ------------------------------------ Richard A. Post /s/ Stephen B. Morris ------------------------------------ Stephen B. Morris -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.4

   1
                                                                     EXHIBIT 3.4

                            CERTIFICATE OF AMENDMENT
                                     OF THE
                      RESTATED CERTIFICATE OF INCORPORATION
                                OF ARBITRON INC.


        Arbitron Inc., a corporation organized and existing under and by virtue
of the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY that:

        FIRST: That the Board of Directors of the Corporation, at a duly called
meeting, duly adopted resolutions setting forth a proposed amendment of the
Restated Certificate of Incorporation of said Corporation, declaring said
amendment to be advisable and proposing that said amendment be considered by the
stockholders of the Corporation. The resolution setting forth the proposed
amendment is as follows:

               RESOLVED, that the Board of Directors declares that it is
        advisable to amend Article IV of the Restated Certificate of
        Incorporation of the Corporation as follows, subject to the
        determination of the appropriate split ratio not to exceed one-for-five
        by an officer of the Corporation.

        Amend Article IV by adding the following at the end of Paragraph A of
        Article IV:

        Simultaneously with the effective date of the filing of this amendment
        to the Corporation's Restated Certificate of Incorporation (the
        "Effective Date"), each [five] shares of common stock, par value fifty
        cents ($.50) per share, of the Corporation issued and outstanding or
        held as treasury shares immediately prior to the Effective Date shall
        automatically be reclassified (the "Reverse Split"), without any action
        on the part of the holder thereof, into one fully paid and nonassessable
        share of common stock, par value fifty cents ($.50) per share. The
        Corporation shall not issue fractional shares to the stockholders
        entitled to a fractional interest in a share of common stock issued
        pursuant to the Reverse Split but shall pay instead to such
        shareholders, in lieu of such fractional interest, an amount in equal
        cash to their pro rata share of the proceeds received from the sale of
        all fractional interests.

        SECOND: The amendment to the Restated Certificate of Incorporation of
the Corporation set forth in this Certificate of Amendment has been duly adopted
in accordance with the provisions of Section 242 of the DGCL; (a) the Board of
Directors of the Corporation having duly adopted resolutions on July 20, 2000
setting forth such amendment, declaring its advisability and directing that such
amendment be submitted to the stockholders of the Corporation for their
consideration and approval, and (b) the stockholders of the Corporation having
duly approved and adopted such amendment be a vote of the holders of a majority
of the shares of outstanding stock of the Corporation entitled to vote thereon
at a duly called meeting of stockholders duly held on October 5, 2000, upon
notice in accordance with Section 222 of the DGCL.
   2

        IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by Dolores L. Cody, its Executive Vice President, there
unto duly authorized and attested by Patricia O'Donnell, its Assistant
Secretary, this 30th day of March, 2001.


                                            ARBITRON INC.


                                            By:    /s/ Dolores L. Cody
                                                  -----------------------------
                                            Name:  Dolores L. Cody
                                            Title: Executive Vice President

ATTEST:

/s/ Patricia O'Donnell
- ----------------------------------
Name:   Patricia O'Donnell
Title:  Assistant Secretary




   3





                    SECRETARY'S CERTIFICATE OF ARBITRON INC.

                             (ARBITRON NAME CHANGE)


In connection with the merger of Arbitron Inc., a Delaware corporation
("Arbitron"), with and into Ceridian Corporation, a Delaware corporation
("Ceridian"), the undersigned hereby certifies that attached hereto as Exhibit A
is a true and correct copy of the Certificate of Ownership and Merger of
Arbitron Inc. with and into Ceridian Corporation, which such Certificate was
filed with the Secretary of State of the State of Delaware on March 30, 2001.


        IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
30th day of March, 2001.


                                /s/   Dolores L. Cody
                                ----------------------
                                Dolores L. Cody
                                Executive Vice President, Chief Legal Officer
                                and Secretary




   4


                 EXHIBIT A - CERTIFICATE OF OWNERSHIP AND MERGER


   5


                            CERTIFICATE OF OWNERSHIP
                                  AND MERGER OF

                                  ARBITRON INC.
                            (A DELAWARE CORPORATION)

                                      INTO

                              CERIDIAN CORPORATION
                            (A DELAWARE CORPORATION)


        Pursuant to Section 253 of the Delaware General Corporation Law,
Ceridian Corporation, a Delaware corporation ("Ceridian"), the holder of 100% of
the outstanding common stock, par value $.01 per share, of Arbitron Inc., a
Delaware corporation ("Arbitron"), and Arbitron hereby adopt this Certificate of
Ownership and Merger for the purpose of merging Arbitron with and into Ceridian
(the "Merger") and do hereby certify that:

        FIRST: Ceridian is the owner of all of the outstanding shares of common
stock of Arbitron, which has only one class of capital stock outstanding.

        SECOND: A copy of the resolutions of Ceridian's Board of Directors
authorizing the Merger, adopted as of February 14, 2001, is attached as
Attachment A and incorporated by reference into this Certificate of Ownership
and Merger. The Merger has been adopted, approved, certified, executed and
acknowledged by Ceridian in accordance with the laws of the State of Delaware.

        THIRD: A copy of the resolutions of the Board of Directors of Arbitron
authorizing the merger, adopted February 14, 2001, is attached as Attachment B
and incorporated into this Certificate of Ownership and Merger. The Merger has
been adopted, approved, certified, executed and acknowledged by Arbitron in
accordance with the laws of the State of Delaware.

        FOURTH: Ceridian Corporation, a Delaware corporation, shall be the
surviving corporation.

        FIFTH: The Merger will become effective at 7:00 a.m., CST, on March 30,
2001.

        SIXTH: As of the effective time of the Merger, Article I of the
Certificate of Incorporation of Ceridian is hereby amended to change Ceridian's
corporate name to "Arbitron Inc."
   6

        IN WITNESS WHEREOF, the undersigned signatures shall constitute the
affirmation or acknowledgment of the signatory, under penalties of perjury, that
the instrument is the signatory's act and deed and that the facts stated herein
are true.


Dated:  March 30, 2001                 CERIDIAN CORPORATION,
                                       a Delaware corporation

                                       By:  /s/ Dolores L. Cody
                                            -----------------------------------
                                       Its: Executive Vice President, Chief
                                            Legal Counsel and Secretary


Dated:  March 30, 2001                 ARBITRON INC.,
                                       a Delaware corporation

                                       By:  /s/ Dolores L. Cody
                                            -----------------------------------

                                       Its: Vice President


   7


                                                                    ATTACHMENT A


                          PROPOSED CONSENT RESOLUTIONS
                          OF THE BOARD OF DIRECTORS OF
                              CERIDIAN CORPORATION


        WHEREAS, Ceridian Corporation ("Ceridian") owns all of the outstanding
shares of common stock of Arbitron Inc., a stock corporation which is organized
under the Delaware General Corporation Law and which has only one class of
capital stock ("Arbitron Inc.").

        WHEREAS, the Board of Directors of Ceridian has deemed it advisable that
Arbitron be merged with and into Ceridian pursuant to Section 253 of the
Delaware General Corporation Law, and that in connection therewith, Article I of
the Certificate of Incorporation of Ceridian be amended to change the name of
Ceridian to "Arbitron Inc."

        RESOLVED, that Arbitron Inc. be merged with and into Ceridian and that
all of the property, rights, privileges and other assets of Arbitron Inc. be
transferred to, and all of its obligations be assumed by, Ceridian, which shall
be the surviving corporation.

        FURTHER RESOLVED, that as of the effective time of the merger of
Arbitron Inc. into Ceridian, Article I of the Certificate of Incorporation of
Ceridian be amended to change Ceridian's corporate name to "Arbitron Inc."

        FURTHER RESOLVED, that the Board of Directors hereby approves and adopts
in all respects a Certificate of Ownership and Merger, substantially in the form
described to the Board of Directors at this meeting, which certificate has been
prepared pursuant to Section 253 of the Delaware General Corporation Law for the
purpose of effecting the above described merger.

        FURTHER RESOLVED, that appropriate officers of Ceridian, or each acting
individually, be and they hereby are authorized and directed to make and
execute, in the name of and on behalf of Ceridian a Certificate of Ownership and
Merger, and to file such certificate in the office of the Secretary of State of
Delaware, and to do all other acts and things that may be necessary to carry out
and effectuate the purpose and intent of these resolutions.

        FURTHER RESOLVED, that the merger shall become effective at 7:00 a.m.,
CST, on March 30, 2001.



   8


                                                                    ATTACHMENT B

                          PROPOSED CONSENT RESOLUTIONS
                          OF THE BOARD OF DIRECTORS OF
                                  ARBITRON INC.


        WHEREAS, Arbitron Inc. ("Arbitron") is a wholly-owned subsidiary of
Ceridian Corporation, a stock corporation which is organized under the Delaware
General Corporation Law ("Ceridian").

        WHEREAS, the Board of Directors of Arbitron has deemed it advisable that
Arbitron be merged with and into Ceridian pursuant to Section 253 of the
Delaware General Corporation Law, and that in connection therewith, Article I of
the Certificate of Incorporation of Ceridian be amended to change the name of
Ceridian Corporation to "Arbitron Inc."

        RESOLVED, that Arbitron be merged with and into Ceridian and that all of
the property, rights, privileges and other assets of Arbitron be transferred to,
and all of its obligations be assumed by, Ceridian, which shall be the surviving
corporation.

        FURTHER RESOLVED, that as of the effective time of the merger of
Arbitron into Ceridian, Article I of the Certificate of Incorporation of
Ceridian be amended to change Ceridian's corporate name to "Arbitron Inc."

        FURTHER RESOLVED, that the Board of Directors hereby approves and adopts
in all respects a Certificate of Ownership and Merger, substantially in the form
described to the Board of Directors at this meeting, which certificate has been
prepared pursuant to Section 253 of the Delaware General Corporation Law for the
purpose of effecting the above described merger.

        FURTHER RESOLVED, that appropriate officers of Arbitron, or each acting
individually, be and they hereby are authorized and directed to make and
execute, in the name of and on behalf of Arbitron a Certificate of Ownership and
Merger, and to file such certificate in the office of the Secretary of State of
Delaware, and to do all other acts and things that may be necessary to carry out
and effectuate the purpose and intent of these resolutions.

        FURTHER RESOLVED, that the merger shall become effective at 7:00 a.m.,
CST, on March 30, 2001.











   9






                    SECRETARY'S CERTIFICATE OF ARBITRON INC.

                              (REVERSE STOCK SPLIT)


In connection with the appointment of The Bank of New York as the Exchange Agent
to effect the one-for-five reverse stock split (the "Reverse Stock Split") of
the common stock of Arbitron Inc., a Delaware corporation formerly known as
Ceridian Corporation (the "Company"), the undersigned hereby certifies that:


1.      Attached hereto as Exhibit A is the Amended and Restated Certificate of
        Incorporation of the Company as in full force and effect as of the date
        hereof.

2.      Attached hereto as Exhibit B are resolutions duly adopted by the Board
        of Directors of the Company on November 28, 2000, such resolutions being
        in full force and effect on the date hereof and not having been modified
        in any respect by any other resolutions.


        IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
30th day of March, 2001.


                                       /s/  Dolores L. Cody
                                       ------------------------------------
                                       Dolores L. Cody
                                       Executive Vice President, Chief Legal
                                       Officer and Secretary




   10



          EXHIBIT A - AMENDED AND RESTATED CERTIFICATE OF INCORPORATION



   11





                    SEE EXHIBIT 3.1, 3.2 AND 3.3 TO FORM 10-K






   12


                             EXHIBIT B - RESOLUTIONS


        WHEREAS, at a special meeting of the stockholders of Ceridian held on
October 5, 2000, the stockholders approved a proposal to amend Ceridian's
Restated Certificate of Incorporation, as amended, to effect immediately after
the completion of the spin-off of a newly formed entity ("New Ceridian") that
will contain Ceridian's human resource services business and human resource
services and Comdata subsidiaries in the form of a distribution of all of the
issued and outstanding shares of common stock of New Ceridian to Ceridian's
stockholders in a tax-free transaction, resulting in two public companies (the
"Spin-Off"), a reverse stock split of Ceridian Common Stock at a ratio to be
established by Ceridian in its sole discretion, not to exceed 1-for-5.

        RESOLVED, that the Board hereby approves and adopts a 1-for-5 reverse
stock split of Ceridian Common Stock (the "Reverse Stock Split"), contingent
upon the completion of the Spin-Off, with the record date for such Reverse Stock
Split to be the same record date as that for the Spin-Off (the "Reverse Stock
Split Record Date") and the distribution date for such Reverse Stock Split to be
the same date as the Distribution Date for the Spin-Off (the "Reverse Stock
Split Effective Date"), with the effective time of the Reverse Stock Split (the
"Reverse Stock Split Effective Time") to be immediately after the completion of
the Spin-Off and the name change of Ceridian.

        FURTHER RESOLVED, that the following plan providing for the Reverse
Stock Split is adopted and approved:

        (a)    Each five (5) shares of Ceridian Common Stock outstanding as the
               end of the business day on the Reverse Stock Split Record Date
               shall be converted to one (1) share of fully paid and
               non-assessable share of Ceridian Common Stock. Ceridian shall
               issue one (1) share of Ceridian Common Stock at the Effective
               Time for each five (5) shares of Ceridian Common Stock (which
               will then be known as Arbitron Common Stock) outstanding as of
               the close of business on the Reverse Stock Split Record Date.

        (b)    No fractional shares of Ceridian Common Stock will be issued as a
               result of the Reverse Stock Split. Holders of Ceridian Common
               Stock who would otherwise be entitled to receive fractional
               shares because the number of shares of Ceridian Common Stock they
               hold is not evenly divisible by five (5) will be entitled, in
               lieu of the fractional shares, to receive, upon surrender to
               Ceridian's transfer agent of the appropriate stock
               certificate(s), a cash payment the amount of which will be the
               proportionate portions of the net proceeds from the sale by the
               transfer agent on behalf of all fractional share holders of the
               aggregate fractional shares of Ceridian Common Stock.

        (c)    From and after the Reverse Stock Split Effective Date, (i) all
               rights pertaining to the shares of Ceridian Common Stock
               outstanding prior to
   13

               the Reverse Stock Split Distribute Date, or accruing by virtue of
               the ownership thereof, shall cease and terminate, and (ii)
               certificates representing shares of Ceridian Common Stock shall
               be deemed to represent only the right to receive the applicable
               number of shares of common stock that are properly outstanding
               after the Reverse Stock Split Effective Date in accordance with
               the foregoing resolutions.

        (d)    Stockholders of Ceridian shall be required to deliver the
               certificates representing their shares of Ceridian Common Stock
               outstanding immediately prior to the Reverse Stock Split
               Effective Time, upon which Ceridian shall issue a certificate
               representing such stockholders holdings of Ceridian Common Stock
               after the Reverse Stock Split Effective Date as a result of the
               Reverse Stock Split.

        (f)    The Bank of New York, as Ceridian's transfer agent, after having
               received written instructions from Ceridian of the effectiveness
               of the Reverse Stock Split described in these resolutions, shall,
               upon receipt of a stock certificate representing shares of
               Ceridian Common Stock outstanding immediately prior to the
               Reverse Stock Split Effective Time (an "Old Certificate") cause
               such certificate to be cancelled and a new certificate to be
               issued evidencing the appropriate number of shares that were
               formerly represented by the Old Certificate, as determined by
               reference to these resolutions (a "New Certificate"), and record,
               register and countersign such New Certificates in accordance with
               its usual practices and instructions to be provided by the
               appropriate officers of Ceridian, and, alternatively, instead of
               issuing the New Certificates, registered holders of Ceridian
               Common Stock on the Reverse Stock Split Record Date will have
               their book-entry accounts adjusted to reflect the Reverse Stock

        (g)    All outstanding stock options and all other contractual rights
               entitling the holders of such rights to acquire shares of
               Ceridian Common Stock shall be appropriately adjusted to give
               effect to the Reverse Stock Split and to prevent dilution or
               enlargement of the respective rights of such holders. The number
               of shares of Ceridian Common Stock which remain available for
               issuance under Ceridian's benefit plans will also be reduced by
               dividing such number of shares available prior to the Reverse
               Stock Split Effective Date by five (5) as provided under the
               anti-dilution provisions of each plan.

        FURTHER RESOLVED, that William Walsh, who will be the Executive Vice
President and Chief Financial Officer of Ceridian as of the effectiveness of the
resignation of John R. Eickhoff be, and hereby is, authorized and directed to
make appropriate adjustments to Ceridian's capital accounts and financial
statements and books and records to reflect the Reverse Stock Split.

        FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each
of them hereby is, authorized and directed, in the name and on behalf of
Ceridian, to take (i) all
   14

reasonable steps as may be necessary from time to time in order to carry out the
purpose and intent of these resolutions, including, without limitation, the
preparation and completion, with legal counsel, of all required documents for
the consummation of the Reverse Stock Split and (ii) any and all actions,
including the execution and delivery of any documents, information statements,
or agreements, as may reasonably be necessary or proper, to evidence the action
taken pursuant to these resolutions, including without limitation the filing of
a certificate of amendment to Ceridian's Restated Certificate of Incorporation
substantially in the form previously approved by Ceridian's stockholders at the
special meeting of stockholders held on October 5, 2000.

        FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each
of them hereby is, authorized and directed to make, execute, acknowledge and
file such certificates and documents as may be required by law with respect to
the foregoing resolutions with the Secretary of State of the State of Delaware
and such other federal, state and local authorities, and to take such steps as
are in their sole judgment necessary or appropriate, to give effect to the
Reverse Stock Split; and that all of the actions of any of such officers that
are consistent with the purpose and intent of these resolutions are hereby
ratified, confirmed and approved in all respects.

        FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each
of them hereby is authorized and directed, in the name and on behalf of Ceridian
to enter into an exchange agent agreement with The Bank of New York pursuant to
which The Bank of New York will assist Ceridian in effecting the Reverse Stock
Split.

        FURTHER RESOLVED, that the appropriate officers of Ceridian be, and each
of them hereby is authorized and directed, in the name and on behalf of
Ceridian, to notify The New York Stock Exchange of the proposed Reverse Stock
Split of Ceridian Common Stock, along with the Reverse Stock Split Record Date
and Reverse Stock Split Effective Date and any other information required by The
New York Stock Exchange, in such form and with such substance necessary to
satisfy Ceridian's obligations under Rule 10b-17 promulgated under the Exchange
Act.

EX-4.1

ex4-1

EX-10.6

   1


                                                                    EXHIBIT 10.6
================================================================================











                                CREDIT AGREEMENT

                          Dated as of January 31, 2001

                                      among

                              CERIDIAN CORPORATION
                           (DBA THE ARBITRON COMPANY),
                                as the Borrower,

                             BANK OF AMERICA, N.A.,
                           as the Administrative Agent
                                       and
                            Letter of Credit Issuer,

                                       and

                         The Other Lenders Party Hereto

                         BANC OF AMERICA SECURITIES LLC,
                                       as
                    Sole Lead Arranger and Sole Book Manager











================================================================================




   2


                                TABLE OF CONTENTS



Section                                                                                    Page
                                                                                       
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS..................................................1
        1.01   Defined Terms.................................................................1
        1.02   Other Interpretive Provisions................................................25
        1.03   Accounting Terms.............................................................26
        1.04   Rounding.....................................................................26
        1.05   References to Agreements and Laws............................................26

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS...........................................26
        2.01   Loans........................................................................26
        2.02   Borrowings, Conversions and Continuations of Loans...........................26
        2.03   Letters of Credit............................................................28
        2.04   Optional Prepayments.........................................................34
        2.05   Mandatory Prepayments........................................................35
        2.06   Reduction or Termination of Commitments......................................35
        2.07   Repayment of Loans...........................................................37
        2.08   Interest.....................................................................37
        2.09   Fees.........................................................................38
        2.10   Computation of Interest and Fees.............................................38
        2.11   Evidence of Debt.............................................................38
        2.12   Payments Generally...........................................................39
        2.13   Sharing of Payments..........................................................41
        2.14   Security and Guaranties......................................................41

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY.........................................42
        3.01   Taxes........................................................................42
        3.02   Illegality...................................................................43
        3.03   Inability to Determine Rates.................................................43
        3.04   Increased Cost and Reduced Return; Capital Adequacy..........................44
        3.05   Funding Losses...............................................................44
        3.06   Matters Applicable to all Requests for Compensation..........................45
        3.07   Survival.....................................................................45

ARTICLE IV. CONDITIONS PRECEDENT............................................................46
        4.01   Conditions to Effectiveness..................................................46
        4.02   Conditions to Initial Credit Extension.......................................49
        4.03   Conditions to all Credit Extensions..........................................51

ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................................52
        5.01   Corporate Existence and Power................................................52
        5.02   Corporate Authorization; No Contravention....................................52
        5.03   Governmental Authorization...................................................53
        5.04   Binding Effect...............................................................53
        5.05   Litigation...................................................................53

                                       i.
   3



                                                                                       
        5.06   No Default...................................................................54
        5.07   ERISA Compliance.............................................................54
        5.08   Title to Properties..........................................................55
        5.09   Taxes........................................................................55
        5.10   Financial Condition..........................................................56
        5.11   Environmental Matters........................................................56
        5.12   Regulated Entities...........................................................57
        5.13   Collateral Documents.........................................................57
        5.14   No Burdensome Restrictions...................................................57
        5.15   Solvency.....................................................................57
        5.16   Labor Relations..............................................................58
        5.17   Intellectual Property; Proprietary Information...............................58
        5.18   Insurance....................................................................59
        5.19   Employment Agreements........................................................59
        5.20   Spin-Off Documents; Private Placement Documents..............................59
        5.21   Capitalization; Subsidiaries.................................................59
        5.22   Margin Regulations...........................................................60
        5.23   Brokers; Certain Expenses....................................................60
        5.24   Year End.....................................................................60
        5.25   Third Party Consents.........................................................60
        5.26   Existing Indebtedness........................................................61
        5.27   New Ceridian Obligations.....................................................61
        5.28   Swap Contracts...............................................................61
        5.29   Full Disclosure..............................................................61

ARTICLE VI. AFFIRMATIVE COVENANTS...........................................................61
        6.01   Financial Statements.........................................................61
        6.02   Certificates; Other Information..............................................62
        6.03   Notices......................................................................63
        6.04   Preservation of Corporate Existence, Etc.....................................65
        6.05   Maintenance of Property......................................................65
        6.06   Insurance....................................................................66
        6.07   Payment of Obligations.......................................................66
        6.08   Compliance with Laws.........................................................66
        6.09   ERISA Compliance.............................................................67
        6.10   Interest Rate Protection.....................................................67
        6.11   Inspection of Property and Books and Records.................................67
        6.12   Environmental Laws...........................................................67
        6.13   Use of Proceeds..............................................................67
        6.14   Additional Guarantors........................................................68
        6.15   Additional Subsidiaries......................................................68
        6.16   Additional Intellectual Property.............................................68
        6.17   Licenses.....................................................................69
        6.18   Further Assurances...........................................................69

ARTICLE VII. NEGATIVE COVENANTS.............................................................70
        7.01   Limitation on Liens..........................................................70

                                       ii.
   4


                                                                                        
        7.02   Mergers and Consolidations...................................................72
        7.03   Indebtedness.................................................................72
        7.04   Disposition of Assets........................................................73
        7.05   Contingent Obligations.......................................................75
        7.06   Loans and Investments........................................................76
        7.07   Dividends and Payments.......................................................77
        7.08   Use of Proceeds..............................................................77
        7.09   Hostile Acquisition..........................................................78
        7.10   Leverage Ratio...............................................................78
        7.11   Fixed Charge Coverage Ratio..................................................78
        7.12   Foreign Subsidiaries.........................................................79
        7.13   Change in Business...........................................................79
        7.14   Accounting Changes...........................................................79
        7.15   Certain Contracts............................................................79
        7.16   Transactions with Affiliates.................................................80
        7.17   Capital Expenditures.........................................................80
        7.18   Sales and Leasebacks.........................................................81
        7.19   Certain Tax Matters..........................................................81

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES................................................81
        8.01   Events of Default............................................................81
        8.02   Remedies Upon Event of Default...............................................84

ARTICLE IX. ADMINISTRATIVE AGENT............................................................85
        9.01   Appointment and Authorization of Administrative Agent........................85
        9.02   Delegation of Duties.........................................................85
        9.03   Liability of Administrative Agent............................................85
        9.04   Reliance by Administrative Agent.............................................86
        9.05   Notice of Default............................................................86
        9.06   Credit Decision; Disclosure of Information by Administrative Agent...........87
        9.07   Indemnification of Administrative Agent......................................87
        9.08   Administrative Agent in its Individual Capacity..............................88
        9.09   Successor Administrative Agent...............................................88
        9.10   Other Agents; Lead Managers..................................................88
        9.11   Collateral Matters...........................................................89

ARTICLE X. MISCELLANEOUS....................................................................89
        10.01  Amendments, Etc..............................................................89
        10.02  Notices and Other Communications; Facsimile Copies...........................91
        10.03  No Waiver; Cumulative Remedies...............................................92
        10.04  Attorney Costs, Expenses and Taxes...........................................92
        10.05  Indemnification by the Borrower..............................................92
        10.06  Payments Set Aside...........................................................93
        10.07  Successors and Assigns.......................................................96
        10.08  Confidentiality..............................................................97
        10.09  Set-off......................................................................97
        10.10  Interest Rate Limitation.....................................................97


                                      iii.



   5

                                                                                       

        10.11  Counterparts.................................................................97
        10.12  Integration..................................................................97
        10.13  Survival of Representations and Warranties...................................97
        10.14  Severability.................................................................98
        10.15  Foreign Lenders..............................................................98
        10.16  Removal and Replacement of Lenders...........................................99
        10.17  Governing Law................................................................99
        10.18  Waiver of Right to Trial by Jury............................................100

SCHEDULES

        1.01(e)   Existing Letters of Credit
        1.01(i)   Initial Permitted Indebtedness
        1.01(s)   Spin-Off Documents
        2.01      Commitments and Pro Rata Shares
        5.05      Litigation Affecting Loan Parties
        5.07      ERISA Compliance
        5.10      Contingent Obligations
        5.11      Environmental Matters
        5.17      Intellectual Property; Proprietary Information
        5.19      Employment Agreements
        5.21      Capitalization; Subsidiaries
        5.23      Brokers' Fees and Related Expenses
        5.25      Third Party Consents
        7.01      Permitted Liens
        7.02(b)   Permitted Transactions
        7.06(b)   Permitted Investments
        10.02     Eurodollar and Domestic Lending Offices, Addresses for Notices



                                      iv.
   6


EXHIBITS



                  FORM OF

               
           A      Loan Notice
           B      Loan Note
           C      Compliance Certificate
           D      Assignment and Acceptance
           E      New Ceridian Guaranty
           F      Subsidiary Guaranty
           G      Borrower Security Agreement
           H      Subsidiary Security Agreement
           I      Supplemental IP Security Agreement
           J      Borrower Pledge Agreement
           K      Subsidiary Pledge Agreement
           L      Effectiveness Date Opinion of Counsel (Content Summary)
           M      Closing Date Opinion of Counsel (Content Summary)
           N      Additional Guarantor Assumption Agreement
           O      Additional Guarantor Opinion of Counsel



                                       v.
   7


                                CREDIT AGREEMENT

        This CREDIT AGREEMENT ("Agreement") is entered into as of January ___,
2001, among CERIDIAN CORPORATION, a Delaware corporation (the "Borrower"), each
lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), BANK OF AMERICA, N.A., as the Administrative Agent
and L/C Issuer, and FLEET NATIONAL BANK, as the Syndication Agent.

        The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.

        In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

        1.01    DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:

        "Account Control Agreement" means any account control agreement, deposit
account control agreement, lockbox or other agreement with any securities
intermediary or depository granting control with respect to any investment
property or deposit account for purposes of Article 9 of the UCC or other
applicable law.

        "Acquisition" means, as to the Borrower and each of its Subsidiaries,
any transaction or series of related transactions for the purpose of or
resulting directly or indirectly in (a) the acquisition of all or substantially
all of the assets of a Person, or of any business or division of a Person, (b)
the acquisition of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary).

        "Additional Guarantor Assumption Agreement" has the meaning specified in
Section 6.14(a).

        "Administrative Agent" means Bank of America in its capacity as the
administrative agent under any of the Loan Documents, or any successor
administrative agent, and, to the extent applicable, in its capacity as
"Collateral Agent" under and as defined in the Intercreditor Agreement.

        "Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

        "Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or



                                       1.
   8

indirectly, power (a) to vote 15% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managing
general partners; or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

        "Agent/Arranger Fee Letter" has the meaning specified in Section
2.09(b).

        "Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

        "Aggregate Distributable Income" means an amount equal to 50% of
Consolidated Net Income (positive or negative) calculated on a cumulative basis,
based on the year-end financial statements delivered to the Administrative Agent
pursuant to Section 6.01(a); provided that any and all amounts paid pursuant to
Section 7.07(a)(iv) or pursuant to any equivalent provision in the Private
Placement Documents shall reduce the amount of Aggregate Distributable Income on
a dollar for dollar basis.

        "Aggregate Commitments" has the meaning set forth in the definition of
"Commitment."

        "Agreement" means this Credit Agreement.

        "Applicable Rate" means the following percentages per annum, each based
upon the applicable "Pricing Level":



                                        APPLICABLE RATE
         ---------------------------------------------------------------------------------
                                                             Eurodollar
                                                                Rate +
                                                            -------------
           Pricing                             Commitment    Letters of       Base Rate
            Level         Leverage Ratio           Fee         Credit             +
         --------------------------------------------------------------------------------
                                                                  
              1       Less than or equal to      0.375%       2.00%             0.500%
                              1.50:1
              2       Less than or equal to      0.400%       2.125%            0.750%
                        2.00:1 but greater
                           than 1.50:1
              3       Less than or equal to      0.425%       2.250%            0.875%
                        2.50:1 but greater
                           than 2.00:1
              4       Less than or equal to      0.475%       2.375%            1.000%
                        3.00:1 but greater
                           than 2.50:1
              5       Less than or equal to      0.500%       2.500%            1.125%
                        3.50:1 but greater
                           than 3.00:1
              6        Greater than 3.50:1       0.550%       2.750%            1.250%
         --------------------------------------------------------------------------------



                                       2.
   9

Initially, and at all times during the first 180 days after the Closing Date,
the applicable Pricing Level shall be Level 5 unless the Leverage Ratio, as
evidenced in the pro forma Compliance Certificate delivered on the Closing Date
or thereafter (based on the Compliance Certificates delivered under Section
6.02(a)), equates to Level 6, in which case the applicable Pricing Level shall
be Level 6 thereafter for the balance of such 180-day period. Each change in the
Applicable Rate based on a change of the Leverage Ratio shall be effective five
Business Days after the date the most recent Compliance Certificate is received
by the Administrative Agent until but excluding the date five Business Days
after the next Compliance Certificate is received. In the event that the
Borrower shall fail to deliver the Compliance Certificate within the time period
provided by Section 6.02(a), then, without limitation of the Lenders' other
rights and remedies hereunder, the Pricing Level shall be Level 6 from the date
upon which such Compliance Certificate was due under Section 6.02(a) until the
date upon which such Compliance Certificate is actually received by the
Administrative Agent.

        "Arbitron Business" means collectively the businesses of: (a) providing
media and marketing research services to broadcasters, advertising agencies,
advertisers, on-line webcasters and cable television; (b) providing media
audience and consumer retail behavior research services to cable systems,
broadcasters, magazines, advertising agencies and newspapers; and (c) providing
application software used to access and analyze media audience information and
software applications to access and analyze consumer retail behavior and media
usage.

        "Arbitron Subsidiaries" means, at all times prior to the Spin-Off
Consummation Date, those Subsidiaries designated as Arbitron Subsidiaries on
Schedule 5.21 and, at all times after the Spin-Off Consummation Date, all
Subsidiaries of the Borrower.

        "Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.

        "Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit D.

        "Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel and the non-duplicative allocated cost of
internal legal services and all disbursements of internal counsel.

        "Attributable Indebtedness" means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease.

        "Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal years ended December
31, 1998 and December 31, 1999 (in each case, giving effect to the Spin-Off
Transaction) and the related consolidated statements of income and cash flows
for the fiscal years of the Borrower ended December 31,



                                       3.
   10

1997, December 31, 1998 and December 31, 1999, each in the final form attached
to the Form 10.

        "Bank of America" means Bank of America, N.A.

        "Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

        "Base Rate Loan" means a Loan that bears interest based on the Base
Rate.

        "Borrower" has the meaning set forth in the introductory paragraph
hereto.

        "Borrower Pledge Agreement" means a Pledge Agreement executed by the
Borrower, in substantially the form of Exhibit J.

        "Borrower Security Agreement" means a Security Agreement executed by the
Borrower, in substantially the form of Exhibit G.

        "Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and having the same Interest Period made by each of the Lenders
pursuant to Section 2.01.

        "Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
applicable offshore Dollar interbank market.

        "Capital Lease" means, as applied to any Person, any lease of property
by such Person as lessee that is classified as a capital lease under GAAP.

         "Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term shall have corresponding meaning.
Effective as of the time of such pledge, deposit or delivery, the Borrower
hereby grants the Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, a Lien on all such cash and deposit account balances. Cash
collateral shall be maintained in blocked, non-interest bearing deposit accounts
at the Administrative Agent as depository.



                                       4.
   11

        "Cash Equivalents" means:

        (a)     securities issued or fully guaranteed or insured by the United
States Government or any agency thereof, having maturities of not more than six
months from the date of acquisition;

        (b)     certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers'
acceptances, having in each case a tenor of not more than six months, issued by
any Lender, or by any U.S. commercial or investment bank or broker having
combined capital and surplus of not less than $100,000,000 whose short term
securities are rated at least A-1 by S&P and P-1 by Moody's;

        (c)     commercial paper or promissory notes of an issuer rated at least
A-1 by S&P or P-1 by Moody's and in either case having a tenor of not more than
three months; and

        (d)     money market funds that comply with all material provisions of
Rule 2a-7 issued by the SEC under the Investment Company Act of 1940.

        "Change of Control" means, with respect to the Borrower, an event or
series of events by which:

        (a)     any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of the Borrower or its Subsidiaries, or any Person acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan), becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person shall be deemed
to have "beneficial ownership" of all securities that such person has the right
to acquire (such rights, "option rights"), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 30%
or more of the equity interests of the Borrower on a partially diluted basis
taking into account equity interests realizable upon the exercise of such
person's or group's option rights; or

        (b)     during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower ceases to be composed of individuals (i) who were members of that board
or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.

        "Closing Date" means the first date all the conditions precedent in
Section 4.02 are satisfied or waived in accordance with Section 4.02.

                                       5.
   12

        "Co-Agent" means Fleet National Bank in its capacity as syndication
agent hereunder.

        "Code" means the Internal Revenue Code of 1986.

        "Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower or any Guarantor and
their respective Subsidiaries in or upon which a Lien now or hereafter exists in
favor of the Lenders, or the Administrative Agent on behalf of the Lenders,
whether under this Agreement or under any other Collateral Documents.

        "Collateral Agent" has the meaning specified in the Intercreditor
Agreement.

        "Collateral Documents" means, collectively, (i) the Security Agreements,
(ii) the Pledge Agreements, (iii) all Account Control Agreements executed and
delivered pursuant to any other Loan Document, (iv) all documents executed by
the Borrower to accomplish Cash Collateralization or pledges of deposit
accounts, and (v) all licenses, UCC financing statements, notices and other
documents executed from time to time under or in connection with the foregoing.

        "Commitment" means, as to each Lender, its obligation (a) to make Loans
to the Borrower pursuant to Section 2.01, and (b) to purchase participations in
L/C Obligations, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on Schedule 2.01,
as such amount may be reduced or adjusted from time to time in accordance with
this Agreement (collectively, the "Aggregate Commitments").

        "Compensation Period" has the meaning specified in Section 2.12(d)(ii).

        "Compliance Certificate" means a certificate substantially in the form
of Exhibit C.

        "Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) the
amount of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income, plus (d) the amount of all
depreciation expense and amortization expense for such period, less (e) interest
income for such period; provided, however, that Consolidated Net Income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from Consolidated Net Income in such current period.

        "Consolidated Funded Indebtedness" means, as of any date of
determination, for Borrower and its Subsidiaries on a consolidated basis, all
(a) obligations for borrowed money, (b) obligations evidenced by bonds,
debentures, notes and loan agreements, (c) obligations in respect of letters of
credit, surety bonds, bankers' acceptances or similar instruments, (d)
obligations to pay the deferred purchase price of property or services (other
than trade payables entered into in the Ordinary Course of Business pursuant to
ordinary terms and paid within the specified time), (e) Attributable
Indebtedness incurred by the Borrower or any of its Subsidiaries in connection
with Synthetic Lease Obligations and Capital Leases and (f) Guaranty



                                       6.
   13

Obligations of the Borrower and its Subsidiaries in respect of obligations of
any Person in the nature of (a) through (d) above.

        "Consolidated Interest Expense" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses of the Borrower and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, but excluding any fees,
charges and expenses of the Borrower and its Subsidiaries arising from the
negotiation, execution, closing and consummation of the Spin-Off Documents and
the "Facility Documents" (as such term is defined in the Intercreditor
Agreement); and (b) the portion of rent expense of the Borrower and its
Subsidiaries with respect to such period under Capital Leases that is treated as
interest in accordance with GAAP.

        "Consolidated Net Income" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries, as determined in accordance with GAAP.

        "Consolidated Net Worth" means, as of any date of determination, with
respect to the Borrower and its Subsidiaries on a consolidated basis,
shareholders' equity on the date of determination as determined in accordance
with GAAP.

        "Consolidated Total Assets" means, as of any date of determination, the
total consolidated assets of the Borrower and its Subsidiaries as determined in
accordance with GAAP.

        "Contingent Obligation" means, as to the Borrower or any of its
Subsidiaries, (a) any Guaranty Obligation of that Person; (b) any reimbursement
obligation of that Person with respect to a standby letter of credit, surety
bond, banker's acceptance, bank guaranty or similar instrument; (c) any
obligation of that Person to purchase any materials, supplies or other property
from, or to obtain the services of, another Person (other than the Borrower or
one of its Subsidiaries) if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other property,
or for such services, shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or tendered, or such services
are ever performed or tendered; and (d) all Indebtedness (other than that of the
Borrower or any of its Subsidiaries) secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including accounts and contract rights) owned by the
Borrower or any such Subsidiary.

        "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

        "Credit Extension" means each of the following: (a) a Borrowing, and (b)
an L/C Credit Extension.

        "Current Portion of Long Term Debt" means, as of any date of
determination, in respect of the Borrower and its Subsidiaries on a consolidated
basis, (a) current portion of long term debt



                                       7.
   14

as determined on such date in accordance with GAAP, plus (b) an amount equal to
the amount, if any, by which the Outstanding Amount on such date exceeds (i) the
Aggregate Commitments on such date less (ii) the amount of any mandatory
reduction in Aggregate Commitments scheduled to occur within the four fiscal
quarter period commencing on such date pursuant to Section 2.06(b)(i); provided,
however, during the 365 days prior to the scheduled Maturity Date (under clause
(a) of the definition of such term), "Current Portion of Long Term Debt" shall
be calculated excluding the then-Outstanding Amount.

        "Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

        "Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

        "Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.

        "Disposition" or "Dispose" means the direct or indirect sale,
assignment, conveyance, lease, transfer, license or other disposition (including
any sale and leaseback transaction) of any property (other than cash or Cash
Equivalents) by any Person, including any sale, assignment, transfer or other
disposition, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.

        "Distribution" means the distribution by dividend of all stock of New
Ceridian held by the Borrower to the Borrower's shareholders, pursuant to a
tax-free transaction under Section 355 of the Code and undertaken pursuant to
the Spin-Off Documents.

        "Dollar" and "$" means lawful money of the United States of America.

        "EBITDA" means, in respect of any Person, for any period as determined
in accordance with GAAP, an amount equal to the sum of (a) net income, plus (b)
interest expense, plus (c) the amount of taxes, based on or measured by income,
used or included in the determination of such net income, plus (d) the amount of
all depreciation expense and amortization expense for such period, less (e)
interest income for such period; provided, however, that net income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from consolidated net income in such current period.



                                       8.
   15

        "Effectiveness Date" means the first day all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(c), waived by the Person entitled to receive the applicable
payment).

        "Eligible Assignee" has the meaning specified in Section 10.07(h).

        "Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the alleged or actual presence, placement, migration,
spillage, leakage, disposal, discharge, emission or release of any Hazardous
Material at, in, or from property, whether or not owned by the Borrower, or (b)
any other circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.

        "Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations,
registration requirements and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental and land use matters or
health and safety matters involving Hazardous Materials.

        "ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto.

        "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is currently or at any relevant time in the past was under
common control with the Borrower within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

        "ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.



                                       9.
   16

        "Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:

                           
          Eurodollar Rate  =             Eurodollar Base Rate
                              --------------------------------------------
                                 1.00 -- Eurodollar Reserve Percentage



        Where,

               "Eurodollar Base Rate" means, for such Interest Period:


        (a)     the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

        (b)     in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease to
be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or

        (c)     in the event the rates referenced in the preceding subsections
(a) and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest (rounded upward to the next 1/16th
of 1%) at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America's London
Branch to major banks in the offshore Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period.

        "Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities") having a term comparable to such Interest Period. The Eurodollar
Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically
as of the effective date of any change in the Eurodollar Reserve Percentage.



                                      10.
   17

        "Eurodollar Rate Loan" means a means a Loan that bears interest at a
rate based on the Eurodollar Rate.

        "Event of Default" means any of the events or circumstances specified in
Article VIII.

        "Event of Loss" means with respect to any asset of any Person, any of
the following: (i) any loss, destruction or damage of such asset; (ii) any sale
or transfer of such asset in connection with any pending or threatened
institution of any proceedings for the condemnation of or seizure of such asset
or of any right of any eminent domain; or (iii) any actual condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such asset, or confiscation of such asset or requisition of the use of such
asset.

        "Evergreen Letter of Credit" has the meaning specified in Section
2.03(b)(iii).

        "Excess Cash Flow" means, for any fiscal year, in respect of the
Borrower and its Subsidiaries on a consolidated basis, the excess, if any, of
Consolidated EBITDA, less the sum of (a) the aggregate amount of all principal
payments made during such year pursuant to (i) Section 2.05 and (ii) the Private
Placement Documents, plus (b) Consolidated Interest Expense for such year, plus
(c) capital expenditures and (without duplication) PPM Expenditures, to the
extent such expenditures are actually made during such year and are otherwise
permitted under Article VII, plus (d) cash taxes actually paid during such year;
provided, however, that Excess Cash Flow shall be calculated without taking into
account Consolidated EBITDA, Consolidated Interest Expense, capital expenditures
or cash taxes accrued or paid prior to the Spin-Off Consummation Date.

        "Exchange Act" means the Securities Exchange Act of 1934.

        "Existing Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of July 31, 1997 among the Borrower, Bank of America,
as agent, and a syndicate of lenders, and after giving effect to that certain
"Waiver to Credit Agreement" entered into by such parties dated as of December
20, 2000.

        "Existing Letters of Credit" means the letters of credit set forth on
Schedule 1.01(e) and issued by the "Issuing Bank" under, and as defined in, the
Existing Credit Facility.

        "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) 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 by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

        "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States of America.



                                      11.
   18

        "Foreign Lender" has the meaning specified in Section 10.15.

        "Foreign Subsidiary" means any Subsidiary of the Borrower incorporated
or organized, and existing, under the laws of any jurisdiction other than the
United States or any state thereof.

        "Form 10" means, until the Closing Date, that certain Form 10 filing
prepared by New Ceridian and delivered to the SEC on or about December 6, 2000
in connection with the Spin-Off Transaction, as amended by that amendment filed
with the SEC on or about December 22, 2000, and by that amendment filed with the
SEC on or about January 22, 2001. From and after the Closing Date, the term
"Form 10" also includes: (a) any amendments to the Form 10 filed with the SEC
between the Effectiveness Date and the Closing Date to the extent permitted by
Section 4.02(a)(i)(H), and (b) any amendments filed with the SEC after the
Closing Date to the extent necessary to accommodate changes to the Spin-Off
Documents permitted by Section 7.15(c).

        "Form 10 Financial Statements" means the Audited Financial Statements
plus all related unaudited financial statements of the Borrower filed with the
Form 10.

        "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied.

        "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.

        "Guarantor" means each Arbitron Subsidiary party to a Guaranty and, at
all times prior to the Spin-Off Consummation Date, New Ceridian.

        "Guaranties" means the Subsidiary Guaranties and the New Ceridian
Guaranty.

        "Guaranty Obligation" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligees in



                                      12.
   19

respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligees against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person; provided, however, that the term
"Guaranty Obligation" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guarantying Person in good faith.

        "Hazardous Materials" means all those substances which are regulated by,
or which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, hazardous chemicals,
special waste, hazardous substance, hazardous material, regulated substance, or
toxic substance, or petroleum or petroleum derived substance or waste.

        "Honor Date" has the meaning set forth in Section 2.03(c)(i).

        "Indebtedness" means, as to any Person at a particular time, all of the
following:

                (a)     all obligations of such Person for borrowed money and
        all obligations of such Person evidenced by bonds, debentures, notes,
        loan agreements or other similar instruments;

                (b)     any fixed (non-contingent) obligations of such Person
        arising under letters of credit (including standby and commercial),
        banker's acceptances, bank guaranties, surety bonds and similar
        instruments;

                (c)     net obligations under any Swap Contract in an amount
        equal to (i) if such Swap Contract has been closed out, the Swap
        Termination Value, or (ii) if such Swap Contract has not been closed
        out, the mark-to-market value thereof determined on the basis of readily
        available quotations provided by any recognized dealer in such Swap
        Contract;

                (d)     whether or not so included as liabilities in accordance
        with GAAP, all obligations of such Person to pay the deferred purchase
        price of property or services (other than trade payables entered into in
        the Ordinary Course of Business pursuant to ordinary terms and paid
        within the specified time), and indebtedness (excluding prepaid interest
        thereon) secured by a Lien on property owned or being purchased by such
        Person (including indebtedness arising under conditional sales or other
        title retention agreements), whether or not such indebtedness shall have
        been assumed by such Person or is limited in recourse; and

                (e)     Capital Leases and Synthetic Lease Obligations.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (that is not itself a
corporation, limited liability company or limited


                                      13.
   20
liability partnership) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such Person
except for customary exceptions acceptable to the Required Lenders. The amount
of any Capital Lease or Synthetic Lease Obligation as of any date shall be
deemed to be the amount of Attributable Indebtedness in respect thereof as of
such date. Without limiting the generality of the foregoing, any indebtedness of
the Borrower to any of the Borrower's Wholly-Owned Subsidiaries, or of any of
the Borrower's Wholly-Owned Subsidiaries to other of the Borrower's Wholly-Owned
Subsidiaries, shall not constitute Indebtedness hereunder.

        "Indemnified Liabilities" has the meaning set forth in Section 10.05.

        "Indemnitees" has the meaning set forth in Section 10.05.

        "Initial Permitted Indebtedness" means that Indebtedness set forth on
Schedule 1.01(i).

        "Intellectual Property" means all trademarks, trademark rights, trade
names, trade name rights, service marks, patents, pending patent applications,
copyrights, franchises, authorizations, inventions, Proprietary Information and
goodwill now existing or hereafter arising, and all other intellectual property
rights held or used by the Borrower and its Subsidiaries.

        "Intercreditor Agreement" means that Intercreditor Agreement, dated as
of the Closing Date, entered into among the Collateral Agent, the Administrative
Agent, the Private Placement Noteholders, and the "Swap Provider" (as defined
therein) as counterparty to Specified Swap Contracts, in form and substance
satisfactory to the Administrative Agent and the Lenders.

        "Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date.

        "Interest Period" means as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Loan) converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower in its Loan Notice; provided that:

                        (i)     any Interest Period that would otherwise end on
                a day that is not a Business Day shall be extended to the next
                succeeding Business Day unless, in the case of a Eurodollar Rate
                Loan, such Business Day falls in another calendar month, in
                which case such Interest Period shall end on the next preceding
                Business Day;

                        (ii)    any Interest Period pertaining to a Eurodollar
                Rate Loan that begins on the last Business Day of a calendar
                month (or on a day for which there is no numerically
                corresponding day in the calendar month at the end of such
                Interest Period) shall end on the last Business Day of the
                calendar month at the end of such Interest Period; and



                                      14.
   21

                        (iii)   no Interest Period shall extend beyond the
                scheduled Maturity Date.

        "Investment" of a Person means (i) the outstanding principal amount of
any loan, advance, extension of credit (other than loans, advances or extensions
of credit arising in the Ordinary Course of Business), or (ii) the amount
(measured by the amount of cash expended or the then-current fair market value
of other assets, including stock of such Person, utilized as consideration) of
any contribution of capital by such Person to any other Person or any investment
in, or purchase or other acquisition of, the stock, partnership or membership
interests, notes, debentures or other securities of any other Person made by
such Person, reduced by the amount of any distribution by such other Person
constituting a return of capital, any payment of principal on such notes,
debentures or other debt securities, or any proceeds from the sale of any equity
or debt securities of such other Person.

        "IRS" means the United States Internal Revenue Service.

        "IRS Ruling Letter" means an affirmative private letter ruling by the
IRS regarding the tax-free nature of the Spin-Off Transaction.

        "Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

        "L/C Advance" means, with respect to each Lender, such Lender's
participation in any L/C Borrowing in accordance with its Pro Rata Share.

        "L/C Application" means an application and agreement for the issuance or
amendment of a letter of credit in the form from time to time in use by the L/C
Issuer.

        "L/C Backstop Date" means the day that is seven days prior to the
scheduled Maturity Date (or, if such day is not a Business Day, the next
preceding Business Day).

        "L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing.

        "L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.

        "L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

        "L/C Obligations" means, as at any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.



                                      15.
   22

        "L/C Sublimit" means an amount equal to the lesser of the Aggregate
Commitments and $25,000,000. The L/C Sublimit is part of, and not in addition
to, the Aggregate Commitments.

        "Lead Lender" means Bank of America or Fleet National Bank.

        "Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer.

        "Lending Office" means, as to any Lender, the office or offices of such
Lender described as such on Schedule 10.02, or such other office or offices as a
Lender may from time to time notify the Borrower and the Administrative Agent.

        "Letters of Credit" means any standby letters of credit issued or deemed
issued hereunder, and shall include the Existing Letters of Credit.

        "Leverage Ratio" means, as of any date of determination, for Borrower
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of
the four fiscal quarters ending on such date.

        "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable, but excluding the interest of a
lessor under an Operating Lease.

        "Loan" has the meaning specified in Section 2.01.

        "Loan Documents" means this Agreement, each Loan Note, the Collateral
Documents, the Guaranties, each Additional Guarantor Assumption Agreement, the
Intercreditor Agreement, each Request for Credit Extension, the Agent/Arranger
Fee Letter, and each Compliance Certificate and other certificates delivered
under any of the foregoing.

        "Loan Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B.

        "Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Loans as the same
Type, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.

        "Loan Parties" means, collectively, the Borrower and all Guarantors.

        "Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole and includes, at any time prior to the Spin-Off
Consummation Date, New Ceridian and its Subsidiaries taken as a whole;



                                      16.
   23

(b) a material impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party or, at any time prior
to the Spin-Off Consummation Date, the ability of New Ceridian to perform its
obligations under any Spin-Off Document to which it is party; or (c) a material
adverse effect upon (i) the legality, validity, binding effect or enforceability
against any Loan Party or Subsidiary of any Loan Document to which it is a party
or, at any time prior to the Spin-Off Consummation Date, against New Ceridian of
any Spin-Off Document to which it is a party, or (ii) the perfection or priority
of any Lien granted under any of the Collateral Documents.

        "Material Software" means, at any time, any software program (including
all releases, versions and modifications thereof) developed, acquired or used in
connection with the Arbitron Business and as to which the Borrower and its
Subsidiaries have received gross royalty or license payments from any and all
third parties in an aggregate amount in excess of $1,000,000 during any of the
five fiscal years preceding such time.

        "Material Subsidiary" means, at any time, any Arbitron Subsidiary: (a)
the assets of which are either 5% or more of Consolidated Total Assets (or the
equivalent thereof in another currency) or the gross revenues of which are 5% or
more of consolidated gross revenue of the Borrower and its Subsidiaries, based
on the most recent financial statements delivered to the Administrative Agent
under Section 4.01(a), 4.02(a) or 6.01; or (b) designated by the Borrower as a
Material Subsidiary pursuant to Section 6.15(b) and not de-designated pursuant
to Section 6.15(c).

        "Maturity Date" means (a) the date that is five years after the Closing
Date, or (b) such earlier date upon which the Commitments may be terminated in
accordance with the terms hereof.

        "Maximum Rate" has the meaning specified in Section 10.10.

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

        "Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.

        "Net Cash Proceeds" has the meaning specified in Section 2.06(b)(ii).

        "New Ceridian" means New Ceridian Corporation, a Delaware corporation.

        "New Ceridian Assets" means, at all times prior to the Spin-Off
Consummation Date, all assets of the Borrower and its Subsidiaries intended
(consistent with the Form 10) to be transferred to New Ceridian pursuant to the
Separation and not including any assets necessary to conduct the Arbitron
Business.

        "New Ceridian Credit Agreement" means that certain Credit Agreement
dated as of the Effectiveness Date, among New Ceridian, the lenders from time to
time party thereto and Bank of America, N.A., as the administrative agent.



                                      17.
   24

        "New Ceridian Guaranty" means a Guaranty executed by New Ceridian, in
substantially the form of Exhibit E.

        "Nielsen" means Nielsen Media Research, Inc., a Delaware corporation.

        "Nielsen JV" means a joint venture that may be created upon the exercise
of an option granted to Nielsen pursuant to the Nielsen JV Option Agreement.

        "Nielsen JV Option Agreement" means that Option Agreement between the
Borrower and Nielsen dated as of May 31, 2000 and as in effect as of the
Effectiveness Date.

        "Nonrenewal Notice Date" has the meaning specified in Section
2.03(b)(iii).

        "Notice of Lien" means any "notice of lien" or similar document intended
to be filed or recorded with any court, registry, recorder" office, central
filing office, or other Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a lien securing obligations
owing to a Governmental Authority.

        "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding.

        "Operating Lease" means, as applied to any Person, any lease of property
which is not a Capital Lease.

        "Ordinary Course of Business" means, in respect of any transaction
involving the Borrower or any Subsidiary, the ordinary course of such Person's
business, as conducted by any such Person (or its predecessor) in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any Loan Document.

        "Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation with the secretary of state or other
department in the state of its formation, in each case as amended from time to
time.

        "Other Taxes" has the meaning specified in Section 3.01(b).

        "Outstanding Amount" means (i) with respect to Loans, on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans, occurring on such date; and
(ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C

                                      18.
   25

Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.

        "Participant" has the meaning specified in Section 10.07(d).

        "PBGC" means the Pension Benefit Guaranty Corporation.

        "Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.

        "Permitted Acquisition" means any Acquisition as to which all of the
following conditions are satisfied: (a) total cash and non cash consideration
(including any deferred payment) paid or required to be paid by the Borrower and
its Subsidiaries in connection with such Acquisition does not exceed
$30,000,000; (b) after giving effect to such Acquisition, total cash and non
cash consideration (including any deferred payment) paid or required to be paid
by the Borrower and its Subsidiaries in connection with all such Acquisitions in
any fiscal year does not exceed $50,000,000; (c) after giving effect to such
Acquisition, the Person, or business or division of such Person, so acquired
shall be a division or Wholly-Owned Subsidiary of the Borrower or one of its
Subsidiaries; and (d) immediately after giving effect to such Acquisition, there
shall exist no Default or Event of Default.

        "Permitted Indebtedness" has the meaning specified in Section 7.03(a).

        "Permitted Liens" has the meaning specified in Section 7.01.

        "Permitted Nielsen JV" means any Person that is a Nielsen JV, provided
the following conditions are at all times satisfied: (i) such Person is an
entity duly formed and existing under the Laws of its jurisdiction of
incorporation or organization; (ii) no less than 50% of the beneficial ownership
of such person is owned by the Borrower and such Person is not a Subsidiary of
Nielsen or of any Affiliate of Nielsen; (iii) the assets and property of such
Person consisting of Intellectual Property or Proprietary Information
contributed by the Borrower or any Subsidiary of the Borrower are subject to no
Liens in favor of any other Person other than Permitted Liens; (iv) such Person
is authorized to use and license the Borrower's PPM Technology to the extent,
but only to the extent, consistent with the Nielsen JV Option Agreement; and (v)
the Organization Documents, and all material contracts and licenses of such
Person entered into, directly or indirectly, with the Borrower or any
Subsidiary, and other material contracts to be entered into by such Person
substantially contemporaneously with its organization are in form and substance
reasonably satisfactory to the Administrative Agent and the Required Lenders.

        "Permitted Swap Contract" means any Swap Contract entered into by the
Borrower or any Subsidiary for which each of the following conditions is
satisfied: (a) such contract is (or was) entered into by such Person in the
Ordinary Course of Business for the purpose of directly



                                      19.
   26

mitigating risks associated with liabilities, commitments or assets held or
reasonably anticipated by such Person (including any Swap Contract entered into
by the Borrower or any Subsidiary for the purpose of hedging interest rate risk
arising in connection with the Obligations (a "Specified Swap Contract")), or
with changes in the value of securities issued by such Person in conjunction
with a securities repurchase program not otherwise prohibited hereunder, and not
for purposes of speculation or taking a "market view"; and (b) such Swap
Contract does not contain: (i) any provision (a "walk-away" provision)
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party, or (ii) with respect to any
Swap Contract that it is not a Specified Swap Contract, any provision creating
or permitting the declaration of an event of default, termination event, or
similar event upon the occurrence of an Event of Default hereunder (other than
an Event of Default under Section 8.01(a)).

        "Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture or Governmental Authority.

        "Placement Agent" means Banc of America Securities LLC or such other
Person designated as the placement agent under the terms of the Private
Placement Documents.

        "Pledge Agreements" means the Borrower Pledge Agreement and the
Subsidiary Pledge Agreements.

        "Pledged Collateral" has the meaning specified in the Pledge Agreements.

        "PPM Expenditures" means (a) at any time prior to the initial exercise
of the option under the Nielsen JV Option Agreement to establish a Nielsen JV,
all capital expenditures and capitalized expenditures (including in respect of
software development and acquisition), made or incurred by the Borrower or its
Subsidiaries in anticipation of a Nielsen JV or in furtherance of the
development or Disposition of PPM Technology, and (b) at any time thereafter,
the sum of the items specified in clause (a) plus all Investments made by the
Borrower and its Subsidiaries in any and all Nielsen JV's.

        "PPM Technology" means (a) all patent, copyright and other intellectual
property rights and technology of the Borrower and its Subsidiaries in the
Borrower's "Portable People Meter" and "Critical Band Encoding Technique," as
such terms are defined in the Nielsen JV Option Agreement, together with all
improvements and additions thereto, and (b) all other audio encoding patents
held by the Borrower and subject to the Nielsen JV Option Agreement.

        "Preliminary Opening Balance Sheet" has the meaning specified in Section
4.01(a)(viii).

        "Private Placement" means a private placement of senior secured notes of
the Borrower in an aggregate principal amount of not less than $50,000,000
pursuant to the Private Placement Documents and entered into on or before the
Effectiveness Date.

        "Private Placement Documents" means, collectively, the Note Purchase
Agreement dated of near or even date herewith among the Borrower, John Hancock
Life Insurance Company and the other Private Placement Noteholders party
thereto, together with all "Note Documents" as defined in such Note Purchase
Agreement.



                                      20.
   27

        "Private Placement Noteholders" means the "Note Holders" under and as
defined in the Private Placement Documents.

        "Proprietary Information" means, as to the Borrower and each of its
Subsidiaries, such Person's trade secrets, including know-how, computer
programs, and technical data, used in the development, production and sale of
products and services.

        "Pro Rata Share" means, with respect to each Lender, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender's Commitment, and set forth opposite the name of such
Lender on Schedule 2.01, as such share may be adjusted as contemplated herein.

        "Register" has the meaning set forth in Section 10.07(c).

        "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.

        "Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Loan Notice, and (b) with respect to an
L/C Credit Extension, an L/C Application.

        "Required Lenders" means, as of any date of determination, Lenders whose
Voting Percentages aggregate more than 50%.

        "Responsible Officer" means the president, chief executive officer,
chief financial officer, treasurer or controller of a Loan Party, and also
includes, in respect of the Borrower, the Executive Vice President of Finance
and Planning of Arbitron. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

        "Revocable" means, in relation to any license of Intellectual Property,
that such license may be revoked or terminated by the licensor at any time or
upon a default or breach of condition by the licensee.

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

        "Scarborough Partnership" means that New York general partnership
created pursuant to the Scarborough Partnership Agreement.

        "Scarborough Partnership Agreement" means that Partnership Agreement
between VNU Advertising Expenditure Corp. and the Borrower, dated as of December
31, 1994, as amended and in effect as of the Effectiveness Date.

        "SEC" means the Securities and Exchange Commission.

                                      21.
   28

        "Security Agreements" means the Borrower Security Agreement, the
Subsidiary Security Agreements and the Supplemental IP Security Agreements.

        "Senior Credit Ratable Amount" means, at any time, with reference to any
mandatory prepayment hereunder pursuant to Section 2.05, an amount equal to the
quotient of: (a) the Aggregate Commitments at such time, divided by (b) the sum
of (i) the Aggregate Commitments at such time, plus (ii) the principal amount
outstanding at such time of all notes issued pursuant to the Private Placement;
provided, however, that if there exists at such time no mandatory prepayment
requirement pursuant to the Private Placement Documents in respect of such
prepayment, or if any such mandatory prepayment has been waived, the "Senior
Credit Ratable Amount" shall equal 1.0.

        "Senior Note Indenture" means that Indenture dated as of June 10, 1999
between Ceridian Corporation, as Issuer, and the Bank of New York, as Trustee,
relating to 7.25% Senior Notes due 2004.

        "Separation" means the consummation of (a) the transfer by way of
absolute assignment and contribution by the Borrower to New Ceridian of all
assets and businesses of the Borrower, other than the Arbitron Business, and (b)
the corresponding allocation of liabilities of the Borrower as between the
Borrower and New Ceridian, through means of novation or cross-indemnities,
pursuant to the Spin-Off Documents.

        "Separation Date" means the date upon which all material aspects of the
Separation have been completed.

        "Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the fair value of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Conveyances Act (as enacted in the State of New York); (b)
the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.

        "Specified Swap Contract" has the meaning specified in the definition of
"Permitted Swap Contract".

        "Spin-Off Consummation Date" means the date upon which all material
aspects of the Spin-Off Transaction have been consummated.

        "Spin-Off Deadline" means the earlier of (a) March 30, 2001 or (b) the
date occurring three Business Days after the Closing Date.



                                      22.
   29

        "Spin-Off Documents" means the documents set forth in Schedule 1.01(s),
each substantially in the form attached to the Form 10 or delivered to the
Administrative Agent pursuant to Article IV.

        "Spin-Off Transaction" means, collectively, (i) the Separation and (ii)
the Distribution.

        "Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests, having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.

        "Subsidiary Guaranty" means a Guaranty executed by any Arbitron
Subsidiary, in substantially the form of Exhibit F.

        "Subsidiary Pledge Agreement" means a Pledge Agreement executed by any
Arbitron Subsidiary, in substantially the form of Exhibit K.

        "Subsidiary Security Agreement" means a Security Agreement executed by
any Arbitron Subsidiary, in substantially the form of Exhibit H.

        "Supplemental Financial Statements" means the unaudited pro forma
consolidated balance sheet of the Borrower and its Arbitron Subsidiaries on a
stand-alone basis for the fiscal quarter ended March 31, 2000 (giving effect to
the Spin-Off Transaction) and the related pro forma consolidated income
statement for such fiscal quarter.

        "Supplemental IP Security Agreement" means any Supplemental Intellectual
Property Security Agreement, in substantially the form of Exhibit I, executed
pursuant to Section 6.16.

        "Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.



                                      23.
   30

        "Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

        "Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

        "Taxes" has the meaning specified in Section 3.01(a).

        "Test Period" means a period of four consecutive fiscal quarters.

        "Threshold Amount" means $5,000,000, except that in respect of
Indebtedness under the Private Placement Documents or any Swap Termination Value
in respect of Specified Swap Contracts, "Threshold Amount" means $0.

        "Transaction Liens" means, collectively, all Liens from time to time
existing in favor of the Collateral Agent for the benefit of the Administrative
Agent and the Lenders, the Private Placement Noteholders, and any Lender
counterparty to a Specified Swap Contract, to the extent subject to the
Intercreditor Agreement.

        "Type" means with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided that in the event that by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for the purposes of definitions related
to such provisions.

        "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).

        "Voting Percentage" means, as to any Lender, (a) at any time when the
Commitments are in effect, such Lender's Pro Rata Share and (b) at any time
after the termination of the Commitments, the percentage (carried out to the
ninth decimal place) which (i) the sum of (a) the Outstanding Amount of such
Lender's Loans, plus (b) such Lender's Pro Rata Share of the Outstanding Amount
of L/C Obligations, then constitutes of (ii) the Outstanding Amount of all Loans
and L/C Obligations; provided, however, that if any Lender has failed to fund
any portion of the Loans, or participations in L/C Obligations required to be
funded by it hereunder, such



                                      24.
   31

Lender's Voting Percentage shall be deemed to be -0-, and the respective Pro
Rata Shares and Voting Percentages of the other Lenders shall be recomputed for
purposes of this definition and the definition of "Required Lenders" without
regard to such Lender's Commitment or the outstanding amount of its Loans, and
L/C Advances, as the case may be.

        "Wholly-Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, or by one or more of the
other Wholly-Owned Subsidiaries of the Borrower, or both.

        1.02    OTHER INTERPRETIVE PROVISIONS.

        (a)     The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

        (b)     (i)     The words "herein" and "hereunder" and words of similar
import when used in any Loan Document shall refer to such Loan Document as a
whole and not to any particular provision thereof.

                (ii)    Unless otherwise specified herein, Article, Section,
        Exhibit and Schedule references are to this Agreement.

                (iii)   The term "including" is by way of example and not
        limitation.

                (iv)    The term "documents" includes any and all instruments,
        documents, agreements, certificates, notices, reports, financial
        statements and other writings, however evidenced.

        (c)     In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."

        (d)     Section headings herein and the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

        1.03    ACCOUNTING TERMS.

        (a)     All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data required to
be submitted pursuant to this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

        (b)     If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate





                                      25.
   32

in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (a) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(b) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

        1.04    ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

        1.05    REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

                                   ARTICLE II.
                     THE COMMITMENTS AND CREDIT EXTENSIONS

        2.01    LOANS. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a "Loan") to the
Borrower from time to time on any Business Day during the period from the
Closing Date to the Maturity Date, in an aggregate amount not to exceed at any
time outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Borrowing, (i) the aggregate Outstanding Amount of
all Loans and L/C Obligations shall not exceed the Aggregate Commitments, and
(ii) the aggregate Outstanding Amount of the Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations shall
not exceed such Lender's Commitment. Within the limits of each Lender's
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.01, prepay under Section 2.04, and reborrow
under this Section 2.01. Loans may be Base Rate Loans or Eurodollar Rate Loans,
as further provided herein.

        2.02    BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.

        (a)     Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Loans as the same Type shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m., New York time, (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and
(ii) on the requested date of any Borrowing of Base Rate Loans. Each such
telephonic notice must be



                                      26.
   33

confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof. Each Loan Notice (whether telephonic or written) shall specify
(i) whether the Borrower is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Loans as the same Type, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
or continued as, or converted to, Base Rate Loans. Any such automatic conversion
to Base Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.

        (b)     Following receipt of a Loan Notice, the Administrative Agent
shall promptly notify each Lender of its Pro Rata Share of the applicable Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of
any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 2:00 p.m., New York time, on the
Business Day specified in the applicable Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.03 (and, if such Borrowing is the
initial Credit Extension, Section 4.02), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to the
Administrative Agent by the Borrower; provided, however, that if, on the date of
the Borrowing there are L/C Borrowings outstanding, then the proceeds of such
Borrowing shall be applied, first, to the payment in full of any such L/C
Borrowings, and second, to the Borrower as provided above.

        (c)     Except as otherwise provided herein, a Eurodollar Rate Loan may
be continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders, and the Required Lenders may demand
that any or all of the then outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans.

        (d)     The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Eurodollar Rate Loan upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the



                                      27.
   34

absence of manifest error. The Administrative Agent shall notify the Borrower
and the Lenders of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

        (e)     After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than eight Interest Periods in effect with respect to
Loans.

        2.03    LETTERS OF CREDIT.

        (a)     The Letter of Credit Commitment.

                (i)     Subject to the terms and conditions set forth herein,
        (A) the L/C Issuer agrees, in reliance upon the agreements of the other
        Lenders set forth in this Section 2.03, (1) from time to time on any
        Business Day during the period from the Closing Date until the L/C
        Backstop Date, to issue Letters of Credit for the account of the
        Borrower, and to amend or renew Letters of Credit previously issued by
        it, in accordance with subsection (b) below, and (2) to honor drafts
        under the Letters of Credit; and (B) the Lenders severally agree to
        participate in Letters of Credit issued for the account of the Borrower;
        provided that the L/C Issuer shall not be obligated to make any L/C
        Credit Extension with respect to any Letter of Credit, and no Lender
        shall be obligated to participate in, any Letter of Credit if as of the
        date of such L/C Credit Extension, (x) the Outstanding Amount of all L/C
        Obligations and all Loans would exceed the Aggregate Commitments, (y)
        the aggregate Outstanding Amount of the Loans of any Lender, plus such
        Lender's Pro Rata Share of the Outstanding Amount of all L/C
        Obligations, would exceed such Lender's Commitment, or (z) the
        Outstanding Amount of the L/C Obligations would exceed the L/C Sublimit.
        Within the foregoing limits, and subject to the terms and conditions
        hereof, the Borrower's ability to obtain Letters of Credit shall be
        fully revolving, and accordingly the Borrower may, during the foregoing
        period, obtain Letters of Credit to replace Letters of Credit that have
        expired or that have been drawn upon and reimbursed. All Existing
        Letters of Credit outstanding as of the Closing Date shall be deemed to
        have been issued pursuant hereto, and from and after the Closing Date
        shall be subject to and governed by the terms and conditions hereof.

                (ii)    The L/C Issuer shall be under no obligation to issue any
        Letter of Credit if:

                        (A)     any order, judgment or decree of any
                Governmental Authority or arbitrator shall by its terms purport
                to enjoin or restrain the L/C Issuer from issuing such Letter of
                Credit, or any Law applicable to the L/C Issuer or any request
                or directive (whether or not having the force of law) from any
                Governmental Authority with jurisdiction over the L/C Issuer
                shall prohibit, or request that the L/C Issuer refrain from, the
                issuance of letters of credit generally or such Letter of Credit
                in particular or shall impose upon the L/C Issuer with respect
                to such Letter of Credit any restriction, reserve or capital
                requirement (for which the L/C Issuer is not otherwise
                compensated hereunder) not in effect on the Closing Date, or
                shall impose upon the L/C Issuer any unreimbursed loss, cost or
                expense which was not applicable on the Closing Date and which
                the L/C Issuer



                                      28.
   35

                in good faith deems material to it;

                        (B)     subject to Section 2.03(b)(iii), the expiry date
                of such requested Letter of Credit would occur more than twelve
                months after the date of issuance or last renewal, unless the
                Required Lenders have approved such expiry date;

                        (C)     the expiry date of such requested Letter of
                Credit would occur after the L/C Backstop Date, unless all the
                Lenders have approved such expiry date;

                        (D)     the issuance of such Letter of Credit would
                violate one or more generally applicable policies of the L/C
                Issuer; or

                        (E)     such Letter of Credit is in a face amount less
                than $100,000, or is to be denominated in a currency other than
                Dollars.

                (iii)   The L/C Issuer shall be under no obligation to amend any
        Letter of Credit if (A) the L/C Issuer would have no obligation at such
        time to issue such Letter of Credit in its amended form under the terms
        hereof, or (B) the beneficiary of such Letter of Credit does not accept
        the proposed amendment to such Letter of Credit.

        (b)     Procedures for Issuance and Amendment of Letters of Credit;
Evergreen Letters of Credit.

                (i)     Each Letter of Credit shall be issued or amended, as the
        case may be, upon the request of the Borrower delivered to the L/C
        Issuer (with a copy to the Administrative Agent) in the form of an L/C
        Application, appropriately completed and signed by a Responsible Officer
        of the Borrower. Such L/C Application must be received by the L/C Issuer
        and the Administrative Agent not later than 11:00 a.m., New York time,
        at least two Business Days (or such later date and time as the L/C
        Issuer may agree in a particular instance in its sole discretion) prior
        to the proposed issuance date or date of amendment, as the case may be.
        In the case of a request for an initial issuance of a Letter of Credit,
        such L/C Application shall specify in form and detail satisfactory to
        the L/C Issuer: (A) the proposed issuance date of the requested Letter
        of Credit (which shall be a Business Day); (B) the amount thereof; (C)
        the expiry date thereof; (D) the name and address of the beneficiary
        thereof; (E) the documents to be presented by such beneficiary in case
        of any drawing thereunder; (F) the full text of any certificate to be
        presented by such beneficiary in case of any drawing thereunder; and (G)
        such other matters as the L/C Issuer may require. In the case of a
        request for an amendment of any outstanding Letter of Credit, such L/C
        Application shall specify in form and detail satisfactory to the L/C
        Issuer (I) the Letter of Credit to be amended; (II) the proposed date of
        amendment thereof (which shall be a Business Day); (III) the nature of
        the proposed amendment; and (IV) such other matters as the L/C Issuer
        may require.

                (ii)    Promptly after receipt of any L/C Application, the L/C
        Issuer will confirm with the Administrative Agent (by telephone or in
        writing) that the Administrative Agent has received a copy of such L/C
        Application from the Borrower and, if not, the L/C Issuer will provide
        the Administrative Agent with a copy thereof. Upon receipt by the L/C
        Issuer of confirmation from the Administrative Agent that the requested
        issuance or



                                      29.
   36

        amendment is permitted in accordance with the terms hereof, then,
        subject to the terms and conditions hereof, the L/C Issuer shall, on the
        requested date, issue a Letter of Credit for the account of the Borrower
        or enter into the applicable amendment, as the case may be, in each case
        in accordance with the L/C Issuer's usual and customary business
        practices. Immediately upon the issuance of each Letter of Credit, each
        Lender shall be deemed to, and hereby irrevocably and unconditionally
        agrees to, purchase from the L/C Issuer a participation in such Letter
        of Credit in an amount equal to the product of such Lender's Pro Rata
        Share times the amount of such Letter of Credit.

                (iii)   If the Borrower so requests in any applicable L/C
        Application, the L/C Issuer may, in it sole and absolute discretion,
        agree to issue a Letter of Credit that has automatic renewal provisions
        (each, an "Evergreen Letter of Credit"); provided that any such
        Evergreen Letter of Credit must permit the L/C Issuer to prevent any
        such renewal at least once in each twelve-month period (commencing with
        the date of issuance of such Letter of Credit) by giving prior notice to
        the beneficiary thereof not later than a day (the "Nonrenewal Notice
        Date") in each such twelve-month period to be agreed upon at the time
        such Letter of Credit is issued. Unless otherwise directed by the L/C
        Issuer, the Borrower shall not be required to make a specific request to
        the L/C Issuer for any such renewal. Once an Evergreen Letter of Credit
        has been issued, the Lenders shall be deemed to have authorized (but may
        not require) the L/C Issuer to permit the renewal of such Letter of
        Credit at any time to a date not later than the L/C Backstop Date;
        provided, however, that the L/C Issuer shall not permit any such renewal
        if (A) the L/C Issuer would have no obligation at such time to issue
        such Letter of Credit in its renewed form under the terms hereof, or (B)
        it has received notice (which may be by telephone or in writing) on or
        before the Business Day immediately preceding the Nonrenewal Notice Date
        (1) from the Administrative Agent that the Required Lenders have elected
        not to permit such renewal or (2) from the Administrative Agent, any
        Lender or the Borrower that one or more of the applicable conditions
        specified in Section 4.03 is not then satisfied. Notwithstanding
        anything to the contrary contained herein, the L/C Issuer shall have no
        obligation to permit the renewal of any Evergreen Letter of Credit at
        any time.

                (iv)    Promptly after its delivery of any Letter of Credit or
        any amendment to a Letter of Credit to an advising bank with respect
        thereto or to the beneficiary thereof, the L/C Issuer will also deliver
        to the Borrower and the Administrative Agent a true and complete copy of
        such Letter of Credit or amendment.

        (c)     Drawings and Reimbursements; Funding of Participations.

                (i)     Upon any drawing under any Letter of Credit, the L/C
        Issuer shall notify the Borrower and the Administrative Agent thereof.
        Not later than 11:00 a.m., New York time, on the date of any payment by
        the L/C Issuer under a Letter of Credit (each such date, an "Honor
        Date"), the Borrower shall reimburse the L/C Issuer through the
        Administrative Agent in an amount equal to the amount of such drawing.
        If the Borrower fails to so reimburse the L/C Issuer by such time, the
        Administrative Agent shall promptly notify each Lender of the Honor
        Date, the amount of the unreimbursed drawing (the "Unreimbursed
        Amount"), and such Lender's Pro Rata Share thereof. In such event, the
        Borrower shall be deemed to have requested a Borrowing of Base Rate
        Loans to be



                                      30.
   37

        disbursed on the Honor Date in an amount equal to the Unreimbursed
        Amount, without regard to the minimum and multiples specified in Section
        2.02 for the principal amount of Base Rate Loans, but subject to the
        amount of the unutilized portion of the Aggregate Commitments and the
        conditions set forth in Section 4.03 (other than the delivery of a Loan
        Notice). Any notice given by the L/C Issuer or the Administrative Agent
        pursuant to this Section 2.03(c)(i) may be given by telephone if
        immediately confirmed in writing; provided that the lack of such an
        immediate confirmation shall not affect the conclusiveness or binding
        effect of such notice.

                (ii)    Each Lender (including the Lender acting as L/C Issuer)
        shall upon any notice pursuant to Section 2.03(c)(i) make funds
        available to the Administrative Agent for the account of the L/C Issuer
        at the Administrative Agent's Office in an amount equal to its Pro Rata
        Share of the Unreimbursed Amount not later than 2:00 p.m., New York
        time, on the Business Day specified in such notice by the Administrative
        Agent, whereupon, subject to the provisions of Section 2.03(c)(iii),
        each Lender that so makes funds available shall be deemed to have made a
        Base Rate Loan to the Borrower in such amount. The Administrative Agent
        shall remit the funds so received to the L/C Issuer.

                (iii)   With respect to any Unreimbursed Amount that is not
        fully refinanced by a Borrowing of Base Rate Loans because the
        conditions set forth in Section 4.03 cannot be satisfied or for any
        other reason, the Borrower shall be deemed to have incurred from the L/C
        Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
        not so refinanced, which L/C Borrowing shall be due and payable on
        demand (together with interest) and shall bear interest at the Default
        Rate. In such event, each Lender's payment to the Administrative Agent
        for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall
        be deemed payment in respect of its participation in such L/C Borrowing
        and shall constitute an L/C Advance from such Lender in satisfaction of
        its participation obligation under this Section 2.03.

                (iv)    Until each Lender funds its Loan or L/C Advance pursuant
        to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn
        under any Letter of Credit, interest in respect of such Lender's Pro
        Rata Share of such amount shall be solely for the account of the L/C
        Issuer.

                (v)     Each Lender's obligation to make Loans or L/C Advances
        to reimburse the L/C Issuer for amounts drawn under Letters of Credit,
        as contemplated by this Section 2.03(c), shall be absolute and
        unconditional and shall not be affected by any circumstance, including
        (A) any set-off, counterclaim, recoupment, defense or other right which
        such Lender may have against the L/C Issuer, the Borrower or any other
        Person for any reason whatsoever; (B) the occurrence or continuance of a
        Default or Event of Default, or (C) any other occurrence, event or
        condition, whether or not similar to any of the foregoing. Any such
        reimbursement shall not relieve or otherwise impair the obligation of
        the Borrower to reimburse the L/C Issuer for the amount of any payment
        made by the L/C Issuer under any Letter of Credit, together with
        interest as provided herein.



                                      31.
   38

                (vi)    If any Lender fails to make available to the
        Administrative Agent for the account of the L/C Issuer any amount
        required to be paid by such Lender pursuant to the foregoing provisions
        of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
        the L/C Issuer shall be entitled to recover from such Lender (acting
        through the Administrative Agent), on demand, such amount with interest
        thereon for the period from the date such payment is required to the
        date on which such payment is immediately available to the L/C Issuer at
        a rate per annum equal to the Federal Funds Rate from time to time in
        effect. A certificate of the L/C Issuer submitted to any Lender (through
        the Administrative Agent) with respect to any amounts owing under this
        clause (vi) shall be conclusive absent manifest error.

        (d)     Repayment of Participations.

                (i)     At any time after the L/C Issuer has made a payment
        under any Letter of Credit and has received from any Lender such
        Lender's L/C Advance in respect of such payment in accordance with
        Section 2.03(c), if the Administrative Agent receives for the account of
        the L/C Issuer any payment related to such Letter of Credit (whether
        directly from the Borrower or otherwise, including proceeds of Cash
        Collateral applied thereto by the Administrative Agent), or any payment
        of interest thereon, the Administrative Agent will distribute to such
        Lender its Pro Rata Share thereof in the same funds as those received by
        the Administrative Agent.

                (ii)    If any payment received by the Administrative Agent for
        the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required
        to be returned, each Lender shall pay to the Administrative Agent for
        the account of the L/C Issuer its Pro Rata Share thereof on demand of
        the Administrative Agent, plus interest thereon from the date of such
        demand to the date such amount is returned by such Lender, at a rate per
        annum equal to the Federal Funds Rate from time to time in effect.

        (e)     Obligations Absolute. The obligation of the Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit, and to
repay each L/C Borrowing and each drawing under a Letter of Credit that is
refinanced by a Borrowing of Loans, shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

                (i)     any lack of validity or enforceability of such Letter of
        Credit, this Agreement, or any other agreement or instrument relating
        thereto;

                (ii)    the existence of any claim, counterclaim, set-off,
        defense or other right that the Borrower may have at any time against
        any beneficiary or any transferee of such Letter of Credit (or any
        Person for whom any such beneficiary or any such transferee may be
        acting), the L/C Issuer or any other Person, whether in connection with
        this Agreement, the transactions contemplated hereby or by such Letter
        of Credit or any agreement or instrument relating thereto, or any
        unrelated transaction;

                (iii)   any draft, demand, certificate or other document
        presented under such Letter of Credit proving to be forged, fraudulent,
        invalid or insufficient in any respect or






                                      32.
   39

        any statement therein being untrue or inaccurate in any respect; or any
        loss or delay in the transmission or otherwise of any document required
        in order to make a drawing under such Letter of Credit;

                (iv)    any payment by the L/C Issuer under such Letter of
        Credit against presentation of a draft or certificate that does not
        strictly comply with the terms of such Letter of Credit; or any payment
        made by the L/C Issuer under such Letter of Credit to any Person
        purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
        for the benefit of creditors, liquidator, receiver or other
        representative of or successor to any beneficiary or any transferee of
        such Letter of Credit, including any arising in connection with any
        proceeding under any Debtor Relief Law; or

                (v)     any other circumstance or happening whatsoever, whether
        or not similar to any of the foregoing, including any other circumstance
        that might otherwise constitute a defense available to, or a discharge
        of, the Borrower.

        The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

        (f)     Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document except to the extent of the
L/C Issuer's gross negligence or willful misconduct. No Agent-Related Person nor
any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or L/C Application. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may



                                      33.
   40

accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

        (g)     Letter of Credit Cash Collateral. Upon the request of the
Administrative Agent (which shall be made at the direction of the L/C Issuer or
the Required Lenders), (i) if the L/C Issuer has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the L/C Backstop Date, any Letter of Credit may
for any reason remain outstanding and partially or wholly undrawn, the Borrower
shall immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount) until (x) in the
case of clause (i) above, such L/C Borrowing together with all related interest
and fees is repaid pursuant to a Borrowing or otherwise, or (y) in the case
clause (ii) above, such Letter of Credit expires without being drawn.

        (h)     Applicability of ISP98 and UCP. Unless otherwise expressly
agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each Letter of Credit.

        (i)     Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Letter of Credit equal to the
Applicable Rate times the actual daily maximum amount available to be drawn
under each Letter of Credit. Such fee for each Letter of Credit shall be due and
payable on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, and on the L/C Backstop Date. If there is any change in the
Applicable Rate during any quarter, the actual daily amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.

        (j)     Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee in an amount with respect to each Letter of Credit equal
to the percent specified in the Agent/Arranger Fee Letter on the maximum amount
available to be drawn thereunder, due and payable on the issuance of such Letter
of Credit. In addition, the Borrower shall pay directly to the L/C Issuer for
its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such fees and
charges are due and payable on demand and are nonrefundable.

        (k)     Conflict with L/C Application. In the event of any conflict
between the terms hereof and the terms of any L/C Application, the terms hereof
shall control.

        2.04    OPTIONAL PREPAYMENTS. The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; provided that (i) such notice
must be received by the Administrative Agent not later than 11:00 a.m., New York
time, (a) three Business Days prior to any date of



                                      34.
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prepayment of Eurodollar Rate Loans, and (b) on the date of prepayment of Base
Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and
(iii) any prepayment of Base Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Loans to
be prepaid. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Loans of the Lenders in accordance with their respective Pro
Rata Shares.

        2.05    MANDATORY PREPAYMENTS.

        (a)     Outstanding Amount in Excess. If for any reason the Outstanding
Amount of all Loans and L/C Obligations exceeds the Aggregate Commitments then
in effect, the Borrower shall immediately prepay Loans and Cash Collateralize
L/C Obligations in an amount equal to such excess.

        (b)     General. Any prepayments pursuant to this Section 2.05 shall be
applied: (i) first to any Base Rate Loans then outstanding; (ii) second to
Eurodollar Rate Loans with the shortest Interest Periods remaining; provided,
however, that if the amount of Base Rate Loans then outstanding is not
sufficient to satisfy the entire prepayment requirement, provided there exists
no Event of Default, the Borrower may, at its option, place any amounts which it
would otherwise be required to use to prepay Eurodollar Rate Loans on a day
other than the last day of the Interest Period therefor in an interest-bearing
account pledged to the Administrative Agent for the benefit of the Lenders
pursuant to documentation satisfactory to the Administrative Agent until the end
of such Interest Period at which time such pledged amounts (plus accrued
interest thereon) will be applied to prepay such Eurodollar Rate Loans; and
(iii) third to amounts held to Cash Collateralize any Letters of Credit. The
Borrower shall pay, together with each prepayment under this Section 2.05,
accrued interest on the amount of any Eurodollar Rate Loans prepaid, and any
amounts required pursuant to Section 3.05.

        2.06    REDUCTION OR TERMINATION OF COMMITMENTS.

        (a)     Optional Commitment Reduction. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or permanently
reduce the Aggregate Commitments to an amount not less than the then Outstanding
Amount of all Loans and L/C Obligations; provided that (i) any such notice shall
be received by the Administrative Agent not later than 11:00 a.m. (New York
Time), three Business Days prior to the date of termination or reduction, (ii)
any such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall pay
any amounts required by Section 3.05. The Administrative Agent shall promptly
notify the Lenders of any such notice of reduction or termination of the
Aggregate Commitments. Once reduced in accordance with this subsection, the
Commitments may not be increased.



                                      35.
   42

        (b)     Mandatory Commitment Reductions.

                (i)     Scheduled Reductions. The Aggregate Commitments shall
        reduce automatically on an aggregate basis in the amount of $25,000,000
        upon each of the first, second, third and fourth year anniversary dates
        following the Closing Date.

                (ii)    Asset Dispositions. If the Borrower or any Arbitron
        Subsidiary shall at any time or from time to time make or agree to make
        a Disposition, other than a Disposition specified in Section 7.04(b)
        (but subject to clause (d) of Section 7.04(b)(ii)), or shall suffer an
        Event of Loss (except to the extent the insurance or other third party
        recovery proceeds received in connection therewith are within 25 days of
        receipt applied to the purchase price of replacement assets
        substantially similar to those experiencing the Event of Loss), other
        than any Disposition or Event of Loss occurring prior to the Separation
        Date to the extent relating to New Ceridian Assets, then (A) the
        Borrower shall promptly notify the Agent of such proposed Disposition or
        such Event of Loss (including the amount of the estimated net cash or
        Cash Equivalents proceeds, calculated exclusive of (x) reasonable
        out-of-pocket expenses, (y) taxes actually paid and (z) the amount of
        any Indebtedness secured solely or principally by such asset and
        actually repaid ("Net Cash Proceeds") to be received by the Borrower or
        such Subsidiary in respect thereof) (a "Disposition Notice") and (B)
        upon the earlier of (1) the date specified for such purpose by the
        Borrower in the Disposition Notice or (2) 30 days after receipt of such
        Net Cash Proceeds by the Borrower or Subsidiary, the Aggregate
        Commitments shall be permanently reduced by an amount equal to the
        Senior Credit Ratable Amount times the amount of such Net Cash Proceeds;
        provided, however, that no reduction of Commitments shall be required
        under this subsection in connection with any Disposition that, alone or
        together with all related Dispositions to the same Person or Affiliate
        of such Person, involves Net Cash Proceeds of less than $1,000,000.

                (iii)   Equity or Debt Issuance.

                        (A)     If the Borrower shall issue new common or
                preferred equity, or any debt securities, the Borrower shall
                promptly notify the Administrative Agent of the estimated
                proceeds of such issuance net of reasonable out-of-pocket
                expenses incurred by the Borrower ("Net Issuance Proceeds") to
                be received by the Borrower in respect thereof (an "Issuance
                Notice"). Upon the earlier of (1) the date specified for such
                purpose in such Issuance Notice or (2) 30 days after the date of
                receipt of such Net Issuance Proceeds actually received, the
                Aggregate Commitments shall be permanently reduced by an amount
                equal to the Senior Credit Ratable Amount times the amount of
                such Net Issuance Proceeds actually received.

                        (B)     No Commitment reduction shall be required under
                this subsection (iii) in connection with (1) the issuance of
                equity securities pursuant to Section 7.07(a)(i), (2) the
                Acquisition by the Borrower or any Subsidiary of cash or Cash
                Equivalents in any Permitted Acquisition, provided that the cash
                or Cash Equivalents so acquired is merely incidental to such
                Permitted Acquisition; or (3) the issuance of debt securities
                pursuant to the Private Placement.



                                      36.
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                (iv)    Excess Cash Flow. Commencing with the fiscal year ending
        in December 2001, and continuing thereafter for so long as the Aggregate
        Commitments as of the last day of any fiscal year shall exceed
        $50,000,000, the Aggregate Commitments shall be automatically reduced on
        the fifth Business Day after the date of delivery to the Administrative
        Agent of the financial statements required under Section 6.01(a) by an
        amount equal to the Senior Credit Ratable Amount times 50% of the amount
        of Excess Cash Flow (if positive) for such fiscal year, provided that
        the Aggregate Commitments, after taking into account such reduction, are
        not required to be reduced under this Section 2.06(b)(iv) to an amount
        that is less than $50,000,000.

                (v)     Prepayment under Private Placement. If in respect of the
        Private Placement the Borrower shall make or participate in any
        prepayment of notes, note purchase or repurchase, redemption, or
        mandatory or optional call of notes, or shall have any notes tendered to
        it pursuant to any voluntary or mandatory put provision, prior to the
        scheduled maturity date specified in the Private Placement Documents,
        other than in respect of matters specified in Section 2.06(b)(ii) or
        (iii) (collectively, a "Private Placement Prepayment"), the Borrower
        shall promptly notify the Administrative Agent of such fact and the
        Aggregate Commitments shall be permanently reduced by an amount equal to
        the amount that would cause the ratio of the Commitment reduction
        required under this subsection to the sum of such amount plus the
        Private Placement Prepayment to equal the Senior Credit Ratable Amount,
        such reduction to occur on the day such Private Placement Prepayment is
        made.

        (c)     General. Any reduction of the Aggregate Commitments shall be
applied to the Commitment of each Lender according to its Pro Rata Share. All
commitment and utilization fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of
such termination. Optional Commitment reductions pursuant to subsection (a)
shall be applied to mandatory Commitment reductions pursuant to subsection
(b)(i) in reverse chronological order.

        2.07    REPAYMENT OF LOANS. The Borrower shall repay to the Lenders on
the Maturity Date the aggregate principal amount of Loans outstanding on such
date.

        2.08    INTEREST.

        (a)     Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the Outstanding Amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.

        (b)     While any Event of Default exists or after acceleration, the
Borrower shall pay interest on the Outstanding Amount of all Obligations at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Law. Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and
payable upon demand.



                                      37.
   44

        (c)     Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

        2.09    FEES. In addition to certain fees described in subsections (i)
and (j) of Section 2.03:

        (a)     Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of
Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee
shall accrue at all times from the Effectiveness Date until the Maturity Date
and shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing with the first such date to
occur after the Effectiveness Date, and on the Maturity Date. The commitment fee
shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect. The commitment fee shall accrue
at all times, including at any time during which one or more of the conditions
in Article IV is not met.

        (b)     Arrangement and Agency Fees. The Borrower shall pay an
arrangement fee to the Arranger for the Arranger's own account, and shall pay an
agency fee to the Administrative Agent for the Administrative Agent's own
account, in the amounts and at the times specified in the letter agreement,
dated September 7, 2000 (the "Agent/Arranger Fee Letter"), among the Borrower,
the Arranger and the Administrative Agent. Such fees shall be fully earned when
paid and shall be nonrefundable for any reason whatsoever.

        (c)     Lenders' Upfront Fee. On the Effectiveness Date, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders in
accordance with their respective Pro Rata Shares, an upfront fee in an amount
set forth in the Agent/Arranger Fee Letter. Such upfront fees are for the credit
facilities committed by the Lenders under this Agreement and are fully earned on
the date paid. The upfront fee paid to each Lender is solely for its own account
and is nonrefundable for any reason whatsoever.

        2.10    COMPUTATION OF INTEREST AND FEES. Computation of interest on
Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed. Computation of all
other types of interest and all fees shall be calculated on the basis of a year
of 360 days and the actual number of days elapsed, which results in a higher
yield to the payee thereof than a method based on a year of 365 or 366 days.
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall bear interest for one day.

        2.11    EVIDENCE OF DEBT.



                                      38.
   45

        (a)     The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure so to record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Loans and L/C Obligations. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of
such Lender shall control. Upon the request of any Lender made through the
Administrative Agent, such Lender's Loans may be evidenced by a Loan Note, in
addition to such accounts or records. Each Lender may attach schedules to its
Loan Note(s) and endorse thereon the date, Type (if applicable), amount and
maturity of the applicable Loans and payments with respect thereto.

        (b)     In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit. In the event of
any conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control.

        2.12    PAYMENTS GENERALLY.

        (a)     All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 12:00 noon,
New York time, on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 12:00 noon, New York time, shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.

        (b)     Subject to the definition of "Interest Period," if any payment
to be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.

        (c)     If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, L/C
Borrowings, interest and fees then due hereunder, such funds shall be applied
(i) first, toward costs and expenses (including Attorney Costs and amounts
payable under Article III) incurred by the Administrative Agent and each Lender,
(ii) second, toward repayment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (iii) third, toward repayment of
principal and L/C Borrowings then due



                                      39.
   46

hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and L/C Borrowings then due to such parties.

        (d)     Unless the Borrower or any Lender has notified the
Administrative Agent prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:

                (i)     if the Borrower failed to make such payment, each Lender
        shall forthwith on demand repay to the Administrative Agent the portion
        of such assumed payment that was made available to such Lender in
        immediately available funds, together with interest thereon in respect
        of each day from and including the date such amount was made available
        by the Administrative Agent to such Lender to the date such amount is
        repaid to the Administrative Agent in immediately available funds, at
        the Federal Funds Rate from time to time in effect; and

                (ii)    if any Lender failed to make such payment, such Lender
        shall forthwith on demand pay to the Administrative Agent the amount
        thereof in immediately available funds, together with interest thereon
        for the period from the date such amount was made available by the
        Administrative Agent to the Borrower to the date such amount is
        recovered by the Administrative Agent (the "Compensation Period") at a
        rate per annum equal to the Federal Funds Rate from time to time in
        effect. If such Lender pays such amount to the Administrative Agent,
        then such amount shall constitute such Lender's Loan, included in the
        applicable Borrowing. If such Lender does not pay such amount forthwith
        upon the Administrative Agent's demand therefor, the Administrative
        Agent may make a demand therefor upon the Borrower, and the Borrower
        shall pay such amount to the Administrative Agent, together with
        interest thereon for the Compensation Period at a rate per annum equal
        to the rate of interest applicable to the applicable Borrowing. Nothing
        herein shall be deemed to relieve any Lender from its obligation to
        fulfill its Commitment or to prejudice any rights which the
        Administrative Agent or the Borrower may have against any Lender as a
        result of any default by such Lender hereunder.

        A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (d) shall be conclusive, absent manifest
error.

        (e)     If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and the conditions to the applicable Credit Extension set
forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

        (f)     The obligations of the Lenders hereunder to make Loans and to
fund participations in Letters of Credit are several and not joint. The failure
of any Lender to make



                                      40.
   47

any Loan or to fund any such participation on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan or purchase its participation.

        (g)     Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

        2.13    SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans of any Type
made by it, or the participations in L/C Obligations held by it, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans of such Type made by them and/or such subparticipations in the
participations in L/C Obligations, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Type of Loan or
such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

        2.14    SECURITY AND GUARANTIES. (a) (a) The Obligations shall be
secured at all times in accordance with the terms hereof and the Collateral
Documents.

        (b)     The Obligations of the Borrower under this Agreement, each of
the Loan Notes and all other Loan Documents shall be unconditionally guaranteed
by the Guarantors pursuant to the Guaranties.



                                      41.
   48

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

        3.01    TAXES.

        (a)     Subject to Section 3.01(e), any and all payments by the Borrower
to or for the account of the Administrative Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, in the case of the Administrative Agent and each Lender, taxes
imposed on or measured by its net income, and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which the Administrative Agent or such Lender, as the
case may be, is organized or maintains a lending office (all such non-excluded
taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Loan Document to the Administrative Agent
or any Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section), the Administrative Agent and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the Administrative
Agent (which shall forward the same to such Lender) the original or a certified
copy of a receipt evidencing payment thereof.

        (b)     In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").

        (c)     If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.

        (d)     Subject to Section 3.01(e), the Borrower agrees to indemnify the
Administrative Agent and each Lender for (i) the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent and such Lender, (ii) amounts payable under Section 3.01(c) and (iii) any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be



                                      42.
   49

made within 30 days after the date the Lender or the Administrative Agent makes
a demand therefor.

        (e)     The Borrower shall not be required to pay any additional amount
in respect of United States federal income tax pursuant to Section 3.01(a) to
any Lender for the account of any Lending Office of such Lender:

                (i)     if the obligation to pay such additional amounts would
        not have arisen but for a failure by such Lender to comply with its
        obligations under Section 10.15 in respect of such Lending Office; or

                (ii)    If any Lender shall have delivered to the Borrower the
        forms referred to in Section 10.15, and such Lender shall not at any
        time be entitled to exemption from deduction or withholding of United
        States federal income tax in respect of payments by the Borrower
        hereunder for the account of the Lending Office of such Lender for any
        reason other than a change in United States law or regulations or in the
        official interpretation of such law or regulations by any Governmental
        Authority charged with the interpretation or administration thereof
        (whether or not having the force of law) after the date of delivery of
        such forms.

        3.02    ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay interest on
the amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.

        3.03    INABILITY TO DETERMINE RATES. If the Administrative Agent
determines in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the applicable offshore Dollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for such
Eurodollar Rate Loan, or (c) the Eurodollar Rate for such Eurodollar Rate Loan
does not adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Rate Loan, the Administrative Agent will promptly notify the Borrower
and all Lenders. Thereafter, the obligation of the Lenders to



                                      43.
   50

make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing, conversion or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.

        3.04    INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.

        (a)     If any Lender determines that as a result of the introduction of
or any change in or in the interpretation of any Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as
the case may be) issuing or participating in Letters of Credit, or a reduction
in the amount received or receivable by such Lender in connection with any of
the foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements utilized, as to Eurodollar Rate Loans, in the determination of the
Eurodollar Rate), then from time to time within 30 days after written demand of
such Lender (such demand to be accompanied by a certificate pursuant to Section
3.06(a)), with a copy of such demand to be sent to the Administrative Agent, the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

        (b)     If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time within 30 days after written demand of such Lender (such demand to be
accompanied by a certificate pursuant to Section 3.06(a)), with a copy of such
demand to be sent to the Administrative Agent, the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such
reduction.

        (c)     If the Borrower is required to pay any amount to any Lender or
the Administrative Agent pursuant to subsection (a) or (b) of this Section 3.04,
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office to
another existing location of such Lender so as to eliminate any such additional
payment by the Borrower which may thereafter accrue, if such change in the sole
judgment of such Lender is not otherwise disadvantageous to such Lender.

        3.05    FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:



                                      44.
   51

        (a)     any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

        (b)     any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;

        (c)     any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.16; or

        (d)     any assignment by any Lead Lender of a Eurodollar Rate Loan on a
day on or before 180 days after the Closing date and other than the last day of
the Interest Period therefor;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

        For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at Eurodollar Base Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
applicable offshore Dollar interbank market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so
funded.

        3.06    MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.

        (a)     A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the calculation of the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Administrative
Agent or such Lender may use any reasonable averaging and attribution methods.

        (b)     Upon any Lender's making a claim for compensation under Section
3.01, 3.02 or 3.04, the Borrower may remove or replace such Lender in accordance
with Section 10.16.

        (c)     The Borrower shall not be obligated to pay any amounts under
Sections 3.01(d), 3.04(a) or 3.04(b) which arose prior to the date that is 180
days preceding the date of the demand required by each such Section or that is
attributable to periods prior to the date that is 180 days preceding the date of
such demand.

        3.07    SURVIVAL. All of the Borrower's obligations under this Article
III shall survive termination of the Commitments and payment in full of all the
other Obligations.



                                      45.
   52

ARTICLE IV.
                              CONDITIONS PRECEDENT

        4.01    CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
is subject to satisfaction of the following conditions precedent; provided that
at the election of the Administrative Agent any of the items required to be
delivered pursuant to subsection (a)(iv), (a)(vi), (e) or (f) may be waived for
purposes of this Section 4.01 provided they shall be deemed added to Section
4.02 and delivered or accomplished by no later than the Closing Date:

        (a)     Unless waived by all the Lenders (or by the Administrative Agent
with respect to immaterial matters or items specified in clause (iv) below with
respect to which the Borrower has given assurances satisfactory to the
Administrative Agent that such items shall be delivered promptly following the
Effectiveness Date), the Administrative Agent's receipt of the following, each
of which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of
the signing Loan Party that is a party thereto, each dated the Effectiveness
Date (or, in the case of certificates of governmental officials, a recent date
before the Effectiveness Date) and each in form and substance satisfactory to
the Administrative Agent and the Lenders:

                (i)     executed counterparts of this Agreement and the
        Guaranties, sufficient in number for distribution to the Administrative
        Agent, each Lender and the Borrower;

                (ii)    Loan Notes executed by the Borrower in favor of each
        Lender requesting such a Loan Note, each in a principal amount equal to
        such Lender's Commitment;

                (iii)   such certificates of resolutions or other action,
        incumbency certificates and/or other certificates of Responsible
        Officers of each Loan Party as the Administrative Agent may require to
        establish the identities of and verify the authority and capacity of
        each Responsible Officer thereof authorized to act as a Responsible
        Officer in connection with this Agreement and the other Loan Documents
        to which such Loan Party is a party;

                (iv)    such evidence as the Administrative Agent may reasonably
        require to verify that each Loan Party is duly organized or formed,
        validly existing, in good standing and qualified to engage in business
        in each jurisdiction (A) in which it is incorporated, or has any
        headquarter function, or (B) in which it is required to be qualified to
        engage in business if the absence of such qualification could have a
        Material Adverse Effect; including certified copies of each Loan Party's
        Organization Documents, certificates of good standing and/or
        qualification to engage in business and tax good standing certificates
        in such jurisdictions;

                (v)     a certificate signed by a Responsible Officer of the
        Borrower certifying (A) that all representations and warranties
        contained in Article V are true and correct on and as of the
        Effectiveness Date and no Default or Event of Default exists on and as
        of such date; (B) that there has been no event or circumstance since the
        date of the most recent of the Audited Financial Statements which has or
        could be reasonably expected to have a Material Adverse Effect; and (C)
        that the Borrower's and New Ceridian's senior management are highly
        confident that the Spin-Off Consummation Date will occur by no



                                      46.
   53

        later than the Spin-Off Deadline under the terms specified in the
        Spin-Off Documents delivered under subsection (a)(vii) below.

                (vi)    one or more opinions of counsel to each Loan Party with
        respect to those matters set forth listed at Exhibit L;

                (vii)   a certificate signed by a Responsible Officer of the
        Borrower certifying the attachment of (A) true and complete draft or
        final copies of all material Spin-Off Documents, which shall be in form
        and substance reasonably satisfactory to the Administrative Agent and
        the Lenders; (B) true and complete copy of the Form 10 as submitted by
        the Borrower to the SEC in connection with the Spin-Off Transaction
        (together with and including all exhibits and attachments thereto),
        which shall be in form and substance satisfactory to the Administrative
        Agent and the Lenders; (C) true and complete copy of the Private
        Placement Documents, which shall satisfy the following conditions: (I)
        having a maturity date occurring not sooner than January 31, 2008, (II)
        having representations and warranties, covenants and events of default
        not more restrictive than those contained in the Loan Documents; (III)
        having no prepayment or amortization of the principal amount of such
        notes until maturity, or prepayments in form and substance satisfactory
        to the Lenders; (IV) having no collateral other than the Collateral, and
        (V) having no guarantor other than the Guarantors; (D) a true and
        complete copy of the Scarborough Partnership Agreement; (E) a true and
        complete copy of the Nielsen JV Option Agreement; and (F) a solvency
        opinion provided by the Houlihan Lokey firm in respect of the Borrower
        and New Ceridian, respectively, addressed to the Administrative Agent,
        dated as of the Effectiveness Date, and any and all certificates and
        other documents provided by the Borrower to the Houlihan Lokey firm in
        respect of such opinion;

                (viii)  such other financial information and documentation as
        the Administrative Agent or any Lender may reasonably request, in form
        and substance reasonably satisfactory to the Administrative Agent and
        the Lenders, including (A) five-year financial projections for the
        Borrower and its Arbitron Subsidiaries on a stand-alone basis, (B) a
        preliminary pro forma opening balance sheet of the Borrower and its
        Subsidiaries as of the Separation Date ("Preliminary Opening Balance
        Sheet"), prepared by the Borrower, and (C) a consolidated balance sheet
        of the Borrower and its Arbitron Subsidiaries on a stand-alone basis, as
        of December 31, 2000, as prepared by the Borrower consistent with GAAP,
        reflecting the consummation of the Spin-Off Transaction as of such date,
        but without giving effect to the refinancing of the Borrower's Existing
        Credit Facility and other Indebtedness pursuant to this Agreement, the
        New Ceridian Credit Agreement and the Private Placement, and in
        substantially similar form as the column captioned "Historical-Arbitron"
        in the balance sheet labeled as "Arbitron Unaudited Pro Forma Condensed
        Combined Balance Sheet Data" set forth in the Form 10;

                (ix)    evidence of the Borrower's receipt of the IRS Ruling
        Letter;

                (x)     evidence of a waiver or consent with respect to defaults
        otherwise arising under the Existing Credit Facility from the
        consummation of the Spin-Off Transaction



                                      47.
   54

        and the financings contemplated thereby by the "Agent" and "Lenders" as
        defined in and party to the Existing Credit Facility; and

                (xi)    such other assurances, certificates, documents, consents
        or opinions as the Administrative Agent, the L/C Issuer, or the Required
        Lenders reasonably may require.

        (b)     The corporate, legal, capital, tax, contractual, and management
structure and attributes of the Borrower and its Subsidiaries and of the
Spin-Off Transaction shall be satisfactory to the Administrative Agent and the
Lenders.

        (c)     Any fees required to be paid on or before the Effectiveness Date
shall have been paid, and unless waived by the Administrative Agent, the
Borrower shall have paid all Attorney Costs of the Administrative Agent to the
extent invoiced prior to or on the Effectiveness Date, plus such additional
amounts of Attorney Costs as shall constitute its reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final settling of
accounts between the Borrower and the Administrative Agent).

        (d)     The Effectiveness Date shall occur no later than February 5,
2001.

        (e)     The Collateral Documents shall be executed by each Loan Party
other than New Ceridian, in appropriate form for recording, where necessary,
together with:

                (i)     acknowledgment copies of all UCC-l financing statements
        filed, registered or recorded to perfect the security interests of the
        Collateral Agent for the benefit of the Administrative Agent and the
        Lenders, or other evidence reasonably satisfactory to the Administrative
        Agent that there has been filed, registered or recorded all financing
        statements and other filings, registrations and recordings (including
        filings at the U.S. Copyright Office, the U.S. Patent and Trademark
        Office or other applicable Governmental Authority in respect of
        Intellectual Property and Proprietary Information) necessary and
        advisable to perfect or protect the Liens of the Collateral Agent for
        the benefit of the Lenders in accordance with applicable law, with such
        exceptions as the Administrative Agent and the Lenders may permit in
        their discretion;

                (ii)    true and complete copies of copyright filings of the
        Borrower and its Subsidiaries at the U.S. Copyright Office in respect of
        computer databases registered during the years 1999 and 2000 and of
        Material Software, as more fully required pursuant to the Security
        Agreements;

                (iii)   written advice relating to such Lien and judgment
        searches as the Administrative Agent shall have requested, and such
        termination statements or other documents as may be necessary to confirm
        that the Collateral is subject to no other Liens in favor of any Persons
        (other than Permitted Liens);

                (iv)    all certificates and instruments representing the
        Pledged Collateral, stock transfer powers executed in blank with
        signatures guaranteed as the Administrative Agent or any Lender may
        specify; provided that in no event shall more than 65% of the capital
        stock of any Foreign Subsidiary be required to be so pledged;



                                      48.
   55

                (v)     Account Control Agreements, executed by all parties
        thereto, relating to (A) any deposit accounts maintained by the Borrower
        in relation to the Arbitron Business with Bank of America or any of its
        Affiliates, and (B) any securities accounts maintained by the Borrower
        in relation to the Arbitron Business;

                (vi)    such consents, estoppels, subordination agreements and
        other documents and instruments executed by landlords, tenants and other
        Persons party to material contracts relating to any Collateral as to
        which the Collateral Agent shall be granted a Lien for the benefit of
        the Lenders, as requested by the Collateral Agent or any Lender; and

                (vii)   evidence that all other actions necessary or, in the
        reasonable opinion of the Administrative Agent or the Lenders, desirable
        to perfect and protect the first priority Lien created by the Collateral
        Documents and to enhance the Administrative Agent's ability to preserve
        and protect its interests in and access to the Collateral, have been
        taken.

        (f)     Insurance Policies. The Borrower shall provide evidence in form
and substance satisfactory to Administrative Agent and any Lender that the
Administrative Agent has been named as loss payee/mortgagee and as additional
insured, for the benefit of the Lenders, as their interests may appear, as
required in accordance with Section 6.06 and the Collateral Documents, together
with a certificate of insurance as to all insurance coverage on the properties
of the Borrower and its Subsidiaries.

        4.02    CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:

        (a)     Unless waived by all the Lenders, the Administrative Agent's
receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, each dated the
Closing Date and each in form and substance satisfactory to the Administrative
Agent and the Lenders:

                (i)     a certificate signed by a Responsible Officer of the
        Borrower certifying (A) that all representations and warranties of the
        Borrower contained in Article V are true and correct on and as of the
        Closing Date, (B) that there exists as of such date no Default
        or Event of Default, (C) that there has been no event or circumstance
        since the date of the most recent Audited Financial Statements which has
        or could reasonably be expected to have a Material Adverse Effect, (D)
        that the Separation Date has occurred pursuant to the Spin-Off
        Documents, which are in full force and effect and in substantially the
        form delivered in connection with the Effectiveness Date (or otherwise
        in form and substance satisfactory to the Administrative Agent and the
        Lenders), (E) that the Borrower's and New Ceridian's senior management
        are highly confident that the Spin-Off Consummation Date will occur by
        no later than the Spin-Off Deadline; (F) that the Borrower has obtained
        stockholder approval to effect a reverse stock split of the Borrower's
        shares of common stock at a ratio not to exceed 1-for-5, which shall
        occur



                                      49.
   56

        promptly but in any event not more than 60 days after the Spin-Off
        Consummation Date; (G) that the Board of Directors of the Borrower has
        authorized and approved the final terms of the Spin-Off Transaction
        (including declaration of a dividend of shares of New Ceridian's common
        stock to Borrower's shareholders); (H) that the SEC has approved the
        form of the Form 10, as it may have been amended since the Effectiveness
        Date to reflect (I) revisions made to conform the Spin-Off Documents
        filed with the Form 10 to those delivered to the Administrative Agent
        pursuant to Section 4.01(a)(vii), (II) the inclusion of the opinions
        described in Section 4.02(a)(iv), (III) any required date revisions not
        inconsistent with the terms hereof, (IV) ministerial revisions necessary
        to address administrative issues or facial ambiguities, and (V) other
        amendments satisfactory to the Required Lenders , (I) that all
        conditions precedent pursuant to the Private Placement have been
        satisfied and that the Private Placement has been, or is
        contemporaneously with the initial funding hereunder being, fully
        funded; and (J) such other matters relating to the Spin-Off Transaction
        as the Administrative Agent may request;

                (ii)    a pro forma Compliance Certificate of the Borrower and
        its Subsidiaries, signed by a Responsible Officer of the Borrower;

                (iii)   a certificate signed by a Responsible Officer of the
        Borrower certifying the attachment of (A) a true and complete copy of
        the final pro forma opening balance sheet of the Borrower and its
        Subsidiaries as of the Separation Date, by the Borrower, which shall
        contain in the opinion of the Administrative Agent and the Lenders no
        material adverse discrepancies from the Preliminary Opening Balance
        Sheet, (B) a true and complete copy of the Supplemental Financial
        Statements, and (C) an audited balance sheet of the Borrower and its
        Arbitron Subsidiaries as of December 31, 2000, which balance sheet shall
        contain in the opinion of the Administrative Agent and the Lenders no
        material adverse discrepancies from the balance sheet delivered by the
        Borrower under Section 4.01(a)(viii)(C), accompanied by the opinion of
        KPMG Peat Marwick LLP or another nationally-recognized independent
        public accounting firm, which report shall state that such balance sheet
        presents fairly in all material respects the financial position of the
        Borrower and the Arbitron Subsidiaries on a stand-alone basis as of such
        date and such opinion shall not be qualified or limited for any reason;

                (iv)    a certificate signed by a Responsible Officer of the
        Borrower certifying the Borrower's receipt, and attaching a true and
        complete copy, of (A) a solvency opinion provided by the Houlihan Lokey
        firm in respect of the Borrower and New Ceridian, respectively,
        addressed to the Administrative Agent, dated as of the Closing Date, and
        including any and all certificates and other documents provided by the
        Borrower to the Houlihan Lokey firm in respect of such opinion; (B) a
        fairness, financial viability and "fair value" opinion addressed to the
        Borrower (or its Board of Directors) and relating to the Spin-Off
        Transaction, provided by the Borrower's financial advisors, Bear Stearns
        & Co., and including any and all certificates and other documents
        provided by the Borrower to Bear Stearns & Co. in respect of such
        opinion;

                (v)     evidence: (A) of payment (prior to or upon the initial
        funding) of all funded Indebtedness of the Borrower existing immediately
        prior to the Closing Date and termination of all credit commitments,
        including the Existing Credit Facility, together



                                      50.
   57

        with evidence of the release of all Liens securing obligations in
        connection therewith, but excluding the Initial Permitted Indebtedness,
        and (B) of the allocation, which shall be satisfactory to the
        Administrative Agent and the Lenders, of all contingent and other
        liabilities of the Borrower as between the Borrower and New Ceridian,
        with such third party acknowledgments or consents relating thereto as
        the Administrative Agent may request;

                (vi)    one or more opinions of counsel to the Borrower
        regarding the matters specified in Exhibit M; and

                (vii)   such other assurances, certificates, documents, consents
        or opinions as the Administrative Agent, the L/C Issuer, or the Required
        Lenders reasonably may require.

        (b)     The Closing Date shall occur no later than March 30, 2001.

        (c)     The corporate, legal, capital, tax, contractual, and management
structure and attributes of the Borrower and its Subsidiaries and of the
Spin-Off Transaction shall conform to those deemed satisfactory by the
Administrative Agent and the Lenders as a condition to the Effectiveness Date,
or shall otherwise be satisfactory to the Administrative Agent and the Lenders.

        4.03    CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Loan Notice
requesting only a conversion of Loans to the other Type, or a continuation of
Loans as the same Type) is subject to the following conditions precedent:

        (a)     The representations and warranties of the Borrower contained in
Article V, and the representations and warranties of any Loan Party in any Loan
Document, shall be true and correct and as of the date of such Credit Extension,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct as of such
earlier date.

        (b)     No Default or Event of Default shall exist, or would result from
such proposed Credit Extension.

        (c)     The Administrative Agent and, if applicable, the L/C Issuer
shall have received a Request for Credit Extension in accordance with the
requirements hereof.

        (d)     The Administrative Agent shall have received, in form and
substance satisfactory to it, such other assurances, certificates, documents or
consents related to the foregoing as the Administrative Agent or the Required
Lenders reasonably may require.

        Each Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Loans as the
same Type) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.03(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.



                                      51.
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                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

        The Borrower represents and warrants to the Administrative Agent and
each Lender as follows:

        5.01    CORPORATE EXISTENCE AND POWER.

        (a)     Each of the Borrower and each Material Subsidiary:

                (i)     is a corporation duly organized, validly existing and in
        good standing under the laws of the jurisdiction of its incorporation;

                (ii)    has the power and authority and all material
        governmental licenses, authorizations, consents and approvals to own its
        assets and carry on its business and to execute, deliver, and perform
        its obligations under the Loan Documents;

                (iii)   is duly qualified as a foreign corporation, licensed and
        in good standing under the laws of each jurisdiction where its
        ownership, lease or operation of property or the conduct of its business
        requires such qualification or license, except where the failure to be
        so qualified, licensed or in good standing would not adversely affect
        the business or operations of the Borrower or such Subsidiary in any
        significant manner; and

                (iv)    is in compliance with all material Laws applicable to
        it.

        (b)     Each Subsidiary of the Borrower which is not a Material
Subsidiary:

                (i)     is a corporation duly organized, validly existing and in
        good standing under the laws of the jurisdiction of its incorporation;

                (ii)    has the power and authority and all governmental
        licenses, authorizations, consents and approvals to own its assets and
        carry on its business;

                (iii)   is duly qualified as a foreign corporation, licensed and
        in good standing under the laws of each jurisdiction where its
        ownership, lease or operation of property or the conduct of its business
        requires such qualification; and

                (iv)    is in compliance with all material Laws applicable to
        it;

except where any failure to comply with the requirements of this subsection (b)
would not, individually or in the aggregate, result in a Material Adverse
Effect.

        (c)     As of the Closing Date, the Borrower does not have any material
place of business other than in the State of New York and the State of Maryland.

        5.02    CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Loan Party of this Agreement and each other
Loan Document and each Spin-Off Document, and the consummation of the Spin-Off
Transaction, have been duly



                                       52
   59

authorized by all necessary corporate action by or on behalf of such Loan Party,
and do not and will not:

        (a)     contravene the terms of such Loan Party's Organization
Documents;

        (b)     conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation (other than the Senior Note Indenture) to which such Loan Party is a
party or any order, injunction, writ or decree of any Governmental Authority to
which such Loan Party or its property is subject; or

        (c)     violate any Law applicable to such Loan Party.

        5.03    GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted to the Administrative Agent under the Collateral Documents) is
necessary or required in connection (a) with the execution, delivery or
performance by, or enforcement against, the Borrower or any other Loan Party of
this Agreement or any other Loan Document or (b) the execution, delivery or
performance by or enforcement against the Borrower or any other Person party
thereto of the Spin-Off Documents, or (c) the consummation of the Spin-Off
Transaction, except in each case as have been obtained on or before the Closing
Date.

        5.04    BINDING EFFECT.

        (a)     This Agreement and each other Loan Document to which the
Borrower or any of its Subsidiaries is a party, when executed and delivered,
will constitute the legal, valid and binding obligations of the Borrower and any
of its Subsidiaries to the extent it is a party thereto, enforceable against
such Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.

        (b)     From and after the Closing Date, each Spin-Off Document
constitutes the legal, valid and binding obligation of each Person party
thereto, enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability. As of the Closing Date, all conditions
precedent to the effectiveness of the Spin-Off Documents have been satisfied.

        5.05    LITIGATION. Attached hereto as Schedule 5.05 is a list of all
material litigation in which the Borrower or any Subsidiary of the Borrower is a
plaintiff or a defendant as of the Effectiveness Date. There are no actions,
suits, proceedings, claims or disputes pending, or to the best knowledge of the
Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Borrower or its Subsidiaries or
their respective properties which:

        (a)     purport to affect or pertain to this Agreement, or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or



                                      53.
   60

        (b)     challenge in any respect the legality or validity of any
material aspect of the Spin-Off Transaction; or

        (c)     except as provided in Schedule 5.05, would reasonably be
expected to have a Material Adverse Effect (and assuming for this purpose the
reasonable likelihood of an adverse decision). No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Loan Document, or the
consummation of any material aspect of the Spin-Off Transaction, or directing
that the transactions provided for herein or therein not be consummated as
herein or therein provided. Since the Effectiveness Date, there has been no
change in the status of any of the matters set forth in Schedule 5.05 that would
reasonably be expected to result in a Material Adverse Effect. All amounts
potentially payable by the Borrower or any Arbitron Subsidiary (including upon
judgment or settlement) in connection with any matter set forth in Schedule 5.05
not relating to the Arbitron Business are subject from and after the Separation
Date to a binding indemnification obligation by New Ceridian in favor of the
Borrower or such Arbitron Subsidiary.

        5.06    NO DEFAULT. No Default or Event of Default exists or would
 result from the incurring of any Obligations by the Borrower or any other Loan
Party or from the grant or perfection of the Transaction Liens on the
Collateral. As of the Effectiveness Date and the Closing Date, neither the
Borrower nor any of its Subsidiaries, (a) is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or (b) is in default under or with respect to any Spin-Off Document. As
of the Effectiveness Date, there exists no "Default" or "Event of Default," and
as of the Closing Date, there exists no "Event of Default," under and as defined
in (i) the Existing Credit Facility, (ii) the Senior Note Indenture, or (iii)
the Private Placement Documents.

        5.07    ERISA COMPLIANCE. Except as referenced or provided for in either
Schedule 5.05 or Schedule 5.07 attached hereto:

        (a)     To the best knowledge of the Borrower, no facts or circumstances
exist which would reasonably be expected to have a Material Adverse Effect in
connection with the failure of any Plan, or the failure of the Borrower, an
ERISA Affiliate or any Person with regard to the Plan, to comply with the
applicable provisions of ERISA, the Code and other Federal or state law. The
Borrower and each ERISA Affiliate have made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

        (b)     There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would, if determined adversely to
the Borrower or any Plan, reasonably be expected to result in a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or would
reasonably be expected to result in a Material Adverse Effect.



                                      54.
   61

        (c)     To the best knowledge of the Borrower (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) neither the Borrower nor any
ERISA Affiliate has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iii) neither the Borrower
nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that would
reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA.

        5.08    TITLE TO PROPERTIES. As of the Effectiveness Date and the
Closing Date, the property of the Borrower and its Subsidiaries is subject to no
Liens, other than Permitted Liens. As of the Closing Date, the Borrower has
retained and has title to or a valid and enforceable leasehold or licensee's
interest in all assets necessary to and appropriate for conducting the Arbitron
Business, and such assets are subject to no Liens, claims or interest of third
parties other than Permitted Liens, and the interests of lessors and licensors
not otherwise prohibited under any Loan Document or Private Placement Document.

        5.09    TAXES.

        (a)     The Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Borrower or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.

        (b)     None of the representations and warranties made by the Borrower,
New Ceridian or any of their Subsidiaries to the IRS in connection with the
Spin-Off Transaction (including with respect to the tax-free nature of the
Spin-Off Transaction and in connection with the Borrower's request for the IRS
Ruling Letter) as of the date such representations and warranties are made or
deemed made, and none of the statements contained in any report, exhibit,
statement or certificate furnished by or on behalf of the Borrower, New Ceridian
or any of their Subsidiaries to the IRS in connection with the Spin-Off
Transaction as of the date such statements are made or deemed made, contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they are made, not misleading.

        (c)     As of the Effectiveness Date, the Closing Date and Spin-Off
Consummation Date, there is no "plan or series of related transactions" of the
type described in Section 355(e) of the Code.



                                      55.
   62

        5.10    FINANCIAL CONDITION.

        (a)     The Form 10 Financial Statements and the Supplemental Financial
Statements:

                (i)     were prepared in accordance with GAAP consistently
        applied throughout the period covered thereby, except as otherwise
        expressly noted therein, subject to ordinary, good faith year-end audit
        adjustments and the absence of footnotes in the case of quarterly
        financial statements,

                (ii)    are complete, accurate and fairly present the financial
        condition of the Borrower and its Subsidiaries as of the date thereof,
        and results of operation for the period covered thereby, in each case
        based upon the assumed consummation of the Spin-Off Transaction on such
        date, and

                (iii)   comply with all applicable Laws relating to spin-off
        transactions.

        (b)     Except as disclosed in filings by the Borrower with the
Securities and Exchange Commission on Form 10-Q for the quarter ended June 30,
2000, or the Form 10, since December 31, 1999 there has been no Material Adverse
Effect.

        (c)     As of the Effectiveness Date and the Closing Date, the Borrower
and its consolidated Subsidiaries have not incurred any material Contingent
Obligations except for those specified in Schedule 5.10, which Schedule also
specifies which Contingent Obligations pertain to the Arbitron Business, and
those specified in Section 7.05(a), Section 7.05(d)(i) or Section 7.05(f).
Except as expressly otherwise stated in Schedule 5.10, New Ceridian is subject,
from and after the Separation Date, to a binding obligation to fully indemnify
the Borrower in respect of all Contingent Obligations specified in such Schedule
5.10 not relating to the Arbitron Business. The projections delivered pursuant
to Section 4.01(a)(viii) have been reasonably prepared, in good faith, based
upon reasonable assumptions, and are consistent with the prepayment requirements
set forth in this Agreement and in the Note Purchase Agreement.

        (d)     The Preliminary Opening Balance Sheet delivered by the Borrower
to the Administrative Agent pursuant to Section 4.01(a)(viii) and the pro forma
opening balance sheet delivered by the Borrower to the Administrative Agent
pursuant to Section 4.02(a)(iii): (i) were prepared on a basis consistent with
GAAP as applied to the Borrower's financial statements, (ii) have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the senior management of the Borrower and New Ceridian as to
the expected future performance of the Borrower, (iii) accurately reflect all
material adjustments required to be made to give effect to the Spin-Off
Transaction, and (iv) present fairly on a pro forma basis the estimated
consolidated financial position of the Borrower and its Arbitron Subsidiaries as
of the date thereof, assuming consummation of the Spin-Off Transaction.

        5.11    ENVIRONMENTAL MATTERS.

        (a)     The ongoing operations of the Borrower and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability that would reasonably be expected to have a Material Adverse
Effect.



                                      56.
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        (b)     As of the Effectiveness Date and the Closing Date, except as
specifically disclosed on Schedule 5.11, neither the Borrower nor any of its
Subsidiaries, nor any of their respective present property or operations, is
subject to any outstanding written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.

        (c)     Except as specifically disclosed on Schedule 5.11, there are no
Hazardous Materials or other conditions or circumstances existing with respect
to any property, or arising from operations of the Borrower or any of its
Subsidiaries that would reasonably be expected to give rise to Environmental
Claims with a potential liability of the Borrower and its Subsidiaries that in
the aggregate for any such condition, circumstance or property would reasonably
be expected to have a Material Adverse Effect.

        (d)     Except as expressly otherwise stated in Schedule 5.11, New
Ceridian is subject from and after the Separation Date, to a binding obligation
to fully indemnify the Borrower in respect of all matters referenced in such
Schedule 5.11 not relating to the Arbitron Business.

        5.12    REGULATED ENTITIES. None of the Borrower, any Person controlling
the Borrower, or any Subsidiary of the Borrower, is (a) an "investment company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness, except that certain Persons who may be deemed to control the
Borrower are registered investment companies within the meaning of the
Investment Company Act of 1940.

        5.13    COLLATERAL DOCUMENTS. The Collateral Documents are effective to
create in favor of the Administrative Agent for the benefit of the Lenders, a
legal, valid and enforceable first priority security interest, subject to the
terms of the Intercreditor Agreement, in all right, title and interest of the
Loan Parties in the Collateral described therein; and UCC-1 financing statements
have been filed in the offices in all of the jurisdictions listed in the
schedules to the Security Agreements.

        5.14    NO BURDENSOME RESTRICTIONS. Neither the Borrower nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Law, which could reasonably be
expected to have a Material Adverse Effect. As of the Effectiveness Date and the
Closing Date, no Subsidiary (other than New Ceridian and Subsidiaries that are
not Arbitron Subsidiaries) is party to or bound by any Contractual Obligation
restricting the ability of such Subsidiary to pay dividends or make loans to the
Borrower.

        5.15    SOLVENCY. The Borrower and each of its Material Subsidiaries are
Solvent. Both immediately before and after the Separation Date and the Spin-Off
Consummation Date, New Ceridian is Solvent. All statements contained in any
certificate delivered to the Administrative Agent pursuant to Section
4.01(a)(viii) and Section 4.02(a)(iv) are true and accurate in all material
respects and not materially misleading, and do not contain any material
omissions of fact.



                                      57.
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        5.16    LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Borrower or any of its Subsidiaries, or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them before any Governmental Authority
which, in any case, could reasonably be expected to have a Material Adverse
Effect.

        5.17    INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION Except as
specifically set forth on Schedule 5.17:

        (a)     The Borrower owns (directly or through the Arbitron
Subsidiaries) all of the Intellectual Property and Proprietary Information that
is material to the Arbitron Business (including that in relation to the
"Portable People Meter" and "Critical Band Encoding Technique"), free of any
right, claim or interest of any Person, except for Permitted Liens.

        (b)     To the best knowledge of the Borrower, no Intellectual Property
or Proprietary Information now employed by the Borrower or its Subsidiaries and
relating to the Arbitron Business infringes upon any rights held by any other
Person.

        (c)     As of the Closing Date and Spin-Off Consummation Date, except as
specifically disclosed on Schedule 5.05 attached hereto, no claim or litigation
regarding any Intellectual Property or Proprietary Information relating to the
Arbitron Business is pending against the Borrower or its Subsidiaries or, to the
Borrower's knowledge, threatened against any of such Persons.

        (d)     As of the Closing Date and Spin-Off Consummation Date, neither
Borrower nor any of its Subsidiaries uses pursuant to a license agreement with
any third party (except for ordinary shrinkwrap licenses for software products
that the Borrower and its Subsidiaries use in the Ordinary Course of Business
and licenses specified on Schedule 5.17) any patents, trademarks, service marks,
trade names, copyrights, trade secrets or franchises material to the conduct of
the Arbitron Business.

        (e)     As of the Closing Date and Spin-Off Consummation Date, in
relation to the Arbitron Business, each of the Borrower's and its Subsidiaries'
respective employees who, either alone or in concert with others, developed,
invented, discovered, derived, programmed or designed Intellectual Property or
Proprietary Information, or who has knowledge of or access to information about
Intellectual Property or Proprietary Information, has entered into one or more
effective assignment of rights agreements in favor of the Borrower or its
Subsidiaries, as applicable, no material exceptions have been taken by any such
employee to the terms of any such agreements, and neither the Borrower nor any
of its Subsidiaries is aware that any of its respective employees is in
violation thereof.

        (f)     As of the Closing Date and Spin-Off Consummation Date, neither
the Borrower nor its Subsidiaries believes it is or will be necessary in
relation to the Arbitron Business to utilize any inventions of any of their
respective employees (or people they currently intend to hire or retain) that
were invented prior to such employment, except those inventions formally

                                      58.
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assigned or transferred to the Borrower or the Arbitron Subsidiaries, as
applicable, by such employees.

        (g)     As of the Effectiveness Date, neither Borrower nor any Arbitron
Subsidiary owns, licenses or sub-licenses any Material Software in connection
with the Arbitron Business.

        5.18    INSURANCE. As of the Closing Date and Spin-Off Consummation
Date, the properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or such Subsidiary operates.

        5.19    EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 5.19, as
of the Effectiveness Date, Closing Date and Spin-Off Consummation Date, in
relation to the Arbitron Business neither the Borrower nor any of its
Subsidiaries is (a) party to or bound by any employment contract or agreement,
agency, independent contractor or sales representative agreement involving
annual compensation at a base rate equal to or exceeding $200,000, golden
parachute agreement, or change of control agreement; or (b) obligated to make
any payments on account of any severance, golden-parachute, or change of control
agreement.

        5.20    SPIN-OFF DOCUMENTS; PRIVATE PLACEMENT DOCUMENTS.

        (a)     The representations and warranties of the Borrower contained in
the Spin-Off Documents and in any other document filed or delivered to the SEC
in connection with the Spin-Off Transaction are true and correct in all material
respects as of the Effectiveness Date and the Closing Date and as of any other
date specified in such documents. There are no material documents or agreements
to be entered into by the Borrower or the Arbitron Subsidiaries in connection
with the Spin-Off Transaction, other than the Spin-Off Documents.


        (b)     The representations and warranties of the Borrower contained in
the Private Placement Documents, and in any other documents delivered to the
Placement Agent in connection therewith, are true and correct in all material
respects as of the Effectiveness Date and the Closing Date and as of any other
date specified in such documents.

        5.21    CAPITALIZATION; SUBSIDIARIES.

        (a)     As of the Effectiveness Date, the Closing Date, and the Spin-Off
Consummation Date, Schedule 5.21 sets forth: (i) a true, correct and reasonably
detailed description of all Subsidiaries, and specifying which Subsidiaries are
(a) Arbitron Subsidiaries and (b) Material Subsidiaries; and (ii) all authorized
shares of capital stock of the Borrower and all the Arbitron Subsidiaries, and
the number of shares of each class of capital stock of such Subsidiaries that
are issued and outstanding. All of the issued and outstanding shares of capital
stock of the Borrower and the Subsidiaries have been duly authorized and are
validly issued, fully paid and non-assessable, and are free and clear of any
Liens and other restrictions (including any restrictions on the right to vote,
sell or otherwise dispose of such capital stock) and of any preemptive or other
similar rights to subscribe for or to purchase any such capital stock.

                                      59.
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        (b)     Except as set forth on Schedule 5.21 (which Schedule sets forth
a true, correct and complete description of, with respect to each security,
title, name of the holder or Person, as applicable, the number of shares of
capital stock underlying such security, exercise price, expiration date and
percentage of shares of such capital stock on a fully diluted basis), as of the
Effectiveness Date and Closing Date, there are: (i) no outstanding rights to
acquire equity in any Subsidiary; (ii) no voting trusts of other agreements or
undertakings with respect to the voting of the capital stock of any Subsidiary;
(iii) no obligations or rights (whether fixed or contingent) on the part of any
Subsidiary, any of its directors or officers, or any other Person to purchase,
repurchase, redeem or "put" any outstanding shares of the capital stock of such
Persons; and (iv) no agreements to which any Subsidiary, any of its directors or
officers, or any other Person is a party granting any other Person any rights of
first offer or first refusal, registration rights or "drag-along" "tag-along" or
similar rights with respect to any transfer of any capital stock or equity
rights of any Subsidiary.

        (c)     As of the Effectiveness Date, the Closing Date and the Spin-Off
Consummation Date, all shares of capital stock and equity rights of the Borrower
or any Subsidiary that have been issued have been issued and offered in
compliance with all applicable federal and state securities laws. Except as set
forth on Schedule 5.21 no additional shares of capital stock of any Arbitron
Subsidiary will become issuable to any Person pursuant to any "anti-dilution"
provisions of any such issued and outstanding securities of any Subsidiary on
account of the issuance of any securities.

        5.22    MARGIN REGULATIONS. Neither the Borrower, New Ceridian, nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying "margin stock" (within the meaning of Regulation U of the
Federal Reserve Board). No part of the proceeds of the Loans is being or will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

        5.23    BROKERS; CERTAIN EXPENSES. No Loan Party or Affiliate has paid
or is obligated to pay any fee or commission to any broker, finder, investment
bank or other intermediary, in connection with this Agreement or any of the
Spin-Off Documents or the transactions contemplated hereby or thereby, other
than as set forth on Schedule 5.23. No Loan Party or Affiliate is bound by any
agreement or commitment for the provision of investment banking or financial
advisory services with respect to any recapitalization, issuance of debt or
equity securities or other capital or financing transactions involving the Loan
Parties that would operate to restrict or prevent the occurrence of the Closing
Date or the Spin-Off Consummation Date.

        5.24    YEAR END. As of the Effectiveness Date, Borrower's and New
Ceridian's fiscal year ends on December 31 of each year.

        5.25    THIRD PARTY CONSENTS. Other than as set forth in Schedule 5.25,
and except as have been obtained before the Closing Date, no approval, consent,
exemption, authorization, amendment or waiver, or other action by, or notice to,
or filing with, any Person is necessary or required in connection with (a) the
execution, delivery or performance by or enforcement against the Borrower or New
Ceridian of the Spin-Off Documents, (b) the consummation of the Spin-Off
Transaction or (c) the conduct of the Arbitron Business from and after the
Closing Date and the Spin-Off Consummation Date.

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        5.26    EXISTING INDEBTEDNESS. As of the Closing Date, neither the
Borrower nor any of the Arbitron Subsidiaries is indebted on account of any
Indebtedness, except Initial Permitted Indebtedness. The allocation of
Indebtedness and other obligations existing as of the Closing Date, as between
the Borrower and New Ceridian, has been undertaken in a fair and reasonable
fashion.

        5.27    NEW CERIDIAN OBLIGATIONS. From and after the Closing Date, New
Ceridian is legally obligated, under the Spin-Off Documents, to indemnify the
Borrower and hold the Borrower harmless from all material obligations of the
Borrower and its Arbitron Subsidiaries other than those incurred pursuant to or
in furtherance of the Arbitron Business, and New Ceridian has neither repudiated
nor breached in any material respect such obligation.

        5.28    SWAP CONTRACTS. As of the Closing Date, neither the Borrower nor
any Subsidiary is party to any Swap Contracts other than Permitted Swap
Contracts.

        5.29    FULL DISCLOSURE. None of the representations or warranties made
by the Borrower, New Ceridian or any of their respective Subsidiaries in the
Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of the Borrower or any
Subsidiary in connection with the Loan Documents as of the date such statements
are made or deemed made, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. The Form 10 (including all Exhibits thereto) does not
contain any untrue statement of a material fact or omit any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading.

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

        The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Required Lenders waive compliance in writing:

        6.01    FINANCIAL STATEMENTS. The Borrower shall deliver to the
Administrative Agent and each Lender in form and detail satisfactory to the
Administrative Agent and the Required Lenders:

        (a)     as soon as available, but not later than 90 days after the end
of each fiscal year commencing with the fiscal year ending December 31, 2000, a
copy of the audited consolidated financial statements of the Borrower as of the
end of such fiscal year, setting forth in each case in comparative form the
figures for the previous year (based on the Audited Financial Statements, if
applicable), and accompanied by the opinion of KPMG Peat Marwick LLP or another
nationally-recognized independent public accounting firm, which opinion shall
state that such consolidated financial statements present fairly in all material
respects the financial position of the Borrower and its Subsidiaries as of the
dates indicated (on a stand-alone basis reflecting the consummation of the
Spin-Off Transaction, in the case of the December 31, 2000 statements) and the
results of



                                      61.
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their operations and their cash flows for the periods indicated in conformity
with GAAP; such opinion shall not be qualified or limited for any reason,
including because of a restricted or limited examination by such accountant of
any material portion of the Borrower's or any Subsidiary's records;

        (b)     (i) as soon as available, but not later than 45 days after the
end of the first three fiscal quarters of each fiscal year of the Borrower, (A)
a copy of the Borrower's quarterly report on Form 10-Q filed with the SEC with
respect to such fiscal quarter, (B) an operating report summarizing the
Borrower's consolidated year-to-date profit and loss, revenue, operating profit,
invested capital, and cash flow information; and (ii) if the Borrower at such
time is not required to file such Form 10-Q with the SEC under the Exchange Act,
as soon as available, but in any event within 60 days after the end of each
fiscal quarter, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
statements of income and cash flows for such fiscal quarter and for the portion
of the Borrower's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year, and the corresponding portion of the previous fiscal year
(based on the Audited Financial Statements or the Supplemental Financial
Statements, if applicable), together with the items described in clause (i)(B)
of this subsection; all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition, results of
operations, and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes;

        (c)     promptly upon receipt thereof, copies of all reports submitted
to the Borrower or any of its Subsidiaries by its independent certified public
accountants in connection with each annual, interim or special audit examination
of the Borrower or any of its Subsidiaries made by such accountants, including
the "management letter" submitted by such accountants to the Borrower or any of
its Subsidiaries in connection with their annual audit; and

        (d)     as soon as available and in any event not less than 30 days
prior to the start of each fiscal year, a consolidated financial forecast for
the Borrower and its Subsidiaries for the following fiscal year, including
forecasted consolidated balance sheets, consolidated statements of income,
shareholders' equity and cash flows of the Borrower and its Subsidiaries, which
forecast shall (i) state the assumptions used in the preparation thereof, (ii)
contain such other information as reasonably requested by any Lender and (iii)
be in form reasonably satisfactory to the Administrative Agent and the Required
Lenders.

        6.02    CERTIFICATES; OTHER INFORMATION. The Borrower shall furnish to
the Administrative Agent and each Lender:

        (a)     as soon as available, but in any event not later than 15 days
after the delivery of the financial statements referred to in Section 6.01(a)
and (b) above, a Compliance Certificate, signed by a Responsible Officer;

        (b)     copies of each registration statement (or prospectus contained
therein) of the Borrower other than with respect to employee benefit plans, each
periodic report regarding the Borrower required pursuant to Section 13 of the
Exchange Act, each annual report, each proxy



                                      62.
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statement and any amendments to any of the above filed or reported by the
Borrower with or to any securities exchange or the SEC, copies of each
communication from the Borrower or any Subsidiary to the Borrower's shareholders
generally, promptly upon the filing or making thereof and copies of such other
filings, reports and communications with the Borrower's shareholders as the
Administrative Agent may from time to time request;

        (c)     upon release, copies of all financially material press releases
by the Borrower or any Material Subsidiary;

        (d)     promptly after the creation or Acquisition of any Material
Subsidiary, the name of such Subsidiary, a description of its business, the
price paid for the stock or assets of such Subsidiary, its net worth and the
value of its assets;

        (e)     promptly after the execution and filing thereof, copies of all
patent, trademark and copyright filing certificates of the Borrower and any
Subsidiary as required more fully under the Security Agreements; and

        (f)     promptly, such additional business, financial, corporate affairs
and other information as the Administrative Agent, at the request of any Lender,
may from time to time reasonably request.

        Reports required to be delivered pursuant to Sections 6.01 or 6.02(b)
shall be deemed to have been delivered on the date on which Borrower posts such
reports on the Borrower's website on the Internet at the website address listed
on Schedule 10.02 hereof or when such report is posted on the Securities and
Exchange Commission's website at www.sec.gov.; provided that (x) Borrower shall
deliver paper copies of such reports to the Administrative Agent and any Lender
who requests the Borrower to deliver such paper copies until written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender, (y) the Borrower shall notify by facsimile the Administrative Agent and
each Lender of the posting of any such reports, and (z) in every instance the
Borrower shall provide paper copies of the Compliance Certificates required by
Section 6.02(a) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the reports referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
reports.

        6.03    NOTICES. The Borrower shall promptly notify the Administrative
Agent and each Lender upon a Responsible Officer of the Borrower obtaining
knowledge:

        (a)     of the occurrence of any Default or Event of Default and, until
the Spin-Off Consummation Date, the occurrence of any "Default" or "Event of
Default" under and as defined in the New Ceridian Credit Agreement;

        (b)     of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of the Borrower or any of its Subsidiaries which
would reasonably be expected to result in a Material Adverse Effect; and (ii)
any dispute, litigation, investigation, proceeding or suspension by an
Governmental Authority that may exist or come to exist at any time in which



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the Borrower or any of its Subsidiaries is a party which would reasonably be
expected to result in a Material Adverse Effect (and assuming for this purpose
the reasonable likelihood of an adverse decision);

        (c)     of the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary which would
reasonably be expected to: (i) have a Material Adverse Effect (and taking into
account the reasonable likelihood of an adverse decision), (ii) if adversely
resolved against such Person, result in the imposition of an injunction or other
stay of the performance of this Agreement or any Loan Document or the
consummation of the Spin-Off Transaction, or (iii) involve an aggregate
liability of $1,000,000 (or its equivalent in another currency) or more;

        (d)     of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions affecting the Borrower or any of its
Subsidiaries or any of their respective properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Borrower or any Subsidiary that could reasonably
be anticipated to cause the property of the Borrower or any of its Subsidiaries
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws,
if, individually or in the aggregate, the events or conditions described or the
amount claimed in clauses (i), (ii) and (iii) would reasonably be expected to
result in a Material Adverse Effect;

        (e)     of the occurrence of any ERISA Event affecting the Borrower or
any ERISA Affiliate, and deliver to the Administrative Agent and each Lender a
copy of any notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the Borrower
or any ERISA Affiliate with respect to such event;

        (f)     of any Material Adverse Effect subsequent to the date of the
most recent audited financial statements of the Borrower delivered to the
Lenders pursuant to Section 6.01(a);

        (g)     of any labor controversy resulting in or threatening to result
in any strike, work stoppage, boycott, shutdown or other labor disruption
against or involving the Borrower or any of its Subsidiaries;

        (h)     of the creation, purchase, or acquisition of any Subsidiary
(including its jurisdiction of incorporation);

        (i)     of: (i) any Subsidiary being or becoming a Material Subsidiary,
and (ii) of any Material Subsidiary ceasing to be a Material Subsidiary;

        (j)     of the occurrence of the Separation Date and the Spin-Off
Consummation Date;

        (k)     of (i) the exercise or termination of any option under the
Nielsen JV Option Agreement, (ii) the formation of any Nielsen JV, (iii) any
decision by the Borrower not to commercially deploy the PPM Technology and (iv)
the occurrence of any material breach or default under the terms of the Nielsen
JV Option Agreement or the Scarborough Partnership Agreement;



                                      64.
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        (l)     of any material breach or default under, or any material waiver
or consent granted pursuant to, any Spin-Off Document;

        (m)     of the occurrence of any Event of Loss or Disposition with
respect to any assets of the Borrower or any Material Subsidiary (other than New
Ceridian) where the fair value of the assets exceed on an aggregate basis, for
each such occurrence, $250,000; and

        (n)     of the occurrence of any "Default" or "Event of Default" (or
comparable term) under, and as defined in, the Private Placement Documents.

        Each notice pursuant to this Section 6.03 shall be accompanied by a
certificate by a Responsible Officer of the Borrower setting forth details of
the occurrence referred to therein, and stating what action, if any, the
Borrower proposes to take with respect thereto and at what time. Each notice
under Section 6.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached or
violated.

        6.04    PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower shall,
and shall cause each of its Subsidiaries to:

        (a)     except as permitted in Section 7.02, preserve and maintain in
full force and effect its corporate existence and good standing under the laws
of its state or jurisdiction of incorporation;

        (b)     preserve and maintain in full force and effect all material
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Sections 7.02 and 7.04;

        (c)     use its reasonable efforts, in the Ordinary Course of Business,
to preserve its business organization and preserve the goodwill and business of
the customers, suppliers and others having material business relations with it;
and

        (d)     preserve or renew all of its registered trademarks, trade names
and service marks, the non-preservation of which would reasonably be expected to
have a Material Adverse Effect, provided, however, that the Borrower shall not
be deemed to be in default under this Section 6.04 if a Subsidiary (other than a
Material Subsidiary) fails to comply herewith so long as such failure is not
material.

        On or before the Spin-Off Consummation Date, the Borrower shall file
with appropriate Governmental Authorities all necessary filings in order to
change its name to "Arbitron Inc."

        6.05    MAINTENANCE OF PROPERTY. The Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted, make all necessary repairs thereto and renewals and
replacements thereof, except as permitted by Section 7.04, and to keep such
property free of any Hazardous Materials. The Borrower shall use at least the
standard of care typical in the industry in the operation of its facilities.



                                      65.
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        6.06    INSURANCE. The Borrower shall maintain, and shall cause each of
its Material Subsidiaries to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance. All such policies, to the extent consisting of CGL or
property or casualty policies, shall name the Administrative Agent as loss
payee/mortgagee and as additional insured, for the benefit of the Lenders, as
their interests may appear. Upon request of the Administrative Agent or any
Lender, the Borrower shall furnish the Administrative Agent, with sufficient
copies for each Lender, at reasonable intervals (but not more than once per
calendar year) a certificate of a Responsible Officer of the Borrower (and, if
requested by the Administrative Agent, any insurance broker of the Borrower)
setting forth the nature and extent of all insurance maintained by the Borrower
and its Material Subsidiaries in accordance with this Section 6.06 (and which,
in the case of a certificate of a broker, were placed through such broker).

        6.07    PAYMENT OF OBLIGATIONS. (a) The Borrower shall, and shall cause
its Subsidiaries to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:

                (i)     all tax liabilities, assessments and governmental
        charges or levies upon it or its properties or assets, unless the same
        are being contested in good faith by appropriate proceedings and
        adequate reserves in accordance with GAAP are being maintained by the
        Borrower or such Subsidiary;

                (ii)    all lawful claims which, if unpaid, would by law become
        a Lien upon its property; and

                (iii)   all Indebtedness, as and when due and payable, but
        subject to any subordination provisions contained in any instrument or
        agreement evidencing such Indebtedness;

provided, however, that the Borrower and its Subsidiaries shall not be deemed to
be in default under this Section 6.07(a) if failure to comply herewith would not
result in a Material Adverse Effect.

        (b)     The Borrower shall use its commercially reasonable efforts to
cause, on or prior to the Spin-Off Consummation Date or as soon as practicable
thereafter, the Borrower and all Arbitron Subsidiaries to be released as
guarantors of or obligors for any liability described in Schedule 5.10 and
allocated to New Ceridian pursuant to the Distribution Agreement between the
Borrower and New Ceridian dated on or before the Separation Date.

        6.08    COMPLIANCE WITH LAWS. The Borrower shall comply, and shall cause
each of its Subsidiaries to comply, in all material respects with all material
Laws applicable to it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.


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        6.09    ERISA COMPLIANCE. The Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with
ERISA, the Code and other applicable Laws; (b) cause each Pension Plan that is
qualified under Section 401(a) of the Code to maintain such qualification; and
(c) make all required contributions to any Pension Plan subject to Section 412
of the Code.

        6.10    INTEREST RATE PROTECTION. Within 90 days of the Closing Date,
the Borrower shall enter into and shall maintain in effect one or more Specified
Swap Contracts providing protection against fluctuations in interest rates with
respect to at least 50% of the difference between the Outstanding Amount from
time to time and the outstanding principal amount from time to time of notes
issued pursuant to the Private Placement; on such terms and with such financial
institutions as shall be satisfactory to the Administrative Agent and the
Required Lenders.

        6.11    INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Borrower shall
maintain and shall cause each of its Material Subsidiaries to maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower and
such Subsidiaries. The Borrower shall permit, and shall cause each of its
Material Subsidiaries to permit, representatives and independent contractors of
the Administrative Agent or any Lender to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, when a Default exists, (i)
the Administrative Agent or any Lender may do any of the foregoing with respect
to the Borrower or any Subsidiary at any time during normal business hours and
without advance notice and (ii) such inspection, examination and meetings shall
be at the Borrower's expense.

        6.12    ENVIRONMENTAL LAWS.

        (a)     The Borrower shall, and shall cause each of its Subsidiaries to,
conduct its operations and keep and maintain its property in compliance in all
material respects with all Environmental Laws.

        (b)     Upon the written request of the Administrative Agent or any
Lender, the Borrower shall submit to the Administrative Agent with sufficient
copies for each Lender, at the Borrower's sole cost and expense, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 6.03(d).

        6.13    USE OF PROCEEDS. The Borrower may use the proceeds of the Loans
and the Letters of Credit (a) to provide all or a portion of the funds necessary
to repay in full all of the Indebtedness of the Borrower that is outstanding as
of the Closing Date, to the extent otherwise permitted or required hereunder,
and to replace any letters of credit outstanding under the Existing Credit
Facility, (b) to the extent otherwise permitted or required hereunder, to


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repurchase or redeem securities of the Borrower, and (c) for working capital and
other general corporate purposes (including Permitted Acquisitions).

        6.14    ADDITIONAL GUARANTORS. If any Arbitron Subsidiary, other than a
Foreign Subsidiary, shall at any time become a Material Subsidiary, or if the
Borrower or any Subsidiary otherwise shall incorporate, create or acquire any
Material Subsidiary, other than a Foreign Subsidiary, the Borrower shall cause
such Material Subsidiary to furnish promptly, but in no event more than 30 days
thereafter, each of the following to the Administrative Agent, in sufficient
quantities for each Lender:

        (a)     if such Subsidiary is the first such Subsidiary, a duly executed
Subsidiary Guaranty, and for each such succeeding Subsidiary, a duly executed
notice and agreement in substantially the form of Exhibit N (an "Additional
Guarantor Assumption Agreement");

        (b)     a duly executed Subsidiary Security Agreement, in substantially
the form of Exhibit H, together with such other Collateral Documents as the
Administrative Agent or any Lender may request; and

        (c)     (i) copies of the resolutions of the board of directors (or
equivalent governing body) of such Subsidiary approving and authorizing the
execution, delivery and performance by such Subsidiary of its Subsidiary
Guaranty or Additional Guarantor Assumption Agreement, this Agreement, and the
other Loan Documents, including all Collateral Documents to which it is a
party), certified as of the effective date of such Additional Guarantor
Assumption Agreement by the Secretary or an Assistant Secretary (or other
appropriate officer) of such Subsidiary; (ii) a certificate of the Secretary or
Assistant Secretary (or other appropriate officer) of such Subsidiary certifying
the names and true signatures of the officers of such Subsidiary authorized to
execute and deliver and perform, as applicable, its Additional Guarantor
Assumption Agreement, this Agreement and all other Loan Documents and Collateral
Documents to be delivered hereunder; (iii) copies of the articles or certificate
of incorporation and bylaws (or other applicable Organization Documents) of such
Subsidiary as in effect on the effective date of such Additional Guarantor
Assumption Agreement, certified by the Secretary or Assistant Secretary (or
other appropriate officer) of such Subsidiary as of such date; and (iv) an
opinion of counsel to such Subsidiary and addressed to the Administrative Agent
and the Lenders, in form satisfactory to the Administrative Agent and addressing
the matters set forth in Exhibit O.

        6.15    ADDITIONAL SUBSIDIARIES.

        (a)     If the Borrower directly or indirectly incorporates, creates or
acquires any additional Arbitron Subsidiary, then within 10 days thereafter, the
Borrower shall (i) (A) pledge the capital stock of such additional Subsidiary to
the Collateral Agent pursuant to the Borrower Pledge Agreement, if such stock is
directly owned by the Borrower, or (B) if such stock is owned by a Subsidiary,
cause such Subsidiary to pledge the capital stock of such additional Subsidiary
to the Administrative Agent pursuant to a Subsidiary Pledge Agreement, (ii)
execute and deliver, or cause such Subsidiary to have executed and delivered, to
the Collateral Agent stock transfer powers executed in blank with signatures
guaranteed as the Collateral Agent shall request, such Subsidiary Security
Agreements and UCC-1 financing statements (as furnished by the Collateral Agent)
for filing in each jurisdiction in which such filing is necessary to establish
and perfect the


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first priority security interest of the Collateral Agent (subject to the terms
of the Intercreditor Agreement) in the Collateral with respect to the Borrower
or such Subsidiary, and (iii) deliver such other items as reasonably requested
by the Administrative Agent in connection with the foregoing, including
resolutions, incumbency and officers' certificates, opinions of counsel, search
reports and other certificates and documents; provided, however, that if any
additional Subsidiary so incorporated, created or acquired is a Foreign
Subsidiary, in no event shall more than 65% of the capital stock of any such
Foreign Subsidiary be required to be so pledged.

        (b)     If the combined EBITDA of all Arbitron Subsidiaries that are not
Material Subsidiaries is greater than or equal to 10% of Consolidated EBITDA,
based on the Borrower's quarterly financial statements for the most recent
calendar quarter delivered to the Administrative Agent pursuant to Section 6.01,
the Borrower shall designate one or more such Subsidiaries as a Material
Subsidiary, such that after giving effect to all such designations the combined
EBITDA of all remaining Arbitron Subsidiaries that are not Material Subsidiaries
is less than 10% of Consolidated EBITDA. Within 10 days of the date of any such
designation, the Borrower and any Subsidiary designated as a Material Subsidiary
shall take all actions required under Section 6.14.

        (c)     Following the delivery of Borrower's quarterly financial
statements pursuant to Section 6.01, the Borrower may de-designate any
Subsidiary previously designated as a Material Subsidiary under subsection (b)
of this Section so that such Subsidiary shall no longer be treated as a Material
Subsidiary, effective as of the date on which such de-designation is made,
provided that: (i) such Subsidiary is not independently a Material Subsidiary
under subsection (a) of the definition thereof and (ii) after giving effect to
such de-designation the combined EBITDA of all Subsidiaries that are not
Material Subsidiaries (including the EBITDA of the Subsidiary that has been
de-designated) shall be less than 10% of Consolidated EBITDA. Notwithstanding
any such de-designation, all Collateral Documents and Subsidiary Guaranties
executed by each such Subsidiary pursuant to Section 6.14 shall continue in full
force and effect according to their respective terms, and subject to the terms
of the Intercreditor Agreement.

        6.16    ADDITIONAL INTELLECTUAL PROPERTY. The Borrower and each Arbitron
Subsidiary shall execute such Supplemental IP Security Agreements and shall
undertake such other filings, recordations, registrations and actions from time
to time with respect to Intellectual Property created, purchased or otherwise
acquired by the Borrower or such Subsidiary after the Effectiveness Date, as
more fully set forth in the Borrower Security Agreement and Subsidiary Security
Agreement or as reasonably requested by the Administrative Agent or any Lender.

        6.17    LICENSES. The Borrower shall, and shall cause each of its
Subsidiaries to, obtain and maintain all material licenses, authorizations,
consents, filings, exemptions, registrations and other governmental approvals
necessary in connection with the execution, delivery and performance of the Loan
Documents, the consummation of the transactions therein contemplated or the
operation and conduct of its business and ownership of their properties.

        6.18    FURTHER ASSURANCES.

        (a)     The Borrower shall ensure that all written information, exhibits
and reports furnished to the Administrative Agent or the Lenders do not and will
not contain any untrue


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statement of a material fact and do not and will not omit to state any material
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the
Administrative Agent and the Lenders and correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgment
or recordation thereof.

        (b)     Promptly upon request by the Administrative Agent or the
Required Lenders, the Borrower shall (and shall cause any of its Subsidiaries
to) do, execute, acknowledge and deliver any and all such further acts,
certificates, security agreements, assignments, estoppel certificates, financing
statements, and continuations or amendments thereof, termination statements,
notices of assignment, transfers, assurances and other instruments as the
Administrative Agent or such Lenders, as the case may be, may reasonably require
from time to time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (ii) to subject to the Liens created
by any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and the
Liens intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Administrative Agent and
Lenders the rights granted or now or hereafter intended to be granted to the
Lenders under any Loan Document or under any other document executed in
connection therewith.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

        The Borrower hereby covenants and agrees that, so long as any Lender
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Required Lenders waive compliance in
writing:

        7.01    LIMITATION ON LIENS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property (including Intellectual Property, Proprietary Information
and accounts and notes receivable, with or without recourse), whether now owned
or hereafter acquired, other than the following ("Permitted Liens"):

        (a)     any Lien created under any Loan Document;

        (b)     (i) Liens existing on the Closing Date and listed on Schedule
7.01 and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations secured
or benefited thereby is permitted by Section 7.03(a)(iii); and (ii) at any time
prior to the Spin-Off Consummation Date, Liens on New Ceridian Assets that
would, if such assets were at such time owned or held by New Ceridian,
constitute "Permitted Liens" under and as defined in the New Ceridian Credit
Agreement;

        (c)     Liens for taxes, fees, assessments or other governmental charges
or statutory obligations which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by Section 6.07,
provided that no Notice of Lien has been filed or recorded under the Code;


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        (d)     Liens arising in the Ordinary Course of Business in connection
with obligations (other than obligations for borrowed money) that are not
overdue or which are being contested in good faith and by appropriate
proceedings, including, but not limited to Liens under bid, performance and
other surety bonds, supersedeas and appeal bonds, Liens on advance or progress
payments received from customers under contracts for the sale, lease or license
of goods, software, services, or real estate and upon the products being sold or
licensed, in each case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of performance under
such contracts does not occur; and Liens upon funds collected temporarily from
others pending payment or remittance on their behalf; provided that the
aggregate value of all collateral pledged by the Borrower together with its
Subsidiaries to secure Liens arising under this subsection and subsection (e) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;

        (e)     Liens (other than any Lien imposed by ERISA) required in the
Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other social security legislation; provided that the
aggregate value of all collateral pledged by the Borrower together with its
Subsidiaries to secure Liens arising under this subsection and subsection (d) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;

        (f)     easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Borrower and its
Subsidiaries;

        (g)     purchase money security interests on any property acquired or
held by the Borrower or its Subsidiaries in the Ordinary Course of Business
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such property to the extent permitted under
Section 7.03; provided, however, that (i) any such Lien attaches to such
property concurrently with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such transaction, and
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property;

        (h)     Liens securing the property of any Person that is acquired by
the Borrower or any of its Subsidiaries after the Effectiveness Date; provided
that such Liens existed prior to the date of such acquisition and were not
created in contemplation thereof or for purposes of circumventing this
Agreement;

        (i)     Liens consisting of pledges of cash collateral or government
securities to secure on a mark-to-market basis Permitted Swap Contracts,
provided that the aggregate value of such collateral so pledged by the Borrower
and all such Subsidiaries in favor of all counterparties thereunder does not at
any time exceed $1,000,000;

        (j)     Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided, however, that (i) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access


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by the Borrower in excess of those set forth by regulations promulgated by the
Federal Reserve Board, and (ii) such deposit account is not intended by the
Borrower or any of its Subsidiaries to provide collateral to the depository
institution; and

        (k)     Liens existing pursuant to the Private Placement Documents or
pursuant to collateral documents securing any Specified Swap Contract, and in
each case, subject to the Intercreditor Agreement.

        7.02    MERGERS AND CONSOLIDATIONS.

        (a)     The Borrower shall not, and shall not permit any of its Arbitron
Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one or a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except as provided in subsection (b) of this Section.

        (b)     Section 7.02(a) shall not prohibit:

                (i)     Permitted Acquisitions;

                (ii)    the merger or consolidation of any Subsidiary (except
        New Ceridian) into the Borrower, or with or into any other Subsidiary,
        provided that if any such transaction is between a Subsidiary and a
        Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary is the continuing
        or surviving corporation;

                (iii)   dispositions of assets pursuant to a dissolution or
        liquidation otherwise permitted under this Agreement of a Subsidiary;

                (iv)    the sale or other disposition of all or substantially
        all of the assets of a Subsidiary of the Borrower to the Borrower or to
        a Wholly-Owned Subsidiary of the Borrower; or

                (v)     the mergers, consolidations or transfers of assets
        listed on Schedule 7.02(b) attached hereto.

        7.03    INDEBTEDNESS.

        (a)     Borrower and Subsidiaries. The Borrower shall not, and shall not
permit any Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than the following (collectively referred to herein as
"Permitted Indebtedness"):

                (i)     the Obligations;

                (ii)    Indebtedness arising from taxes, fees, assessments or
        other governmental charges or statutory obligations which are not
        delinquent or remain payable without penalty, or to the extent that
        non-payment thereof is permitted by Section 6.07;


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                (iii)   (A) Initial Permitted Indebtedness of the Borrower or
        any Subsidiary existing on the Closing Date or extensions, renewals and
        refinancings of such Indebtedness, provided that the principal amount of
        such Indebtedness being extended, renewed or refinanced does not
        increase; and (B) at all times prior to the Spin-Off Consummation Date,
        Indebtedness constituting "Initial Permitted Indebtedness" under and as
        defined in the New Ceridian Credit Agreement;

                (iv)    accounts payable of Borrower or its Subsidiaries to
        trade creditors for goods and services and current operating liabilities
        (not the result of the borrowing of money) incurred in the Ordinary
        Course of Business in accordance with customary terms and paid within
        the specified time, unless contested in good faith by appropriate
        proceedings and reserved for in accordance with GAAP;

                (v)     obligations in respect of Permitted Swap Contracts;

                (vi)    Indebtedness of Borrower or any Subsidiary of the
        Borrower secured by Permitted Liens of the type referred to in Section
        7.01(g), in a principal amount (including imputed principal for Capital
        Leases) not to exceed $5,000,000, in the aggregate for the Borrower and
        all Subsidiaries of the Borrower, at any time outstanding;

                (vii)   Indebtedness not secured by any Lien, in an outstanding
        principal amount not to exceed, together with the principal amount of
        Indebtedness outstanding at such time under clause (vi), $10,000,000 at
        any time in the aggregate for the Borrower and all Subsidiaries;

                (viii)  unsecured Indebtedness not to exceed $14,000,000
        incurred prior to December 31, 2001 in favor of the seller of certain
        assets relating to a Person known as "Coventry", as partial
        consideration for the Borrower's acquisition of such assets; provided
        the sum of all payments (including principal, interest, fees and other
        amounts) required to be made thereunder over the scheduled term thereof
        does not exceed $16,000,000;

                (ix)    Indebtedness arising in connection with the Private
        Placement Documents;

                (x)     prior to the Closing Date, Indebtedness required to be
        repaid on or before the Closing Date pursuant to Section 4.02(a)(v); and

                (xi)    Indebtedness of Wholly-Owned Subsidiaries incurred
        pursuant to transactions permitted under Section 7.06(f).

        (b)     Subsidiaries. The Borrower shall not permit any of its
Subsidiaries to incur, assume or suffer to exist any Indebtedness if the
aggregate principal amount of all Indebtedness of any such Subsidiary at any
time would exceed 10% of such Subsidiary's net worth.

        7.04    DISPOSITION OF ASSETS.

        (a)     The Borrower shall not, and shall not permit any of its
Subsidiaries, to Dispose of any assets (including Intellectual Property,
Proprietary Information, accounts and rights to


                                      73.
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payment), whether now owned or hereafter acquired, or enter into any agreement
to make any Disposition of such assets, except as permitted under subsection
(b).

        (b)     Section 7.04(a) shall not apply to or restrict:

                (i)     (A) the Spin-Off Transaction; or (B) at any time prior
        to the Spin-Off Consummation Date, Dispositions of New Ceridian Assets
        that would be permitted under the New Ceridian Credit Agreement if such
        assets were at such time assets of New Ceridian;

                (ii)    the sale of equipment to the extent that such equipment
        is exchanged for credit against the purchase price of similar
        replacement equipment, or the proceeds of such sale are reasonably
        promptly, but in no event more than 30 days, applied to the purchase
        price of such replacement equipment; provided, however, that: (A) the
        replacement equipment has comparable value and is of the same type, and
        used for the same purpose, as the equipment sold; (B) the Person selling
        equipment under this subsection is the same Person that purchases any
        replacement equipment; (C) any such sale is conducted at arm's length
        and under commercially reasonable terms; and (D) to the extent there
        exists more than $1,000,000 of Net Cash Proceeds from all such equipment
        sold which have not yet been invested in replacement equipment, such
        amount shall be promptly applied under Section 2.05(a);

                (iii)   the transfer of assets by the Borrower (A) to any of its
        Material Subsidiaries if such transfer is a sale for fair market value
        and the consideration received by the Borrower is cash; or (B) to any
        Wholly-Owned Subsidiary;

                (iv)    Revocable licenses in the Ordinary Course of Business of
        Intellectual Property of the Borrower or its Subsidiaries to third
        parties (other than a Nielsen JV) upon commercially reasonable terms and
        that do not, singly or in the aggregate, result in a Material Adverse
        Effect;

                (v)     (A) assignments and sales to a Permitted Nielsen JV of
        software used or usable for the compilation of data solely derived from
        PPM Technology, and to the extent, but only to the extent, consistent
        with the Nielsen JV Option Agreement; and (B) Revocable, non-exclusive
        licenses of software and other Intellectual Property to a Permitted
        Nielsen JV in the Ordinary Course of Business upon commercially
        reasonable terms that do not, singly or in the aggregate, result in a
        Material Adverse Effect;

                (vi)    the license by the Borrower of its PPM Technology,
        solely for the purpose of audience measurement, to a Permitted Nielsen
        JV to the extent, but only to the extent, consistent with the Nielsen JV
        Option Agreement, and otherwise in form and substance satisfactory to
        the Administrative Agent and the Required Lenders;

                (vii)   the non-transferable, exclusive U.S. license by the
        Borrower of its "Critical Band Encoding Technology" to Nielsen and the
        license to a Permitted Nielsen JV of encoding patents, to the extent,
        but only to the extent, consistent with the Nielsen JV Option Agreement,
        and otherwise in form and substance reasonably satisfactory to the
        Administrative Agent and the Required Lenders;


                                      74.
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                (viii)  the Disposition of assets or stock of Ceridian Info Tech
        (India) Private Limited and CSW Research Limited; provided that no
        Intellectual Property or Proprietary Information is Disposed of as part
        of any such Disposition, other than Intellectual Property and
        Proprietary Information that is not materially related to the Arbitron
        Business; and further provided that the total aggregate value of all
        assets and stock transferred pursuant to this clause does not exceed
        $3,500,000;

                (ix)    the transfer by any Subsidiary of the Borrower of assets
        (upon voluntary liquidation or otherwise) to the Borrower or a
        Wholly-Owned Subsidiary of the Borrower that is a Material Subsidiary;
        or

                (x)     transfers by the Borrower or its Subsidiaries totaling
        on a consolidated, aggregate basis for all such transfers in any fiscal
        year an amount not in excess of $1,000,000; provided that (A) each such
        transfer is otherwise permitted pursuant to the Loan Documents, (B) the
        consideration paid to the Company or its Subsidiaries in connection with
        each such transfer is exclusively in the form of cash or Cash
        Equivalents, (C) unused transfers permitted by this subsection (b)(x)
        shall not accrue to the following year, and (D) after giving effect to
        each such transfer there shall exist no Default or Event of Default.

        7.05    CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligations, except:

        (a)     Contingent Obligations set forth in Schedule 5.10, or incurred
pursuant to any Loan Document or any Specified Swap Contract;

        (b)     Contingent Obligations arising in connection with supersedeas or
appeal bonds in respect of litigation to which the Borrower or any of its
Subsidiaries is a party or a real party in interest, in an amount for all such
obligations on an aggregate consolidated basis not to exceed $1,000,000 at any
time outstanding; provided that after giving effect to each such obligation
there shall exist no Default or Event of Default;

        (c)     endorsements for collection or deposit in the Ordinary Course of
Business;

        (d)     until the Spin-Off Consummation Date, (i) Contingent Obligations
incurred in connection with the guaranty, of near or even date herewith, made by
the Borrower in favor of Bank of America, N.A. (in its capacity as
administrative agent under the New Ceridian Credit Agreement) to guarantee the
obligations of New Ceridian under the New Ceridian Credit Agreement; and (ii)
Contingent Obligations not incurred pursuant to or in furtherance of the
Arbitron Business;

        (e)     Contingent Obligations incurred pursuant to the Private
Placement Documents;

        (f)     Contingent Obligations consisting of Guaranty Obligations of (i)
the Borrower in respect of Indebtedness of any Wholly-Owned Subsidiary or (ii)
any Subsidiary in respect of Indebtedness of the Borrower or any Wholly-Owned
Subsidiary; and


                                      75.
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        (g)     other Contingent Obligations of the Borrower and its
Subsidiaries in an aggregate amount not in excess of $1,000,000 at any time
outstanding.

        7.06    LOANS AND INVESTMENTS. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, purchase, acquire, hold or maintain the
capital stock, assets (constituting a business unit), obligations or other
securities of or any interest in any Person, or otherwise extend any credit to,
make any Guaranty Obligation with respect to or make any additional investments
in any Person, other than:

        (a)     Investments listed on Schedule 7.06(b) and held by the Borrower
or any Subsidiary as of the Closing Date;

        (b)     Investments in the form of Cash Equivalents or investment grade
marketable securities;

        (c)     extensions of credit in the nature of accounts receivable or
notes receivable arising from the sales of goods or services or franchising
activities in the Ordinary Course of Business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;

        (d)     Investments resulting in Permitted Acquisitions;

        (e)     advances to officers, directors and employees of the Borrower
and its Subsidiaries in an aggregate amount for all such advances by the
Borrower and its Subsidiaries not to exceed in the aggregate $1,000,000 at any
time outstanding, for travel, entertainment, relocation and analogous purposes
arising in the Ordinary Course of Business;

        (f)     extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries or the Borrower, in each case in the Ordinary Course
of Business;

        (g)     Contingent Obligations permitted by Section 7.05;

        (h)     Investments permitted by Section 7.02;

        (i)     Investments resulting from Dispositions permitted under Section
7.04(b)(iii), (vi), (vii) or (ix);

        (j)     Investments consisting of PPM Expenditures in an amount not to
exceed $5,000,000 for all such Investments in respect of all Nielsen JV's on an
aggregate basis in any fiscal year;

        (k)     Investments existing or entered into prior to the Separation
Date to the extent constituting New Ceridian Assets; or

        (l)     additional Investments otherwise permitted hereunder in Persons
that are not, and will not be after giving effect to each such Investment, a
Subsidiary, in an amount not to exceed


                                      76.
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$3,500,000 in the aggregate for all such Investments in any fiscal year;
provided that this subsection shall not permit Investments in either the
Scarborough Partnership or any Nielsen JV.

        7.07    DIVIDENDS AND PAYMENTS.

        (a)     The Borrower shall not, and shall not suffer or permit any of
its Subsidiaries to, declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem, or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, except that the
Borrower may:

                (i)     declare and make (A) the Distribution, or (B) dividend
        payments or other distributions payable solely in shares of its common
        stock (and, solely in respect of fractional shares, cash of a de minimis
        amount);

                (ii)    purchase, redeem or otherwise acquire shares of its
        common stock or warrants or options to acquire any such shares out of
        proceeds received from the substantially concurrent issue of new shares
        of its common stock, after taking into account (A) any prepayment made
        under Section 2.05 as a result of any reduction in the Aggregate
        Commitments under Section 2.06(b)(iii) in relation to such issuance and
        (B) any prepayment made or required to be made under the Private
        Placement Documents in relation to such issuance;

                (iii)   make payments in the Ordinary Course of Business in
        connection with its Pension Plan or in connection with the employment,
        termination or compensation of its employees, officers or directors; and

                (iv)    from and after that date on which the Borrower's 2002
        year end financial statements are received by the Administrative Agent
        pursuant to Section 6.01, declare or pay cash dividends to its
        stockholders out of (and in an aggregate amount not exceeding) Aggregate
        Distributable Income; provided, however, that immediately after giving
        effect to any such proposed declaration or payment there exists no
        Default or Event of Default.

        (b)     The Borrower shall not suffer or permit any Subsidiary of the
Borrower (other than New Ceridian) to grant or otherwise agree to or suffer to
exist any consensual restrictions on the ability of such Subsidiary to pay
dividends and make other distributions to the Borrower, or to pay any
Indebtedness owed to the Borrower or transfer properties and assets to the
Borrower.

        (c)     After the Spin-Off Consummation Date, the Subsidiaries may
declare and make dividend payments in the Ordinary Course of Business to the
Borrower and to Wholly-Owned Subsidiaries (and, in the case of a dividend
payment by a non-Wholly-Owned Subsidiary, to the Borrower and any Subsidiary and
to each other owner of capital stock of such Subsidiary on a pro rata basis
based on their relative ownership interests).

        7.08    USE OF PROCEEDS. The Borrower shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the Loan proceeds, or the
Letter of Credit, directly or indirectly, in violation of Regulation T, U or X
of the Federal Reserve Board.


                                      77.
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        7.09    HOSTILE ACQUISITION. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any Acquisition unless: (a) the
Acquisition complies with applicable Laws, (b) the board of directors or
equivalent governing body of the Person to be so acquired provides written
consent or approval of such Acquisition prior to its commencement; and (c) such
Acquisition is otherwise permitted hereunder.

        7.10    LEVERAGE RATIO. The Borrower shall not permit its Leverage Ratio
for any fiscal quarter, beginning with the fiscal quarter ended December 31,
2000, calculated as of the last date of such quarter, to exceed, for the Test
Period ending on such date (including in respect of Test Period fiscal quarters
ending prior to the Effectiveness Date, and using for this purpose the Form 10
Financial Statements and the Supplemental Financial Statements), the following
amounts:



          ------------------------------------------------------------
               FISCAL QUARTER ENDING:        MAXIMUM LEVERAGE RATIO
          ------------------------------------------------------------
                                          
             December 31, 2000 through            3.75 to 1.00
                 September 30, 2001
          ------------------------------------------------------------
             December 31, 2001 through
                 September 30, 2002               3.25 to 1.00
          ------------------------------------------------------------
             December 31, 2002 through
                 September 30, 2003               3.00 to 1.00
          ------------------------------------------------------------
             December 31, 2003 through
                 September 30, 2004               2.75 to 1.00
          ------------------------------------------------------------
              December 31, 2004 and
                    thereafter                    2.50 to 1.00
          ------------------------------------------------------------
 

        7.11    FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit as of
the last day of any fiscal quarter, beginning with the fiscal quarter ended
December 31, 2000: (a) the sum of (i) the Borrower's Consolidated EBITDA for the
Test Period ending on such day, less (ii) taxes actually paid in cash or Cash
Equivalents for the Test Period ending on such day, less (iii) capital
expenditures plus (without duplication) PPM Expenditures for the Test Period
ending on such day, (b) divided by the sum of (i) Consolidated Interest Expense
for the Test Period ending on such day plus (ii) Current Portion of Long-Term
Debt as of such day; for the Borrower and its Subsidiaries on a consolidated
basis (including in respect of Test Period fiscal quarters ending prior to the
Effectiveness Date, and using for this purpose the Form 10 Financial Statements
and the Supplemental Financial Statements), to be less than the following
amounts:


                                      78.
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          ------------------------------------------------------------
               FISCAL QUARTER ENDING              MINIMUM RATIO
          ------------------------------------------------------------
                                               
             December 31, 2000 through            2.00 to 1.00
                 September 30, 2001
          ------------------------------------------------------------
             December 31, 2001 through            2.25 to 1.00
                 September 30, 2002
          ------------------------------------------------------------
             December 31, 2002 through            2.50 to 1.00
                 September 30, 2003
          ------------------------------------------------------------
             December 31, 2003 through            3.00 to 1.00
                 September 30, 2004
          ------------------------------------------------------------
              December 31, 2004 and               3.50 to 1.00
                   thereafter
          ------------------------------------------------------------


        7.12    FOREIGN SUBSIDIARIES. The Borrower shall not, and shall not
suffer or permit any Subsidiary to, (a) make any Disposition of, or make any
Investment of, any of its property, business or assets (including Intellectual
Property, Proprietary Information, accounts and rights to payment), whether now
owned or hereafter acquired, to or in any Foreign Subsidiary, except
Dispositions or Investments that, individually or in the aggregate, (i) are
otherwise permitted hereunder and (ii) would not reasonably be expected to have
a Material Adverse Effect on the business, results of operation or financial
condition of the Borrower together with those of its Subsidiaries that are not
Foreign Subsidiaries, taken as a whole, or (b) make any Investment in, or any
Disposition to, Ceridian Info Tech (India) Private Limited in an aggregate
amount, for all such Investments and Dispositions in respect of the Borrower and
all Subsidiaries together from and after the Effectiveness Date, in excess of
$200,000.

        7.13    CHANGE IN BUSINESS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, (i) engage in any material line of business
substantially different from those lines of business carried on by the Borrower
and its Subsidiaries on the Closing Date; (ii) extend any material amount of
Indebtedness to or make any material equity Investment in any Person which
engages in one or more lines of business all of which are substantially
different from those lines of business carried on by the Borrower and its
Subsidiaries on the Effectiveness Date; or (iii) enter into any joint venture
which engages in a material line of business substantially different from those
lines of business carried on by the Borrower and its Subsidiaries on the
Effectiveness Date.

        7.14    ACCOUNTING CHANGES. The Borrower shall not, and shall not suffer
or permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP, or
change the fiscal year of the Borrower or of any of its consolidated
Subsidiaries.

        7.15    CERTAIN CONTRACTS.

        (a)     The Borrower shall not permit any of its Arbitron Subsidiaries
(other than New Ceridian) to enter into any Contractual Obligation restricting
the ability of such Subsidiary to pay dividends or make loans to the Borrower or
Arbitron Subsidiaries of the Borrower.

        (b)     The Borrower shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any amendment, restatement, extension,
supplement or other modification of the


                                      79.
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Private Placement Documents (i) if the effect of any such action would be to
render any of the conditions set forth in Section 4.01(a)(vii)(c) inaccurate or
unsatisfied in any respect, or (ii) that would increase the rate of interest or
any "Make Whole Amount" payable under the Private Placement Documents.

        (c)     Unless consented to by the Required Lenders, the Borrower shall
not, and shall not suffer or permit any of its Subsidiaries to, enter into any
amendment, revision, supplement or modification to any of the Spin-Off Documents
after the Closing Date, other than (i) ministerial changes necessary to address
administrative issues, or (ii) changes necessary to address facial ambiguities.

        7.16    TRANSACTIONS WITH AFFILIATES.

        (a)     The Borrower shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any material transaction of any kind with any
Affiliate of the Borrower (other than a Subsidiary), or with New Ceridian and
any of its Subsidiaries, other than arm's-length transactions with such Persons
that are otherwise permitted hereunder.

        (b)     The Borrower shall not suffer or permit any Nielsen JV or the
Scarborough Partnership to Dispose of, or grant any Lien upon, Intellectual
Property or Proprietary Information licensed to either such Person by the
Borrower, provided, however, that the Scarborough Partnership may grant licenses
of such Intellectual Property (i) to the Borrower, and (ii) to third Persons in
the Ordinary Course of Business upon commercially reasonable terms; and provided
further that a Permitted Nielsen JV may grant licenses in such Intellectual
Property (A) to the Borrower, (B) to Nielsen to the extent, but only to the
extent, consistent with the Nielsen JV Option Agreement, and otherwise in form
and substance satisfactory to the Administrative Agent and the Required Lenders
and (C) which are non-exclusive, non-transferable and Revocable to other Persons
on commercially reasonable terms in the Ordinary Course of Business and
consistent with the Nielsen JV Option Agreement.

        (c)     Except as consented to in writing by the Administrative Agent
and the Required Lenders, the Borrower shall not make or permit any amendment,
modification, extension, renewal, restatement or assignment of the Nielsen JV
Option Agreement or the Scarborough Partnership Agreement that would, directly
or indirectly, (i) increase the amount of cash contributions or payments
required to be made by the Borrower or any of its Subsidiaries to Nielsen, any
Nielsen JV, or the Scarborough Partnership (ii) require the license or other
Disposition of Intellectual Property of the Borrower or its Subsidiaries other
than the property previously contemplated or alter the license or other transfer
arrangements such that they involve longer terms, or less consideration than
previously contemplated, or (iii) include products, applications or markets
other than as previously contemplated, (iv) cause any such Nielsen JV to no
longer satisfy the requirements of a Permitted Nielsen JV, or (v) foreseeably be
detrimental to the Borrower or its Subsidiaries or to the interests of the
Lenders.

        7.17    CAPITAL EXPENDITURES. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, make any expenditures for fixed or capital
assets of the Borrower or its Subsidiaries, including obligations under Capital
Leases, in excess of $5,000,000 in the aggregate for all such Persons, on a
consolidated basis, in any fiscal year (not including


                                      80.
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equipment and real estate subject to a sale-leaseback transaction consented to
by the Required Lenders, and completed no later than 90 days after the date on
which such property is sold by the Borrower or Subsidiary pursuant to such
sale-leaseback transaction); provided, however, that this Section shall not
restrict the incurrence of capital expenditures in respect of New Ceridian
Assets prior to the Spin-Off Consummation Date, provided that any lease or other
obligation (other than obligations in respect of trade payables entered into in
the Ordinary Course of Business on customary payment terms) of the Borrower or
any Arbitron Subsidiary related to such New Ceridian Asset shall be released or
terminated on or before the Spin-Off Consummation Date.

        7.18    SALES AND LEASEBACKS. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, become liable, directly or indirectly, with
respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which the Borrower or such Subsidiary has sold or transferred or
is to sell or transfer to any other Person, or (b) which the Borrower or such
Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to any other Person in connection with such lease.

        7.19    CERTAIN TAX MATTERS. The Borrower shall not, (a) during the two
year period following the Closing Date, cease to be engaged in the active trade
or business relied upon for purposes of satisfying the requirements of Section
355(b) of the Code and obtaining, and staying in conformity with, the IRS Ruling
Letter; or (b) during the applicable period provided by Section 355(e)(2)(b) of
the Code with respect to the Distribution, enter into any transaction or make
any change to its equity structure (including stock issuance, pursuant to the
exercise of options, option grants or otherwise, capital contributions or
acquisitions, but not including the Distribution) that may cause the
Distribution to be treated as part of a plan pursuant to which one or more
Persons acquire directly or indirectly capital stock of the Borrower
representing a "50 percent or greater interest" within the meaning of Section
355(e) of the Code; provided that, in each case, the Borrower may take such
actions if (i) the Borrower obtains an private letter ruling from the IRS to the
effect that such actions should not result in the Distribution being taxable to
New Ceridian or its shareholders, or (ii) the Borrower delivers to the
Administrative Agent an opinion of independent counsel addressed to the
Administrative Agent to the same effect, provided, that such opinion is
reasonably acceptable in form and substance to the Administrative Agent.

                                  ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

        8.01    EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:

        (a)     Non-Payment. The Borrower fails to pay (i) when and as required
to be paid herein, any amount of principal of any Loan, or any L/C Obligation,
or (ii) within three days after the same becomes due, any interest on any Loan
or on any L/C Obligation, or any commitment, utilization or other fee due
hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or


                                      81.
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        (b)     Specific Covenants. The Borrower fails to perform or observe any
term, covenant, or agreement contained in Section 6.03(a), (b), (c), (d), or
(f), Section 6.09, Section 6.13 or in Article VII; or the Borrower fails to
perform or observe any term, covenant or agreement contained in Section 6.01 or
Section 6.02 or in Section 6.03 (other than subsections (a), (b), (c), (d) or
(f) thereof) and such failure continues unremedied for a period of 10 days; or

        (c)     Other Defaults. The Borrower fails to perform or observe any
other term or covenant contained in this Agreement or any other Loan Document,
and such default continues unremedied for a period of 20 days; or

        (d)     Representations and Warranties. Any representation or warranty
made or deemed made by the Borrower or any other Loan Party herein, in any other
Loan Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or

        (e)     Cross-Default. (i) The Borrower or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty
Obligation (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guaranty Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guaranty Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased
or redeemed (automatically or otherwise) prior to its stated maturity, or such
Guaranty Obligation to become payable or cash collateral in respect thereof to
be demanded; or (ii) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (I) any event of default
under such Swap Contract as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (II) any Termination
Event (as so defined) under such Swap Contract as to which the Borrower or any
Subsidiary is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Borrower or such Subsidiary as a result thereof is
greater than the Threshold Amount; or

        (f)     Insolvency Proceedings, Etc. Any Loan Party, any of its
Subsidiaries, the Scarborough Partnership or the Nielsen JV institutes or
consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is


                                      82.
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entered in any such proceeding; provided, however, that it shall not be an Event
of Default under this subsection (f) if any Subsidiary of the Borrower to which
this subsection applies does not have annual revenues in excess of 1% of the
consolidated revenues of the Borrower or net worth which constitutes more than
5% of the Consolidated Net Worth of the Borrower in the fiscal year immediately
preceding the date this subsection first becomes applicable to such Subsidiary;
or

        (g)     Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; provided, however, that it shall
not be an Event of Default under this subsection (g) if any Subsidiary of the
Borrower to which this subsection applies does not have annual revenues in
excess of 1% of the consolidated revenues of the Borrower or net worth which
constitutes more than 5% of the Consolidated Net Worth of the Borrower in the
fiscal year immediately preceding the date this subsection first becomes
applicable to such Subsidiary; or

        (h)     Judgments. There is entered against the Borrower or any
Subsidiary (i) a final judgment, order or decree for the payment of money in an
aggregate amount exceeding $5,000,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any non-monetary final judgment, order or decree that has, or would
reasonably be expected to have, a Material Adverse Effect and, in either case,
(a) enforcement proceedings are commenced by any creditor upon such judgment,
order or decree, or (b) there shall be any period of 10 consecutive days during
which such judgment, order or decree continues unsatisfied and during which a
stay of enforcement of such judgment, order, or decree by reason of a pending
appeal or otherwise, shall not be in effect; or

        (i)     ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or would reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount that would reasonably be
expected to result in a Material Adverse Effect, or (ii) the Borrower or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
that would reasonably be expected to result in a Material Adverse Effect; or

        (j)     Invalidity of Loan Documents. Any Loan Document, at any time
after its execution and delivery and for any reason other than the agreement of
all the Lenders or satisfaction in full of all the Obligations, ceases to be in
full force and effect, or is declared by a court of competent jurisdiction to be
null and void, invalid or unenforceable in any material respect; or any Loan
Party denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

        (k)     Invalidity of Spin-Off Documents. Any Spin-Off Document, at any
time after its execution and delivery and for any reason other than the
satisfaction in full of all the obligations therein, ceases to be in full force
and effect, or is declared by a court of competent jurisdiction to be null and
void, invalid or unenforceable in any respect; or any party thereto denies that
it has


                                      83.
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any or further liability or obligation under any Spin-Off Document, or purports
to revoke, terminate or rescind any Spin-Off Document; or

        (l)     Change of Control. There occurs any Change of Control;

        (m)     Collateral. (i) Any provision of any Collateral Document

        shall for any reason cease to be valid and binding on or enforceable
        against the Borrower or any Subsidiary party thereto, or the Borrower or
        any Subsidiary shall so state in writing or bring an action to limit its
        obligations or liabilities thereunder, or

                (ii)    any Collateral Document shall for any reason (other than
        pursuant to the terms thereof) cease to create a valid security interest
        in the Collateral purported to be covered thereby, or such security
        interest shall for any reason cease to be a perfected and first priority
        security interest subject only to Permitted Liens; or

        (n)     Guarantor Defaults. Any Guarantor fails in any material respect
to perform or observe any term, covenant or agreement in its Guaranty; or any
Guaranty is for any reason partially (including with respect to future advances)
or wholly revoked or invalidated, or otherwise ceases to be in full force and
effect, or any Guarantor or any other Person contests in any manner the validity
or enforceability thereof or denies that it has any further liability or
obligation thereunder; or any event described at subsections (f) or (g) of this
Section occurs with respect to any Guarantor; or

        (o)     Spin-Off Consummation. The Spin-Off Consummation Date does not
occur on or before the Spin-Off Deadline.

        8.02    REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs,
the Administrative Agent shall, at the request of, or may, with the consent of,
the Required Lenders,

        (a)     declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;

        (b)     declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;

        (c)     require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and

        (d)     exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

provided, however, that upon the occurrence of any event specified in subsection
(f) of Section 8.01, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become


                                      84.
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due and payable, and the obligation of the Borrower to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

                                   ARTICLE IX.
                              ADMINISTRATIVE AGENT

        9.01    APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

        (a)     Each Lender hereby irrevocably (subject to Section 9.09)
appoints, designates and authorizes the Administrative Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

        (b)     The L/C Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time (and except for so long) as the Administrative Agent may agree
at the request of the Required Lenders to act for the L/C Issuer with respect
thereto; provided, however, that the L/C Issuer shall have all of the benefits
and immunities (i) provided to the Administrative Agent in this Article IX with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Administrative Agent" as used in this Article IX
included the L/C Issuer with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the L/C Issuer.

        9.02    DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.

        9.03    LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its


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own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Loan Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Affiliate thereof.

        9.04    RELIANCE BY ADMINISTRATIVE AGENT.

        (a)     The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Loan Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under any
Loan Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders or all the Lenders, if required hereunder, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and participants. Where this Agreement expressly permits or prohibits an
action unless the Required Lenders otherwise determine, the Administrative Agent
shall, and in all other instances, the Administrative Agent may, but shall not
be required to, initiate any solicitation for the consent or a vote of the
Lenders.

        (b)     For purposes of determining compliance with the conditions
specified in Section 4.01 and Section 4.02, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Administrative
Agent to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.

        9.05    NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The


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Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Article VIII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.

        9.06    CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

        9.07    INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), based on such Lender's Pro Rata Share, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders or all Lenders, as the case may be, shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share (based on such Lender's
Pro Rata Share) of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Administrative Agent in connection with the


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preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Administrative Agent is not reimbursed for such expenses
by or on behalf of the Borrower. The undertaking in this Section shall survive
termination of the Commitments, the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.

        9.08    ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.

        9.09    SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders
which successor administrative agent shall be consented to by the Borrower at
all times other than during the existence of an Event of Default (which consent
of the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor
administrative agent and the retiring Administrative Agent's appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article IX and Sections 10.03 and 10.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.

        9.10    OTHER AGENTS; LEAD MANAGERS. None of the Lenders identified on
the facing page or signature pages of this Agreement as a "syndication agent,"
"documentation agent," "co-


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agent" or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

        9.11    COLLATERAL MATTERS.

        (a)     The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.

        (b)     The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations known to the
Administrative Agent and payable under this Agreement or any other Loan
Document; (ii) constituting property sold or to be sold or disposed of as part
of or in connection with any Disposition permitted hereunder; (iii) constituting
property in which the Borrower or any Subsidiary owned no interest at the time
the Lien was granted or at any time thereafter; (iv) constituting property
leased to the Borrower or any Subsidiary in a transaction permitted under this
Agreement; (v) consisting of an instrument evidencing Indebtedness or other debt
instrument, if the indebtedness evidenced thereby has been paid in full; or (vi)
if approved, authorized or ratified in writing by the Required Lenders or all
the Lenders, as the case may be, as provided in Section 10.01(f). Upon request
by the Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this Section 9.11(b), provided that the absence of any
such confirmation for whatever reason shall not affect the Administrative
Agent's rights under this Section 9.11.

        Each Bank agrees with and in favor of each other (which agreement shall
not be for the benefit of the Borrower or any Subsidiary) that the Borrower's
obligation to such Bank under this Agreement and the other Loan Documents is not
and shall not be secured by any real property collateral now or hereafter
acquired by such Bank.

                                   ARTICLE X.
                                  MISCELLANEOUS

        10.01   AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall, unless in writing and signed by each of the Lenders
directly


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affected thereby and by the Borrower, and acknowledged by the Administrative
Agent, do any of the following:

        (a)     extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02);

        (b)     postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document;

        (c)     reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or any fees or other amounts payable
hereunder or under any other Loan Document; provided, however, that only the
consent of the Required Lenders shall be necessary to amend the definition of
"Default Rate" or to waive any obligation of the Borrower to pay interest at the
Default Rate;

        (d)     change the percentage of the Aggregate Commitments or of the
aggregate unpaid principal amount of the Loans and L/C Obligations which is
required for the Lenders or any of them to take any action hereunder;

        (e)     change the Pro Rata Share or Voting Percentage of any Lender
other than as set forth in Section 3.06(b) or 10.16;

        (f)     amend this Section, or any provision herein providing for
consent or other action by all the Lenders;

        (g)     amend Section 2.06(b), or amend Section 4.01 or 4.02 or waive
any condition precedent specified therein (subject to the proviso in the
introductory clause to Section 4.01); or

        (h)     discharge any Guarantor, or release all or substantially all of
the Collateral except as otherwise may be provided herein or in the Collateral
Documents;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Required Lenders or all
the Lenders, as the case may be, affect the rights or duties of the L/C Issuer
under this Agreement or any L/C Application relating to any Letter of Credit
issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; and
(iii) the Agent/Arranger Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, any Lender that has failed to
fund any portion of the Loans, or participations in L/C Obligations required to
be funded by it hereunder shall not have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Pro Rata Share or the
Commitment amount of such Lender may not be increased without the consent of
such Lender.


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        10.02   NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

        (a)     General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 10.02; or, in the case of the Borrower, the
Administrative Agent, or the L/C Issuer to such other address as shall be
designated by such party in a notice to the other parties, and in the case of
any other party, to such other address as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, and the L/C Issuer. All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if
delivered by hand or by courier, when signed for by the intended recipient; (B)
if delivered by first class mail, four Business Days after deposit in the mails,
postage prepaid; (C) if delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (D) if delivered by electronic mail (which form of
delivery is subject to the provisions of subsection (c) below), when delivered;
provided, however, that notices and other communications to the Administrative
Agent, or the L/C Issuer pursuant to Article II shall be in writing and shall
not be effective until actually received by such Person. Any notice or other
communication permitted to be given, made or confirmed by telephone hereunder
shall be given, made or confirmed by means of a telephone call to the intended
recipient at the number specified on Schedule 10.02, it being understood and
agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.

        (b)     Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

        (c)     Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.

        (d)     Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.


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        10.03   NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

        10.04   ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. The agreements in this Section shall survive
the termination of the Commitments and repayment of all the other Obligations.
At the election of any Indemnitee, the Borrower shall defend such Indemnitee
using legal counsel satisfactory to such Indemnitee in such Person's sole
discretion, at the sole cost and expense of the Borrower; provided, however,
that the Borrower shall only be obligated to hire one counsel to represent all
of the Lenders unless any Lender advises the Borrower that its legal counsel has
advised it that its interest is materially different from that of the other
Lenders and it would not be adequately represented without its own separate
counsel, in which case the borrower shall hire separate counsel for such Lender,
satisfactory to such Lender. All amounts owing under this Section 10.04 shall be
paid within 30 days after demand.

        10.05   INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to indemnify, save and
hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against: (a) any and
all claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Administrative Agent or any Lender)
relating directly or indirectly to a claim, demand, action or cause of action
that such Person asserts or may assert against any Loan Party, any Affiliate of
any Loan Party or any of their respective officers or directors; (b) any and all
claims, demands, actions or causes of action that may at any time (including at
any time following repayment of the Obligations and the resignation or removal
of the Administrative Agent or the replacement of any Lender) be asserted or
imposed against any Indemnitee, arising out of or relating to, the Loan
Documents, any predecessor loan documents, the Commitments, the use or
contemplated use of the proceeds of any Credit


                                      92.
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Extension, or the relationship of any Loan Party, the Administrative Agent and
the Lenders under this Agreement or any other Loan Document; (c) any
administrative or investigative proceeding by any Governmental Authority arising
out of or related to a claim, demand, action or cause of action described in
subsection (a) or (b) above; and (d) any and all liabilities (including
liabilities under indemnities), losses, costs or expenses (including Attorney
Costs) that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action, cause of action or proceeding, or as a result
of the preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, and whether or not
an Indemnitee is a party to such claim, demand, action, cause of action or
proceeding (all the foregoing, collectively, the "Indemnified Liabilities");
provided that no Indemnitee shall be entitled to indemnification for any claim
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. The agreements in this Section shall
survive the termination of the Commitments and repayment of all the other
Obligations.

        10.06   PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.

        10.07   SUCCESSORS AND ASSIGNS.

        (a)     The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

        (b)     Subject to the prior consent of the Administrative Agent, the
L/C Issuer and, provided there exists no Default or Event of Default, the
Borrower (such Borrower consent not to be unreasonably withheld), any Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b), participations in
L/C Obligations at the time owing to it); provided that (i) except in the case
of an assignment of the


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entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent, shall not be less than $5,000,000 unless the Administrative Agent
otherwise consents, (ii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, and
(iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $4,000. Subject to acceptance and recording thereof by
the Administrative Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Acceptance, the
Eligible Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
10.04 and 10.05). Upon request, the Borrower (at its expense) shall execute and
deliver new or replacement Loan Notes to the assigning Lender and the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection 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 subsection (d) of this Section.

        (c)     The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent 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.

        (d)     Any Lender may, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender's participations in L/C
Obligations) owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any



                                      94.
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provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification that would (A) postpone any date
upon which any payment of money is scheduled to be paid to such Participant (B)
reduce the principal, interest, fees or other amounts payable to such
Participant, or (C) release the Guarantor from the Guaranty. Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.09 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.12 as though
it were a Lender.

        (e)     A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
10.15 as though it were a Lender.

        (f)     Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Loan Notes, if any) to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

        (g)     If the consent of the Borrower to an assignment or to an
Eligible Assignee is required hereunder (including a consent to an assignment
which does not meet the minimum assignment threshold specified in clause (i) of
the proviso to the first sentence of Section 10.07(b)), the Borrower shall be
deemed to have given its consent five Business Days after the date notice
thereof has been delivered by the assigning Lender (through the Administrative
Agent) unless such consent is expressly refused by the Borrower prior to such
fifth Business Day.

        (h)     As used herein, the following terms have the following meanings:

        "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.

        "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural Person)
approved by the Administrative Agent, in the case of any assignment of a Loan,
and the L/C Issuer, and unless (x) such Person is taking delivery of an
assignment in connection with physical settlement of a credit derivatives
transaction or (y) an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed).

                                      95.
   102

        "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.

        (i)     Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 20 days' notice to the Borrower
and the Lenders, resign as L/C Issuer. The Borrower shall be entitled to appoint
from among the Lenders a successor L/C Issuer hereunder; provided, however, that
no failure by the Borrower to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer. Bank of America shall retain all
the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Loans or fund participations in
Unreimbursed Amounts pursuant to Section 2.03(c)).

        10.08   CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Borrower;
(g) with the consent of the Borrower; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; (i) to the National
Association of Insurance Commissioners or any other similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's or its Affiliates' investment portfolio in connection with ratings
issued with respect to such Lender or its Affiliates; or (j) to any Person from
time to time party (directly, or through any agent or trustee) to the
Intercreditor Agreement. For the purposes of this Section, "Information" means
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.



                                      96.
   103

        10.09   SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement
or any other Loan Document and although such Obligations may be contingent or
unmatured. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.

        10.10   INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations.

        10.11   COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        10.12   INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.

        10.13   SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the


                                      97.
   104

Administrative Agent or any Lender or on their behalf and notwithstanding that
the Administrative Agent or any Lender may have had notice or knowledge of any
Default or Event of Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.

        10.14   SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

        10.15   FOREIGN LENDERS. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Administrative Agent that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (a) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Person by the Borrower pursuant to this Agreement, (b) promptly
notify the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (c) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction. If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold any tax or other amount from payments made in respect of such Person,
such Person shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the payment of all Obligations and the
resignation or replacement of the Administrative Agent.



                                      98.
   105

        10.16   REMOVAL AND REPLACEMENT OF LENDERS.

        (a)     Under any circumstances set forth herein providing that the
Borrower shall have the right to remove or replace a Lender as a party to this
Agreement, the Borrower may, upon notice to such Lender and the Administrative
Agent, (i) remove such Lender by terminating such Lender's Commitment or (ii)
replace such Lender by causing such Lender to assign its Commitment (without
payment of any assignment fee) pursuant to Section 10.07(b) to one or more other
Lenders or Eligible Assignees procured by the Borrower; provided, however, that
if the Borrower elects to exercise such right with respect to any Lender
pursuant to Section 3.06(b), it shall be obligated to remove or replace, as the
case may be, all Lenders that have made similar requests for compensation
pursuant to Section 3.01 or 3.04. The Borrower shall (x) pay in full all
principal, interest, fees and other amounts owing to such Lender through the
date of termination or assignment (including any amounts payable pursuant to
Section 3.05), (y) provide appropriate assurances and indemnities (which may
include letters of credit) to the L/C Issuer as it may reasonably require with
respect to any continuing obligation to purchase participation interests in any
L/C Obligations then outstanding, and (z) release such Lender from its
obligations under the Loan Documents. Any Lender being replaced shall execute
and deliver an Assignment and Acceptance with respect to such Lender's
Commitment and outstanding Credit Extensions. The Administrative Agent shall
distribute an amended Schedule 2.01, which shall be deemed incorporated into
this Agreement, to reflect changes in the identities of the Lenders and
adjustments of their respective Commitments and/or Pro Rata Shares resulting
from any such removal or replacement. The Borrower may not under any
circumstances remove or replace the Lender that is the L/C Issuer without
causing such Lender simultaneously to be replaced as L/C Issuer and, causing
such Lender to be released from all liability in respect of then-outstanding
Letters of Credit; all pursuant to documentation in form and substance
satisfactory to such Lender.

        (b)     In order to make all the Lenders' interests in any outstanding
Credit Extensions ratable in accordance with any revised Pro Rata Shares after
giving effect to the removal or replacement of a Lender, the Borrower shall pay
or prepay, if necessary, on the effective date thereof, all outstanding Loans of
all Lenders, together with any amounts due under Section 3.05. The Borrower may
then request Loans from the Lenders in accordance with their revised Pro Rata
Shares. The Borrower may net any payments required hereunder against any funds
being provided by any Lender or Eligible Assignee replacing a terminating
Lender. The effect for purposes of this Agreement shall be the same as if
separate transfers of funds had been made with respect thereto.

        10.17   GOVERNING LAW.

        (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE



                                      99.
   106

COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW
YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN THE
JURISDICTION OF SUCH COURTS IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

        10.18   WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


                                      100.
   107



                                                                SCHEDULE 1.01(e)

                           EXISTING LETTERS OF CREDIT




- --------------------- ------------------ ------------------------- -------------- ---------------
   LETTER OF CREDIT      BENEFICIARY        U.S. DOLLAR AMOUNT       ISSUE DATE      EXPIRATION
       NO.                                        (AS OF                                DATE
                                             EFFECTIVENESS DATE)
- --------------------- ------------------ ------------------------- -------------- ---------------
                                                                      
      7504494           222 Riverside          $151,283.33           11/28/00        12/01/01
                       Plaza Corp c/o
     (Arbitron)           NY State
                          Teachers'
                         Retirement
                           System
- --------------------- ------------------ ------------------------- -------------- ---------------




                               1.

   108



                                                                SCHEDULE 1.01(i)

                         INITIAL PERMITTED INDEBTEDNESS



1.      Repayment obligations pursuant to the Letters of Credit described in
        Schedule 1.01(e).

2.      There are no existing capital leases.

3.      Final payment in the amount of three million dollars ($3,000,000) to
        Tapscan Inc. due on May 4, 2001 under the Asset Purchase Agreement dated
        May 4, 1998.




                               1.

   109



                                                                SCHEDULE 1.01(s)

                               SPIN-OFF DOCUMENTS

1.      The Form 10

2.      Amended and Restated Certificate of Incorporation of the Borrower

3.      Amended and Restated Bylaws of the Borrower

4.      Distribution Agreement dated on or before the Separation Date between
        the Borrower and New Ceridian (see Schedules below)

   
   

   Schedule        Description of Schedule
   --------        -----------------------

                
   1.1(o)          Conveyancing and Assumption Instruments

   1.1(g)          Debt Realignment Plan

   1.1(ff)         List of Divested Business Entities Relating to Arbitron Business

   1.1(gg)         December 31, 1999 Media Information Balance Sheet

   1.1 (ii)(iii)   Government Contracts Exclusively Relating to Media Information Business

   1.1 (ii)(iv)    Lease Agreements Relating to Media Information Business

   1.1(ll)         List of Certain Liabilities to remain with the Corporation after Spin-Off

   1.1(ll) A       List of Certain Liabilities to be Assumed by New Ceridian

   2.8(a)          Guarantees where Corporation (Arbitron Inc.) is to be removed as a Guarantor

   2.8(b)          Guarantees where New Ceridian is to be removed as a guarantor of a Media
                   Information Liability

   7.3(b)          Allocation of deductibles with respect to Shared Insurance Policies

   7.3(e)          Allocation of deductible for Workers' Compensation, General Liability and
                   Automotive Liability Claims

   8.5             Allocation of Expenses
   


5.      Personnel Agreement dated on or before the Separation Date between
        Arbitron and New Ceridian


                               1.

   110


6.      Tax Matters Agreement dated on or before the Separation Date between
        Arbitron and New Ceridian

7.      Transition Services Agreement dated on or before the Separation Date
        between Arbitron and New Ceridian

8.      Information Statement dated December 6, 2000 attached as Annex A to the
        Form 10

9.      Bill of Sale and Assumption Agreement, dated on or before the Separation
        Date, between the Borrower and the Parent.

10.     Real Estate Sublease Agreement, dated on or before the Separation Date,
        between the Borrower, as sub-lessor, and the Parent, as sub-lessee,
        related to the facilities located at 142 W. 57th Street, New York, New
        York.



                               2.
   111


                                                                   SCHEDULE 2.01

                                   COMMITMENTS
                               AND PRO RATA SHARES




                  LENDER                           COMMITMENT                  PRO RATA SHARE
- ------------------------------------------- -------------------------- -------------------------------

                                                                         
Bank of America, N.A.                              $40,000,000                 17.777777778%

Fleet National Bank                                $40,000,000                 17.777777778%

The Chase Manhattan Bank                           $30,000,000                 13.333333333%

U.S. Bank National Association                     $30,000,000                 13.333333333%

The Bank of New York                               $20,000,000                  8.888888889%

BNP Paribas                                        $20,000,000                  8.888888889%

Bear Stearns Corporate Lending Inc.                $15,000,000                  6.666666667%

Citizens Bank of Massachusetts                     $15,000,000                  6.666666667%

The Royal Bank of Scotland plc                     $15,000,000                  6.666666667%
- ------------------------------------------- -------------------------- -------------------------------

Total                                             $225,000,000                      100%
- -----                                             ------------                      ----
- ------------------------------------------- -------------------------- -------------------------------




                               1.

   112


                                                                   SCHEDULE 5.05

                        LITIGATION AFFECTING LOAN PARTIES

        The following information is provided regarding various matters in
litigation involving the Borrower and the Subsidiaries of the Borrower. The
information provided includes matters where the plaintiff has alleged damages in
an amount that exceeds $5,000,000 or where such damages are currently unknown,
but could potentially exceed $5,000,000, and excludes threatened litigation
where the threatening party or parties specified no Dollar threshold. Inclusion
of any matter on the lists provided below shall not be deemed a conclusion on
the part of the Borrower or its Subsidiaries that an adverse determination in
connection with such matter is likely or expected, or that such a determination
would necessarily result in a Material Adverse Effect. Terms not otherwise
defined in this Schedule are used herein as defined in the Agreement.

1.      Flying J, Inc. v. Comdata Network, Inc. and Trendar Corporation, et. al.
In July 1996, Comdata was sued in the U.S. District Court for the Northern
District of Utah by Flying J, an operator of a large chain of truck stops and
formerly a significant Comdata customer. The complaint alleges violations of
various antitrust laws, tortious interference with contract and unfair
competition. Specifically, Flying J alleges that Comdata's market position in
the transportation industry caused Flying J's agreement(s) with another truck
stop chain to deploy point-of-sale authorization devices and truck driver
service kiosks to unravel. Comdata filed a motion to dismiss, stay or transfer
this case to the U.S. District Court for the Eastern District of Tennessee where
Comdata had previously filed suit against Flying J in April 1996, seeking a
temporary restraining order and, later, a permanent injunction to prevent Flying
J from misappropriating certain confidential and proprietary information of
Comdata, including misuse of Comdata's Comchek card numbers. Although the
temporary restraining order was granted by the Tennessee court and remained in
place through mid-December 1996, the Tennessee court declined to issue a
permanent injunction and the Tennessee case, accordingly, was dismissed. The
plaintiff filed an amended complaint in the Utah case in mid-January 1997. In
January 1999, plaintiffs filed a second and third amended complaint seeking to
add claims for interference with contractual relations with NCR and NTS, Inc.
Plaintiffs' expert report has been filed under seal. A motion is pending to have
the court reconsider its denial of plaintiffs' motion the Borrower as a party.
Similar motions have been denied twice previously. Meanwhile, plaintiffs have
sued the Borrower separately, repeating the same allegations made against
Comdata. The complaint was accompanied with a motion to stay following the
Borrower's answer. Ceridian has answered and is pursuing dispositive motions to
dismiss. Ceridian believes that the separate suit filed against it is subject to
various affirmative defenses, including, without limitation, lack of standing,
laches, unclean hands, no damages as a result of conduct of the Borrower and
statute of limitation defenses, and in addition the Borrower does not believe
that suit reaches the damages thresholds specified above. The suit is disclosed
only to provide a complete description of the current circumstances. The lawsuit
against Comdata is currently scheduled for a four-week trial beginning in June
2001.


2.      Fortune Funding LLC, et al. v. Ceridian Corporation. On July 28, 2000
the owner of the Borrower's former headquarters building sued the Borrower in
the United States District Court for the District of Minnesota. The complaint
alleges breach of contract, violation of Minn. Stat.

                               1.
   113

561.17, common law waste, intentional and negligent misrepresentation, and
violation of the consumer fraud act.

3.      The Huntington National Bank v. ABR Benefits Services, Inc. The
Huntington National Bank sued ABR Benefits Services in Circuit Court, Pinellas
County, Florida. Plaintiff terminated their contract with ABR and claims breach
of contract and wrongful retention of hardware and software. ABR's professional
liability carrier is paying costs. The matter is currently in the discovery
phase.


                               2.

   114


                                                                   SCHEDULE 5.07

                                ERISA COMPLIANCE

Not Applicable.



                               1.
   115


                                                                   SCHEDULE 5.10

                             CONTINGENT OBLIGATIONS

1.      Reimbursement obligations relating to letters of credit set forth in
Schedule 1.01(e).

2.      Contingent Obligations arising in connection with the Borrower's
guarantee of the obligations of New Ceridian under the New Ceridian Credit
Agreement.

3.      The Borrower's obligations to pay certain obligations as expressly set
forth in the Spin-Off Documents.

4.      Existing Contingent Obligations relating to a $1,200,000 letter of
credit required by Liberty Sites, Ltd., the landlord of the Montreal, Canada
facilities, and Contingent Obligations related to a guaranty of the account
party's obligations in respect thereto, given to the issuing bank (CIBC) by the
Borrower as of the Effectiveness Date, and by New Ceridian on the Closing Date.

5.      Existing Contingent Obligations of $100,000 relating to the obligations
of Resumix (a divested subsidiary) under a switchboard lease/purchase.

6.      Existing Contingent Obligations of $18,900,000 under surety bonds
primarily relating to various licensing or permitting requirements of Comdata
(and its subsidiaries) for fuel tax, ATM, check cashing and related matters.

7.      Existing Contingent Obligations of $900,000 under performance guarantees
of Empros (a divested business operation) in Mexico, as to which the Borrower
has a "back-up" indemnity from Siemens, the acquiror of Empros.

8.      Existing Guarantees by the Borrower as of the Effectiveness Date, as
described in Schedule 1.01(i), by New Ceridian as of the Closing Date, in
substantially the form of Exhibit E, and by the Borrower's domestic Material
Subsidiaries, in substantially the form of Exhibit F.

9.      Contingent Obligations relating to a $2,000,000 Letter of Credit (the
amount subject to rescission) issued under the Existing Credit Facility and to
be reissued under the New Ceridian Credit Agreement.

10.     Contingent Obligations arising in connection with the Borrower's
guarantee to landlords in respect of 5 sales office locations leased by CCL (no
sum certain), which guarantees were executed on March 10, 1998.

11.     Contingent Obligations arising in connection with the Borrower's
guarantee in the amount of $1,103,170 to IBM Canada, LTd of obligations of CCL,
which guarantee was executed on December 7, 1998 and expires on January 1, 2003.

12.     Contingent Obligations arising in connection with the Borrower's
guarantee in the amount of $3,000,000 to CIBC of obligations of Pernicom, which
guarantee was executed on August 27, 1999.


                               1.



   116

13.     Contingent Obligations arising in connection with the Borrower's
customer guarantee for no sum certain to Asda of obligations of Centre-File,
which guarantee was executed on September 5, 1997.

14.     Contingent Obligations arising in connection with the Borrower's
overdraft guarantee for no sum certain to National Westminster of obligations of
Centre-File, which guarantee was executed on August 18, 1997.

15.     Contingent Obligations arising in connection with the Borrower's
landlord guarantee in the amount of $34,000 to Kingsway Group PLC of obligations
of CCP, which guarantee was executed on July 1, 2000 and expires on December 24,
2002.

16.     Contingent Obligations arising in connection with the Borrower's
customer guarantee for no sum certain to Exxon Card Services of obligations of
LAES/Comdata, which guarantee was executed on September 24, 1997 and expires on
September 24, 2002.

17.     Contingent Obligations arising in connection with the Borrower's
customer guarantee for no sum certain to Exxon Card Services of obligations of
SVS/Comdata, which guarantee was executed on March 1, 1999 and expires on March
1, 2004.

18.     Contingent Obligations arising in connection with the Borrower's
guarantee for no sum certain to IBM of obligations of Comdata, which guarantee
was executed on June 30, 1998.

19.     Contingent Obligations arising in connection with the Borrower's
landlord guarantee for no sum certain to Norwestern Mutual Insurance of
obligations of Comdata.

20.     Contingent Obligations arising in connection with the Borrower's
guarantee in the amount of $0 to AmSouth (1st American) of obligations of
Comdata, which guarantee was executed on September 4, 1998.

21.     Contingent Obligations arising in connection with the Borrower's
guarantee in the amount of $0 to Chase Manhattan Bank of obligations of
PowerPay.com, which guarantee was executed on October 1, 1999.

22.     Contingent Obligations arising in connection with the Borrower's
guarantee in the amount of $575,000 to Amplicon of obligations of Usertech,
which guarantee was executed on November 3, 2000 and expires on November 1,
2003.



                               2.

   117


                                                                   SCHEDULE 5.11

                              ENVIRONMENTAL MATTERS

        The following information is provided regarding various matters relating
to Environmental Laws, Environmental Claims and Hazardous Materials involving
the Borrower and its Subsidiaries. Inclusion of any matter on the lists provided
below shall not be deemed a conclusion on the part of the Borrower that such
matter would or could reasonably be expected to result in a Material Adverse
Effect. Terms not otherwise defined in this Schedule are used herein as defined
in the Agreement.

1.      Printed Circuits Operations, St. Louis Park, Minnesota. Groundwater
contamination was discovered at the printed circuits facility formerly operated
by the Borrower's Computer Products division in St. Louis Park. Despite the sale
of the printed circuits business and the transfer of the St. Louis Park real
estate to CD Systems in connection with the spin-off of CD Systems, the Borrower
remains responsible for environmental matters related to this site. A consent
order was signed with the Minnesota Pollution Control Agency ("MPCA") which
obligates the Borrower to perform MPCA-approved remedial actions. The MPCA has
accepted the Borrower's proposed remedial alternative involving the treatment
and discharge of contaminated groundwater, and has issued a record of decision
setting the recommended cleanup levels for the groundwater. A response action
plan was submitted and approved and remediation facilities have been in
operation since July 1990. Groundwater clean up has progressed to the point
where the site is expected to start the closure and delisting process within the
next 1-2 years. CD Systems is pursuing a sale of this property. The remaining
cost of implementing remedial actions was most recently estimated by management
to be under $500,000.

2.      Imprimis/Seagate Environmental Matters. The Borrower has agreed to
indemnify Seagate against a portion of environmental liabilities relating the
Imprimis facilities and sites where Imprimis may have disposed of hazardous
materials, to the extent such liabilities relate to occurrences that predate the
sale of Imprimis to Seagate, and to the extent such liabilities exceed the
amount of applicable reserves on the closing balance sheet of Imprimis. Because
those reserves have been exhausted, the Borrower is responsible for up to $8.2
million of the next $9.2 million of such liabilities, and for 50 percent of such
liabilities beyond that amount, with a maximum indemnification obligation of
$15.7 million. The Borrower has paid approximately $8.2 million to Seagate
pursuant to this indemnity through mid-2000. The Borrower has established
reserves for the full amount of its remaining liability with respect to this
indemnification undertaking.

3.      Chemical Marketing Corporation of America. In April and May 1999, MPCA
has requested information, under the Minnesota Environmental Response and
Liability Act regarding the possible release of hazardous substances or
pollutants of contaminants at the Chemical Marketing Company of America Site,
previously located at 180 Humboldt Avenue North, Hennepin County, Minneapolis.
The Borrower's initial review of its documents shows that it had shipped
hazardous waste from its former VTC subsidiary's location at 2800 E. Old
Shakopee Road, Bloomington, MN back in the early 1980's. The Borrower has
responded to the requests and is in discussion with MPCA and other PRPs
regarding site clean up. Total clean up


                               1.

   118

costs are estimated by management to be between $660,000 to $1,400,000. The
Borrower has adequate reserves available to cover anticipated clean up costs.

4.      Spring Grove, Minnesota. After detecting low levels of contamination in
two municipal wells in Spring Grove, the MPCA requested information from the
Borrower and Northern Engraving Corporation ("NEC") regarding a facility in
Spring Grove operated by the Borrower from 1965 to 1971 and since that time by
NEC. The Borrower and NEC subsequently entered into a consent order with the
MPCA pursuant to which the Borrower and NEC are implementing certain remedial
actions and have reimbursed the MPCA for 75% of its past costs in connection
with this matter. Estimated future costs for the Borrower under the consent
order may be as much as $500,000 over a period of as much as thirty years.

5.      Freeway Sanitary Landfill, Burnsville, Minnesota. In April 1994, the
Borrower received a request for information from the MPCA regarding the
Borrower's connection with this landfill. Apparently groundwater contamination
has been discovered in connection with this facility. The Borrower's
investigation to date suggests that some waste materials generated by the
Borrower were disposed of at this landfill during the relevant time period
(1969-1990) in accordance with applicable law. In 1996, the State of Minnesota,
under the Minnesota Landfill Cleanup Law, assumed responsibility for all further
response actions at the site. The Landfill Cleanup Law requires the Borrower to
preserve its rights to insurance coverage for cleanup costs at the site.

6.      Oak Grove Landfill, Anoka County, Minnesota. This landfill in Anoka
County, Minnesota, closed in 1984, was the subject of an investigation by the
EPA and MPCA for several years. The Borrower's involvement with the site,
allegedly as a result of utilizing a transporter who disposed of waste at the
landfill, was relatively small. Nevertheless, the Borrower joined an Oak Grove
PRP group, which has negotiated a consent decree with the EPA. The Borrower
contributed approximately $250,000 to the PRP group and does not expect to make
any significant future payments with respect to this site. In 1996, the State of
Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for
all further response actions at the site. The Landfill Cleanup Law requires the
Borrower to preserve its rights to insurance coverage for cleanup costs at the
site. The State of Minnesota has recently brought a lawsuit against the
insurance companies and has subpoenaed all applicable records from PRP.

7.      Isanti County, Minnesota. In the 1991 settlement of a civil action filed
in the U.S. District Court for Minnesota, the Borrower and nine other parties
agreed to reimburse the EPA and the MPCA for costs incurred in the surface
cleanup of five waste disposal sites in Isanti County, and to create a
remediation fund to conduct remedial activities at the sites for a period of 12
years, at which time the State of Minnesota would take over the sites. The
Borrower has paid its share of these amounts. The settlement agreement also
provides that unless new information is discovered during the 12 year period
that indicates the seven settling PRPs have in the past been responsible for any
additional contamination at these sites, the settling PRPs would obtain a full
release from the State at the conclusion of the 12 year period.

8.      Ecolotech, Minneapolis and St. Paul, Minnesota. Prior to 1987, the
Borrower shipped wastes to Ecolotech, which operated facilities in Minneapolis
and St. Paul. Soil and groundwater contamination where discovered at the sites
and a consent order was entered into by the generators (including the Borrower)
with the MPCA in 1987. Remedial efforts specified for the



                               2.

   119

sites have been completed. The Borrower is awaiting termination of the consent
order by the MPCA.

9.      Hopkins Landfill, Hopkins, Minnesota. In March 1994, the Borrower
received a letter from the City of Hopkins identifying the Borrower as having
used the Hopkins Landfill for disposal of waste and seeking reimbursement of
methane remediation costs. The City then placed a "hold" on its reimbursement
request until the state legislature passed the Landfill Cleanup Law. In July
1996, the Borrower received a request from MPCA for information regarding the
Borrower's connection with this landfill. The records search to date has not
uncovered any disposal records for the Hopkins Landfill. The State of Minnesota,
under the Minnesota Landfill Cleanup Law, has assumed responsibility for all
further response actions at the site. The Landfill Cleanup Law requires the
Borrower to preserve its rights to insurance coverage for cleanup costs at the
site.

10.     Other. The Borrower has identified certain of its facilities that
contain asbestos containing materials ("ACM"). As to such facilities, it is the
Borrower's policy and practice, in accordance with applicable Environmental
Laws, to manage ACM in place or remove it when necessary. The Borrower is also
aware of underground storage tanks located in its Comdata subsidiary facilities
in Brentwood, Tennessee and Newberry, South Carolina which are being utilized in
accordance with applicable Environmental Laws.



                               3.
   120


                                                                   SCHEDULE 5.17

                 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION

(a)

                (i)     TVScan software and trademark license dated May 1, 1998
        from Tapscan Inc. to Arbitron for its exclusive use in the radio, agency
        and advertising industries worldwide and the television and cable
        industries outside the U.S. TVScan processes and provides custom
        analysis reports of television viewing data.

                (ii)    Software used for internal business: See 4(d) below.

                (iii)   License agreement between Arbitron and Claritas Inc. for
        PRIZM/Clusters (population) data.

                (iv)    License agreement between Arbitron and Market Statistics
        for demographic and economic data.

                (v)     Software license agreement dated July 17, 2000 between
        Ceridian and Lariat Software, Inc. for software to be used in Borrower's
        services or processes.

                (vi)    Software license agreement between CSW Research Ltd.,
        and outside third parties. The licensed software is used in connection
        with survey research, including questionnaire design, automated
        telephone dialing, and data analysis. All agreements listed are for a
        one year term and are auto renewing for a like term.

        (b)     None.

        (c)     See Schedule 5.05, Item 3.

        (d)     See the list below.


ACT
Add Strip
Adobe Acrobat 4
ADOBE ACROBAT FULL
Adobe After Effects 4
Adobe Illustrator 6
Adobe Illustrator 7
Adobe PageMaker 6.5
Adobe Photoshop 5.5, 6 and 5LE
Adobe Type Manager Deluxe and Lite 4.6
Alladin StuffIt Deluxe 5.5
Allaire Cold Fusion 4
Apple OS 8.6 and 9.0.4
ARCSERVE


                               1.

   121

ASPChart Charting Component
ATAMAN TELNET
ATLAS GIS
AUDIX VOICEPOWER
BackupEXEC
BARSPOOL
C++/DEC
CAS FOR WINDOWS
CDR
CLIENTS & PROFITS
Clients & Profits 4.0

CODE1+
COLD FUSION
COMPARERITE
Corel Draw 6
CRYSTAL INFO
CUTEFTP
DATAJET
DB BRZ
DBASE IV
DEFINITY G1
Deltagraph 4.5
DESIGNER
DEVELOPER
DOC1/DEC
DOC1/NT
DTC MANAGER
EDIFY
EXCEED6
Extensis Portfolio 5
Extensis Suitcase 8 and 9
EZCASE
EZFLOW
Fetch 3.03
FileMaker Pro 3, 4 and 5
FOREHELP
FREELANCE GRAPHICS
GEMBASE
GEOCODER
GHOST
GOLDMINE
HELPDESK
HP UNIX
HYPERION
IMAGE PRO


                               2.

   122

IMAGEBASIC
IMAGEKEY
JAVA/DEC
Kai's Power Tools 3
KAWA
LAN WORKGROUP
LAN WORKPLACE
LAWSON INSIGHT
LEAD TOOLS
LEXMARK TOOLKIT
LISTCONV
LOTUS 1-2-3 V4.0
LOTUS 1-2-3 V5.0
LWP PRO 95/NT
MacLink Plus 9.7.1 through 11
Macromedia Dreamweaver 3 and 4
Macromedia Fireworks 3
Macromedia Flash 4 and 5
Macromedia Fontographer 4.1.5
Macromedia Freehand 8.01 and 9
MAILSTREAM
MCAFEE VIRUS SCAN
MEDIAMAX
MICRO FOCUS COBOL
MICRO FOCUS COBOL\DEC
MICROSOFT ACCESS
MICROSOFT EXCEL
MICROSOFT FOXPRO
MICROSOFT FRONTPAGE
Microsoft Internet Explorer 5
MICROSOFT OFFICE 2000
Microsoft Office 98 for Mac
MICROSOFT OFFICE PRO
MICROSOFT OFFICE97
MICROSOFT OFFICE97
Microsoft Outlook Exchange 8.2.1
Microsoft Outlook Express 5
MICROSOFT PROJECT
MICROSOFT PUBLISHER
MICROSOFT VB
MICROSOFT VFOXPRO
MICROSOFT VISSTUDIO
MICROSOFT WIN 2000
Microsoft Windows Media Player
MICROSOFT WORD
MICRPSOFT POWERPNT


                               3.
   123

MITEK ICR/OCR
MS IIS
MS INTERNET EXPLORER
Netscape Communicator 4.7 and 6
NETWARE
NFS Maestro
Norton AntiVirus 5 and 6
Norton Utilities 4 and 5
ODBC FOR OS/2
ODBC FOR WINDOWS
ORACLE/NT
ORACLE/DEC
OS/2 LAN REQUESTER
OS/2 LAN SERVER
PAGEMAKER
PARADOX
PcAnywhere
PHOTOSHOP
PIXTOOLS/EZ
PIXTOOLS/IMAGE PROC
PKZIP/PKUNZIP
Pocket Ethernet Adapter III
PowerBuilder Desktop
PowerBuilder Professional
PowerPoint
PPI Modem Utilities
Project
PROMIX
ProtoView
PROXY
PVCS DEC
PVCS TRAKKER
PVCS Version Manager
PVCS\PC Columbia
PVCS\PC New York
QA Plus
QA Plus
QBAL
Quark Express 3.32
Quick Xpense
Quicken ExpensAble
QuickLink II Fax
QuickLink II Windows and DOS
Quancept CATI
Quanquest
Quantum


                               4.
   124

Quanvert
Quanvert DBA
Quicktime
Quinput
Quinput DOS
REELBACKUP
REELIBRARIAN
REFLECTIONS FOR HP
ReFox
Removable Cartridge Disk Utilities
Roadmap to Developer Products and Services
ROBO HELP
ROBOT
ROLM CBXII
ROLM PHONEMAIL
RTPatch for InstallShield Professional
SALES TAX
Sanyo Boot Floppy
SAS
SAVEU2
SCO Unix Driver for AHA
SCSI Interface Kit
SCSI Network Manager
SCSI Pro!
SDK's, DDK's, and Operating Systems
SEAGATE CRYSTAL REPT
Serv-U FTP Server
Sheridan Developer's Toolkit
SideBar Try-n-Buy
Sidekick
SMARTGATE
SmartSuite 97
SmartSuite ATM Program Disk
SMAX
Solutions Development Kit
Sound Blaster 16 Software
Special Enhancements R410
Spread
SPSS
SQLNET
SQLNET FOR OS/2
SQLPLUS
SQZ!
Stacker
Stacker
Stacker


                               5.
   125

Stacker
Stealth 64
Stealth 64 DRAM
Stealth 64 Video
Stealth II S220
Stealth II S220 Game Sampler CD
Stealth VRAM
Stonefield Database Toolkit
Superdisk for EtherCard
SYLVAN MAPS
SYNCSORT
SYSTEM COMMANDER
T4900 Reference Manual
Tab Pro
TCP/IP
TCP/IP DOS
TCP/IP OS2
Tech Net
TELEMATE
TELETHENA
Test
TEXTPAD
ThinkPad Bundle
Tools and Systems
TOTAL ACCESS STATS
Track for Windows
TrackMate
TRU64 UNIX DEC
TRUE DB GRID PRO 5.0
True DBGrid Pro
True DBGrid Pro VC++
UNIFACE
VBAssist
Vibra 16
Video for Windows Runtime
View for Windows
Viper V330
Viper VLB
VISIO
VISIO NETWORK EQ 2000
Visio Professional
Visio2000 Professional
Vistacom
VISUAL BASIC
Visual Basic Professional
Visual C++


                               6.
   126

Visual C++ Power Tools
Visual C++ Subscription
Visual Components
Visual FoxPro
Visual FoxPro Professional Edition
Visual FoxPro Professional Training Series
Visual FoxPro Windows Professional
Visual FoxPro Windows Standard
Visual J++ Technology Preview 2
Visual Studio 97 Service Pack 3
Visual Studio Enterprise Edition
Visual Studio MSDN Library
Visual Studio Professional Edition
Visual Studio Professional Edition Licenses
Visual Test
VSFlexGrid Pro
VS-OCX
WEBBASE
Windows
WINDOWS 3.51
WINDOWS 95
Windows 95
Windows 95, Win32 SDK
Windows 95, Win32 SDK and Windows NT
Windows 95, Win32 SDK, Backoffice 1.5 SDK
Windows 98
Windows for Workgroups/DOS
WINDOWS NT 4.0 Clients
WINDOWS NT 4.0 Servers
WINDOWS NT 4.0 W/S
Windows NT Server
Windows NT Server
Windows NT Workstation
Windows NT Workstation, Win32 SDK, Windows
NT
 DDK
Windows Sound System
Winfax Lite
Winfax Pro
Winfax Pro Patch
WinLib Wizard
WinList for Windows
Winstone 94
Winzip
Wordperfect
Workgroup Add-On for Windows



                               7.
   127

XTree Gold
XTree Gold
zip Install
zip tools 100




        (e)     None.

        (f)     None.

        (g)     Material Software owned and used by Arbitron:

                (i)     Maximi$er/MediaProfessional (owned by Arbitron);
        performs research and sales analysis using respondent-level radio
        audience estimate data.

                (ii)    Tapscan (owned by Arbitron); processes respondent-level
        and summary-level radio audience estimate data.

                (iii)   Qualitap (owned by Arbitron); processes qualitative
        data.

                (iv)    TV Qualitap (owned by Arbitron and licensed to Tapscan
        Inc. for its exclusive use in the television and cable industries in the
        U.S.); processes qualitative data.

                (v)     TVScan software (owned by Tapscan Inc. and licensed to
        Arbitron for its exclusive use in the radio, agency and advertising
        industries worldwide and the television and cable industries outside the
        U.S.)


Note: Copyright registration applications were filed on Form TX in the U.S.
Copyright Office for Maximi$er (a/k/a MediaProfessional), Tapscan, TVScan and
Qualitap on December 18, 2000. Copyright registration applications were filed on
December 28, 2000 for Borrower's internal software used to produce its ratings
data..

                               8.
   128


                                                                   SCHEDULE 5.19

                              EMPLOYMENT AGREEMENTS

        There is currently an employment agreement with Stephen B. Morris.
Borrower's policy for its Arbitron division prior to the Spin-Off Consummation
Date is that members of the Arbitron Executive Staff are generally eligible to
receive up to one year's salary as severance in the event of termination of
employment for reasons other than for cause. It is expected that change of
control agreements will be entered into with members of the Executive Staff of
Arbitron Inc. after the Spin-Off Consummation Date.



                               1.
   129


                                                                   SCHEDULE 5.21

                          CAPITALIZATION; SUBSIDIARIES

                               Information as of the Effectiveness Date

        1.      Borrower's capitalization as of the Effectiveness Date:

                No. shares authorized: 500,000,000

                No. shares issued: 161,685,596

                No. shares outstanding: 145,681,462

                Please note that the shares listed above are subject to a
reverse stock split at a ratio of one-for-five. The reverse stock split will be
effective immediately after the Spin-Off Consummation Date.



        2.      Following is a list of Borrower's Subsidiaries as of the
Effectiveness Date:





- -------------------------------------- ---------------------- --------------------- --------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- -------------------------------------- ---------------------- --------------------- --------------
                                                                           
Arbitron Holdings Inc. (First Tier     Delaware               100%                  1000/1000
Arbitron subsidiary) formed in
October 2000
- -------------------------------------- ---------------------- --------------------- --------------

    CSW Research Ltd. (Second Tier     United Kingdom         100%                  410,000/
    Subsidiary of Arbitron Holdings,
    Inc.)                                                                           405,000
- -------------------------------------- ---------------------- --------------------- --------------

Euro-Fieldswork Ltd. (First Tier       United Kingdom         100%                  No shares yet
Arbitron Subsidiary)                                                                authorized nor
                                                                                    issued
- -------------------------------------- ---------------------- --------------------- --------------

Ceridian Infotech (India) Private      India                  100%                  8,400,000/
Limited  (First Tier Arbitron
Subsidiary)                                                                         1,712,374
- -------------------------------------- ---------------------- --------------------- --------------

ABR Information Services, Inc.         Florida                100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    ABR Employer Services, Inc.        Florida                100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    ABR Properties, Inc.               Florida                100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    BMC Consultants, Inc.              Colorado               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------




                               1.
   130





- -------------------------------------- ---------------------- --------------------- --------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- -------------------------------------- ---------------------- --------------------- --------------
                                                                           
    Ceridian Benefits Services, Inc.   Florida                100%                  N/A

    (f/k/a ABR Benefits Services,
        Inc.)
- -------------------------------------- ---------------------- --------------------- --------------

    Ceridian Retirement Plan           Florida                100%                  N/A
    Services, Inc.

    (f/k/a ABR Retirement Plan
    Services, Inc.)
- -------------------------------------- ---------------------- --------------------- --------------

    Charing Company, Inc.              Wisconsin              100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Chowning, Ltd.                     Wisconsin              100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

        The Barrington Group           Wisconsin              100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Matthews, Malone & Associates,
    Ltd.                               Arizona                100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    MidAtlantic 401(k) Services, Inc.  Virginia               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Western Pension Service            California             100%                  N/A
    Corporation
- -------------------------------------- ---------------------- --------------------- --------------

        Ceridian Investors Advisors,   Florida                100%                  N/A
        Inc.

        (f/k/a ABR Investment
        Advisors, Inc.)
- -------------------------------------- ---------------------- --------------------- --------------

Arbat Middle East E.C. (held in        Bahrain                100%                  N/A
trust) (inactive)
- -------------------------------------- ---------------------- --------------------- --------------

Ceridian Canada Holdings, Inc.         Delaware               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Ceridian Canada Ltd.               Canada                 100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

        33444651 Canada Ltd.           Canada                 100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Ceridian Performance Partners      Canada                 100%                  N/A
    Ltd.
- -------------------------------------- ---------------------- --------------------- --------------

Ceridian Holdings U.K. Limited         United Kingdom         100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Centrefile Limited                 United Kingdom         100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

        Centrefile APS Limited         United Kingdom         100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

        Centrefile (Mauritius) Ltd.    Mauritius              100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Ceridian Performance Partners      United Kingdom         100%                  N/A
    Limited
- -------------------------------------- ---------------------- --------------------- --------------

        Usertech UK Limited            United Kingdom         100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------




                               2.
   131


- -------------------------------------- ---------------------- --------------------- --------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- -------------------------------------- ---------------------- --------------------- --------------

                                                                           
Ceridian Tax Services, Inc.            California             100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

Comdata Network, Inc.                  Maryland               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Comdata Network Inc. of            California             100%                  N/A
    California
- -------------------------------------- ---------------------- --------------------- --------------

    Comdata Telecommunications         Delaware               100%                  N/A
    Services, Inc.
- -------------------------------------- ---------------------- --------------------- --------------

    International Automated Energy     Florida                100%                  N/A
    Systems, Inc.
- -------------------------------------- ---------------------- --------------------- --------------

    Permicom Permits Services, Inc.    Canada                 100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

    Stored Value Systems, Inc.         Delaware               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

Computing Devices International        Delaware               100%                  N/A
Satellite Services, Inc.
- -------------------------------------- ---------------------- --------------------- --------------

Partnership Group, Inc., The           Pennsylvania           100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

Plan Ware Inc. (inactive)              Pennsylvania           100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------

POWERPAY.COM INC.                      New Jersey             100%                  N/A

(f/k/a Ceridian Small Business
Solutions, Inc.)
- -------------------------------------- ---------------------- --------------------- --------------

User Technology Services, Inc.         New York               100%                  N/A
- -------------------------------------- ---------------------- --------------------- --------------




3.      Following is a list of Borrower's Arbitron Subsidiaries as of the
        Effectiveness Date:



- ------------------------------------------------- ------------------------------------------------
SUBSIDIARY                                          STATE OR OTHER JURISDICTION OF ORGANIZATION
- ------------------------------------------------- ------------------------------------------------

- ------------------------------------------------- ------------------------------------------------
                                               
Arbitron Holdings Inc.                            Delaware
- ------------------------------------------------- ------------------------------------------------
    CSW Research Limited
                                                  United Kingdom
- ------------------------------------------------- ------------------------------------------------
    Euro-Fieldwork Limited
                                                  United Kingdom
- ------------------------------------------------- ------------------------------------------------

Ceridian Infotech (India) Private Limited         India
- ------------------------------------------------- ------------------------------------------------



                               3.



   132

4.      Following is a list of Borrower's Material Subsidiaries as of the
        Effectiveness Date:



- ------------------------------------------------- -----------------------------------------------
MATERIAL SUBSIDIARIES                             STATE OR OTHER JURISDICTION OF ORGANIZATION
- ------------------------------------------------- -----------------------------------------------
                                               
ABR Information Services, Inc.                    Florida
- ------------------------------------------------- -----------------------------------------------
Comdata Network, Inc.                             Maryland
- ------------------------------------------------- -----------------------------------------------



                Information as of the Spin-Off Consummation Date

1.      Following is a list of Borrower's Arbitron Subsidiaries after the
Spin-Off Consummation Date:



- ------------------------------- --------------------------- --------------------- ---------------
                                                               PERCENTAGE OF      NO. OF SHARES
                                      STATE OR OTHER         VOTING SECURITIES     AUTHORIZED/
                                     JURISDICTION OF        OWNED BY IMMEDIATE       ISSUED &
SUBSIDIARY                             ORGANIZATION                PARENT          OUTSTANDING
- ------------------------------- --------------------------- --------------------- ---------------
                                                                        
Arbitron Holdings Inc.          Delaware                    100%                  1000/1000
- ------------------------------- --------------------------- --------------------- ---------------
    CSW Research Limited                                                          410,000/
                                United Kingdom              100%                  405,000
- ------------------------------- --------------------------- --------------------- ---------------
    Euro-Fieldwork Limited                                                        No shares yet
                                United Kingdom              100%                  authorized
                                                                                  nor issued
- ------------------------------- --------------------------- --------------------- ---------------
                                                                                  8,400,000/
Ceridian Infotech (India)
Private Limited                 India                       100%                  1,712,374
- ------------------------------- --------------------------- --------------------- ---------------



2.      There will not be any Material Subsidiaries of the Borrower as of the
Spin-Off Consummation Date.




                               4.
   133


                                                                   SCHEDULE 5.23

                       BROKERS' FEES AND RELATED EXPENSES

None.



                               1.
   134


                                                                   SCHEDULE 5.25

                              THIRD PARTY CONSENTS

None.



                               1.
   135


                                                                   SCHEDULE 7.01

                                 PERMITTED LIENS

None.



                               1.
   136


                                                                SCHEDULE 7.02(b)

                             PERMITTED TRANSACTIONS

1.      Sale of assets of Ceridian Infotech (India) Private, Limited

2.      Sale of assets of CSW Research Limited

3.      Dissolution of Euro-Fieldword Limited

3.      Separation ("Spin-off") of Ceridian Corporation into two publicly traded
companies to be known as Ceridian Corporation and Arbitron Inc., respectively,
pursuant to Spin-off documents.





                               1.
   137


                                                                SCHEDULE 7.06(b)

                              PERMITTED INVESTMENTS

1.      The following is a list of the Investments of the Borrower and its
Subsidiaries (other than Investments in Subsidiaries) as of the Effectiveness
Date:




- ------------------------------ ------------------ ----------------------- -----------------------
                               STATE OR OTHER
                               JURISDICTION OF    PERCENTAGE OF VOTING
COMPANY                        INCORPORATION      SECURITIES OWNED       ARBITRON INVESTMENT
- ------------------------------ ------------------ ----------------------- -----------------------

                                                                 
Barrios Technology, Inc.       Texas              9.9%                    0
- ------------------------------ ------------------ ----------------------- -----------------------

Buyers' Health Care Action     Minnesota          9.3%                    0
Group, Inc.
- ------------------------------ ------------------ ----------------------- -----------------------

HotJobs.com, Ltd.              Delaware           1.4%                    0
- ------------------------------ ------------------ ----------------------- -----------------------

Revelation Technologies, Inc.  Delaware           7.4%                    0
- ------------------------------ ------------------ ----------------------- -----------------------

TruckersB2B, Inc.              Delaware           800,000 shares          0
- ------------------------------ ------------------ ---------------------- ------------------------

                               Delaware           13.75%                 1994:   $2,000,000
                                                                         1995:   $1,000,000
ADcom Information Services,                                              1996:   $1,585,000
                                                                         ------------------
Inc.                                                                     Total:   $4,585,000
- ------------------------------ ------------------ ---------------------- ------------------------

The Center for Online
Learning, Inc.                 Florida            2.8%                   2000:   $2,000
- ------------------------------ ------------------ ---------------------- ------------------------

Symmetrical Holdings, Inc.     Florida            7.5%                   1997:     $900,000
(f/k/a Symmetrical Resources                                             1998:     $500,000
                                                                         ------------------
Corporation)                                                             Total:  $1,400,000
- ------------------------------ ------------------ ---------------------- ------------------------



2.      The following is a list of the Investments of the Borrower and its
Subsidiaries (other than Investments in Subsidiaries) as of the Spin-Off
Consummation Date:



- ------------------------------------------ ------------------------------------------------------
COMPANY                                    STATE OR OTHER JURISDICTION OF INCORPORATION
- ------------------------------------------ ------------------------------------------------------
                                        
ADcom Information Services, Inc.           Delaware
- ------------------------------------------ ------------------------------------------------------
The Center for Online Learning, Inc.       Florida
- ------------------------------------------ ------------------------------------------------------
Symmetrical Holdings, Inc.                 Florida
(f/k/a Symmetrical Resources Corporation)
- ------------------------------------------ ------------------------------------------------------



                               1.
   138


                                                                  SCHEDULE 10.02

                    EURODOLLAR AND DOMESTIC LENDING OFFICES,
                              ADDRESSES FOR NOTICES

CERIDIAN CORPORATION
Arbitron Company
9705 Patuxent Woods Drive
Columbia, MD  21046

Attention:     James Dwyer, Controller
               Telephone:  (410) 312-8295
               Facsimile:  410-312-8625
               Electronic Mail:  jim.dwyer@arbitron.com
               Website:  www.arbitron.com


BANK OF AMERICA, as Administrative Agent

Administrative Agent--Lending and Administrative Notices
(for payments and Requests for Credit Extensions):

Bank of America, N.A.
Credit Services
Mail Code:  NC1-001-15-04
One Independence Center
101 North Tryon Street
Charlotte, NC 28255-0001
Acct. No.  1366212250600
ABA #: 053000196

Attention:     Barry Flynn
Telephone:     704-388-2374
Facsimile:     704-409-0015
Email:         barry.m.flynn@bankofamerica.com

With copy to:

Bank of America, N.A.
6610 Rockledge Drive, Suite 602
Bethesda, MD  20817

Attention:     Chitt Swamidasan
Telephone:     301-571-0716
Facsimile:     301-571-0719
Email:         chitt.swamidasan@bankofamerica.com



                                       1.
   139

L/C Issuer:
- ----------

Bank of America, N.A.
Trade Operations-Los Angeles #22621
333 S. Beaudry Avenue, 19th Floor
Mail Code:  CA9-703-19-23
Los Angeles, CA 90017-1466

Attention:     Sandra Leon
Telephone:     213.345.5231
Facsimile:     213.345.6694
Email:         sandra.leon@bankofamerica.com

Other Notices as a Lender:
- -------------------------

Bank of America, N.A.
6610 Rockledge Drive, Suite 602
Bethesda, MD  20817

Attention:     Chitt Swamidasan
Telephone:     301-571-0716
Facsimile:     301-571-0719
Email:         chitt.swamidasan@bankofamerica.com


THE BANK OF NEW YORK

Requests for Credit Extensions:
- ------------------------------

The Bank of New York
One Wall Street
New York, NY 10286

Attention:     Dorothy Fowler
Telephone:     212-635-7294
Facsimile:     212-635-8679/8634
Email:         None

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

The Bank of New York
One Wall Street
New York, NY 10286

Attention:     Kristen Talaber
Telephone:     212-635-8692
Facsimile:     212-635-8593
Email:         ktalaber@bankofny.com



                                       2.
   140

BEAR STEARNS CORPORATE LENDING INC.

Requests for Credit Extensions:
- ------------------------------

Bear, Stearns & Co. Inc.
245 Park Avenue, 4th Floor
New York, NY 10167

Attention:     Victor F. Bulzacchelli
Telephone:     (212) 272-3042
Facsimile:     (212) 272-9184
Email:  vbulzacchelli@bear.com

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

Bear, Stearns & Co. Inc.
245 Park Avenue, 4th Floor
New York, NY 10167

Attention:     Gloria Dombrowski
Telephone:     (212) 272-6043
Facsimile:     (212) 272-4844
Email:         gdombrowski@bear.com

With copy to:

Bear, Stearns & Co. Inc.
245 Park Avenue, 4th Floor
New York, NY 10167

Attention:     Patrick Marsh
Telephone:     (212) 272-7959
Facsimile:     (212) 272-9184
Email:         patrickmarsh@bear.com


BNP PARIBAS

Requests for Credit Extensions:
- ------------------------------

BNP Paribas
919 Third Avenue
New York, NY 10022

Attention:     Anthony Garcia
Telephone:     (212) 471-6652
Facsimile:     (212) 471-6697
Email:         anthony.garcia@americas.bnpparibas.com



                                       3.
   141

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

BNP Paribas
787 Seventh Avenue, 33rd Floor
New York, NY 10019

Attention:     Ted Koerner
Telephone:     (212) 841-2968
Facsimile:     (212) 841-2996
Email:         theodore.koerner@americas.bnpparibas.com



                                       4.
   142


THE CHASE MANHATTAN BANK



Requests for Credit Extensions:
- ------------------------------


The Chase Manhattan Bank
1166 Avenue of the Americas
15th Floor
New York, NY 10036


Attention:     Andrea Kennedy
Telephone:     (212) 899-1412
Facsimile:     (212) 899-2906
E-mail:        Andrea.Kennedy@chase.com

Notices (other than Requests for Credit Extensions):
- ---------------------------------------------------

The Chase Manhattan Bank
1166 Avenue of the Americas
15th Floor
New York, NY 10036

Attention:     Carol A. Kornbluth
Telephone:     (212) 899-1418
Facsimile:     (212) 899-2908
E-mail:        Carol.Kornbluth@chase.com

With a copy to:
- --------------

The Chase Manhattan Bank
270 Park Avenue, 40
New York, NY 10017

Attention:     Cris Kako
Telephone:     (212) 270-2074
Facsimile:     (212) 270-7481
E-mail:        Cris.Kako@chase.com

CITIZENS BANK OF MASSACHUSETTS

Requests for Credit Extensions:
- ------------------------------

Citizens Bank of Massachusetts
53 State Street, 8th Floor
Boston, MA 02109

Attention:     Monique Laurina
Telephone:     (617) 994-7052
Facsimile:     (617) 227-2035



                                       5.
   143

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

Citizens Bank of Massachusetts
53 State Street, 8th Floor
Boston, MA 02109

Attention:     Errin Siagel
Telephone:     (617) 994-7055
Facsimile:     (617) 227-8854
Email:         errin.siagel@citizensbank.com

FLEET NATIONAL BANK, as Syndication Agent

Requests for Credit Extensions:

Fleet National Bank
100 Federal Street
Mailcode: MADE 10009B
Boston, MA 02110

Attention:     Anita Hoffmann
Telephone:     (617) 434-8212
Facsimile:     (617) 434-8277

Notices (other than Requests for Credit Extensions):
- ---------------------------------------------------

Fleet National Bank
100 Federal Street
Mailcode: MADE 10009D
Boston, MA 02110

Attention:     Michael D. Elwell
Telephone:     (617) 434-8290
Facsimile:     (617) 434-8426
E-mail:        Michael_D_Elwell@Fleet.com




                                       6.
   144

THE ROYAL BANK OF SCOTLAND PLC

Requests for Credit Extensions:
- ------------------------------

The Royal Bank of Scotland plc
65 East 55th Street, 21st Floor
New York, NY 10022

Attention:     Helaine Griffith
Telephone:     212-401-1338
Facsimile:     212-401-1336
Email:         None

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

The Royal Bank of Scotland plc
101 Park Avenue, 10th Floor
New York, NY 10016

Attention:     Lee Morse
Telephone:     212-401-3765
Facsimile:     212-401-3456
Email:         lee.morse@rbos.com


U.S. BANK NATIONAL ASSOCIATION

Requests for Credit Extensions:
- ------------------------------

U.S. Bank National Association
601 2nd Avenue South
MPFP0702
Minneapolis, MN 55402-4302

Attention:     Karen Johnson
Telephone:     612-973-0546
Facsimile:     612-973-0825
Email:         None



                                       7.
   145

Notices (other than Requests for Credit Extensions):
- --------------------------------------------------

U.S. Bank National Association
601 2nd Avenue South
MPFP0702
Minneapolis, MN 55402-4302

Attention:     Elliot J. Jaffee
Telephone:     612-973-0543
Facsimile:     612-973-0825
Email:         None


                                       8.





   146



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                      CERIDIAN CORPORATION, as Borrower

                                      By: /s/ WILLIAM J. WALSH
                                          --------------------------------------

                                      Name: William J. Walsh
                                           -------------------------------------

                                      Title: Executive Vice President of Finance
                                            ------------------------------------
                                             and Planning of Arbitron and
                                             Vice President of Ceridian


                                      S-1.
   147

                                  BANK OF AMERICA, N.A., as
                                  Administrative Agent, a Lender and L/C Issuer

                                  By: /s/ CHITT SWAMIDASAN
                                      --------------------------------------
                                  Name:   CHITT SWAMIDASAN
                                       -------------------------------------

                                  Title:    Principal
                                       -------------------------------------



                                      S-2.
   148


                                      FLEET NATIONAL BANK, AS A LENDER


                                      By:       /s/ MICHAEL D. ELWELL
                                          --------------------------------------

                                      Name:     Michael D. Elwell
                                           -------------------------------------

                                      Title:    Assistant Vice President
                                            ------------------------------------


                                      S-3.
   149

                                      U.S. BANK NATIONAL ASSOCIATION, AS
                                      A LENDER

                                      By:       [SIG]
                                          --------------------------------------

                                      Name:   Elliot J. Jaffee
                                           -------------------------------------

                                      Title:  Senior Vice President
                                            ------------------------------------


                                      S-5.
   150

                                      THE CHASE MANHATTAN BANK, AS A LENDER


                                      By:     /s/ CAROL A. KORUBLUTH
                                          --------------------------------------

                                      Name:   Carol A. Korubluth
                                           -------------------------------------

                                      Title:  Vice President
                                            ------------------------------------



                                      S-4.
   151

                                      THE BANK OF NEW YORK, AS A LENDER

                                      By:       [SIG]
                                          --------------------------------------

                                      Name:     Kristen E. Talaber
                                           -------------------------------------

                                      Title:    Vice President
                                            ------------------------------------

                                      S-6.
   152


                                      BNP PARIBAS, AS A LENDER


                                      By:     [SIG]
                                          --------------------------------------

                                      Name:   Serge Desrayaud
                                           -------------------------------------

                                      Title:  Head of Asset Management
                                            ------------------------------------


                                      By:       [SIG]
                                          --------------------------------------

                                      Name:     Gregg Bonardi
                                           -------------------------------------

                                      Title:    Director
                                            ------------------------------------


                                      S-7.
   153


                                      BEAR STEARNS CORPORATE LENDING INC.,
                                      AS A LENDER

                                      By:       [SIG]
                                          --------------------------------------

                                      Name:     Donald Mullen
                                           -------------------------------------

                                      Title:    Sr. Managing Director
                                            ------------------------------------



                                      S-8.
   154

                                      THE ROYAL BANK OF SCOTLAND PLC,
                                      AS A LENDER

                                      By:       [SIG]
                                          --------------------------------------

                                      Name:     Jayne Seaford
                                           -------------------------------------

                                      Title:    Vice President
                                            ------------------------------------



                                     S-10.
   155


                                     CITIZENS BANK OF MASSACHUSETTS, AS A LENDER


                                      By:       [SIG]
                                          --------------------------------------

                                      Name:     JAYNE SEAFORD
                                           -------------------------------------

                                      Title:    V.P.
                                            ------------------------------------


                                      S-9.
   156
                                                                       EXHIBIT A

                               FORM OF LOAN NOTICE

                                                        Date: ___________, _____


To:      BANK OF AMERICA, N.A., as Administrative Agent

Ladies and Gentlemen:

       Reference is made to that certain Credit Agreement, dated as of January
31, 2001 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Credit Agreement;" the terms defined therein
being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders from time to time party thereto, and
Bank of America, N.A., as the administrative agent for such Lenders (in such
capacity, the "Administrative Agent").

       The undersigned hereby requests (select one):

       [ ] A Borrowing of Loans    [ ] A conversion or continuation of Loans

       1.       On                                           (a Business Day).
                   -----------------------------------------

       2.       In the amount of $                                   .
                                  -----------------------------------

       3.       Comprised of                                         .
                             ----------------------------------------
                                 [Type of Loan requested]

       4.       For Eurodollar Rate Loans:  with an Interest Period of ____
                months.

       The foregoing request complies with the requirements of Section 2.01 of
the Credit Agreement. Other than in connection with a conversion or continuation
of Loans, the undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the above date, before and after
giving effect to the Borrowing or conversion or continuation of Loans requested
above:

       (a)    The representations and warranties made by the Borrower in the
Credit Agreement, or which are contained in any certificate, document or
financial or other statement furnished at any time under or in connection
therewith, are and will be correct on and as of the date of the Borrowing or
conversion or continuation of Loans requested above, except to the extent that
such representations and warranties specifically refer to any earlier date; and


                                      A-1
   157









       (b)    no Default or Event of Default has occurred and is continuing on
the date hereof or after giving effect to the Borrowing or conversion or
continuation of Loans requested above.

                            CERIDIAN CORPORATION

                            By:
                                 -----------------------------------------------

                            Name:
                                   ---------------------------------------------

                            Title:
                                    --------------------------------------------




                                      A-2
   158




                                                                       EXHIBIT B

                                FORM OF LOAN NOTE


$
 -----------------------                                 -----------------------

       FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to the order of _____________________________ (the "Lender"), on the
Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of __________________Dollars ($____________), or such lesser
principal amount of Loans (as defined in such Credit Agreement) due and payable
by the Borrower to the Lender on the Maturity Date under that certain Credit
Agreement, dated as of January 31, 2001 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the "Credit
Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and BANK OF
AMERICA, N.A., as the administrative agent for such Lenders (in such capacity,
the "Administrative Agent").

       The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and at such times as are specified in the Credit
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Credit Agreement.

       This Loan Note is one of the Loan Notes referred to in the Credit
Agreement, is entitled to the benefits thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein. This Loan Note is
also entitled to the benefits of the Guaranty. Upon the occurrence of one or
more of the Events of Default specified in the Credit Agreement, all amounts
then remaining unpaid on this Loan Note shall become, or may be declared to be,
immediately due and payable all as provided in the Credit Agreement. Loans made
by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Loan Note and endorse thereon the date, amount and
maturity of its Loans and payments with respect thereto.

       The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Loan Note.




                                      B-1
   159



       THIS LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

                           CERIDIAN CORPORATION

                           By:
                               ------------------------------------------------

                           Name:
                                  ---------------------------------------------

                           Title:
                                   --------------------------------------------




                                      B-2
   160



                     LOANS AND PAYMENTS WITH RESPECT THERETO


                                                                    AMOUNT OF        OUTSTANDING
                   TYPE OF                                          PRINCIPAL         PRINCIPAL
                    LOAN           AMOUNT OF         END OF        OR INTEREST         BALANCE           NOTATION
  DATE              MADE           LOAN MADE        INTEREST        PAID THIS        THIS DATE           MADE BY
                                                     PERIOD           DATE
                                                                                       

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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





                                      B-3
   161


                                                                       EXHIBIT C

                         FORM OF COMPLIANCE CERTIFICATE

                                       Financial Statement Date:          ,
                                                                ----------


To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

       Reference is made to that certain Credit Agreement, dated as of January
31, 2001 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Credit Agreement;" the terms defined therein
being used herein as therein defined), among CERIDIAN CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders from time to time party thereto, and
BANK OF AMERICA, N.A., as the administrative agent for such Lenders (in such
capacity, the "Administrative Agent").

       The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _______________________________________________ of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and that:

            [Use following for fiscal year-end financial statements]

       1.     Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Credit Agreement for the fiscal
year of the Borrower ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.

           [Use following for fiscal quarter-end financial statements]

       1.     Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.

       2.     The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.

       3.     A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and



                                      C-1
   162



                                 [select one:]

       [to the best knowledge of the undersigned during such fiscal period, the
Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it.]

                                     --or--

       [the following covenants or conditions have not been performed or
observed and the following is a list of each such Default or Event of Default
and its nature and status:]

       4.     The financial covenant analyses and information set forth on
              Schedule 2 attached hereto are true and accurate on and
              as of the date of this Certificate.

       IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_____________, _________.

                             CERIDIAN CORPORATION

                             By:
                                  ---------------------------------------------

                             Name:
                                    -------------------------------------------

                             Title:
                                     ------------------------------------------




                                      C-2
   163
 For The Quarter/Year Ended _________________________________(Statement Date")


                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

I.     SECTION 7.10 - LEVERAGE RATIO

       A.     Consolidated Funded Indebtedness of the Borrower and its
              Subsidiaries as of the Statement Date:

              1.     All obligations for borrowed money of the Borrower and its
                     Subsidiaries on a consolidated basis at the Statement
                     Date:                           $
                                                     -------------------------

              2.     All obligations of the Borrower and its Subsidiaries as
                     evidenced by bonds, debentures, notes and loan agreements
                     on a consolidated basis at the Statement Date:
                                                    $
                                                     -------------------------


              3.     All obligations of the Borrower and its Subsidiaries in
                     respect of letters of credit, surety bonds, bankers'
                     acceptances or similar instruments on a consolidated basis
                     at the Statement Date:          $
                                                     -------------------------

              4.     All obligations of the Borrower and its Subsidiaries to pay
                     the deferred purchase price of property or services (other
                     than trade payables entered into in the Ordinary Course of
                     Business pursuant to ordinary terms and paid within the
                     specified time) on a consolidated basis at the Statement
                     Date:                          $
                                                     -------------------------


              5.     The capitalized amount of all Capital Leases of the
                     Borrower and its Subsidiaries that would appear on a
                     balance sheet of such Persons prepared as of the Statement
                     Date in accordance with GAAP and the capitalized amount of
                     the remaining lease payments under any Synthetic Lease
                     Obligations incurred by the Borrower or any of its
                     Subsidiaries which would appear on a balance sheet of such
                     Persons prepared as of the Statement Date in accordance
                     with GAAP if such lease were accounted for as a Capital
                     Lease:                         $
                                                     -------------------------




                                  Schedule 2-1
   164


              6.     All guaranty obligations of the Borrower and its
                     Subsidiaries in respect of obligations of any Person in the
                     nature of the obligations referenced in Lines I.A.1 through
                     I.A.4 above:                    $
                                                       -------------------------

              7.     Consolidated Funded Indebtedness as of the Statement Date
                     [Line I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 +
                     I.A.6]:                         $
                                                       -------------------------

       B.     Consolidated EBITDA of the Borrower and its Subsidiaries for the
              period of the four fiscal quarters ending on the Statement Date
              ("Test Period"):

              1.     Net income of the Borrower and its Subsidiaries on a
                     consolidated basis for the Test Period, as determined in
                     accordance with GAAP:            $
                                                       -------------------------

              2.     All extraordinary non-cash losses and non-cash gains, and
                     non-cash losses and non-cash gains from discontinued
                     operations of the Borrower and its Subsidiaries on a
                     consolidated basis for the Test Period:
                                                     $
                                                       -------------------------

              3.     All cash payments made by the Borrower and its Subsidiaries
                     during the Test Period in respect of non-cash charges
                     listed on Line I.B.2 of Schedule 2 attached to any
                     Compliance Certificate delivered to the Administrative
                     Agent prior to the Statement Date hereof:
                                                   $
                                                       -------------------------

              4.     All interest, premium payments, fees, charges and related
                     expenses of the Borrower and its Subsidiaries in connection
                     with borrowed money (including capitalized interest) or in
                     connection with the deferred purchase price of assets, in
                     each case to the extent treated as interest in accordance
                     with GAAP for the Test Period, but excluding any fees,
                     charges and expenses of the Borrower and its Subsidiaries
                     arising from the negotiation, execution, closing and
                     consummation of the Spin-Off Documents, the Loan Documents,
                     the Private Placement Documents and any Specified Swap
                     Contracts:                       $
                                                       -------------------------



                                  Schedule 2-2
   165


              5.     The portion of all rent expense of the Borrower and its
                     Subsidiaries for the Test Period under Capital Leases that
                     is treated as interest in accordance with GAAP on a
                     consolidated basis:              $
                                                       -------------------------

              6.     The amount of taxes of the Borrower and its Subsidiaries on
                     a consolidated basis for the Test Period, based on or
                     measured by income used or included in the determination of
                     Line I.B.1:                     $
                                                       -------------------------
              7.     All depreciation expense and amortization expense of the
                     Borrower and its Subsidiaries on a consolidated basis for
                     the Test Period:                $
                                                       -------------------------

              8.     All interest income of the Borrower and its Subsidiaries on
                     a consolidated basis for the Test Period:
                                                      $
                                                       -------------------------

              9.     Consolidated EBITDA for the Test Period [Line I.B.1 +/-
                     I.B.2 (if the amount in Line I.B.2 constitutes a loss, it
                     should be added; if it constitutes a gain, it should be
                     subtracted) - I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 -
                     I.B.8]:                          $
                                                       -------------------------

       C.     Leverage Ratio [Line I.A.7 / I.B.9]:               _________ to 1

       D.     Maximum permitted Leverage Ratio at the Statement Date (See
              Section 7.10 of the Agreement for ratio applicable to the
              Statement Date):                                   _________ to 1

                       COMPLIANCE WITH COVENANT (YES / NO)

II.      SECTION 7.11 - FIXED CHARGE COVERAGE RATIO

       A.     Consolidated EBITDA for the Test Period [Line I.B.9]:
                                                      $
                                                       -------------------------

       B.     Taxes actually paid by the Borrower and its Subsidiaries on a
              consolidated basis in cash or Cash Equivalents for the Test
              Period:
                                                     $
                                                       -------------------------


       C.     Capital expenditures plus (without duplication) PPM Expenditures
              of the Borrower and its Subsidiaries on a consolidated basis for
              the Test Period:                       $
                                                       -------------------------

                                  Schedule 2-3
   166


       D.     Consolidated Interest Expense of the Borrower and its Subsidiaries
              on a consolidated basis for the Test Period [Line I.B.4 + I.B.5]:

                                                      $
                                                       -------------------------

       E.     Current Portion of Long-Term Debt for the Test Period of the
              Borrower and its Subsidiaries on a consolidated basis:
                                                     $
                                                       -------------------------

       F.     Fixed Charge Coverage Ratio
             [(Line II.A - II.B - II.C) /(Line II.D + II.E)]:
                                                                __________ to 1

       G.     Minimum permitted Fixed Charge Ratio (See Section 7.11 of the
              Agreement for ratio applicable to the Statement Date):

                                                                ___________to 1

                       COMPLIANCE WITH COVENANT (YES / NO)



                                  Schedule 2-4
   167


                                                                       EXHIBIT D

                        FORM OF ASSIGNMENT AND ACCEPTANCE

              Reference is made to that certain Credit Agreement, dated as of
January 31, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Credit Agreement;" the terms defined
therein being used herein as therein defined), among CERIDIAN CORPORATION, a
Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and BANK OF AMERICA, N.A., as the administrative agent for such Lenders
(in such capacity, the "Administrative Agent").

              The assignor identified on the signature page hereto (the
"Assignor") and the assignee identified on the signature page hereto (the
"Assignee") agree as follows:

       1.     (a)   Subject to paragraph 11, effective as of the date
specified on Schedule 1 hereto (the "Effective Date"), the Assignor hereby
irrevocably sells and assigns to the Assignee without recourse to the Assignor,
and the Assignee hereby irrevocably purchases and assumes from the Assignor
without recourse to the Assignor, the interest described on Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement.

       (b)    From and after the Effective Date, (i) the Assignee shall be a
party under the Credit Agreement and will have all the rights and obligations of
a Lender for all purposes under the Loan Documents to the extent of the Assigned
Interest and be bound by the provisions thereof, and (ii) the Assignor shall
relinquish its rights and be released from its obligations under the Credit
Agreement to the extent of the Assigned Interest. The Assignor and/or the
Assignee, as agreed by the Assignor and the Assignee, shall deliver, in
immediately available funds, any applicable assignment fee required under
Section 10.07(b) of the Credit Agreement.

       2.     On the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Interest as agreed upon by the Assignor and the Assignee.

       3.     From and after the Effective Date, the Administrative Agent shall
make all payments under the Credit Agreement and the Loan Notes, if any, in
respect of the Assigned Interest (including all payments of principal, interest
and fees with respect thereto) to the Assignee. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and such Loan Notes, if any, for periods prior to the Effective Date directly
between themselves.

       4.     The Assignor represents and warrants to the Assignee that:

       (a)    The Assignor is the legal and beneficial owner of the Assigned
Interest, and the Assigned Interest is free and clear of any adverse claim;




                                      D-1
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       (b)    the Assigned Interest listed on Schedule 1 accurately and
completely sets forth the Outstanding Amount of all Loans and L/C Obligations
relating to the Assigned Interest as of the Effective Date;

       (c)    it has the power and authority and the legal right to make,
deliver and perform, and has taken all necessary action, to authorize the
execution, delivery and performance of this Assignment and Acceptance, and any
and all other documents delivered by it in connection herewith and to fulfill
its obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Loan Documents, and no consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection in connection herewith or therewith; and

       (d)    this Assignment and Acceptance constitutes the legal, valid and
binding obligation of the Assignor.

              The Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Affiliates or the performance by the Borrower or any of its Affiliates of
their respective obligations under the Loan Documents, and assumes no
responsibility with respect to any statements, warranties or representations
made under or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
other than as expressly set forth above.

       5.     The Assignee represents and warrants to the Assignor and the
Administrative Agent that:

       (a)    it is an Eligible Assignee;

       (b)    it has the full power and authority and the legal right to make,
deliver and perform, and has taken all necessary action, to authorize the
execution, delivery and performance of this Assignment and Acceptance, and any
and all other documents delivered by it in connection herewith and to fulfill
its obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Loan Documents, and no consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection in connection herewith or therewith;

       (c)    this Assignment and Acceptance constitutes the legal, valid and
binding obligation of the Assignee;

       (d)    under applicable Laws no tax will be required to be withheld by
the Administrative Agent or the Borrower with respect to any payments to be made
to the Assignee hereunder or under any Loan Document, and unless otherwise
indicated in the space opposite the Assignee's signature below, no tax forms
described in Section 10.15 of the Credit Agreement are required to be delivered
by the Assignee; and

       (e)    the Assignee has received a copy of the Credit Agreement, together
with copies of the most recent financial statements of the Borrower delivered
pursuant thereto, and such other



                                      D-2
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documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance. The Assignee
has independently and without reliance upon the Assignor or the Administrative
Agent and based on such information as the Assignee has deemed appropriate, made
its own credit analysis and decision to enter into this Assignment and
Acceptance. The Assignee will, independently and without reliance upon the
Administrative Agent or any Lender, and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement.

       6.     The Assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
incidental thereto.

       7.     If either the Assignee or the Assignor desires a Loan Note to
evidence its Loans, it shall request the Administrative Agent to procure a Loan
Note from the Borrower.

       8.     The Assignor and the Assignee agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance.

       9.     This Assignment and Acceptance shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns;
provided, however, that the Assignee shall not assign its rights or obligations
hereunder without the prior written consent of the Assignor and any purported
assignment, absent such consent, shall be void.

       10.    This Assignment and Acceptance may be executed by facsimile
signatures with the same force and effect as if manually signed and may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Assignment and Acceptance shall be governed by and construed in accordance with
the laws of the state specified in the Section of the Credit Agreement entitled
"Governing Law."

       11.    The effectiveness of the assignment described herein is subject
to:

       (a)    if such consent is required by the Credit Agreement, receipt by
the Assignor and the Assignee of the consent of the Administrative Agent and/or
the Borrower to the assignment described herein. By delivering a duly executed
and delivered copy of this Assignment and Acceptance to the Administrative
Agent, the Assignor and the Assignee hereby request any such required consent
and request that the Administrative Agent register the Assignee as a Lender
under the Credit Agreement effective as of the Effective Date; and

       (b)    receipt by the Administrative Agent of (or other arrangements
acceptable to the Administrative Agent with respect to) any applicable
assignment fee referred to in Section 10.07(b) of the Agreement and any tax
forms required by Section 10.15 of the Credit Agreement.


                                      D-3
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              By signing below, the Administrative Agent agrees to register the
Assignee as a Lender under the Credit Agreement, effective as of the Effective
Date with respect to the Assigned Interest, and will adjust the registered Pro
Rata Share of the Assignor under the Credit Agreement to reflect the assignment
of the Assigned Interest.

       12.    Attached hereto as Schedule 2 is all contact, address, account and
other administrative information relating to the Assignee.

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


                                     ASSIGNOR:
                                     [NAME OF ASSIGNOR]

                                     By:
                                        -----------------------------
                                     Name:
                                          ---------------------------
                                     Title:
                                           --------------------------






[ ]     Tax forms required by        ASSIGNEE:
        Section 10.15 of the         [NAME OF ASSIGNEE]
        Credit Agreement
        included
                                     By:
                                        -----------------------------
                                     Name:
                                          ---------------------------
                                     Title:
                                           --------------------------


(Signatures continue)




                                      D-4
   171




In accordance with and 10.07 of the
Credit Agreement, the undersigned
consent to the foregoing assignment
as of the Effective Date:

CERIDIAN CORPORATION


By:
   -----------------------------
Name:
     ---------------------------
Title:
      --------------------------


BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer

By:
   -----------------------------

Title:
      --------------------------




                                      D-5
   172




                                   SCHEDULE 1
                          to Assignment and Acceptance
                              The Assigned Interest


Effective Date:
                ----------------------



                                       TYPE AND AMOUNT OF OUTSTANDING OBLIGATIONS           ASSIGNED PRO RATA
        ASSIGNED COMMITMENT                             ASSIGNED                                  SHARE
                                                                               
$                                     [type] $                                                                %
 ---------------------------                  ----------------------------------     -------------------------




                                  Schedule 1-1

   173
                                   SCHEDULE 2
                          to Assignment and Acceptance
                             Administrative Details

   (Assignee to list names of credit contacts, addresses, phone and facsimile
    numbers, electronic mail addresses and account and payment information)




                                  Schedule 2-1
   174


                                                                       EXHIBIT E

                          FORM OF NEW CERIDIAN GUARANTY

       THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made by
NEW CERIDIAN CORPORATION, a Delaware corporation (the "Guarantor"), in favor of
(a) the financial institutions (the "Lenders" and, individually, a "Lender")
from time to time party to that certain Credit Agreement dated as of January 31,
2001 (as renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the
"Borrower"), the Lenders and BANK OF AMERICA, N.A., as the administrative agent
for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap
Provider" (as defined herein), and (c) the Note Holders party from time to time
to the Note Purchase Agreement (collectively, the "Guaranteed Parties" and each,
individually, a "Guaranteed Party").

                                    RECITALS

       WHEREAS, it is a requirement under the Credit Agreement and the Note
Purchase Agreement that Guarantor shall be bound by the terms and conditions of
this Guaranty pending the Spin-Off Consummation Date; and

       WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Borrower pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;

       WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Borrower being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;

       NOW, THEREFORE, in consideration of the Administrative Agent and Lenders
entering into the Credit Agreement, the Guarantor hereby agrees as follows:

       SECTION 1 Definitions; Interpretation.

       (a)    Terms Defined in Credit Agreement. All capitalized terms used in
this Guaranty and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.

       (b)    Certain Defined Terms. As used in this Guaranty, the following
terms shall have the following meanings:

       "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time pursuant
thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its
capacity as Administrative Agent for the benefit of itself and the other Lenders
from time to time party to the Credit Agreement, and the L/C Issuer; (b) the




                                      E-1
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Note Holders from time to time party to the Note Purchase Agreement; and (c) the
Swap Provider.

       "Credit Documents" means, collectively, the Loan Documents, the Swap
Documents, and the Note Purchase Documents.

       "Guaranteed Obligations" has the meaning set forth in Section 2(a).

       "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned to
them in the first paragraph hereof.

       "Guarantor Documents" means this Guaranty, and all other certificates,
documents, agreements and instruments delivered to the Guaranteed Parties under
or in connection with this Guaranty.

       "Indemnified Liabilities" has the meaning set forth in Section 15(b).

       "Indemnified Person" has the meaning set forth in Section 15(b).

       "Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the Note Holders.

       "Note Holder Collateral Documents" means, collectively, (a) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Note
Holders), (b) all Account Control Agreements executed by any Loan Party under
any Note Holder Document, (c) all documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Note Holder Document, and (d)
all licenses, UCC financing statements, notices and other documents executed
from time to time or in connection with any of the foregoing.

       "Note Holder Documents" means, collectively, the Note Purchase Agreement,
the Note Holder Collateral Documents and the Note Holder Guaranties.

       "Note Holder Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Note Holders.

       "Note Holder" means a "Note Holder" under, and as defined in, the Note
Purchase Agreement.

       "Note Purchase Agreement" means that Note Purchase Agreement dated as of
January 31, 2001 among the Borrower and the Note Holders party thereto.

       "Solvent" means, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities


                                      E-2
   176


evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the
alternative, for purposes of the New York Uniform Fraudulent Conveyance Act; (b)
the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.

       "Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the
Borrower and the Swap Provider as swap counterparties.

       "Specified Swap Contract" means any interest rate swap entered into
between the Borrower and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

       "Subordinated Debt" has the meaning set forth in Section 7(a).

       "Subordinated Debt Payments" has the meaning set forth in Section 7(b).

       "Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider), (ii) all Account Control Agreements executed by any Loan Party under
any Swap Document, (iii) all documents executed by any Loan Party to accomplish
cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC
financing statements, notices and other documents executed from time to time or
in connection with any of the foregoing.

       "Swap Documents" means, collectively, (a) any Specified Swap Agreement,
(b) the Swap Collateral Documents, and (c) the Swap Guaranties.

       "Swap Guaranties" means the Guaranties under and as defined in the Credit
Agreement, but to the extent entered into by the Guarantors thereunder for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider.

       "Swap Provider" has the meaning specified in the Intercreditor Agreement.

       (c)    Interpretation. The rules of interpretation set forth in Section
1.02 of the Credit Agreement shall be applicable to this Guaranty and are
incorporated herein by this reference.

       SECTION 2 Guaranty.



                                      E-3
   177


       (a)    Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to each of the Guaranteed Parties, and their respective successors,
endorsees, transferees and assigns, the full and prompt payment when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise) and performance of the indebtedness, liabilities and other
obligations of the Borrower to each such Guaranteed Party, whether created
under, arising out of or in connection with any of the Credit Documents,
including all Obligations (as independently defined in each of the Credit
Agreement and the Note Purchase Agreement); and any obligations under any
Specified Swap Agreement to the extent arising out of any one or more Specified
Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are
used herein in their most comprehensive sense and include any and all advances,
debts, obligations and liabilities, now existing or hereafter arising, whether
voluntary or involuntary and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether recovery
upon such indebtedness, liabilities and obligations may be or hereafter becomes
unenforceable or shall be an allowed or disallowed claim under the Bankruptcy
Code or other applicable law. The foregoing indebtedness, liabilities and other
obligations of the Borrower, and all other indebtedness, liabilities and
obligations to be paid or performed by the Guarantor in connection with this
Guaranty (including any and all amounts due under Section 15), shall hereinafter
be collectively referred to as the "Guaranteed Obligations."

       (b)    Limitation of Guaranty. To the extent that any court of competent
jurisdiction shall impose by final judgment under applicable law (including the
New York Fraudulent Conveyance Act and Sections 544 and 548 of the Bankruptcy
Code) any limitations on the amount of the Guarantor's liability with respect to
any of the Guaranteed Obligations which any of the Guaranteed Parties can
enforce under this Guaranty, such Guaranteed Parties by their acceptance hereof
accept such limitation on the amount of the Guarantor's liability hereunder to
the extent needed to make this Guaranty and the Guarantor Documents fully
enforceable and nonavoidable.

       SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional, and
shall not be affected by any circumstance which might constitute a discharge of
a surety or guarantor other than the indefeasible payment and performance in
full of all Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, the Guarantor agrees as follows:

       (i)    the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent upon
the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Borrower or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;

       (ii)   this Guaranty is a guaranty of payment when due and not merely of
collectibility;

       (iii)  the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and



                                      E-4
   178

       (iv)   the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:

              (A)    any proceeding under any Debtor Relief Laws with respect to
the Borrower, any other guarantor or any other Person;

              (B)    any limitation, discharge, or cessation of the liability of
the Borrower, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity or
unenforceability in whole or in part of any of the Guaranteed Obligations or the
Loan Documents;

              (C)    subject to Section 24 hereof, any merger, acquisition,
consolidation or change in structure of the Borrower, the Guarantor or any other
guarantor or Person, or any sale, lease, transfer or other disposition of any or
all of the assets or shares of the Borrower, the Guarantor, any other guarantor
or other Person;

              (D)    any assignment or other transfer, in whole or in part, of
any of the Guaranteed Parties' interests in and rights under this Guaranty or
the other Credit Documents, including the Guaranteed Parties' right to receive
payment of the Guaranteed Obligations;

              (E)    any claim, defense, counterclaim or setoff, other than that
of prior performance, that the Borrower, the Guarantor, any other guarantor or
other Person may have or assert, including any defense of incapacity or lack of
corporate or other authority to execute any of the Credit Documents;

              (F)    the Guaranteed Parties' or any Lender's amendment,
modification, renewal, extension, cancellation or surrender of any Credit
Document;

              (G)    the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;

              (H)    any impairment or invalidity of any collateral securing any
of the Guaranteed Obligations or any failure to perfect any of the Liens of the
Guaranteed Parties thereon or therein; and

              (I)    any other guaranty, whether by the Guarantor or any other
Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Borrower to the Guaranteed
Parties.

              SECTION 4 Consents of Guarantor. The Guarantor hereby
unconditionally consents and agrees that, without notice to or further assent
from the Guarantor:

              (i)    the principal or other amount of the Guaranteed Obligations
in respect of any of the Guaranteed Parties may be increased or decreased as to
such Guaranteed Parties and additional indebtedness or obligations of the
Borrower under the Credit Documents may be



                                      E-5
   179


incurred, by one or more amendments, modifications, renewals or extensions of
any such Credit Documents;

              (ii)   the time, manner, place or terms of any payment under any
of the Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any Guaranteed Obligation or any fee or other
amount payable under such Credit Documents, by an amendment, modification or
renewal of any Credit Documents or otherwise;

              (iii)  the time for the Borrower's (or any other Person's)
performance of or compliance with any term, covenant or agreement on its part to
be performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;

              (iv)   any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the payment
and performance of all or any part of the Guaranteed Obligations owing to such
Guaranteed Parties, and may permit or consent to any such action or any result
of such action, and shall not be obligated to demand or enforce payment upon any
collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any
failure to collect or enforce payment or performance of the Guaranteed
Obligations from any Person or to realize on any collateral therefor;

              (v)    the Guaranteed Parties may take and hold other security
(legal or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale
thereof;

              (vi)   the Guaranteed Parties may request and accept other
guaranties of the Guaranteed Obligations and any other indebtedness, obligations
or liabilities of the Borrower to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to any
such action or the result of any such action; and

              (vii)  the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege (including
the right to accelerate the maturity of any Loan and any power of sale) granted
by any Credit Document or other security document or agreement, or otherwise
available to the Guaranteed Parties, with respect to the Guaranteed Obligations
or any collateral, even if the exercise of such right, remedy, power or
privilege affects or eliminates any right of subrogation or any other right of
the Guarantor against the Borrower;

              all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.

              SECTION 5 Guarantor's Waivers.



                                      E-6
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       (a)    Certain Waivers. The Guarantor waives and agrees not to assert:

              (i)    any right to require any of the Guaranteed Parties to
marshal assets in favor of the Borrower, the Guarantor, any other guarantor or
any other Person, to proceed against the Borrower, any other guarantor or any
other Person, to proceed against or exhaust any of the Collateral, to give
notice of the terms, time and place of any public or private sale of personal
property security constituting the Collateral or other collateral for the
Guaranteed Obligations or comply with any other provisions of Section 9-504 of
the New York UCC (or any equivalent provision of any other applicable law) or to
pursue any other right, remedy, power or privilege of the Guaranteed Parties
whatsoever;

              (ii)   the defense of the statute of limitations in any action
hereunder or for the collection or performance of the Guaranteed Obligations;

              (iii)  any defense arising by reason of any lack of corporate or
other authority or any other defense of the Borrower, the Guarantor or any other
Person;

              (iv)   any defense based upon the Guaranteed Parties' errors or
omissions in the administration of the Guaranteed Obligations;

              (v)    any rights to set-offs and counterclaims;

              (vi)   any defense based upon an election of remedies (including,
if available, an election to proceed by nonjudicial foreclosure) which destroys
or impairs the subrogation rights of the Guarantor or the right of the Guarantor
to proceed against the Borrower or any other obligor of the Guaranteed
Obligations for reimbursement; and

              (vii)  without limiting the generality of the foregoing, to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties, or which may conflict with the terms of this Guaranty,
including any and all benefits that otherwise might be available to the
Guarantor under New York Laws. This means, among other things: (A) the
Guaranteed Parties may collect from the Guarantor without first foreclosing on
any real or personal property collateral pledged by the Borrower; and (B) if the
Guaranteed Parties forecloses on any real property collateral pledged by the
Borrower: (1) the amount of the debt may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price, and (2) the Guaranteed Parties may collect from the
Guarantor even if the Administrative Agent, by foreclosing on the real property
collateral, has destroyed any right the Guarantor may have to collect from the
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses the Guarantor may have because the Borrower's debt is secured by real
property.

              (b)    Additional Waivers. The Guarantor waives any and all notice
of the acceptance of this Guaranty, and any and all notice of the creation,
renewal, modification, extension or accrual of the Guaranteed Obligations, or
the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of
any right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and


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permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Borrower,
the Guarantor or any other Person with respect to the Guaranteed Obligations.

              (c)    Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Borrower
and any other guarantor. Upon the occurrence and during the continuance of any
Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Borrower or any such other guarantor is joined
therein or a separate action or actions are brought against the Borrower or any
such other guarantor.

              (d)    Financial Condition of Borrower. The Guarantor shall not
have any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Borrower or the ability of the Borrower to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.

              SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it
may acquire by way of subrogation under this Guaranty, by any payment hereunder
or otherwise, (ii) any rights of contribution, indemnification, reimbursement or
similar suretyship claims arising out of this Guaranty or (iii) any other right
which it might otherwise have or acquire (in any way whatsoever) which could
entitle it at any time to share or participate in any right, remedy or security
of the Guaranteed Parties as against the Borrower or other guarantors, whether
in connection with this Guaranty, any of the other Credit Documents or
otherwise. If any amount shall be paid to the Guarantor on account of the
foregoing rights at any time when all the Guaranteed Obligations shall not have
been paid in full, such amount shall be held in trust for the benefit of the
Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the
Collateral Agent on their behalf) to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Documents and subject to the Intercreditor Agreement.

              SECTION 7 Subordination.


              (a)    Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Borrower to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions to
the Borrower or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts payable
by the Borrower to the Guarantor in connection therewith, whether now existing
or hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined (the "Subordinated Debt")
shall be subject, subordinate and junior in right of


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payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.

                  (b)      No Payments. Other than arising out of the
consummation of the Spin-Off Transaction, as long as any of the Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not accept
or receive any payment or distribution by or on behalf of the Borrower, directly
or indirectly, of assets of the Borrower of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the Subordinated Debt ("Subordinated Debt
Payments"), except that if no Event of Default exists and no notice described
below has been received by the Guarantor, the Guarantor shall be entitled to
accept and receive any and all payments. During the existence of an Event of
Default (or if any Event of Default would exist immediately after the making of
a Subordinated Debt Payment), and upon receipt by the Borrower of notice from
the Guaranteed Parties (or the Collateral Agent on their behalf) of such
Default, and until such Event of Default is cured or waived, pursuant to the
terms of the applicable Credit Documents, the Borrower shall not make, accept or
receive any Subordinated Debt Payment. In the event that, notwithstanding the
provisions of this Section 7, any Subordinated Debt Payments shall be received
in contravention of this Section 7 by the Guarantor before all Guaranteed
Obligations are paid in full in cash or cash equivalents, such Subordinated Debt
Payments shall be held in trust for the benefit of the Guaranteed Parties and
shall be paid over or delivered to the Guaranteed Parties (or the Collateral
Agent on their behalf) for application to the payment in full in cash or cash
equivalents of all Guaranteed Obligations remaining unpaid to the extent
necessary to give effect to this Section 7, after giving effect to any
concurrent payments or distributions to the Guaranteed Parties in respect of the
Guaranteed Obligations.

              (c)    Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):

                     (i)    accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect of
the Subordinated Debt;

                     (ii)   exercise any rights under or with respect to (A) any
guaranties of the Subordinated Debt, or (B) any collateral held by it, including
causing or compelling the pledge or delivery of any collateral, any attachment
of, levy upon, execution against, foreclosure upon or the taking of other action
against or institution of other proceedings with respect to any collateral held
by it, notifying any account debtors of the Borrower or asserting any claim or
interest in any insurance with respect to any collateral, or attempt to do any
of the foregoing;

                     (iii)  exercise any rights to set-offs and counterclaims in
respect of any indebtedness, liabilities or obligations of the Guarantor to the
Borrower against any of the Subordinated Debt; or




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                     (iv)   commence, or cause to be commenced, or join with any
creditor other than the Guaranteed Parties in commencing, any proceeding under
any Debtor Relief Laws as against Borrower.

              (d)    Subordination Upon Any Distribution of Assets of the
Borrower. In the event of any payment or distribution of assets of the Borrower
of any kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Borrower, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim in
any such proceeding, shall first be paid in full in cash, or payment provided
for in cash or in cash equivalents, before any Subordinated Debt Payment is
made; and (ii) to the extent permitted by applicable law, any Subordinated Debt
Payment to which the Guarantor would be entitled except for the provisions
hereof, shall be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Guaranteed Parties (or the Collateral
Agent acting on their behalf) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any concurrent
payment or distribution or provision therefor to the Guaranteed Parties in
respect of such Guaranteed Obligations.

              (e)    Authorization to Guaranteed Parties. If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is
commenced by or against the Borrower or its property:

                     (i)    the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name of
the Guarantor or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution in respect of the Subordinated
Debt and give acquittance therefor and to file claims and proofs of claim and
take such other action (including voting the Subordinated Debt) as they may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Guaranteed Parties; and

                     (ii)   the Guarantor shall promptly take such action as any
of the Guaranteed Parties may reasonably request (A) to collect the Subordinated
Debt for the account of the Guaranteed Parties and to file appropriate claims or
proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver
to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such
powers of attorney, assignments and other instruments as they may request to
enable them to enforce any and all claims with respect to the Subordinated Debt,
and (C) to collect and receive any and all Subordinated Debt Payments.

              SECTION 8 Continuing Guaranty; Reinstatement.

              (a)    Continuing Guaranty. This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding upon
the Guarantor until the payment and performance in full of all Guaranteed
Obligations.



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              (b)    Reinstatement. This Guaranty shall continue to be effective
or shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Borrower (or
receipt of any proceeds of collateral) shall be rescinded, invalidated, declared
to be fraudulent or preferential, set aside, voided or otherwise required to be
repaid to the Borrower, its estate, trustee, receiver or any other Person
(including under any Debtor Relief Laws or other state or federal law), or must
otherwise be restored by the Guaranteed Parties, whether as a result of
proceedings under any Debtor Relief Laws or otherwise. To the extent any payment
is so rescinded, set aside, voided or otherwise repaid or restored, the
Guaranteed Obligations shall be revived in full force and effect without
reduction or discharge for such payment. All losses, damages, costs and expenses
that the Guaranteed Parties may suffer or incur as a result of any voided or
otherwise set aside payments shall be specifically covered by the indemnity in
favor of the Guaranteed Parties contained in Section 15.

              SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of
the foregoing provisions of this Guaranty and not in limitation of any other
right which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith
pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral
Agent on their behalf) an amount equal to the amount of the Guaranteed
Obligations then due as aforesaid (including interest which, but for the filing
of a petition in any proceeding under any Debtor Relief Laws with respect to the
Borrower, would have accrued on such Guaranteed Obligations, whether or not a
claim is allowed against the Borrower for such interest in any such proceeding
under any Debtor Relief Laws). The Guarantor shall make each payment hereunder,
unconditionally in full without set-off, counterclaim or other defense, or
deduction for any Taxes, on the day when due in Dollars and in same day or
immediately available funds, to the Collateral Agent at such office or account
of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral
Agent on their behalf) may direct. All such payments shall be promptly applied
from time to time by the Guaranteed Parties as provided in the Credit Documents.

              SECTION 10 Representations and Warranties. The Guarantor
represents and warrants to the Guaranteed Parties that:

              (a)    Organization and Powers. The Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would have a Material Adverse Effect and has all requisite
power and authority: (i) to own its assets and carry on its business, and (ii)
to execute, deliver and perform its obligations under the Guarantor Documents
and Spin-Off Documents.

              (b)    Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor Documents
and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized
by all necessary corporate action of the Guarantor, and do not and will not: (i)
contravene the terms of the Guarantor's organization documents or (ii) conflict
with or result in any breach or contravention of, or the creation of any



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Lien under, any document evidencing any material Contractual Obligation to which
the Guarantor is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Guarantor or its property is subject, or
(iii) violate any Laws.

              (c)    Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

              (d)    Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the due execution,
delivery or performance by, or enforcement against, the Guarantor of the
Guarantor Documents, (ii) the execution, delivery or performance by or
enforcement against the Guarantor of the Spin-Off Documents or (iii) the
consummation of the Spin-Off Transaction.

              (e)    No Prior Assignment. The Guarantor has not previously
assigned any interest in the Subordinated Debt or any collateral relating
thereto, no Person other than the Guarantor owns an interest in the Subordinated
Debt or any such collateral (whether as joint holders of the Subordinated Debt,
participants or otherwise), and the entire Subordinated Debt is owing only to
the Guarantor.

              (f)    Solvency. Immediately prior to and after and giving effect
to (i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.

              (g)    Consideration. The Guarantor has received at least
"reasonably equivalent value" (as such phrase is used in Section 548 of the
Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272
of the New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is a
party.

              (h)    Independent Investigation. The Guarantor hereby
acknowledges that it has undertaken its own independent investigation of the
financial condition of the Borrower and all other matters pertaining to this
Guaranty and further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto. The
Guarantor represents and warrants that it has received and reviewed copies of
the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information concerning
the financial condition of the Borrower and any other matters pertinent hereto
that the Guarantor may desire. The Guarantor is not relying upon or expecting
the Guaranteed Parties to furnish to the Guarantor any information now or
hereafter in the Guaranteed Parties' possession concerning the financial
condition of the Borrower or any other matter.

              SECTION 11 Reporting Covenant. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that it shall


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furnish to the Guaranteed Parties such information respecting the operations,
properties, business or condition (financial or otherwise) of the Guarantor or
its Subsidiaries as any of the Guaranteed Parties may from time to time
reasonably request.

              SECTION 12 Additional Covenants. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that:

              (a)    Preservation of Existence, Etc. The Guarantor shall, and
shall cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the case
of this clause (ii) where the non-preservation could not reasonably be expected
to have a Material Adverse Effect.

              (b)    Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and assurances
and perform such acts as any of the Guaranteed Parties shall deem reasonably
necessary or appropriate to effectuate the purposes of this Guaranty and the
other Guarantor Documents, and promptly provide the Guaranteed Parties with
evidence of the foregoing satisfactory in form and substance to the Guaranteed
Parties.

              SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or to such replacement Swap Provider may be
appointed from time to time consistent with the Intercreditor Agreement),
according to the information listed in Schedule 10.02 of the Credit Agreement
for such party as a Lender and (b) any notice to the Note Holders shall be
delivered to the address specified for such Persons in the Note Purchase
Agreement (or to such replacement Note Holders as may be appointed from time to
time consistent with the Intercreditor Agreement). Notices to the Guarantor
shall be sent or delivered to the address set forth in the Credit Agreement for
the Borrower. All such notices, requested and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.

              SECTION 14 No Waiver; Cumulative Remedies. No failure on the part
of any Guaranteed Party to exercise, and no delay in exercising on the part of
any Guaranteed Party, any right, remedy, power or privilege hereunder or under
any other Guarantor Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

              SECTION 15 Costs and Expenses; Indemnification.

              (a)    Costs and Expenses. The Guarantor shall:



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                     (i)    whether or not the transactions contemplated hereby
are consummated, pay or reimburse each of the Guaranteed Parties for all costs
and expenses incurred by them in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this Guaranty,
any other Guarantor Document and any other documents prepared in connection
herewith or therewith and the consummation of the transactions contemplated
hereby and thereby; and

                     (ii)   pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).

              (b)    Indemnification. The Borrower shall indemnify, defend and
hold each of the Guaranteed Parties and each Lender and Note Holder and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suites, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in favor of any
third-party in any way relating to or arising out of this Guaranty or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any proceeding under any Debtor Relief Laws
or appellate proceeding) related to or arising out of this Guaranty or relating
to the Collateral, whether or not any Indemnified Person is a party thereto (the
"Indemnified Liabilities"); provided that the Guarantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person.

              (c)    Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel satisfactory
to such Indemnified Person in such Person's sole discretion, at the sole cost
and expense of the Guarantor.

              (d)    Interest. Any amounts payable to the Guaranteed Parties
under this Section 15 if not paid upon demand shall bear interest from the date
of such demand until paid in full, at the Default Rate.

              SECTION 16 Right of Set-Off. In addition to any rights and
remedies of the Guaranteed Parties and the Lenders provided by law, if an Event
of Default exists or any reimbursement or payment obligation under any of the
Credit Documents has been accelerated, each of the Guaranteed Parties and
Lenders is hereby authorized at any time and from time to time, upon notice to
the other Guaranteed Parties as prescribed in the Intercreditor Agreement, but
without notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Person to or for the credit or


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the account of the Guarantor against any and all of the obligations of the
Guarantor then due and owing, irrespective of whether or not such Person shall
have made any demand upon the Borrower or the Guarantor under any of the Credit
Documents. Each Lender and the Guaranteed Parties shall promptly notify the
Guarantor (through the Collateral Agent) after any such set-off and application
made by it; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the Lenders
and Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which such Persons may have.

              SECTION 17 Marshalling; Payments Set Aside. None of the Lenders,
the Note Holders, or the Guaranteed Parties shall be under any obligation to
marshal any assets in favor of the Guarantor or any other Person or against or
in payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Guaranteed Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of
such recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Lender severally
agrees to pay to the Collateral Agent upon demand its pro rata share of any
amount so recovered from or repaid by the Collateral Agent.

              SECTION 18 Benefits of Guaranty. This Guaranty is entered into for
the sole protection and benefit of the Lenders, the Note Holders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person (other
than any Indemnified Person specified herein) shall be a direct or indirect
beneficiary of, or shall have any direct or indirect cause of action or claim in
connection with, this Guaranty. The Guaranteed Parties, by their acceptance of
this Guaranty, shall not have any obligations under this Guaranty to any Person
other than the Guarantor, and such obligations shall be limited to those
expressly stated herein.

              SECTION 19 Binding Effect; Assignment.

              (a)    Successors and Assigns. The provisions of this Guaranty
shall be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.

              (b)    Assignment. The Guarantor shall not have the right to
assign or transfer its rights and obligations hereunder or under any other
Guarantor Documents without the prior written consent of the Required Lenders.
Each of the Guaranteed Parties, the Note Holders and the Lenders may, without
notice to or consent by the Guarantor, sell, assign, transfer or grant
participations in all or any portion of such Person's rights and obligations
hereunder and under the other Guarantor Documents in connection with any sale,
assignment, transfer or grant of a participation by such Person in accordance
with Section 10.07 of the Credit Agreement or in its rights and obligations
thereunder and under any of the other Credit Documents. The Guarantor agrees
that in connection with any such sale, assignment, transfer or grant by any
Lender, such Lender may deliver to the prospective participant or assignee
financial statements and other relevant information relating to the Guarantor
and its Subsidiaries.



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              SECTION 20 Governing Law and Jurisdiction.

              (a)    THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED
PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

              (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

              SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS
GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

              SECTION 22 Entire Agreement; Amendments. This Guaranty, together
with the other Guarantor Documents, embodies the entire agreement of the
Guarantor with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended
only by written agreement between the Guarantor and the Guaranteed Party to whom
such



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amendment relates. Any such amendment shall not effect any guaranty of the
Guarantor granted hereunder to any other Guaranteed Party.

              SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed Party
shall not in any way affect or impair the legality or enforceability of that or
any other provision of this Guaranty or any instrument or agreement required
hereunder in respect of any other Guaranteed Party. The parties acknowledge that
this Guaranty has, solely for reasons of convenience, been prepared and executed
as a single document, but that the legal effect shall be in all respects as
thought the Guarantor had executed separate guaranties, in favor of each
Guaranteed Party. Any provision of this Agreement and the other Credit Documents
to which the Grantor is a party that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

              SECTION 24 Termination. This Guaranty shall terminate in all
respects on the Spin-Off Consummation Date, provided, that (i) as of the
Spin-Off Consummation Date, there exists no Default or Event of Default, and
(ii) all of the representations and warranties of the Borrower contained in
Article V of the Credit Agreement, or which were contained in any Loan Document
or Spin-Off Documents furnished prior to the Spin-Off Consummation Date are true
and correct on and as of the Spin-Off Consummation Date, except to the extent
that such representations and warranties specifically refer to any earlier date,
in which case they shall be true and correct as of such earlier date, and (iii)
the Administrative Agent shall have received a certificate of a Responsible
Officer of the Borrower, dated as of the Spin-Off Consummation Date, certifying
that (A) the Spin-Off Consummation Date has occurred, (B) as of the Spin-Off
Consummation Date there exists no Default or Event of Default, and (C) all of
the representations and warranties of the Borrower contained in Article V of the
Credit Agreement, or which were contained in any Loan Documents or Spin-Off
Documents furnished prior to the Spin-Off Consummation Date, are true and
correct on and as of the Spin-Off Consummation Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they shall be certified as being true and correct as of such earlier
date.




                                      E-17
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              IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as
of the date first above written.

                                                NEW CERIDIAN CORPORATION


                                                By:
                                                   ------------------------
                                                Title:
                                                      ---------------------
                                                Address:
                                                New Ceridian Corporation
                                                3311 East Old Shakopee Road
                                                Minneapolis, MN 55425-1640

                                                Attn: John H. Grierson
                                                Fax No.: (952) 853-3932





                                      E-18
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                                                                       EXHIBIT F

                           FORM OF SUBSIDIARY GUARANTY

              THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is
made by each of the Subsidiaries listed on Schedule 1 hereto (collectively, the
"Guarantor"), in favor (a) of the financial institutions (each a "Lender" and,
collectively, the "Lenders") from time to time party to that certain Credit
Agreement dated as of January 31, 2001 (as renewed, extended, modified, amended
or restated from time to time, the "Credit Agreement"), among CERIDIAN
CORPORATION, a Delaware corporation (the "Borrower"), the Lenders and BANK OF
AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the
"Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c)
the Note Holders (as defined herein) (collectively, the "Guaranteed Parties" and
each, individually, a "Guaranteed Party").

                                    RECITALS

              WHEREAS, it is a requirement under of the Credit Agreement and the
Note Purchase Agreement that Guarantor shall be bound by the terms and
conditions of this Guaranty pending the Spin-Off Consummation Date; and

              WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Borrower pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;

              WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Borrower being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;

              NOW, THEREFORE, in consideration of the Administrative Agent and
Lenders entering into the Credit Agreement, the Guarantor hereby agrees as
follows:

              SECTION 1 Definitions; Interpretation.

              (a)    Terms Defined in Credit Agreement. All capitalized terms
used in this Guaranty and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

              (b)    Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings:

              "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time pursuant
thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its
capacity as Administrative Agent for the benefit of itself and





                                      F-1
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the other Lenders from time to time party to the Credit Agreement, and the L/C
Issuer; (b) the Note Holders for the benefit of itself and the other Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.

              "Credit Documents" means, collectively, the Loan Documents, the
Swap Documents, and the Note Purchase Documents.

              "Guaranteed Obligations" has the meaning set forth in Section
2(a).

              "Guaranteed Parties" and "Guaranteed Party" have the meanings
assigned to them in the first paragraph hereof.

              "Guarantor Documents" means this Guaranty, and all other
certificates, documents, agreements and instruments delivered to the Guaranteed
Parties under or in connection with this Guaranty.

              "Indemnified Liabilities" has the meaning set forth in Section
15(b).

              "Indemnified Person" has the meaning set forth in Section 15(b).

              "Intercreditor Agreement" means that Intercreditor Agreement dated
as of January ___, 2001 among the Collateral Agent, the Administrative Agent,
the Swap Provider, and the Note Holders Agent.

              "Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Note Holders), (b) all Account Control Agreements executed by any Loan Party
under any Note Holder Document, (c) all documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Note Holder Document, and (d)
all licenses, UCC financing statements, notices and other documents executed
from time to time or in connection with any of the foregoing.

              "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

              "Note Holder Guaranties" means the Guaranties under and as defined
in the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Note Holders.

              "Note Holder" means a "Note Holder" under, and as defined in, the
Note Purchase Agreement.

              "Note Purchase Agreement" means that Note Purchase Agreement dated
as of January 31, 2001 among the Borrower, the Note Holders and the other Note
Holders party thereto.



                                      F-2
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              "Solvent" means, as to any Person at any time, that (a) the fair
value of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New
York Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of
the property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (c) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.

              "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Borrower and the Swap Provider as swap counterparties.

              "Specified Swap Contract" means any interest rate swap entered
into between the Borrower and the Swap Provider as swap counterparties
constituting a "Specified Swap Contract" as defined in the Credit Agreement.

              "Subordinated Debt" has the meaning set forth in Section 7(a).

              "Subordinated Debt Payments" has the meaning set forth in Section
7(b).

              "Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider), (ii) all Account Control Agreements executed by any Loan Party under
any Swap Document, (iii) all documents executed by any Loan Party to accomplish
cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC
financing statements, notices and other documents executed from time to time or
in connection with any of the foregoing.

              "Swap Documents" means, collectively, (a) any Specified Swap
Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties.

              "Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.

              "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

              (c)    Interpretation. The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and
are incorporated herein by this reference.



                                      F-3
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              SECTION 2 Guaranty.

              (a)    Guaranty. The Guarantor hereby unconditionally and
irrevocably guarantees to the Guaranteed Parties, and their respective
successors, endorsees, transferees and assigns, the full and prompt payment when
due (whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise) and performance of the indebtedness,
liabilities and other obligations of the Borrower to each such Guaranteed Party,
whether created under, arising out of or in connection with any of the Credit
Documents, including all Obligations (as independently defined in each of the
Credit Agreement and the Note Purchase Agreement); and any obligations under any
Specified Swap Agreement to the extent arising out of any one or more Specified
Swap Contracts. The terms "indebtedness," "liabilities" and "obligations" are
used herein in their most comprehensive sense and include any and all advances,
debts, obligations and liabilities, now existing or hereafter arising, whether
voluntary or involuntary and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether recovery
upon such indebtedness, liabilities and obligations may be or hereafter becomes
unenforceable or shall be an allowed or disallowed claim under the Bankruptcy
Code or other applicable law. The foregoing indebtedness, liabilities and other
obligations of the Borrower, and all other indebtedness, liabilities and
obligations to be paid or performed by the Guarantor in connection with this
Guaranty (including any and all amounts due under Section 15), shall hereinafter
be collectively referred to as the "Guaranteed Obligations."

              (b)    Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's liability
with respect to any of the Guaranteed Obligations which any of the Guaranteed
Parties can enforce under this Guaranty, such Guaranteed Parties by their
acceptance hereof accept such limitation on the amount of the Guarantor's
liability hereunder to the extent needed to make this Guaranty and the Guarantor
Documents fully enforceable and nonavoidable.

              SECTION 3 Liability of Guarantor. The liability of the Guarantor
under this Guaranty shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
payment and performance in full of all Guaranteed Obligations. In furtherance of
the foregoing and without limiting the generality thereof, the Guarantor agrees
as follows:

              (i)    the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent upon
the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Borrower or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;

              (ii)   this Guaranty is a guaranty of payment when due and not
merely of collectibility;



                                      F-4
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              (iii)  the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and

              (iv)   the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:

                     (A)    any proceeding under any Debtor Relief Laws with
respect to the Borrower, any other guarantor or any other Person;

                     (B)    any limitation, discharge, or cessation of the
liability of the Borrower, any other guarantor or any other Person for any
Guaranteed Obligations due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of any of the Guaranteed
Obligations or the Loan Documents;

                     (C)    any merger, acquisition, consolidation or change in
structure of the Borrower, the Guarantor or any other guarantor or Person, or
any sale, lease, transfer or other disposition of any or all of the assets or
shares of the Borrower, the Guarantor, any other guarantor or other Person;

                     (D)    any assignment or other transfer, in whole or in
part, of any of the Guaranteed Parties' interests in and rights under this
Guaranty or the other Credit Documents, including the Guaranteed Parties' right
to receive payment of the Guaranteed Obligations;

                     (E)    any claim, defense, counterclaim or setoff, other
than that of prior performance, that the Borrower, the Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the Credit
Documents;

                     (F)    the Guaranteed Parties' amendment, modification,
renewal, extension, cancellation or surrender of any Credit Document;

                     (G)    the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;

                     (H)    any impairment or invalidity of any collateral
securing any of the Guaranteed Obligations or any failure to perfect any of the
Liens of the Guaranteed Parties thereon or therein; and

                     (I)    any other guaranty, whether by the Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Borrower to the Guaranteed
Parties.

              SECTION 4 Consents of Guarantor. The Guarantor hereby
unconditionally consents and agrees that, without notice to or further assent
from the Guarantor:



                                      F-5
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              (i)    the principal amount of the Guaranteed Obligations in
respect of any of the Guaranteed Parties may be increased or decreased as to
such Guaranteed Party and additional indebtedness or obligations of the Borrower
under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Document;

              (ii)   the time, manner, place or terms of any payment under any
Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any Guaranteed Obligation or any fee or other
amount payable under such Credit Documents, by an amendment, modification or
renewal of any Credit Documents or otherwise;

              (iii)  the time for the Borrower's (or any other Person's)
performance of or compliance with any term, covenant or agreement on its part to
be performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;

              (iv)   any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the payment
and performance of all or any part of the Guaranteed Obligations owing to such
Guaranteed Parties, and may permit or consent to any such action or any result
of such action, and shall not be obligated to demand or enforce payment upon any
collateral, nor shall the Guaranteed Parties be liable to the Guarantor for any
failure to collect or enforce payment or performance of the Guaranteed
Obligations from any Person or to realize on any collateral therefor;

              (v)    the Guaranteed Parties may take and hold other security
(legal or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale
thereof;

              (vi)   the Guaranteed Parties may request and accept other
guaranties of the Guaranteed Obligations and any other indebtedness, obligations
or liabilities of the Borrower to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to any
such action or the result of any such action; and

              (vii)  the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege (including
the right to accelerate the maturity of any Loan and any power of sale) granted
by any Credit Document or other security document or agreement, or otherwise
available to the Guaranteed Parties, with respect to the Guaranteed Obligations
or any collateral, even if the exercise of such right, remedy, power or
privilege affects or eliminates any right of subrogation or any other right of
the Guarantor against the Borrower;



                                      F-6
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              all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.

               SECTION 5 Guarantor's Waivers.

              (a)    Certain Waivers. The Guarantor waives and agrees not to
assert:

                     (i)    any right to require any of the Guaranteed Parties
to marshal assets in favor of the Borrower, the Guarantor, any other guarantor
or any other Person, to proceed against the Borrower, any other guarantor or any
other Person, to proceed against or exhaust any of the Collateral, to give
notice of the terms, time and place of any public or private sale of personal
property security constituting the Collateral or other collateral for the
Guaranteed Obligations or comply with any other provisions of Section 9-504 of
the New York UCC (or any equivalent provision of any other applicable law) or to
pursue any other right, remedy, power or privilege of the Guaranteed Parties
whatsoever;

                     (ii)   the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;

                     (iii)  any defense arising by reason of any lack of
corporate or other authority or any other defense of the Borrower, the Guarantor
or any other Person;

                     (iv)   any defense based upon the Guaranteed Parties' or
any Lender's errors or omissions in the administration of the Guaranteed
Obligations;

                     (v)    any rights to set-offs and counterclaims;

                     (vi)   any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Borrower or any other obligor of the
Guaranteed Obligations for reimbursement; and

                     (vii)  without limiting the generality of the foregoing, to
the fullest extent permitted by law, any defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of this
Guaranty, including any and all benefits that otherwise might be available to
the Guarantor under New York Laws. This means, among other things: (A) the
Guaranteed Parties may collect from the Guarantor without first foreclosing on
any real or personal property collateral pledged by the Borrower; and (B) if the
Guaranteed Parties forecloses on any real property collateral pledged by the
Borrower: (1) the amount of the debt may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price, and (2) the Guaranteed Parties may collect from the
Guarantor even if the Administrative Agent, by foreclosing on the real property
collateral, has destroyed any right the Guarantor may have to collect from the
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses the Guarantor may have because the Borrower's debt is secured by real
property.




                                      F-7
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              (b)    Additional Waivers. The Guarantor waives any and all notice
of the acceptance of this Guaranty, and any and all notice of the creation,
renewal, modification, extension or accrual of the Guaranteed Obligations, or
the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of
any right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and permitted
to exist in reliance upon this Guaranty. The Guarantor waives promptness,
diligence, presentment, protest, demand for payment, notice of default, dishonor
or nonpayment and all other notices to or upon the Borrower, the Guarantor or
any other Person with respect to the Guaranteed Obligations.

              (c)    Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Borrower
and any other guarantor. Upon the occurrence and during the continuance of any
Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Borrower or any such other guarantor is joined
therein or a separate action or actions are brought against the Borrower or any
such other guarantor.

              (d)    Financial Condition of Borrower. The Guarantor shall not
have any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Borrower or the ability of the Borrower to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.

              SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it
may acquire by way of subrogation under this Guaranty, by any payment hereunder
or otherwise, (ii) any rights of contribution, indemnification, reimbursement or
similar suretyship claims arising out of this Guaranty or (iii) any other right
which it might otherwise have or acquire (in any way whatsoever) which could
entitle it at any time to share or participate in any right, remedy or security
of the Guaranteed Parties as against the Borrower or other guarantors, whether
in connection with this Guaranty, any of the other Credit Documents or
otherwise. If any amount shall be paid to the Guarantor on account of the
foregoing rights at any time when all the Guaranteed Obligations shall not have
been paid in full, such amount shall be held in trust for the benefit of the
Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the
Collateral Agent on their behalf) to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Documents (and subject to the Intercreditor Agreement).

              SECTION 7 Subordination.

              (a)    Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Borrower to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments



                                      F-8
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evidencing any credit extensions to the Borrower or otherwise, including all
principal on any such credit extensions, all interest accrued thereon, all fees
and all other amounts payable by the Borrower to the Guarantor in connection
therewith, whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined (the "Subordinated Debt") shall be subject, subordinate and junior
in right of payment and exercise of remedies, to the extent and in the manner
set forth herein, to the prior payment in full in cash or cash equivalents of
the Guaranteed Obligations.

              (b)    No Payments. As long as any of the Guaranteed Obligations
shall remain outstanding and unpaid, the Guarantor shall not accept or receive
any payment or distribution by or on behalf of the Borrower, directly or
indirectly, of assets of the Borrower of any kind or character, whether in cash,
property or securities, including on account of the purchase, redemption or
other acquisition of Subordinated Debt, as a result of any collection, sale or
other disposition of collateral, or by setoff, exchange or in any other manner,
for or on account of the Subordinated Debt ("Subordinated Debt Payments"),
except that if no Event of Default exists and no notice described below has been
received by the Guarantor, the Guarantor shall be entitled to accept and receive
any and all payments. During the existence of an Event of Default (or if any
Event of Default would exist immediately after the making of a Subordinated Debt
Payment), and upon receipt by the Borrower of notice from the Guaranteed Parties
(or the Collateral Agent on their behalf) of such Default, and until such Event
of Default is cured or waived, pursuant to the terms of the applicable Credit
Documents, the Borrower shall not make, accept or receive any Subordinated Debt
Payment. In the event that, notwithstanding the provisions of this Section 7,
any Subordinated Debt Payments shall be received in contravention of this
Section 7 by the Guarantor before all Guaranteed Obligations are paid in full in
cash or cash equivalents, such Subordinated Debt Payments shall be held in trust
for the benefit of the Guaranteed Parties and shall be paid over or delivered to
the Guaranteed Parties (or the Collateral Agent on their behalf) for application
to the payment in full in cash or cash equivalents of all Guaranteed Obligations
remaining unpaid to the extent necessary to give effect to this Section 7, after
giving effect to any concurrent payments or distributions to the Guaranteed
Parties in respect of the Guaranteed Obligations.

              (c)    Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):

                     (i)    accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect of
the Subordinated Debt;

                     (ii)   exercise any rights under or with respect to (A) any
guaranties of the Subordinated Debt, or (B) any collateral held by it, including
causing or compelling the pledge or delivery of any collateral, any attachment
of, levy upon, execution against, foreclosure upon or the taking of other action
against or institution of other proceedings with respect to any collateral held
by it, notifying any account debtors of the Borrower or asserting any claim or
interest in any insurance with respect to any collateral, or attempt to do any
of the foregoing;


                                      F-9
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                     (iii)  exercise any rights to set-offs and counterclaims in
respect of any indebtedness, liabilities or obligations of the Guarantor to the
Borrower against any of the Subordinated Debt; or

                     (iv)   commence, or cause to be commenced, or join with any
creditor other than the Guaranteed Parties in commencing, any proceeding under
any Debtor Relief Laws as against Borrower.

              (d)    Subordination Upon Any Distribution of Assets of the
Borrower. In the event of any payment or distribution of assets of the Borrower
of any kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Borrower, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim in
any such proceeding, shall first be paid in full in cash, or payment provided
for in cash or in cash equivalents, before any Subordinated Debt Payment is
made; and (ii) to the extent permitted by applicable law, any Subordinated Debt
Payment to which the Guarantor would be entitled except for the provisions
hereof, shall be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Guaranteed Parties (or the Collateral
Agent acting on their behalf) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any concurrent
payment or distribution or provision therefor to the Guaranteed Parties in
respect of such Guaranteed Obligations.

              (e)    Authorization to Guaranteed Parties. If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is
commenced by or against the Borrower or its property:

                     (i)    the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name of
the Guarantor or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution in respect of the Subordinated
Debt and give acquittance therefor and to file claims and proofs of claim and
take such other action (including voting the Subordinated Debt) as they may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Guaranteed Parties; and

                     (ii)   the Guarantor shall promptly take such action as any
of the Guaranteed Parties may reasonably request (A) to collect the Subordinated
Debt for the account of the Guaranteed Parties and to file appropriate claims or
proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver
to the Guaranteed Parties (or the Collateral Agent acting on their behalf), such
powers of attorney, assignments and other instruments as they may request to
enable them to enforce any and all claims with respect to the Subordinated Debt,
and (C) to collect and receive any and all Subordinated Debt Payments.

                  SECTION 8  Continuing Guaranty; Reinstatement.


                                      F-10
   202


              (a)    Continuing Guaranty. This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding upon
the Guarantor until the payment and performance in full of all Guaranteed
Obligations.

              (b)    Reinstatement. This Guaranty shall continue to be effective
or shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Borrower (or
receipt of any proceeds of collateral) shall be rescinded, invalidated, declared
to be fraudulent or preferential, set aside, voided or otherwise required to be
repaid to the Borrower, its estate, trustee, receiver or any other Person
(including under any Debtor Relief Laws or other state or federal law), or must
otherwise be restored by the Guaranteed Parties, whether as a result of
proceedings under any Debtor Relief Laws or otherwise. To the extent any payment
is so rescinded, set aside, voided or otherwise repaid or restored, the
Guaranteed Obligations shall be revived in full force and effect without
reduction or discharge for such payment. All losses, damages, costs and expenses
that the Guaranteed Parties may suffer or incur as a result of any voided or
otherwise set aside payments shall be specifically covered by the indemnity in
favor of the Guaranteed Parties contained in Section 15.

              SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of
the foregoing provisions of this Guaranty and not in limitation of any other
right which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith
pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral
Agent on their behalf) an amount equal to the amount of the Guaranteed
Obligations then due as aforesaid (including interest which, but for the filing
of a petition in any proceeding under any Debtor Relief Laws with respect to the
Borrower, would have accrued on such Guaranteed Obligations, whether or not a
claim is allowed against the Borrower for such interest in any such proceeding
under any Debtor Relief Laws). The Guarantor shall make each payment hereunder,
unconditionally in full without set-off, counterclaim or other defense, or
deduction for any Taxes, on the day when due in Dollars and in same day or
immediately available funds, to the Collateral Agent at such office or account
of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral
Agent on their behalf) may direct. All such payments shall be promptly applied
from time to time by the Guaranteed Parties as provided in the Intercreditor
Documents.

              SECTION 10 Representations and Warranties. The Guarantor
represents and warrants to the Guaranteed Parties that:

              (a)    Organization and Powers. The Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would have a Material Adverse Effect and has all requisite
power and authority: (i) to own its assets and carry on its business, and (ii)
to execute, deliver and perform its obligations under the Guarantor Documents
and Spin-Off Documents.



                                      F-11
   203

              (b)    Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor Documents
and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized
by all necessary corporate action of the Guarantor, and do not and will not: (i)
contravene the terms of the Guarantor's organization documents or (ii) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, any document evidencing any material Contractual Obligation to which the
Guarantor is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Guarantor or its property is subject, or
(iii) violate any Laws.

              (c)    Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

              (d)    Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the due execution,
delivery or performance by, or enforcement against, the Guarantor of the
Guarantor Documents, (ii) the execution, delivery or performance by or
enforcement against the Guarantor of the Spin-Off Documents or (iii) the
consummation of the Spin-Off Transaction.

              (e)    The Guarantor has not previously assigned any interest in
the Subordinated Debt or any collateral relating thereto, no Person other than
the Guarantor owns an interest in the Subordinated Debt or any such collateral
(whether as joint holders of the Subordinated Debt, participants or otherwise),
and the entire Subordinated Debt is owing only to the Guarantor.

              (f)    Solvency. Immediately prior to and after and giving effect
to (i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.

              (g)    Consideration. The Guarantor has received at least
"reasonably equivalent value" (as such phrase is used in Section 548 of the
Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272
of the New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is a
party.

              (h)    Independent Investigation. The Guarantor hereby
acknowledges that it has undertaken its own independent investigation of the
financial condition of the Borrower and all other matters pertaining to this
Guaranty and further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto. The
Guarantor represents and warrants that it has received and reviewed copies of
the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information concerning
the financial condition of the Borrower and any other matters pertinent hereto
that the Guarantor may desire. The Guarantor is not relying upon



                                      F-12
   204
or expecting the Guaranteed Parties to furnish to the Guarantor any information
now or hereafter in the Guaranteed Parties' possession concerning the financial
condition of the Borrower or any other matter.

              SECTION 11 Reporting Covenant. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.

              SECTION 12 Additional Covenants. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that:

              (a)    Preservation of Existence, Etc. The Guarantor shall,
and shall cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the case
of this clause (ii) where the non-preservation could not reasonably be expected
to have a Material Adverse Effect.

              (b)    Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and assurances
and perform such acts as any of the Guaranteed Parties shall deem reasonably
necessary or appropriate to effectuate the purposes of this Guaranty and the
other Guarantor Documents, and promptly provide the Guaranteed Parties with
evidence of the foregoing satisfactory in form and substance to the Guaranteed
Parties.

              SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or such replacement Swap Provider as the Swap
Provider may direct in writing), according to the information listed in Schedule
10.02 of the Credit Agreement for such party as a Lender and (b) any notice to
the Note Holders be delivered to the address specified for such Persons in the
Note Purchase Agreement (or to such replacement Note Holders as may be appointed
from time to time consistent with the Intercreditor Agreement). Notices to the
Guarantor shall be sent or delivered to the address set forth in the Credit
Agreement for the Borrower. All such notices, requested and communications
shall, when transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon receipt by the addressee, or
if delivered, upon delivery.

              SECTION 14 No Waiver; Cumulative Remedies. No failure on the part
of any Guaranteed Parties to exercise, and no delay in exercising on the part of
any Guaranteed Parties, any right, remedy, power or privilege hereunder or under
any other Guarantor Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other



                                      F-13
   205


right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

              SECTION 15 Costs and Expenses; Indemnification.

              (a)    Costs and Expenses. The Guarantor shall:

                     (i)    whether or not the transactions contemplated hereby
are consummated, pay or reimburse each of the Guaranteed Parties for all costs
and expenses incurred by them in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this Guaranty,
any other Guarantor Document and any other documents prepared in connection
herewith or therewith and the consummation of the transactions contemplated
hereby and thereby; and

                     (ii)   pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).

              (b)    Indemnification. The Borrower shall indemnify, defend and
hold each of the Guaranteed Parties, and each Lender and Note Holder and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suites, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in favor of any
third-party in any way relating to or arising out of this Guaranty or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any proceeding under any Debtor Relief Laws
or appellate proceeding) related to or arising out of this Guaranty or relating
to the Collateral, whether or not any Indemnified Person is a party thereto (the
"Indemnified Liabilities"); provided that the Guarantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person.

              (c)    Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel satisfactory
to such Indemnified Person in such Person's sole discretion, at the sole cost
and expense of the Guarantor.

              (d)    Interest. Any amounts payable to the Guaranteed Parties
under this Section 15 if not paid upon demand shall bear interest from the date
of such demand until paid in full, at the Default Rate.


                                      F-14
   206

              (e)    Survival. The agreements in this Section shall survive
payment of all other Guaranteed Obligations.

              SECTION 16 Right of Set-Off. In addition to any rights and
remedies of the Guaranteed Parties and the Lenders provided by law, if an Event
of Default exists or any reimbursement or payment obligation under any of the
Credit Documents has been accelerated, each Guaranteed Parties and Lenders is
hereby authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Person to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor then due and owing,
irrespective of whether or not such Person shall have made any demand upon the
Borrower or the Guarantor under any of the Credit Documents. Each Lender and the
Guaranteed Parties shall promptly notify the Guarantor (through the Collateral
Agent) after any such set-off and application made by it; provided, however,
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of the Lenders and Guaranteed Parties under
this Section 16 are in addition to other rights and remedies (including other
rights of set-off) which the such parties may have.

              SECTION 17 Marshalling; Payments Set Aside. None of the Lenders,
the Note Holders, or the Guaranteed Parties shall be under any obligation to
marshal any assets in favor of the Guarantor or any other Person or against or
in payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Guaranteed Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of
such recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Lender severally
agrees to pay to the Collateral Agent upon demand its pro rata share of any
amount so recovered from or repaid by the Collateral Agent.

              SECTION 18 Benefits of Guaranty. This Guaranty is entered into for
the sole protection and benefit of the Lenders, the Note Holders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person (other
than the Collateral Agent and any Indemnified Person specified herein) shall be
a direct or indirect beneficiary of, or shall have any direct or indirect cause
of action or claim in connection with, this Guaranty. The Guaranteed Parties, by
their acceptance of this Guaranty, shall not have any obligations under this
Guaranty to any Person other than the Guarantor, and such obligations shall be
limited to those expressly stated herein.

              SECTION 19 Binding Effect; Assignment.



                                      F-15
   207

              (a)    Successors and Assigns. The provisions of this Guaranty
shall be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.

              (b)    Assignment. The Guarantor shall not have the right to
assign or transfer its rights and obligations hereunder or under any other
Guarantor Documents without the prior written consent of the Required Lenders.
Each of the Guaranteed Parties, the Note Holders, and the Lenders may, without
notice to or consent by the Guarantor, sell, assign, transfer or grant
participations in all or any portion of such Person's rights and obligations
hereunder and under the other Guarantor Documents in connection with any sale,
assignment, transfer or grant of a participation by such Person in accordance
with Section 10.07 of the Credit Agreement in its rights and obligations
thereunder and under any of the Credit Documents. The Guarantor agrees that in
connection with any such sale, assignment, transfer or grant by any Lender, such
Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Guarantor and its
Subsidiaries.

                  SECTION 20 Governing Law and Jurisdiction.

              (a)    THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED
PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

              (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

              SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS
GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO


                                      F-16
   208


THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

              SECTION 22 Entire Agreement; Amendments. This Guaranty, together
with the other Guarantor Documents, embodies the entire agreement of the
Guarantor with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended
only by written agreement between the Guarantor and the Guaranteed Party to whom
such amendment relates. Any such amendment shall not effect any guaranty of the
Guarantor granted hereunder to any other Guaranteed Party.

              SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed Party
shall not in any way affect or impair the legality or enforceability of that or
any other provision of this Guaranty or any instrument or agreement required
hereunder in respect of any other Guaranteed Party. The parties acknowledge that
this Guaranty has, solely for reasons of convenience, been prepared and executed
as a single document, but that the legal effect shall be in all respects as
thought the Guarantor had executed separate guaranties, in favor of each
Guaranteed Party. Any provision of this Agreement and the other Credit Documents
to which the Grantor is a party that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

              SECTION 24 Multiple Guarantors; Joint and Several Liability. When
this Guaranty is executed by more than one Guarantor, the word "Guarantor" shall
mean all and any one or more of them, and the obligations of all Persons signing
this Guaranty shall be joint and several.

                  [remainder of page intentionally left blank]




                                      F-17
   209



              IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as
of the date first above written.

                                           [NAME OF SUBSIDIARY]

                                           By:
                                              --------------------------
                                                  Title

                                           Address:
                                           [             ]
                                            -------------
                                           Attn:  [        ]
                                                   --------
                                           Fax No.  [      ]
                                                     ------


                                           [NAME OF SUBSIDIARY]

                                           By:
                                              --------------------------
                                                  Title

                                           Address:
                                           [             ]
                                            -------------
                                           Attn:  [        ]
                                                   --------
                                           Fax No.  [      ]
                                                     ------




                                           [NAME OF SUBSIDIARY]

                                           By:
                                              --------------------------
                                                  Title

                                           Address:
                                           [             ]
                                            -------------
                                           Attn:  [        ]
                                                   --------
                                           Fax No.  [      ]
                                                     ------


                                           [NAME OF SUBSIDIARY]

                                           By:
                                              --------------------------
                                                  Title

                                           Address:
                                           [             ]
                                            -------------
                                           Attn:  [        ]
                                                   --------
                                           Fax No.  [      ]
                                                     ------


                                      F-18
   210



                                   SCHEDULE 1
                           to the Subsidiary Guaranty

                                  SUBSIDIARIES



                                  Schedule 1-1
   211



                                                                       EXHIBIT G


                          [BORROWER] SECURITY AGREEMENT

              THIS SECURITY AGREEMENT (this "Agreement"), dated as of February
__, 2001, is made by and among CERIDIAN CORPORATION, a Delaware corporation (the
"Grantor") in favor of the "Collateral Agent" (as defined herein) for the
benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such
capacity, the "Administrative Agent") for itself and the financial institutions
(the "Lenders" and, individually, a "Lender") from time to time party to that
certain Credit Agreement dated as of January 31, 2001 (as renewed, extended,
modified, amended or restated from time to time, the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein); and (c) the Note Holders party from
time to time to the Note Purchase Agreement.

                                    RECITALS

              WHEREAS, it is a condition precedent to the borrowings under the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and grant to the Collateral Agent, for the ratable benefit of the
Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.

              NOW, THEREFORE, the parties hereto agree as follows:

              SECTION 1 Definitions; Interpretation.

              (a)    Terms Defined in Credit Agreement. All capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement.

              (b)    Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

              "Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit account for purposes of Article 9 of the UCC or
applicable law.

              "Accounts" means any and all accounts of Grantor, whether now
existing or hereafter acquired or arising, and in any event includes all
accounts receivable, contract rights, royalties, Rights to Payment and other
obligations of any kind owed to Grantor arising out of or in connection with the
sale, lease, license or other transfer of Intellectual Property, merchandise,
goods or commodities or the rendering of services or arising from any other
transaction, however evidenced, and whether or not earned by performance, all
guaranties, indemnities and security with respect to the foregoing, and all
letters of credit relating thereto, in each case whether now existing or
hereafter acquired or arising.





                                      G-1
   212


              "Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such a way as to permit selective search and
retrieval using electronic, electromagnetic, manual or mechanical methods, which
relate to Grantor's business, and wherever maintained, collected or accessed.

              "Books" means all books, records and other written, electronic or
other documentation in whatever form maintained now or hereafter by or for
Grantor in connection with the ownership of its assets or the conduct of its
business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing
Grantor's assets (including Inventory and Rights to Payment), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and
output of whatever kind; (vi) any other computer prepared or electronically
stored, collected or reported information and equipment of any kind; and (vii)
any and all other rights now or hereafter arising out of any contract or
agreement between Grantor and any service bureau, computer or data processing
company or other Person charged with preparing or maintaining any of Grantor's
books or records or with credit reporting, including with regard to Grantor's
Accounts.

              "Chattel Paper" means all writings of whatever sort which evidence
a monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.

              "Collateral" has the meaning set forth in Section 2.

              "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.

              "Copyright Office" means the United States Copyright Office.

              "Credit Agents" and each, individually, a "Credit Agent" means (a)
the Administrative Agent (for the benefit of itself and the other Lenders, and
the L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

              "Credit Documents" means, collectively, the Loan Documents, the
Note Holder Documents and the Swap Documents.

              "Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.

              "Database Copyright Filing" has the meaning specified in Section
5(q)(v)(A).

              "Debt Participant" means a "Debt Participant" under, and as
defined in, the Intercreditor Agreement.




                                      G-2
   213

              "Deposit Account" means any demand, time, savings, passbook or
like account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and loan association, credit union or like organization (including
Bank of America) and all funds and amounts therein, whether or not restricted or
designated for a particular purpose.

              "Documents" means any and all documents of title, bills of lading,
dock warrants, dock receipts, warehouse receipts and other documents of Grantor,
whether or not negotiable, and includes all other documents which purport to be
issued by a bailee or agent and purport to cover goods in any bailee's or
agent's possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Grantor for
the purpose of ultimate sale or exchange of goods or for the purpose of loading,
unloading, storing, shipping, transshipping, manufacturing, processing or
otherwise dealing with goods in a manner preliminary to their sale or exchange,
in each case whether now existing or hereafter acquired or arising.

              "Equipment" means all now existing or hereafter acquired equipment
of Grantor in all of its forms, wherever located, and in any event includes any
and all machinery, furniture, equipment, furnishings and fixtures in which
Grantor now or hereafter acquires any right, and all other goods and tangible
personal property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other electronic
data processing equipment and other office equipment, computer programs and
related data processing software, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.

              "Filing Offices" has the meaning set forth in Section 3(a).

              "General Intangibles" means all general intangibles of Grantor,
now existing or hereafter acquired or arising, and in any event includes: (i)
all tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract or
tort and however arising; (iii) all Intellectual Property; (iv) all rights of
stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority; (vi)
all indemnity agreements, guaranties, insurance policies and other contractual,
equitable and legal rights of whatever kind or nature; and (vii) all rights to
receive payment and other rights arising under any Swap Contracts; in each case
whether now existing or hereafter acquired or arising.

              "Grantor" has the meaning set forth in the first paragraph hereof.

              "Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.

              "Instruments" means any and all negotiable instruments and every
other writing which evidences a right to the payment of money, wherever located
and whether now existing or hereafter acquired.


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              "Intellectual Property" means the following properties and assets
owned or held by Grantor or in which Grantor otherwise has any interest, now
existing or hereafter acquired or arising:

              (i)    all patents and patent applications, domestic or foreign,
all licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and patent
licenses as described in Schedule 2), all rights to sue for past, present or
future infringement thereof, all rights arising in connection with any of the
foregoing and pertaining thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; all copyrights and
applications for copyright (including with respect to the Arbitron Databases and
the Material Arbitron Software), domestic or foreign, together with the
underlying works of authorship (including titles), whether or not the underlying
works of authorship have been published and whether said copyrights are
statutory or arise under the common law, and all other rights and works of
authorship (including the copyrights and copyright applications described in
Schedule 2), all rights, claims and demands in any way relating to any such
copyrights or works, including royalties and rights to sue for past, present or
future infringement, and all rights of renewal and extension of copyright;

              (ii)   all state (including common law), federal and foreign
trademarks, service marks and trade names, and applications for registration of
such trademarks, service marks and trade names, all licenses relating to any of
the foregoing and all income and royalties with respect to any licenses
(including such marks, names, applications and licenses as described in Schedule
2), whether registered or unregistered and wherever registered, all rights to
sue for past, present or future infringement or unconsented use thereof, all
rights arising therefrom and pertaining thereto and all reissues, extensions and
renewals thereof;

              (iii)  all trade secrets, trade dress, trade styles, logos, other
source of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and Material
Software Additions), confidential information, customer lists, license rights,
advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and catalogs;

              (iv)   the entire goodwill of or associated with the businesses
now or hereafter conducted by Grantor connected with and symbolized by any of
the aforementioned properties and assets; and

              (v)    all intellectual property rights and property of the
Grantor now existing or hereafter arising, covered by any Supplemental IP
Security Agreement executed by Grantor from time to time in accordance with
Section 3(c).

              "Intercreditor Agreement" means that Intercreditor Agreement dated
as of January _____, 2001 among the Collateral Agent, the Administrative Agent,
the Swap Provider, and the "Note Holders" (as defined therein).



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              "Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or otherwise,
and all additions and accessions thereto, and any Document representing or
relating to any of the foregoing at any time.

              "Investment Property" means any and all investment property of
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts and commodity
accounts, and all financial assets held in any securities account or otherwise,
wherever located, and whether now existing or hereafter acquired or arising.

              "Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.

              "Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.

              "Material Software Addition" means any update, release, version,
patch, debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs, including
all object and source code and all copies and encodings thereof, purchased,
created or otherwise acquired by Grantor after the Closing Date.

              "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Loan Party
under any Note Holder Document, (iii) all documents executed by any Loan Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

              "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

              "Note Holder Guaranties" means the Guaranties under and as defined
in the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Note Holders.



                                      G-5
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              "Note Holder" means a "Note Holder" under, and as defined in, the
Note Purchase Agreement.

              "Note Purchase Agreement" means that Note Purchase Agreement dated
as of January 31, 2001 among the Borrower, the Note Holders party thereto.

              "Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.

              "Patent and Trademark Office" means the United States Patent and
Trademark Office.

              "Proceeds" means whatever is receivable or received from or upon
the sale, lease, license, collection, use, exchange or other disposition,
whether voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of
Grantor from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.

              "Rights to Payment" means all Accounts and any and all rights and
claims to the payment or receipt of money or other forms of consideration of any
kind in, to and under all Chattel Paper, Documents, General Intangibles,
Instruments, Investment Property and Proceeds.

              "Secured Obligations" means all indebtedness, liabilities and
other obligations of the Grantor to the Collateral Agent, any of the Credit
Agents and any Debt Participant, whether now existing or hereafter arising, and
whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, now or hereafter created under,
arising out of, or in connection with any of the Credit Documents, including all
Obligations (as independently defined in each of the Credit Agreement and the
Note Purchase agreement), and any obligations under any of the Swap Documents.

              "Software Copyright Filing" has the meaning specified in Section
5(q)(v)(B).

              "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Grantor and the Swap Provider as swap counterparties.

              "Specified Swap Contract" means any interest rate swap entered
into between the Grantor and the Swap Provider as swap counterparties
constituting a "Specified Swap Contract" as defined in the Credit Agreement.


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              "Supplemental IP Security Agreement" means a Supplemental IP
Security Agreement substantially in the form of Exhibit I of the Credit
Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the
Credit Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.

              "Swap Collateral Documents" means, collectively, (a) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider, (b) all Account Control Agreements executed by any Loan Party under
any Swap Document, (c) any documents executed by any Loan Party to accomplish
cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC
financing statements, notices and other documents executed from time to time in
connection with any of the foregoing.

              "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

              "Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.

              "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

              "UCC" means the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.

              "UCC Financing Statements" has the meaning specified in Section
4(f).

              (c)    Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the UCC.

              (d)    Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.

              SECTION 2 Security Interest.

              (a)    Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby


                                      G-7
   218


grants to the Collateral Agent (for the benefit of the Credit Agents, and each
of them), a security interest in all of Grantor's right, title and interest in,
to and under the following property, wherever located and whether now existing
or owned or hereafter acquired or arising (collectively, the "Collateral"):

                  (i)      all Accounts;

                  (ii)     all Chattel Paper;

                  (iii)    all Deposit Accounts;

                  (iv)     all Documents;

                  (v)      all Equipment;

                  (vi)     all General Intangibles;

                  (vii)    all Inventory;

                  (viii)   all Books;

                  (ix)     all products and Proceeds of any and all of the
                           foregoing; and

                  (x)      all Letter of Credit Proceeds.

Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, any Intellectual Property which is now held or hereafter held by
Grantor as licensee, lessee or otherwise, to the extent such Intellectual
Property consists of: (i) ordinary shrinkwrap licenses governing software
products that Grantor purchased for use in the Ordinary Course of Business; or
(ii) licenses listed on Schedule 5.17 of the Credit Agreement.

              (b)    Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts, agreements
and other documents included in the Collateral, to the extent set forth therein,
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent
of any of the rights hereunder shall not release Grantor from any of its duties
or obligations under such contracts, agreements and other documents included in
the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall
have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall any
such Person be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.

              (c)    Continuing Security Interest. Grantor agrees that this
Agreement shall create continuing security interests in the Collateral which
shall remain in effect until terminated in accordance with Section 23.



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              SECTION 3 Perfection Procedures. Grantor shall duly complete,
execute and deliver to the Collateral Agent and each of the Credit Agents
concurrently with the execution of this Agreement, and at any time and from time
to time, all Supplemental IP Security Agreements, financing statements,
continuation statements, termination statements, security agreements, chattel
mortgages, assignments, patent, copyright and trademark collateral assignments,
fixture filings, warehouse receipts, Account Control Agreements, documents of
title, affidavits, reports, notices, schedules of account, letters of authority
and all other documents and instruments, in form satisfactory to the
Administrative Agent, and take all other action, as the Collateral Agent (upon
instruction of the Instructing Group) may request, to perfect and continue
perfected, maintain the priority of or provide notice of the Collateral Agent's
security interests in the Collateral for the benefit of each of the Credit
Agents and to accomplish the purposes of this Agreement. Without limiting the
generality of the foregoing, Grantor shall from time to time take the following
actions:

              (a)    Filing of Security Agreements; Financing Statements. On or
prior to the Closing Date Grantor shall execute, notarize and deliver (i) an
original of this Agreement, (ii) such original UCC Financing Statements and
(iii) such original Supplemental IP Security Agreements as the Collateral Agent
at the instruction of the Instructing Group may reasonably request; all duly
completed and in final form for recordation at the offices described in Schedule
3 (the "Filing Offices"), and after the Closing Date the Grantor shall execute,
notarize and deliver original completed UCC Financing Statements for filing or
recording in the appropriate filing office or offices in any state identified by
a Grantor in a notice delivered pursuant to Section 5(e).

              (b)    Deposit Accounts. On or prior to the Closing Date Grantor
shall execute such Account Control Agreements, notices, and shall take such
other action, as the Collateral Agent at the instruction of the Instructing
Group may reasonably request, to perfect and continue perfected, maintain the
priority of or provide notice of the Collateral Agent's security interests in
Collateral for the benefit of each of the Credit Agents consisting of Deposit
Accounts and to accomplish the purposes of this Agreement.

              (c)    Intellectual Property Collateral.

              (i)    Patents; etc. Promptly following any submission, filing or
recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record such
duly completed, signed and notarized Supplemental IP Security Agreement with the
Patent and Trademark Office or Copyright Office, as applicable, and take such
other action as may be necessary, or as the Collateral Agent at the instruction
of the Instructing Group may reasonably request, to perfect or protect the
Collateral Agent's security interests in such Intellectual Property for the
benefit of each of the Credit Agents. Grantor shall promptly, but in any event
not later than ten days after any such recordation, deliver to the Collateral
Agent and each Credit Agent true and complete copies of all file-stamped
applications, disclosure documents and amendments, and all file-stamped
Supplemental IP Security Agreements recorded at the Patent and Trademark Office.

              (ii)   Copyrights. Grantor shall:


                                      G-9
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              (A) Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright Office
and take such other actions as may be necessary or appropriate in the discretion
of the Collateral Agent at the instruction of the Instructing Group to perfect
or protect the Collateral Agent's security interests in (I) all Database
Copyright Filings for such quarter, and (II) all Software Copyright Filings made
since the most recently filed Supplemental IP Security Agreement; and

              (B) take such other action as may be necessary, or the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property.

              (iii) The Grantor hereby authorizes the Collateral Agent to
modify, amend or supplement the Schedules hereto and to reexecute this Agreement
and any Supplemental IP Security Agreement from time to time on the Grantor's
behalf and as its attorney-in-fact to include any such future Collateral and to
cause to such reexecuted Agreement, Supplemental IP Security Agreement or such
modified, amended or supplemented Schedules to be filed with the Copyright
Office or the Patent and Trademark Office.

              (d)    Documents, Etc. Within five calendar days after receipt,
Grantor shall deliver to the Collateral Agent, or an agent designated by it, for
the benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to deliver
any Document, Chattel Paper, promissory note, trade acceptance or other
instrument having a face amount not in excess of $100,000. Upon the request of
the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with
such legends as the Collateral Agent shall reasonably specify.

              SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit Agreement,
which are incorporated and restated herein by this reference, and which are true
and correct as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:

              (a)    Location of Chief Executive Office and Collateral.
Grantor's chief executive office and principal place of business is located at
the address set forth in Schedule 1, and all other locations where Grantor
conducts business or Collateral is kept are set forth in Schedule 1.

              (b)    Locations of Books. All locations where Books pertaining to
the Rights to Payment are kept, including all equipment necessary for accessing
such Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for Grantor, are set forth in Schedule 1.



                                      G-10
   221

              (c)    Trade Names and Trade Styles. All trade names and trade
styles under which Grantor presently conducts the Arbitron Business operations
are set forth in Schedule 1, and, except as set forth in Schedule 1 and in
connection with the Transaction, Grantor has not, at any time in the past year:
(i) been known as or used any other corporate, trade or fictitious name; (ii)
changed its name; (iii) been the surviving or resulting corporation in a merger
or consolidation; or (iv) acquired through asset purchase or otherwise any
business of any Person.

              (d)    Ownership of Collateral. Grantor is, and, subject to
Section 5(i), will continue to be, the sole and complete owner of the
Collateral, or has a valid and enforceable leasehold or licensee's interest in
such Collateral as set forth in Schedule 2 and in accordance with subsection (i)
of this Section 4 (or, in the case of after-acquired Collateral, at the time
Grantor acquires rights in such Collateral, will be the sole and complete owner
thereof, or will have a valid and enforceable leasehold or licensee's interest
in such Collateral, to the extent permitted hereunder or under the Credit
Agreement), free from any Lien other than Permitted Liens.

              (e)    Enforceability; Priority of Security Interest. (i) This
Agreement together with such Supplemental IP Security Agreements as have been
executed by Grantor and filed at the Copyright Office or Patent and Trademark
Office in respect of the Intellectual Property create security interests which
are enforceable against the Collateral in which Grantor now has rights and will
create security interests which are enforceable against any Collateral in which
Grantor hereafter acquires rights at the time Grantor acquires any such rights.

              (ii)   The Collateral Agent has a perfected and first priority
security interest in the Collateral in which Grantor now has rights, and will
have a perfected and first priority security interest in the Collateral in which
Grantor hereafter acquires rights at the time Grantor acquires any such rights,
in each case for the Credit Agent's benefit and, subject only to Permitted
Liens, securing the payment and performance of the Secured Obligations.

              (f)    Other Financing Statements. Other than (i) financing
statements or other filings naming the owner of the asset to which such Lien
relates as debtor, under the UCC, copyright, patent, or trademark or any
comparable law ("UCC Financing Statements") disclosed to the Administrative
Agent prior to the Effective Date and listed on Schedule 5.17 of the Credit
Agreement, and (ii) UCC Financing Statements in favor of the Collateral Agent
for itself and the Credit Agents pursuant to the Credit Documents, no effective
UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor,
pledgor or the like or covering all or any part of the Collateral is on file in
any filing or recording office in any jurisdiction, except in connection with
Permitted Liens.

              (g)    Rights to Payment.


              (i)    The Rights to Payment represent valid, binding and
enforceable obligations of the account debtors or other Persons obligated
thereon, representing undisputed, bona fide transactions completed in accordance
with the terms and provisions contained in any documents related thereto, and
are and will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the extent
reflected by the



                                      G-11
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Grantor's reserves for uncollectible Rights to Payment or to the extent, if any,
that such account debtors or other Persons may be entitled to normal and
ordinary course trade discounts, returns, adjustments and allowances in
accordance with Section 5(m), or as otherwise disclosed to the Credit Agents in
writing or occurring in the ordinary course of business;

              (ii)   to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their debts
as they come due, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;

              (iii)  all Rights to Payment comply in all material respects with
all applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;

              (iv)   Grantor has not assigned any of its rights under the Rights
to Payment except as provided in this Agreement or as set forth in the other
Credit Documents;

              (v)    all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and

              (vi)   Grantor has no knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights to
Payment, except to the extent that Grantor has established adequate reserves
therefor in accordance with GAAP;

              (h)    Inventory. No Inventory is stored with any bailee,
warehouseman or similar Person or on any premises leased to Grantor, nor has any
Inventory been consigned to Grantor or consigned by Grantor to any Person or is
held by Grantor for any Person under any "bill and hold" or other arrangement,
except at locations listed in Schedule 1.

              (i)    Intellectual Property.

              (i)    As of the Closing Date, except as set forth in Schedule 2,
(A) Grantor (directly or through any Subsidiary) does not own, possess or use
under any licensing arrangement (other than ordinary shrinkwrap licenses
governing software products that Grantor purchased for use in the Ordinary
Course of Business) Intellectual Property materially related to the Arbitron
Business, and (B) Grantor (directly or through any Subsidiary) has no
registrations or applications therefor pending before any Governmental
Authority, that are or may be materially related to the Arbitron Business, for
any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron
Software, Material Software Additions or Arbitron Databases for which any such
application was submitted after December 31, 1998, (III) copyrights in respect
of "Radio Market Reports" of Grantor for which any such application was
submitted after December 1, 2000, or (IV) any other copyrights for which such
application was submitted after December 31, 1999.

              (ii)   All Grantor's Intellectual Property is subsisting and has
not been adjudged invalid or unenforceable in whole or in part.


                                      G-12
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              (iii)  All maintenance fees required to be paid by Grantor on
account of any of its patents have been timely paid for maintaining such patents
in force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.

              (iv)   To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.

              (v)    Grantor is the owner or licensee of its Intellectual
Property and the past, present and contemplated future use of such Intellectual
Property by Grantor has not, does not and will not infringe or violate any
right, privilege or license agreement of or with any other Person in any
material respect.

              (vi)   Grantor owns, has material rights under, is a party to, or
an assignee of a party to all Intellectual Property necessary and appropriate to
continue to conduct the Arbitron Business.

              (vii)  The Arbitron Databases purchased developed or otherwise
acquired by Grantor since December 31, 1998 are protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.

              (viii) The Material Arbitron Software is protected under current,
valid and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.

              (ix)   Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications therefor
issued by the Patent and Trademark Office and under the U.S. patent laws (except
with respect to such patents that have expired of their own terms, and not as
the result of any abandonment, dispute or settlement).

              (j)    Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered to
the Collateral Agent or as otherwise disclosed to the Administrative Agent and
the other Credit Agents.

              (k)    Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.
No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Credit Agents.

              (l)    Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on or
before the date hereof), (ii) no Person other than Grantor owns an interest in
the Instruments (whether as joint holders, participants or otherwise), (iii) all
Instruments are owing only to Grantor, and (iv) no material default exists under
or in respect of the Instruments.



                                      G-13
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              (m)    Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.

              SECTION 5 Covenants. In addition to the covenants of the Grantor
set forth in the Credit Agreement, which are incorporated herein by this
reference, so long as any of the Secured Obligations remain unsatisfied, Grantor
agrees that:

              (a)    Defense of Collateral. Grantor shall appear in and defend
any action, suit or proceeding which may affect to a material extent its title
to, or right or interest in, or the Collateral Agent's rights or interest in,
the Collateral.

              (b)    Preservation of Collateral. Grantor shall do and perform
all reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.

              (c)    Compliance with Laws, Etc. Grantor shall comply in all
material respects with all laws, regulations and ordinances (including with
respect to the Fair Labor Standards Act), and with all policies of insurance,
relating in a material way to the possession, operation, maintenance and control
of the Collateral.

              (d)    Location of Books and Chief Executive Office. Grantor
shall: (i) keep all Books pertaining to the Rights to Payment at the locations
set forth in Schedule 1; and (ii) give at least 30 days' prior written notice to
the Collateral Agent and each Credit Agent of (A) any changes in any such
location where Books pertaining to the Rights to Payment are kept, including any
change of name or address of any service bureau, computer or data processing
company or other Person preparing or maintaining any Books or collecting Rights
to Payment for Grantor or (B) any changes in the location of Grantor's chief
executive office or principal place of business.

              (e)    Location of Collateral. If any Collateral of Grantor shall
be physically relocated to, or otherwise be physically located in, a state of
the United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one Business
Day after becoming aware thereof).

              (f)    Change in Name, Identity or Structure. Grantor shall give
at least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any changes
in, additions to or other modifications of its trade names used as the name of
Grantor set forth in Schedule 1, and (iv) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.

              (g)    Maintenance of Records. Grantor shall keep accurate and
complete Books with respect to the Collateral, disclosing the Collateral Agent's
security interests hereunder for the benefit of the Credit Agents.



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              (h)    Invoicing of Sales. The Grantor will invoice all of its
sales upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.

              (i)    Disposition of Collateral. Grantor shall not surrender or
lose possession of (other than to a Credit Agent), sell, lease, rent, or
otherwise dispose of or transfer any of the Collateral or any right or interest
therein, except to the extent expressly permitted by the Credit Agreement.

              (j)    Liens. (i) Grantor shall keep the Collateral free of all
Liens except Permitted Liens.


              (ii)   Notwithstanding any other provision contained herein or in
the Credit Agreement, no Disposition of any assets of the Grantor shall be
deemed a transfer of goods free of the Collateral Agent's security interests
under Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j)
thereof shall be free of such security interests. Accordingly, all non-excluded
Dispositions shall be subject at all times to the Liens of the Collateral Agent.

              (k)    Expenses. The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.

              (l)    Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which any
Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Administrative Agent may reasonably require, in form
and substance satisfactory to the Administrative Agent.

              (m)    Rights to Payment. Grantor shall:

              (i)    with such frequency as the Collateral Agent may reasonably
require, furnish to the Collateral Agent (A) master customer listings, including
all names and addresses, together with copies or originals (as requested by the
Administrative Agent) of documents, customer statements, repayment histories and
present status reports relating to the Accounts; (B) accurate records and
summaries of Accounts, including detailed agings specifying the name, face value
and date of each invoice, and listings of Accounts that are disputed or have
been cancelled; and (C) such other information relating to the Accounts as the
Collateral Agent shall from time to time reasonably request;

              (ii)   give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their terms or pursuant to Grantor's
Ordinary Course of Business, and during the existence of an Event of Default,
take all such action to such end as may from time to time be reasonably
requested by the Collateral Agent, except that Grantor may at any time grant any
extension of the time for payment or enter into any agreement to make a rebate
or otherwise to reduce the amount owing on or with respect to, or compromise or
settle for less than the full amount thereof, any Account or other Right to
Payment, in the Ordinary Course of Business, according to normal trade
practices;


                                      G-15
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              (iii)  if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or
defense exists or has been asserted or threatened with respect to an Account or
other Right to Payment, disclose such fact to the Collateral Agent in the Books
relating to such Account or other Right to Payment when such Books are requested
for inspection by the Collateral Agent, and in connection with any invoice or
report furnished by Grantor to the Collateral Agent relating to such Account or
other Right to Payment;

              (iv)   if Accounts in an amount in excess of $500,000 for any and
all such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent thereof
and execute any documents and instruments and take any other steps reasonably
requested by the Collateral Agent in order that all monies due and to become due
thereunder shall be assigned to the Collateral Agent and notice thereof given to
the federal authorities under the Federal Assignment of Claims Act (provided
that such assignment and notice shall not be required if the applicable contract
prohibits assignment);

              (v)    in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the Accounts
and other Rights to Payment;

              (vi)   subject to Section 7, upon the request of the Collateral
Agent (A) at any time, notify all or any designated portion of the account
debtors and other obligors on the Rights to Payment of the security interests
hereunder, and (B) if there exists any Default or Event of Default, notify the
account debtors and other obligors on the Rights to Payment or any designated
portion thereof that payment shall be made directly to the Collateral Agent or
to such other Person or location as the Collateral Agent shall specify; and

              (vii)  if there exists any Default or Event of Default, establish
such lockbox or similar arrangements for the payment of the Accounts and other
Rights to Payment as the Administrative Agent shall require.

              (n)    Deposit Accounts and Securities Accounts. Grantor shall
give the Collateral Agent immediate notice of the establishment of any new
Deposit Account and any new securities account with respect to any Investment
Property.

              (o)    Inventory. Grantor shall:

              (i)    at such times as the Collateral Agent shall reasonably
request, prepare and deliver to the Collateral Agent a report of all Inventory,
in form and substance reasonably satisfactory to the Collateral Agent ;

              (ii)   upon the request of the Collateral Agent, take a physical
listing of the Inventory and promptly deliver a copy of such physical listing to
the Collateral Agent; and

              (iii)  not store any Inventory with a bailee, warehouseman or
similar Person or on premises leased to Grantor, nor dispose of any Inventory on
a bill-and-hold, guaranteed sale,



                                      G-16
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sale and return, sale on approval, consignment or similar basis, nor acquire any
Inventory from any Person on any such basis, except in the ordinary course of
business and in accordance with its normal practices.

              (p)    Equipment. Grantor shall, upon the Collateral Agent's
request, deliver to the Collateral Agent a report of each item of Equipment, in
form and substance reasonably satisfactory to the Collateral Agent.

              (q)    Intellectual Property Collateral. Grantor shall:

              (i)    not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public, except for Intellectual Property having negligible
commercial value;

              (ii)   not enter into any agreements or transactions (including
any license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of business, or enter into any exclusive
license or sublicense of any Intellectual Property, except in a transaction
permitted under the Credit Documents;

              (iii)  promptly give the Collateral Agent notice of any rights
Grantor may obtain to any new patentable inventions, copyrightable works or
other new Intellectual Property, prior to the registration or recordation
thereof (including pursuant to this Section 5(q)) as to which Grantor (a) has
received gross royalty or license payments from any and all third parties in an
aggregate amount excess of $1,000,000 during any of the five fiscal years
preceding such time or (b) reasonably projects that it will receive gross
royalty or license payments from any and all third parties in an aggregate
amount excess of $1,000,000 during the any of the subsequent five fiscal years;
provided that Grantor shall have no obligation to provide notice under this
subsection (iii) to the extent that Grantor has satisfied, or within the
immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);

              (iv)   not less frequently than once every three calendar months
and, additionally, upon the purchase, creation or other acquisition of any
Material Software Addition, diligently record, register or prosecute, as
applicable, all applications for patents, copyrights and trademarks, and
diligently record, register and prosecute, as applicable, any and all
continuations, continuations-in-part, applications for reissue, applications for
certificate of correction and like matters in respect of Grantor's Intellectual
Property as shall be reasonable and appropriate in accordance with prudent
business practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with any
Intellectual Property; and, without limiting the generality of the foregoing,

              (v) (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms to
the Copyright Office and take such other actions as necessary to register under
the U.S. copyright laws any and all additions, modifications or other changes to
the Arbitron Databases (each, a "Database Copyright Filing") since the Closing
Date; and (B) not less frequently than once every three calendar months and,
additionally, promptly after any purchase, creation or other acquisition of any
Material Software Addition, submit such duly completed, signed and notarized
copyright



                                      G-17
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registration forms to the Copyright Office and take such other actions as
necessary to register under the U.S. copyright laws each Material Software
Addition (each, a "Software Copyright Filing"); and


              (vi) not less frequently than once ever three calendar months, and
promptly but in any event not later than ten days after any and all recordations
described in subsections (iv) and (v) of this Section 5(q), and after any and
all recordations described in Section 3(c), deliver to the Collateral Agent and
each Credit Agent all such duly completed, file-stamped (or otherwise
certificated or acknowledged) and recorded documents together with such other
documents and information as the Collateral Agent or any Credit Agent may
reasonably request.

              (r)    Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of any
change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the Collateral and such other
reports and other information in connection with the Collateral as the
Collateral Agent at the instruction of the Instructing Group may reasonably
request, all in reasonable detail; and (iii) upon reasonable request of the
Collateral Agent or any Credit Agent make such demands and requests for
information and reports as Grantor is entitled to make in respect of the
Collateral.

              (s)    Insurance. (i) Grantor shall carry and maintain in full
force and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent for
the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified in
the Credit Agreement. Upon the request of the Collateral Agent, at the
instruction of the Instructing Group, and in any event not less often than
annually, Grantor shall furnish the Collateral Agent and each Credit Agent with
full information as to the insurance carried by it and, if so requested, copies
of all such insurance policies. All insurance policies required under this
subsection (s) shall provide that they shall not be terminated or cancelled nor
shall any such policy be materially changed without at least 30 days' prior
written notice to the Grantor and the Collateral Agent (or 10 days' prior
written notice if the Collateral Agent consents to such shorter notice). Receipt
of notice of termination or cancellation of any such insurance policies or
reduction of coverages or amounts thereunder shall entitle the Collateral Agent
to renew any such policies, cause the coverages and amounts thereof to be
maintained at levels required pursuant to the first sentence of this subsection
(s) or otherwise to obtain similar insurance in place of such policies, in each
case at the expense of the Grantor.

              (ii)   If Collateral of Grantor with a value exceeding $1,000,000
(the "Settlement Consent Threshold") shall be materially damaged or destroyed,
in whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on account
of any loss on any Collateral covered by insurance shall be made for less than
insured value without the consent of the Collateral Agent (with the consent of
the Instructing Group), unless, so long as there exists no Default or Event of
Default, the total value of each such loss or series of related losses so
compromised does not exceed the

                                      G-18
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Settlement Consent Threshold. Unless there exists any Default or Event of
Default, the Collateral Agent (upon instruction of the Instructing Group) shall
promptly execute such necessary consents, waivers and endorsements to permit
Grantor to settle losses the total aggregate value of which is in an amount less
than the Settlement Consent Threshold, and to receive payment therefor, as
reasonably requested by Grantor. After the occurrence and during the continuance
of an Event of Default, or as otherwise required under any of the Credit
Documents, all sums payable to Grantor by any insurer with respect to a casualty
relating to all or any part of the Collateral shall be paid to the Collateral
Agent (upon instruction of the Instructing Group). If Grantor shall receive any
insurance proceeds which are to be paid to the Collateral Agent pursuant to the
previous sentence, Grantor shall hold such proceeds in trust for the Collateral
Agent and shall segregate such proceeds from other funds of Grantor, and shall
immediately forward such proceeds in the form received to the Collateral Agent
(appropriately indorsed by Grantor to the order of the Collateral Agent or in
such other manner as shall be satisfactory to the Collateral Agent, upon
instruction of the Instructing Group). All such insurance proceeds may be
retained by the Collateral Agent as part of Collateral hereunder and held in the
Proceeds Account, applied by the Collateral Agent toward payment of all or part
of the Secured Obligations in such order as is provided herein, or released to
Grantor upon its request with the consent of the Instructing Group.

              (t)    Other Swap Obligations. Grantor shall not enter into any
swap contract under or subject to a Specified Swap Agreement, other than a
Specified Swap Contract.

              SECTION 6 Administration of the Rights to Payment.

              (a)    Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists at
such time any Event of Default, all remittances received by Grantor shall be
held in trust for the Collateral Agent and, in accordance with the Collateral
Agent's instructions, remitted to the Collateral Agent or deposited to an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).

              (b)    Investment Property and Instruments. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists at
such time any Event of Default, the Collateral Agent shall be entitled, subject
to the Intercreditor Agreement, to receive all distributions and payments of any
nature with respect to any Investment Property or Instruments, and all such
distributions or payments received by Grantor shall be held in trust for the
Collateral Agent and, in accordance with any of the its instructions (with the
consent of the Instructing Group), remitted to the Collateral Agent or deposited
to an account with the Administrative Agent in the form received (with any
necessary endorsements or instruments of assignment or transfer). If there
exists any Default or Event of Default any such distributions and payments with
respect to any Investment Property held in any securities account shall be held
and retained in such securities account, in each case as part of the Collateral
hereunder. Additionally, the Collateral Agent shall have the right, if there
exists any Default or Event of Default, following prior written notice to
Grantor, to vote and to give consents, ratifications and waivers with respect to
any Investment Property and Instruments, and to exercise all rights of

                                      G-19
   230


conversion, exchange, subscription or any other rights, privileges or options
pertaining thereto, as if the Collateral Agent was the absolute owner thereof;
provided that the Collateral Agent shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to Grantor or any
other Person for any failure to do so or delay in doing so.

              (e)    Distributions to Be Held for Administrative Agent.
Distributions and other payments which are received by the Grantor but which it
is not entitled to retain as a result of the operation of this Section 6 shall
be held in trust for the benefit of the Collateral Agent and be segregated from
the other property or funds of Grantor, and be forthwith paid over or delivered
to the Collateral Agent in the same form as so received.

              SECTION 7 Authorization; Appointment as Attorney-in-Fact. The
Collateral Agent shall have the right to, in the name of Grantor, or in the name
of any of the Credit Parties or otherwise, without notice to or assent by
Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and
any officers or employees or agents designated by the Collateral Agent) as
Grantor's true and lawful attorney-in-fact, with full power and authority to:

              (i)    sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security interests
in the Collateral of the Collateral Agent (for the benefit of the Credit Agents)
and file any such financing statements and Supplemental IP Security Agreements
by electronic means with or without a signature as authorized or required by
applicable law or filing procedures;

              (ii)   take possession of and endorse any notes, acceptances,
checks, drafts, money orders or other forms of payment or security and collect
any Proceeds of any Collateral;

              (iii)  sign and endorse any invoice or bill of lading relating to
any of the Collateral, warehouse or storage receipts, drafts against customers
or other obligors, assignments, notices of assignment, verifications and notices
to customers or other obligors;

              (iv)   notify the U.S. Postal Service and other postal authorities
to change the address for delivery of mail addressed to Grantor to such address
as Collateral Agent may designate (provided that the Collateral Agent agrees it
will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights to
Payment;

              (v)    receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);

              (vi)   send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;



                                      G-20
   231


              (vii)  contact, or direct Grantor to contact, all account debtors
and other obligors on the Rights to Payment and instruct such account debtors
and other obligors to make all payments directly to the Collateral Agent;

              (viii) assert, adjust, sue for, compromise or release any claims
under any policies of insurance;

              (ix)   exercise dominion and control over, and refuse to permit
further withdrawals from, Deposit Accounts maintained with Bank of America or
any other bank, financial institution or other Person;

              (x)    notify each Person maintaining lockbox or similar
arrangements for the payment of the Rights to Payment to remit all amounts
representing collections on the Rights to Payment directly to the Collateral
Agent;

              (xi)   ask, demand, collect, receive and give acquittances and
receipts for any and all Rights to Payment, enforce payment or any other rights
in respect of the Rights to Payment and other Collateral, grant consents, agree
to any amendments, modifications or waivers of the agreements and documents
governing the Rights to Payment and other Collateral, and otherwise file any
claims, take any action or institute, defend, settle or adjust any actions,
suits or proceedings with respect to the Collateral, as the Collateral Agent
(upon instruction of the Instructing Group) may deem necessary or desirable to
maintain, preserve and protect the Collateral, to collect the Collateral or to
enforce the rights of the Collateral Agent with respect to the Collateral;

              (xii)  execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual Property
and grant or issue any exclusive or non-exclusive license or sublicense with
respect to any Intellectual Property;

              (xiii) execute any and all endorsements, assignments or other
documents and instruments necessary to sell, lease, assign, convey or otherwise
transfer title in or dispose of the Collateral;

              (xiv)  execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interest of the Collateral therein; and

              (xv)   execute any and all such other documents and instruments,
and do any and all acts and things for and on behalf of Grantor, which the
Collateral Agent (upon instruction of the Instructing Group) may deem necessary
or advisable (A) to realize upon the Collateral, and (B) to maintain, protect
and preserve the Collateral and security interests of the Collateral Agent
therein and to accomplish the purposes of this Agreement.

The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent pursuant to clauses


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(ii) through (xiii), (xiv)(A) and (xv)(A). The foregoing power of attorney is
coupled with an interest and irrevocable so long as any of the Secured
Obligations has not been paid and performed in full. Grantor hereby ratifies, to
the extent permitted by law, any and all acts that the Collateral Agent shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.

              SECTION 8 Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which Grantor has agreed to perform or pay
under or in connection with this Agreement, and which Grantor has failed to
perform or pay as and when due, and Grantor shall reimburse the Collateral Agent
on demand for any amounts paid by the Collateral Agent pursuant to this Section
8.

              SECTION 9 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.

              SECTION 10. Remedies.


              (a)    Remedies. If there exists any Default or Event of Default,
the Collateral Agent shall have, in addition to all other rights and remedies
granted to in this Agreement, the Credit Agreement or any other Credit Document,
all rights and remedies of a secured party under the UCC and other applicable
laws. Without limiting the generality of the foregoing, Grantor agrees that:

              (i)    The Collateral Agent may peaceably and without notice enter
any premises of Grantor; take possession of any Collateral; remove, prohibit
access to or use of, or dispose of all or part of the Collateral on any premises
of Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional,
and otherwise collect, receive, appropriate and realize upon all or any part of
the Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or sue for all or any part of the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may determine.

              (ii)   The Collateral Agent may require Grantor to assemble all or
any part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.

              (iii)  The Collateral Agent may use or transfer any of Grantor's
rights and interests in any Intellectual Property, by license, by sublicense (to
the extent permitted by an applicable license) or otherwise, on such conditions
and in such manner as the Collateral Agent (upon instruction of the Instructing
Group) may determine.



                                      G-22
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              (iv)   The Collateral Agent may secure the appointment of a
receiver of the Collateral or any part thereof (to the extent and in the manner
provided by applicable law).

              (v)    The Collateral Agent may withdraw (or cause to be
withdrawn) any and all funds from any Deposit Accounts or securities accounts.

              (vi)   The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at the
same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction of
the Instructing Group) deem advisable; provided, however, that Grantor shall be
credited with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall have the right
upon any such public sale, and, to the extent permitted by law, upon any such
private sale, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which right or equity of redemption
Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees
that the sending of notice by ordinary mail, postage prepaid, to the address of
Grantor set forth in the Credit Agreement, of the place and time of any public
sale or of the time after which any private sale or other intended disposition
is to be made, shall be deemed reasonable notice thereof if such notice is sent
ten days prior to the date of such sale or other disposition or the date on or
after which such sale or other disposition may occur, provided that the
Collateral Agent may provide Grantor shorter notice or no notice, to the extent
permitted by the UCC or other applicable law.

              (b)    License. For the purpose of enabling the Collateral Agent
to exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to Collateral Agent for
the benefit of the Credit Agents an irrevocable, non-exclusive and assignable
license (exercisable without payment or royalty or other compensation to
Grantor) to use, license or sublicense any Intellectual Property.

              (c)    Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent, at
its election, (i) retain the proceeds of any sale, collection, disposition or
other realization upon the Collateral (or any portion thereof) in a special
purpose non-interest-bearing restricted deposit account (the "Proceeds Account")
created and maintained by the Collateral Agent for the benefit of the Credit
Agents for such purpose (which shall constitute a Deposit Account included
within the Collateral hereunder) until such time as the Collateral Agent may
elect to apply such proceeds to the Secured Obligations, and Grantor agrees that
such retention of such proceeds by the Collateral Agent shall not be deemed
strict foreclosure with respect thereto; (ii) in any manner elected by the
Collateral Agent (upon instruction of the Instructing Group), estimate the
liquidated amount of any such contingent, unmatured or unliquidated claims and
apply the proceeds of the Collateral against such amount; or (iii) otherwise
proceed in any manner permitted by applicable law. Grantor agrees that the

                                      G-23
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Proceeds Account shall be a blocked account and that upon the irrevocable
deposit of funds into the Proceeds Account, Grantor shall not have any right of
withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives
until the termination of the security interests granted under this Agreement in
accordance with Section 23 the right to make any withdrawal from the Proceeds
Account and the right to instruct the Collateral Agent or any of the Credit
Parties to honor drafts against the Proceeds Account.

              (d)    Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

              SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties (A)
to proceed against any Person, (B) to exhaust any other collateral or security
for any of the Secured Obligations, (C) to pursue any remedy, or (D) to make or
give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Collateral; and (iii) all claims, damages, and demands against the
Collateral Agent, or any of the Credit Parties arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Collateral.

              SECTION 12 Notices. All notices or other communications hereunder
shall be given in the manner and to the addresses specified in, and shall be
effective as provided in, the Credit Agreement; provided, however, that notices
hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank
using the information listed in Schedule 10.02 of the Credit Agreement for such
party as a Lender or such replacement Swap Provider as may be appointed from
time to time pursuant to the terms of the Intercreditor Agreement, and (b) the
Note Holders shall be delivered to such Persons at the address specified in the
Note Purchase Agreement, or to such replacement Note Holders as may be appointed
from time to time consistent with the terms of the Intercreditor Agreement.

              SECTION 13 No Waiver; Cumulative Remedies. No failure on the part
of the Collateral Agent, or any of the Credit Parties to exercise, and no delay
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent,
or any of the Credit Parties.

              SECTION 14 Indemnification; Other Charges.


                                      G-24
   235

              (a)    Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and the other Lenders, and their
respective directors, officers, employees, agents, counsel and other advisors
(each an "Indemnified Person") against, and hold each of them harmless from, any
and all liabilities, obligations, losses, claims, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including the reasonable fees and disbursements of counsel to an
Indemnified Person (including allocated costs of internal counsel), which may be
imposed on, incurred by, or asserted against any Indemnified Person, in any way
relating to or arising out of this Agreement or the transactions contemplated
hereby or any action taken or omitted to be taken by it hereunder (the
"Indemnified Liabilities"); provided that Grantor shall not be liable to any
Indemnified Person with respect to Indemnified Liabilities resulting from such
Indemnified Person's gross negligence or willful misconduct. If and to the
extent that the foregoing indemnification is for any reason held unenforceable,
Grantor agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.

              (b)    Other Charges. The Grantor agrees to indemnify the
Collateral Agent and the Credit Parties against and hold each of them harmless
from any and all present and future stamp, transfer, documentary and other such
taxes, levies, fees, assessments and other charges made by any jurisdiction by
reason of the execution, delivery, performance and enforcement of this
Agreement.

              (c)    Interest. Any amounts payable to the any Indemnified Person
under this Section 14 or otherwise under this Agreement if not paid upon demand
shall bear interest from the date of such demand until paid in full, at the
applicable rate, (a) for the Administrative Agent and any Lender, as set forth
in Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set
forth in the Specified Swap Agreement, and (c) for the Note Holders as set forth
in Section 2.08(b) of the Note Purchase Agreement.

              SECTION 15 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by Grantor, each Indemnified Person
referred to in Section 14 and their respective successors and assigns.

              SECTION 16 Governing Law and Jurisdiction.


              (a)    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL
AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

              (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT



                                      G-25
   236


PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE
CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL
COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR
OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF
THE CREDIT PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

              SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

              SECTION 18 Entire Agreement; Amendment. This Agreement, together
with the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.

              SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision


                                      G-26
   237

of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

              SECTION 20 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Collateral Agent or any Credit Agent of a
facsimile transmitted document purportedly bearing the signature of a Grantor
shall bind Grantor with the same force and effect as the delivery of a hard copy
original. Any failure by the Collateral Agent or any Credit Agent to receive the
hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Collateral
Agent or such Credit Party.

              SECTION 21 Incorporation of Provisions of the Credit Agreement. To
the extent the Credit Agreement contains provisions of general applicability to
the Credit Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.

              SECTION 22 No Inconsistent Requirements. Grantor acknowledges that
this Agreement and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.

              SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Grantor under the Credit Agreement and payment and performance in
full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination of
all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.

              (ii)   Concurrently with any permitted disposition of Collateral
under the Credit Documents, the security interests hereunder shall automatically
be released from the Collateral so disposed of, subject to Section 5(j);
provided, however, that the security interests shall continue in the Proceeds
thereof. Upon satisfaction to all conditions precedent to any permitted
disposition set forth herein or in the other Credit Documents, the Collateral
Agent and all Credit Agents shall execute and deliver any releases or other
documents reasonably requested by the relevant Grantor to accomplish or confirm
the release of Collateral provided by this Section. Any such release shall
specifically describe the portion of the Collateral to be released, shall be


                                      G-27
   238



expressed to be unconditional and shall be without recourse or warranty (other
than a warranty that the Collateral Agent and the Credit Agents have not
assigned their rights and interests to any other Person).

              SECTION 24 Assumption. Upon execution and delivery to the
Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the
Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the
effective date of such Subsidiary Security Agreement, such Subsidiary shall be
deemed a Grantor party hereto, and this Agreement shall be deemed amended to
include any amendments to the Schedules provided by such Subsidiary in
connection therewith.

              SECTION 25 Intercreditor Agreement. Notwithstanding anything set
forth in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]




                                      G-28
   239



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



                                        CERIDIAN CORPORATION
                                        Grantor


                                        By:
                                            -------------------------------
                                            Name:
                                            Title:


                                        BANK OF AMERICA, N.A.,
                                        as Collateral


                                        By:
                                            -------------------------------
                                            Name:
                                            Title:



                                      G-29
   240
                                 SCHEDULE 1
                            to the Security Agreement


1.    LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
      COLLATERAL

      a.    Chief Executive Office and Principal Place of Business:








      b.    Other locations where Grantor conducts business or Collateral is
            kept:








2.    LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT









3.    TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS
      NAMES; ETC.









4.    DEPOSIT ACCOUNTS








                                  SCHEDULE 1-1
   241





5.    INVESTMENT PROPERTY









6.    INSTRUMENTS









7.    LEASED EQUIPMENT









8.    MATERIAL SOFTWARE




















                                  SCHEDULE 1-2

                                         Exhibits to Arbitron Credit Agreement





   242

                                   SCHEDULE 2
                            to the Security Agreement



(a)   ISSUED PATENTS OF GRANTOR




   Grantor     Patent No.   Issue Date   Inventors      Title       Agent
   -------     ----------   ----------   ---------      -----       -----
                                                     









(b)   PENDING PATENT APPLICATIONS OF GRANTOR



Grantor         Application No.      Filing Date     Inventors       Title
- -------         ---------------      -----------     ---------       -----
                                                         








(c)   TRADEMARKS OF GRANTOR




               Registration  Registration                Registered
    Grantor         No.         Date       Filing Date     Owner         Mark
    -------        ---          ----       -----------     -----         ----
                                                          







(d)   PENDING TRADEMARK APPLICATIONS OF GRANTOR



                 Application
    Grantor          No.        Filing Date    Applicant         Mark
    -------          ---        -----------    ---------         ----
                                                     








(e)   COPYRIGHTS OF GRANTOR




    Grantor               Copyright Title            Reg. No.    Date of Issue
    -------               ---------------            --------    -------------
                                                        










                                  SCHEDULE 2-1

                                         Exhibits to Arbitron Credit Agreement

   243




(f)   COPYRIGHT APPLICATIONS OF GRANTOR




       Grantor              Title                           Date of Application
       -------              -----                           -------------------
                                                      












(g)   COPYRIGHT LICENSES OF GRANTOR





    Grantor      Title    Copyright Owner             Reg. No.    Date of Issue
    -------      -----    ---------------             --------    -------------
                                                      














                                  SCHEDULE 2-2

                                         Exhibits to Arbitron Credit Agreement

   244



                                   SCHEDULE 3
                            to the Security Agreement


                                 FILING OFFICES

















                                  SCHEDULE 3-1

                                         Exhibits to Arbitron Credit Agreement




   245


                                                                       EXHIBIT H


                         [SUBSIDIARY] SECURITY AGREEMENT

            THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __,
2001, is made by and among _____________ (the "Grantor") in favor of the
"Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA,
N.A., as the administrative agent (in such capacity, the "Administrative Agent")
for itself and the financial institutions (the "Lenders" and, individually, a
"Lender") from time to time party to that certain Credit Agreement dated as of
January 31, 2001 (as renewed, extended, modified, amended or restated from time
to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined in
herein); and (c) the Note Holders party from time to time to the Note Purchase
Agreement.

                                    RECITALS

            WHEREAS, it is a condition precedent to the borrowings under the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and grant to the Collateral Agent, for the ratable benefit of the
Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.

            NOW, THEREFORE, the parties hereto agree as follows:

            SECTION 1 Definitions; Interpretation.

            (a)   Terms Defined in Credit Agreement.  All capitalized terms
used herein and not otherwise defined shall have the meanings assigned to
them, respectively, in the Credit Agreement.

            (b)   Certain Defined Terms.  As used in this Agreement, the
following terms shall have the following meanings:

            "Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit accounts for purposes of Article 9 of the UCC or
applicable law.

            "Accounts" means any and all accounts of Grantor, whether now
existing or hereafter acquired or arising, and in any event includes all
accounts receivable, contract rights, royalties, Rights to Payment and other
obligations of any kind owed to Grantor arising out of or in connection with the
sale, lease, license or other transfer of Intellectual Property, merchandise,
goods or commodities or the rendering of services or arising from any other
transaction, however evidenced, and whether or not earned by performance, all
guaranties, indemnities and security with respect to the foregoing, and all
letters of credit relating thereto, in each case whether now existing or
hereafter acquired or arising.

            "Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such way as to permit selective search and
retrieval using electronic,



                                      H-1

                                         Exhibits to Arbitron Credit Agreement
   246


electromagnetic, manual or mechanical methods, which relate to Grantor's
business, and wherever maintained, collected or accessed.

            "Books" means all books, records and other written, electronic or
other documentation in whatever form maintained now or hereafter by or for
Grantor in connection with the ownership of its assets or the conduct of its
business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing
Grantor's assets (including Inventory and Rights to Payment), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and
output of whatever kind; (vi) any other computer prepared or electronically
stored, collected or reported information and equipment of any kind; and (vii)
any and all other rights now or hereafter arising out of any contract or
agreement between Grantor and any service bureau, computer or data processing
company or other Person charged with preparing or maintaining any of Grantor's
books or records or with credit reporting, including with regard to Grantor's
Accounts.

            "Borrower" has the meaning specified in the Credit Agreement.

            "Chattel Paper" means all writings of whatever sort which evidence a
monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.

            "Collateral" has the meaning set forth in Section 2.

            "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.

            "Credit Agents" and each, individually, a "Credit Agent" means (a)
the Administrative Agent (for the benefit of itself and the other Lenders, and
the L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

            "Credit Documents" means, collectively, the Loan Documents, the Note
Holder Documents and the Swap Documents.

            "Credit Parties" and each, individually, a "Credit Party" means the
Credit Agents and the Debt Participants.

            "Database Copyright Filing" has the meaning set forth in Section
5(q)(v)(A).

            "Debt Participant" means a "Debt Participant" under, and as defined
in, the Intercreditor Agreement.

            "Deposit Account" means any demand, time, savings, passbook or like
account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and loan


                                      H-2

                                         Exhibits to Arbitron Credit Agreement

   247

association, credit union or like organization (including Bank of America) and
all funds and amounts therein, whether or not restricted or designated for a
particular purpose.

            "Documents" means any and all documents of title, bills of lading,
dock warrants, dock receipts, warehouse receipts and other documents of Grantor,
whether or not negotiable, and includes all other documents which purport to be
issued by a bailee or agent and purport to cover goods in any bailee's or
agent's possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Grantor for
the purpose of ultimate sale or exchange of goods or for the purpose of loading,
unloading, storing, shipping, transshipping, manufacturing, processing or
otherwise dealing with goods in a manner preliminary to their sale or exchange,
in each case whether now existing or hereafter acquired or arising.

            "Equipment" means all now existing or hereafter acquired equipment
of Grantor in all of its forms, wherever located, and in any event includes any
and all machinery, furniture, equipment, furnishings and fixtures in which
Grantor now or hereafter acquires any right, and all other goods and tangible
personal property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other electronic
data processing equipment and other office equipment, computer programs and
related data processing software, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.

            "Filing Offices" has the meaning set forth in Section 3(a).

            "General Intangibles" means all general intangibles of Grantor, now
existing or hereafter acquired or arising, and in any event includes: (i) all
tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract or
tort and however arising; (iii) all Intellectual Property; (iv) all rights of
stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority; (vi)
all indemnity agreements, guaranties, insurance policies and other contractual,
equitable and legal rights of whatever kind or nature; and (vii) all rights to
receive payment and other rights under any Swap Contracts; in each case whether
now existing or hereafter acquired or arising.

            "Grantor" has the meaning set forth in the first paragraph hereof.

            "Instructing Group" means "Instructing Group" under, and as defined
in, the Intercreditor Agreement.

            "Instruments" means any and all negotiable instruments and every
other writing which evidences a right to the payment of money, wherever located
and whether now existing or hereafter acquired.

                                      H-3

                                         Exhibits to Arbitron Credit Agreement
   248

            "Intellectual Property" means the following properties and assets
owned or held by Grantor or in which Grantor otherwise has any interest, now
existing or hereafter acquired or arising:

            (i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and patent
licenses as described in Schedule 2), all rights to sue for past, present or
future infringement thereof, all rights arising in connection with any of the
foregoing and pertaining thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; all copyrights and
applications for copyright (including with respect to the Arbitron Databases and
the Material Arbitron Software), domestic or foreign, together with the
underlying works of authorship (including titles), whether or not the underlying
works of authorship have been published and whether said copyrights are
statutory or arise under the common law, and all other rights and works of
authorship (including the copyrights and copyright applications described in
Schedule 2), all rights, claims and demands in any way relating to any such
copyrights or works, including royalties and rights to sue for past, present or
future infringement, and all rights of renewal and extension of copyright;

            (ii) all state (including common law), federal and foreign
trademarks, service marks and trade names, and applications for registration of
such trademarks, service marks and trade names, all licenses relating to any of
the foregoing and all income and royalties with respect to any licenses
(including such marks, names, applications and licenses as described in Schedule
2), whether registered or unregistered and wherever registered, all rights to
sue for past, present or future infringement or unconsented use thereof, all
rights arising therefrom and pertaining thereto and all reissues, extensions and
renewals thereof;

            (iii) all trade secrets, trade dress, trade styles, logos, other
source of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and all
Material Software Additions), confidential information, customer lists, license
rights, advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and catalogs;
and

            (iv) the entire goodwill of or associated with the businesses now or
hereafter conducted by Grantor connected with and symbolized by any of the
aforementioned properties and assets; and

            (v) all intellectual property rights and property of the Grantor now
existing or hereafter arising, covered by any Supplemental IP Security Agreement
executed by Grantor from time to time in accordance with Section 3(c).

            "Intercreditor Agreement" means that Intercreditor Agreement dated
as of January 31, 2001 among the Collateral Agent, the Administrative Agent, the
Swap Provider, and the "Note Holders" (as defined therein).

                                      H-4

                                         Exhibits to Arbitron Credit Agreement
   249

            "Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or otherwise,
and all additions and accessions thereto, and any Document representing or
relating to any of the foregoing at any time.

            "Investment Property" means any and all investment property of
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts and commodity
accounts, and all financial assets held in any securities account or otherwise,
wherever located, and whether now existing or hereafter acquired or arising.

            "Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.

            "Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.

            "Material Software Addition" means any update, release, version,
patch, debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs, including
all object and source code and all copies and encodings thereof, purchased,
created or otherwise acquired by Grantor after the Closing Date.

            "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Loan Party
under any Note Holder Document, (iii) all documents executed by any Loan Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

            "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

            "Note Holder Guaranties" means the Guaranties under and as defined
in the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Note Holders.

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            "Note Holder" means a "Note Holder" under, and as defined in, the
Note Purchase Agreement.

            "Note Purchase Agreement" means that Note Purchase Agreement dated
as of January 31, 2001 among the Borrower, the Note Holders party thereto.

            "Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.

            "Patent and Trademark Office" means the United States Patent and
Trademark Office.

            "Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of
Grantor from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.

            "Rights to Payment" means all Accounts and any and all rights and
claims to the payment or receipt of money or other forms of consideration of any
kind in, to and under all Chattel Paper, Documents, General Intangibles,
Instruments, Investment Property and Proceeds.

            "Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent, any of the Credit Agents and
any Debt Participant whether now existing or hereafter arising, and whether due
or to become due, absolute or contingent, liquidated or unliquidated, determined
or undetermined, now or hereafter created under, arising out of or in connection
with any of the Credit Documents, including all Obligations (as independently
defined in each of the Credit Agreement and the Note Purchase Agreement), and
any obligations under any of the Swap Documents.

            "Software Copyright Filing" has the meaning set forth in Section
5(q)(v)(B).

            "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Borrower and the Swap Provider as swap counterparties.

            "Specified Swap Contract" means any interest rate swap entered into
between the Borrower and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

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            "Supplemental IP Security Agreement" means a Supplemental IP
Security Agreement substantially in the form of Exhibit I of the Credit
Agreement, executed pursuant to Section 3(c) hereof and Section 6.16 of the
Credit Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.

            "Swap Collateral Documents" means, collectively, (a) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider, (b) all Account Control Agreements executed by any Loan Party under
any Swap Document, (c) any documents executed by any Loan Party to accomplish
cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC
financing statements, notices and other documents executed from time to time in
connection with any of the foregoing.

            "Swap Documents" means, collectively, any Specified Swap Agreement,
the Swap Collateral Documents and the Swap Guaranties.

            "Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.

            "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

            "UCC" means the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.

            "UCC Financing Statements" has the meaning specified in Section
4(f).

            (c) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

            (d) Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.

            SECTION 2 Security Interest.

            (a) Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby


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grants to the Collateral Agent (for the benefit of the Credit Agents, and each
of them), a security interest in all of Grantor's right, title and interest in,
to and under the following property, wherever located and whether now existing
or owned or hereafter acquired or arising (collectively, the "Collateral"):

            (i)    all Accounts;

            (ii)   all Chattel Paper;

            (iii)  all Deposit Accounts;

            (iv)   all Documents;

            (v)    all Equipment;

            (vi)   all General Intangibles;

            (vii)  all Inventory;

            (viii) all Books;

            (ix)   all products and Proceeds of any and all of the foregoing;
                   and

            (x)    all Letter of Credit Proceeds.

Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, Intellectual Property which is now or hereafter held by Grantor as
licensee, lessee or otherwise, to the extent such Intellectual Property consists
of: (i) ordinary shrinkwrap licenses governing software products that Grantor
purchased for use in the Ordinary Course of Business; or (ii) licenses listed on
Schedule 5.17 of the Credit Agreement.

            (b) Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts, agreements
and other documents included in the Collateral, to the extent set forth therein,
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent
of any of the rights hereunder shall not release Grantor from any of its duties
or obligations under such contracts, agreements and other documents included in
the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall
have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall any
such Person be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.

            (c) Continuing Security Interest. Grantor agrees that this Agreement
shall create continuing security interests in the Collateral which shall remain
in effect until terminated in accordance with Section 23.

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            SECTION 3 Perfection Procedures. Grantor shall duly complete,
execute and deliver to the Collateral Agent and each of the Credit Agents
concurrently with the execution of this Agreement, and at any time and from time
to time, all Supplemental IP Security Agreements, financing statements,
continuation statements, termination statements, security agreements, chattel
mortgages, assignments, patent, copyright and trademark collateral assignments,
fixture filings, warehouse receipts, Account Control Agreements, documents of
title, affidavits, reports, notices, schedules of account, letters of authority
and all other documents and instruments, in form satisfactory to the
Administrative Agent, and take all other action, as the Collateral Agent may
request, to perfect and continue perfected, maintain the priority of or provide
notice of the Collateral Agent's security interest in the Collateral for the
benefit of each of the Credit Agents and to accomplish the purposes of this
Agreement. Without limiting the generality of the foregoing, Grantor shall from
time to time take the following actions:

            (a) Filing of Security Agreements; Financing Statements. On or prior
to the Closing Date Grantor shall execute, notarize and deliver (i) an original
of this Agreement; (ii) such original UCC Financing Statements and (iii) such
original Supplemental IP Security Agreements as the Collateral Agent at the
instruction of the Instructing Group may reasonably request; all duly completed
and in final form for recordation at the offices described in Schedule 3 (the
"Filing Offices"), and after the Closing Date the Grantor shall execute,
notarize and deliver completed UCC Financing Statements for filing or recording
in the appropriate filing or recording office or offices in any state identified
by a Grantor in a notice delivered to the Administrative Agent pursuant Section
5(e).

            (b) Deposit Accounts. On or prior to the Closing Date, Grantor shall
execute such Account Control Agreements, notices, and shall take such other
action, as the Collateral Agent at the instruction of the Instructing Group may
reasonably request, to perfect and continue perfected, maintain the priority of
or provide notice of the Collateral Agent's security interests in Collateral for
the benefit of each of the Credit Agents consisting of Deposit Accounts and to
accomplish the purposes of this Agreement.

            (c) Intellectual Property Collateral.

            (i) Patents, Etc. Promptly following any submission, filing or
recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record such
duly completed, signed and notarized Supplemental IP Security Agreement with the
Patent and Trademark Office or Copyright Office, as applicable, and take such
other action as may be necessary, or as the Collateral Agent at the instruction
of the Instructing Group may reasonably request, to perfect or protect the
Collateral Agent's security interests in such Intellectual Property for the
benefit of each of the Credit Agents. Grantor shall promptly, but in any event
not later than ten days after any such recordation, deliver to the Collateral
Agent and each Credit Agent true and complete copies of all file-stamped
applications, disclosure documents and amendments, and all file-stamped
Supplemental IP Security Agreements recorded at the Patent and Trademark Office.

            (ii)  Copyrights.  Grantor shall:


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            (A) Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright Office
and take such other actions as may be necessary or appropriate in the discretion
of the Collateral Agent at the instruction of the Instructing Group to perfect
or protect the Collateral Agent's security interests in (I) all Database
Copyright Filings for such quarter, and (II) all Software Copyright Filings made
since the most recently filed Supplemental IP Security Agreement; and

            (B) take such other action as may be necessary, or as the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property for the benefit of the Credit
Agents.

            (iii) The Grantor hereby authorizes the Collateral Agent to modify,
amend or supplement the Schedules hereto and to reexecute this Agreement and any
Supplemental IP Security Agreement from time to time on the Grantor's behalf and
as its attorney-in-fact to include any such future Collateral and to cause to
such reexecuted Agreement, Supplemental IP Security Agreement or such modified,
amended or supplemented Schedules to be filed with the Copyright Office or the
Patent and Trademark Office.

            (d) Documents, Etc. Within five calendar days after receipt, Grant
shall deliver to the Collateral Agent, or an agent designated by it, for the
benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to deliver
any Document, Chattel Paper, promissory note, trade acceptance or other
instrument having a face amount not in excess of $100,000. Upon the request of
the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with
such legends as the Collateral Agent shall reasonably specify.

            SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit Agreement,
which are incorporated and restated herein by this reference, and which are true
and correct as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:

            (a) Location of Chief Executive Office and Collateral. Grantor's
chief executive office and principal place of business is located at the address
set forth in Schedule 1, and all other locations where Grantor conducts business
or Collateral is kept are set forth in Schedule 1.

            (b) Locations of Books. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for Grantor, are set forth in Schedule 1.

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            (c) Trade Names and Trade Styles. All trade names and trade styles
under which Grantor presently conducts the Arbitron Business operations are set
forth in Schedule 1, and, except as set forth in Schedule 1 and in connection
with the Transaction, Grantor has not, at any time in the past year: (i) been
known as or used any other corporate, trade or fictitious name; (ii) changed its
name; (iii) been the surviving or resulting corporation in a merger or
consolidation; or (iv) acquired through asset purchase or otherwise any business
of any Person.

            (d) Ownership of Collateral. Grantor is, and, subject to Section
5(i), will continue to be, the sole and complete owner of the Collateral, or has
a valid and enforceable leasehold or licensee's interest in such Collateral as
set forth in Schedule 2 and in accordance with subsection (i) of this Section 4
(or, in the case of after-acquired Collateral, at the time Grantor acquires
rights in such Collateral, will be the sole and complete owner thereof, or will
have a valid and enforceable leasehold or licensee's interest in such
Collateral, to the extent permitted hereunder or under the Credit Agreement),
free from any Lien other than Permitted Liens.

            (e)   Enforceability; Priority of Security Interest.

            (i) This Agreement together with such Supplemental IP Security
Agreements as have been executed by Grantor and filed at the Copyright Office or
the Patent and Trademark Office in respect of the Intellectual Property create
security interests which are enforceable against the Collateral in which Grantor
now has rights and will create security interests which are enforceable against
the Collateral in which Grantor hereafter acquires rights at the time Grantor
acquires any such rights.

            (ii) The Collateral Agent has a perfected and first priority
security interest in the Collateral in which Grantor now has rights, and will
have a perfected and first priority security interest in the Collateral in which
Grantor now has rights and will create a security interest in any Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights, in each case for the Credit Agents' benefit and, subject only to
Permitted Liens, securing the payment and performance of the Secured
Obligations.

            (f) Other Financing Statements. Other than (i) financing statements
or similar filings naming the owner of the asset to which such Lien relates as
debtor, under the UCC, copyright, patent, trademark or any comparable law ("UCC
Financing Statements") disclosed to the Administrative Agent prior to the
Effective Date and (i) UCC Financing Statements in favor of the Collateral Agent
for itself and the Credit Agents pursuant to the Credit Documents, no effective
UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor,
pledgor or the like or covering all or any part of the Collateral is on file in
any filing or recording office in any jurisdiction, except in connection with
Permitted Liens.

            (g)   Rights to Payment.

            (i) The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto, and are and
will be genuine, free from Liens, and not subject to any


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adverse claims, counterclaims, setoffs, defaults, disputes, defenses, discounts,
retainages, holdbacks or conditions precedent of any kind of character, except
to the extent reflected by the Grantor's reserves for uncollectible Rights to
Payment or to the extent, if any, that such account debtors or other Persons may
be entitled to normal and ordinary course trade discounts, returns, adjustments
and allowances in accordance with Section 5(m), or as otherwise disclosed to the
Credit Agents in writing or occurring in the ordinary course of business;

            (ii) to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their debts
as they come due, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;

            (iii) all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;

            (iv) Grantor has not assigned any of its rights under the Rights to
Payment except as provided in this Agreement or as set forth in the other Credit
Documents;

            (v) all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and

            (vi) Grantor has not any knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights to
Payment, except to the extent that Grantor has established adequate reserves
therefor in accordance with GAAP;

            (h) Inventory. No Inventory is stored with any bailee, warehouseman
or similar Person or on any premises leased to Grantor, nor has any Inventory
been consigned to Grantor or consigned by Grantor to any Person or is held by
Grantor for any Person under any "bill and hold" or other arrangement, except at
locations listed in Schedule 1.

            (i)   Intellectual Property.

            (i) As of the Closing Date, except as set forth in Schedule 2, (A)
Grantor (directly or through any Subsidiary) does not own, possess or use under
any licensing arrangement (other than ordinary shrinkwrap licenses governing
software products that Grantor purchased for use in the Ordinary Course of
Business) Intellectual Property materially related to the Arbitron Business, and
(B) Grantor (directly or through any Subsidiary) has no registrations or
applications therefor pending before any Governmental Authority, that are or may
be materially related to the Arbitron Business, for any (I) patents or
trademarks, (II) copyrights in respect of Material Arbitron Software, Material
Software Additions or Arbitron Databases for which any such application was
submitted after December 31, 1998, (III) copyrights in respect of "Radio Market
Reports" of Grantor for which any such application was submitted after December
1, 2000, or (IV) any other copyrights for which such application was submitted
after December 31, 1999.

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            (ii) All Grantor's Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable in whole or in part.

            (iii) All maintenance fees required to be paid by Grantor on account
of any of its patents have been timely paid for maintaining such patents in
force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.

            (iv) To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.

            (v) Grantor is the owner or licensee of its Intellectual Property
and the past, present and contemplated future use of such Intellectual Property
by Grantor has not, does not and will not infringe or violate any right,
privilege or license agreement of or with any other Person in any material
respect.

            (vi) Grantor owns, licenses, has material rights under, is a party
to, or an assignee of a party to all other Intellectual Property necessary and
appropriate to continue to conduct the Arbitron Business.

            (vii) The Arbitron Databases are protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.

            (viii)      The Material Arbitron Software is protected under
current, valid and enforceable copyright registrations (or applications
therefor) at the Copyright Office and under the U.S. copyright laws.

            (ix) Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications therefor
issued by the Patent and Trademark Office and under the U.S. patent laws (except
with respect to such patents that have expired of their own terms, and not as
the result of any abandonment, dispute or settlement).

            (j) Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered to
the Collateral Agent or as otherwise disclosed to the Administrative Agent and
the other Credit Agents.

            (k) Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.
No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Collateral Agent for the benefit of the
Credit Agents.

            (l) Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on or
before the date hereof), (ii) no Person other than Grantor owns an interest in
the Instruments (whether as joint holders,


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participants or otherwise), (iii) all Instruments are owing only to Grantor, and
(iv) no material default exists under or in respect of the Instruments.

            (m) Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.

            SECTION 5 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied, Grantor agrees
that:

            (a) Defense of Collateral. Grantor shall appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Collateral Agent's right or interest in, the
Collateral.

            (b) Preservation of Collateral. Grantor shall do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.

            (c) Compliance with Laws, Etc. Grantor shall comply in all material
respects with all laws, regulations and ordinances (including with respect to
the Fair Labor Standards Act), and with all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.

            (d) Location of Books and Chief Executive Office. Grantor shall: (i)
keep all Books pertaining to the Rights to Payment at the locations set forth in
Schedule 1; and (ii) give at least 30 days' prior written notice to the
Collateral Agent and each Credit Agent of (A) any changes in any such location
where Books pertaining to the Rights to Payment are kept, including any change
of name or address of any service bureau, computer or data processing company or
other Person preparing or maintaining any Books or collecting Rights to Payment
for Grantor or (B) any changes in the location of Grantor's chief executive
office or principal place of business.

            (e) Location of Collateral. If any Collateral of Grantor shall be
physically relocated to, or otherwise be physically located in, a state of the
United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one Business
Day after becoming aware thereof).

            (f) Change in Name, Identity or Structure. Grantor shall give at
least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any changes
in, additions to or other modifications of its trade names used as the name of
Grantor set forth in Schedule 1, and (iv) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.

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            (g) Maintenance of Records. Grantor shall keep accurate and complete
Books with respect to the Collateral, disclosing the Collateral Agent's security
interests hereunder for the benefit of the Credit Agents.

            (h) Invoicing of Sales. The Grantor will invoice all of its sales
upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.

            (i) Disposition of Collateral. Grantor shall not surrender or lose
possession of (other than to a Credit Agent), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent expressly permitted by the Credit Documents.

            (j)   Liens.

            (i)   Grantor shall keep the Collateral free of all Liens except
Permitted Liens.

            (ii) Notwithstanding any other provision contained herein or in the
Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a
transfer of goods free of the Collateral Agent's security interests under
Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j)
thereof shall be free of such security interests. Accordingly, all non-excluded
Dispositions shall be subject at all times to the Liens of the Collateral Agent
for the benefit of the Credit Agents.

            (k)   Expenses.  The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.

            (l) Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which any
Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Collateral Agent may reasonably require, in form and
substance satisfactory to the Collateral Agent.

            (m)   Rights to Payment.  Grantor shall:

            (i) with such frequency as the Collateral Agent for the benefit of
the Credit Agents may reasonably require, furnish to the Collateral Agent and
each Credit Agent (A) master customer listings, including all names and
addresses, together with copies or originals (as requested by the Collateral
Agent or any Credit Agent) of documents, customer statements, repayment
histories and present status reports relating to the Accounts; (B) accurate
records and summaries of Accounts, including detailed agings specifying the
name, face value and date of each invoice, and listings of Accounts that are
disputed or have been cancelled; and (C) such other information relating to the
Accounts as any of the Credit Agents shall from time to time reasonably request;

            (ii) give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their

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terms or pursuant to Grantor's Ordinary Course of Business, and during the
existence of an Event of Default, take all such action to such end as may from
time to time be reasonably requested by Collateral Agent, except that Grantor
may at any time grant any extension of the time for payment or enter into any
agreement to make a rebate or otherwise to reduce the amount owing on or with
respect to, or compromise or settle for less than the full amount thereof, any
Account or other Right to Payment, in the Ordinary Course of Business, according
to normal trade practices;

            (iii) if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or
defense exists or has been asserted or threatened with respect to an Account or
other Right to Payment, disclose such fact to the Collateral Agent and the
Credit Parties in the Books relating to such Account or other Right to Payment
when such Books are requested for inspection by the Collateral Agent, and in
connection with any invoice or report furnished by Grantor to the Collateral
Agent relating to such Account or other Right to Payment;

            (iv) if Accounts in an amount in excess of $500,000 for any and all
such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent and the
Credit Parties thereof and execute any documents and instruments and take any
other steps reasonably requested by the Collateral Agent in order that all
monies due and to become due thereunder shall be assigned to the Collateral
Agent and notice thereof given to the federal authorities under the Federal
Assignment of Claims Act (provided that such assignment and notice shall not be
required if the applicable contract prohibits assignment);

            (v) in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the Accounts
and other Rights to Payment;

            (vi) subject to Section 7, upon the request of the Collateral Agent
(A) at any time, notify all or any designated portion of the account debtors and
other obligors on the Rights to Payment of the security interests hereunder, and
(B) if there exists any Default or Event of Default, notify the account debtors
and other obligors on the Rights to Payment or any designated portion thereof
that payment shall be made directly to the Collateral Agent or to such other
Person or location as the Collateral Agent shall specify; and

            (vii) if there exists any Default or Event of Default, establish
such lockbox or similar arrangements for the payment of the Accounts and other
Rights to Payment as the Collateral Agent (upon instruction of the Instructing
Group) shall require.

            (n) Deposit Accounts and Securities Accounts. Grantor shall give the
Collateral Agent and the Credit Parties immediate notice of the establishment of
any new Deposit Account and any new securities account with respect to any
Investment Property.

            (o)   Inventory.  Grantor shall:

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            (i) at such times as the Collateral Agent or any Credit Agent shall
reasonably request, prepare and deliver to the Collateral Agent and each Credit
Agent a report of all Inventory, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent;

            (ii) upon the request of the Collateral Agent or any Credit Agent,
take a physical listing of the Inventory and promptly deliver a copy of such
physical listing to the Collateral Agent and each Credit Agent; and

            (iii) not store any Inventory with a bailee, warehouseman or similar
Person or on premises leased to Grantor, nor dispose of any Inventory on a
bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar basis, nor acquire any Inventory from any Person on any such basis,
except in the ordinary course of business and in accordance with its normal
practices.

            (p) Equipment. Grantor shall, upon the Collateral Agent or any
Credit Agent request, deliver to the Collateral Agent and each Credit Agent a
report of each item of Equipment, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent.

            (q)   Intellectual Property Collateral.  Grantor shall:

            (i) not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public, except for Intellectual Property having negligible
commercial value;

            (ii) not enter into any agreements or transactions (including any
license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of business, or enter into any exclusive
license or sublicense of any Intellectual Property, except in a transaction
permitted under the Credit Documents;

            (iii) promptly give the Collateral Agent and each Credit Agent
notice of any rights Grantor may obtain to any new patentable inventions,
copyrightable works or other new Intellectual Property, prior to the
registration or recordation thereof (including pursuant to this Section 5(q)) as
to which Grantor (a) has received gross royalty or license payments from any and
all third parties in an aggregate amount excess of $1,000,000 during any of the
five fiscal years preceding such time or (b) reasonably projects that it will
receive gross royalty or license payments from any and all third parties in an
aggregate amount excess of $1,000,000 during the any of the subsequent five
fiscal years; provided that Grantor shall have no obligation to provide notice
under this subsection (iii) to the extent that Grantor has satisfied, or within
the immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);

            (iv) not less frequently than once every three calendar months and,
additionally, upon the purchase, creation or other acquisition of any Material
Software Addition, diligently record, register or prosecute, as applicable, all
applications for patents, copyrights and trademarks, and diligently record,
register and prosecute, as applicable, any and all


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continuations, continuations-in-part, applications for reissue, applications for
certificate of correction and like matters in respect of Grantor's Intellectual
Property as shall be reasonable and appropriate in accordance with prudent
business practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with any
Intellectual Property; and, without limiting the generality of the foregoing,

            (v) (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms to
the Copyright Office and take such other actions as necessary to register under
the U.S. copyright laws any and all additions, modifications or other changes to
the Arbitron Databases (each, a "Database Copyright Filing") since the Closing
Date; and (B) not less frequently than once every three calendar months and,
additionally, promptly after any purchase, creation or other acquisition of any
Material Software Addition, submit such duly completed, signed and notarized
copyright registration forms to the Copyright Office and take such other actions
as necessary to register under the U.S. copyright laws each Material Software
Addition (each, a "Software Copyright Filing");

            (vi) not less frequently than once every three calendar months, and
promptly but in any event not later than ten days after any and all recordations
described in subsections (iv) and (v) of this Section 5(q), and after any and
all recordations described in Section 3(c), deliver to the Collateral Agent and
each Credit Agent all such duly completed, file-stamped (other otherwise
certificated or acknowledged) and recorded documents together with such other
documents and information as the Collateral Agent or any Credit Agent may
reasonably request.

            (r) Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of any
change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the Collateral and such other
reports and other information in connection with the Collateral as the
Collateral Agent at the instruction of the Instructing Group may reasonably
request, all in reasonable detail; and (iii) upon reasonable request of the
Collateral Agent of any Credit Agent make such demands and requests for
information and reports as Grantor is entitled to make in respect of the
Collateral.

            (s) Insurance. (i) Grantor shall carry and maintain in full force
and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent for
the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified in
the Credit Agreement. Upon the request of any of the Credit Agents, and in any
event not less often than annually, Grantor shall furnish the Collateral Agent
and each Credit Agent with full information as to the insurance carried by it
and, if so requested, copies of all such insurance policies. All insurance
policies required under this subsection (s) shall provide that they shall not be
terminated or cancelled nor shall any such policy be materially changed without
at least 30 days' prior written notice to the Grantor and the Collateral Agent
(or 10 days' prior written notice if the Collateral Agent consents to such
shorter notice). Receipt of notice of


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termination or cancellation of any such insurance policies or reduction of
coverages or amounts thereunder shall entitle the Collateral Agent to renew any
such policies, cause the coverages and amounts thereof to be maintained at
levels required pursuant to the first sentence of this subsection (s) or
otherwise to obtain similar insurance in place of such policies, in each case at
the expense of the Grantor.

            (ii) If Collateral of Grantor with a value exceeding $1,000,000 (the
"Settlement Consent Threshold") shall be materially damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on account
of any loss on any Collateral covered by insurance shall be made for less than
insured value without the consent of the Collateral Agent (with the consent of
the Instructing Group), unless, so long as there exists no Default or Event of
Default, the total value of each such loss or series of related losses so
compromised does not exceed the Settlement Consent Threshold. Unless there
exists any Default or Event of Default, the Collateral Agent (upon instruction
of the Instructing Group) shall promptly execute such necessary consents,
waivers and endorsements to permit Grantor to settle losses the total aggregate
value of which is in an amount less than the Settlement Consent Threshold, and
to receive payment therefor, as reasonably requested by Grantor. After the
occurrence and during the continuance of an Event of Default, or as otherwise
required under any of the Credit Documents, all sums payable to Grantor by any
insurer with respect to a casualty relating to all or any part of the Collateral
shall be paid to the Collateral Agent (upon instruction of the Instructing
Group). If Grantor shall receive any insurance proceeds which are to be paid to
the Collateral Agent pursuant to the previous sentence, Grantor shall hold such
proceeds in trust for the Collateral Agent and shall segregate such proceeds
from other funds of Grantor, and shall immediately forward such proceeds in the
form received to the Collateral Agent (appropriately indorsed by Grantor to the
order of the Collateral Agent or in such other manner as shall be satisfactory
to the Collateral Agent, upon instruction of the Instructing Group). All such
insurance proceeds may be retained by the Collateral Agent as part of Collateral
hereunder and held in the Proceeds Account, applied by the Collateral Agent
toward payment of all or part of the Secured Obligations in such order as is
provided herein, or released to Grantor upon its request with the consent of the
Instructing Group.

            SECTION 6 Administration of the Rights to Payment.

            (a) Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, if there exists at such time any Event of Default, all
remittances received by Grantor shall be held in trust for the Collateral Agent
and, in accordance with the Collateral Agent's instructions (upon instruction
from the Instructing Group), remitted to the Collateral Agent or deposited in an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).

            (b) Investment Property and Instruments. At the request of the
Collateral Agent (at the request of the Instructing Group), if there exists at
such time any Event of Default, the Collateral Agent shall be entitled, subject
to the Intercreditor Agreement, to receive all distributions and payments of any
nature with respect to any Investment Property or Instruments,


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and all such distributions or payments received by Grantor shall be held in
trust for the Collateral Agent and, in accordance with its instructions (with
the consent of the Instructing Group), remitted to the Collateral Agent or
deposited to an account with the Collateral Agent in the form received (with any
necessary endorsements or instruments of assignment or transfer). If there
exists any Default or Event of Default any such distributions and payments with
respect to any Investment Property held in any securities account shall be held
and retained in such securities account, in each case as part of the Collateral
hereunder. Additionally, the Collateral Agent shall have the right, if there
exists any Default or Event of Default, following prior written notice to
Grantor, to vote and to give consents, ratifications and waivers with respect to
any Investment Property and Instruments, and to exercise all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining thereto, as if the Collateral Agent were the absolute owner thereof;
provided that the Collateral Agent shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to Grantor or any
other Person for any failure to do so or delay in doing so.

            (e) Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of this Section 6 shall be held
in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of Grantor, and be forthwith paid over or delivered to the
Collateral Agent in the same form as so received.

            SECTION 7 Authorization; Appointed Attorney-in-Fact. The Collateral
Agent shall have the right to, in the name of Grantor, or in the name of the any
of the Credit Parties or otherwise, without notice to or assent by Grantor, and
Grantor hereby constitutes and appoints the Collateral Agent (and any of the
officers or employees or agents designated by the Collateral Agent) as Grantor's
true and lawful attorney-in-fact, with full power and authority to:

            (i) sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security interests
and in the Collateral of the Collateral Agent (for the benefit of the Credit
Agents) and file any such financing statements and Supplemental IP Security
Agreements by electronic means with or without a signature as authorized or
required by applicable law or filing procedures;

            (ii) take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;

            (iii) sign and endorse any invoice or bill of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;

            (iv) notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to Grantor to such address the
Collateral Agent may designate (provided that the Collateral Agent agrees it
will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights to
Payment;

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            (v)  receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);

            (vi) send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;

            (vii) contact, or direct Grantor to contact, all account debtors and
other obligors on the Rights to Payment and instruct such account debtors and
other obligors to make all payments directly to the Collateral Agent;

            (viii) assert, adjust, sue for, compromise or release any
claims under any policies of insurance;

            (ix) exercise dominion and control over, and refuse to permit
further withdrawals from, Deposit Accounts maintained with Bank of America or
any other bank, financial institution or other Person;

            (x)  notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Collateral Agent;

            (xi) ask, demand, collect, receive and give acquittances and
receipts for any and all Rights to Payment, enforce payment or any other rights
in respect of the Rights to Payment and other Collateral, grant consents, agree
to any amendments, modifications or waivers of the agreements and documents
governing the Rights to Payment and other Collateral, and otherwise file any
claims, take any action or institute, defend, settle or adjust any actions,
suits or proceedings with respect to the Collateral, as the Collateral Agent
(upon instruction of the Instructing Group) may deem necessary or desirable to
maintain, preserve and protect the Collateral, to collect the Collateral or to
enforce the rights of the Collateral Agent with respect to the Collateral;

            (xii) execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual Property
and grant or issue any exclusive or non-exclusive license or sublicense with
respect to any Intellectual Property;

            (xiii) execute any and all endorsements, assignments or other
documents and instruments necessary to sell, lease, assign, convey or otherwise
transfer title in or dispose of the Collateral;

            (xiv) execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interests of the Collateral Agent therein; and

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            (xv) execute any and all such other documents and instruments, and
do any and all acts and things for and on behalf of Grantor, which the
Collateral Agent (upon instruction from the Instructing Group) may deem
necessary or advisable (A) to realize upon the Collateral, and (B) to maintain,
protect and preserve the Collateral and the security interests of the Collateral
Agent therein and to accomplish the purposes of this Agreement.

The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent, pursuant to clauses (ii) through (xiii), (xiv)(A) and
(xv)(A). The foregoing power of attorney is coupled with an interest and
irrevocable so long as any of the Secured Obligations has not been paid and
performed in full. Grantor hereby ratifies, to the extent permitted by law, any
and all acts that the Collateral Agent shall lawfully and in good faith do or
cause to be done by virtue of and in compliance with this Section 7.

            SECTION 8 Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which Grantor has agreed to perform or pay
under or in connection with this Agreement, and which Grantor has failed to
perform or pay as and when due, and Grantor shall reimburse the Collateral Agent
on demand for any amounts paid by the Collateral Agent pursuant to this Section
8.

            SECTION 9 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.

            SECTION 10  Remedies.

            (a) Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to it in this Agreement, the Credit Agreement or any other Credit
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, Grantor
agrees that:

            (i) The Collateral Agent may peaceably and without notice enter any
premises of Grantor, take possession of any Collateral, remove, prohibit access
to or use of, or dispose of all or part of the Collateral on any premises of
Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or sue for all or any part of the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may determine.

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            (ii) The Collateral Agent may require Grantor to assemble all or any
part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.

            (iii) The Collateral Agent may use or transfer any of Grantor's
rights and interests in any Intellectual Property, by license, by sublicense (to
the extent permitted by an applicable license) or otherwise, on such conditions
and in such manner as the Collateral Agent (upon instruction of the Instructing
Group) may determine.

            (iv) The Collateral Agent may secure the appointment of a receiver
of the Collateral or any part thereof (to the extent and in the manner provided
by applicable law).

            (v) The Collateral Agent may withdraw (or cause to be withdrawn) any
and all funds from any Deposit Accounts or securities accounts.

            (vi) The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral Agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at the
same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction of
the Instructing Group) deem advisable; provided, however, that Grantor shall be
credited with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall have the right
upon any such public sale, and, to the extent permitted by law, upon any such
private sale, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which right or equity of redemption
Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees
that the sending of notice by ordinary mail, postage prepaid, to the address of
Grantor set forth in the Credit Agreement, of the place and time of any public
sale or of the time after which any private sale or other intended disposition
is to be made, shall be deemed reasonable notice thereof if such notice is sent
ten days prior to the date of such sale or other disposition or the date on or
after which such sale or other disposition may occur, provided that the
Collateral Agent may provide Grantor shorter notice or no notice, to the extent
permitted by the UCC or other applicable law.

            (b) License. For the purpose of enabling the Collateral Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to the Collateral Agent
for the benefit of the Credit Agents an irrevocable, non-exclusive and
assignable license (exercisable without payment or royalty or other compensation
to Grantor) to use, license or sublicense any Intellectual Property.

            (c) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent for
the benefit of the Credit Agents may, at their election, (i) retain the proceeds
of any sale, collection, disposition or other realization upon the Collateral
(or any portion


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thereof) in a special purpose non-interest-bearing restricted deposit account
(the "Proceeds Account") created and maintained by the Collateral Agent for the
benefit of the Credit Agents for such purpose (which shall constitute a Deposit
Account included within the Collateral hereunder) until such time as the
Collateral Agent may elect to apply such proceeds to the Secured Obligations,
and Grantor agrees that such retention of such proceeds by the Collateral Agent
shall not be deemed strict foreclosure with respect thereto; (ii) in any manner
elected by the Collateral Agent (upon instruction of the Instructing Group),
estimate the liquidated amount of any such contingent, unmatured or unliquidated
claims and apply the proceeds of the Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable law. Grantor agrees that
the Proceeds Account shall be a blocked account and that upon the irrevocable
deposit of funds into the Proceeds Account, Grantor shall not have any right of
withdrawal with respect to such funds. Accordingly, Grantor irrevocably waives
until the termination of the security interests granted under this Agreement in
accordance with Section 23 the right to make any withdrawal from the Proceeds
Account and the right to instruct the Collateral Agent, or any of the Credit
Parties to honor drafts against the Proceeds Account.

            (d) Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

            SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties (A)
to proceed against any Person, (B) to exhaust any other collateral or security
for any of the Secured Obligations, (C) to pursue any remedy, or (D) to make or
give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Collateral; and (iii) all claims, damages, and demands against the
Collateral Agent, or any of the Credit Parties arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Collateral.

            SECTION 12 Notices. All notices or other communications hereunder
shall be given in the manner and to the addresses specified in, and shall be
effective as provided in, the Credit Agreement; provided, however, that notices
hereunder to (a) the Swap Provider shall be delivered to Fleet National Bank
using the information listed in Schedule 10.02 of the Credit Agreement for such
party as a Lender or such replacement Swap Provider as may be appointed from
time to time pursuant to the terms of the Intercreditor Agreement, and (b) the
Note Holders shall be delivered to such persons at the address specified in the
Note Purchase Agreement, or to such replacement Note Holders as may be appointed
from time to time consistent with the terms of the Intercreditor Agreement.

            SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of
the Collateral Agent, or any of the Credit Parties to exercise, and no delay in
exercising, any right,


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remedy, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights and remedies under this
Agreement are cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to the Collateral Agent, or any of
the Credit Parties.

            SECTION 14  Indemnification; Other Charges.

            (a) Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and their respective directors,
officers, employees, agents, counsel and other advisors (each an "Indemnified
Person") against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to an Indemnified Person (including
allocated costs of internal counsel), which may be imposed on, incurred by, or
asserted against any Indemnified Person, in any way relating to or arising out
of this Agreement or the transactions contemplated hereby or any action taken or
omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided
that Grantor shall not be liable to any Indemnified Person with respect to
Indemnified Liabilities resulting from such Indemnified Person's gross
negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, Grantor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

            (b) Other Charges. The Grantor agrees to indemnify the Collateral
Agent and the Credit Parties against and hold each of them harmless from any and
all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by reason
of the execution, delivery, performance and enforcement of this Agreement.

            (c) Interest. Any amounts payable to any Indemnified Person under
this Section 14 or otherwise under this Agreement if not paid upon demand shall
bear interest from the date of such demand until paid in full, at the applicable
rate, (a) for the Administrative Agent and any Lender, as set forth in Section
2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the
Specified Swap Agreement, and (c) for the Note Holders as set forth in Section
2.08(b) of the Note Purchase Agreement.

            SECTION 15 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by Grantor, each of the Credit
Parties, the Collateral Agent, each Indemnified Person referred to in Section 14
and their respective successors and assigns.

            SECTION 16 Governing Law and Jurisdiction.

            (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE;

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PROVIDED THAT THE COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

            (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT
PARTIES WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

            SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

            SECTION 18 Entire Agreement; Amendment. This Agreement, together
with the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.

            SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the


                                      H-26

                                         Exhibits to Arbitron Credit Agreement
   271

Secured Obligations owing to the Collateral Agent for the benefit of each Credit
Agent. The illegality or unenforceability of any provision of this Agreement or
any instrument or agreement required hereunder with respect to any Credit Agent
shall not in any way affect or impair the legality or enforceability of that or
any other provision of this Agreement or any instrument or agreement required
hereunder in respect to any other Credit Agent. The parties acknowledge that
this Agreement has, solely for reasons of convenience, been prepared and
executed as a single document, but that the legal effect shall be in all
respects as though the Grantor had executed separate security interests, for the
benefit of each of the Credit Agents. Any provision of this Agreement and the
other Credit Documents to which the Grantor is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

            SECTION 20 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Collateral Agent or any Credit Agent of a
facsimile transmitted document purportedly bearing the signature of a Grantor
shall bind Grantor with the same force and effect as the delivery of a hard copy
original. Any failure by the Collateral Agent or any Credit Agent to receive the
hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Collateral
Agent or such Credit Party.

            SECTION 21 Incorporation of Provisions of the Credit Agreement. To
the extent the Credit Agreement contains provisions of general applicability to
the Credit Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.

            SECTION 22 No Inconsistent Requirements. Grantor acknowledges that
this Agreement and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.

            SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Borrower under the Credit Agreement and payment and performance
in full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination of
all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.

                                      H-27

                                         Exhibits to Arbitron Credit Agreement
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            (ii) Concurrently with any permitted disposition of Collateral under
the Credit Documents, the security interests hereunder shall automatically be
released from the Collateral so disposed of, subject to Section 5(j); provided,
however, that the security interests shall continue in the Proceeds thereof.
Upon satisfaction to all conditions precedent to any permitted disposition set
forth herein or in the other Credit Documents, the Collateral Agent and all
Credit Agents shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Collateral provided by this Section. Any such release shall
specifically describe the portion of the Collateral to be released, shall be
expressed to be unconditional and shall be without recourse or warranty (other
than a warranty that the Collateral Agent and the Credit Agents have not
assigned their rights and interests to any other Person).

            SECTION 24 Assumption. Upon execution and delivery to the
Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of the
Grantor as provided in Section 6.14 of the Credit Agreement, effective as of the
effective date of such Subsidiary Security Agreement, such Guarantor shall be
deemed a Grantor party hereto, and this Agreement shall be deemed amended to
include any amendments to the Schedules provided by such Subsidiary in
connection therewith.

            SECTION 25 Intercreditor Agreement. Notwithstanding anything set
forth in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                 [remainder of page intentionally left blank]




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                                         Exhibits to Arbitron Credit Agreement
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            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.


                                  [_________________] CORPORATION
                                  Grantor


                                  By:
                                         ---------------------------------------
                                  Name:
                                  Title:


                                  BANK OF AMERICA, N.A.,
                                  as Collateral Agent


                                  By:
                                         ---------------------------------------
                                         Name:
                                         Title:




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                                   SCHEDULE 1
                            to the Security Agreement


1.    LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
COLLATERAL

      a.    Chief Executive Office and Principal Place of Business:








      b.    Other locations where Grantor conducts business or Collateral is
kept:








2.    LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT









3.    TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES;
ETC.










4.    DEPOSIT ACCOUNTS



                                  Schedule 1-1

                                         Exhibits to Arbitron Credit Agreement


   275


5.    INVESTMENT PROPERTY









6.    INSTRUMENTS









7.    LEASED EQUIPMENT






                                  Schedule 1-2

                                         Exhibits to Arbitron Credit Agreement


   276





                                   SCHEDULE 2
                            to the Security Agreement



(a)   ISSUED PATENTS OF GRANTOR




   Grantor     Patent No.   Issue Date   Inventors      Title       Agent
   -------     ----------   ----------   ---------      -----       -----
                                                     






(b)   PENDING PATENT APPLICATIONS OF GRANTOR



Grantor           Application No.   Filing Date     Inventors       Title
- -------           ---------------   -----------     ---------       -----
                                                        




 (c)  TRADEMARKS OF GRANTOR

 
 
               Registration    Registration               Registered
    Grantor        No.             Date      Filing Date     Owner         Mark
    -------        ---             ----      -----------     -----         ----
                                                            

 




(d)   PENDING TRADEMARK APPLICATIONS OF GRANTOR



                 Application
    Grantor          No.        Filing Date    Applicant         Mark
    -------         ---         -----------    ---------         ----
                                                     






(e)   COPYRIGHTS OF GRANTOR




    Grantor               Copyright Title            Reg. No.    Date of Issue
    -------               ---------------            --------    -------------
                                                        





                                  Schedule 2-1

                                         Exhibits to Arbitron Credit Agreement



   277


(f)   COPYRIGHT APPLICATIONS OF GRANTOR



       Grantor              Title                           Date of Application
       -------              -----                           -------------------
                                                      






(g)   COPYRIGHT LICENSES OF GRANTOR




    Grantor      Title   Copyright Owner               Reg. No.    Date of Issue
    -------      -----   ---------------               --------    -------------
                                                       





                                  Schedule 2-2

                                         Exhibits to Arbitron Credit Agreement


   278





                                   SCHEDULE 3
                            to the Security Agreement


                                 FILING OFFICES








                                  Schedule 3-1

                                         Exhibits to Arbitron Credit Agreement


   279

                                                                       EXHIBIT I


                       SUPPLEMENTAL IP SECURITY AGREEMENT

            THIS SUPPLEMENTAL IP SECURITY AGREEMENT (this "Agreement"), dated as
of _________ __, 2001, is made by and among [____________________], a [________]
corporation (the "Grantor") in favor of BANK OF AMERICA, N.A., as the Collateral
Agent for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent
(in such capacity, the "Administrative Agent") for itself and the financial
institutions (the "Lenders" and, individually, a "Lender") from time to time
party to that certain Credit Agreement dated as of January 31, 2001 (as renewed,
extended, modified, amended or restated from time to time, the "Credit
Agreement"); (b) the "Swap Provider" (as defined in the Security Agreement); and
(c) the Note Holders party from time to time to the Note Purchase Agreement.

                                    RECITALS

            WHEREAS, it is a covenant the satisfaction of which permits
borrowings under the Credit Agreement and the Note Purchase Agreement that the
Grantor enter into this Agreement and grant to the Collateral Agent for the
benefit of the Credit Parties the security interests hereinafter provided to
secure the obligations of the Grantor described below.

            WHEREAS, the Grantor is party to that Security Agreement dated as of
February __, 2001 by and among Grantor[, other Subsidiaries of the Borrower
party thereto] and the Collateral Agent for the benefit of the Credit Parties
(the "Security Agreement").

            NOW, THEREFORE, the parties hereto agree as follows:

            SECTION 1 Definitions; Interpretation. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in subsections (a), (b) and (c) of Section 1 of the Security
Agreement. The rules of interpretation set forth in subsection (d) of Section 1
of the Security Agreement shall be applicable to this Agreement and are
incorporated herein by this reference.

            SECTION 2 Grant of Security Interest.

            (a) As a continuing security for the payment and performance of the
Secured Obligations, the Grantor hereby pledges, assigns, transfers,
hypothecates and sets over to the Collateral Agent (for the benefit of the
Credit Parties, and each of them), and hereby grants to the Collateral Agent
(for the benefit of the Credit Parties, and each of them), a security interest
in all of Grantor's right, title and interest in, to and under the Intellectual
Property, wherever located and whether now existing or owned or hereafter
acquired or arising, including without limitation such Intellectual Property
described and set forth on Schedule 1 hereto.

            (b) Notwithstanding the foregoing provisions of this Section 2, the
grant of a security interest as provided herein shall not extend to, and the
term "Intellectual Property" shall not include, Intellectual Property which is
now or hereafter held by Grantor as licensee, lessee or otherwise to the extent
such Intellectual Property consists of: (i) ordinary shrinkwrap licenses


                                      I-1

                                         Exhibits to Arbitron Credit Agreement
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governing software products that Grantor purchased in the Ordinary Course of
Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement.

            SECTION 3 Further Assurances; Appointment of Collateral Agent as
Attorney-in-Fact. The Grantor at its expense shall execute and deliver, or cause
to be executed and delivered, to the Collateral Agent any and all documents and
instruments, in form and substance satisfactory to the Collateral Agent (upon
instruction of the Instructing Group), and take any and all action, which the
Collateral Agent (upon instruction of the Instructing Group) may request from
time to time, to perfect and continue perfected, maintain the priority of or
provide notice of the security interest of the Collateral Agent in the
Intellectual Property Collateral and to accomplish the purposes of this
Agreement. The Collateral Agent shall have the right, in the name of the
Grantor, or in the name of the Collateral Agent or any of the Credit Parties or
otherwise, upon notice to but without the requirement of assent by the Grantor,
and the Grantor hereby constitutes and appoints the Collateral Agent (and any of
the Collateral Agent's officers or employees or agents designated by the
Collateral Agent) as the Grantor's true and lawful attorney-in-fact with full
power and authority, to: (i) sign any financing statements and any other
documents and instruments which the Collateral Agent (upon instruction of the
Instructing Group) deems necessary or advisable to perfect or continue
perfected, maintain the priority of or provide notice of the Collateral Agent's
security interest in the Intellectual Property; (ii) assert, adjust, sue for,
compromise or release any claims under any policies of insurance; and (iii)
execute any and all such other documents and instruments, and do any and all
acts and things for and on behalf of the Grantor, which the Collateral Agent
(upon instruction of the Instructing Group) may deem necessary or advisable to
maintain, protect, realize upon and preserve the Intellectual Property and the
Collateral Agent's security interest therein and to accomplish the purposes of
this Agreement, including (A) to defend, settle, adjust or institute any action,
suit or proceeding with respect to the Intellectual Property, (B) to assert or
retain any rights under any license agreement for any of the Intellectual
Property, including without limitation any rights of the Grantor arising under
Section 365(n) of the Bankruptcy Code, and (C) to execute any and all
applications, documents, papers and instruments for the Collateral Agent to use
the Intellectual Property, to grant or issue any exclusive or non-exclusive
license or sub-license with respect to any Intellectual Property and to assign,
convey or otherwise transfer title in or dispose of the Intellectual Property;
provided, however, that the Collateral Agent agrees that, except upon and during
the continuance of an Event of Default, it shall not exercise the power of
attorney pursuant to clauses (ii) and (iii). The power of attorney set forth in
this Section 3, being coupled with an interest, is irrevocable so long as this
Agreement shall not have terminated.

            SECTION 4 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.

                                      I-2

                                         Exhibits to Arbitron Credit Agreement
   281

            SECTION 5   Credit Parties' Rights and Remedies.

            (a) Upon and during the continuation of a Default, the Collateral
Agent shall have all rights and remedies available to it under this Agreement,
the Security Agreement and applicable law with respect to the security interests
in any of the Intellectual Property. Grantor agrees that such rights and
remedies include, but are not limited to, the right of the Collateral Agent as a
secured party to sell or otherwise dispose of the Intellectual Property pursuant
to the UCC.

            (b) The cash proceeds actually received from the sale or other
disposition or collection of Intellectual Property, and any other amounts
received in respect of the Intellectual Property Collateral the application of
which is not otherwise provided for herein, shall be applied as provided in the
Security Agreement.

            SECTION 6 Security Agreement. This Agreement is supplementary to and
entered into in support of the Security Agreement. The terms and provisions of
the Security Agreement are incorporated herein by reference and shall be applied
as if fully set forth herein. The Grantor acknowledges that the rights and
remedies of the Collateral Agent with respect to the security interests in the
Intellectual Property granted hereby are more fully set forth in the Security
Agreement and that all such rights and remedies are cumulative.

            SECTION 7 Independence. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable Laws (including the UCC, patent law, trademark law and copyright
law) and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.

            SECTION 8 Representations and Warranties. The representations and
warranties of the Grantor set forth in the Section 4 of the Security Agreement
and incorporated herein by Section 6 hereof are true and correct as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case such representations and
warranties are true and correct as of such earlier date.

            SECTION 9 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.

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

                                      I-3

                                         Exhibits to Arbitron Credit Agreement
   282



                                    CERIDIAN CORPORATION
                                    Grantor


                                    By:
                                        ---------------------------------------
                                        Name:
                                        Title:


                                    BANK OF AMERICA, N.A.,
                                    as Administrative Agent


                                    By:
                                        ---------------------------------------
                                        Name:
                                        Title:




                                      I-4

                                         Exhibits to Arbitron Credit Agreement
   283



                                   SCHEDULE 1
                    to the Supplemental IP Security Agreement


(a)   NEW ISSUED PATENTS OF GRANTOR




   Grantor     Patent No.   Issue Date   Inventors      Title       Agent
   -------     ----------   ----------   ---------      -----       -----
                                                     






(b)   PENDING PATENT APPLICATIONS OF GRANTOR



Grantor           Application No.   Filing Date     Inventors       Title
- -------           ---------------   -----------     ---------       -----
                                                        




 (c)  NEW U.S. TRADEMARKS OF GRANTOR



               Registration   Registration               Registered
    Grantor        No.            Date      Filing Date     Owner         Mark
    -------        ---            ----      -----------     -----         ----
                                                           






(d)   PENDING TRADEMARK APPLICATIONS OF GRANTOR



                 Application
    Grantor          No.        Filing Date    Applicant         Mark
    -------          ---        -----------    ---------         ----
                                                     






(e)   NEW COPYRIGHTS OF GRANTOR



    Grantor               Copyright Title            Reg. No.    Date of Issue
    -------               ---------------            --------    -------------
                                                        






                                  Schedule 1-1

                                         Exhibits to Arbitron Credit Agreement


   284





(f)   NEW COPYRIGHT APPLICATIONS OF GRANTOR



       Grantor              Title          Application No.  Date of Application
       -------              -----          ---------------  -------------------
                                                   





(g)   NEW COPYRIGHT LICENSES OF GRANTOR





    Grantor      Title   Copyright Owner               Reg. No.    Date of Issue
    -------      -----   ---------------               --------    -------------
                                                       






                                  Schedule 1-2

                                         Exhibits to Arbitron Credit Agreement




   285


                                                                       EXHIBIT J


                        FORM OF BORROWER PLEDGE AGREEMENT

                THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
February __, 2001, is made among CERIDIAN CORPORATION, a Delaware corporation
(the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent for the benefit
of: (a) BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders from time to time party to
the Credit Agreement, dated as of January 31, 2001 (the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein), and (c) the Note Holders party from
time to time to the Note Purchase Agreement.

                It is a condition precedent to the borrowings under each of the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and pledge to the Collateral Agent the shares of the capital
stock of each of the Subsidiaries set forth in Schedule 1 (collectively, the
"Subsidiaries"), owned by the Grantor, to secure the obligations of the Grantor
described below.

                Accordingly, the parties hereto agree as follows:

                SECTION 1 Definitions; Interpretation.

                (a)     Terms Defined in Credit Agreement. All capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.

                (b)     Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

                "Additional Collateral" means any and all (i) additional capital
stock or other equity securities of the Subsidiaries, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in the capital stock or other equity securities of the
Subsidiaries, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.

                "Collateral Agent" means Bank of America, N.A. in its capacity
as "Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.



                                      J-1
   286


                "Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

                "Credit Documents" means, collectively, the Loan Documents, the
Note Holder Documents and the Swap Documents.

                "Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.

                "Debt Participant" means a "Debt Participant" under, and as
defined in, the Intercreditor Agreement.

                "Exchange Act" means the Securities Exchange Act of 1934.

                "Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.

                "Intercreditor Agreement" means that Intercreditor Agreement
dated as of January ___, 2001 among the Collateral Agent, the Administrative
Agent, the Swap Provider, and the Note Holders.

                "Investment Property" means any and all investment property of
the Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.

                "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Loan Party
under any Note Holder Document, (iii) all documents executed by any Loan Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.



                                      J-2
   287


                "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Borrower, the Note Holders party thereto.

                "Pledged Collateral" has the meaning set forth in Section 2(a).

                "Pledged Shares" means (a) all of the issued and outstanding
shares of capital stock, whether certificated or uncertificated, of the
Subsidiaries now owned by the Grantor (other than Ceridian Infotech (India)
Private Limited), as more specifically described in Schedule 2, provided,
however, that 65% (but no more than 65%) of the issued and outstanding capital
stock of any Subsidiary which is a Foreign Subsidiary, measured on a non-diluted
basis) shall constitute Pledged Shares hereunder, and (b) all Investment
Property.

                "Secured Obligations" means all indebtedness, liabilities and
other obligations of the Grantor to the Collateral Agent (for the benefit of the
Credit Agents), whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, now or created under, arising out of or in connection with any of
the Credit Documents, including all Obligations (as independently defined in
each of the Credit Agreement and the Note Purchase Agreement), and any
obligations under any Specified Swap Agreement to the extent arising out of any
Specified Swap Contracts.

                "Securities Act" means the Securities Act of 1933.

                "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Grantor and the Swap Provider as swap counterparties.

                "Specific Swap Contract" means any interest rate swap entered
into between Grantor and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

                "Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Loan Party
under any Swap Document, (c) any documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.

                "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

                "Swap Provider" has the meaning specified in the Intercreditor
Agreement.



                                      J-3
   288


                "UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

                (c)     Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the UCC.

                (d)     Interpretation. The rules of interpretation set forth in
Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this
Agreement and are incorporated herein by this reference.

                SECTION 2 Security Interest.

                (a)     Grant of Security Interest. As security for the payment
and performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.

                (b)     Delivery of Pledged Shares. The Grantor hereby agrees to
deliver to or for the account of the Collateral Agent, at the address and to the
Person to be designated by theAdministrative Agent, the certificates
representing the Pledged Shares, which shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent (with the consent of the Instructing Group).

                (c)     Delivery of Additional Collateral. If the Grantor shall
become entitled to receive or shall receive any Additional Collateral, the
Grantor shall accept any such Additional Collateral as the agent for the
Collateral Agent, shall hold it in trust for the Collateral Agent, shall
segregate it from other property or funds of the Grantor, and shall deliver all
Additional Collateral and all certificates, instruments and other writings
representing such Additional Collateral forthwith to or for the account of the
Collateral Agent, at the address and to the Person



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to be designated by the Collateral Agent upon instruction from the Instructing
Group, which shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Collateral Agent (with consent of the
Instructing Group), as the Collateral Agent shall request, to be held by the
Collateral Agent subject to the terms hereof, as part of the Pledged Collateral.
Upon accepting any such Additional Collateral hereunder, the Collateral Agent
shall promptly send a notification to the Grantor describing the Additional
Collateral accepted and held as part of the Pledged Collateral hereunder, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.

                (d)     Transfer of Security Interest Other Than by Delivery. If
for any reason Pledged Collateral cannot be delivered to or for the account of
the Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).

                (e)     Continuing Security Interest. The Grantor agrees that
this Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.

                SECTION 3 Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:

                (a)     Valid Issuance of Pledged Collateral. All the Pledged
Shares have been, and upon issuance any Additional Collateral will be, duly and
validly issued, and are and will be fully paid and non-assessable.

                (b)     Ownership of Pledged Collateral. With respect to the
Pledged Shares the Grantor is, and with respect to any Additional Collateral the
Grantor will be, the legal record and beneficial owner thereof, and has and will
have good and marketable title thereto, subject to no Lien except for the pledge
and security interests created by this Agreement.

                (c)     Capitalization of the Subsidiary. The Pledged Shares
constitute 100% of the issued and outstanding shares of capital stock of the
Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of
the Grantor, the Pledged Shares constitute no less than 65% of the issued and
outstanding capital stock of the Subsidiary, measured on a non-diluted basis.



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                (d)     Options, Warrants, Etc. Other than as set forth in
Schedule 2, no securities convertible into or exchangeable for any shares of
capital stock of the Subsidiary, or any options, warrants or other commitments
entitling any Person to purchase or otherwise acquire any shares of capital
stock of the Subsidiary, are issued and outstanding.

                (e)     Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent.

                (f)     Shareholders Agreements. There are no shareholders
agreements, voting trusts, proxy agreements or other agreements or
understandings which affect or relate to the voting or giving of written
consents with respect to any of the Pledged Collateral.

                (g)     No Violation of Securities Laws. None of the Pledged
Shares has been transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such transfer
may be subject.

                (h)     Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).

                (i)     Other Financing Statements. Other than (i) financing
statements disclosed to the Collateral Agent and (ii) financing statements in
favor of the Collateral Agent, no effective financing statement naming the
Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and
covering all or any part of the Pledged Collateral is on file in any filing or
recording office in any jurisdiction.

                (j)     Enforceability; Priority of Security Interest. This
Agreement (i) creates an enforceable perfected and first priority security
interest in and pledge of the Pledged Collateral upon delivery thereof pursuant
to Section 2(b), and (ii) will create an enforceable perfected and first
priority security interest in and pledge of the Additional Collateral upon
delivery thereof pursuant to Section 2(c) (or upon the taking of such other
action with respect thereto as may be requested by the Collateral Agent pursuant
to Section 2(d)), in each case securing the payment and performance of the
Secured Obligations.

                The Grantor agrees that the foregoing representations and
warranties shall be deemed to have been made by it on the date of each delivery
of Pledged Collateral hereunder.

                SECTION 4 Covenants. In addition to the covenants of the Grantor
set forth in the Credit Agreement, which are incorporated herein by this
reference, so long as any of the Secured Obligations remain unsatisfied or
unpaid, the Grantor agrees that:

                (a)     Defense of Pledged Collateral. The Grantor will, at its
own expense, appear in and defend any action, suit or proceeding which purports
to affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.


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                (b)     Preservation of Collateral. The Grantor will do and
perform all reasonable acts that may be necessary and appropriate to maintain,
preserve and protect the Pledged Collateral.

                (c)     Compliance with Laws, Etc. The Grantor will comply with
all laws, regulations and ordinances relating in a material way to the
possession, maintenance and control of the Pledged Collateral.

                (d)     Location of Books and Chief Executive Office. The
Grantor will: (i) keep all books and records pertaining to the Pledged
Collateral at the location set forth in Section 3(h); and (ii) give at least 30
days' prior written notice to the Collateral Agent of (A) any changes in any
such location where books and records pertaining to the Pledged Collateral are
kept, or (B) any change in the location of the Grantor's chief executive office
or principal place of business.

                (e)     Change in Name, Identity or Structure. The Grantor will
give at least 30 days' prior written notice to the Collateral Agent of (i) any
change in its name, (ii) any changes in, additions to or other modifications of
its trade names used as the name of Grantor, and (iii) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading.

                (f)     Disposition of Pledged Collateral. Except as permitted
by the Credit Agreement, the Grantor will not surrender or lose possession of
(other than to the Collateral Agent or, with the prior consent of the Collateral
Agent, to a depositary or financial intermediary), exchange, sell, convey,
assign or otherwise dispose of or transfer the Pledged Collateral or any right,
title or interest therein.

                (g)     Liens. Except for Permitted Liens, the Grantor will not
create, incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.

                (h)     Shareholders Agreements. The Grantor will not enter into
any shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.

                (i)     Issuance of Additional Shares. The Grantor will not
consent to or approve, or allow the Subsidiary to consent to or approve, the
issuance to any Person of any additional shares of any class of capital stock of
the Subsidiary, or of any securities convertible into or exchangeable for any
such shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.

                (j)     Notices. The Grantor will deliver promptly to the
Collateral Agent all reports and notices received by the Grantor from the
Subsidiary in respect of any of the Pledged Collateral.



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                (k)     Further Assurances. The Grantor will promptly, upon the
written request from time to time of the Collateral Agent, execute, acknowledge
and deliver, and file and record, all such financing statements and other
documents and instruments, and take all such action, as shall be reasonably
necessary to carry out the purposes of this Agreement.

                SECTION 5 Administration of the Pledged Collateral.

                (a)     Distributions and Voting Prior to an Event of Default.
Unless there exists any Default or Event of Default: (i) the Grantor shall be
entitled to receive and retain for its own account any cash dividend on or other
cash distribution, if any, in respect of the Pledged Collateral; and (ii) the
Grantor shall have the right to vote the Pledged Collateral and to retain the
power to control the direction, management and policies of the Subsidiary to the
same extent as the Grantor would if the Pledged Collateral were not pledged to
the Collateral Agent pursuant to this Agreement; provided, however, that the
Grantor shall not be entitled to receive (A) cash paid, payable or otherwise
distributed in redemption of, or in exchange for or in substitution of, any
Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction
of capital, capital surplus or paid-in-surplus or any other type of
recapitalization involving the Subsidiary; and provided further, however, that
no vote shall be cast or consent, waiver or ratification given or action taken
which would have the effect of impairing the position or interest of the
Collateral Agent in respect of the Pledged Collateral or which would alter the
voting rights with respect to the stock of the Subsidiary or be inconsistent
with or violate any provision of this Agreement and other Credit Documents. If
applicable, the Grantor shall be deemed the beneficial owner of all Pledged
Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to
file all reports required to be filed by beneficial owners of securities
thereunder. The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantor all such proxies and other instruments as
the Grantor may reasonably request for the purpose of enabling the Grantor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this subsection (a) and to receive the distributions which it is authorized
to receive and retain pursuant to this subsection (a).

                (b)     General Authority upon an Event of Default. If there
exists any Default or Event of Default:

                        (i)     the Collateral Agent shall be entitled to
receive all distributions and payments of any nature with respect to the Pledged
Collateral, to be held by the Collateral Agent as part of the Pledged
Collateral;

                        (ii)    the Collateral Agent shall have the right
following prior written notice to the Grantor to vote or consent to take any
action with respect to the Pledged Shares and exercise all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
the Pledged Collateral as if the Collateral Agent were the absolute owner
thereof; and



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                        (iii)   the Collateral Agent shall have the right, for
and in the name, place and stead of the Grantor, to execute endorsements,
assignments or other instruments of conveyance or transfer with respect to all
or any of the Pledged Collateral, to endorse any checks, drafts, money orders
and other instruments relating thereto, to sue for, collect, receive and give
acquittance for all moneys due or to become due in connection with the Pledged
Collateral and otherwise to file any claims, take any action or institute,
defend, settle or adjust any actions, suits or proceedings with respect to the
Pledged Collateral, execute any and all such other documents and instruments,
and do any and all such acts and things, as the Collateral Agent may deem
necessary or desirable to protect, collect, realize upon and preserve the
Pledged Collateral, to enforce the Collateral Agent's rights with respect to the
Pledged Collateral and to accomplish the purposes of this Agreement.

                (c)     Distributions to Be Held for Administrative Agent.
Distributions and other payments which are received by the Grantor but which it
is not entitled to retain as a result of the operation of subsection (a) or (b)
shall be held in trust for the benefit of the Collateral Agent, be segregated
from the other property or funds of the Grantor, and be forthwith paid over or
delivered to the Collateral Agent in the same form as so received.

                (d)     Certain Other Administrative Matters. At any time and
from time to time, the Collateral Agent may cause any of the Pledged Collateral
to be transferred into its name or into the name of its nominee or nominees
(subject to the revocable rights specified in subsection (a)). The Collateral
Agent shall at all times have the right to exchange uncertificated Pledged
Collateral for certificated Pledged Collateral, and to exchange certificated
Pledged Collateral for certificates of larger or smaller denominations, for any
purpose consistent with this Agreement.

                (e)     Appointment of Collateral Agent as Attorney-in-Fact. For
the purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with
regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this



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subsection (e). The foregoing power of attorney is coupled with an interest and
irrevocable so long as the Secured Obligations have not been paid and performed
in full. Grantor hereby ratifies, to the extent permitted by law, all that the
Collateral Agent shall lawfully and in good faith do or cause to be done by
virtue of and in compliance with this Section 5.

                SECTION 6 Performance of Grantor Obligations. The Collateral
Agent may perform or pay any obligation which the Grantor has agreed to perform
or pay under or in connection with this Agreement, and the Grantor shall
reimburse the Collateral Agent on demand for any amounts paid by the Collateral
Agent pursuant to this Section 6.

                SECTION 7 Collateral Agent's Duties. Notwithstanding any
provision contained in this Agreement, the Collateral Agent shall have no duty
to exercise any of the rights, privileges or powers afforded to it and shall not
be responsible to the Grantor or any other Person for any failure to do so or
delay in doing so. Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder and the accounting for
moneys actually received by the Collateral Agent hereunder, the Collateral Agent
shall have no duty or liability to exercise or preserve any rights, privileges
or powers pertaining to the Pledged Collateral.

                SECTION 8 Remedies.

                (a)     Remedies. If there exists any Default or Event of
Default, the Collateral Agent shall have, in addition to all other rights and
remedies granted to it in this or any Credit Document, all rights and remedies
of a secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted by the UCC or other applicable law. The
Grantor recognizes that the Collateral Agent may be unable to make a public sale
of any or all of the Pledged Collateral, by reason of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent and each Credit Party shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Pledged Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption the Grantor
hereby releases to the extent permitted by law.



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                (b)     Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the liquidated amount of any
such contingent, unmatured or unliquidated claims and apply the proceeds of the
Pledged Collateral against such amount; or (iii) otherwise proceed in any manner
permitted by applicable law. The Grantor agrees that the Proceeds Account shall
be a blocked account and that upon the irrevocable deposit of funds into the
Proceeds Account, the Grantor shall not have any right of withdrawal with
respect to such funds. Accordingly, the Grantor irrevocably waives until the
termination of this Agreement in accordance with Section 22 the right to make
any withdrawal from the Proceeds Account and the right to instruct the
Collateral Agent to honor drafts against the Proceeds Account.

                (c)     Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

                SECTION 9 Registration Rights.

                (a)     Registration of Pledged Collateral. If the Collateral
Agent at the request of the Instructing Group shall determine to exercise its
right to sell any or all of the Pledged Collateral pursuant to Section 8, and if
the Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and
the Grantor's and the Subsidiary's respective directors and officers to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things as may, in the view of the Collateral Agent, be
advisable to register such Pledged Collateral under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the view of the Collateral Agent
(with the consent of the Instructing Group), are necessary or be necessary or
advisable, all in conformity with the requirements of the Securities and
Exchange Commission applicable thereto. The Grantor agrees to comply, and to
cause the Subsidiary to comply, with



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the provisions of the securities or "Blue Sky" laws of any jurisdiction which
the Collateral Agent shall designate, and to cause the Subsidiary to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which shall satisfy the provisions of Section 11(a)
of the Securities Act. The Grantor shall cause to be furnished to the Collateral
Agent and each of the Credit Agents such number of copies of each preliminary
prospectus and prospectus, shall promptly notify the Collateral Agent of the
happening of any event (upon becoming aware thereof) as a result of which any
then effective prospectus includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of then existing
circumstances and shall cause the Collateral Agent and each Credit Agent to be
furnished with such number of copies as any such Person may reasonably request
of such supplement to or amendment of such prospectus as is necessary to
eliminate such untrue statement or correct such omission.

                (b)     No Obligation to Delay Private Sale. Neither the
Collateral Agent nor the Credit Parties shall be under any obligation to delay a
private sale of any of the Pledged Collateral (as contemplated by subsection
(a)) for the period of time necessary to permit the issuer thereof to register
such Pledged Collateral for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer would agree to do so.

                (c)     Further Acts. The Grantor further agrees to do or to use
its best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion of the Pledged Collateral
pursuant to subsections (a) and (b) valid and binding and in compliance with any
and all applicable laws (including the Exchange Act), regulations, orders,
writs, injunctions, decrees or awards of any and all Governmental Authorities
having jurisdiction over any such sale or sales.

                (d)     Equitable Relief. The Grantor acknowledges that a breach
of any of the covenants contained in this Section 9 will cause irreparable
injury to the Collateral Agent and the Credit Parties, that the Collateral Agent
and Credit Parties have no adequate remedy at law in respect of such breach and,
as a consequence, agrees that each and every covenant contained in this Section
9 shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.

                (e)     Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.

                SECTION 10 Certain Waivers. The Grantor waives, to the fullest
extent permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in the Collateral
Agent's power, or (D) to make or give any presentments, demands for performance,
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notices of protests or notices of dishonor in connection with any of the Pledged
Collateral; and (iii) all claims, damages, and demands against the Collateral
Agent arising out of the repossession, retention, sale or application of the
proceeds of any sale of the Pledged Collateral.

                SECTION 11 Notices. All notices, requests or other
communications hereunder shall be given in the manner and to the addresses
specified in the Credit Agreement; provided, however, that notices hereunder (a)
to the Swap Provider shall be delivered to Fleet National Bank using the
information listed in Schedule 10.02 of the Credit Agreement for such party as a
Lender (or such replacement Swap Provider as may be appointed from time to time
consistent with the terms of the Intercreditor Agreement), and (b) to the Note
Holders as set forth in the Note Purchase Agreement (or such replacement Note
Holders as may be appointed from time to time consistent with the terms of the
Intercreditor Agreement). All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.

                SECTION 12 No Waiver; Cumulative Remedies. No failure on the
part of the Collateral Agent or any Credit Party to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.

                SECTION 13 Costs and Expenses; Indemnification; Other Charges.

                (a)     Costs and Expenses. The Grantor agrees to pay on demand:

                        (i)     the out-of-pocket costs and expenses of the
Collateral Agent and any of the Credit Parties' attorney costs, in connection
with the negotiation, preparation, execution, delivery and administration of
this Agreement, and any amendments, modifications or waivers of the terms
thereof, and the custody of the Pledged Collateral;

                        (ii)    all title, appraisal (including the allocated
cost of internal appraisal services), survey, audit, consulting, search,
recording, filing and similar costs, fees and expenses incurred or sustained by
the Collateral Agent or any Credit Party in connection with this Agreement or
the Pledged Collateral; and

                        (iii)   all costs and expenses of the Collateral Agent
or any Credit Party, including Attorney Costs, in connection with the
enforcement or attempted enforcement of, and preservation of any rights or
interest under, this Agreement, any out-of-court workout or other refinancing or
restructuring or in any bankruptcy case, and the protection, sale or collection
of, or other realization upon, any of the Pledged Collateral, including any and
all losses, costs and expenses sustained by the Collateral Agent and any Credit
Party as a result of any failure by the Grantor to perform or observe its
obligations contained herein.



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                (b)     Indemnification. The Grantor shall indemnify, defend and
hold the Collateral Agent, Agent-Related Persons and each Credit Party and each
of its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

                (c)     Other Charges. The Grantor agrees to indemnify the
Indemnified Persons against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.

                (d)     Interest. Any amounts payable to the Collateral Agent or
any Credit Party under this Section 13 or otherwise under this Agreement if not
paid upon demand shall bear interest from the date of such demand until paid in
full, at the applicable rate of interest (a) for the Administrative Agent or any
Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the
Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any
Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement.

                SECTION 14 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Grantor, the Collateral Agent
and each Credit Party and their respective successors and assigns.



                                      J-14
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                SECTION 15 Governing Law and Jurisdiction.

                (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY
INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE
COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.

                (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

                SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



                                      J-15
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                SECTION 17 Entire Agreement; Amendment. This Agreement, together
with the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.

                SECTION 18 Independence. This Agreement sets forth independent
and separate security interests of the Grantor in favor of the Collateral Agent
in respect of the Secured Obligations owing to the Collateral Agent for the
benefit of each Credit Agent. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
with respect to any Credit Agent shall not in any way affect or impair the
legality or enforceability of that or any other provision of this Agreement or
any instrument or agreement required hereunder in respect to any other Credit
Agent. The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                SECTION 19 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.

                SECTION 20 Incorporation of Provisions of the Credit Agreement.
To the extent the Credit Agreement contains provisions of general applicability
to the Loan Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.

                SECTION 21 No Inconsistent Requirements. The Grantor
acknowledges that this Agreement, and the other Credit Documents may contain
covenants and other terms and provisions variously stated regarding the same or
similar matters, and agrees that all such covenants, terms and provisions are
cumulative and all shall be performed and satisfied in accordance with their
respective terms.

                SECTION 22 Termination. Upon termination of the Commitments of
the Lenders, surrender of all Letters of Credit and payment and performance in
full of all Secured Obligations, this Agreement shall terminate and the
Collateral Agent shall (with the consent of the Instructing Group) promptly
redeliver to the Grantor any of the Pledged Collateral in its possession and
shall execute and deliver to the Grantor such documents and instruments



                                      J-16
   301


reasonably requested by the Grantor as shall be necessary to evidence
termination of all security interests given by the Grantor to the Collateral
Agent hereunder; provided, however, that the obligations of the Grantor under
Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all
conditions precedent to any permitted disposition set forth herein or in the
other Credit Documents, the Collateral Agent shall execute and deliver any
releases or other documents reasonably requested by the relevant Grantor to
accomplish or confirm the release of Pledged Shares provided by this Section.

                SECTION 23 Intercreditor Agreement. Notwithstanding anything set
forth in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]



                                      J-17
   302


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


                                           CERIDIAN CORPORATION
                                           THE GRANTOR



                                           By:
                                              ----------------------------------

                                              Name:
                                              Title:

                                           BANK OF AMERICA, N.A.
                                           THE COLLATERAL AGENT



                                           By:
                                              ----------------------------------

                                              Name:
                                              Title:




                                      J-18
   303


                                   SCHEDULE 1
                          to the Stock Pledge Agreement

                                  SUBSIDIARIES








                                  SCHEDULE 1-1

   304


                                   SCHEDULE 2
                         to the Stock Pledge Agreement

                                 PLEDGED SHARES

                _______ stock of _________________ being represented by stock
certificates as follows:


        Certificate No.         Certificate Date                No. of Shares











                                  SCHEDULE 2-1


   305


                                   SCHEDULE 3
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                      OF CAPITAL STOCK OF THE SUBSIDIARIES








                                  SCHEDULE 3-1

   306


                                                                       EXHIBIT K


                       FORM OF SUBSIDIARY PLEDGE AGREEMENT


                THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
February __, 2001, is made among ___________________, a _______________
corporation (the "Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent on
behalf of, and for the benefit of, (a) BANK OF AMERICA, N.A. in its capacity as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders from time to time party to the Credit Agreement dated as of January 31,
2001 (as amended, modified, renewed or extended from time to time, the "Credit
Agreement"), (b) the "Swap Provider" (as defined herein), and (c) the "Note
Holders" (as defined herein) party to the Note Purchase Agreement.

                It is a condition precedent to the borrowings under each of the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and pledge to the Collateral Agent the shares of the capital
stock of ___________________________, a ____________ corporation (the
"Subsidiary"), owned by the Grantor, to secure the obligations of the Borrower
described below.

                Accordingly, the parties hereto agree as follows:

                SECTION 1 Definitions; Interpretation.

                (a)     Terms Defined in Credit Agreement. All capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.

                (b)     Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

                "Additional Collateral" means any and all (i) additional capital
stock or other equity securities of the Subsidiary, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in capital stock or other equity securities of the
Subsidiary, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.

                "Borrower" means CERIDIAN CORPORATION, a Delaware corporation.

                "Credit Documents" means the Loan Documents together with the
Swap Documents.



                                      K-1
   307


                "Collateral Agent" means Bank of America, N.A. in its capacity
as "Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.

                "Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

                "Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.

                "Credit Documents" means, collectively, the Loan Documents, the
Note Holder Documents and the Swap Documents.

                "Debt Participant" means a "Debt Participant" under, and as
defined in, the Intercreditor Agreement.

                "Exchange Act" means the Securities and Exchange Act of 1934.

                "Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.

                "Intercreditor Agreement" means that Intercreditor Agreement
dated as of January 31, 2001 among the Collateral Agent, the Administrative
Agent, the Swap Provider and the Note Holders.

                "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Loan Party
under any Note Holder Document, (iii) all documents executed by any Loan Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.



                                      K-2
   308


                "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Borrower and the Note Holders party
thereto.

                "Intercreditor Agreement" means that Intercreditor Agreement
dated as of __________ _____, 2001 among the Collateral Agent, the
Administrative Agent, the Swap Provider, and the Note Holders.

                "Investment Property" means any and all investment property of
the Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.

                "Pledged Collateral" has the meaning set forth in Section 2(a).

                "Pledged Shares" mean (a) all of the issued and outstanding
shares of capital stock, whether certificated or uncertificated, of the
Subsidiary now owned by the Grantor (other than Ceridian Infotech (India)
Private Limited), as more specifically described in Schedule 1, provided,
however, that if the Subsidiary is a Foreign Subsidiary of the Grantor, 65% (but
no more than 65%) of the issued and outstanding capital stock of the Subsidiary,
measured on a non-diluted basis, shall constitute Pledged Shares, and (b) all
Investment Property.

                "Secured Obligations" means all indebtedness, liabilities and
other obligations of the Borrower to the Collateral Agent, whether now existing
or hereafter arising, and whether due to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, nor or created under,
arising out of or in connection with any of the Credit Documents, including all
Obligations (as independently defined in each of the Credit Agreement and the
Note Purchase Agreement), and any of the obligations under any Swap Documents.

                "Securities Act" means the Securities Act of 1933.

                "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Borrower and the Swap Provider as swap counterparties.

                "Specific Swap Contract" means any interest rate swap entered
into between the Borrower and the Swap Provider as swap counterparties
constituting a "Specified Swap Contract" as defined in the Credit Agreement.

                "Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Loan Party
under any Swap Document, (c) any documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.



                                      K-3
   309


                "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

                "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

                "UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York: provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

                (c)     Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the UCC.

                (d)     Interpretation. The rules of interpretation set forth in
Section 1.02 and 1.05 of the Credit Agreement shall be applicable to this
Agreement and are incorporated herein by this reference.

                SECTION 2 Security Interest.

                (a)     Grant of Security Interest. As security for the payment
and performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.

                (b)     Delivery of Pledged Shares. The Grantor hereby agrees to
deliver to or for the account of the Collateral Agent, at the address and to the
Person to be designated by theAdministrative Agent, the certificates
representing the Pledged Shares, which shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of



                                      K-4
   310


transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent (with the consent of the Instructing Group).

                (c)     Delivery of Additional Collateral. If the Grantor shall
become entitled to receive or shall receive any Additional Collateral, the
Grantor shall accept any such Additional Collateral as the agent for the
Collateral Agent, shall hold it in trust for the Collateral Agent, shall
segregate it from other property or funds of the Grantor, and shall deliver all
Additional Collateral and all certificates, instruments and other writings
representing such Additional Collateral forthwith to or for the account of the
Collateral Agent, at the address and to the Person to be designated by the
Collateral Agent upon instruction from the Instructing Group, which shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent (with consent of the Instructing Group), as
the Collateral Agent shall request, to be held by the Collateral Agent subject
to the terms hereof, as part of the Pledged Collateral. Upon accepting any such
Additional Collateral hereunder, the Collateral Agent shall promptly send a
notification to the Grantor describing the Additional Collateral accepted and
held as part of the Pledged Collateral hereunder, which notification shall be
deemed to be a Schedule to this Agreement and may be attached hereto.

                (d)     Transfer of Security Interest Other Than by Delivery. If
for any reason Pledged Collateral cannot be delivered to or for the account of
the Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).

                (e)     Continuing Security Interest. The Grantor agrees that
this Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.

                SECTION 3 Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:

                (a)     Valid Issuance of Pledged Collateral. All the Pledged
Shares have been, and upon issuance any Additional Collateral will be, duly and
validly issued, and are and will be fully paid and non-assessable.

                (b)     Ownership of Pledged Collateral. With respect to the
Pledged Shares the Grantor is, and with respect to any Additional Collateral the
Grantor will be, the legal record and



                                      K-5
   311


beneficial owner thereof, and has and will have good and marketable title
thereto, subject to no Lien except for the pledge and security interests created
by this Agreement.

                (c)     Capitalization of the Subsidiary. The Pledged Shares
constitute 100% of the issued and outstanding shares of capital stock of the
Subsidiary, provided, however, that if the Company is a Foreign Subsidiary of
the Grantor, the Pledged Shares constitute no less than 65% of the issued and
outstanding capital stock of the Subsidiary, measured on a non-diluted basis.

                (d)     Options, Warrants, Etc. Other than as set forth in
Schedule 2, no securities convertible into or exchangeable for any shares of
capital stock of the Subsidiary, or any options, warrants or other commitments
entitling any Person to purchase or otherwise acquire any shares of capital
stock of the Subsidiary, are issued and outstanding.

                (e)     Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent.

                (f)     Shareholders Agreements. There are no shareholders
agreements, voting trusts, proxy agreements or other agreements or
understandings which affect or relate to the voting or giving of written
consents with respect to any of the Pledged Collateral.

                (g)     No Violation of Securities Laws. None of the Pledged
Shares has been transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such transfer
may be subject.

                (h)     Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).

                (i)     Other Financing Statements. Other than (i) financing
statements disclosed to the Collateral Agent and (ii) financing statements in
favor of the Collateral Agent, no effective financing statement naming the
Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and
covering all or any part of the Pledged Collateral is on file in any filing or
recording office in any jurisdiction.

                (j)     Enforceability; Priority of Security Interest. This
Agreement (i) creates an enforceable perfected and first priority security
interest in and pledge of the Pledged Collateral upon delivery thereof pursuant
to Section 2(b), and (ii) will create an enforceable perfected and first
priority security interest in and pledge of the Additional Collateral upon
delivery thereof pursuant to Section 2(c) (or upon the taking of such other
action with respect thereto as may be requested by the Collateral Agent pursuant
to Section 2(d)), in each case securing the payment and performance of the
Secured Obligations.

                The Grantor agrees that the foregoing representations and
warranties shall be deemed to have been made by it on the date of each delivery
of Pledged Collateral hereunder.



                                      K-6
   312


                SECTION 4 Covenants. In addition to the covenants of the Grantor
set forth in the Credit Agreement, which are incorporated herein by this
reference, so long as any of the Secured Obligations remain unsatisfied or
unpaid, the Grantor agrees that:

                (a)     Defense of Pledged Collateral. The Grantor will, at its
own expense, appear in and defend any action, suit or proceeding which purports
to affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.

                (b)     Preservation of Collateral. The Grantor will do and
perform all reasonable acts that may be necessary and appropriate to maintain,
preserve and protect the Pledged Collateral.

                (c)     Compliance with Laws, Etc. The Grantor will comply with
all laws, regulations and ordinances relating in a material way to the
possession, maintenance and control of the Pledged Collateral.

                (d)     Location of Books and Chief Executive Office. The
Grantor will: (i) keep all books and records pertaining to the Pledged
Collateral at the location set forth in Section 3(h); and (ii) give at least 30
days' prior written notice to the Collateral Agent of (A) any changes in any
such location where books and records pertaining to the Pledged Collateral are
kept, or (B) any change in the location of the Grantor's chief executive office
or principal place of business.

                (e)     Change in Name, Identity or Structure. The Grantor will
give at least 30 days' prior written notice to the Collateral Agent of (i) any
change in its name, (ii) any changes in, additions to or other modifications of
its trade names used as the name of Grantor, and (iii) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading.

                (f)     Disposition of Pledged Collateral. Except as permitted
by the Credit Agreement, the Grantor will not surrender or lose possession of
(other than to the Collateral Agent or, with the prior consent of the Collateral
Agent, to a depositary or financial intermediary), exchange, sell, convey,
assign or otherwise dispose of or transfer the Pledged Collateral or any right,
title or interest therein.

                (g)     Liens. Except for Permitted Liens, the Grantor will not
create, incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.

                (h)     Shareholders Agreements. The Grantor will not enter into
any shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.



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                (i)     Issuance of Additional Shares. The Grantor will not
consent to or approve, or allow the Subsidiary to consent to or approve, the
issuance to any Person of any additional shares of any class of capital stock of
the Subsidiary, or of any securities convertible into or exchangeable for any
such shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.

                (j)     Notices. The Grantor will deliver promptly to the
Collateral Agent all reports and notices received by the Grantor from the
Subsidiary in respect of any of the Pledged Collateral.

                (k)     Further Assurances. The Grantor will promptly, upon the
written request from time to time of the Collateral Agent, execute, acknowledge
and deliver, and file and record, all such financing statements and other
documents and instruments, and take all such action, as shall be reasonably
necessary to carry out the purposes of this Agreement.

                SECTION 5 Administration of the Pledged Collateral.

                (a)     Distributions and Voting Prior to an Event of Default.
Unless there exists any Default or Event of Default: (i) the Grantor shall be
entitled to receive and retain for its own account any cash dividend on or other
cash distribution, if any, in respect of the Pledged Collateral; and (ii) the
Grantor shall have the right to vote the Pledged Collateral and to retain the
power to control the direction, management and policies of the Subsidiary to the
same extent as the Grantor would if the Pledged Collateral were not pledged to
the Collateral Agent pursuant to this Agreement; provided, however, that the
Grantor shall not be entitled to receive (A) cash paid, payable or otherwise
distributed in redemption of, or in exchange for or in substitution of, any
Pledged Collateral, or (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 of the Subsidiary or in connection with a reduction
of capital, capital surplus or paid-in-surplus or any other type of
recapitalization involving the Subsidiary; and provided further, however, that
no vote shall be cast or consent, waiver or ratification given or action taken
which would have the effect of impairing the position or interest of the
Collateral Agent in respect of the Pledged Collateral or which would alter the
voting rights with respect to the stock of the Subsidiary or be inconsistent
with or violate any provision of this Agreement and other Credit Documents. If
applicable, the Grantor shall be deemed the beneficial owner of all Pledged
Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to
file all reports required to be filed by beneficial owners of securities
thereunder. The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantor all such proxies and other instruments as
the Grantor may reasonably request for the purpose of enabling the Grantor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this subsection (a) and to receive the distributions which it is authorized
to receive and retain pursuant to this subsection (a).

                (b)     General Authority upon an Event of Default. If there
exists any Default or Event of Default:



                                      K-8
   314


                        (i)     the Collateral Agent shall be entitled to
receive all distributions and payments of any nature with respect to the Pledged
Collateral, to be held by the Collateral Agent as part of the Pledged
Collateral;

                        (ii)    the Collateral Agent shall have the right
following prior written notice to the Grantor to vote or consent to take any
action with respect to the Pledged Shares and exercise all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
the Pledged Collateral as if the Collateral Agent were the absolute owner
thereof; and

                        (iii)   the Collateral Agent shall have the right, for
and in the name, place and stead of the Grantor, to execute endorsements,
assignments or other instruments of conveyance or transfer with respect to all
or any of the Pledged Collateral, to endorse any checks, drafts, money orders
and other instruments relating thereto, to sue for, collect, receive and give
acquittance for all moneys due or to become due in connection with the Pledged
Collateral and otherwise to file any claims, take any action or institute,
defend, settle or adjust any actions, suits or proceedings with respect to the
Pledged Collateral, execute any and all such other documents and instruments,
and do any and all such acts and things, as the Collateral Agent may deem
necessary or desirable to protect, collect, realize upon and preserve the
Pledged Collateral, to enforce the Collateral Agent's rights with respect to the
Pledged Collateral and to accomplish the purposes of this Agreement.

                (c)     Distributions to Be Held for Administrative Agent.
Distributions and other payments which are received by the Grantor but which it
is not entitled to retain as a result of the operation of subsection (a) or (b)
shall be held in trust for the benefit of the Collateral Agent, be segregated
from the other property or funds of the Grantor, and be forthwith paid over or
delivered to the Collateral Agent in the same form as so received.

                (d)     Certain Other Administrative Matters. At any time and
from time to time, the Collateral Agent may cause any of the Pledged Collateral
to be transferred into its name or into the name of its nominee or nominees
(subject to the revocable rights specified in subsection (a)). The Collateral
Agent shall at all times have the right to exchange uncertificated Pledged
Collateral for certificated Pledged Collateral, and to exchange certificated
Pledged Collateral for certificates of larger or smaller denominations, for any
purpose consistent with this Agreement.

                (e)     Appointment of Collateral Agent as Attorney-in-Fact. For
the purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with



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regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this subsection (e). The foregoing power of attorney is coupled with
an interest and irrevocable so long as the Secured Obligations have not been
paid and performed in full. Grantor hereby ratifies, to the extent permitted by
law, all that the Collateral Agent shall lawfully and in good faith do or cause
to be done by virtue of and in compliance with this Section 5.

                SECTION 6 Performance of Grantor Obligations. The Collateral
Agent may perform or pay any obligation which the Grantor has agreed to perform
or pay under or in connection with this Agreement, and the Grantor shall
reimburse the Collateral Agent on demand for any amounts paid by the Collateral
Agent pursuant to this Section 6.

                SECTION 7 Collateral Agent's Duties. Notwithstanding any
provision contained in this Agreement, the Collateral Agent shall have no duty
to exercise any of the rights, privileges or powers afforded to it and shall not
be responsible to the Grantor or any other Person for any failure to do so or
delay in doing so. Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder and the accounting for
moneys actually received by the Collateral Agent hereunder, the Collateral Agent
shall have no duty or liability to exercise or preserve any rights, privileges
or powers pertaining to the Pledged Collateral.

                SECTION 8 Remedies.

                (a)     Remedies. If there exists any Default or Event of
Default, the Collateral Agent shall have, in addition to all other rights and
remedies granted to it in this or any Credit Document, all rights and remedies
of a secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted



                                      K-10
   316


by the UCC or other applicable law. The Grantor recognizes that the Collateral
Agent may be unable to make a public sale of any or all of the Pledged
Collateral, by reason of prohibitions contained in applicable securities laws or
otherwise, and expressly agrees that a private sale to a restricted group of
purchasers for investment and not with a view to any distribution thereof shall
be considered a commercially reasonable sale. The Collateral Agent and each
Credit Party shall have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase the whole or any part
of the Pledged Collateral so sold, free of any right or equity of redemption,
which right or equity of redemption the Grantor hereby releases to the extent
permitted by law.

                (b)     Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the liquidated amount of any
such contingent, unmatured or unliquidated claims and apply the proceeds of the
Pledged Collateral against such amount; or (iii) otherwise proceed in any manner
permitted by applicable law. The Grantor agrees that the Proceeds Account shall
be a blocked account and that upon the irrevocable deposit of funds into the
Proceeds Account, the Grantor shall not have any right of withdrawal with
respect to such funds. Accordingly, the Grantor irrevocably waives until the
termination of this Agreement in accordance with Section 22 the right to make
any withdrawal from the Proceeds Account and the right to instruct the
Collateral Agent to honor drafts against the Proceeds Account.

                (c)     Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

                SECTION 9 Registration Rights.

                (a)     Registration of Pledged Collateral. If the Collateral
Agent at the request of the Instructing Group shall determine to exercise its
right to sell any or all of the Pledged Collateral pursuant to Section 8, and if
the Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall



                                      K-11
   317


execute and deliver, and shall cause the Subsidiary and the Grantor's and the
Subsidiary's respective directors and officers to execute and deliver, all such
instruments and documents, and to do or cause to be done all such other acts and
things as may, in the view of the Collateral Agent, be advisable to register
such Pledged Collateral under the provisions of the Securities Act and to cause
the registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
which, in the view of the Collateral Agent (with the consent of the Instructing
Group), are necessary or be necessary or advisable, all in conformity with the
requirements of the Securities and Exchange Commission applicable thereto. The
Grantor agrees to comply, and to cause the Subsidiary to comply, with the
provisions of the securities or "Blue Sky" laws of any jurisdiction which the
Collateral Agent shall designate, and to cause the Subsidiary to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which shall satisfy the provisions of Section 11(a) of the
Securities Act. The Grantor shall cause to be furnished to the Collateral Agent
and each of the Credit Agents such number of copies of each preliminary
prospectus and prospectus, shall promptly notify the Collateral Agent of the
happening of any event (upon becoming aware thereof) as a result of which any
then effective prospectus includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of then existing
circumstances and shall cause the Collateral Agent and each Credit Agent to be
furnished with such number of copies as any such Person may reasonably request
of such supplement to or amendment of such prospectus as is necessary to
eliminate such untrue statement or correct such omission.

                (b)     No Obligation to Delay Private Sale. Neither the
Collateral Agent nor the Credit Parties shall be under any obligation to delay a
private sale of any of the Pledged Collateral (as contemplated by subsection
(a)) for the period of time necessary to permit the issuer thereof to register
such Pledged Collateral for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer would agree to do so.

                (c)     Further Acts. The Grantor further agrees to do or to use
its best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion of the Pledged Collateral
pursuant to subsections (a) and (b) valid and binding and in compliance with any
and all applicable laws (including the Exchange Act), regulations, orders,
writs, injunctions, decrees or awards of any and all Governmental Authorities
having jurisdiction over any such sale or sales.

                (d)     Equitable Relief. The Grantor acknowledges that a breach
of any of the covenants contained in this Section 9 will cause irreparable
injury to the Collateral Agent and the Credit Parties, that the Collateral Agent
and Credit Parties have no adequate remedy at law in respect of such breach and,
as a consequence, agrees that each and every covenant contained in this Section
9 shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.



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   318


                (e)     Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.

                SECTION 10 Certain Waivers. The Grantor waives, to the fullest
extent permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in Collateral Agent's
power, or (D) to make or give any presentments, demands for performance, notices
of nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Pledged Collateral; and (iii) all claims, damages,
and demands against the Collateral Agent arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Pledged
Collateral.

                SECTION 11 Notices. All notices, requests or other
communications hereunder shall be given in the manner and to the addresses
specified in the Credit Agreement; provided, however, that notices hereunder (a)
to the Swap Provider shall be delivered to Fleet National Bank using the
information listed in Schedule 10.02 of the Credit Agreement for such party as a
Lender (or such replacement Swap Provider as may be appointed from time to time
consistent with the terms of the Intercreditor Agreement), and (b) to the Note
Holders as set forth in the Note Purchase Agreement (or such replacement Note
Holders as may be appointed from time to time consistent with the terms of the
Intercreditor Agreement). All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.

                SECTION 12 No Waiver; Cumulative Remedies. No failure on the
part of the Collateral Agent or any Credit Party to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.

                SECTION 13 Costs and Expenses; Indemnification; Other Charges.

                (a)     Costs and Expenses. The Grantor agrees to pay on demand:

                        (i)     the out-of-pocket costs and expenses of the
Collateral Agent and any of the Credit Parties' attorney costs, in connection
with the negotiation, preparation, execution, delivery and administration of
this Agreement, and any amendments, modifications or waivers of the terms
thereof, and the custody of the Pledged Collateral;

                        (ii)    all title, appraisal (including the allocated
cost of internal appraisal services), survey, audit, consulting, search,
recording, filing and similar costs, fees and expenses incurred or sustained by
the Collateral Agent or any Credit Party in connection with this Agreement or
the Pledged Collateral; and



                                      K-13
   319


                        (iii)   all costs and expenses of the Collateral Agent
or any Credit Party, including Attorney Costs, in connection with the
enforcement or attempted enforcement of, and preservation of any rights or
interest under, this Agreement, any out-of-court workout or other refinancing or
restructuring or in any bankruptcy case, and the protection, sale or collection
of, or other realization upon, any of the Pledged Collateral, including any and
all losses, costs and expenses sustained by the Collateral Agent and any Credit
Party as a result of any failure by the Grantor to perform or observe its
obligations contained herein.

                (b)     Indemnification. The Grantor shall indemnify, defend and
hold the Collateral Agent, Agent-Related Persons and each Credit Party and each
of its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

                (c)     Other Charges. The Grantor agrees to indemnify the
Indemnified Persons against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.

                (d)     Interest. Any amounts payable to the Collateral Agent or
any Credit Party under this Section 13 or otherwise under this Agreement if not
paid upon demand shall bear



                                      K-14
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interest from the date of such demand until paid in full, at the applicable rate
of interest (a) for the Administrative Agent or any Lender, as set forth in
Section 2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth
in the Specified Swap Agreement, and (c) for any Note Holder, as set forth in
Section 2.08(b) of the Note Purchase Agreement.

                SECTION 14 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Grantor, the Collateral Agent
and each Credit Party and their respective successors and assigns.

                SECTION 15 Governing Law and Jurisdiction.

                (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY
INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE
COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.

                (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

                SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER



                                      K-15
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ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                SECTION 17 Entire Agreement; Amendment. This Agreement, together
with the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.

                SECTION 18 Independence. This Agreement sets forth independent
and separate security interests of the Grantor in favor of the Collateral Agent
in respect of the Secured Obligations owing to the Collateral Agent for the
benefit of each Credit Agent. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
with respect to any Credit Agent shall not in any way affect or impair the
legality or enforceability of that or any other provision of this Agreement or
any instrument or agreement required hereunder in respect to any other Credit
Agent. The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                SECTION 19 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.

                SECTION 20 Incorporation of Provisions of the Credit Agreement.
To the extent the Credit Agreement contains provisions of general applicability
to the Loan Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.

                SECTION 21 No Inconsistent Requirements. The Grantor
acknowledges that this Agreement, and the other Credit Documents may contain
covenants and other terms and provisions variously stated regarding the same or
similar matters, and agrees that all such



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covenants, terms and provisions are cumulative and all shall be performed and
satisfied in accordance with their respective terms.

                SECTION 22 Termination. Upon termination of the Commitments of
the Lenders, surrender of all Letters of Credit and payment and performance in
full of all Secured Obligations, this Agreement shall terminate and the
Collateral Agent shall (with the consent of the Instructing Group) promptly
redeliver to the Grantor any of the Pledged Collateral in its possession and
shall execute and deliver to the Grantor such documents and instruments
reasonably requested by the Grantor as shall be necessary to evidence
termination of all security interests given by the Grantor to the Collateral
Agent hereunder; provided, however, that the obligations of the Grantor under
Sections 9(e) and 13 shall survive such termination. Upon satisfaction to all
conditions precedent to any permitted disposition set forth herein or in the
other Credit Documents, the Collateral Agent shall execute and deliver any
releases or other documents reasonably requested by the relevant Grantor to
accomplish or confirm the release of Pledged Shares provided by this Section.

                SECTION 23 Intercreditor Agreement. Notwithstanding anything set
forth in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]




                                      K-17
   323


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


                                          [                                    ]
                                           ------------------------------------
                                          THE GRANTOR



                                          By:
                                             -----------------------------------

                                             Name:
                                             Title:

                                          BANK OF AMERICA, N.A.
                                          THE COLLATERAL AGENT



                                          By:
                                             -----------------------------------

                                             Name:
                                             Title:



                                      K-18
   324


                                   SCHEDULE 1
                          to the Stock Pledge Agreement

                                 PLEDGED SHARES

                _______ stock of _________________ being represented by stock
certificates as follows:


        Certificate No.         Certificate Date              No. of Shares








                                  SCHEDULE 1-1

   325


                                   SCHEDULE 2
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                      OF CAPITAL STOCK OF THE SUBSIDIARIES







                                  SCHEDULE 2-1

   326


                                   SCHEDULE 3
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                       OF CAPITAL STOCK OF THE SUBSIDIARY







                                  SCHEDULE 3-1

   327


                                                                       EXHIBIT L


                 FORM OF EFFECTIVENESS DATE OPINIONS OF COUNSEL
                                (CONTENT SUMMARY)

1.      Each Loan Party is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with the corporate power
and authority and all material governmental licenses, authorizations, consents
and approvals to own and operate (or lease, as the case may be) its properties
and to carry on its business as it is now conducted. Each Loan Party is
qualified as a foreign corporation, licensed and in good standing in each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license, except where the failure
to be so qualified, licensed or in good standing would not adversely affect the
business or operations of such Loan Party in any significant manner.

2.      Each Loan Party has the corporate power and authority to enter into and
perform the Loan Documents to which it is a party, and has taken all necessary
corporate action to authorize the execution, delivery and performance of such
Loan Documents.

3.      No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Loan Party of the Loan Documents to which it is a
party.

4.      The Loan Documents to which each Loan Party is a party have been duly
executed and delivered by such Loan Party and constitute the legal, valid and
binding obligations of such Loan Party, enforceable against such Loan Party in
accordance with their respective terms.

5.      The execution, delivery and performance by each Loan Party of the Loan
Documents to which it is a party will not (i) violate or be in conflict with any
provision of the certificate or articles of incorporation, as the case may be,
or by-laws of such Loan Party, (ii) violate or be in conflict with any law or
regulation having applicability to such Loan Party, (iii) violate or contravene
any judgment, decree, injunction, writ or order of any court, or any arbitrator
or other Governmental Authority, having jurisdiction over such Loan Party or
such Loan Party's properties or by which such Loan Party may be bound, or (iv)
violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
loan or credit agreement (including the Existing Credit Facility), or any other
agreement for borrowed money or any other material agreement, lease or
instrument to which such Loan Party is a party or by which it or such Loan
Party's properties may be bound, or result in the creation of any Lien upon any
of the assets or properties of such Loan Party.

6.      The provisions of the Borrower Security Agreement and the Subsidiary
Security Agreement (collectively, the "Security Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Collateral described in such Security
Agreements and the financing statements related thereto. The financing
statements filed with the ____________ (the "Filing Offices") are in appropriate
form for filing in the Filing Offices, (ii) the Filing Offices are the
appropriate filing offices in order to




                                      L-1
   328


perfect a security interest in such Collateral, subject only to the provisions
of the Intercreditor Agreement, (iii) the Administrative Agent has a perfected
security interest in such Collateral, and (iv) no other action is necessary
under the Uniform Commercial Code or other laws (including without limitation
the U.S. copyright laws, the U.S. patent laws and the U.S. trademark laws) as in
effect in ______________ to perfect a security interest in such Collateral.

7.      The provisions of the Borrower Stock Pledge Agreement and the Subsidiary
Stock Pledge Agreement (collectively, the "Stock Pledge Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Pledged Collateral described therein.
The security interest in the Pledged Collateral created under the Stock Pledge
Agreements will become perfected upon delivery to and possession by the
Administrative Agent of the certificates representing the Pledged Collateral,
indorsed to the Administrative Agent or in blank by an effective indorsement.

8.      Based solely on our review of the minute books and stock records of the
Loan Parties, to our knowledge, the authorized, issued and outstanding capital
stock of each Loan Party (other than Ceridian) as set forth on Schedule __
hereto constitutes all of the authorized, issued and outstanding capital stock
of such Loan Party, and all of such issued and outstanding capital stock is
owned of record by the Persons indicated on such Schedule __.

9.      No filings, registrations, recordings, or other actions are necessary
under the laws of _______________ to create, preserve, perfect, and protect the
Administrative Agent's Lien in the Pledged Securities under the Stock Pledge
Agreements, and no consent, approval, or authorization of any Person is required
under the laws of _______________ in order for the Administrative Agent's Lien
to be created, preserved, perfected, and protected.

10.     The extension of credit under the Credit Agreement does not violate the
provisions of Regulations T, U or X of the Federal Reserve Board.

11.     No Loan Party is an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940.

12.     No Loan Party 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 Public Utility Holding
Company Act of 1935.



                                      L-2
   329


                                                                       EXHIBIT M


                    FORM OF CLOSING DATE OPINIONS OF COUNSEL
                                (CONTENT SUMMARY)

1.      Each Loan Party has the corporate power and authority to enter into and
perform the Spin-Off Transaction and each of the Spin-Off Documents to which it
is a party, and has taken all necessary corporate action to authorize the
execution, delivery and performance of each Spin-Off Document and to consummate
the Spin-Off Transaction.

2.      No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Loan Party of any Spin-Off Document to which it is a
party, or to consummate the Spin-Off Transaction, except as have been obtained
prior to the Closing Date.

3.      The Spin-Off Documents to which each Loan Party is a party have been
duly executed and delivered by such Loan Party and constitute the legal, valid
and binding obligations of such Loan Party, enforceable against such Loan Party
in accordance with their respective terms.

4.      The execution, delivery and performance by each Loan Party of each
Spin-Off Document to which it is a party, and the consummation of the Spin-Off
Transaction, will not (i) violate or be in conflict with any provision of the
certificate or articles of incorporation, as the case may be, or by-laws of such
Loan Party, (ii) violate or be in conflict with any law or regulation having
applicability to such Loan Party, (iii) violate or contravene any judgment,
decree, injunction, writ or order of any court, or any arbitrator or other
Governmental Authority, having jurisdiction over such Loan Party or such Loan
Party's properties or by which such Loan Party may be bound, or (iv) violate or
conflict with, or constitute a default under or result in the termination of, or
accelerate the performance required by, any indenture, any loan or credit
agreement, or any other agreement for borrowed money or any other material
agreement, lease or instrument to which such Loan Party is a party or by which
it or such Loan Party's properties may be bound, or result in the creation of
any Lien upon any of the assets or properties of such Loan Party.

5.      The Distribution is legal under the Delaware General Corporation Law.




                                      M-1
   330



                                                                       EXHIBIT N


                FORM OF ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT



Date:  ______________




To each of the Lenders party to the Credit Agreement referred to below, and to
Bank of America, N.A., as the Administrative Agent


Ladies and Gentlemen:

                This agreement ("Additional Guarantor Assumption Agreement") is
made and delivered pursuant to Section 6.14 of that certain Credit Agreement
dated as of January 31, 2001 (as renewed, extended, amended or restated, the
"Credit Agreement"), among CERIDIAN CORPORATION (the "Borrower"), the several
financial institutions from time to time party thereto (each a "Lender" and
together with the Assignor, the "Lenders") and BANK OF AMERICA, N.A., as
administrative agent (in such capacity, the "Administrative Agent"). All
capitalized terms used in this Additional Guarantor Assumption Agreement and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement.

                _____________, a _____________ corporation (the "Subsidiary")
hereby confirms, represents and warrants to the Administrative Agent and the
Lenders that the Subsidiary is a Subsidiary of the Borrower effective as of
________________. [The Subsidiary further represents that it is a Foreign
Subsidiary.]

                The documents, resolutions, incumbency and officer's
certificates, opinions of counsel, UCC-1 financing statements, Supplemental IP
Security Agreements and other documents and certificates required to be
delivered to the Administrative Agent under subsections (b) and (c) of Section
6.14 and Section 6.16 of the Credit Agreement will be furnished to the
Administrative Agent in accordance with the requirements of the Credit
Agreement.

                The Subsidiary hereby confirms that with effect from the date
hereof, the Subsidiary shall (i) be a party to the Guaranty, dated as of January
31, 2001 (the "Subsidiary Guaranty"), given by certain Subsidiaries of the
Borrower, as Guarantor, in favor of the Administrative Agent, to the Security
Agreement, dated as of January 31, 2001, (the "Subsidiary Security Agreement"),
among certain Subsidiaries of the Borrower, as Grantors, and the Administrative
Agent and to the Supplemental IP Security Agreements dated as of ______, ____,
and ______; and (ii) shall have the same obligations, duties and liabilities
towards the Administrative Agent and Lenders as those which the Subsidiary would
have had if the Subsidiary had been an original party to the Subsidiary
Guaranty, as a Guarantor, and the Subsidiary Security Agreement, as a Grantor
(and pursuant to Section 2(a) of the Subsidiary



                                      N-1
   331


Security Agreement, the Subsidiary hereby grants to the Administrative Agent a
security interest in all its "Collateral" (as defined therein) as security for
the payment and performance of the Secured Obligations (as defined therein)).
The Subsidiary hereby confirms its acceptance of, and consents to, all
representations and warranties, covenants, and other terms and provisions of the
Subsidiary Guaranty applicable to Guarantors, and the Subsidiary Security
Agreement applicable to Grantors, and to any other Loan Documents to which the
Guarantors are parties.

                Without limiting the generality of the foregoing, the Subsidiary
confirms that effective as of the date hereof it shall be liable as a Guarantor
pursuant to Section 8.01(n) of the Credit Agreement.

                This Additional Guarantor Assumption Agreement shall constitute
a Loan Document under the Credit Agreement.

                THIS ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                IN WITNESS WHEREOF, the Subsidiary has caused this Additional
Guarantor Assumption Agreement to be duly executed and delivered in
_____________, ______________, by its proper and duly authorized officer as of
the day and year first above written.

                                   [SUBSIDIARY]

                                   By:
                                       -----------------------------------------

                                   Name:
                                         ---------------------------------------

                                   Title:
                                          --------------------------------------



                                      N-2
   332


                                                                       EXHIBIT O


                 FORM OF ADDITIONAL GUARANTOR OPINION OF COUNSEL
                                (CONTENT SUMMARY)

                1.      The Additional Guarantor is a ___________ duly
organized, validly existing and in good standing under the laws of [the State of
__________] [the country of _________] with the power and authority to own and
operate (or lease, as the case may be) its properties and to carry on its
business as it is now conducted. The Additional Guarantor is qualified and in
good standing in ___________________.

                2.      The Additional Guarantor has the power and authority to
enter into and perform the Additional Guarantor Documents, and has taken all
necessary action to authorize the execution, delivery and performance of the
Additional Guarantor Documents.

                3.      No authorization, consent, approval, license, exemption
of, or filing or registration with, any Governmental Authority, or approval or
consent of any other Person, is required for the due execution, delivery or
performance by the Additional Guarantor of the Additional Guarantor Documents[,
except for recordings or filings in connection with the perfection of the Liens
on the Collateral in favor of the Administrative Agent on behalf of the
Lenders].

                4.      The Additional Guarantor Documents have been duly
executed and delivered by the Additional Guarantor and constitute the legal,
valid and binding obligations of the Additional Guarantor enforceable against
the Additional Guarantor in accordance with their respective terms.

                5.      The execution, delivery and performance by the
Additional Guarantor of the Additional Guarantor Documents will not (i) violate
or be in conflict with any provision of the _______________ [specify applicable
Organization Documents reviewed] of the Additional Guarantor or any, (ii)
violate or be in conflict with any law or regulation having applicability to the
Additional Guarantor, (iii) violate or contravene any judgment, decree,
injunction, writ or order of any court, or any arbitrator or other Governmental
Authority, having jurisdiction over the Additional Guarantor or the Additional
Guarantor's properties or by which the Additional Guarantor may be bound, or
(iv) violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
loan or credit agreement, or any other agreement for borrowed money or any other
material Contractual Obligation to which the Additional Guarantor is a party or
by which it or the Additional Guarantor's properties may be bound, or result in
the creation of any Lien upon any of the assets or properties of the Additional
Guarantor.

                6.      The provisions of the Security Agreement [and
Supplemental IP Security Agreement] are in form sufficient to create, in favor
of the Administrative Agent on behalf of the Lenders, as secured party, a valid
security interest in and lien on the Collateral of the Additional Guarantor
described in the Security Agreement and the financing statements. Upon the
filing of the financing statements with the filing offices and the delivery of
the Pledged Collateral, the



                                      O-1
   333


Administrative Agent will have a valid and perfected security interest in and
lien on all of such Collateral described in the Security Agreement and the
financing statements.

                7.      Except as specifically disclosed in
__________________________, there are no actions, suits, proceedings, claims or
disputes pending, or to the best of our knowledge, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, against
the Additional Guarantor or any of its properties which (i) purport to affect or
pertain to the Additional Guarantor Documents, or any of the transactions
contemplated thereby; or (ii) if determined adversely to the Additional
Guarantor, would be likely to have a Material Adverse Effect.

                8.      Our opinion set forth in paragraph 4 above is subject to
the qualification that the enforceability of the Additional Guarantor Documents
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
equity principles.




                                      O-2

EX-10.7

   1
                                                                    EXHIBIT 10.7

================================================================================
================================================================================












                              CERIDIAN CORPORATION
                           (DBA THE ARBITRON COMPANY)







              $50,000,000 Senior Secured Notes due January 31, 2008






                             =======================


                             NOTE PURCHASE AGREEMENT

                             =======================





                                January 31, 2001

================================================================================
================================================================================

   2

                                TABLE OF CONTENTS



Section                                                                    Page
- -------                                                                    ----

                                                                     
ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS....................................1
         1.01  Defined Terms...................................................1
         1.02  Other Interpretive Provisions..................................20
         1.03  Accounting Terms...............................................21
         1.04  Rounding.......................................................21
         1.05  References to Agreements and Laws..............................21

ARTICLE II  AUTHORIZATION, SALE AND PURCHASE OF NOTES.........................22
         2.01  Authorization of Notes.........................................22
         2.02  Sale and Purchase of Notes.....................................22
         2.03  Closing........................................................22
         2.04  Optional Prepayments...........................................22
         2.05  Mandatory Offers to Make Prepayments...........................22
         2.06  General Provisions Concerning Prepayments......................24
         2.07  Repayment of Notes.............................................25
         2.08  Interest.......................................................25
         2.09  Reserved.......................................................25
         2.10  Computation of Interest........................................25
         2.11  Reserved.......................................................25
         2.12  Payments Generally.............................................25
         2.13  Reserved.......................................................26
         2.14  Security and Guaranties........................................26

ARTICLE III  TAXES............................................................26
         3.01  Taxes..........................................................26
         3.02  Reserved.......................................................27
         3.03  Reserved.......................................................27
         3.04  Reserved.......................................................27
         3.05  Reserved.......................................................27
         3.06  Matters Applicable to all Requests for Compensation............27
         3.07  Survival.......................................................28

ARTICLE IV  CONDITIONS PRECEDENT..............................................28
         4.01  Conditions to Effectiveness....................................28
         4.02  Conditions to Purchase of Notes................................31
         4.03  Reserved.......................................................33

ARTICLE V  REPRESENTATIONS AND WARRANTIES.....................................33
         5.01  Corporate Existence and Power..................................33
         5.02  Corporate Authorization; No Contravention......................34
         5.03  Governmental Authorization.....................................34
         5.04  Binding Effect.................................................35



                                      -i-
   3

                                                                     
         5.05  Litigation.....................................................35
         5.06  No Default.....................................................36
         5.07  ERISA Compliance...............................................36
         5.08  Title to Properties............................................37
         5.09  Taxes..........................................................37
         5.10  Financial Condition............................................37
         5.11  Environmental Matters..........................................38
         5.12  Regulated Entities.............................................39
         5.13  Collateral Documents...........................................39
         5.14  No Burdensome Restrictions.....................................39
         5.15  Solvency.......................................................39
         5.16  Labor Relations................................................39
         5.17  Intellectual Property; Proprietary Information.................40
         5.18  Insurance......................................................40
         5.19  Employment Agreements..........................................41
         5.20  Spin-Off Documents; Note Documents.............................41
         5.21  Capitalization; Subsidiaries...................................41
         5.22  Margin Regulations.............................................42
         5.23  Brokers; Certain Expenses......................................42
         5.24  Year End.......................................................42
         5.25  Third Party Consents...........................................42
         5.26  Existing Indebtedness..........................................42
         5.27  New Ceridian Obligations.......................................43
         5.28  Swap Contracts.................................................43
         5.29  Full Disclosure................................................43
         5.30  Offer of Notes; Investment Bankers.............................43

ARTICLE VI  AFFIRMATIVE COVENANTS.............................................43
         6.01  Financial Statements...........................................43
         6.02  Certificates; Other Information................................44
         6.03  Notices........................................................45
         6.04  Preservation of Corporate Existence, Etc.......................47
         6.05  Maintenance of Property........................................47
         6.06  Insurance......................................................48
         6.07  Payment of Obligations.........................................48
         6.08  Compliance with Laws...........................................49
         6.09  ERISA Compliance...............................................49
         6.10  Interest Rate Protection.......................................49
         6.11  Inspection of Property and Books and Records...................49
         6.12  Environmental Laws.............................................49
         6.13  Use of Proceeds................................................49
         6.14  Additional Guarantors..........................................50
         6.15  Additional Subsidiaries........................................50
         6.16  Additional Intellectual Property...............................51
         6.17  Licenses.......................................................51
         6.18  Further Assurances.............................................52




                                      -ii-
   4

                                                                     
ARTICLE VII  NEGATIVE COVENANTS...............................................52
         7.01  Limitation on Liens............................................52
         7.02  Mergers and Consolidations.....................................54
         7.03  Indebtedness...................................................55
         7.04  Disposition of Assets..........................................56
         7.05  Contingent Obligations.........................................57
         7.06  Notes and Investments..........................................58
         7.07  Dividends and Payments.........................................59
         7.08  Use of Proceeds................................................60
         7.09  Hostile Acquisition............................................60
         7.10  Leverage Ratio.................................................60
         7.11  Fixed Charge Coverage Ratio....................................61
         7.12  Foreign Subsidiaries...........................................61
         7.13  Change in Business.............................................61
         7.14  Accounting Changes.............................................62
         7.15  Certain Contracts..............................................62
         7.16  Transactions with Affiliates...................................62
         7.17  Capital Expenditures...........................................63
         7.18  Sales and Leasebacks...........................................63
         7.19  Certain Tax Matters............................................63

ARTICLE VIII  EVENTS OF DEFAULT AND REMEDIES..................................64
         8.01  Events of Default..............................................64
         8.02  Remedies Upon Event of Default.................................66
         8.03  Rescission of Acceleration.....................................67

ARTICLE IX  REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES.........68
         9.01  Registration, Transfer and Exchange of Notes...................68
         9.02  Replacement of Notes...........................................68
         9.03  Transfer of Notes..............................................68
         9.04  ERISA..........................................................69

ARTICLE X  MISCELLANEOUS......................................................70
         10.01  Amendments, Etc...............................................70
         10.02  Notices and Other Communications; Facsimile Copies............71
         10.03  No Waiver; Cumulative Remedies................................72
         10.04  Attorney Costs, Expenses and Taxes............................72
         10.05  Indemnification by the Company................................72
         10.06  Payments Set Aside............................................73
         10.07  Transferees, Successors and Assigns...........................73
         10.08  Confidentiality...............................................73
         10.09  Set-off.......................................................74
         10.10  Interest Rate Limitation......................................74
         10.11  Counterparts..................................................75
         10.12  Integration...................................................75



                                     -iii-
   5

                                                                     
         10.13  Survival of Representations and Warranties....................75
         10.14  Severability..................................................75
         10.15  Note Holders..................................................75
         10.16  Reserved......................................................76
         10.17  Governing Law.................................................76
         10.18  Waiver of Right to Trial by Jury..............................77
         10.19  Purchase for Investment.......................................77




SCHEDULES

         I            Schedule of Note Holders
         1.01(i)      Initial Permitted Indebtedness
         1.01(s)      Spin-Off Documents
         2.03         Wire Instructions
         5.05         Litigation Affecting Note Parties
         5.07         ERISA Compliance
         5.10         Contingent Obligations
         5.11         Environmental Matters
         5.17         Intellectual Property; Proprietary Information
         5.19         Employment Agreements
         5.21         Capitalization; Subsidiaries
         5.23         Brokers' Fees and Related Expenses
         5.25         Third Party Consents
         7.01         Permitted Liens
         7.02(b)      Permitted Mergers, Etc.
         7.06(b)      Permitted Investments
         10.02        Addresses for Notices


EXHIBITS

              A       Form of Note
              B       Compliance Certificate
              C       Reserved
              D       New Ceridian Guaranty
              E       Subsidiary Guaranty
              F       Company Security Agreement
              G       Subsidiary Security Agreement
              H       Supplemental IP Security Agreement
              I       Company Pledge Agreement
              J       Subsidiary Pledge Agreement
              K       Effectiveness Date Opinion of Counsel (Content Summary)
              L       Closing Date Opinion of Counsel (Content Summary)
              M       Additional Guarantor Assumption Agreement
              N       Additional Guarantor Opinion of Counsel
              O       Form of Accession Agreement

                                      -iv-

   6

                             NOTE PURCHASE AGREEMENT

         This NOTE PURCHASE AGREEMENT ("Agreement") is entered into as of
January __, 2001, among CERIDIAN CORPORATION, a Delaware corporation that will
change its name to Arbitron Inc. on or about the Closing Date (the "Company"),
and each of the Note Holders named on Schedule I attached hereto.

         In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

         1.01     DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:

         "Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit account for purposes of Article 9 of the UCC or
other applicable law.

         "Acquisition" means, as to the Company and each of its Subsidiaries,
any transaction or series of related transactions for the purpose of or
resulting directly or indirectly in (a) the acquisition of all or substantially
all of the assets of a Person, or of any business or division of a Person, (b)
the acquisition of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary).

         "Additional Guarantor Assumption Agreement" has the meaning specified
in Section 6.14(a).

         "Administrative Agent" means the administrative agent or agents under
any of the Note Documents, or any successor agent or agents.

         "Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 15% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

         "Aggregate Distributable Income" means an amount equal to 50% of
Consolidated Net Income (positive or negative) calculated on a cumulative basis,
based on the year-end financial statements delivered to the Note Holders
pursuant to Section 6.01(a); provided that any and all amounts paid pursuant to
Section 7.07(a)(iv) or pursuant to any equivalent provision in the Note

                                      -1-
   7

Documents shall reduce the amount of Aggregate Distributable Income on a dollar
for dollar basis.

         "Agreement" means this Note Purchase Agreement.

         "Arbitron Business" means collectively the businesses of: (a) providing
media and marketing research services to broadcasters, advertising agencies,
advertisers, on-line webcasters and cable television; (b) providing media
audience and consumer retail behavior research services to cable systems,
broadcasters, magazines, advertising agencies and newspapers; and (c) providing
application software used to access and analyze media audience information and
software applications to access and analyze consumer retail behavior and media
usage.

         "Arbitron Subsidiaries" means, at all times prior to the Spin-Off
Consummation Date, those Subsidiaries designated as Arbitron Subsidiaries on
Schedule 5.21 and, at all times after the Spin-Off Consummation Date, all
Subsidiaries of the Company.

         "Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel and the non-duplicative allocated cost of
internal legal services and all disbursements of internal counsel.

         "Attributable Indebtedness" means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease.

         "Audited Financial Statements" means the audited consolidated balance
sheet of the Company and its Subsidiaries for the fiscal years ended December
31, 1998 and December 31, 1999 (in each case, giving effect to the Spin-Off
Transaction) and the related consolidated statements of income and cash flows
for the fiscal years of the Company ended December 31, 1997, December 31, 1998
and December 31, 1999, each in the final form attached to the Form 10.

         "Bank of America" means Bank of America, N.A.

         "Business Day" means any day other than a Saturday, Sunday, or other
day which shall be in Boston, Massachusetts or New York, New York, a legal
holiday or a day on which banking institutions therein are authorized by law to
close.

         "Capital Lease" means, as applied to any Person, any lease of property
by such Person as lessee that is classified as a capital lease under GAAP.

         "Cash Equivalents" means:

                  (a)    securities issued or fully guaranteed or insured by the
         United States Government or any agency thereof, having maturities of
         not more than six months from the date of acquisition;

                                      -2-
   8

                  (b)    certificates of deposit, time deposits, Eurodollar time
         deposits, repurchase agreements, reverse repurchase agreements, or
         bankers' acceptances, having in each case a tenor of not more than six
         months, issued by any Lender under the New Credit Facility, or by any
         U.S. commercial or investment bank or broker having combined capital
         and surplus of not less than $100,000,000 whose short term securities
         are rated at least A-1 by S&P and P-1 by Moody's;

                  (c)    commercial paper or promissory notes of an issuer rated
         at least A-1 by S&P or P-1 by Moody's and in either case having a tenor
         of not more than three months; and

                  (d)    money market funds that comply with all material
         provisions of Rule 2a-7 issued by the SEC under the Investment Company
         Act of 1940.

         "Change of Control" means, with respect to the Company, an event or
series of events by which:

                  (a)    any "person" or "group" (as such terms are used in
         Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
         excluding any employee benefit plan of the Company or its Subsidiaries,
         or any Person acting in its capacity as trustee, agent or other
         fiduciary or administrator of any such plan), becomes the "beneficial
         owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
         Exchange Act of 1934, except that a person shall be deemed to have
         "beneficial ownership" of all securities that such person has the right
         to acquire (such rights, "option rights"), whether such right is
         exercisable immediately or only after the passage of time), directly or
         indirectly, of 30% or more of the equity interests of the Company on a
         partially diluted basis taking into account equity interests realizable
         upon the exercise of such person's or group's option rights; or

                  (b)    during any period of 12 consecutive months, a majority
         of the members of the board of directors or other equivalent governing
         body of the Company ceases to be composed of individuals (i) who were
         members of that board or equivalent governing body on the first day of
         such period, (ii) whose election or nomination to that board or
         equivalent governing body was approved by individuals referred to in
         clause (i) above constituting at the time of such election or
         nomination at least a majority of that board or equivalent governing
         body, or (iii) whose election or nomination to that board or other
         equivalent governing body was approved by individuals referred to in
         clauses (i) and (ii) above constituting at the time of such election or
         nomination at least a majority of that board or equivalent governing
         body.

         "Closing" has the meaning specified in Section 2.03.

         "Closing Date" means the first date all the conditions precedent in
Section 4.02 are satisfied or waived in accordance with Section 4.02.

         "Code" means the Internal Revenue Code of 1986.

                                      -3-
   9

         "Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company or any Guarantor and
their respective Subsidiaries in or upon which a Lien now or hereafter exists in
favor of the Note Holders, or any agent on behalf of or as bailee for the Note
Holders, whether under this Agreement or under any of the Collateral Documents.

         "Collateral Agent" has the meaning specified in the Intercreditor
Agreement.

         "Collateral Documents" means, collectively, (i) the Security
Agreements, (ii) the Pledge Agreements, (iii) the Account Control Agreements,
(iv) all documents executed by the Company to accomplish Cash Collateralization
(as defined in the New Credit Facility) or pledges of deposit accounts and (v)
all licenses, UCC financing statements, notices and other documents executed
from time to time under or in connection with the foregoing.

         "Company" has the meaning set forth in the introductory paragraph
hereto.

         "Company Pledge Agreement" means a Pledge Agreement executed by the
Company, in substantially the form of Exhibit I.

         "Company Security Agreement" means a Security Agreement executed by the
Company, in substantially the form of Exhibit F.

         "Compliance Certificate" means a certificate substantially in the form
of Exhibit B.

         "Consolidated EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) the
amount of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income, plus (d) the amount of all
depreciation expense and amortization expense for such period, less (e) interest
income for such period; provided, however, that Consolidated Net Income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from Consolidated Net Income in such current period.

         "Consolidated Funded Indebtedness" means, as of any date of
determination, for Company and its Subsidiaries on a consolidated basis, all (i)
obligations for borrowed money, (ii) obligations evidenced by bonds, debentures,
notes and Note agreements, (iii) obligations in respect of letters of credit,
surety bonds, bankers' acceptances or similar instruments, (iv) obligations to
pay the deferred purchase price of property or services (other than trade
payables entered into in the Ordinary Course of Business pursuant to ordinary
terms and paid within the specified time), and (v) Attributable Indebtedness
incurred by the Company or any of its Subsidiaries in connection with Synthetic
Lease Obligations and Capital Leases; and (vi) Guaranty obligations of the
Company and its Subsidiaries in respect of obligations of any Person in the
nature of (i) through (v) above.

                                      -4-
   10

         "Consolidated Interest Expense" means, for any period, for the Company
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses of the Company and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, but excluding any fees,
charges and expenses of the Company and its Subsidiaries arising from the
negotiation, execution, closing and consummation of the Spin-Off Documents and
the "Facility Documents" (as such term is defined in the Intercreditor
Agreement); and (b) the portion of rent expense of the Company and its
Subsidiaries with respect to such period under Capital Leases that is treated as
interest in accordance with GAAP.

         "Consolidated Net Income" means, for any period, for the Company and
its Subsidiaries on a consolidated basis, the net income of the Company and its
Subsidiaries, as determined in accordance with GAAP.

         "Consolidated Net Worth" means, as of any date of determination, with
respect to the Company and its Subsidiaries on a consolidated basis,
shareholders' equity on the date of determination as determined in accordance
with GAAP.

         "Consolidated Total Assets" means, as of any date of determination, the
total consolidated assets of the Company and its Subsidiaries as determined in
accordance with GAAP.

         "Contingent Obligation" means, as to the Company or any of its
Subsidiaries, (a) any Guaranty Obligation of that Person; (b) any reimbursement
obligation of that Person with respect to a standby letter of credit, surety
bond, banker's acceptance, bank guaranty or similar instrument; (c) any
obligation of that Person to purchase any materials, supplies or other property
from, or to obtain the services of, another Person (other than the Company or
one of its Subsidiaries) if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other property,
or for such services, shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or tendered, or such services
are ever performed or tendered; and (d) all Indebtedness (other than that of the
Company or any of its Subsidiaries) secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including accounts and contract rights) owned by the
Company or any such Subsidiary.

         "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "Current Portion of Long Term Debt" means, as of any date of
determination, in respect of the Company and its Subsidiaries on a consolidated
basis, (a) current portion of long term debt as determined on such date in
accordance with GAAP (provided that, for purposes of Section 7.11 only, during
the 365-day period immediately preceding the Maturity Date, the current portion
of the Notes shall be deemed to be $10,000,000), plus (b) an amount equal to the
amount, if any, by which the Outstanding Amount (as defined in the New Credit
Facility) on such date exceeds (i) the Aggregate Commitments (as defined in the
New Credit Facility) on such date less

                                      -5-
   11

(ii) the amount of any mandatory reduction in Aggregate Commitments scheduled to
occur within the four fiscal quarter period commencing on such date pursuant to
Section 2.06(b)(i) of the New Credit Facility; provided, however, during the 365
days prior to the scheduled Maturity Date of the New Credit Facility (under
clause (a) of the definition of Maturity Date in the New Credit Facility),
"Current Portion of Long Term Debt" shall be calculated excluding the
then-outstanding principal amount of the New Credit Facility.

         "Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

         "Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

         "Default Rate" means an interest rate equal to 11.96% per annum.

         "Disposition" or "Dispose" means the direct or indirect sale,
assignment, conveyance, lease, transfer, license or other disposition (including
any sale and leaseback transaction) of any property (other than cash or Cash
Equivalents) by any Person, including any sale, assignment, transfer or other
disposition, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.

         "Distribution" means the distribution by dividend of all stock of New
Ceridian held by the Company to the Company's shareholders, pursuant to a
tax-free transaction under Section 355 of the Code and undertaken pursuant to
the Spin-Off Documents.

         "Dollar" and "$" means lawful money of the United States of America.

         "EBITDA" means, in respect of any Person, for any period as determined
in accordance with GAAP, an amount equal to the sum of (a) net income, plus (b)
interest expense, plus (c) the amount of taxes, based on or measured by income,
used or included in the determination of such net income, plus (d) the amount of
all depreciation expense and amortization expense for such period, less (e)
interest income for such period; provided, however, that net income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from consolidated net income in such current period.

         "Effectiveness Date" means the first day all the conditions precedent
in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in
the case of Section 4.01(c), waived by the Person entitled to receive the
applicable payment).

         "Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any

                                      -6-
   12

Environmental Law or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal, remedial
or response costs, restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon (a) the alleged or actual
presence, placement, migration, spillage, leakage, disposal, discharge, emission
or release of any Hazardous Material at, in, or from property, whether or not
owned by the Company, or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.

         "Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations,
registration requirements and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental and land use matters or
health and safety matters involving Hazardous Materials.

         "ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is currently or at any relevant time in the past was under
common control with the Company within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

         "ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.

         "Event of Default" means any of the events or circumstances specified
in Article VIII.

         "Event of Loss" means with respect to any asset of any Person, any of
the following: (i) any loss, destruction or damage of such asset; (ii) any sale
or transfer of such asset in connection with any pending or threatened
institution of any proceedings for the condemnation of or seizure of such asset
or of any right of any eminent domain; or (iii) any actual condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such asset, or confiscation of such asset or requisition of the use of such
asset.

                                      -7-
   13

         "Exchange Act" means the Securities Exchange Act of 1934.

         "Existing Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of July 31, 1997 among the Company, Bank of America,
as agent, and a syndicate of lenders, and after giving effect to that certain
"Waiver to Credit Agreement" dated as of December 20, 2000.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States of America.

         "Foreign Subsidiary" means any Subsidiary of the Company incorporated
or organized, and existing, under the laws of any jurisdiction other than the
United States or any state thereof.

         "Form 10" means until the Closing Date, that certain Form 10 filing
prepared by New Ceridian and delivered to the SEC on or about December 6, 2000
in connection with the Spin-Off Transaction, as amended by that amendment filed
with the SEC on or about December 22, 2000, and by that amendment filed with the
SEC on or about January 22, 2001. From and after the Closing Date, the term
"Form 10" also includes: (a) any amendments to the Form 10 filed with the SEC
between the Effectiveness Date and the Closing Date to the extent permitted by
Section 4.02(a)(i)(H), and (b) any amendments filed with the SEC after the
Closing Date to the extent necessary to accommodate changes to the Spin-Off
Documents permitted by Section 7.15(c).

         "Form 10 Financial Statements" means the Audited Financial Statements
plus all related unaudited financial statements of the Company filed with the
Form 10.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.

         "Guarantor" means each Arbitron Subsidiary party to a Guaranty and, at
all times prior to the Spin-Off Consummation Date, New Ceridian.

         "Guaranties" means the Subsidiary Guaranties and the New Ceridian
Guaranty.

         "Guaranty Obligation" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any

                                      -8-
   14

Indebtedness or other obligation payable or performable by another Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation, or (iv)
entered into for the purpose of assuring in any other manner the obligees in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligees against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person; provided, however, that the term
"Guaranty Obligation" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guarantying Person in good faith.

         "Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, hazardous chemicals,
special waste, hazardous substance, hazardous material, regulated substance, or
toxic substance, or petroleum or petroleum derived substance or waste.

         "Indebtedness" means, as to any Person at a particular time, all of the
following:

                  (a)    all obligations of such Person for borrowed money and
         all obligations of such Person evidenced by bonds, debentures, notes,
         Note agreements or other similar instruments;

                  (b)    any fixed (non-contingent) obligations of such Person
         arising under letters of credit (including standby and commercial),
         banker's acceptances, bank guaranties, surety bonds and similar
         instruments;

                  (c)    net obligations under any Swap Contract in an amount
         equal to (i) if such Swap Contract has been closed out, the Swap
         Termination Value, or (ii) if such Swap Contract has not been closed
         out, the mark-to-market value thereof determined on the basis of
         readily available quotations provided by any recognized dealer in such
         Swap Contract;

                  (d)    whether or not so included as liabilities in accordance
         with GAAP, all obligations of such Person to pay the deferred purchase
         price of property or services (other than trade payables entered into
         in the Ordinary Course of Business pursuant to ordinary terms and paid
         within the specified time), and indebtedness (excluding prepaid
         interest thereon) secured by a Lien on property owned or being
         purchased by such Person

                                      -9-
   15

         (including indebtedness arising under conditional sales or other title
         retention agreements), whether or not such indebtedness shall have been
         assumed by such Person or is limited in recourse; and

                  (e)    Capital Leases and Synthetic Lease Obligations.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (that is not itself a
corporation, limited liability company or limited liability partnership) in
which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person except for customary
exceptions acceptable to the Required Note Holders. The amount of any Capital
Lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date. Without
limiting the generality of the foregoing, any indebtedness of the Company to any
of the Company's Wholly Owned Subsidiaries, or of any of the Company's Wholly
Owned Subsidiaries to other of the Company's Wholly Owned Subsidiaries, shall
not constitute Indebtedness hereunder.

         "Indemnified Liabilities" has the meaning set forth in Section 10.05.

         "Indemnitees" has the meaning set forth in Section 10.05.

         "Initial Permitted Indebtedness" means that Indebtedness set forth on
Schedule 1.01(i).

         "Intellectual Property" means all trademarks, trademark rights, trade
names, trade name rights, service marks, patents, pending patent applications,
copyrights, franchises, authorizations, inventions, Proprietary Information and
goodwill now existing or hereafter arising, and all other intellectual property
rights held or used by the Company and its Subsidiaries.

         "Intercreditor Agreement" means that Intercreditor Agreement, dated as
of the Closing Date, entered into among the Collateral Agent, the Administrative
Agent, the Note Holders, and the "Swap Provider" (as defined therein) as
counterparty to the Specified Swap Contracts, in form and substance satisfactory
to the Required Note Holders, as amended or modified from time to time in
accordance with the terms thereof.

         "Interest Payment Date" means the last day of each January, April, July
and October, commencing April 30, 2001.

         "Investment" of a Person means (i) the outstanding principal amount of
any Note, advance, extension of credit (other than Notes, advances or extensions
of credit arising in the Ordinary Course of Business), or (ii) the amount
(measured by the amount of cash expended or the then-current fair market value
of other assets, including stock of such Person, utilized as consideration) of
any contribution of capital by such Person to any other Person or any investment
in, or purchase or other acquisition of, the stock, partnership or membership
interests, notes, debentures or other securities of any other Person made by
such Person, reduced by the amount of any distribution by such other Person
constituting a return of capital, any payment of principal on such notes,
debentures or other debt securities, or any proceeds from the sale of any equity
or debt securities of such other Person.

                                      -10-
   16

         "IRS" means the United States Internal Revenue Service.

         "IRS Ruling Letter" means an affirmative private letter ruling by the
IRS regarding the tax-free nature of the Spin-Off Transaction.

         "Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

         "Lender" means each lender from time to time party to the New Credit
Facility.

         "Leverage Ratio" means, as of any date of determination, for Company
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of
the four fiscal quarters ending on such date.

         "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable, but excluding the interest of a
lessor under an Operating Lease.

         "Note Documents" means the New Credit Facility, the Intercreditor
Agreement and each note, security agreement, pledge agreement, control
agreement, borrowing request, fee letter, certificate or other agreement,
document or instrument executed or delivered in connection therewith.

         "Make Whole Amount" means, at any date, with respect to any prepayment
or payment (whether on account of acceleration or otherwise) of any Notes, if
the Treasury Rate plus 75 basis points at such date is lower than 9.96%, the
excess of (x) the present value of the principal and interest payments on and in
respect of the Notes being prepaid or paid, as the case may be, that would
otherwise become due and payable (without giving effect to such prepayment or
payment) (including the final payment on the maturity date of the Notes),
discounted at a rate which is equal to the Treasury Rate plus 75 basis points
over (y) the principal amount of the Notes being prepaid or paid, as the case
may be, at par. If the Treasury Rate plus 75 basis points at the date of such
prepayment or payment is equal to or higher than 9.96% per annum, the Make Whole
Amount for purposes of such prepayment or payment is zero.

         "Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole and includes, at any time

                                      -11-
   17

prior to the Spin-Off Consummation Date, New Ceridian and its Subsidiaries taken
as a whole; (b) a material impairment of the ability of any Note Party to
perform its obligations under any Note Document to which it is a party or, at
any time prior to the Spin-Off Consummation Date, the ability of New Ceridian to
perform its obligations under any Spin-Off Document to which it is party; or (c)
a material adverse effect upon (i) the legality, validity, binding effect or
enforceability against any Note Party or Subsidiary of any Note Document to
which it is a party or, at any time prior to the Spin-Off Consummation Date,
against New Ceridian of any Spin-Off Document to which it is a party, or (ii)
the perfection or priority of any Lien granted under any of the Collateral
Documents.

         "Material Software" means, at any time, any software program (including
all releases, versions and modifications thereof) developed, acquired or used in
connection with the Arbitron Business and as to which the Company or its
Subsidiaries have received gross royalty or license payments from any and all
third parties in an aggregate amount in excess of $1,000,000 during any of the
five fiscal years preceding such time.

         "Material Subsidiary" means, at any time, any Arbitron Subsidiary: (a)
the assets of which are either 5% or more of Consolidated Total Assets (or the
equivalent thereof in another currency) or the gross revenues of which are 5% or
more of consolidated gross revenue of the Company and its Subsidiaries, based on
the most recent financial statements delivered to the Note Holders under Section
4.01(a), 4.02(a) or 6.01; or (b) designated by the Company as a Material
Subsidiary pursuant to Section 6.15(b) and not de-designated pursuant to Section
6.15(c).

         "Maturity Date" means (a) January 31, 2008, or (b) such earlier date
upon which the Notes and other Obligations may be accelerated in accordance with
the terms hereof.

         "Maximum Rate" has the meaning specified in Section 10.10.

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

         "Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.

         "Net Cash Proceeds" has the meaning specified in Section 2.05(a).

         "New Ceridian" means New Ceridian Corporation, a Delaware corporation.

         "New Ceridian Assets" means, at all times prior to the Spin-Off
Consummation Date, all assets of the Company and its Subsidiaries intended
(consistent with the Form 10) to be transferred to New Ceridian pursuant to the
Separation and not including any assets necessary to conduct the Arbitron
Business.
         "New Ceridian Credit Agreement" means that certain Credit Agreement
dated as of January 31, 2001, among New Ceridian, the lenders from time to time
party thereto and Bank of

                                      -12-
   18

America, as the administrative agent, as amended or modified from time to time,
and any agreement or agreements relating to extensions of credit which are a
refinancing or replacement of such Credit Agreement.

         "New Ceridian Guaranty" means a Guaranty executed by New Ceridian, in
substantially the form of Exhibit D.

         "New Credit Facility" means the Credit Agreement dated as of January 3,
2001 among the Company, Bank of America, as the Administrative Agent and Letter
of Credit Issuer, and a syndicate of lenders, as amended or modified from time
to time (subject to the Intercreditor Agreement), and any agreement or
agreements relating to the refinancing or replacement of such Credit Agreement.

         "Nielsen" means Nielsen Media Research, Inc., a Delaware corporation.

         "Nielsen JV" means a joint venture that may be created upon the
exercise of an option granted to Nielsen pursuant to the Nielsen JV Option
Agreement.

         "Nielsen JV Option Agreement" means that Option Agreement between the
Company and Nielsen dated as of May 31, 2000 and as in effect as of the
Effectiveness Date.

         "Note Documents" means this Agreement, the Notes, the Intercreditor
Agreement, the Collateral Documents, the Guaranties, each Additional Guarantor
Assumption Agreement, each Compliance Certificate and other certificates
delivered under any of the foregoing.

         "Note Holder-Related Persons" means each of the Note Holders and the
Note Holder Representative (including any successor Note Holder Representative),
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

         "Note Holder Representative" means John Hancock Life Insurance Company,
and its successors and assigns.

         "Note Holders" means each of the Persons named on Schedule I attached
hereto and their respective transferees, successors and assigns.

         "Note Parties" means, collectively, the Company and all other Persons
from time to time party to a Note Document, other than any Note Holder, or the
Administrative Agent or any Lender pursuant to the New Credit Facility who may
be a party from time to time to the Intercreditor Agreement or any of the
Collateral Documents.

         "Notes" has the meaning specified in Section 2.01.

         "Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder" office,
central filing office, or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a lien securing
obligations owing to a Governmental Authority.

                                      -13-
   19

         "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Note Party arising under any Note
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement by or against any
Note Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding.

         "Operating Lease" means, as applied to any Person, any lease of
property which is not a Capital Lease.

         "Ordinary Course of Business" means, in respect of any transaction
involving the Company or any Subsidiary, the ordinary course of such Person's
business, as conducted by any such Person (or its predecessor) in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any Note Document.

         "Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
secretary of state or other department in the state of its formation, in each
case as amended from time to time.

         "Other Taxes" has the meaning specified in Section 3.01(b).

         "Outstanding Amount" means with respect to the Notes on any date, the
aggregate outstanding principal amount thereof after giving effect to
prepayments or repayments of the Notes occurring on such date.

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.

         "Permitted Acquisition" means any Acquisition as to which all of the
following conditions are satisfied: (a) total cash and non cash consideration
(including any deferred payment) paid or required to be paid by the Company and
its Subsidiaries in connection with such Acquisition does not exceed
$30,000,000; (b) after giving effect to such Acquisition, total cash and non
cash consideration (including any deferred payment) paid or required to be paid
by the Company and its Subsidiaries in connection with all such Acquisitions in
any fiscal year does not exceed $50,000,000; (c) after giving effect to such
Acquisition, the Person, or business or division of such Person, so acquired
shall be a Wholly Owned Subsidiary of the Company or one

                                      -14-
   20

of its Subsidiaries; and (d) immediately after giving effect to such
Acquisition, there shall exist no Default or Event of Default.

         "Permitted Indebtedness" has the meaning specified in Section 7.03(a).

         "Permitted Liens" has the meaning specified in Section 7.01.

         "Permitted Nielsen JV" means any Person that is a Nielsen JV, provided
the following conditions are at all times satisfied: (i) such Person is an
entity duly formed and existing under the Laws of its jurisdiction of
incorporation or organization; (ii) no less than 50% of the beneficial ownership
of such person is owned by the Company and such Person is not a Subsidiary of
Nielsen or of any Affiliate of Nielsen; (iii) the assets and property of such
Person consisting of Intellectual Property or Proprietary Information
contributed by the Company or any Subsidiary of the Company are subject to no
Liens in favor of any other Person other than Permitted Liens; (iv) such Person
is authorized to use and license the Company's PPM Technology to the extent, but
only to the extent, consistent with the Nielsen JV Option Agreement; and (v) the
Organization Documents and all material contracts and licenses of such Person
entered into, directly or indirectly, with the Company or any Subsidiary, and
other material contracts to be entered into by such Person substantially
contemporaneously with its formation are in form and substance reasonably
satisfactory to the Required Note Holders.

         "Permitted Swap Contract" means any Swap Contract entered into by the
Company or any Subsidiary for which each of the following conditions is
satisfied: (a) such contract is (or was) entered into by such Person in the
Ordinary Course of Business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person (including any Swap Contract entered into by the
Company or any Subsidiary for the purpose of hedging interest rate risk arising
in connection with the Obligations (a "Specified Swap Contract")), or with
changes in the value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view"; and (b) such Swap Contract
does not contain: (i) any provision (a "walk-away" provision) exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party, or (ii) with respect to any Swap Contract
that it is not a Specified Swap Contract, any provision creating or permitting
the declaration of an event of default, termination event, or similar event upon
the occurrence of an Event of Default hereunder (other than an Event of Default
under Section 8.01(a)).

         "Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture or Governmental Authority.

         "Pledge Agreements" means the Company Pledge Agreement and the
Subsidiary Pledge Agreements.

         "Pledged Collateral" has the meaning specified in the Pledge
Agreements.

         "PPM Expenditures" means (a) at any time prior to the initial exercise
of the option under the Nielsen JV Option Agreement to establish a Nielsen JV,
all capital expenditures and

                                      -15-
   21

capitalized expenditures (including in respect of software development and
acquisition), made or incurred by the Company or its Subsidiaries in
anticipation of a Nielsen JV or in furtherance of the development or Disposition
of PPM Technology, and (b) at any time thereafter, the sum of the items
specified in clause (a) plus all Investments made by the Company and its
Subsidiaries, in any and all Nielsen JV's.

         "PPM Technology" means (a) all patent, copyright and other intellectual
property rights and technology of the Company and its Subsidiaries in the
Company's "Portable People Meter" and "Critical Band Encoding Technique," as
such terms are defined in the Nielsen JV Option Agreement, together with all
improvements and additions thereto, and (b) all other audio encoding patents
held by the Company and subject to the Nielson JV Option Agreement.

         "Preliminary Opening Balance Sheet" has the meaning specified in
Section 4.01(a)(viii).

         "premium" when used in conjunction with references to principal of and
interest on the Notes, shall mean any amount due upon any payment or prepayment
of any of the Notes, other than principal and interest, and shall include the
Make Whole Amount.

         "Proprietary Information" means, as to the Company and each of its
Subsidiaries, such Person's trade secrets, including know-how, computer
programs, and technical data, used in the development, production and sale of
products and services.

         "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.

         "Required Note Holders" means, as of any date of determination, the
holder or holders of more than 50% in interest of the Notes at the time
outstanding (excluding all Notes at the time owned by the Company, any of its
Subsidiaries or any of their respective Affiliates).

         "Responsible Officer" means the president, chief executive officer,
chief financial officer, treasurer or controller of a Note Party, and also
includes, in respect of the Company, the Executive Vice President of Finance and
Planning of Arbitron. Any document delivered hereunder that is signed by a
Responsible Officer of a Note Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Note Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Note Party.

         "Revocable" means, in relation to any license of Intellectual Property,
that such license may be revoked or terminated by the licensor at any time or
upon default or breach of condition by the licensee.

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

         "Scarborough Partnership" means that New York general partnership
created pursuant to the Scarborough Partnership Agreement.

                                      -16-
   22

         "Scarborough Partnership Agreement" means that Partnership Agreement
between VNU Advertising Expenditure Corp. and the Company, dated as of December
31, 1994, as amended and in effect as of the Effectiveness Date.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect from time to time.

         "Security Agreements" means the Company Security Agreement, the
Subsidiary Security Agreements and the Supplemental IP Security Agreements.

         "Senior Credit Ratable Amount" means, at any time, with reference to
any mandatory prepayment hereunder pursuant to Section 2.05, an amount equal to
the quotient of: (a) the Outstanding Amount divided by (b) the sum of (i) the
Outstanding Amount, plus (ii) the Aggregate Commitments of the Lenders (but in
no event greater than $225,000,000) under and as defined in the New Credit
Facility at such time; provided, however, that if there exists at such time no
mandatory prepayment requirement pursuant to the Note Documents in respect of
such prepayment or if any such mandatory prepayment has been waived, the "Senior
Credit Ratable Amount" shall equal 1.0.

         "Senior Note Indenture" means that Indenture dated as of June 10, 1999
between Ceridian Corporation, as Issuer, and the Bank of New York, as Trustee,
relating to 7.25% Senior Notes due 2004.

         "Separation" means the consummation of (a) the transfer by way of
absolute assignment and contribution by the Company to New Ceridian of all
assets and businesses of the Company, other than the Arbitron Business, and (b)
the corresponding allocation of liabilities of the Company as between the
Company and New Ceridian, through means of novation or cross-indemnities,
pursuant to the Spin-Off Documents.

         "Separation Date" means the date upon which all material aspects of the
Separation have been completed.

         "Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the fair value of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Conveyances Act (as enacted in the State of New York); (b)
the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such

                                      -17-
   23

Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital.

         "Specified Swap Contract" has the meaning specified in the definition
of "Permitted Swap Contract".

         "Spin-Off Consummation Date" means the date upon which all material
aspects of the Spin-Off Transaction have been consummated.

         "Spin-Off Deadline" means the earlier of (a) March 30, 2001 or (b) the
date occurring three Business Days after the Closing Date.

         "Spin-Off Documents" means the documents set forth in Schedule 1.01(s),
each substantially in the form attached to the Form 10 or delivered to the Note
Holders pursuant to Article IV.

         "Spin-Off Transaction" means, collectively, (i) the Separation and (ii)
the Distribution.

         "Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Company.

         "Subsidiary Guaranty" means a Guaranty executed by any Arbitron
Subsidiary, in substantially the form of Exhibit E.

         "Subsidiary Pledge Agreement" means a Pledge Agreement executed by any
Arbitron Subsidiary, in substantially the form of Exhibit J.

         "Subsidiary Security Agreement" means a Security Agreement executed by
any Arbitron Subsidiary, in substantially the form of Exhibit G.

         "Supplemental Financial Statements" means the unaudited pro forma
consolidated balance sheet of the Company and Arbitron Subsidiaries on a
stand-alone basis for the fiscal quarter ended March 31, 2000 (giving effect to
the Spin-Off Transaction) and the related pro forma consolidated income
statement for such fiscal quarter.

         "Supplemental IP Security Agreement" means any Supplemental
Intellectual Property Security Agreement, in substantially the form of Exhibit
H, executed pursuant to Section 6.16.

         "Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index

                                      -18-
   24

transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"Master Agreement"), including any such obligations or liabilities under any
Master Agreement.

         "Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender under the New Credit
Facility).

         "Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

         "Taxes" has the meaning specified in Section 3.01(a).

         "Test Period" means a period of four consecutive fiscal quarters.

         "Threshold Amount" means $5,000,000, except that in respect of
Indebtedness under the Note Documents or any Swap Termination Value in respect
of Specified Swap Contracts, "Threshold Amount" means $0.

         "Transaction Liens" means, collectively, all Liens from time to time
existing in favor of the Collateral Agent, for the benefit of the Administrative
Agent, the Note Holders and any Lender counterparty to a Specified Swap
Contract, to the extent subject to the Intercreditor Agreement.

         "Treasury Rate" at any time with respect to any Notes being prepaid or
paid (whether on account of acceleration or otherwise), as the case may be,
shall mean and shall be determined by reference to the applicable display on
Bloomberg Financial Markets Service as of 10:00 A.M., Boston time, on the second
Business Day prior to the date fixed for such prepayment or payment (or, if such
display is no longer available, any publicly available source of similar market
data), and shall be the yield on actively traded United States Treasury
securities adjusted to a maturity equal to the then remaining Weighted Average
Life to Maturity of the Notes then being prepaid

                                      -19-
   25

or paid (whether on account of acceleration or otherwise) (the "Remaining
Life"). If the Remaining Life is not equal to the maturity of a United States
Treasury security for which a yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of the two closest United States Treasury
securities for which such yields are given, except that if the Remaining Life is
less than one year, the average yield on actively traded United States Treasury
securities adjusted to a constant maturity of one year shall be used. The
Treasury Rate shall be computed to the fifth decimal place (one-thousandth of a
percentage point) and then rounded to the fourth decimal place (one-hundredth of
a percentage point).

         "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided that in the event that by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for the purposes of definitions related
to such provisions.

         "Weighted Average Life to Maturity" of any Indebtedness or obligation
shall mean, at any date, the number of years obtained by dividing the then
Remaining Dollar-years of such Indebtedness or obligation by the then
outstanding principal amount of such Indebtedness or obligation. For purposes of
this definition, the "Remaining Dollar-years" of any Indebtedness or obligation
shall mean, at any date, the total of the products obtained by multiplying (a)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payment, including payment at final maturity, in respect thereof,
by (b) the number of years (calculated to the nearest one-twelfth) which will
elapse between such date and the making of such payment.

         "Wholly Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Company, or by one or more of the
other Wholly Owned Subsidiaries of the Company, or both.

         1.02     OTHER INTERPRETIVE PROVISIONS.

         (a)      The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

         (b)      The words "herein" and "hereunder" and words of similar import
when used in any Note Document shall refer to such Note Document as a whole and
not to any particular provision thereof.

                  (i)    Unless otherwise specified herein, Article, Section,
         Exhibit and Schedule references are to this Agreement.

                  (ii)   The term "including" is by way of example and not
         limitation.

                                      -20-
   26

                  (iii)  The term "documents" includes any and all instruments,
         documents, agreements, certificates, notices, reports, financial
         statements and other writings, however evidenced.

         (c)      In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means "to
and including."

         (d)      Section headings herein and the other Note Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Note Document.

         1.03     ACCOUNTING TERMS.

         (a)      All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data required to
be submitted pursuant to this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

         (b)      If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Note Document, and either
the Company or the Required Note Holders shall so request, the Note Holders and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Note Holders); provided that, until so amended, (a)
such ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (b) the Company shall provide to the Note
Holders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

         1.04     ROUNDING. Any financial ratios required to be maintained by
the Company pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

         1.05     REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Note Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Note Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

                                      -21-
   27

                                   ARTICLE II
                    AUTHORIZATION, SALE AND PURCHASE OF NOTES

         2.01     AUTHORIZATION OF NOTES. The Company has authorized the issue
and sale of its Senior Secured Notes due January 31, 2008 (herein, together with
any notes issued in exchange therefor or replacement thereof, called the
"Notes") in the aggregate principal amount of $50,000,000. The Notes are to be
substantially in the form of Exhibit A attached hereto.

         2.02     SALE AND PURCHASE OF NOTES. The Company will issue and sell to
each of the Note Holders listed on Schedule I and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Company contained herein and in the other Note Documents, each of the Note
Holders shall purchase from the Company, at the Closing, as specified in Section
2.03, such Notes as are specified on that portion of Schedule I attached hereto
as is applicable to such Note Holder. The aggregate purchase price of the Notes
shall be $50,000,000.

         2.03     CLOSING. The closing of the sale and purchase of the Notes
hereunder (the "Closing") shall take place at the office of Choate, Hall &
Stewart or such other place as the Company and the Note Holder Representative
may agree, on the Business Day on or before the Spin-Off Deadline specified by
the Company to the Note Holder Representative on five (5) Business Days prior
written notice (the "Closing Date"), not later than 11:00 A.M. Boston,
Massachusetts time (the Note Holders' reinvestment deadline). At the Closing,
the Company will deliver to the Note Holders the Notes to be issued to them at
the Closing against payment of the purchase price thereof to (or for the benefit
of) the Company in immediately available funds in accordance with the wire
instructions set forth on Schedule 2.03. Delivery of the Notes to be issued to
the Note Holders at the Closing shall be made in the form of one or more Notes,
in such denominations and registered in such names as are specified on Schedule
I and in each case dated and bearing interest from the Closing Date. If at the
Closing the Company shall fail to tender the Notes to be delivered to the Note
Holders thereat as provided herein, or if at the Closing any of the conditions
specified in Article IV shall not have been fulfilled to the Note Holders'
satisfaction, the Note Holders shall, at their election, be relieved of all
further obligations under this Agreement and the other Note Documents, without
thereby waiving any other rights the Note Holders may have by reason of such
failure or non-fulfillment.

         2.04     OPTIONAL PREPAYMENTS. At any time or from time to time, the
Company may, at its option, upon notice as set forth in Section 2.06(b), prepay
all or any part (in an integral multiple of $100,000 and a minimum of $5,000,000
or such lesser principal amount thereof as shall then be outstanding) of the
Notes, together with all accrued and unpaid interest thereon, upon the
concurrent payment of a premium equal to the Make-Whole Amount.

         2.05     MANDATORY OFFERS TO MAKE PREPAYMENTS.

         (a)      Asset Dispositions. If the Company or any Arbitron Subsidiary
shall at any time or from time to time make or agree to make a Disposition,
other than a Disposition specified in Section 7.04(b) (but subject to clause (D)
of Section 7.04(b)(ii)) or shall suffer an Event of Loss (except to the extent
the insurance or other third party recovery proceeds received in connection
therewith are within 25 days of receipt applied to the purchase price of
replacement assets

                                      -22-
   28

substantially similar to those experiencing the Event of Loss), other than any
Disposition or Event of Loss occurring prior to the Separation Date to the
extent relating to New Ceridian Assets, then (i) the Company shall promptly
notify the Note Holders of such proposed Disposition or such Event of Loss
(including the amount of the estimated net cash or Cash Equivalents proceeds,
calculated exclusive of (x) reasonable out-of-pocket expenses, (y) taxes
actually paid and (z) the amount of Indebtedness secured solely or principally
by such assets and actually repaid ("Net Cash Proceeds") to be received by the
Company or such Subsidiary in respect thereof), which notice shall contain and
constitute an offer to prepay without premium the Notes of each Note Holder, as
further provided in Section 2.05(d), and (ii) promptly upon, and in no event
later than 30 days after, receipt by the Company or the Subsidiary of the Net
Cash Proceeds of such Disposition or Event of Loss, the Company shall, subject
to the provisions of Section 2.05(d), prepay the Notes of each Note Holder that
shall have timely elected to accept such offer, provided that the aggregate
amount to be paid to the Note Holders pursuant to this Section 2.05(a) shall not
exceed an amount equal to the Senior Credit Ratable Amount times the amount of
such Net Cash Proceeds (with each Note Holder being entitled to its pro rata
share thereof in proportion to the outstanding principal amount of Notes then
held by it); provided, however, that no prepayment shall be required under this
subsection in connection with any Disposition that, alone or together with all
related Dispositions to the same Person or Affiliate of such Person, involves
Net Cash Proceeds of less than $1,000,000.

         (b)      Equity or Debt Issuance. (i) If the Company shall issue new
common or preferred equity, or, subject to Section 7.03, any debt securities,
the Company shall promptly notify the Note Holders of the estimated proceeds of
such issuance net of reasonable out-of-pocket expenses incurred by the Company
("Net Issuance Proceeds") to be received by the Company in respect thereof,
which notice shall contain and constitute an offer to prepay without premium the
Notes, as further provided in Section 2.05(d). Promptly upon, and in no event
later than 30 days after, receipt by the Company of such Net Issuance Proceeds
of such issuance, the Company shall, subject to the provisions of Section
2.05(d), prepay the Notes of each Note Holder that shall have timely elected to
accept such offer, provided that the aggregate amount to be paid to the Note
Holders pursuant to this Section 2.05(b) shall not exceed an amount equal to the
Senior Credit Ratable Amount times the amount of such Net Issuance Proceeds
(with each Note Holder being entitled to its pro rata share thereof in
proportion to the outstanding principal amount of Notes then held by it). (ii)
No prepayment shall be required under this subsection (b) in connection with (A)
the issuance of equity securities pursuant to Section 7.07(a)(i), or (B) the
Acquisition by the Company or any Subsidiary of cash or Cash Equivalents in any
Permitted Acquisition, provided that the cash or Cash Equivalents so acquired is
merely incidental to such Permitted Acquisition, or (C) the issuance of any debt
instrument or incurrence of debt pursuant to the New Credit Facility.

         (c)      Reserved.

         (d)      Offers to Prepay; Acceptance, etc.

                  (i)    Each offer to prepay Notes pursuant to Sections 2.05(a)
         and (b) shall be an offer to prepay the Notes of each holder on the
         date required pursuant to such Section which date shall be specified in
         such offer (the "Proposed Prepayment Date").

                                      -23-
   29

                  (ii)   A holder of Notes may accept an offer to prepay made
         pursuant to Section 2.05(a) or (b) by causing a notice of such
         acceptance to be given to the Company not later than 10 Business Days
         following the date upon which such offer shall have been given to such
         Note Holder. A failure by a Note Holder to respond to an offer to
         prepay made pursuant to Section 2.05(a) or (b) shall be deemed to
         constitute a rejection of the offer by such Note Holder.

                  (iii)  Prepayment of the Notes to be prepaid pursuant to this
         Section 2.05 shall be at 100% of the principal amount of such Notes,
         together with interest on such Notes accrued to the date of prepayment.

                  (iv)   Each offer to prepay the Notes pursuant to this Section
         2.05 shall be accompanied by a certificate, executed by a senior
         financial officer of the Company and dated the date of such offer,
         specifying: (A) the Proposed Prepayment Date; (B) that such offer is
         made pursuant to this Section 2.05; (C) the principal amount of each
         Note offered to be prepaid; (D) the interest that would be due on each
         Note offered to be prepaid, accrued to the Proposed Prepayment Date;
         and (E) that the conditions of this Section 2.05 have been fulfilled.

         (e)      Prepayments Under New Credit Facility. In no event shall the
Company prepay any Notes under the New Credit Facility on account of any events
of the kind referred to in Sections 2.05(a) or (b) without concurrently offering
to prepay all Notes then and to the extent required pursuant to this Section
2.05.

         2.06     GENERAL PROVISIONS CONCERNING PREPAYMENTS.

         (a)      Allocation of Partial Prepayments of Notes. In the case of
each partial prepayment of the Notes under Section 2.04 or 2.05, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding and then required to be prepaid (excluding any Notes at the
time owned by the Company or any Affiliate of the Company) in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof, with
adjustments, to the extent practicable, to compensate for any prior prepayments
not made exactly in such proportion.

         (b)      Notice of Prepayments of Notes. In the case of each prepayment
under Section 2.04 or 2.05, the Company shall give written notice thereof to
each holder of Notes not less than 30 (5 days in the case of any prepayment
pursuant to Section 2.05) nor more than 60 days prior to the date fixed for such
prepayment. Each such notice shall set forth: (i) the date fixed for prepayment;
(ii) the aggregate principal amount of Notes to be prepaid on such date; and
(iii) the aggregate principal amount of Notes held by such holder to be prepaid
on such date and the amount of accrued interest and an estimation of the
Make-Whole Amount, if any, to be paid to such holder on such date (together with
the calculation of such Make-Whole Amount, which calculation shall be
satisfactory to each holder of the Notes).

         (c)      Maturity; Accrued Interest; Surrender, etc. of Notes. In the
case of each prepayment of all or any part of any Note, the principal amount to
be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such

                                      -24-
   30

principal amount accrued to such date and the premium, if any, due thereon. Any
Note prepaid in full shall be surrendered to the Company at its principal place
of business promptly following prepayment and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.

         (d)      Purchase of Notes. The Company will not, and will not permit
any of its Affiliates to, directly or indirectly, purchase or otherwise acquire,
or offer to purchase or otherwise acquire, any outstanding Notes except by way
of payment or prepayment in accordance with the provisions of the Notes and this
Agreement.

         2.07     REPAYMENT OF NOTES. The Company shall repay to the Note
Holders on the Maturity Date the aggregate principal amount of the Notes
outstanding on such date, together with all accrued and unpaid interest thereon.

         2.08     INTEREST.

         (a)      Subject to the provisions of subsection (b) below, the Notes
shall bear interest at a per annum rate equal to 9.96%.

         (b)      While any Event of Default exists or after acceleration, the
Company shall pay interest on the Outstanding Amount of all Obligations at an
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Law. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

         (c)      Interest on each Note shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at maturity and at such other
times as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

         2.09     RESERVED.

         2.10     COMPUTATION OF INTEREST. Computation of interest on the Notes
shall be calculated on the basis of a 360-day year of twelve-30 day months.

         2.11     RESERVED.

         2.12     PAYMENTS GENERALLY.

         (a)      All payments to be made by the Company shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Company
hereunder shall be made to the Note Holders by the method and at the address for
such purpose specified in Schedule I attached hereto or by such other method or
at such other address as a Note Holder may designate in writing, without
requiring any presentation or surrender of such Note, except that if any Note
shall be paid, prepaid and/or repurchased in full, such Note, at the Company's
request, shall be surrendered to the Company promptly following such payment,
prepayment or repurchase and cancelled.

                                      -25-
   31

         (b)      If any payment to be made by the Company shall come due on a
day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest.

         2.13     RESERVED.

         2.14     SECURITY AND GUARANTIES.

         (a)      Subject to and in accordance with the Intercreditor Agreement
and the Collateral Documents, the Obligations shall be secured at all times in
accordance with the terms hereof and the Collateral Documents by a first
priority perfected security interest in all of the properties and assets of the
Company and its Subsidiaries (other than real property), whether now existing or
hereafter acquired or created, except as expressly otherwise provided herein and
in the Collateral Documents.

         (b)      The Obligations of the Company under this Agreement, each of
the Notes and all other Note Documents shall be unconditionally guaranteed by
the Guarantors pursuant to the Guaranties.

                                   ARTICLE III
                                      TAXES

         3.01     TAXES.

         (a)      Any and all payments by the Company to or for the account of
any of the Note Holders under any Note Document shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Note Holder,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which such Note Holder is organized or
maintains an office (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as "Taxes"). If the Company shall be required by
any Laws to deduct any Taxes from or in respect of any sum payable under any
Note Document to any Note Holder, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), such Note Holder
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Company shall furnish to such Note Holder
the original or a certified copy of a receipt evidencing payment thereof.

         (b)      In addition, the Company agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Note
Document or from the execution, delivery,

                                      -26-
   32

performance, enforcement or registration of, or otherwise with respect to, any
Note Document (hereinafter referred to as "Other Taxes").

         (c)      If the Company shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Note Document to any
Note Holder, the Company shall also pay to such Note Holder, at the time
interest is paid, such additional amount that such Note Holder specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Note Holder would
have received if such Taxes or Other Taxes had not been imposed.

         (d)      The Company agrees to indemnify each Note Holder for (i) the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section) paid by
such Note Holder, (ii) amounts payable under Section 3.01(c) and (iii) any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
any Note Holder makes a demand therefor.

         (e)      The Company shall not be required to pay any additional amount
in respect of United States federal income tax pursuant to Section 3.01(a) to
any Note Holder:

                  (i)    if the obligation to pay such additional amounts would
         not have arisen but for a failure by such Note Holder to comply with
         its obligations under Section 10.15; or

                  (ii)   if any Note Holder shall have delivered to the Company
         the forms referred to in Section 10.15, and such Note Holder shall not
         at any time be entitled to exemption from deduction or withholding of
         United States federal income tax in respect of payments by the Company
         hereunder for the account of such Note Holder for any reason other than
         a change in United States law or regulations or in the official
         interpretation of such law or regulations by any Governmental Authority
         charged with the interpretation or administration thereof (whether or
         not having the force of law) after the date of delivery of such forms.

         3.02     RESERVED.

         3.03     RESERVED.

         3.04     RESERVED.

         3.05     RESERVED.

         3.06     MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.

         (a)      A certificate of any Note Holder claiming compensation under
this Article III and setting forth the calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Note Holder may use any
reasonable averaging and attribution methods.

                                      -27-
   33

         (b)      Reserved

         (c)      The Company shall not be obligated to pay any amounts under
Sections 3.01(d) which arose prior to the date that is 180 days preceding the
date of the demand required by each such Section or that is attributable to
periods prior to the date that is 180 days preceding the date of such demand.

         3.07     SURVIVAL. All of the Company's obligations under this Article
III shall survive termination of the Note Documents and payment in full of the
Notes and all the other Obligations.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         4.01     CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement is subject to satisfaction of the following conditions precedent;
provided that at the election of the Required Note Holders any of the items
required to be delivered pursuant to subsection (a)(iv), (a)(vi), (e) or (f) may
be waived for purposes of this Section 4.01, provided that they shall be deemed
added to Section 4.02 and delivered or accomplished by no later than the Closing
Date.

         (a)      Unless waived by all the Note Holders, the Note Holders'
receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Note Party that is a party
thereto, each dated the Effectiveness Date (or, in the case of certificates of
governmental officials, a recent date before the Effectiveness Date) and each in
form and substance satisfactory to the Required Note Holders:

                  (i)    executed counterparts of this Agreement and the
         Guaranties, sufficient in number for distribution to each Note Holder
         and the Company;

                  (ii)   the Notes issued to the Note Holders in accordance with
         Section 2.03;

                  (iii)  such certificates of resolutions or other action,
         incumbency certificates and/or other certificates of Responsible
         Officers of each Note Party as the Note Parties may require to
         establish the identities of and verify the authority and capacity of
         each Responsible Officer thereof authorized to act as a Responsible
         Officer in connection with this Agreement and the other Note Documents
         to which such Note Party is a party;

                  (iv)   such evidence as the Note Holders may reasonably
         require to verify that each Note Party is duly organized or formed,
         validly existing, in good standing and qualified to engage in business
         in each jurisdiction (a) in which it is incorporated, or has any
         headquarter function, or (b) in which it is required to be qualified to
         engage in business if the absence of such qualification could have a
         Material Adverse Effect; including certified copies of each Note
         Party's Organization Documents, certificates of good standing and/or
         qualification to engage in business and tax good standing certificates
         in such jurisdictions;

                                      -28-
   34

                  (v)    a certificate signed by a Responsible Officer of the
         Company certifying (A) that all representations and warranties
         contained in Article V are true and correct on and as of the
         Effectiveness Date and no Default or Event of Default exists on and as
         of such date; (B) that there has been no event or circumstance since
         the date of the most recent of the Audited Financial Statements which
         has or could be reasonably expected to have a Material Adverse Effect;
         and (C) that the Company's and New Ceridian's senior management are
         highly confident that the Spin-Off Consummation Date will occur by no
         later than the Spin-Off Deadline under the terms specified in the
         Spin-Off Documents delivered under subsection (a)(vii) below.

                  (vi)   one or more opinions of counsel to each Note Party with
         respect to those matters set forth listed at Exhibit K;

                  (vii)  a certificate signed by a Responsible Officer of the
         Company certifying the attachment of (A) true and complete draft or
         final copies of all material Spin-Off Documents, which shall be in form
         and substance reasonably satisfactory to the Note Holders; (B) true and
         complete copy of the Form 10 as submitted by the Company to and
         approved by the SEC in connection with the Spin-Off Transaction
         (together with and including all exhibits and attachments thereto),
         which shall be in form and substance satisfactory to the Required Note
         Holders; (C) true and complete copy of each of the Note Documents,
         which shall satisfy the following conditions: (I) a maturity date
         occurring five (5) years after the Closing Date of the New Credit
         Facility (subject to termination in accordance with the terms thereof),
         (II) representations and warranties, covenants and events of default
         not more restrictive than those contained in the Note Documents; (III)
         aggregate commitments of no less than $225,000,000 with scheduled
         reductions in such commitments or other amortization in form and
         substance satisfactory to the Required Note Holders; (IV) no collateral
         other than the Collateral, and (V) no guarantor other than the
         Guarantors; (D) a true and complete copy of the Scarborough Partnership
         Agreement; (E) a true and complete copy of the Nielsen J.V. Option
         Agreement; and (F) a solvency opinion provided by the Houlihan Lokey
         firm in respect of the Company and New Ceridian, respectively,
         addressed to the Note Holder Representative, dated as of the
         Effectiveness Date, and any and all certificates and other documents
         provided by the Company to the Houlihan Lokey firm in respect of such
         opinion.

                  (viii) such other financial information and documentation as
         any Note Holder may reasonably request, in form and substance
         reasonably satisfactory to the Required Note Holders, including (A)
         five-year financial projections for the Company and its Arbitron
         Subsidiaries on a stand-alone basis, (B) a preliminary pro forma
         opening balance sheet of the Company and its Subsidiaries as of the
         Separation Date ("Preliminary Opening Balance Sheet"), prepared by the
         Company, and (C) a consolidated balance sheet of the Company and it
         Arbitron Subsidiaries on a stand-alone basis, as of December 31, 2000,
         as prepared by the Company consistent with GAAP, reflecting the
         consummation of the Spin-Off Transaction as of such date, but without
         giving effect to the refinancing of the Company's Existing Credit
         Facility and other Indebtedness pursuant to this Agreement, the New
         Ceridian Credit Agreement and the

                                      -29-
   35

         New Credit Facility, and in substantially similar form as the column
         captioned "Historical-Arbitron" in the balance sheet labeled as
         "Arbitron Unaudited Pro Forma Condensed Combined Balance Sheet Date"
         set forth in the Form 10;

                  (ix)   evidence of the Company's receipt of the IRS Ruling
         Letter;

                  (x)    evidence of a waiver or consent with respect to
         defaults otherwise arising under the Existing Credit Facility from the
         consummation of the Spin-Off Transaction and the financings
         contemplated thereby by the "Agent" and "Lenders" as defined in and
         party to the Existing Credit Facility; and

                  (xi)   such other assurances, certificates, documents,
         consents or opinions as the Required Note Holders or the Note Holder
         Representative reasonably may require.

         (b)      The corporate, legal, capital, tax, contractual, and
management structure and attributes of the Company and its Subsidiaries and of
the Spin-Off Transaction shall be satisfactory to the Required Note Holders.

         (c)      Any fees required to be paid on or before the Effectiveness
Date shall have been paid, and unless waived by the Required Note Holders or the
Note Holder Representative, as applicable, the Company shall have paid all
Attorney Costs of the Note Holders and the Note Holder Representative to the
extent invoiced prior to or on the Effectiveness Date, plus such additional
amounts of Attorney Costs as shall constitute their reasonable estimate of
Attorney Costs incurred or to be incurred by them through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Company and the Note Holders or the Note Holder
Representative).

         (d)      The Effectiveness Date shall occur no later than February 5,
2001.

         (e)      The Collateral Documents shall be executed by each Note Party
other than New Ceridian, in appropriate form for recording, where necessary,
together with:

                  (i)    acknowledgment copies of all UCC-l financing statements
         filed, registered or recorded to perfect the security interests of the
         Collateral Agent for the benefit of the Note Holders, or other evidence
         reasonably satisfactory to the Required Note Holders that there has
         been filed, registered or recorded all financing statements and other
         filings, registrations and recordings (including filings at the U.S.
         Copyright Office, the U.S. Patent and Trademark Office or other
         applicable Governmental Authority in respect of Intellectual Property
         and Proprietary Information) necessary and advisable to perfect or
         protect the Liens of the Collateral Agent for the benefit of the Note
         Holders in accordance with applicable law, with such exceptions as the
         Required Note Holders may permit in their discretion;

                  (ii)   true and complete copies of copyright filings of the
         Company and its Subsidiaries at the U.S. Copyright Office in respect of
         computer databases registered during the years 1999 and 2000 and of the
         Material Software, as more fully required pursuant to the Security
         Agreements;

                                      -30-
   36

                  (iii)  written advice relating to such Lien and judgment
         searches as the Note Holders shall have requested, and such termination
         statements or other documents as may be necessary to confirm that the
         Collateral is subject to no other Liens in favor of any Persons (other
         than Permitted Liens);

                  (iv)   all certificates and instruments representing the
         Pledged Collateral, stock transfer powers executed in blank with
         signatures guaranteed as the Collateral Agent or any Note Holder or the
         Note Holder Representative may specify; provided that in no event shall
         more than 65% of the capital stock of any Foreign Subsidiary be
         required to be so pledged;

                  (v)    Account Control Agreements, executed by all parties
         thereto, relating to (a) any deposit accounts maintained by the Company
         in relation to the Arbitron Business with Bank of America or any of its
         Affiliates, and (b) any securities accounts maintained by the Company
         in relation to the Arbitron Business;

                  (vi)   such consents, estoppels, subordination agreements and
         other documents and instruments executed by landlords, tenants and
         other Persons party to material contracts relating to any Collateral as
         to which the Collateral Agent, for the benefit of the Note Holders,
         shall be granted a Lien, as requested by the any Note Holder; and

                  (vii)  evidence that all other actions necessary or, in the
         reasonable opinion of the Required Note Holders or the Note Holder
         Representative, desirable to perfect and protect the first priority
         Lien created by the Collateral Documents and to enhance the ability of
         the Note Holders or the Note Holder Representative to preserve and
         protect their interests in and access to the Collateral, have been
         taken.

         (f)      Insurance Policies. The Company shall provide evidence in form
and substance satisfactory to the Required Note Holders that the Note Holders
(or the Note Holder Representative on their behalf) have (or has) been named as
loss payees/mortgagees and as additional insured(s), as their interests may
appear, as required in accordance with Section 6.06 and the Collateral
Documents, together with a certificate of insurance as to all insurance coverage
on the properties of the Company and its Subsidiaries.

         4.02     CONDITIONS TO PURCHASE OF NOTES. The obligation of each Note
Holder to purchase and pay for the Notes to be issued hereunder is subject to
satisfaction of the following conditions precedent:

         (a)      Unless waived by the Required Note Holders, the Note Holders'
receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Note Party, each dated the
Closing Date and each in form and substance satisfactory to the Required Note
Holders:

                  (i)    a certificate signed by a Responsible Officer of the
         Company certifying (A) that all representations and warranties of the
         Company contained in Article V are true and correct on and as of the
         Closing Date, (B) that there exists as of such date no Default

                                      -31-
   37

         or Event of Default, (C) that there has been no event or circumstance
         since the date of the most recent Audited Financial Statements which
         has or could reasonably be expected to have a Material Adverse Effect,
         (D) that the Separation Date has occurred pursuant to the Spin-Off
         Documents, which are in full force and effect and in substantially the
         form delivered in connection with the Effectiveness Date (or otherwise
         in form and substance satisfactory to the Note Holders), (E) that the
         Company's and New Ceridian's senior management are highly confident
         that the Spin-Off Consummation Date will occur by no later than the
         Spin-Off Deadline; (F) that the Company has obtained stockholder
         approval to effect a reverse stock split of the Company's shares of
         common stock at a ratio not to exceed 1-for-5, which shall occur
         promptly but in any event not more than 60 days after the Spin-Off
         Consummation Date; (G) that the Board of Directors of the Company has
         authorized and approved the final terms of the Spin-Off Transaction
         (including declaration of a dividend of shares of New Ceridian's common
         stock to Company's shareholders); (H) that the SEC has approved the
         form of the Form 10, as it may have been amended since the
         Effectiveness Date to reflect (I) revisions made to conform the
         Spin-Off Documents filed with the Form 10 to those delivered to the
         Note Holders pursuant to Section 4.01(a)(vii), (II) the inclusion of
         the opinions described in Section 4.02(a)(iv), (III) any required date
         revisions not inconsistent with the terms hereof, (IV) ministerial
         revisions necessary to address administrative issues or facial
         ambiguities, and (V) other amendments satisfactory to the Required Note
         Holders, (I) that all conditions precedent pursuant to the New Credit
         Facility have been satisfied and that the New Credit Facility has been,
         or is contemporaneously with the initial funding hereunder being, fully
         funded; and (J) such other matters relating to the Spin-Off Transaction
         as the Required Note Holders may request;

                  (ii)   a pro forma Compliance Certificate of the Company and
         its Subsidiaries, signed by a Responsible Officer of the Company;

                  (iii)  a certificate signed by a Responsible Officer of the
         Company certifying the attachment of (A) a true and complete copy of
         the final pro forma opening balance sheet of the Company and its
         Subsidiaries as of the Separation Date, by the Company, which shall
         contain in the opinion of the Note Holders no material adverse
         discrepancies from the Preliminary Opening Balance Sheet, (B) a true
         and complete copy of the Supplemental Financial Statements, and (C) an
         audited balance sheet of the Company and its Arbitron Subsidiaries as
         of December 31, 2000, which balance sheet shall contain in the opinion
         of the Required Note Holders no material adverse discrepancies from the
         balance sheet delivered by the Company under Section 4.01(a)(viii)(C),
         accompanied by the opinion of KPMG Peat Marwick LLP or another
         nationally-recognized independent public accounting firm, which report
         shall state that such balance sheet presents fairly in all material
         respects the financial position of the Company and the Arbitron
         Subsidiaries on a stand-alone basis as of such date and such opinion
         shall not be qualified or limited for any reason;

                  (iv)   a certificate signed by a Responsible Officer of the
         Company certifying the Company's receipt, and attaching a true and
         complete copy, of (A) a solvency opinion provided by the Houlihan Lokey
         firm in respect of the Company and New Ceridian,


                                      -32-
   38

         respectively, addressed to the Note Holder Representative, dated as of
         the Closing Date, and including any and all certificates and other
         documents provided by the Company to the Houlihan Lokey firm in respect
         of such opinion; (B) a fairness, financial viability, and "fair value"
         opinion addressed to the Company (or its Board of Directors) and
         relating to the Spin-Off Transaction, provided by the Company's
         financial advisors, Bear Stearns & Co., and including any and all
         certificates and other documents provided by the Company to Bear
         Stearns & Co. in respect of such opinion;

                  (v)    evidence: (A) of payment (prior to or upon the initial
         funding) of all funded Indebtedness of the Company existing immediately
         prior to the Closing Date and termination of all credit commitments,
         including the Existing Credit Facility together with evidence of the
         release of all Liens securing obligations in connection therewith, but
         excluding the Initial Permitted Indebtedness, and (B) of the
         allocation, which shall be satisfactory to the Note Holders, of all
         contingent and other liabilities of the Company as between the Company
         and New Ceridian, with such third party acknowledgments or consents
         relating thereto as the Note Holders may request;

                  (vi)   one or more opinions of counsel to the Company
         regarding the matters specified in Exhibit L; and

                  (vii)  such other assurances, certificates, documents,
         consents or opinions as the Required Note Holders or the Note Holder
         Representative reasonably may require.

         (b)      The Closing Date shall occur no later than March 30, 2001.

         (c)      The corporate, legal, capital, tax, contractual, and
management structure and attributes of the Company and its Subsidiaries and of
the Spin-Off Transaction shall conform to those deemed satisfactory by the
Required Note Holders as a condition to the Effectiveness Date, or shall
otherwise be satisfactory to the Required Note Holders.

         4.03     RESERVED.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         The Company represents and warrants to each Note Holder as follows:

         5.01     CORPORATE EXISTENCE AND POWER.

         (a)      Each of the Company and each Material Subsidiary:

                  (i)    is a corporation duly organized, validly existing and
         in good standing under the laws of the jurisdiction of its
         incorporation;

                  (ii)   has the power and authority and all material
         governmental licenses, authorizations, consents and approvals to own
         its assets and carry on its business and to execute, deliver, and
         perform its obligations under the Note Documents;

                                      -33-
   39

                  (iii)  is duly qualified as a foreign corporation, licensed
         and in good standing under the laws of each jurisdiction where its
         ownership, lease or operation of property or the conduct of its
         business requires such qualification or license, except where the
         failure to be so qualified, licensed or in good standing would not
         adversely affect the business or operations of the Company or such
         Subsidiary in any significant manner; and

                  (iv)   is in compliance with all material Laws applicable to
         it.

         (b)      Each Subsidiary of the Company which is not a Material
Subsidiary:

                  (i)    is a corporation duly organized, validly existing and
         in good standing under the laws of the jurisdiction of its
         incorporation;

                  (ii)   has the power and authority and all governmental
         licenses, authorizations, consents and approvals to own its assets and
         carry on its business;

                  (iii)  is duly qualified as a foreign corporation, licensed
         and in good standing under the laws of each jurisdiction where its
         ownership, lease or operation of property or the conduct of its
         business requires such qualification; and

                  (iv)   is in compliance with all material Laws applicable to
         it;

except where any failure to comply with the requirements of this subsection (b)
would not, individually or in the aggregate, result in a Material Adverse
Effect.

         (c)      As of the Closing Date, the Company does not have any material
place of business other than in the State of New York and the State of Maryland.

         5.02     CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Note Party of this Agreement and each other
Note Document and each Spin-Off Document, and the consummation of the Spin-Off
Transaction, have been duly authorized by all necessary corporate action by or
on behalf of such Note Party, and do not and will not:

         (a)      contravene the terms of such Note Party's Organization
Documents;

         (b)      conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation (other than the Senior Note Indenture, provided that any such
conflict with or breach or contravention of the Senior Note Indenture shall be
of no further effect after giving effect to the transactions that will occur on
the Closing Date) to which such Note Party is a party or any order, injunction,
writ or decree of any Governmental Authority to which such Note Party or its
property is subject; or

         (c)      violate any Law applicable to such Note Party.

         5.03     GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted under the Collateral Documents) is

                                      -34-
   40

necessary or required in connection (a) with the execution, delivery or
performance by, or enforcement against, the Company or any other Note Party of
this Agreement or any other Note Document or (b) the execution, delivery or
performance by or enforcement against the Company or any other Person party
thereto of the Spin-Off Documents, or (c) the consummation of the Spin-Off
Transaction, except in each case as have been obtained on or before the Closing
Date.

         5.04     BINDING EFFECT.

         (a)      This Agreement and each other Note Document to which the
Company or any of its Subsidiaries is a party, when executed and delivered, will
constitute the legal, valid and binding obligations of the Company and any of
its Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.

         (b)      From and after the Closing Date, each Spin-Off Document
constitutes the legal, valid and binding obligation of each Person party
thereto, enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability. As of the Closing Date, all conditions
precedent to the effectiveness of the Spin-Off Documents have been satisfied.

         5.05     LITIGATION. Attached hereto as Schedule 5.05 is a list of all
material litigation in which the Company or any Subsidiary of the Company is a
plaintiff or a defendant as of the Effectiveness Date. There are no actions,
suits, proceedings, claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Company or its Subsidiaries or their
respective properties which:

         (a)      purport to affect or pertain to this Agreement, or any other
Note Document, or any of the transactions contemplated hereby or thereby; or

         (b)      challenge in any respect the legality or validity of any
material aspect of the Spin-Off Transaction; or

         (c)      except as provided in Schedule 5.05, would reasonably be
expected to have a Material Adverse Effect (and assuming for this purpose the
reasonable likelihood of an adverse decision). No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Note Document, or the
consummation of any material aspect of the Spin-Off Transaction, or directing
that the transactions provided for herein or therein not be consummated as
herein or therein provided. Since the Effectiveness Date, there has been no
change in the status of any of the matters set forth in Schedule 5.05 that would
reasonably be expected to result in a Material Adverse Effect. All amounts
potentially payable by the Company or any Arbitron Subsidiary (including upon
judgment or settlement) in connection with any matter set forth in Schedule 5.05
not relating to

                                      -35-
   41

the Arbitron Business are subject from and after the Separation Date to a
binding indemnification obligation by New Ceridian in favor of the Company or
such Arbitron Subsidiary.

         5.06     NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Company or any other Note
Party or from the grant or perfection of the Transaction Liens on the
Collateral. As of the Effectiveness Date and the Closing Date, neither the
Company nor any of its Subsidiaries, (a) is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or (b) is in default under or with respect to any Spin-Off Document. As
of the Effectiveness Date, there exists no "Default" or "Event of Default," and
as of the Closing Date, there exists no "Event of Default," under and as defined
in (i) the Existing Credit Facility (ii) the Senior Note Indenture or (iii) the
Note Documents.

         5.07     ERISA COMPLIANCE. Except as referenced or provided for in
either Schedule 5.05 or Schedule 5.07 attached hereto:

         (a)      To the best knowledge of the Company, no facts or
circumstances exist which would reasonably be expected to have a Material
Adverse Effect in connection with the failure of any Plan, or the failure of the
Company, an ERISA Affiliate or any Person with regard to the Plan, to comply
with the applicable provisions of ERISA, the Code and other Federal or state
law. The Company and each ERISA Affiliate have made all required contributions
to any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.

         (b)      There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would, if determined adversely to
the Company or any Plan, reasonably be expected to result in a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or would
reasonably be expected to result in a Material Adverse Effect.

         (c)      To the best knowledge of the Company (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) neither the Company nor any
ERISA Affiliate has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iii) neither the Company
nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the Company
nor any ERISA Affiliate has engaged in a transaction that would reasonably be
expected to be subject to Section 4069 or 4212(c) of ERISA.

         (d)      The consummation of the transactions contemplated by the Note
Documents will not involve any transaction that is subject to the prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975(c)(1)(A)-(D) of the

                                      -36-
   42

Code. The Company's representation in the immediately preceding sentence is made
in reliance upon and subject to the accuracy of the representation of the Note
Holders in Section 9.04 as to the source of funds used to pay the purchase price
of the Notes to be purchased by the Note Holders.

         5.08     TITLE TO PROPERTIES. As of the Effectiveness Date and the
Closing Date, the property of the Company and its Subsidiaries is subject to no
Liens, other than Permitted Liens. As of the Closing Date, the Company has
retained and has title to, or a valid and enforceable leasehold or licensee's
interest in, all assets necessary to and appropriate for conducting the Arbitron
Business, and such assets are subject to no Liens, claims or interest of third
parties other than Permitted Liens, and the interests of lessors and licensors
not otherwise prohibited under any Note Document or Note Document.

         5.09     TAXES.

         (a)      The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Company or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.

         (b)      None of the representations and warranties made by the
Company, New Ceridian or any of their Subsidiaries to the IRS in connection with
the Spin-Off Transaction (including with respect to the tax-free nature of the
Spin-Off Transaction and in connection with the Company's request for the IRS
Ruling Letter) as of the date such representations and warranties are made or
deemed made, and none of the statements contained in any report, exhibit,
statement or certificate furnished by or on behalf of the Company, New Ceridian
or any of their Subsidiaries to the IRS in connection with the Spin-Off
Transaction as of the date such statements are made or deemed made, contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they are made, not misleading.

         (c)      As of the Effectiveness Date, the Closing Date and Spin-Off
Consummation Date, there is no "plan or series of related transactions" of the
type described in Section 355(e) of the Code.

         5.10     FINANCIAL CONDITION.

         (a)      The Form 10 Financial Statements and the Supplemental
Financial Statements:

                  (i)    were prepared in accordance with GAAP consistently
         applied throughout the period covered thereby, except as otherwise
         expressly noted therein, subject to ordinary, good faith year-end audit
         adjustments and the absence of footnotes in the case of quarterly
         financial statements,

                                      -37-
   43

                  (ii)   are complete, accurate and fairly present the financial
         condition of the Company and its Subsidiaries as of the date thereof,
         and results of operation for the period covered thereby, in each case
         based upon the assumed consummation of the Spin-Off Transaction on such
         date, and

                  (iii)  comply with all applicable Laws relating to spin-off
         transactions.

         (b)      Except as disclosed in filings by the Company with the
Securities and Exchange Commission on Form 10-Q for the quarter ended June 30,
2000, or the Form 10, since December 31, 1999 there has been no Material Adverse
Effect.

         (c)      As of the Effectiveness Date and the Closing Date, the Company
and its consolidated Subsidiaries have not incurred any material Contingent
Obligations except for those specified in Schedule 5.10, which Schedule also
specifies which Contingent Obligations pertain to the Arbitron Business, and
those specified in Section 7.05(a), Section 7.05(d)(i) or Section 7.05(f).
Except as expressly otherwise stated in Schedule 5.10, New Ceridian is subject,
from and after the Separation Date, to a binding obligation to fully indemnify
the Company in respect of all Contingent Obligations specified in such Schedule
5.10 not relating to the Arbitron Business. The projections delivered pursuant
to Section 4.01(a)(viii) have been reasonably prepared, in good faith, based
upon reasonable assumptions, and are consistent with the prepayment requirements
set forth in this Agreement and the New Credit Facility.

         (d)      The Preliminary Opening Balance Sheet delivered by the Company
to the Note Holders pursuant to Section 4.01(a)(viii) and the pro forma
operating balance sheet delivered by the Company to the Note Holders pursuant to
Section 4.02(a)(iii): (i) were prepared on a basis consistent with GAAP as
applied to the Company's financial statements, (ii) have been reasonably
prepared on bases reflecting the currently available estimates and judgments of
the senior management of the Company and New Ceridian as to the future expected
performance of the Company, (iii) accurately reflect all material adjustments
required to be made to give effect to the Spin-Off Transaction, and (iv) present
fairly on a pro forma basis the estimated consolidated financial position of the
Company and its Arbitron Subsidiaries as of the date thereof, assuming
consummation of the Spin-Off Transaction.

         5.11     ENVIRONMENTAL MATTERS.

         (a)      The ongoing operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability that would reasonably be expected to have a Material Adverse
Effect.

         (b)      As of the Effectiveness Date and the Closing Date, except as
specifically disclosed on Schedule 5.11, neither the Company nor any of its
Subsidiaries, nor any of their respective present property or operations, is
subject to any outstanding written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.

                                      -38-
   44

         (c)      Except as specifically disclosed on Schedule 5.11, there are
no Hazardous Materials or other conditions or circumstances existing with
respect to any property, or arising from operations of the Company or any of its
Subsidiaries that would reasonably be expected to give rise to Environmental
Claims with a potential liability of the Company and its Subsidiaries that in
the aggregate for any such condition, circumstance or property would reasonably
be expected to have a Material Adverse Effect.

         (d)      Except as expressly otherwise stated in Schedule 5.11, New
Ceridian is subject from and after the Separation Date to a binding obligation
to fully indemnify the Company in respect of all matters referenced in such
Schedule 5.11 not relating to the Arbitron Business.

         5.12     REGULATED ENTITIES. None of the Company, any Person
controlling the Company, or any Subsidiary of the Company, is (a) an "investment
company" within the meaning of the Investment Company Act of 1940; or (b)
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness, except that certain Persons who may be deemed to control the
Company are registered investment companies within the meaning of the Investment
Company Act of 1940.

         5.13     COLLATERAL DOCUMENTS. The Collateral Documents are effective
to create in favor of the Administrative Agent for the benefit of the Note
Holders, a legal, valid and enforceable first priority security interest,
subject to the term of the Intercreditor Agreement, in all right, title and
interest of the Note Parties in the Collateral described therein; and UCC-1
financing statements have been filed in the offices in all of the jurisdictions
listed in the schedules to the Security Agreements.

         5.14     NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Law, which could reasonably be
expected to have a Material Adverse Effect. As of the Effectiveness Date and the
Closing Date, no Subsidiary (other than New Ceridian and Subsidiaries that are
not Arbitron Subsidiaries) is party to or bound by any Contractual Obligation
restricting the ability of such Subsidiary to pay dividends or make Notes to the
Company.

         5.15     SOLVENCY. The Company and each of its Material Subsidiaries
are Solvent. Both immediately before and after the Separation Date and the
Spin-Off Consummation Date, New Ceridian is Solvent. All statements contained in
any certificate delivered to the Note Holders pursuant to Section 4.01(a)(viii)
and Section 4.02(a)(iv) are true and accurate in all materials respects and not
materially misleading and do not contain any material omissions of fact.

         5.16     LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority which,
in any case, could reasonably be expected to have a Material Adverse Effect.

                                      -39-
   45

         5.17     INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION. Except as
specifically set forth on Schedule 5.17:

         (a)      The Company owns (directly or through the Arbitron
Subsidiaries) all of the Intellectual Property and Proprietary Information that
is material to the Arbitron Business (including that in relation to the
"Portable People Meter" and "Critical Band Encoding Technique"), free of any
right, claim or interest of any Person, except for Permitted Liens.

         (b)      To the best knowledge of the Company, no Intellectual Property
or Proprietary Information now employed by the Company or its Subsidiaries and
relating to the Arbitron Business infringes upon any rights held by any other
Person.

         (c)      As of the Closing Date and Spin-Off Consummation Date, except
as specifically disclosed on Schedule 5.05 attached hereto, no claim or
litigation regarding any Intellectual Property or Proprietary Information
relating to the Arbitron Business is pending against the Company or any of its
Subsidiaries or, to the Company's knowledge, threatened, against any of such
Persons.

         (d)      As of the Closing Date and Spin-Off Consummation Date, neither
the Company nor any of its Subsidiaries uses pursuant to a license agreement
with any third party (except for ordinary shrinkwrap licenses for software
products that the Company and its Subsidiaries use in the Ordinary Course of
Business and licenses specified on Schedule 5.17) any patents, trademarks,
service marks, trade names, copyrights, trade secrets or franchises material to
the conduct of the Arbitron Business.

         (e)      As of the Closing Date and Spin-Off Consummation Date, in
relation to the Arbitron Business, each of the Company's and its Subsidiaries'
respective employees who, either alone or in concert with others, developed,
invented, discovered, derived, programmed or designed Intellectual Property or
Proprietary Information, or who has knowledge of or access to information about
Intellectual Property or Proprietary Information, has entered into one or more
effective assignment of rights agreements in favor of the Company or its
Subsidiaries, as applicable, no material exceptions have been taken by any such
employee to the terms of any such agreements, and neither the Company nor any of
its Subsidiaries is aware that any of its respective employees is in violation
thereof.

         (f)      As of the Closing Date and Spin-Off Consummation Date, neither
the Company nor its Subsidiaries believes it is or will be necessary in relation
to the Arbitron Business to utilize any inventions of any of their respective
employees (or people they currently intend to hire or retain) that were invented
prior to such employment, except those inventions formally assigned or
transferred to the Company or the Arbitron Subsidiaries, as applicable, by such
employees.

         (g)      As of the Effectiveness Date, neither the Company nor any
Arbitron Subsidiary owns, licenses or sub-licenses any Material Software in
connection with the Arbitron Business.

         5.18     INSURANCE. As of the Closing Date and Spin-Off Consummation
Date, the properties of the Company and its Subsidiaries are insured with
financially sound and reputable

                                      -40-
   46

insurance companies, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where the Company or such Subsidiary
operates.

         5.19     EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 5.19,
as of the Effectiveness Date, Closing Date and Spin-Off Consummation Date in
relation to the Arbitron Business, neither the Company nor any of its
Subsidiaries is (a) party to or bound by any employment contract or agreement,
agency, independent contractor or sales representative agreement involving
annual compensation at a base rate equal to or exceeding $200,000, golden
parachute agreement, or change of control agreement; or (b) obligated to make
any payments on account of any severance, golden-parachute, or change of control
agreement.

         5.20     SPIN-OFF DOCUMENTS; NOTE DOCUMENTS.

         (a)      The representations and warranties of the Company contained in
the Spin-Off Documents and in any other document filed or delivered to the SEC
in connection with the Spin-Off Transaction are true and correct in all material
respects as of the Effectiveness Date and the Closing Date and as of any other
date specified in such documents. There are no material documents or agreements
to be entered into by the Company or the Arbitron Subsidiaries in connection
with the Spin-Off Transaction, other than the Spin-Off Documents.

         (b)      The representations and warranties of the Company contained in
the Note Documents, and in any other documents delivered to the Administrative
Agent in connection therewith, are true and correct in all material respects as
of the Effectiveness Date and the Closing Date and as of any other date
specified in such documents.

         5.21     CAPITALIZATION; SUBSIDIARIES.

         (a)      As of the Effectiveness Date, the Closing Date, and the
Spin-Off Consummation Date, Schedule 5.21 sets forth: (i) a true, correct and
reasonably detailed description of all Subsidiaries, and specifying which
Subsidiaries are (A) Arbitron Subsidiaries and (B) Material Subsidiaries; and
(ii) all authorized shares of capital stock of the Company and all the Arbitron
Subsidiaries, and the number of shares of each class of capital stock of such
Subsidiaries that are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company and the Subsidiaries have been duly
authorized and are validly issued, fully paid and non-assessable, and are free
and clear of any Liens and other restrictions (including any restrictions on the
right to vote, sell or otherwise dispose of such capital stock) and of any
preemptive or other similar rights to subscribe for or to purchase any such
capital stock.

         (b)      Except as set forth on Schedule 5.21 (which Schedule sets
forth a true, correct and complete description of, with respect to each
security, title, name of the holder or Person, as applicable, the number of
shares of capital stock underlying such security, exercise price, expiration
date and percentage of shares of such capital stock on a fully diluted basis),
as of the Effectiveness Date and Closing Date, there are: (i) no outstanding
rights to acquire equity in any Subsidiary; (ii) no voting trusts of other
agreements or undertakings with respect to the voting of the capital stock of
any Subsidiary; (iii) no obligations or rights (whether fixed or contingent) on
the part of any Subsidiary, any of its directors or officers, or any other
Person to purchase,

                                      -41-
   47

repurchase, redeem or "put" any outstanding shares of the capital stock of such
Persons; and (iv) no agreements to which any Subsidiary, any of its directors or
officers, or any other Person is a party granting any other Person any rights of
first offer or first refusal, registration rights or "drag-along" "tag-along" or
similar rights with respect to any transfer of any capital stock or equity
rights of any Subsidiary.

         (c)      As of the Effectiveness Date, the Closing Date and the
Spin-Off Consummation Date, all shares of capital stock and equity rights of the
Company or any Subsidiary that have been issued have been issued and offered in
compliance with all applicable federal and state securities laws. Except as set
forth on Schedule 5.21 no additional shares of capital stock of any Arbitron
Subsidiary will become issuable to any Person pursuant to any "anti-dilution"
provisions of any such issued and outstanding securities of any Subsidiary on
account of the issuance of any securities.

         5.22     MARGIN REGULATIONS. Neither the Company, New Ceridian, nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying "margin stock" (within the meaning of Regulation U of the
Federal Reserve Board). No part of the proceeds of the sale of the Notes is
being or will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.

         5.23     BROKERS; CERTAIN EXPENSES. No Note Party or Affiliate has paid
or is obligated to pay any fee or commission to any broker, finder, investment
bank or other intermediary, in connection with this Agreement, the Note
Documents or any of the Spin-Off Documents or the transactions contemplated
hereby or thereby, other than as set forth on Schedule 5.23. No Note Party or
Affiliate is bound by any agreement or commitment for the provision of
investment banking or financial advisory services with respect to any
recapitalization, issuance of debt or equity securities or other capital or
financing transactions involving the Note Parties that would operate to restrict
or prevent the occurrence of the Closing Date or the Spin-Off Consummation Date.

         5.24     YEAR END. As of the Effectiveness Date, the Company's and New
Ceridian's fiscal year ends on December 31 of each year.

         5.25     THIRD PARTY CONSENTS. Other than as set forth in Schedule
5.25, and except as have been obtained before the Closing Date, no approval,
consent, exemption, authorization, amendment or waiver, or other action by, or
notice to, or filing with, any Person is necessary or required in connection
with (a) the execution, delivery or performance by or enforcement against the
Company or New Ceridian of the Spin-Off Documents, (b) the consummation of the
Spin-Off Transaction or (c) the conduct of the Arbitron Business from and after
the Closing Date and the Spin-Off Consummation Date.

         5.26     EXISTING INDEBTEDNESS. As of the Closing Date, neither the
Company nor any of the Arbitron Subsidiaries is indebted on account of any
Indebtedness, except Initial Permitted Indebtedness. The allocation of
Indebtedness and other obligations existing as of the Closing Date, as between
the Company and New Ceridian, has been undertaken in a fair and reasonable
fashion.

                                      -42-
   48

         5.27     NEW CERIDIAN OBLIGATIONS. From and after the Closing Date, New
Ceridian is legally obligated, under the Spin-Off Documents, to indemnify the
Company and hold the Company harmless from all material obligations of the
Company and its Arbitron Subsidiaries other than those incurred pursuant to or
in furtherance of the Arbitron Business, and New Ceridian has neither repudiated
nor breached in any material respect such obligation.

         5.28     SWAP CONTRACTS. As of the Closing Date, neither the Company
nor any Subsidiary is party to any Swap Contracts other than Permitted Swap
Contracts.

         5.29     FULL DISCLOSURE. None of the representations or warranties
made by the Company, New Ceridian or any of their respective Subsidiaries in the
Note Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of the Company or any
Subsidiary in connection with the Note Documents as of the date such statements
are made or deemed made, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. The Form 10 (including all Exhibits thereto) does not
contain any untrue statement of a material fact or omit any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were or are made, not misleading.

         5.30     OFFER OF NOTES; INVESTMENT BANKERS. Neither the Company nor
any Person acting on its behalf (a) has directly or indirectly offered the Notes
or any part thereof or any similar securities for issue or sale to, or solicited
any offer to buy any of the same from, anyone other than the Note Holders, (b)
has taken or will take any action which would bring the issuance, exchange or
sale of the Notes within the provisions of Section 5 of the Securities Act or
the registration or qualification provisions of any applicable blue sky or other
securities laws, (c) has dealt with any broker, finder, commission agent or
other similar Person in connection with the sale of the Notes and the other
transactions contemplated by the Note Documents, other than Banc of America
Securities, LLC (the "Placement Agent"), or (d) is under any obligation to pay
any broker's fee, finder's fee or commission in connection with such
transactions, other than a fee to the Placement Agent which fee is the
obligation solely of the Company.

                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS

         The Company covenants and agrees that, so long as any of the Notes
shall remain outstanding or any other Obligation shall remain unpaid or
unsatisfied, unless the Required Note Holders waive compliance in writing:

         6.01     FINANCIAL STATEMENTS. The Company shall deliver to the each
Note Holder in form and detail satisfactory to the Required Note Holders:

         (a)      as soon as available, but not later than 90 days after the end
of each fiscal year commencing with the fiscal year ending December 31, 2000, a
copy of the audited consolidated financial statements of the Company as of the
end of such fiscal year, setting forth in each case

                                      -43-
   49

in comparative form the figures for the previous year (based on the Audited
Financial Statements, if applicable), and accompanied by the opinion of KPMG
Peat Marwick LLP or another nationally-recognized independent public accounting
firm, which report shall state that such consolidated financial statements
present fairly in all material respects the financial position of the Company
and its Subsidiaries as of the dates indicated (on a stand-alone basis
reflecting the consummation of the Spin-Off Transaction, in the case of the
December 31, 2000 statements) and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP; such opinion shall not
be qualified or limited for any reason, including because of a restricted or
limited examination by such accountant of any material portion of the Company's
or any Subsidiary's records;

         (b)      (i) as soon as available, but not later than 45 days after the
end of the first three fiscal quarters of each fiscal year of the Company, (A) a
copy of the Company 's quarterly report on Form 10-Q filed with the SEC with
respect to such fiscal quarter, and (B) an operating report summarizing the
Company's consolidated year-to-date profit and loss, revenue, operating profit,
invested capital, and cash flow information, and (ii) if the Company at such
time is not required to file such Form 10-Q with the SEC under the Exchange Act,
as soon as available, but in any event within 60 days after the end of each
fiscal quarter, a consolidated balance sheet of the Company and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated statements of
income and cash flows for such fiscal quarter and for the portion of the
Company's fiscal year then ended, setting forth in each case in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year,
and the corresponding portion of the previous fiscal year (based on the Audited
Financial Statements or the Supplemental Financial Statements, if applicable),
together with the items described in clause (i)(B) of this subsection; all in
reasonable detail and certified by a Responsible Officer of the Company as
fairly presenting the financial condition, results of operations, and cash flows
of the Company and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.

         (c)      promptly upon receipt thereof, copies of all reports submitted
to the Company or any of its Subsidiaries by its independent certified public
accountants in connection with each annual, interim or special audit examination
of the Company or any of its Subsidiaries made by such accountants, including
the "management letter" submitted by such accountants to the Company or any of
its Subsidiaries in connection with their annual audit; and

         (d)      as soon as available and in any event not less than 30 days
prior to the start of each fiscal year, a consolidated financial forecast for
the Company and its Subsidiaries for the following fiscal year, including
forecasted consolidated balance sheets, consolidated statements of income,
shareholders' equity and cash flows of the Company and its Subsidiaries, which
forecast shall (A) state the assumptions used in the preparation thereof, (B)
contain such other information as reasonably requested by any Note Holder and
(C) be in form reasonably satisfactory to the Required Note Holders.

         6.02     CERTIFICATES; OTHER INFORMATION. The Company shall furnish to
each Note Holder:

                                      -44-
   50

         (a)      as soon as available, but in any event not later than 15 days
after the delivery of the financial statements referred to in Section 6.01(a)
and (b) above, a Compliance Certificate, signed by a Responsible Officer;

         (b)      copies of each registration statement (or prospectus contained
therein) of the Company other than with respect to employee benefit plans, each
periodic report regarding the Company required pursuant to Section 13 of the
Exchange Act, each annual report, each proxy statement and any amendments to any
of the above filed or reported by the Company with or to any securities exchange
or the SEC, copies of each communication from the Company or any Subsidiary to
the Company's shareholders generally, promptly upon the filing or making thereof
and copies of such other filings, reports and communications with the Company's
shareholders as the Note Holders may from time to time request;

         (c)      upon release, copies of all financially material press
releases by the Company or any Material Subsidiary;

         (d)      promptly after the creation or Acquisition of any Material
Subsidiary, the name of such Subsidiary, a description of its business, the
price paid for the stock or assets of such Subsidiary, its net worth and the
value of its assets;

         (e)      promptly after the execution and filing thereof, copies of all
patent, trademark and copyright filing certificates of the Company and any
Subsidiary as required more fully under the Security Agreements; and

         (f)      promptly, such additional business, financial, corporate
affairs and other information as any Note Holder, may from time to time
reasonably request.

         Reports required to be delivered pursuant to Sections 6.01 or 6.02(b)
shall be deemed to have been delivered on the date on which Company posts such
reports on the Company's website on the Internet at the website address listed
on Schedule 10.02 hereof or when such report is posted on the Securities and
Exchange Commission's website at www.sec.gov.; provided that (x) Company shall
deliver paper copies of such reports to any Note Holder who requests the Company
to deliver such paper copies until written request to cease delivering paper
copies is given by such Note Holder, (y) the Company shall notify by facsimile
each Note Holder of the posting of any such reports, and (z) in every instance
the Company shall provide paper copies of the Compliance Certificates required
by Section 6.02(a) to each of the Note Holders.

         6.03     NOTICES. The Company shall promptly notify the Note Holders
upon a Responsible Officer of the Company obtaining knowledge:

         (a)      of the occurrence of any Default or Event of Default and,
until the Spin-Off Consummation Date, the occurrence of any "Default" or "Event
of Default" under and as defined in the New Ceridian Credit Agreement;

         (b)      of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of the Company or any of its Subsidiaries which would
reasonably be expected to result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or

                                      -45-
   51

suspension by an Governmental Authority that may exist or come to exist at any
time in which the Company or any of its Subsidiaries is a party which would
reasonably be expected to result in a Material Adverse Effect (and assuming for
this purpose the reasonable likelihood of an adverse decision);

         (c)      of the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any Subsidiary which would
reasonably be expected to: (i) have a Material Adverse Effect (and taking into
account the reasonable likelihood of an adverse decision), (ii) if adversely
resolved against such Person, result in the imposition of an injunction or other
stay of the performance of this Agreement or any Note Document or the
consummation of the Spin-Off Transaction, or (iii) involve an aggregate
liability of $1,000,000 (or its equivalent in another currency) or more;

         (d)      of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions affecting the Company or any of its
Subsidiaries or any of their respective properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Company or any Subsidiary that could reasonably
be anticipated to cause the property of the Company or any of its Subsidiaries
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws,
if, individually or in the aggregate, the events or conditions described or the
amount claimed in clauses (i), (ii) and (iii) would reasonably be expected to
result in a Material Adverse Effect;

         (e)      of the occurrence of any ERISA Event affecting the Company or
any ERISA Affiliate, and deliver to each Note Holder a copy of any notice with
respect to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event;

         (f)      of any Material Adverse Effect subsequent to the date of the
most recent audited financial statements of the Company delivered to the Note
Holders pursuant to Section 6.01(a);

         (g)      of any labor controversy resulting in or threatening to result
in any strike, work stoppage, boycott, shutdown or other labor disruption
against or involving the Company or any of its Subsidiaries;

         (h)      of the creation, purchase, or acquisition of any Subsidiary
(including its jurisdiction of incorporation);

         (i)      of: (i) any Subsidiary being or becoming a Material
Subsidiary, and (ii) of any Material Subsidiary ceasing to be a Material
Subsidiary;

         (j)      of the occurrence of the Separation Date and the Spin-Off
Consummation Date;

         (k)      of (i) the exercise or termination of any option under the
Nielsen JV Option Agreement, (ii) the formation of the Nielsen JV, (iii) any
decision by the Company not to commercially deploy the PPM Technology, and (iv)
the occurrence of any material breach or

                                      -46-
   52

default under the terms of the Nielsen JV Option Agreement or the Scarborough
Partnership Agreement;

         (l)      of any material breach or default under, or any material
waiver or consent granted pursuant to, any Spin-Off Document;

         (m)      of the occurrence of any Event of Loss or Disposition with
respect to any assets of the Company or any Material Subsidiary (other than New
Ceridian), where the fair value of the assets exceed on an aggregate basis, for
each such occurrence, $250,000; and

         (n)      of the occurrence of any "Default" or "Event of Default" (or
comparable term) under, and as defined in, the Note Documents.

         Each notice pursuant to this Section 6.03 shall be accompanied by a
certificate by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action, if any, the Company
proposes to take with respect thereto and at what time. Each notice under this
Section 6.03 shall describe with particularity any and all clauses or provisions
of this Agreement or other Note Document that have been breached or violated.

         6.04     PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall,
and shall cause each of its Subsidiaries to:

         (a)      except as permitted in Section 7.02, preserve and maintain in
full force and effect its corporate existence and good standing under the laws
of its state or jurisdiction of incorporation;

         (b)      preserve and maintain in full force and effect all material
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Sections 7.02 and 7.04;

         (c)      use its reasonable efforts, in the Ordinary Course of
Business, to preserve its business organization and preserve the goodwill and
business of the customers, suppliers and others having material business
relations with it; and

         (d)      preserve or renew all of its registered trademarks, trade
names and service marks, the non-preservation of which would reasonably be
expected to have a Material Adverse Effect, provided, however, that the Company
shall not be deemed to be in default under this Section 6.04 if a Subsidiary
(other than a Material Subsidiary) fails to comply herewith so long as such
failure is not material.

         On or before the Spin-Off Consummation Date, the Company shall file
with appropriate Governmental Authorities all necessary filings in order to
change its name to "Arbitron Inc."

         6.05     MAINTENANCE OF PROPERTY. The Company shall, and shall cause
each of its Subsidiaries, to maintain and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted, make all necessary repairs thereto and renewals and
replacements thereof, except as permitted by Section 7.04, and to keep

                                      -47-
   53

such property free of any Hazardous Materials. The Company shall use at least
the standard of care typical in the industry in the operation of its facilities.

         6.06     INSURANCE. The Company shall, and shall cause each of its
Material Subsidiaries to, maintain with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance. All such policies, to the extent consisting of comprehensive
general liability or property or casualty policies, shall name the
Administrative Agent as loss payee/mortgagee and as additional insured, for the
benefit of the Note Holders, as their interests may appear. Upon request of or
any Note Holder, the Company shall furnish each Note Holder, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Company (and, if requested by any Note Holder, any
insurance broker of the Company) setting forth the nature and extent of all
insurance maintained by the Company and its Material Subsidiaries in accordance
with this Section 6.06 (and which, in the case of a certificate of a broker,
were placed through such broker).

         6.07     PAYMENT OF OBLIGATIONS.

         (a)      The Company shall, and shall cause its Subsidiaries to, pay
and discharge as the same shall become due and payable, all their respective
obligations and liabilities, including:

                  (i)    all tax liabilities, assessments and governmental
         charges or levies upon it or its properties or assets, unless the same
         are being contested in good faith by appropriate proceedings and
         adequate reserves in accordance with GAAP are being maintained by the
         Company or such Subsidiary;

                  (ii)   all lawful claims which, if unpaid, would by law become
         a Lien upon its property; and

                  (iii)  all Indebtedness, as and when due and payable, but
         subject to any subordination provisions contained in any instrument or
         agreement evidencing such Indebtedness;

provided, however, that the Company and its Subsidiaries shall not be deemed to
be in default under this Section 6.07 if failure to comply herewith would not
result in a Material Adverse Effect.

         (b)      The Company shall use commercially reasonable efforts to
cause, on or prior to the Spin-Off Consummation Date or as soon as practicable
thereafter, the Company and all Arbitron Subsidiaries to be released as
guarantors of or obligors for any liability described in Schedule 5.10 and
allocated to New Ceridian pursuant to the Distribution Agreement between the
Company and New Ceridian dated on or before the Separation Date.

                                      -48-
   54

         6.08     COMPLIANCE WITH LAWS. The Company shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
material Laws applicable to it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.

         6.09     ERISA COMPLIANCE. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with
ERISA, the Code and other applicable Laws; (b) cause each Pension Plan that is
qualified under Section 401(a) of the Code to maintain such qualification; and
(c) make all required contributions to any Pension Plan subject to Section 412
of the Code.

         6.10     INTEREST RATE PROTECTION. Within 90 days of the Closing Date,
the Company shall enter into and maintain in effect one or more Specified Swap
Contracts providing protection against fluctuations in interest rates with
respect to at least 50% of the difference between the Outstanding Amount under
the New Credit Facility from time to time, and the aggregate outstanding amount
of the Notes from time to time; on such terms and with such financial
institutions as shall be satisfactory to the Required Note Holders.

         6.11     INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall maintain and shall cause each of its Material Subsidiaries to maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Company and
such Subsidiaries. The Company shall permit, and shall cause each of its
Material Subsidiaries to permit, representatives and independent contractors of
any Note Holder to visit and inspect any of their respective properties, to
examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Company;
provided, however, when a Default exists, (i) any Note Holder may do any of the
foregoing with respect to the Company or any Subsidiary at any time during
normal business hours and without advance notice and (ii) such inspection,
examination and meetings shall be at the Company's expense.

         6.12     ENVIRONMENTAL LAWS.

         (a)      The Company shall, and shall cause each of its Subsidiaries
to, conduct its operations and keep and maintain its property in compliance in
all material respects with all Environmental Laws.

         (b)      Upon the written request of any Note Holder, the Company shall
submit to the Note Holder, at the Company's sole cost and expense, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 6.03(d).

         6.13     USE OF PROCEEDS. The Company may use the proceeds of the sale
of the Notes (a) to provide all or a portion of the funds necessary to repay in
full all of the Indebtedness of the Company that is outstanding as of the
Closing Date, to the extent otherwise permitted or required

                                      -49-
   55

hereunder, and to replace any letters of credit outstanding under the Existing
Credit Facility, (b) to the extent otherwise permitted or required hereunder, to
repurchase or redeem securities of the Company, and (c) for working capital and
other general corporate purposes (including Permitted Acquisitions).

         6.14     ADDITIONAL GUARANTORS. If any Arbitron Subsidiary, other than
a Foreign Subsidiary, shall at any time become a Material Subsidiary, or if the
Company or any Subsidiary otherwise shall incorporate, create or acquire any
Material Subsidiary, other than a Foreign Subsidiary, the Company shall cause
such Material Subsidiary to furnish promptly, but in no event more than 30 days
thereafter, each of the following to the Administrative Agent, in sufficient
quantities for each Note Holder:

         (a)      if such Subsidiary is the first such Subsidiary, a duly
executed Subsidiary Guaranty and for each such succeeding Subsidiary, a duly
executed notice and agreement in substantially the form of Exhibit M (an
"Additional Guarantor Assumption Agreement");

         (b)      a duly executed Subsidiary Security Agreement, in
substantially the form of Exhibit G, together with such other Collateral
Documents as the Administrative Agent or any Note Holder may request; and

         (c)      (i) copies of the resolutions of the board of directors (or
equivalent governing body) of such Subsidiary approving and authorizing the
execution, delivery and performance by such Subsidiary of its Subsidiary
Guaranty or Additional Guarantor Assumption Agreement, its Subsidiary Security
Agreement, this Agreement, and the other Note Documents, including all
Collateral Documents to which it is a party), certified as of the effective date
of such Additional Guarantor Assumption Agreement and Subsidiary Security
Agreement by the Secretary or an Assistant Secretary (or other appropriate
officer) of such Subsidiary; (ii) a certificate of the Secretary or Assistant
Secretary (or other appropriate officer) of such Subsidiary certifying the names
and true signatures of the officers of such Subsidiary authorized to execute and
deliver and perform, as applicable, its Additional Guarantor Assumption
Agreement, its Subsidiary Security Agreement, this Agreement and all other Note
Documents and Collateral Documents to be delivered hereunder; (iii) copies of
the articles or certificate of incorporation and bylaws (or other applicable
Organization Documents) of such Subsidiary as in effect on the effective date of
such Additional Guarantor Assumption Agreement and Subsidiary Security
Agreement, certified by the Secretary or Assistant Secretary (or other
appropriate officer) of such Subsidiary as of such date; and (iv) an opinion of
counsel to such Subsidiary and addressed to the Administrative Agent and the
Note Holders, satisfactory to the Required Note Holders and addressing the
matters set forth in Exhibit N

         6.15     ADDITIONAL SUBSIDIARIES.

         (a)      If the Company directly or indirectly incorporates, creates or
acquires any additional Subsidiary, then within 10 days thereafter, the Company
(for the benefit of the Note Holders) shall (i) (A) pledge the capital stock of
such additional Subsidiary to the Note Holders (or the Collateral Agent on their
behalf) pursuant to the Company Pledge Agreement, if such stock is directly
owned by the Company, or (B) if such stock is owned by a Subsidiary, cause such
Subsidiary to pledge the capital stock of such additional Subsidiary to the Note
Holders (or

                                      -50-
   56

the Collateral Agent on their behalf) pursuant to a Subsidiary Pledge Agreement,
(ii) execute and deliver, or cause such Subsidiary to have executed and
delivered, to the Note Holders (or their bailee) (or the Collateral Agent on
their behalf) stock transfer powers executed in blank with signatures guaranteed
as any Note Holder shall request, such Subsidiary Security Agreements and UCC-1
financing statements (as furnished by the Note Holders) for filing in each
jurisdiction in which such filing is necessary to establish and perfect the
first priority security interest of the Collateral Agent for the benefit of the
Note Holders (subject to the terms of the Intercreditor Agreement) in the
Collateral with respect to the Company or such Subsidiary, and (iii) deliver
such other items as reasonably requested by the Required Note Holders in
connection with the foregoing, including resolutions, incumbency and officers'
certificates, opinions of counsel, search reports and other certificates and
documents; provided, however, that if any additional Subsidiary so incorporated,
created or acquired is a Foreign Subsidiary, in no event shall more than 65% of
the capital stock of any such Foreign Subsidiary be required to be so pledged.

         (b)      If the combined EBITDA of all Arbitron Subsidiaries that are
not Material Subsidiaries is greater than or equal to 10% of Consolidated
EBITDA, based on the Company's quarterly financial statements for the most
recent calendar quarter delivered to the Note Holders pursuant to Section 6.01,
the Company shall designate one or more such Subsidiaries as a Material
Subsidiary, such that after giving effect to all such designations the combined
EBITDA of all remaining Arbitron Subsidiaries that are not Material Subsidiaries
is less than 10% of Consolidated EBITDA. Within 10 days of the date of any such
designation, the Company and any Subsidiary designated as a Material Subsidiary
shall take all actions required under Section 6.14.

         (c)      Following the delivery of Company's quarterly financial
statements pursuant to Section 6.01, the Company may de-designate any Subsidiary
previously designated as a Material Subsidiary under subsection (b) of this
Section 6.15 so that such Subsidiary shall no longer be treated as a Material
Subsidiary, effective as of the date on which such de-designation is made,
provided that: (i) such Subsidiary is not independently a Material Subsidiary
under subsection (a) of the definition thereof and (ii) after giving effect to
such de-designation the combined EBITDA of all Subsidiaries that are not
Material Subsidiaries (including the EBITDA of the Subsidiary that has been
de-designated) shall be less than 10% of Consolidated EBITDA. Notwithstanding
any such de-designation, all Collateral Documents and Subsidiary Guaranties
executed by each such Subsidiary pursuant to Section 6.14 shall continue in full
force and effect according to their respective terms, and subject to the terms
of the Intercreditor Agreement.

         6.16     ADDITIONAL INTELLECTUAL PROPERTY. The Company and each
Arbitron Subsidiary shall execute such Supplemental IP Security Agreements and
shall undertake such other filings, recordations, registrations and actions from
time to time with respect to Intellectual Property created, purchased or
otherwise acquired by the Company or such Subsidiary after the Effectiveness
Date, as more fully set forth in the Company Security Agreement and Subsidiary
Security Agreement or as reasonably requested by the Required Note Holders.

         6.17     LICENSES. The Company shall, and shall cause each of its
Subsidiaries to, obtain and maintain all material licenses, authorizations,
consents, filings, exemptions, registrations and other governmental approvals
necessary in connection with the execution, delivery and

                                      -51-
   57

performance of the Note Documents, the consummation of the transactions therein
contemplated or the operation and conduct of its business and ownership of their
properties.

         6.18     FURTHER ASSURANCES.

         (a)      The Company shall ensure that all written information,
exhibits and reports furnished to the Note Holders do not and will not contain
any untrue statement of a material fact and do not and will not omit to state
any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Note Holders and correct any defect or error that may be
discovered therein or in any Note Document or in the execution, acknowledgment
or recordation thereof.

         (b)      Promptly upon request by the Required Note Holders, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge and deliver any and all such further acts, certificates, security
agreements, assignments, estoppel certificates, financing statements, and
continuations or amendments thereof, termination statements, notices of
assignment, transfers, assurances and other instruments as the Required Note
Holders, as the case may be, may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Note Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Note Holders the rights granted or now or
hereafter intended to be granted to the Note Holders under any Note Document or
under any other document executed in connection therewith.

                                  ARTICLE VII
                               NEGATIVE COVENANTS

         The Company hereby covenants and agrees that, so long as any of the
Notes shall remain outstanding, or any other Obligation shall remain unpaid or
unsatisfied, unless the Required Note Holders waive compliance in writing:

         7.01     LIMITATION ON LIENS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property (including Intellectual Property, Proprietary Information
and accounts and notes receivable, with or without recourse), whether now owned
or hereafter acquired, other than the following ("Permitted Liens"):

         (a)      any Lien created under any Note Document;

         (b)      (i) Liens existing on the Closing Date and listed on Schedule
7.01 and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations secured
or benefited thereby is permitted by Section 7.03(a)(iii); and (ii) at any time
prior to the Spin-Off Consummation Date, Liens on New

                                      -52-
   58

Ceridian Assets that would, if such assets were at such time owned or held by
New Ceridian, constitute "Permitted Liens" under and as defined in the New
Ceridian Credit Agreement.

         (c)      Liens for taxes, fees, assessments or other governmental
charges or statutory obligations which are not delinquent or remain payable
without penalty, or to the extent that non-payment thereof is permitted by
Section 6.07, provided that no Notice of Lien has been filed or recorded under
the Code;

         (d)      Liens arising in the Ordinary Course of Business in connection
with obligations (other than obligations for borrowed money) that are not
overdue or which are being contested in good faith and by appropriate
proceedings, including, but not limited to Liens under bid, performance and
other surety bonds, supersedeas and appeal bonds, Liens on advance or progress
payments received from customers under contracts for the sale, lease or license
of goods, software, services or real estate and upon the products being sold or
licensed, in each case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of performance under
such contracts does not occur; and Liens upon funds collected temporarily from
others pending payment or remittance on their behalf; provided that the
aggregate value of all collateral pledged by the Company together with its
Subsidiaries to secure Liens arising under this subsection and subsection (e) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;

         (e)      Liens (other than any Lien imposed by ERISA) required in the
Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other social security legislation; provided that the
aggregate value of all collateral pledged by the Company together with its
Subsidiaries to secure Liens arising under this subsection and subsection (d) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;

         (f)      easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;

         (g)      purchase money security interests on any property acquired or
held by the Company or its Subsidiaries in the Ordinary Course of Business
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such property to the extent permitted under
Section 7.03; provided, however, that (i) any such Lien attaches to such
property concurrently with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such transaction, and
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property;

         (h)      Liens securing the property of any Person that is acquired by
the Company or any of its Subsidiaries after the Effectiveness Date; provided
that (a) such Liens existed prior to the date of such acquisition and were not
created in contemplation thereof or for purposes of circumventing this
Agreement;

                                      -53-
   59

         (i)      Liens consisting of pledges of cash collateral or government
securities to secure on a mark-to-market basis Permitted Swap Contracts,
provided that the aggregate value of such collateral so pledged by the Company
and all Subsidiaries in favor of all counterparties thereunder does not at any
time exceed $1,000,000;

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

         (k)      Liens existing pursuant to the Note Documents or pursuant to
collateral documents securing any Specified Swap Contract, and in each case,
subject to the Intercreditor Agreement.

         7.02     MERGERS AND CONSOLIDATIONS.

         (a)      The Company shall not, and shall not permit any of its
Arbitron Subsidiaries to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one or a series of transactions) all
or substantially all of its assets (whether now owned or hereafter acquired) to
or in favor of any Person, except as provided in subsection (b) of this Section.

         (b)      Section 7.02(a) shall not prohibit:

                  (i)    Permitted Acquisitions;

                  (ii)   the merger or consolidation of any Subsidiary (except
         New Ceridian) into the Company, or with or into any other Subsidiary,
         provided that if any such transaction is between a Subsidiary and a
         Wholly Owned Subsidiary, the Wholly Owned Subsidiary is the continuing
         or surviving corporation; and

                  (iii)  dispositions of assets pursuant to a dissolution or
         liquidation otherwise permitted under this Agreement of a Subsidiary;

                  (iv)   the sale or other disposition of all or substantially
         all of the assets of a Subsidiary of the Company to the Company or to a
         Wholly-Owned Subsidiary of the Company; or

                  (v)    the mergers, consolidations or transfers of assets
         listed on Schedule 7.02(b) attached hereto.

                                      -54-
   60

         7.03     INDEBTEDNESS.

         (a)      Company and Subsidiaries. The Company shall not, and shall not
permit any Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than the following (collectively referred to herein as
"Permitted Indebtedness"):

                  (i)    the Obligations;

                  (ii)   Indebtedness arising from taxes, fees, assessments or
         other governmental charges or statutory obligations which are not
         delinquent or remain payable without penalty, or to the extent that
         non-payment thereof is permitted by Section 6.07;

                  (iii)  (A) Initial Permitted Indebtedness of the Company or
         any Subsidiary of the Company existing on the Closing Date or
         extensions, renewals and refinancings of such Indebtedness, provided
         that the principal amount of such Indebtedness being extended, renewed
         or refinanced does not increase; and (B) at all times prior to the
         Spin-Off Consummation Date, Indebtedness constituting "Initial
         Permitted Indebtedness" under and as defined in the New Ceridian Credit
         Agreement;

                  (iv)   accounts payable of the Company or its Subsidiaries to
         trade creditors for goods and services and current operating
         liabilities (not the result of the borrowing of money) incurred in the
         Ordinary Course of Business in accordance with customary terms and paid
         within the specified time, unless contested in good faith by
         appropriate proceedings and reserved for in accordance with GAAP;

                  (v)    obligations in respect of Permitted Swap Contracts;

                  (vi)   Indebtedness of the Company or any Subsidiary of the
         Company secured by Permitted Liens of the type referred to in Section
         7.01(g), in a principal amount (including imputed principal for Capital
         Leases) not to exceed $5,000,000, in the aggregate for the Company and
         all Subsidiaries of the Company, at any time outstanding;

                  (vii)  Indebtedness not secured by any Lien, in an outstanding
         principal amount not to exceed, together with the principal amount of
         Indebtedness outstanding at such time under clause (vi), $10,000,000 at
         any time in the aggregate for the Company and all Subsidiaries;

                  (viii) unsecured Indebtedness not to exceed $14,000,000
         incurred prior to December 31, 2001 in favor of the seller of certain
         assets relating to a Person known as "Coventry", as partial
         consideration for the Company's acquisition of such assets; provided
         the sum of all payments (including principal, interest, fees and other
         amounts) required to be made thereunder over the scheduled term thereof
         does not exceed $16,000,000;

                  (ix)   Indebtedness arising in connection with the Note
         Documents (or any extensions, renewals, refinancings or replacements
         thereof), provided that the aggregate outstanding principal amount of
         such Indebtedness does not exceed at any time

                                      -55-
   61

         $225,000,000 (plus the amount of any Protective Advances (as defined in
         the Intercreditor Agreement) made in accordance with the terms of the
         Intercreditor Agreement);

                  (x)    prior to the Closing Date, Indebtedness required to be
         repaid on or before the Closing Date pursuant to Section 4.02(a)(v);
         and

                  (xi)   Indebtedness of Wholly-Owned Subsidiaries incurred
         pursuant to transactions permitted under Section 7.06(f).

         (b)      Subsidiaries. The Company shall not permit any of its
Subsidiaries to incur, assume or suffer to exist any Indebtedness if the
aggregate principal amount of all Indebtedness of such Subsidiaries at any time
would exceed 10% of such Subsidiary's net worth.

         7.04     DISPOSITION OF ASSETS.

         (a)      The Company shall not, and shall not permit any of its
Subsidiaries, to Dispose of any assets (including Intellectual Property,
Proprietary Information, accounts and rights to payment), whether now owned or
hereafter acquired, or enter into any agreement to make any Disposition of such
assets, except as permitted under subsection (b).

         (b)      Section 7.04(a) shall not apply to or restrict:

                  (i)    (A) the Spin-Off Transaction; or (B) at any time prior
         to the Spin-Off Consummation Date, Dispositions of New Ceridian Assets
         that would be permitted under the New Ceridian Credit Agreement if such
         assets were at such time assets of New Ceridian;

                  (ii)   the sale of equipment to the extent that such equipment
         is exchanged for credit against the purchase price of similar
         replacement equipment, or the proceeds of such sale are reasonably
         promptly, but in no event more than 30 days, applied to the purchase
         price of such replacement equipment; provided, however, that: (A) the
         replacement equipment has comparable value and is of the same type, and
         used for the same purpose, as the equipment sold; (B) the Person
         selling equipment under this subsection is the same Person that
         purchases any replacement equipment; (C) any such sale is conducted at
         arm's length and under commercially reasonable terms; and (D) to the
         extent there exists more than $1,000,000 of Net Cash Proceeds from all
         such equipment sold which have not yet been invested in replacement
         equipment, such amount shall be promptly applied under Section 2.05(a);

                  (iii)  the transfer of assets by the Company (A) to any of its
         Material Subsidiaries if such transfer is a sale for fair market value
         and the consideration received by the Company is cash; or (B) to any
         Wholly-Owned Subsidiary;

                  (iv)   Revocable Licenses in the Ordinary Course of Business
         of Intellectual Property of the Company or its Subsidiaries to third
         parties (other than Nielsen JV) upon

                                      -56-
   62

         commercially reasonable terms and that do not, singly or in the
         aggregate result in a Material Adverse Effect;

                  (v)    (A) assignments and sales to a Permitted Nielsen JV of
         software used or usable for the compilation of data solely derived from
         PPM Technology, and to the extent, but only to the extent, consistent
         with the Nielsen JV Option Agreement; and (B) Revocable, non-exclusive
         licenses of software and other Intellectual Property to a Permitted
         Nielsen JV in the Ordinary Course of Business upon commercially
         reasonable terms that do not, singly or in the aggregate, result in a
         Material Adverse Effect;

                  (vi)   the license by the Company of its PPM Technology,
         solely for the purpose of audience measurement, to a Permitted Nielsen
         JV to the extent, but only to the extent, consistent with the Nielsen
         JV Option Agreement, and otherwise in form and substance satisfactory
         to the Required Note Holders;

                  (vii)  the non-transferable, exclusive U.S.-license by the
         Company of its "Critical Band Encoding Technology" to Nielsen and the
         license to a Permitted Nielsen JV of encoding patents, to the extent,
         but only to the extent, consistent with the Nielsen JV Option
         Agreement, and otherwise in form and substance reasonably satisfactory
         to the Required Note Holders;

                  (viii) the Disposition of assets or stock of Ceridian Info
         Tech (India) Private Limited and CSW Research Limited; provided that no
         Intellectual Property or Proprietary Information is Disposed of as part
         of any such Disposition, other than Intellectual Property and
         Proprietary Information that is not materially related to the Arbitron
         Business; and further provided that the total aggregate value of all
         assets and stock transferred pursuant to this clause does not exceed
         $3,500,000;

                  (ix)   the transfer by any Subsidiary of the Company of assets
         (upon voluntary liquidation or otherwise) to the Company or a Wholly
         Owned Subsidiary of the Company that is a Material Subsidiary; and

                  (x)    transfers by the Company or its Subsidiaries totaling
         on a consolidated, aggregate basis for all such transfers in any fiscal
         year an amount not in excess of $1,000,000; provided that (A) each such
         transfer is otherwise permitted pursuant to the Note Documents, (B) the
         consideration paid to the Company or its Subsidiaries in connection
         with each such transfer is exclusively in the form of cash or Cash
         Equivalents, (C) unused transfers permitted by this subsection (b)(x)
         shall not accrue to the following year, and (D) after giving effect to
         each such transfer there shall exist no Default or Event of Default.

         7.05     CONTINGENT OBLIGATIONS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligations, except:

         (a)      Contingent Obligations set forth in Schedule 5.10, or incurred
pursuant to any Note Document or any Specified Swap Contract;

                                      -57-
   63

         (b)      Contingent Obligations arising in connection with supersedeas
or appeal bonds in respect of litigation to which the Company or any of its
Subsidiaries is a party or a real party in interest, in an amount for all such
obligations on an aggregate consolidated basis not to exceed $1,000,000 at any
time outstanding; provided that after giving effect to each such obligation
there shall exist no Default or Event of Default;

         (c)      endorsements for collection or deposit in the Ordinary Course
of Business;

         (d)      until the Spin-Off Consummation Date, (i) Contingent
Obligations incurred in connection with the guaranty, of near or even date
herewith, made by the Company in favor of the administrative agent under (and as
defined in) the New Ceridian Credit Agreement to guarantee the obligations of
New Ceridian under the New Ceridian Credit Agreement; and (ii) Contingent
Obligations not incurred pursuant to or in furtherance of the Arbitron Business;

         (e)      Contingent Obligations incurred pursuant to the Note
Documents;

         (f)      Contingent Obligations consisting of Guaranty Obligations of
(i) the Company in respect of Indebtedness of any Wholly-Owned Subsidiary or
(ii) any Subsidiary in respect of Indebtedness of the Company or any
Wholly-Owned Subsidiary; and

         (g)      other Contingent Obligations of the Company and its
Subsidiaries in an aggregate amount not in excess of $1,000,000 at any time
outstanding.

         7.06     NOTES AND INVESTMENTS. The Company shall not, nor shall it
permit any of its Subsidiaries to, purchase, acquire, hold or maintain the
capital stock, assets (constituting a business unit), obligations or other
securities of or any interest in any Person, or otherwise extend any credit to,
make any Guaranty Obligation with respect to or make any additional investments
in any Person, other than:

         (a)      Investments listed on Schedule 7.06(b) and held by the Company
or any Subsidiary as of the Closing Date;

         (b)      Investments in the form of Cash Equivalents or investment
grade marketable securities;

         (c)      extensions of credit in the nature of accounts receivable or
notes receivable arising from the sales of goods or services or franchising
activities in the Ordinary Course of Business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;

         (d)      Investments resulting in Permitted Acquisitions;

         (e)      advances to officers, directors and employees of the Company
and its Subsidiaries in an aggregate amount for all such advances by the Company
and its Subsidiaries not to exceed in the aggregate $1,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous purposes
arising in the Ordinary Course of Business;

                                      -58-
   64

         (f)      extensions of credit by the Company to any of its Wholly Owned
Subsidiaries or by any of its Wholly Owned Subsidiaries to another of its Wholly
Owned Subsidiaries or the Company, in each case in the Ordinary Course of
Business;

         (g)      Contingent Obligations permitted by Section 7.05;

         (h)      Investments permitted by Section 7.02;

         (i)      Investments resulting from Dispositions permitted under
Section 7.04(b) (iii), (vi), (vii) or (ix);

         (j)      Investments consisting of PPM Expenditures in an amount not to
exceed: (i) $5,000,000 for all such Investments in respect of all Nielsen JV's
on an aggregate basis in any fiscal year ending on or before December 31, 2005;
or (ii) $10,000,000 for all such Investments in respect of all Nielsen JV's in
any fiscal year ending after December 31, 2005.

         (k)      Investments existing or entered into prior to the Separation
Date to the extent constituting New Ceridian Assets; or

         (l)      additional Investments otherwise permitted hereunder in
Persons that are not, and will not be after giving effect to each such
Investment, a Subsidiary, in an amount not to exceed $3,500,000 in the aggregate
for all such Investments in any fiscal year; provided that this subsection shall
not permit Investments in either the Scarborough Partnership or any Nielsen JV .

         7.07     DIVIDENDS AND PAYMENTS.

         (a)      The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem, or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, except that the
Company may:

                  (i)    declare and make (A) the Distribution, or (B) dividend
         payments or other distributions payable solely in shares of its common
         stock (and, solely in respect of fractional shares, cash of a de
         minimis amount);

                  (ii)   purchase, redeem or otherwise acquire shares of its
         common stock or warrants or options to acquire any such shares out of
         proceeds received from the substantially concurrent issue of new shares
         of its common stock, after taking into account (a) any prepayment made
         under Section 2.05 of the Credit Agreement as a result of any reduction
         in the Aggregate Commitments under Section 2.06(b)(iii) of the Credit
         Agreement in relation to such issuance and (b) any prepayment made or
         required to be made under the Note Documents in relation to such
         issuance;

                  (iii)  make payments in the Ordinary Course of Business in
         connection with its Pension Plan or in connection with the employment,
         termination or compensation of its employees, officers or directors;
         and

                                      -59-
   65

                  (iv)   from and after that date on which the Company's 2002
         year end financial statements are received by the Note Holders pursuant
         to Section 6.01, declare or pay cash dividends to its stockholders out
         of (and in an aggregate amount not exceeding) Aggregate Distributable
         Income; provided, however, that immediately after giving effect to any
         such proposed declaration or payment there exists no Default or Event
         of Default.

         (b)      The Company shall not suffer or permit any Subsidiary of the
Company (other than New Ceridian) to grant or otherwise agree to or suffer to
exist any consensual restrictions on the ability of such Subsidiary to pay
dividends and make other distributions to the Company, or to pay any
Indebtedness owed to the Company or transfer properties and assets to the
Company.

         (c)      After the Spin-Off Consummation Date, the Subsidiaries may
declare and make dividend payments in the Ordinary Course of Business to the
Company and to Wholly Owned Subsidiaries (and, in the case of a dividend payment
by a non-Wholly Owned Subsidiary, to the Company and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests).

         7.08     USE OF PROCEEDS. The Company shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the proceeds of the sale of
the Notes, directly or indirectly, in violation of Regulation T, U or X of the
Federal Reserve Board.

         7.09     HOSTILE ACQUISITION. The Company shall not, and shall not
permit any of its Subsidiaries to, make any Acquisition unless: (a) the
Acquisition complies with applicable Laws, (b) the board of directors or
equivalent governing body of the Person to be so acquired provides written
consent or approval of such Acquisition prior to its commencement; and (c) such
Acquisition is otherwise permitted hereunder.

         7.10     LEVERAGE RATIO. The Company shall not permit its Leverage
Ratio for any fiscal quarter, beginning with the fiscal quarter ended December
31, 2000, calculated as of the last date of such quarter, to exceed, for the
Test Period ending on such date (including Test Period fiscal quarters ending
prior to the Effectiveness Date, and using for this purpose the Form 10
Financial Statements and the Supplemental Financial Statements), the following
amounts:



                ------------------------------------------ ------------------------------------
                         FISCAL QUARTER ENDING:                   MAXIMUM LEVERAGE RATIO
                ------------------------------------------ ------------------------------------
                                                               
                          December 31, 2000 through                 3.75 to 1.00
                             September 30, 2001
                ------------------------------------------ ------------------------------------
                          December 31, 2001 through                 3.25 to 1.00
                             September 30, 2002

                ------------------------------------------ ------------------------------------
                          December 31, 2002 through                 3.00 to 1.00
                             September 30, 2003

                ------------------------------------------ ------------------------------------
                          December 31, 2003 and                     2.75 to 1.00
                               thereafter

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


                                      -60-
   66

         7.11     FIXED CHARGE COVERAGE RATIO. The Company shall not permit as
of the last day of any fiscal quarter, beginning with the fiscal quarter ended
December 31, 2000: (a) the sum of (i) the Company's Consolidated EBITDA for the
Test Period ending on such day, less (ii) taxes actually paid in cash or Cash
Equivalents for the Test Period ending on such day, less (iii) capital
expenditures plus (without duplication) PPM Expenditures for the Test Period
ending on such day, (b) divided by the sum of (i) Consolidated Interest Expense
for the Test Period ending on such day plus (ii) the Current Portion of
Long-Term Debt as of such day; for the Company and its Subsidiaries on a
consolidated basis (including in respect of Test Period fiscal quarters ending
prior to the Effectiveness Date, and using for this purpose the Form 10
Financial Statements and the Supplemental Financial Statements), to be less than
the following amounts:



                ------------------------------------------ ------------------------------------
                          FISCAL QUARTER ENDING                       MINIMUM RATIO
                ------------------------------------------ ------------------------------------
                                                                 
                          December 31, 2000 through                  2.00 to 1.00
                              September 30, 2001
                ------------------------------------------ ------------------------------------
                          December 31, 2001 through                  2.25 to 1.00
                              September 30, 2002

                ------------------------------------------ ------------------------------------
                          December 31, 2002 through                  2.50 to 1.00
                              September 30, 2003

                ------------------------------------------ ------------------------------------
                          December 31, 2003 and                      2.75 to 1.00
                                thereafter

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


         7.12     FOREIGN SUBSIDIARIES. The Company shall not, and shall not
suffer or permit any Subsidiary to, (a) make any Disposition of, or make any
Investment of, any of its property, business or assets (including Intellectual
Property, Proprietary Information, accounts and rights to payment), whether now
owned or hereafter acquired, to or in any Foreign Subsidiary, except
Dispositions or Investments that, individually or in the aggregate, (i) are
otherwise permitted hereunder and (ii) would not reasonably be expected to have
a Material Adverse Effect on the business, results of operation or financial
condition of the Company together with those of its Subsidiaries that are not
Foreign Subsidiaries, taken as a whole, or (b) make any Investment in, or any
Disposition to, Ceridian Info Tech (India) Private Limited in an aggregate
amount, for all such Investments and Dispositions in respect of the Company and
all Subsidiaries of the Company together from and after the Effectiveness Date,
in excess of $200,000.

         7.13     CHANGE IN BUSINESS. The Company shall not, and shall not
permit any of its Subsidiaries to, (i) engage in any material line of business
substantially different from those lines of business carried on by the Company
and its Subsidiaries on the Closing Date; (ii) extend any material amount of
Indebtedness to or make any material equity Investment in any Person which
engages in one or more lines of business all of which are substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the Effectiveness Date; or (iii) enter into any joint venture
which engages in a material line of business substantially different from those
lines of business carried on by the Company and its Subsidiaries on the
Effectiveness Date.

                                      -61-
   67

         7.14     ACCOUNTING CHANGES. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required or permitted by
GAAP, or change the fiscal year of the Company or of any of its consolidated
Subsidiaries.

         7.15     CERTAIN CONTRACTS.

         (a)      The Company shall not permit any of its Arbitron Subsidiaries
(other than New Ceridian) to enter into any Contractual Obligation restricting
the ability of such Subsidiary to pay dividends or make Notes to the Company or
Arbitron Subsidiaries of the Company.

         (b)      The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any amendment, restatement, extension,
supplement or other modification of the Note Documents if the effect of any such
action would be to render any of the conditions set forth in Section
4.01(a)(vii)(C) inaccurate or unsatisfied in any respect.

         (c)      Unless consented to by the Required Note Holders, the Company
shall not, and shall not suffer or permit any of its Subsidiaries to, enter into
any amendment, revision, supplement or modification to any of the Spin-Off
Documents after the Closing Date, other than (i) ministerial changes necessary
to address administrative issues, or (ii) changes necessary to address facial
ambiguities.

         7.16     TRANSACTIONS WITH AFFILIATES.

         (a)      The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any material transaction of any kind with any
Affiliate of the Company (other than a Subsidiary), or with the New Ceridian and
any of its Subsidiaries, other than arm's-length transactions with such Persons
that are otherwise permitted hereunder.

         (b)      The Company shall not suffer or permit any Nielsen JV or the
Scarborough Partnership to Dispose of, or grant any Lien upon, Intellectual
Property or Proprietary Information licensed to either such Person by the
Company, provided, however, that the Scarborough Partnership may grant licenses
of such Intellectual Property (i) to the Company, and (ii) to third Persons in
the Ordinary Course of Business upon commercially reasonable terms, and provided
further that a Permitted Nielsen JV may grant licenses in such Intellectual
Property (A) to the Company, (B) to Nielsen to the extent, but only to the
extent, consistent with the Nielsen JV Option Agreement, and otherwise in form
and substance satisfactory to the Required Note Holders and (C) which are
non-exclusive, non-transferable and Revocable to other Persons on commercially
reasonable terms in the Ordinary Course of Business and consistent with the
Nielsen JV Option Agreement.

         (c)      Except as consented to in writing by the Required Note
Holders, the Company shall not make or permit any amendment, modification,
extension, renewal, restatement or assignment of the Nielsen JV Option Agreement
or the Scarborough Partnership Agreement that would, directly or indirectly, (i)
increase the amount of cash contributions or payments required to be made by the
Company or any of its Subsidiaries to Nielsen, any Nielsen JV, or he Scarborough
Partnership (ii) require the license or other Disposition of Intellectual
Property of

                                      -62-
   68

the Company or its Subsidiaries other than the property previously contemplated
or alter the license or other transfer arrangements such that they involve
longer terms, or less consideration than previously contemplated or (iii)
include products, applications or markets other than as previously contemplated,
(iv) cause any such Nielsen JV to no longer satisfy the requirements of a
Permitted Nielsen JV, or (v) forseeably be detrimental to the Company or its
Subsidiaries or to the interests of the Note Holders.

         7.17     CAPITAL EXPENDITURES. The Company shall not, nor shall it
permit any of its Subsidiaries to, make any expenditures for fixed or capital
assets of the Company or its Subsidiaries, including obligations under Capital
Leases, in excess of: (i) $5,000,000 in the aggregate for all such Persons, on a
consolidated basis, in any fiscal year ending on or before December 31, 2005, or
(ii) $10,000,000 in the aggregate for all such Persons, on a consolidated basis,
in any fiscal year ending after December 31, 2005 (not including, in any case,
equipment and real estate subject to a sale-leaseback transaction that is
consented to by the Required Note Holders and that is completed no later than 90
days after the date on which such property is sold by the Company or Subsidiary
pursuant to such sale-leaseback transaction); provided, however, that this
Section shall not restrict the incurrence of capital expenditures in respect of
New Ceridian Assets prior to the Spin-Off Consummation Date, provided that any
lease or other obligation (other than obligations in respect of trade payables
entered into in the Ordinary Course of Business on customary payment terms) of
the Company or any Arbitron Subsidiary related to such New Ceridian Assets shall
be released or terminated on or before the Spin-Off Consummation Date.

         7.18     SALES AND LEASEBACKS. The Company shall not, nor shall it
permit any of its Subsidiaries to, become liable, directly or indirectly, with
respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which the Company or such Subsidiary has sold or transferred or is
to sell or transfer to any other Person, or (b) which the Company or such
Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Company or such
Subsidiary to any other Person in connection with such lease.

         7.19     CERTAIN TAX MATTERS. The Company shall not, (a) during the two
year period following the Closing Date, cease to be engaged in the active trade
or business relied upon for purposes of satisfying the requirements of Section
355(b) of the Code and obtaining, and staying in conformity with, the IRS Ruling
Letter; or (b) during the applicable period provided by Section 355(e)(2)(B) of
the Code with respect to the Distribution, enter into any transaction or make
any change to its equity structure (including stock issuance, pursuant to the
exercise of options, option grants or otherwise, capital contributions or
acquisitions, but not including the Distribution) that may cause the
Distribution to be treated as part of a plan pursuant to which one or more
Persons acquire directly or indirectly capital stock of the Company representing
a "50 percent or greater interest" within the meaning of Section 355(e) of the
Code; provided that, in each case, the Company may take such actions if (i) the
Company obtains an private letter ruling from the IRS to the effect that such
actions should not result in the Distribution being taxable to New Ceridian or
its shareholders, or (ii) the Company delivers to the Note Holders an opinion of

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independent counsel addressed to the Note Holders to the same effect, provided,
that such opinion is reasonably acceptable in form and substance to the Required
Note Holders.

                                  ARTICLE VIII
                         EVENTS OF DEFAULT AND REMEDIES

         8.01     EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:

         (a)      Non-Payment. The Company fails to pay (i) when and as required
to be paid herein, any amount of principal of, or the Make-Whole Amount in
respect of, any Note or (ii) within three days after the same becomes due, any
interest on any Note or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Note Document; or

         (b)      Specific Covenants. The Company fails to perform or observe
any term, covenant, or agreement contained in Section 6.03(a), (b), (c), (d), or
(f), Section 6.09, Section 6.13 or in Article VII; or the Company fails to
perform or observe any term, covenant or agreement contained in Section 6.01 or
Section 6.02 or in Section 6.03 (other than subsections (a), (b), (c), (d) or
(f) thereof) and such failure continues unremedied for a period of 10 days; or

         (c)      Other Defaults. The Company fails to perform or observe any
other term or covenant contained in this Agreement or any other Note Document,
and such default continues unremedied for a period of 20 days; or

         (d)      Representations and Warranties. Any representation or warranty
made or deemed made by the Company or any other Note Party herein, in any other
Note Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or

         (e)      Cross-Default. (i) The Company or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty
Obligation (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guaranty Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guaranty Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased
or redeemed (automatically or otherwise) prior to its stated maturity, or such
Guaranty Obligation to become payable or cash collateral in respect thereof to
be demanded; or (ii) there occurs (A) under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (I) any event
of default under such Swap Contract as to which the Company or any Subsidiary is
the Defaulting

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Party (as defined in such Swap Contract) or (II) any Termination Event (as so
defined) under such Swap Contract as to which the Company or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Company or such Subsidiary as a result thereof is greater than
the Threshold Amount; or

         (f)      Insolvency Proceedings, Etc. Any Note Party, any of its
Subsidiaries, the Scarborough Partnership or the Nielsen JV institutes or
consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; provided,
however, that it shall not be an Event of Default under this subsection (f) if
any Subsidiary of the Company to which this subsection applies does not have
annual revenues in excess of 1% of the consolidated revenues of the Company or
net worth which constitutes more than 5% of the Consolidated Net Worth of the
Company in the fiscal year immediately preceding the date this subsection first
becomes applicable to such Subsidiary; or

         (g)      Inability to Pay Debts; Attachment. (i) The Company or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; provided, however, that it shall
not be an Event of Default under this subsection (g) if any Subsidiary of the
Company to which this subsection applies does not have annual revenues in excess
of 1% of the consolidated revenues of the Company or net worth which constitutes
more than 5% of the Consolidated Net Worth of the Company in the fiscal year
immediately preceding the date this subsection first becomes applicable to such
Subsidiary; or

         (h)      Judgments. There is entered against the Company or any
Subsidiary (i) a final judgment, order or decree for the payment of money in an
aggregate amount exceeding $5,000,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any non-monetary final judgment, order or decree that has, or would
reasonably be expected to have, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment,
order or decree, or (B) there shall be any period of 10 consecutive days during
which such judgment, order or decree continues unsatisfied and during which a
stay of enforcement of such judgment, order or decree, by reason of a pending
appeal or otherwise, shall not be in effect; or

         (i)      ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or would reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount that would reasonably be
expected to result in a Material Adverse Effect, or (ii) the Company or any
ERISA Affiliate fails to pay when due, after the expiration of any

                                      -65-
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applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount that would reasonably be expected to result in a Material Adverse Effect;
or

         (j)      Invalidity of Note Documents. Any Note Document, at any time
after its execution and delivery and for any reason other than the agreement of
all the Note Holders or satisfaction in full of all the Obligations, ceases to
be in full force and effect, or is declared by a court of competent jurisdiction
to be null and void, invalid or unenforceable in any material respect; or any
Note Party denies that it has any or further liability or obligation under any
Note Document, or purports to revoke, terminate or rescind any Note Document; or

         (k)      Invalidity of Spin-Off Documents. Any Spin-Off Document, at
any time after its execution and delivery and for any reason other than the
satisfaction in full of all the obligations therein, ceases to be in full force
and effect, or is declared by a court of competent jurisdiction to be null and
void, invalid or unenforceable in any respect; or any party thereto denies that
it has any or further liability or obligation under any Spin-Off Document, or
purports to revoke, terminate or rescind any Spin-Off Document; or

         (l)      Change of Control. There occurs any Change of Control; or

         (m)      Collateral.

                  (i)    Any provision of any Collateral Document shall for any
         reason cease to be valid and binding on or enforceable against the
         Company or any Subsidiary party thereto, or the Company or any
         Subsidiary shall so state in writing or bring an action to limit its
         obligations or liabilities thereunder, or

                  (ii)   any Collateral Document shall for any reason (other
         than pursuant to the terms thereof) cease to create a valid security
         interest in the Collateral purported to be covered thereby, or such
         security interest shall for any reason cease to be a perfected and
         first priority security interest subject only to Permitted Liens; or

         (n)      Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in its Guaranty;
or any Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f) or
(g) of this Section occurs with respect to any Guarantor; or

         (o)      Spin-Off Consummation. The Spin-Off Consummation Date does not
occur on or before the Spin-Off Deadline.

         8.02     REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs, the Required Note Holders may (or may direct the Note Holder
Representative to):

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   72

         (a)      declare the unpaid principal amount of all outstanding Notes,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or thereunder or under any other Note Document to be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company; and

         (b)      exercise all rights and remedies available to them or the Note
Holder Representative under the Note Documents or applicable law;

provided, however, that (x) upon the occurrence of any event specified in
subsection (a) of Section 8.01, any Note Holder may declare the unpaid principal
amount of all outstanding Notes held by such Note Holder, all interest accrued
and unpaid thereon, and all other amounts owing or payable to such Note Holder
hereunder or thereunder or under any other Note Document to be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company and (y) upon the
occurrence of any event specified in subsection (f) of Section 8.01, the unpaid
principal amount of all outstanding Notes and all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or thereunder or under
any other Note Document shall automatically become due and payable without
further act of any Note Holder.

         Upon any acceleration of the Notes or any Note pursuant to this Section
8.02 or otherwise, in addition to the unpaid principal amount of and accrued and
unpaid interest on such Notes or Note, to the extent permitted by law, as
liquidated damages and not as a penalty, the Make-Whole Amount, calculated as of
the date of such acceleration, shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Company.

         8.03     RESCISSION OF ACCELERATION. Notwithstanding the provisions of
Section 8.02, at any time after the occurrence of any Event of Default and of
notice thereof, if any, by any Note Holder or Note Holders and before any
judgment, decree or order for payment of the money due has been obtained by or
on behalf of any Note Holder or Note Holders, the Required Note Holders by
written notice to the Company, may rescind and annul such Event of Default
and/or notice of such Event of Default and the consequences thereof with respect
to all of the Notes (excluding any Notes which were accelerated pursuant to
clause (x) of the proviso in Section 8.02 by any holder or holders on account of
an Event of Default of the character described in subsection (a) of Section
8.01) if:

                  (1)    the Company has paid a sum sufficient to pay

                         (A)     all overdue interest on all Notes at the rate
                  specified in the Notes;

                         (B)     the principal of (and premium, if any, on) any
                  Notes which have become due otherwise than by such Event of
                  Default or notice thereof and interest thereon; and

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   73

                         (C)     interest on such overdue principal (and
                  premium, if any) and, to the extent that payment of such
                  interest is lawful, interest upon overdue interest; and

                  (2)    all Defaults and Events of Default, other than the
         non-payment of the principal of Notes which have become due solely by
         such acceleration, have been cured or waived as provided in Section
         10.01.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

                                   ARTICLE IX
            REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES

         9.01     REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Notes issued
hereunder shall be issued in registered form. The Company shall keep at its
principal executive office (which at Closing shall be located at the address set
forth in Schedule 10.02) a register in which the Company shall provide for the
registration and transfer of the Notes. The name and address of each Note Holder
shall be registered in such register. The Company shall give to any Note Holder
promptly (but in any event within 10 days) following request therefor, a
complete and correct copy of the names and addresses of all registered Note
Holders and the amount of Notes held by each. Subject to Section 9.03, whenever
any Note or Notes shall be surrendered for transfer or exchange, the Company, at
its expense, will execute and deliver in exchange therefor a new Note or Notes
(in such denominations and registered in such name or names as may be requested
by the holder of the surrendered Note or Notes), in the same aggregate unpaid
principal amount as that of the Note or Notes so surrendered and dated so as not
to result in any loss of interest. The Company may treat the Person in whose
name any Note is registered as the owner of such Note for all purposes.

         9.02     REPLACEMENT OF NOTES. Upon receipt by the Company of
reasonably satisfactory evidence of the loss, theft, destruction or mutilation
of any Note and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnity, and (in the case of mutilation) upon surrender of such
Note, the Company, at its expense, will execute and deliver in lieu of such Note
a new Note of like tenor and dated so as not to result in any loss of interest.
An agreement to indemnify and/or affidavit from any institutional Note Holder
shall constitute satisfactory indemnity and/or satisfactory evidence of loss,
theft or destruction for the purpose of this Section 9.02.

         9.03     TRANSFER OF NOTES.

         (a)      Upon the transfer of any Notes by any Note Holder or the
registration of any transferee, successor or assign of any Note Holder, such
transferee, successor or assign shall, by its acceptance of such Notes, be
deemed to have become a party to the Intercreditor Agreement and to have agreed
with each other party to the Intercreditor Agreement to be bound by the
applicable provisions thereof, and promptly following a request thereof by any
party to the

                                      -68-
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Intercreditor Agreement, such transferee, successor or assign shall further
evidence the same by executing an Accession Agreement in a form substantially
identical to Exhibit O.

         (b)      In no event may any Notes be transferred by any Note Holder to
any Person other than a: (i) bank, (ii) financial institution, (iii) insurance
company, (iv) other institutional investor or (v) any entity for which any of
the foregoing acts as investment advisor or investment manager that, in each of
cases (i) through (v), has assets of greater than $75,000,000 (each, a
"Permitted Transferee") including any agent or trustee for, and any Person
formed by or on behalf of Permitted Transferee provided that if any agent or
trustee or any such Person so formed having assets of less than $75,000,000 is
the transferee, the Permitted Transferee shall guarantee the indemnification
obligations of the transferee under the Intercreditor Agreement.

         (c)      The Company shall not issue to any Person any Note (i) in a
denomination of less than $500,000, unless such Person is acquiring all of the
Notes held by any other Person, or (ii) if such issuance would result in there
being more than fifteen (15) Note Holders.

         9.04     ERISA. Each of the Note Holders represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by such Note Holder to pay the purchase price of
the Notes to be purchased hereunder:

         (a)      the Source is an "insurance company general account" as
defined in Section V(e) of Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and, except as disclosed to the Company in writing the
amount of reserves and liabilities for the general account contract(s) held by
or on behalf of any employee benefit plan or group of plans maintained by the
same employer (or an "affiliate" thereof as defined in Section V(a)(1) of PTE
95-60) or employee organization do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities)
plus surplus as set forth in the NAIC Annual Statement filed with the state of
domicile of the insurer; or

         (b)      the Source is a separate account of an insurance company
maintained by such Note Holder in which an employee benefit plan (or its related
trust) has an interest, which separate account is maintained solely in
connection with fixed contractual obligations under which the amounts payable,
or credited, to such plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the investment
performance of the separate account; or

         (c)      the Source is either (A) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990) with respect
to which the insurance company satisfies the record maintenance requirements in
Section III(b) of PTE 90-1, or (B) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) with respect to which the bank
satisfies the record maintenance requirements in Section III(b) of PTE 91-38
and, except as disclosed to the Company in writing, no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

         (d)      the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM"

                                      -69-
   75

(within the meaning of Part V of the QPAM Exemption), no employee benefit plan's
assets that are included in such investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest
in the Company and (A) the identity of such QPAM and (B) the names of all
employee benefit plans whose assets are included in such investment fund have
been disclosed to the Company in writing; or

         (e)      the Source is a governmental plan; or

         (f)      the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing; or

         (g)      the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 9.04, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA, and the term "QPAM
Exemption" means PTE 84-14 (issued March 13, 1984).

                                   ARTICLE X
                                  MISCELLANEOUS

         10.01    AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Note Document, and no consent to any departure by
the Company or any other Note Party therefrom, shall be effective unless in
writing signed by the Required Note Holders and the Company or the applicable
Note Party, as the case may be, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by each of the Note Holders directly affected
thereby and by the Company, do any of the following:

         (a)      amend Section 2.04 or 2.05;

         (b)      postpone any date fixed by this Agreement or any other Note
Document for any payment of principal, interest, fees or other amounts due to
the Note Holders (or any of them) hereunder or under any other Note Document;

         (c)      reduce the principal of, or the rate of interest specified
herein on, any Note or any other amounts payable hereunder or under any other
Note Document; provided, however, that only the consent of the Required Note
Holders shall be necessary to amend the definition of "Default Rate" or to waive
any obligation of the Company to pay interest at the Default Rate;

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   76

         (d)      change the percentage of the aggregate unpaid principal amount
of Notes which is required for the Note Holders or any of them to take any
action hereunder;

         (e)      Reserved

         (f)      amend this Section, or any provision herein providing for
consent or other action by all the Note Holders;

         (g)      amend Section 4.01 or 4.02 or waive any condition precedent
specified therein (subject to the first proviso in the introductory clause to
Section 4.01); or

         (h)      discharge any Guarantor, or release all or substantially all
of the Collateral except as otherwise may be provided herein or in the
Collateral Documents.

         10.02    NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

         (a)      General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the
address, facsimile number or (subject to subsection (c) below) electronic mail
address specified for notices on Schedule 10.02; or, to such other address as
shall be designated in a notice to the other parties. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand
or by courier, when signed for by the intended recipient; (B) if delivered by
first class mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered.

         (b)      Effectiveness of Facsimile Documents and Signatures. Note
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Note Parties and Note Holders. The Note Holders may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.

         (c)      Limited Use of Electronic Mail. Electronic mail and internet
and intranet websites may be used only to distribute routine communications,
such as financial statements and other information, and to distribute Note
Documents for execution by the parties thereto, and may not be used for any
other purpose.

         (d)      Reliance by Note Holders. The Note Holders shall be entitled
to rely and act upon any notices even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Company shall
indemnify each Note Holder - Related Person from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on

                                      -71-
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behalf of the Company. All telephonic notices to and other communications with
any Note Holder may be recorded by such Note Holder and each of the parties
hereto hereby consents to such recording.

         10.03    NO WAIVER; CUMULATIVE REMEDIES. No failure by any Note Holder
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein or therein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

         10.04    ATTORNEY COSTS, EXPENSES AND TAXES. The Company agrees (a) to
pay or reimburse the Note Holders and the Note Holder Representative for all
costs and expenses incurred in connection with the development, preparation,
negotiation and execution of this Agreement and the other Note Documents and any
amendment, waiver, consent or other modification of the provisions hereof and
thereof (whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Note Holders and the Note Holder Representative for all costs and
expenses incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Note
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Note Holders and the
Note Holder Representative and the cost of independent public accountants and
other outside experts retained by the Note Holders and the Note Holder
Representative. The agreements in this Section shall survive the repayment of
the Notes and all other Obligations. At the election of any Indemnitee, the
Company shall defend such Indemnitee using legal counsel satisfactory to such
Indemnitee in such Person's sole discretion, at the sole cost and expense of the
Company; provided, however, that the Company shall only be obligated to hire one
counsel to represent all of the Note Holders unless any Note Holder advises the
Company that its legal counsel has advised it that its interest is materially
different from that of the other Note Holders and it would not be adequately
represented without its own separate counsel, in which case the Company shall
hire separate counsel for such Note Holder, satisfactory to such Note Holder.
All amounts owing under this Section 10.04 shall be paid within 30 days after
demand.

         10.05    INDEMNIFICATION BY THE COMPANY. Whether or not the
transactions contemplated hereby are consummated, the Company agrees to
indemnify, save and hold harmless each Note Holder - Related Person and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against: (a) any and
all claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Note Holders) relating directly or
indirectly to a claim, demand, action or cause of action that such Person
asserts or may assert against any Note Party,

                                      -72-
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any Affiliate of any Note Party or any of their respective officers or
directors; (b) any and all claims, demands, actions or causes of action that may
at any time (including at any time following repayment of the Obligations) be
asserted or imposed against any Indemnitee, arising out of or relating to, the
Note Documents, any predecessor Note documents, the use or contemplated use of
the proceeds of the sale of the Notes, or the relationship of any Note Party,
and the Note Holders under this Agreement or any other Note Document; (c) any
administrative or investigative proceeding by any Governmental Authority arising
out of or related to a claim, demand, action or cause of action described in
subsection (a) or (b) above; and (d) any and all liabilities (including
liabilities under indemnities), losses, costs or expenses (including Attorney
Costs) that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action, cause of action or proceeding, or as a result
of the preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, and whether or not
an Indemnitee is a party to such claim, demand, action, cause of action or
proceeding (all the foregoing, collectively, the "Indemnified Liabilities");
provided that no Indemnitee shall be entitled to indemnification for any claim
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. The agreements in this Section shall
survive the repayment of the Notes and of all the other Obligations.

         10.06    PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to any Note Holder, or any Note Holder exercises its right of set-off,
and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by such Note
Holder in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such set-off had not
occurred.

         10.07    TRANSFEREES, SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective transferees, successors and assigns permitted hereby,
except that the Company may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Note Holder
(and any attempted assignment or transfer by the Company without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective transferees, successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

         10.08    CONFIDENTIALITY. Each of the Note Holders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder;

                                      -73-
   79

(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any transferee or prospective transferee of any Notes;
(g) with the consent of the Company; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Note Holder on a nonconfidential basis from a
source other than the Company; (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Note Holder's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates; or (j) to any Person from time to time party
(directly or through any agent or trustee) to the Intercreditor Agreement. For
the purposes of this Section, "Information" means all information received from
the Company relating to the Company or its business, other than any such
information that is available to any Note Holder on a nonconfidential basis
prior to disclosure by the Company; provided that, in the case of information
received from the Company after the date hereof, such information is clearly
identified in writing at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

         10.09    SET-OFF. In addition to any rights and remedies of the Note
Holders provided by law, upon the occurrence and during the continuance of any
Event of Default, each Note Holder is authorized at any time and from time to
time, without prior notice to the Company or any other Note Party, any such
notice being waived by the Company (on its own behalf and on behalf of each Note
Party) to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Note Holder to or for
the credit or the account of the respective Note Parties against any and all
Obligations owing to such Note Holder, now or hereafter existing, irrespective
of whether or not such Note Holder shall have made demand under this Agreement
or any other Note Document and although such Obligations may be contingent or
unmatured. Each Note Holder agrees promptly to notify the Company after any such
set-off and application made by such Note Holder; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.

         10.10    INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Note Document, the interest paid or agreed to be paid
under the Note Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If any Note Holder
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Notes or, if it exceeds such
unpaid principal, refunded to the Company. In determining whether the interest
contracted for, charged, or received by a Note Holder exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations.

                                      -74-
   80

         10.11    COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         10.12    INTEGRATION. This Agreement, together with the other Note
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Note Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Note Holders in any other Note
Document shall not be deemed a conflict with this Agreement. Each Note Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

         10.13    SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Note Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Note
Holder, regardless of any investigation made by any Note Holder or on their
behalf and notwithstanding that any Note Holder may have had notice or knowledge
of any Default or Event of Default, and shall continue in full force and effect
as long as any Note shall remain unpaid or unsatisfied.

         10.14    SEVERABILITY. Any provision of this Agreement and the other
Note Documents to which the Company is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

         10.15    NOTE HOLDERS.

         (a)      Each Note Holder that is a citizen or resident of the United
States or a United States corporation, partnership or trust ("a U.S. Note
Holder") shall deliver, upon request, to the Company, prior to receipt of any
payment made to such Person by the Company pursuant to this Agreement (or after
accepting an assignment of an interest herein), two duly signed completed copies
of IRS Form W-9 or any successor (providing such Person's taxpayer
identification number and certifying that such Person is not subject to backup
withholding) or such other evidence satisfactory to the Company that such Person
is entitled to an exemption from U.S. backup withholding tax.

         (b)      Each Note Holder that is a "non-resident alien individual" or
a "foreign corporation, partnership or trust" within the meaning of the Code (a
"Foreign Note Holder") shall deliver, upon request, to the Company, prior to
receipt of any payment made to such Person by the Company pursuant to this
Agreement (or after accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(establishing that such Person is a foreign person and, if applicable, entitling
it to an exemption

                                      -75-
   81

from, or reduction of, withholding tax on all payments to be made to such Person
by the Company pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Company
pursuant to this Agreement and representing that the income with which that Form
is associated is not subject to withholding because it is effectively connected
with the conduct of a United States trade or business) or such other evidence
satisfactory to the Company that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax.

         (c)      Following the delivery of the form described in subsections
(a) and (b) of this Section 10.15 and from time to time, each such Person shall
(a) promptly submit to the Company such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Company of any available exemption from
or reduction of, United States withholding taxes in respect of all payments to
be made to such Person by the Company pursuant to this Agreement, (b) promptly
notify the Company of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (c) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Note
Holder, and as may be reasonably necessary to avoid any requirement of
applicable Laws that the Company make any deduction or withholding for taxes
from amounts payable to such Person. If such Person fails to deliver the above
forms or other documentation, then the Company may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Section 3406 or Sections 1441 and 1442 of the Code, without
reduction. If any Governmental Authority asserts that the Company did not
properly withhold any tax or other amount from payments made in respect to such
Person, such Person shall indemnify the Company therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Company under this Section, and costs and expenses (including
Attorney Costs) of the Company. The obligation of the Note Holders under this
Section shall survive the payment of all Obligations.

         10.16    RESERVED.

         10.17    GOVERNING LAW.

         (a)      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH NOTEHOLDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         (b)      ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER NOTE DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY AND EACH NOTE HOLDER CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE

                                      -76-
   82

JURISDICTION OF THOSE COURTS. THE COMPANY AND EACH NOTE HOLDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN THE JURISDICTION OF SUCH COURTS IN
RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE COMPANY AND
EACH NOTE HOLDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

         10.18    WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY NOTE DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         10.19    PURCHASE FOR INVESTMENT. Each Note Holder represents and
warrants that (i) it will acquire the Notes to be issued to it pursuant hereto
for its own account for investment and not for distribution in any manner that
would violate applicable securities laws, but without prejudice to its rights to
dispose of such Notes or a portion thereof to a transferee or transferees, in
accordance with such laws if at some future time a Note Holder deems it
advisable to do so and (ii) it is an "accredited investor", as defined in
Regulation D of the SEC under the Securities Act. The acquisition of such Notes
at the Closing shall constitute the confirmation of the foregoing
representations and warranties. Each Note Holder understands that the Notes are
being sold to the Note Holders in a transaction which is exempt from the
registration requirements of the Securities Act, and that, in making the
representations and warranties contained in Section 5.30, the Company is
relying, to the extent applicable, upon the representations and warranties
contained herein.

            [The remainder of this page is left blank intentionally.]



                                      -77-
   83

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                      CERIDIAN CORPORATION

                                      By:  /s/ William J. Walsh
                                          ---------------------

                                      Name:  William J. Walsh

                                      Title: Executive Vice President of Finance

                                             and Planning of Arbitron and Vice

                                             President of Ceridian


                                      JOHN HANCOCK LIFE INSURANCE
                                      COMPANY

                                      By:  /s/ Daniel C. Budde

                                      Name:  Daniel C. Budde

                                      Title: Managing Director


                                      JOHN HANCOCK VARIABLE LIFE
                                      INSURANCE COMPANY

                                      By:  /s/ Daniel C. Budde

                                      Name:  Daniel C. Budde

                                      Title: Authorized Signatory


                                      COMMONWEALTH OF
                                      PENNSYLVANIA STATE EMPLOYES'
                                      RETIREMENT SYSTEM

                                      BY JOHN HANCOCK LIFE INSURANCE
                                      COMPANY, AS INVESTMENT ADVISOR


                                      By:  /s/ Daniel C. Budde

                                      Name:  Daniel C. Budde

                                      Title: Managing Director



                                      -78-
   84

                                      SIGNATURE 4 LIMITED

                                      BY JOHN HANCOCK LIFE INSURANCE
                                      COMPANY, AS PORTFOLIO ADVISOR


                                      By:  /s/ Daniel C. Budde

                                      Name:  Daniel C. Budde

                                      Title: Managing Director


                                      SIGNATURE 5 LIMITED

                                      BY JOHN HANCOCK LIFE INSURANCE
                                      COMPANY, AS PORTFOLIO ADVISOR


                                      By:  /s/ Daniel C. Budde

                                      Name:  Daniel C. Budde

                                      Title: Managing Director





                                      -79-
   85
                                                                      SCHEDULE I


                       JOHN HANCOCK LIFE INSURANCE COMPANY


1.  All payments on account of the Notes or other obligations in accordance
    with the provisions thereof shall be made by bank wire transfer of
    immediately available funds for credit, not later than 12 noon, Boston time,
    to:


        BankBoston
        ABA No. 011000390
        Boston, Massachusetts 02110
        Account of:   John Hancock Life Insurance Company
                      Private Placement Collection Account
        Account Number: 541-55417
        On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
        January 31, 2008 (PPN 156779 A* 1)

2.  Contemporaneous with the above wire transfer, advice setting forth:

    (1)  the full name, interest rate and maturity date of the Notes or
         other obligations;

    (2)  allocation of payment between principal and interest and any special
         payment; and

    (3)  name and address of Bank (or Trustee) from which wire transfer was sent
         shall be delivered or faxed AND mailed to:

         John Hancock Life Insurance Company
         200 Clarendon Street
         Boston, MA 02117
         Attention: Manager, Investment Accounting Division, B-3
         Fax: (617) 572-0628

3.  All notices with respect to prepayments, both scheduled and unscheduled,
    whether partial or in full, and notice of maturity shall be delivered or
    faxed AND mailed to:


                                                       
         John Hancock Life Insurance Company      and:     John Hancock Life Insurance Company
         200 Clarendon Street                              200 Clarendon Street
         Boston, MA 02117                                  Boston, MA 02117
         Attention: Manager, Investment                    Attention: Investment Law Division, T-50
         Accounting Division, B-3                          Fax: (617) 572-9269

         Fax: (617) 572-0628



4.  All other communications which shall include, but not be limited to,
    financial statements and certificates of compliance with financial
    covenants, shall be delivered or faxed AND mailed to:


   86

         John Hancock Life Insurance Company
         200 Clarendon Street
         Boston, MA 02117
         Attention: Bond and Corporate Finance Group, T-57
         Fax: (617) 572-1605

5.  A copy of any notices relating to change in issuer's name, address or
    principal place of business or location of collateral and a copy of any
    legal opinions shall be delivered or faxed AND mailed to:

         John Hancock Life Insurance Company
         200 Clarendon Street
         Boston, MA 02117
         Attention: Investment Law Division, T-50
         Fax: (617) 572-9269

6.  All securities shall be registered in the name of: JOHN HANCOCK LIFE
    INSURANCE COMPANY

7.  Tax I.D. No. 04-1414660
                                
8.  Securities to be Purchased:     (a) $31,500,000 9.96% Senior Secured Note (No. R-1)
                                    (b) $ 4,500,000 9.96% Senior Secured Note (No. R-2)




   87
                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY


1.          All payments on account of the Notes or other obligations in
    accordance with the provisions thereof shall be made by bank wire transfer
    of immediately available funds for credit, not later than 12 noon, Boston
    time, to:


            BankBoston
            ABA No. 011000390
            Boston, Massachusetts 02110
            Account of:   John Hancock Life Insurance Company
                          Private Placement Collection Account
            Account Number: 541-55417
            On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
            January 31, 2008 (PPN 156779 A* 1)

2.          Contemporaneous with the above wire transfer, advice setting forth:

      (1)   the full name, interest rate and maturity date of the Notes or other
           obligations;

      (2)   allocation of payment between principal and interest and any special
           payment; and

      (3)   name and address of Bank (or Trustee) from which wire transfer was
           sent shall be delivered or faxed AND mailed to:

            John Hancock Variable Life Insurance Company
            200 Clarendon Street
            Boston, MA 02117
            Attention: Manager, Investment Accounting Division, B-3
            Fax: (617) 572-0628

3.          All notices with respect to prepayments, both scheduled and
        unscheduled, whether partial or in full, and notice of maturity shall
        be delivered or faxed AND mailed to:


                                                            
        John Hancock Variable Life Insurance Company     and:  John Hancock Life Insurance Company
        200 Clarendon Street                                   200 Clarendon Street
        Boston, MA 02117                                       Boston, MA 02117
        Attention: Manager, Investment                         Attention: Investment Law Division, T-50
        Accounting Division, B-3                               Fax: (617) 572-9269

        Fax: (617) 572-0628




   88

4.          All other communications which shall include, but not be limited to,
        financial statements and certificates of compliance with financial
        covenants, shall be delivered or faxed AND mailed to:


            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA 02117
            Attention: Bond and Corporate Finance Group, T-57
            Fax: (617) 572-1605

5.          A copy of any notices relating to change in issuer's name, address
        or principal place of business or location of collateral and a copy of
        any legal opinions shall be delivered or faxed AND mailed to:


            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA 02117
            Attention: Investment Law Division, T-50
            Fax: (617) 572-9269

6.          All securities shall be registered in the name of: JOHN HANCOCK
        VARIABLE LIFE INSURANCE COMPANY


7.          Tax I.D. No. 04-2664016


8.          Securities to be Purchased:  $2,000,000 9.96% Senior Secured
        Note (No. R-3)



   89
                          COMMONWEALTH OF PENNSYLVANIA
                        STATE EMPLOYES' RETIREMENT SYSTEM

1.   All payments on account of the Notes or other obligations in accordance
     with the provisions thereof shall be made by bank wire transfer of
     immediately available funds for credit, not later than 11:30 a.m., Boston
     time, to:

            Federal Reserve Bank of Boston
            A/C Boston Safe Deposit & Trust Company
            ABA No. 011001234
            DDA: 125261
            Ref:  CPZFFD01302
            On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
            January 31, 2008
            (PPN 156779 A* 1)

2.   Contemporaneous with the above wire transfer, advice setting forth
     (1) the full name, interest rate and maturity date of the Notes or other
     obligations;
     (2) allocation of payment between principal and interest and any special
     payment; and
     (3) name and address of Bank (or Trustee) from which wire transfer was
     sent, shall be delivered or faxed AND mailed to:

            Mellon Bank, N.A.
            Three Mellon Bank Center, Room 153-3610
            Pittsburgh, Pennsylvania  15259-0001
            Attn: Principal & Interest Unit
            Fax:  412-236-0120

3.   All notices with respect to prepayments, both scheduled and unscheduled,
     whether partial or in full, and notice of maturity shall be delivered or
     faxed AND mailed to:

            Mellon Bank, N.A.
            Three Mellon Bank Center, Room 153-3610
            Pittsburgh, Pennsylvania  15259-0001
            Attn: Principal & Interest Unit
            Fax:  412-236-0120

4.   All other communications shall be delivered or faxed AND mailed to:

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, Massachusetts  02117

   90

            Attention:  Scott Hartz, Bond and Corporate Finance Group, T-57
            Fax:  617-572-1605

5.   A copy of any notices relating to change in issuer's name, address or
     principal place of business or location of collateral and a copy of any
     legal opinions shall be delivered or faxed AND mailed to

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA  02117
            Attention:  Investment Law Division, T-50
            Fax:  617-572-9269

6.   Execution documents shall be executed as follows:

                    COMMONWEALTH OF PENNSYLVANIA
                    STATE EMPLOYES' RETIREMENT SYSTEM
                    By:  John Hancock Life Insurance Company,
                           as Investment Advisor
                    By: Daniel C. Budde
                    Managing Director

7.   All securities shall be registered in the name of SERS & CO.

8.   Tax I.D. No. 23-1732438

9.   Securities to be Purchased:  $3,000,000 9.96% Senior Secured Note (No.
     R-4)


   91



                               SIGNATURE 4 LIMITED

1.   All payments on account of the Notes or other obligations in accordance
     with the provisions thereof shall be made by bank wire transfer of
     immediately available funds for credit, not later than 12 noon, Boston
     time, to:

            HARE & CO.
            c/o The Bank of New York
            ABA No. 021-000-018
            BNF: IOC566
            On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
     January 31, 2008
            (PPN 156779 A* 1)

2.   Contemporaneous with the above wire transfer, advice setting forth:

     (1)   the full name, interest rate and maturity date of the Notes or
other obligations;

     (2)   allocation of payment between principal and interest and any
special payment; and

     (3)   name and address of Bank (or Trustee) from which wire transfer was
sent shall be delivered or faxed AND mailed to:

                                                           
            Investors Bank & Trust Company     and:             HARE & CO.
            200 Clarendon Street                                c/o The Bank of New York
            Boston, MA 02116                                    P.O. Box 19266
            Attn: Mike DeVelis                                  Newark, NJ 07195
            Fax: (617) 927-8302



3.   All notices with respect to prepayments, both scheduled and unscheduled,
     whether partial or in full, and notice of maturity shall be delivered or
     faxed AND mailed to:

                                                            
            Investors Bank & Trust Company           and:       HARE & CO.
            200 Clarendon Street                                c/o The Bank of New York
            Boston, MA 02116                                    P.O. Box 19266
            Attn.: Michael DeVelis                              Newark, NJ 07195
            Fax: (617) 927-8302


            and:


            John Hancock Life Insurance Company                 John Hancock Life Insurance
            200 Clarendon Street                                Company




   92

                                                            


            Boston, MA 02117                                    200 Clarendon Street
            Attention: Investment Law Division, T-50            Boston, MA 02117
                                                                Attention: Bond and Corporate
            Fax: (617) 572-9269                                     Finance Group, T-57
                                                                Fax: (617) 572-1650





4.      All other communications which shall include, but not be limited to,
        financial statements and certificates of compliance with financial
        covenants, shall be delivered or faxed AND mailed to:

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA 02117
            Attention: Bond and Corporate Finance Group, T-57
            Fax: (617)-572-1605

5.      A copy of any notices relating to change in issuer's name, address or
        principal place of business or location of collateral and a copy of any
        legal opinions shall be delivered or faxed AND mailed to:

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA  02117
            Attention: Investment Law Division, T-50
            Fax: (617)-572-9269

6.      Execution documents shall be executed as follows:
           Signature 4 Limited
           By:  John Hancock Life Insurance Company,
               as Portfolio Advisor
           By: Daniel C. Budde
           Managing Director

7.      All securities shall be registered in the name of: HARE & CO.

8.      Securities to be Purchased: $2,000,000 9.96% Senior Secured Note (No.
R-5)


   93



                                SIGNATURE 5 L.P.

1.      All payments on account of the Notes or other obligations in accordance
        with the provisions thereof shall be made by bank wire transfer of
        immediately available funds for credit, not later than 12 noon, Boston
        time, to:

            HARE & CO.
            c/o The Bank of New York
            ABA No. 021-000-018
            BNF: IOC566
            On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008

            (PPN 156779 A* 1)

2.      Contemporaneous with the above wire transfer, advice setting forth:

        (1)   the full name, interest rate and maturity date of the Notes or
other obligations;

        (2)   allocation of payment between principal and interest and any
special payment; and

        (3) name and address of Bank (or Trustee) from which wire transfer was
sent shall be delivered or faxed AND mailed to:

                                                        
            Investors Bank & Trust Company          and:   HARE & CO.
            200 Clarendon Street                           c/o The Bank of New York
            Boston, MA 02116                               P.O. Box 19266
            Attn: Mike DeVelis                             Newark, NJ 07195
            Fax: (617) 927-8302



3.      All notices with respect to prepayments, both scheduled and unscheduled,
        whether partial or in full, and notice of maturity shall be delivered or
        faxed AND mailed to:

                                                        
            Investors Bank & Trust Company          and:   HARE & CO.
            200 Clarendon Street                           c/o The Bank of New York
            Boston, MA 02116                               P.O. Box 19266
            Attn.: Michael DeVelis                         Newark, NJ 07195
            Fax: (617) 927-8302


           and:


            John Hancock Life Insurance Company     and:   John Hancock Life Insurance
            200 Clarendon Street                           Company



   94

                                                        
            Boston, MA 02117                                200 Clarendon Street
            Attention: Investment Law Division, T-50        Boston, MA 02117
                                                            Attention: Bond and Corporate
            Fax: (617) 572-9269                                 Finance Group, T-57
                                                            Fax: (617) 572-1605



4.      All other communications which shall include, but not be limited to,
        financial statements and certificates of compliance with financial
        covenants, shall be delivered or faxed AND mailed to:

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA 02117
            Attention: Bond and Corporate Finance Group, T-57
            Fax: (617)-572-1605

5.      A copy of any notices relating to change in issuer's name, address or
        principal place of business or location of collateral and a copy of any
        legal opinions shall be delivered or faxed AND mailed to:

            John Hancock Life Insurance Company
            200 Clarendon Street
            Boston, MA  02117
            Attention: Investment Law Division, T-50
            Fax: (617)-572-9269

6.      Execution documents shall be executed as follows:
           Signature 5 L.P.
           By:  John Hancock Life Insurance Company,
               as Portfolio Advisor
           By: Daniel C. Budde
           Managing Director

7.      All securities shall be registered in the name of: HARE & CO.

8.      Securities to be Purchased: $7,000,000 9.96% Senior Secured Note (No.
R-6)


   95


                                                                SCHEDULE 1.01(i)

                         INITIAL PERMITTED INDEBTEDNESS



1.      Repayment obligations pursuant to the Letters of Credit described in
        Schedule 1.01(e) under the New Credit Facility.

2.      There are no existing capital leases.

3.      Final payment in the amount of three million dollars ($3,000,000) to
        Tapscan Inc. due on May 4, 2001 under the Asset Purchase Agreement dated
        May 4, 1998.



   96

                                                                SCHEDULE 1.01(s)

                               SPIN-OFF DOCUMENTS

1.      The Form 10

2.      Amended and Restated Certificate of Incorporation of the Company

3.      Amended and Restated Bylaws of the Company

4.      Distribution Agreement dated on or before the Separation Date between
        the Company and New Ceridian (see Schedules below)




   Schedule        Description of Schedule
   --------        ------------------------
                
   1.1(o)          Conveyancing and Assumption Instruments

   1.1(g)          Debt Realignment Plan

   1.1(ff)         List of Divested Business Entities Relating to Arbitron Business

   1.1(gg)         December 31, 1999 Media Information Balance Sheet

   1.1 (ii)(iii)   Government Contracts Exclusively Relating to Media Information Business

   1.1 (ii)(iv)    Lease Agreements Relating to Media Information Business

   1.1(ll)         List of Certain Liabilities to remain with the Corporation after Spin-Off

   1.1(ll) A       List of Certain Liabilities to be Assumed by New Ceridian

   2.8(a)          Guarantees where Corporation (Arbitron Inc.) is to be removed as a
                   Guarantor

   2.8(b)          Guarantees where New Ceridian is to be removed as a guarantor of a Media
                   Information Liability

   7.3(b)          Allocation of deductibles with respect to Shared Insurance Policies

   7.3(e)          Allocation of deductible for Workers' Compensation, General Liability and
                   Automotive Liability Claims

   8.5             Allocation of Expenses



5.      Personnel Agreement dated on or before the Separation Date between
        Arbitron and New Ceridian


   97

6.      Tax Matters Agreement dated on or before the Separation Date between
        Arbitron and New Ceridian

7.      Transition Services Agreement dated on or before the Separation Date
        between Arbitron and New Ceridian

8.      Information Statement dated December 6, 2000 attached as Annex A to the
        Form 10

9.      Bill of Sale and Assumption Agreement, dated on or before the Separation
        Date, between the Company and the Parent.

10.     Real Estate Sublease Agreement, dated on or before the Separation Date,
        between the Company, as sub-lessor, and the Parent, as sub-lessee,
        related to the facilities located at 142 W. 57th Street, New York, New
        York.



   98


                                                                   SCHEDULE 5.05

                        LITIGATION AFFECTING NOTE PARTIES

        The following information is provided regarding various matters in
litigation involving the Company and the Subsidiaries of the Company. The
information provided includes matters where the plaintiff has alleged damages in
an amount that exceeds $5,000,000 or where such damages are currently unknown,
but could potentially exceed $5,000,000, and excludes threatened litigation
where the threatening party or parties specified no Dollar threshold. Inclusion
of any matter on the lists provided below shall not be deemed a conclusion on
the part of the Company or its Subsidiaries that an adverse determination in
connection with such matter is likely or expected, or that such a determination
would necessarily result in a Material Adverse Effect. Terms not otherwise
defined in this Schedule are used herein as defined in the Agreement.

1.      Flying J, Inc. v. Comdata Network, Inc. and Trendar Corporation, et. al.
In July 1996, Comdata was sued in the U.S. District Court for the Northern
District of Utah by Flying J, an operator of a large chain of truck stops and
formerly a significant Comdata customer. The complaint alleges violations of
various antitrust laws, tortious interference with contract and unfair
competition. Specifically, Flying J alleges that Comdata's market position in
the transportation industry caused Flying J's agreement(s) with another truck
stop chain to deploy point-of-sale authorization devices and truck driver
service kiosks to unravel. Comdata filed a motion to dismiss, stay or transfer
this case to the U.S. District Court for the Eastern District of Tennessee where
Comdata had previously filed suit against Flying J in April 1996, seeking a
temporary restraining order and, later, a permanent injunction to prevent Flying
J from misappropriating certain confidential and proprietary information of
Comdata, including misuse of Comdata's Comchek card numbers. Although the
temporary restraining order was granted by the Tennessee court and remained in
place through mid-December 1996, the Tennessee court declined to issue a
permanent injunction and the Tennessee case, accordingly, was dismissed. The
plaintiff filed an amended complaint in the Utah case in mid-January 1997. In
January 1999, plaintiffs filed a second and third amended complaint seeking to
add claims for interference with contractual relations with NCR and NTS, Inc.
Plaintiffs' expert report has been filed under seal. A motion is pending to have
the court reconsider its denial of plaintiffs' motion the Company as a party.
Similar motions have been denied twice previously. Meanwhile, plaintiffs have
sued the Company separately, repeating the same allegations made against
Comdata. The complaint was accompanied with a motion to stay following the
Company's answer. Ceridian has answered and is pursuing dispositive motions to
dismiss. Ceridian believes that the separate suit filed against it is subject to
various affirmative defenses, including, without limitation, lack of standing,
laches, unclean hands, no damages as a result of conduct of the Company and
statute of limitation defenses, and in addition the Company does not believe
that suit reaches the damages thresholds specified above. The suit is disclosed
only to provide a complete description of the current circumstances. The lawsuit
against Comdata is currently scheduled for a four-week trial beginning in June
2001.

2.      Fortune Funding LLC, et al. v. Ceridian Corporation. On July 28, 2000
the owner of the Company's former headquarters building sued the Company in the
United States District Court for the District of Minnesota. The complaint
alleges breach of contract, violation of Minn. Stat.

   99

561.17, common law waste, intentional and negligent misrepresentation, and
violation of the consumer fraud act.

3.      The Huntington National Bank v. ABR Benefits Services, Inc. The
Huntington National Bank sued ABR Benefits Services in Circuit Court, Pinellas
County, Florida. Plaintiff terminated their contract with ABR and claims breach
of contract and wrongful retention of hardware and software. ABR's professional
liability carrier is paying costs. The matter is currently in the discovery
phase.







   100


                                                                   SCHEDULE 5.07

                                ERISA COMPLIANCE

Not Applicable.


























   101


                                                                   SCHEDULE 5.10

                             CONTINGENT OBLIGATIONS

1.      Reimbursement obligations relating to letters of credit set forth in
Schedule 1.01(e) of the New Credit Facility.

2.      Contingent Obligations arising in connection with the Company's
guarantee of the obligations of New Ceridian under the New Ceridian Credit
Agreement.

3.      The Company's obligations to pay certain obligations as expressly set
forth in the Spin-Off Documents.

4.      Existing Contingent Obligations relating to a $1,200,000 letter of
credit required by Liberty Sites, Ltd., the landlord of the Montreal, Canada
facilities, and Contingent Obligations related to a guaranty of the account
party's obligations in respect thereto, given to the issuing bank (CIBC) by the
Company as of the Effectiveness Date, and by New Ceridian on the Closing Date.

5.      Existing Contingent Obligations of $100,000 relating to the obligations
of Resumix (a divested subsidiary) under a switchboard lease/purchase.

6.      Existing Contingent Obligations of $18,900,000 under surety bonds
primarily relating to various licensing or permitting requirements of Comdata
(and its subsidiaries) for fuel tax, ATM, check cashing and related matters.

7.      Existing Contingent Obligations of $900,000 under performance guarantees
of Empros (a divested business operation) in Mexico, as to which the Company has
a "back-up" indemnity from Siemens, the acquiror of Empros.

8.      Existing Guarantees by the Company as of the Effectiveness Date, as
described in Schedule 1.01(i) of the New Credit Facility, by New Ceridian as of
the Closing Date, in substantially the form of Exhibit E, and by the Company's
domestic Material Subsidiaries, in substantially the form of Exhibit F.

9.      Contingent Obligations relating to a $2,000,000 Letter of Credit (the
amount subject to rescission) issued under the Existing Credit Facility and to
be reissued under the New Ceridian Credit Agreement.

10.     Contingent Obligations arising in connection with the Company's
guarantee to landlords in respect of 5 sales office locations leased by CCL (no
sum certain), which guarantees were executed on March 10, 1998.

11.     Contingent Obligations arising in connection with the Company's
guarantee in the amount of $1,103,170 to IBM Canada, LTd of obligations of CCL,
which guarantee was executed on December 7, 1998 and expires on January 1, 2003.


   102


12.     Contingent Obligations arising in connection with the Company's
guarantee in the amount of $3,000,000 to CIBC of obligations of Pernicom, which
guarantee was executed on August 27, 1999.

13.     Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Asda of obligations of Centre-File, which
guarantee was executed on September 5, 1997.

14.     Contingent Obligations arising in connection with the Company's
overdraft guarantee for no sum certain to National Westminster of obligations of
Centre-File, which guarantee was executed on August 18, 1997.

15.     Contingent Obligations arising in connection with the Company's landlord
guarantee in the amount of $34,000 to Kingsway Group PLC of obligations of CCP,
which guarantee was executed on July 1, 2000 and expires on December 24, 2002.

16.     Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Exxon Card Services of obligations of
LAES/Comdata, which guarantee was executed on September 24, 1997 and expires on
September 24, 2002.

17.     Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Exxon Card Services of obligations of
SVS/Comdata, which guarantee was executed on March 1, 1999 and expires on March
1, 2004.

18.     Contingent Obligations arising in connection with the Company's
guarantee for no sum certain to IBM of obligations of Comdata, which guarantee
was executed on June 30, 1998.

19.     Contingent Obligations arising in connection with the Company's landlord
guarantee for no sum certain to Norwestern Mutual Insurance of obligations of
Comdata.

20.     Contingent Obligations arising in connection with the Company's
guarantee in the amount of $0 to AmSouth (1st American) of obligations of
Comdata, which guarantee was executed on September 4, 1998.

21.     Contingent Obligations arising in connection with the Company's
guarantee in the amount of $0 to Chase Manhattan Bank of obligations of
PowerPay.com, which guarantee was executed on October 1, 1999.

22.     Contingent Obligations arising in connection with the Company's
guarantee in the amount of $575,000 to Amplicon of obligations of Usertech,
which guarantee was executed on November 3, 2000 and expires on November 1,
2003.



   103


                                                                   SCHEDULE 5.11

                              ENVIRONMENTAL MATTERS

        The following information is provided regarding various matters relating
to Environmental Laws, Environmental Claims and Hazardous Materials involving
the Company and its Subsidiaries. Inclusion of any matter on the lists provided
below shall not be deemed a conclusion on the part of the Company that such
matter would or could reasonably be expected to result in a Material Adverse
Effect. Terms not otherwise defined in this Schedule are used herein as defined
in the Agreement.

1.      Printed Circuits Operations, St. Louis Park, Minnesota. Groundwater
contamination was discovered at the printed circuits facility formerly operated
by the Company's Computer Products division in St. Louis Park. Despite the sale
of the printed circuits business and the transfer of the St. Louis Park real
estate to CD Systems in connection with the spin-off of CD Systems, the Company
remains responsible for environmental matters related to this site. A consent
order was signed with the Minnesota Pollution Control Agency ("MPCA") which
obligates the Company to perform MPCA-approved remedial actions. The MPCA has
accepted the Company's proposed remedial alternative involving the treatment and
discharge of contaminated groundwater, and has issued a record of decision
setting the recommended cleanup levels for the groundwater. A response action
plan was submitted and approved and remediation facilities have been in
operation since July 1990. Groundwater clean up has progressed to the point
where the site is expected to start the closure and delisting process within the
next 1-2 years. CD Systems is pursuing a sale of this property. The remaining
cost of implementing remedial actions was most recently estimated by management
to be under $500,000.

2.      Imprimis/Seagate Environmental Matters. The Company has agreed to
indemnify Seagate against a portion of environmental liabilities relating the
Imprimis facilities and sites where Imprimis may have disposed of hazardous
materials, to the extent such liabilities relate to occurrences that predate the
sale of Imprimis to Seagate, and to the extent such liabilities exceed the
amount of applicable reserves on the closing balance sheet of Imprimis. Because
those reserves have been exhausted, the Company is responsible for up to $8.2
million of the next $9.2 million of such liabilities, and for 50 percent of such
liabilities beyond that amount, with a maximum indemnification obligation of
$15.7 million. The Company has paid approximately $8.2 million to Seagate
pursuant to this indemnity through mid-2000. The Company has established
reserves for the full amount of its remaining liability with respect to this
indemnification undertaking.

3.      Chemical Marketing Corporation of America. In April and May 1999, MPCA
has requested information, under the Minnesota Environmental Response and
Liability Act regarding the possible release of hazardous substances or
pollutants of contaminants at the Chemical Marketing Company of America Site,
previously located at 180 Humboldt Avenue North, Hennepin County, Minneapolis.
The Company's initial review of its documents shows that it had shipped
hazardous waste from its former VTC subsidiary's location at 2800 E. Old
Shakopee Road, Bloomington, MN back in the early 1980's. The Company has
responded to the requests and is in discussion with MPCA and other PRPs
regarding site clean up. Total clean up


   104

costs are estimated by management to be between $660,000 to $1,400,000. The
Company has adequate reserves available to cover anticipated clean up costs.

4.      Spring Grove, Minnesota. After detecting low levels of contamination in
two municipal wells in Spring Grove, the MPCA requested information from the
Company and Northern Engraving Corporation ("NEC") regarding a facility in
Spring Grove operated by the Company from 1965 to 1971 and since that time by
NEC. The Company and NEC subsequently entered into a consent order with the MPCA
pursuant to which the Company and NEC are implementing certain remedial actions
and have reimbursed the MPCA for 75% of its past costs in connection with this
matter. Estimated future costs for the Company under the consent order may be as
much as $500,000 over a period of as much as thirty years.

5.      Freeway Sanitary Landfill, Burnsville, Minnesota. In April 1994, the
Company received a request for information from the MPCA regarding the Company's
connection with this landfill. Apparently groundwater contamination has been
discovered in connection with this facility. The Company's investigation to date
suggests that some waste materials generated by the Company were disposed of at
this landfill during the relevant time period (1969-1990) in accordance with
applicable law. In 1996, the State of Minnesota, under the Minnesota Landfill
Cleanup Law, assumed responsibility for all further response actions at the
site. The Landfill Cleanup Law requires the Company to preserve its rights to
insurance coverage for cleanup costs at the site.

6.      Oak Grove Landfill, Anoka County, Minnesota. This landfill in Anoka
County, Minnesota, closed in 1984, was the subject of an investigation by the
EPA and MPCA for several years. The Company's involvement with the site,
allegedly as a result of utilizing a transporter who disposed of waste at the
landfill, was relatively small. Nevertheless, the Company joined an Oak Grove
PRP group, which has negotiated a consent decree with the EPA. The Company
contributed approximately $250,000 to the PRP group and does not expect to make
any significant future payments with respect to this site. In 1996, the State of
Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for
all further response actions at the site. The Landfill Cleanup Law requires the
Company to preserve its rights to insurance coverage for cleanup costs at the
site. The State of Minnesota has recently brought a lawsuit against the
insurance companies and has subpoenaed all applicable records from PRP.

7.      Isanti County, Minnesota. In the 1991 settlement of a civil action filed
in the U.S. District Court for Minnesota, the Company and nine other parties
agreed to reimburse the EPA and the MPCA for costs incurred in the surface
cleanup of five waste disposal sites in Isanti County, and to create a
remediation fund to conduct remedial activities at the sites for a period of 12
years, at which time the State of Minnesota would take over the sites. The
Company has paid its share of these amounts. The settlement agreement also
provides that unless new information is discovered during the 12 year period
that indicates the seven settling PRPs have in the past been responsible for any
additional contamination at these sites, the settling PRPs would obtain a full
release from the State at the conclusion of the 12 year period.

8.      Ecolotech, Minneapolis and St. Paul, Minnesota.  Prior to 1987, the
Company shipped wastes to Ecolotech, which operated facilities in Minneapolis
and St. Paul. Soil and groundwater contamination where discovered at the sites
and a consent order was entered into by the generators (including the Company)
with the MPCA in 1987. Remedial efforts specified for the

   105

sites have been completed. The Company is awaiting termination of the consent
order by the MPCA.

9.      Hopkins Landfill, Hopkins, Minnesota. In March 1994, the Company
received a letter from the City of Hopkins identifying the Company as having
used the Hopkins Landfill for disposal of waste and seeking reimbursement of
methane remediation costs. The City then placed a "hold" on its reimbursement
request until the state legislature passed the Landfill Cleanup Law. In July
1996, the Company received a request from MPCA for information regarding the
Company's connection with this landfill. The records search to date has not
uncovered any disposal records for the Hopkins Landfill. The State of Minnesota,
under the Minnesota Landfill Cleanup Law, has assumed responsibility for all
further response actions at the site. The Landfill Cleanup Law requires the
Company to preserve its rights to insurance coverage for cleanup costs at the
site.

10.     Other. The Company has identified certain of its facilities that contain
asbestos containing materials ("ACM"). As to such facilities, it is the
Company's policy and practice, in accordance with applicable Environmental Laws,
to manage ACM in place or remove it when necessary. The Company is also aware of
underground storage tanks located in its Comdata subsidiary facilities in
Brentwood, Tennessee and Newberry, South Carolina which are being utilized in
accordance with applicable Environmental Laws.















   106


                                                                   SCHEDULE 5.17

               INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION

(a)

                (i)     TVScan software and trademark license dated May 1, 1998
        from Tapscan Inc. to Arbitron for its exclusive use in the radio, agency
        and advertising industries worldwide and the television and cable
        industries outside the U.S. TVScan processes and provides custom
        analysis reports of television viewing data.

                (ii)    Software used for internal business: See 4(d) below.

                (iii)   License agreement between Arbitron and Claritas Inc. for
        PRIZM/Clusters (population) data.

                (iv)    License agreement between Arbitron and Market Statistics
        for demographic and economic data.

                (v)     Software license agreement dated July 17, 2000 between
        Ceridian and Lariat Software, Inc. for software to be used in Company's
        services or processes.

                (vi)    Software license agreement between CSW Research Ltd.,
        and outside third parties. The licensed software is used in connection
        with survey research, including questionnaire design, automated
        telephone dialing, and data analysis. All agreements listed are for a
        one year term and are auto renewing for a like term.

        (b)    None.

        (c)    See Schedule 5.05, Item 3.

        (d)    See the list below.


                                                             
ACT
Add Strip
Adobe Acrobat 4
ADOBE ACROBAT FULL
Adobe After Effects 4
Adobe Illustrator 6
Adobe Illustrator 7
Adobe PageMaker 6.5
Adobe Photoshop 5.5, 6 and 5LE
Adobe Type Manager Deluxe and Lite 4.6
Alladin StuffIt Deluxe 5.5
Allaire Cold Fusion 4
Apple OS 8.6 and 9.0.4
ARCSERVE



   107


                                                             
ASPChart Charting Component
ATAMAN TELNET
ATLAS GIS
AUDIX VOICEPOWER
BackupEXEC
BARSPOOL
C++/DEC
CAS FOR WINDOWS
CDR
CLIENTS & PROFITS
Clients & Profits 4.0

CODE1+
COLD FUSION
COMPARERITE
Corel Draw 6
CRYSTAL INFO
CUTEFTP
DATAJET
DB BRZ
DBASE IV
DEFINITY G1
Deltagraph 4.5
DESIGNER
DEVELOPER
DOC1/DEC
DOC1/NT
DTC MANAGER
EDIFY
EXCEED6
Extensis Portfolio 5
Extensis Suitcase 8 and 9
EZCASE
EZFLOW
Fetch 3.03
FileMaker Pro 3, 4 and 5
FOREHELP
FREELANCE GRAPHICS
GEMBASE
GEOCODER
GHOST
GOLDMINE
HELPDESK
HP UNIX
HYPERION
IMAGE PRO



   108

                                                             
IMAGEBASIC
IMAGEKEY
JAVA/DEC
Kai's Power Tools 3
KAWA
LAN WORKGROUP
LAN WORKPLACE
LAWSON INSIGHT
LEAD TOOLS
LEXMARK TOOLKIT
LISTCONV LOTUS 1-2-3 V4.0
LOTUS 1-2-3 V5.0
LWP PRO 95/NT
MacLink Plus 9.7.1 through 11
Macromedia Dreamweaver 3 and 4
Macromedia Fireworks 3
Macromedia Flash 4 and 5
Macromedia Fontographer 4.1.5
Macromedia Freehand 8.01 and 9
MAILSTREAM
MCAFEE VIRUS SCAN
MEDIAMAX
MICRO FOCUS COBOL
MICRO FOCUS COBOL\DEC
MICROSOFT ACCESS
MICROSOFT EXCEL
MICROSOFT FOXPRO
MICROSOFT FRONTPAGE
Microsoft Internet Explorer 5
MICROSOFT OFFICE 2000
Microsoft Office 98 for Mac
MICROSOFT OFFICE PRO
MICROSOFT OFFICE97
MICROSOFT OFFICE97
Microsoft Outlook Exchange 8.2.1
Microsoft Outlook Express 5
MICROSOFT PROJECT
MICROSOFT PUBLISHER
MICROSOFT VB
MICROSOFT VFOXPRO
MICROSOFT VISSTUDIO
MICROSOFT WIN 2000
Microsoft Windows Media Player
MICROSOFT WORD
MICRPSOFT POWERPNT



   109
                                                             
MITEK ICR/OCR
MS IIS
MS INTERNET EXPLORER
Netscape Communicator 4.7 and 6
NETWARE
NFS Maestro
Norton AntiVirus 5 and 6
Norton Utilities 4 and 5
ODBC FOR OS/2
ODBC FOR WINDOWS
ORACLE/NT
ORACLE/DEC
OS/2 LAN REQUESTER
OS/2 LAN SERVER
PAGEMAKER
PARADOX
PcAnywhere
PHOTOSHOP
PIXTOOLS/EZ
PIXTOOLS/IMAGE PROC
PKZIP/PKUNZIP
Pocket Ethernet AdapterIII
PowerBuilder Desktop
PowerBuilder Professional
PowerPoint
PPI Modem Utilities
Project
PROMIX
ProtoView
PROXY
PVCS DEC
PVCS TRAKKER
PVCS Version Manager
PVCS\PC Columbia
PVCS\PC New York
QA Plus
QA Plus
QBAL
Quark Express 3.32
Quick Xpense
Quicken ExpensAble
QuickLink II Fax
QuickLink II Windows and DOS
Quancept CATI
Quanquest
Quantum




   110
                                                             
Quanvert
Quanvert DBA
Quicktime
Quinput
Quinput DOS
REELBACKUP
REELIBRARIAN
REFLECTIONS FOR HP
ReFox
Removable Cartridge Disk Utilities
Roadmap to Developer Products and Services
ROBO HELP
ROBOT
ROLM CBXII
ROLM PHONEMAIL
RTPatch for InstallShield Professional
SALES TAX
Sanyo Boot Floppy
SAS
SAVEU2
SCO Unix Driver for AHA
SCSI Interface Kit
SCSI Network Manager
SCSI Pro!
SDK's, DDK's, and Operating Systems
SEAGATE CRYSTAL REPT
Serv-U FTP Server
Sheridan Developer's Toolkit
SideBar Try-n-Buy
Sidekick
SMARTGATE
SmartSuite 97
SmartSuite ATM Program Disk
SMAX
Solutions Development Kit
Sound Blaster 16 Software
Special Enhancements R410
Spread
SPSS
SQLNET
SQLNET FOR OS/2
SQLPLUS
SQZ!
Stacker
Stacker
Stacker



   111
                                                             
Stacker
Stealth 64
Stealth 64 DRAM
Stealth 64 Video
Stealth II S220
Stealth II S220 Game Sampler CD
Stealth VRAM
Stonefield Database Toolkit
Superdisk for EtherCard
SYLVAN MAPS
SYNCSORT
SYSTEM COMMANDER
T4900 Reference Manual
Tab Pro
TCP/IP
TCP/IP DOS
TCP/IP OS2
Tech Net
TELEMATE
TELETHENA
Test
TEXTPAD
ThinkPad Bundle
Tools and Systems
TOTAL ACCESS STATS
Track for Windows
TrackMate
TRU64 UNIX DEC
TRUE DB GRID PRO 5.0
True DBGrid Pro
True DBGrid Pro VC++
UNIFACE
VBAssist
Vibra 16
Video for Windows Runtime
View for Windows
Viper V330
Viper VLB
VISIO
VISIO NETWORK EQ 2000
Visio Professional
Visio2000 Professional
Vistacom
VISUAL BASIC
Visual Basic Professional
Visual C++



   112

                                                             
Visual C++ Power Tools
Visual C++ Subscription
Visual Components
Visual FoxPro
Visual FoxPro Professional Edition
Visual FoxPro Professional Training Series
Visual FoxPro Windows Professional
Visual FoxPro Windows Standard
Visual J++ Technology Preview 2
Visual Studio 97 Service Pack 3
Visual Studio Enterprise Edition
Visual Studio MSDN Library
Visual Studio Professional Edition
Visual Studio Professional Edition Licenses
Visual Test
VSFlexGrid Pro
VS-OCX
WEBBASE
Windows
WINDOWS 3.51
WINDOWS 95
Windows 95
Windows 95, Win32 SDK
Windows 95, Win32 SDK and Windows NT
Windows 95, Win32 SDK, Backoffice 1.5 SDK
Windows 98
Windows for Workgroups/DOS
WINDOWS NT 4.0 Clients
WINDOWS NT 4.0 Servers
WINDOWS NT 4.0 W/S
Windows NT Server
Windows NT Server
Windows NT Workstation
Windows NT Workstation, Win32 SDK, Windows
NT
DDK
Windows Sound System
Winfax Lite
Winfax Pro
Winfax Pro Patch
WinLib Wizard
WinList for Windows
Winstone 94
Winzip
Wordperfect
Workgroup Add-On for Windows



   113
                                                             
XTree Gold
XTree Gold
zip Install
zip tools 100







        (e)    None.

        (f)    None.

        (g)    Material Software owned and used by Arbitron:

               (i)    Maximi$er/MediaProfessional (owned by Arbitron); performs
        research and sales analysis using respondent-level radio audience
        estimate data.

               (ii)   Tapscan (owned by Arbitron); processes respondent-level
        and summary-level radio audience estimate data.

               (iii)  Qualitap (owned by Arbitron); processes qualitative data.

               (iv)   TV Qualitap (owned by Arbitron and licensed to Tapscan
        Inc. for its exclusive use in the television and cable industries in the
        U.S.); processes qualitative data.

               (v)    TVScan software (owned by Tapscan Inc. and licensed to
        Arbitron for its exclusive use in the radio, agency and advertising
        industries worldwide and the television and cable industries outside the
        U.S.)

    NOTE: COPYRIGHT REGISTRATION APPLICATIONS WERE FILED ON FORM TX IN THE U.S.
             COPYRIGHT OFFICE FOR MAXIMI$ER (A/K/A MEDIAPROFESSIONAL), TAPSCAN,
 TVSCAN AND QUALITAP ON DECEMBER 18, 2000. COPYRIGHT REGISTRATION APPLICATIONS
       WERE FILED ON DECEMBER 28, 2000 FOR COMPANY'S INTERNAL SOFTWARE USED TO
   PRODUCE ITS RATINGS DATA.




   114


                                                                   SCHEDULE 5.19

                           EMPLOYMENT AGREEMENTS

        There is currently an employment agreement with Stephen B. Morris.
Company's policy for its Arbitron division prior to the Spin-Off Consummation
Date is that members of the Arbitron Executive Staff are generally eligible to
receive up to one year's salary as severance in the event of termination of
employment for reasons other than for cause. It is expected that change of
control agreements will be entered into with members of the Executive Staff of
Arbitron Inc. after the Spin-Off Consummation Date.
















   115


                                                                   SCHEDULE 5.21

                          CAPITALIZATION; SUBSIDIARIES

                    Information as of the Effectiveness Date

        1.     Company's capitalization as of the Effectiveness Date:

               No. shares authorized: 500,000,000

               No. shares issued: 161,685,596

               No. shares outstanding: 145,681,462

               Please note that the shares listed above are subject to a reverse
stock split at a ratio of one-for-five. The reverse stock split will be
effective immediately after the Spin-Off Consummation Date.



        2.     Following is a list of Company's Subsidiaries as of the
Effectiveness Date:





- --------------------------------------------------------------------------------------------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- ----------                                 ------------              ------          -----------
- --------------------------------------------------------------------------------------------------
                                                                         
Arbitron Holdings Inc. (First Tier     Delaware               100%                  1000/1000
Arbitron subsidiary) formed in
October 2000
- --------------------------------------------------------------------------------------------------
    CSW Research Ltd. (Second Tier     United Kingdom         100%                  410,000/
    Subsidiary of Arbitron Holdings,
    Inc.)                                                                          405,000
- --------------------------------------------------------------------------------------------------
Euro-Fieldswork Ltd. (First Tier       United Kingdom         100%                  No shares
Arbitron Subsidiary)                                                                yet
                                                                                    authorized
                                                                                    nor issued
- --------------------------------------------------------------------------------------------------
Ceridian Infotech (India) Private                                                   8,400,000/
Limited  (First Tier Arbitron
Subsidiary)                            India                  100%                  1,712,374
- --------------------------------------------------------------------------------------------------
ABR Information Services, Inc.         Florida                100%                  N/A
- --------------------------------------------------------------------------------------------------
    ABR Employer Services, Inc.        Florida                100%                  N/A
- --------------------------------------------------------------------------------------------------
    ABR Properties, Inc.               Florida                100%                  N/A
- --------------------------------------------------------------------------------------------------
    BMC Consultants, Inc.              Colorado               100%                  N/A
- --------------------------------------------------------------------------------------------------


   116




- --------------------------------------------------------------------------------------------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- ----------                                 ------------              ------          -----------
- --------------------------------------------------------------------------------------------------
                                                                         
    Ceridian Benefits Services, Inc.   Florida                100%                  N/A
    (f/k/a ABR Benefits Services,
        Inc.)
- --------------------------------------------------------------------------------------------------
    Ceridian Retirement Plan           Florida                100%                  N/A
    Services, Inc.
    (f/k/a ABR Retirement Plan
    Services, Inc.)
- --------------------------------------------------------------------------------------------------
    Charing Company, Inc.              Wisconsin              100%                  N/A
- --------------------------------------------------------------------------------------------------
    Chowning, Ltd.                     Wisconsin              100%                  N/A
- --------------------------------------------------------------------------------------------------
        The Barrington Group           Wisconsin              100%                  N/A
- --------------------------------------------------------------------------------------------------
    Matthews, Malone & Associates,     Arizona                100%                  N/A
    Ltd.
- --------------------------------------------------------------------------------------------------
    MidAtlantic 401(k) Services, Inc.  Virginia               100%                  N/A
- --------------------------------------------------------------------------------------------------
    Western Pension Service            California             100%                  N/A
    Corporation
- --------------------------------------------------------------------------------------------------
        Ceridian Investors Advisors,   Florida                100%                  N/A
        Inc.
        (f/k/a ABR Investment
        Advisors, Inc.)
- --------------------------------------------------------------------------------------------------
Arbat Middle East E.C. (held in        Bahrain                100%                  N/A
trust) (inactive)
- --------------------------------------------------------------------------------------------------
Ceridian Canada Holdings, Inc.         Delaware               100%                  N/A
- --------------------------------------------------------------------------------------------------
    Ceridian Canada Ltd.               Canada                 100%                  N/A
- --------------------------------------------------------------------------------------------------
        33444651 Canada Ltd.           Canada                 100%                  N/A
- --------------------------------------------------------------------------------------------------
    Ceridian Performance Partners      Canada                 100%                  N/A
    Ltd.
- --------------------------------------------------------------------------------------------------
Ceridian Holdings U.K. Limited         United Kingdom         100%                  N/A
- --------------------------------------------------------------------------------------------------
    Centrefile Limited                 United Kingdom         100%                  N/A
- --------------------------------------------------------------------------------------------------
        Centrefile APS Limited         United Kingdom         100%                  N/A
- --------------------------------------------------------------------------------------------------
        Centrefile (Mauritius) Ltd.    Mauritius              100%                  N/A
- --------------------------------------------------------------------------------------------------
    Ceridian Performance Partners      United Kingdom         100%                  N/A
    Limited
- --------------------------------------------------------------------------------------------------
        Usertech UK Limited            United Kingdom         100%                  N/A
- --------------------------------------------------------------------------------------------------




- --------------------------------------------------------------------------------------------------
                                                                                       NO. OF
                                                                 PERCENTAGE OF         SHARES
                                          STATE OR OTHER       VOTING SECURITIES     AUTHORIZED/
                                          JURISDICTION OF     OWNED BY IMMEDIATE      ISSUED &
SUBSIDIARY                                 ORGANIZATION              PARENT          OUTSTANDING
- ----------                                 ------------              ------          -----------
- --------------------------------------------------------------------------------------------------
                                                                         
Ceridian Tax Services, Inc.            California             100%                  N/A
- --------------------------------------------------------------------------------------------------
Comdata Network, Inc.                  Maryland               100%                  N/A
- --------------------------------------------------------------------------------------------------
    Comdata Network Inc. of            California             100%                  N/A
    California
- --------------------------------------------------------------------------------------------------
    Comdata Telecommunications         Delaware               100%                  N/A
    Services, Inc.
- --------------------------------------------------------------------------------------------------
    International Automated Energy     Florida                100%                  N/A
    Systems, Inc.
- --------------------------------------------------------------------------------------------------
    Permicom Permits Services, Inc.    Canada                 100%                  N/A
- --------------------------------------------------------------------------------------------------
    Stored Value Systems, Inc.         Delaware               100%                  N/A
- --------------------------------------------------------------------------------------------------
Computing Devices International        Delaware               100%                  N/A
Satellite Services, Inc.
- --------------------------------------------------------------------------------------------------
Partnership Group, Inc., The           Pennsylvania           100%                  N/A
- --------------------------------------------------------------------------------------------------
Plan Ware Inc. (inactive)              Pennsylvania           100%                  N/A
- --------------------------------------------------------------------------------------------------
POWERPAY.COM INC.                      New Jersey             100%                  N/A
(f/k/a Ceridian Small Business
Solutions, Inc.)
- --------------------------------------------------------------------------------------------------
User Technology Services, Inc.         New York               100%                  N/A
- --------------------------------------------------------------------------------------------------


   117


3.      Following is a list of Company's Arbitron Subsidiaries as of the
        Effectiveness Date:



- --------------------------------------------------------------------------------------------------
SUBSIDIARY                                          STATE OR OTHER JURISDICTION OF ORGANIZATION
- -----------                                         ----------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
                                              
Arbitron Holdings Inc.                            Delaware

- --------------------------------------------------------------------------------------------------
    CSW Research Limited                          United Kingdom

- --------------------------------------------------------------------------------------------------
    Euro-Fieldwork Limited                        United Kingdom

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

Ceridian Infotech (India) Private Limited         India
- --------------------------------------------------------------------------------------------------





4.      Following is a list of Company's Material Subsidiaries as of the
    Effectiveness Date:



- --------------------------------------------------------------------------------------------------
MATERIAL SUBSIDIARIES                             STATE OR OTHER JURISDICTION OF ORGANIZATION
- ----------------------                           --------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
                                              
ABR Information Services, Inc.                    Florida
- --------------------------------------------------------------------------------------------------
Comdata Network, Inc.                             Maryland
- --------------------------------------------------------------------------------------------------




                Information as of the Spin-Off Consummation Date

1.      Following is a list of Company's Arbitron Subsidiaries after the Spin-
Off Consummation Date:



- --------------------------------------------------------------------------------------------------
                                                               PERCENTAGE OF      NO. OF SHARES
                                      STATE OR OTHER         VOTING SECURITIES     AUTHORIZED/
                                     JURISDICTION OF        OWNED BY IMMEDIATE       ISSUED &
SUBSIDIARY                             ORGANIZATION                PARENT          OUTSTANDING
- ----------                             ------------                ------          -----------
- --------------------------------------------------------------------------------------------------
                                                                       
Arbitron Holdings Inc.          Delaware                    100%                  1000/1000
- --------------------------------------------------------------------------------------------------
    CSW Research Limited        United Kingdom              100%                  410,000/
                                                                                  405,000
- --------------------------------------------------------------------------------------------------
    Euro-Fieldwork Limited      United Kingdom              100%                  No shares yet
                                                                                  authorized
                                                                                  nor issued
- --------------------------------------------------------------------------------------------------
Ceridian Infotech (India)       India                       100                   8,400,000/
Private Limited                                                                   1,712,374
- --------------------------------------------------------------------------------------------------




        2.      THERE WILL NOT BE ANY MATERIAL SUBSIDIARIES OF THE COMPANY AS OF
                                                 THE SPIN-OFF CONSUMMATION DATE.

   118






                                                                   SCHEDULE 5.23

                       BROKERS' FEES AND RELATED EXPENSES

None.












   119


                                                                   SCHEDULE 5.25

                              THIRD PARTY CONSENTS

None.














   120


                                                                   SCHEDULE 7.01

                                 PERMITTED LIENS

None.




















   121


                                                                SCHEDULE 7.02(b)

                               TRANSFERABLE ASSETS

1.      Sale of assets of Ceridian Infotech (India) Private, Limited

2.      Sale of assets of CSW Research Limited

3.      Dissolution of Euro-Fieldword Limited

3.      Separation ("Spin-off") of Ceridian Corporation into two publicly traded
companies to be known as Ceridian Corporation and Arbitron Inc., respectively,
pursuant to Spin-off documents.



















   122

                                                                SCHEDULE 7.06(b)

                              PERMITTED INVESTMENTS

1.      The following is a list of the Investments of the Company and its
Subsidiaries (other than Investments in Subsidiaries) as of the Effectiveness
Date:


 

- ----------------------------------------------------------------------------------------------------
                                 STATE OR OTHER
                                 JURISDICTION OF    PERCENTAGE OF VOTING
  COMPANY                        INCORPORATION      SECURITIES OWNED        ARBITRON INVESTMENT
  -------                        -------------      ----------------        -------------------
- ----------------------------------------------------------------------------------------------------
                                                                 

Barrios Technology, Inc.       Texas                 9.9%                    0
- ----------------------------------------------------------------------------------------------------

Buyers' Health Care Action     Minnesota             9.3%                    0
Group, Inc.
- ----------------------------------------------------------------------------------------------------
HotJobs.com, Ltd.              Delaware              1.4%                    0

- ----------------------------------------------------------------------------------------------------
Revelation Technologies, Inc.  Delaware              7.4%                    0
- ----------------------------------------------------------------------------------------------------
TruckersB2B, Inc.              Delaware           800,000 shares             0
- ----------------------------------------------------------------------------------------------------

ADcom Information Services,    Delaware              13.75%                  1994:
Inc.                                                                         $2,000,000
                                                                             1995:
                                                                             $1,000,000
                                                                             1996:
                                                                             -----
                                                                             $1,585,000
                                                                             ----------
                                                                             Total:
                                                                             $4,585,000
- ---------------------------------------------------------------------------------------------------
The Center for Online          Florida            2.8%                    2000:   $2,000
Learning, Inc.
- ---------------------------------------------------------------------------------------------------
Symmetrical Holdings, Inc.     Florida            7.5%                    1997:     $900,000
(f/k/a Symmetrical Resources                                              1998:     $500,000
Corporation)                                                              ------------------
                                                                          Total:  $1,400,000
- ---------------------------------------------------------------------------------------------------




2.      The following is a list of the Investments of the Company and its
Subsidiaries (other than Investments in Subsidiaries) as of the Spin-Off
Consummation Date:




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

COMPANY                                    STATE OR OTHER JURISDICTION OF INCORPORATION
- ----------                                 --------------------------------------------
- -------------------------------------------------------------------------------------------------
                                       
ADcom Information Services, Inc.           Delaware
- -------------------------------------------------------------------------------------------------
The Center for Online Learning, Inc.       Florida
- -------------------------------------------------------------------------------------------------


   123


- -------------------------------------------------------------------------------------------------
                                       
Symmetrical Holdings, Inc.                 Florida
f/k/a Symmetrical Resources Corporation)
- -------------------------------------------------------------------------------------------------












   124

                                                                  SCHEDULE 10.02

                              ADDRESSES FOR NOTICES

CERIDIAN CORPORATION
Arbitron Corporation
9705 Patuxnet Woods Dr.
Columbia, MD 20146

Attention:     Dolores Cody, Vice President
               Telephone:  (410) 312-8276
               Facsimile:  (410) 312-8613
               Electronic Mail:  dolores.cody@arbitron.com
               Website:  www.arbitron.com

cc: Christopher M. Scotti
    Oppenheimer Wolff & Donnelly LLP
    Plaza VII
    Suite 3400
    Minneapolis, MN 55402
    Telephone:  612-607-7396
    Facsimile:  612-607-7100
    Electronic Mail:  cscotti@oppenheimer.com


NOTE HOLDERS
John Hancock Life Insurance Company
200 Clarendon Street, 57th Floor
Boston, Massachusetts 02117

Attention:     Daniel C. Budde
               Telephone: (617) 572-9644
               Facsimile: (617) 572-5068
               Electronic Mail: DBudde@JHancock.com
               Website: www.jhancock.com

cc: Brewster W. Lee
    Choate, Hall & Stewart
    Exchange Place,  53 State Street
    Boston, MA 02109
    Telephone: (617) 248-5051
    Facsimile: (617) 248-4000
    Electronic Mail: Blee@Choate.com








   125




                                                                       EXHIBIT A

                                  FORM OF NOTE

               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               __________________, THE ORIGINAL HOLDER OF THIS NOTE, AND THE
               COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY
               ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
               INTERCREDITOR AGREEMENT.


                              CERIDIAN CORPORATION

                 9.96% Senior Secured Note due January 31, 2008



No. R-___
$___________                                                    January 31, 2001


        CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to _________________________________, or
registered assigns, the principal amount of ___________________________________
DOLLARS ($_______________) on January 31, 2008, with interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid balance of such
principal amount at a rate per annum equal to 9.96%, from the date hereof,
payable quarterly on the last day of each January, April, July and October after
the date hereof, commencing on April 30, 2001, until the principal hereof shall
have become due and payable (whether at maturity or at a date fixed for
prepayment or by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and (to the extent
permitted by applicable law) premium, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate per annum
equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of
the holder hereof, on demand, and, upon acceleration of this Note, together with
the Make-Whole Amount specified in the Note Purchase Agreement hereinafter
referred to, as liquidated damages and not as a penalty; provided that in no
event shall the amount payable by the Company as interest on this Note exceed
the highest lawful rate permissible under any law applicable hereto. Payments of
principal, premium, if any, and interest hereon shall be made in lawful money of
the United States of America by the method and at the address for such purpose
specified in the Note Purchase Agreement hereinafter referred to, and such
payments shall be overdue for purposes


   126

hereof if not made on the originally scheduled date of payment therefor, without
giving effect to any applicable grace period.

        This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

        This Note is subject to prepayment only as specified in the Note
Purchase Agreement.

        Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

        This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

        In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

        The parties hereto, including the makers and all guarantors and
endorsers of this Note, hereby waive presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.

        This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


            [The remainder of this page is intentionally left blank.]


   127


        IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                                 CERIDIAN CORPORATION


                                                 By
                                                   --------------------------
                                                                         (Title)









   128


                               FORM OF ASSIGNMENT

                          [To be signed only upon transfer of Note]

                                      For value received, the undersigned hereby
sells, assigns and transfers unto                  the within Note, and appoints
Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full
power of substitution in the premises.

Date:                ,     .



                                ................................................
                              (Signature must conform in all respects to name of
                               Holder as specified on the face of the Note)


Signed in the presence of



 .........................



















   129





                                                                       EXHIBIT B

                         FORM OF COMPLIANCE CERTIFICATE

                                            Financial Statement Date:          ,
                                                                     ----------


To:     John Hancock Life Insurance Company as Note Holder Representative

Ladies and Gentlemen:

        Reference is made to that certain Credit Agreement, dated as of January
31, 2001 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Note Agreement;" the terms defined therein being
used herein as therein defined), among CERIDIAN CORPORATION, a Delaware
corporation (the "Company"), the Note Holders from time to time party thereto,
and John Hancock Life Insurance Company as the Note Holder Representative for
such Note Holders (in such capacity, the "Note Holder Representative").

        The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _______________________________________________ of the
Company, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Company, and that:

            [Use following for fiscal year-end financial statements]

        1.     Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Credit Agreement for the fiscal
year of the Company ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.

           [Use following for fiscal quarter-end financial statements]

        1.  Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of the
Company ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

        2.  The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Company during the accounting period covered by the attached
financial statements.


   130

        3.  A review of the activities of the Company during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Company performed and observed
all its Obligations under the Note Documents, and

                                  [select one:]

        [to the best knowledge of the undersigned during such fiscal period, the
Company performed and observed each covenant and condition of the Note Documents
applicable to it.]

                                     --or--

        [the following covenants or conditions have not been performed or
observed and the following is a list of each such Default or Event of Default
and its nature and status:]

        4.  The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.

        IN WITNESS WHEREOF, the undersigned has executed this Certificate as of

- -------------, ---------.

                                                   CERIDIAN CORPORATION

                                                   By:
                                                        ------------------------

                                                   Name:
                                                          ----------------------

                                                   Title:
                                                           ---------------------








   131

                For the Quarter/Year ended ___________________("Statement Date")

                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

                    ARTICLE XISECTION 7.10 - LEVERAGE RATIO
                    ---------------------------------------

        11.01   Consolidated Funded Indebtedness of the Company and its
                      Subsidiaries as of the Statement Date:

        (a)
All obligations for borrowed money of the Company and its Subsidiaries on a
consolidated basis at the Statement Date: $


        (b)
All obligations of the Company and its Subsidiaries as evidenced by bonds,
debentures, notes and Note agreements on a consolidated basis at the Statement
Date: $

        (c)
All obligations of the Company and its Subsidiaries in respect of letters of
credit, surety bonds, bankers' acceptances or similar instruments on a
consolidated basis at the Statement Date: $

        (d)
___________________________________________________All obligations of the
Company and its Subsidiaries to pay the deferred purchase price of property or
services (other than trade payables entered into in the Ordinary Course of
Business pursuant to ordinary terms and paid within the specified time) on a
consolidated basis at the Statement



        (e)
The capitalized amount of all Capital Leases of the Company and its Subsidiaries
that would appear on a balance sheet of such Persons prepared as of the
Statement Date in accordance with GAAP and the capitalized amount of the
remaining lease payments under any Synthetic Lease Obligations incurred by the
Company or any of its Subsidiaries which would appear on a balance sheet of such
Persons prepared as of the Statement Date in accordance with GAAP if such lease
were accounted for as a Capital Lease:

        (f)
All guaranty obligations of the Company and its Subsidiaries in respect of
obligations of any Person in the nature of the obligations referenced in Lines
I.A.1 through I.A.4 above:

        (g)
Consolidated Funded Indebtedness as of the Statement Date
[Line I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 + I.A.6]:


Statement Date:


   132

        11.02   Consolidated EBITDA of the Company and its Subsidiaries for the
period of the four fiscal quarters ending on the Statement Date ("Test Period"):









   133

        (a)
Net income of the Company and its Subsidiaries on a consolidated basis for the
Test Period, as determined in accordance with GAAP:

        (b)
All extraordinary non-cash losses and non-cash gains, and non-cash losses and
non-cash gains from discontinued operations of the Company and its Subsidiaries
on a consolidated basis for the Test Period: $_____________

_______________________________________

        (c)                                                 All cash payments
made by the Company and its Subsidiaries during the Test Period in respect of
non-cash charges listed on Line I.B.2 of Schedule 2 attached to any Compliance
Certificate delivered to the Administrative Agent prior to the Statement Date
hereof:_________________________________$

        (d)
All interest, premium payments, fees, charges and related expenses of the
Company and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP
for the Test Period, but excluding any fees, charges and expenses of the Company
and its Subsidiaries arising from the negotiation, execution, closing and
consummation of the Spin-Off Documents, the Note Documents, the Private
Placement Documents and any Specified Swap Contracts: $

        (e)
The portion of all rent expense of the Company and its Subsidiaries for the Test
Period under Capital Leases that is treated as interest in accordance with GAAP
on a consolidated basis:

        (f)
The amount of taxes of the Company and its Subsidiaries on a consolidated basis
for the Test Period, based on or measured by income used or included in the
determination of Line I.B.1:

        (g)
All depreciation expense and amortization expense of the Company and its
Subsidiaries on a consolidated basis for the Test Period:

        (h)
All interest income of the Company and its Subsidiaries on a consolidated basis
for the Test Period:

        (i)
Consolidated EBITDA for the Test Period [Line I.B.1 +/- I.B.2 (if the amount in
Line I.B.2 constitutes a loss, it should be added; if it constitutes a gain, it
should be subtracted) - I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 - I.B.8]: $



   134

        11.03   Leverage Ratio
[Line I.A.7 / I.B.9]:                                             _________ to 1

        11.04   Maximum permitted Leverage Ratio at the Statement Date (See
Section 7.10 of the Agreement for ratio applicable to the Statement Date):
_________ to 1

                       COMPLIANCE WITH COVENANT (YES / NO)

             ARTICLE XIISECTION 7.11 - FIXED CHARGE COVERAGE
             -----------------------------------------------------
                                     RATIO
                                     -----


        12.01   Consolidated EBITDA for the Test Period [Line I.B.9]: $_________


        12.02   Taxes actually paid by the Company and its Subsidiaries on a
consolidated basis in cash or Cash Equivalents for the Test Period: $___________

        12.03   Capital expenditures plus (without duplication) PPM Expenditures
of the Company and its Subsidiaries on a consolidated basis for the Test Period:
$_______________________

        12.04   Consolidated Interest Expense of the Company and its
Subsidiaries on a consolidated basis for the Test Period [Line I.B.4 + I.B.5]:
$__________________

        12.05   Current Portion of Long-Term Debt for the Test Period of the
Company and its Subsidiaries on a consolidated basis: $_______________

        12.06   Fixed Charge Coverage Ratio
[(Line II.A - II.B - II.C) /(Line II.D + II.E)]:                 __________ to 1

        12.07   Minimum permitted Fixed Charge Ratio (See Section 7.11 of the
Agreement for ratio    applicable to the Statement Date):        ___________to 1

                       COMPLIANCE WITH COVENANT (YES / NO)


   135


                                                                     EXHIBIT D

                          FORM OF NEW CERIDIAN GUARANTY

        THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made
by NEW CERIDIAN CORPORATION, a Delaware corporation (the "Guarantor"), in favor
of (a) the financial institutions (the "Lenders" and, individually, a "Lender")
from time to time party to that certain Credit Agreement dated as of January 31,
2001 (as renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the
"Company"), the Lenders and BANK OF AMERICA, N.A., as the administrative agent
for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap
Provider" (as defined herein), and (c) the Lenders party from time to time to
the Note Purchase Agreement (collectively, the "Guaranteed Parties" and each,
individually, a "Guaranteed Party").

                                    RECITALS

        WHEREAS, it is a requirement under the Credit Agreement and the Note
Purchase Agreement that Guarantor shall be bound by the terms and conditions of
this Guaranty pending the Spin-Off Consummation Date; and

        WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Company pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;

        WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Company being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;

        NOW, THEREFORE, in consideration of the Administrative Agent and Lenders
entering into the Credit Agreement, the Guarantor hereby agrees as follows:

        SECTION 1 Definitions; Interpretation.

        (a)    Terms Defined in Credit Agreement.  All capitalized terms used in
this Guaranty and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.

        (b)    Certain Defined Terms.  As used in this Guaranty, the following
terms shall have the following meanings:

        "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time pursuant
thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its
capacity as Administrative Agent for the benefit of itself and the other Lenders
from time to time party to the Credit Agreement, and the L/C Issuer; (b) the
Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.



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        "Credit Documents" means, collectively, the Note Documents, the Swap
Documents, and the Note Purchase Documents.

        "Guaranteed Obligations" has the meaning set forth in Section 2(a).

        "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned
to them in the first paragraph hereof.

        "Guarantor Documents" means this Guaranty, and all other certificates,
documents, agreements and instruments delivered to the Guaranteed Parties under
or in connection with this Guaranty.

        "Indemnified Liabilities" has the meaning set forth in Section 15(b).

        "Indemnified Person" has the meaning set forth in Section 15(b).

        "Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the Lenders.

               "Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Lenders), (b) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (c) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (d) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.

               "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.

               "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.

               "Note Holder" means a "Note Holder" under, and as defined in, the
Note Purchase Agreement.

               "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company and the Lenders party thereto.

        "Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the
New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable
value of the property of such Person is not less than the amount that will be
required to pay the probable liability of such





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Person on its debts as they become absolute and matured; (c) such Person is
able to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature
in the normal course of business; (d) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature; and (e) such Person is
not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute
unreasonably small capital.

        "Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.

        "Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

        "Subordinated Debt" has the meaning set forth in Section 7(a).

        "Subordinated Debt Payments" has the meaning set forth in Section 7(b).

        "Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider), (ii) all Account Control Agreements executed by any Note Party under
any Swap Document, (iii) all documents executed by any Note Party to accomplish
cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC
financing statements, notices and other documents executed from time to time or
in connection with any of the foregoing.

        "Swap Documents" means, collectively, (a) any Specified Swap Agreement,
(b) the Swap Collateral Documents, and (c) the Swap Guaranties.

        "Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.

        "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        (c) Interpretation. The rules of interpretation set forth in Section
1.02 of the Credit Agreement shall be applicable to this Guaranty and are
incorporated herein by this reference.

        SECTION 2  Guaranty.

        (a) Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to each of the Guaranteed Parties, and their respective successors,
endorsees, transferees and assigns, the full and prompt payment when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise) and performance of the indebtedness, liabilities and other
obligations of the Company to each such Guaranteed Party,




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whether created under, arising out of or in connection with any of the Credit
Documents, including all Obligations (as independently defined in each of the
Credit Agreement and the Note Purchase Agreement); and any obligations under
any Specified Swap Agreement to the extent arising out of any one or more
Specified Swap Contracts. The terms "indebtedness," "liabilities" and
"obligations" are used herein in their most comprehensive sense and include
any and all advances, debts, obligations and liabilities, now existing or
hereafter arising, whether voluntary or involuntary and whether due or not
due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such indebtedness, liabilities and
obligations may be or hereafter becomes unenforceable or shall be an allowed
or disallowed claim under the Bankruptcy Code or other applicable law. The
foregoing indebtedness, liabilities and other obligations of the Company, and
all other indebtedness, liabilities and obligations to be paid or performed by
the Guarantor in connection with this Guaranty (including any and all amounts
due under Section 15), shall hereinafter be collectively referred to as the
"Guaranteed Obligations."

        (b)    Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's
liability with respect to any of the Guaranteed Obligations which any of the
Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by
their acceptance hereof accept such limitation on the amount of the
Guarantor's liability hereunder to the extent needed to make this Guaranty and
the Guarantor Documents fully enforceable and nonavoidable.

        SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional,
and shall not be affected by any circumstance which might constitute a
discharge of a surety or guarantor other than the indefeasible payment and
performance in full of all Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, the Guarantor agrees as
follows:

        (i)    the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent
upon the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Company or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;

        (ii)   this Guaranty is a guaranty of payment when due and not merely
of collectibility;

        (iii)  the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and

        (iv)   the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:

               (A)    any proceeding under any Debtor Relief Laws with respect
to the Company, any other guarantor or any other Person;



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               (B)    any limitation, discharge, or cessation of the liability
of the Company, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity
or unenforceability in whole or in part of any of the Guaranteed Obligations
or the Note Documents;

               (C)    subject to Section 24 hereof, any merger, acquisition,
consolidation or change in structure of the Company, the Guarantor or any
other guarantor or Person, or any sale, lease, transfer or other disposition
of any or all of the assets or shares of the Company, the Guarantor, any other
guarantor or other Person;

               (D)    any assignment or other transfer, in whole or in part,
of any of the Guaranteed Parties' interests in and rights under this Guaranty
or the other Credit Documents, including the Guaranteed Parties' right to
receive payment of the Guaranteed Obligations;

               (E)    any claim, defense, counterclaim or setoff, other than
that of prior performance, that the Company, the Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the
Credit Documents;

               (F)    the Guaranteed Parties' or any Lender's amendment,
modification, renewal, extension, cancellation or surrender of any Credit
Document;

               (G)    the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;

               (H)    any impairment or invalidity of any collateral securing
any of the Guaranteed Obligations or any failure to perfect any of the Liens
of the Guaranteed Parties thereon or therein; and

               (I)    any other guaranty, whether by the Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Company to the Guaranteed
Parties.

        SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from the
Guarantor:

        (i)    the principal or other amount of the Guaranteed Obligations in
respect of any of the Guaranteed Parties may be increased or decreased as to
such Guaranteed Parties and additional indebtedness or obligations of the
Company under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Documents;

        (ii)   the time, manner, place or terms of any payment under any of
the Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any Guaranteed Obligation or any fee or other
amount payable under such Credit Documents, by an amendment, modification or
renewal of any Credit Documents or otherwise;



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        (iii)  the time for the Company's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;

        (iv)   any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Guaranteed Obligations owing
to such Guaranteed Parties, and may permit or consent to any such action or
any result of such action, and shall not be obligated to demand or enforce
payment upon any collateral, nor shall the Guaranteed Parties be liable to the
Guarantor for any failure to collect or enforce payment or performance of the
Guaranteed Obligations from any Person or to realize on any collateral
therefor;

        (v)    the Guaranteed Parties may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of
any such action, and may apply such security and direct the order or manner of
sale thereof;

        (vi)   the Guaranteed Parties may request and accept other guaranties
of the Guaranteed Obligations and any other indebtedness, obligations or
liabilities of the Company to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to
any such action or the result of any such action; and

        (vii)   the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege
(including the right to accelerate the maturity of any Note and any power of
sale) granted by any Credit Document or other security document or agreement,
or otherwise available to the Guaranteed Parties, with respect to the
Guaranteed Obligations or any collateral, even if the exercise of such right,
remedy, power or privilege affects or eliminates any right of subrogation or
any other right of the Guarantor against the Company;

        all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.

        SECTION 5 Guarantor's Waivers.

        (a)    Certain Waivers.  The Guarantor waives and agrees not to
assert:

                      (i)    any right to require any of the Guaranteed
Parties to marshal assets in favor of the Company, the Guarantor, any other
guarantor or any other Person, to proceed against the Company, any other
guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or
private sale of personal property security constituting the Collateral or
other collateral for the Guaranteed Obligations or comply with any other
provisions of Section 9-504 of the New York UCC (or any




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equivalent provision of any other applicable law) or to pursue any other
right, remedy, power or privilege of the Guaranteed Parties whatsoever;

                      (ii)   the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;

                      (iii)  any defense arising by reason of any lack of
corporate or other authority or any other defense of the Company, the
Guarantor or any other Person;

                      (iv)   any defense based upon the Guaranteed Parties'
errors or omissions in the administration of the Guaranteed Obligations;

               (v)    any rights to set-offs and counterclaims;

                      (vi)   any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Company or any other obligor of the
Guaranteed Obligations for reimbursement; and

                      (vii)  without limiting the generality of the foregoing,
to the fullest extent permitted by law, any defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of
this Guaranty, including any and all benefits that otherwise might be
available to the Guarantor under New York Laws. This means, among other
things: (A) the Guaranteed Parties may collect from the Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Company; and (B) if the Guaranteed Parties forecloses on any real property
collateral pledged by the Company: (1) the amount of the debt may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price, and (2) the
Guaranteed Parties may collect from the Guarantor even if the Administrative
Agent, by foreclosing on the real property collateral, has destroyed any right
the Guarantor may have to collect from the Company. This is an unconditional
and irrevocable waiver of any rights and defenses the Guarantor may have
because the Company's debt is secured by real property.

        (b) Additional Waivers. The Guarantor waives any and all notice of the
acceptance of this Guaranty, and any and all notice of the creation, renewal,
modification, extension or accrual of the Guaranteed Obligations, or the
reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any
right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and
permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Company,
the Guarantor or any other Person with respect to the Guaranteed Obligations.

        (c) Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Company
and any other guarantor. Upon the occurrence and during the continuance of any
Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Company or any such other guarantor




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is joined therein or a separate action or actions are brought against the
Company or any such other guarantor.

        (d)    Financial Condition of Company. The Guarantor shall not have
any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Company or the ability of the Company to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.

        SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that
it may acquire by way of subrogation under this Guaranty, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Guaranty or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of the Guaranteed Parties as against the Company or
other guarantors, whether in connection with this Guaranty, any of the other
Credit Documents or otherwise. If any amount shall be paid to the Guarantor on
account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Guaranteed Parties and shall forthwith be paid to
the Guaranteed Parties (or the Collateral Agent on their behalf) to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents and subject to
the Intercreditor Agreement.

        SECTION 7  Subordination.

        (a)    Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Company to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions
to the Company or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts
payable by the Company to the Guarantor in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (the
"Subordinated Debt") shall be subject, subordinate and junior in right of
payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.

        (b)    No Payments. Other than arising out of the consummation of the
Spin-Off Transaction, as long as any of the Guaranteed Obligations shall
remain outstanding and unpaid, the Guarantor shall not accept or receive any
payment or distribution by or on behalf of the Company, directly or
indirectly, of assets of the Company of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the Subordinated Debt ("Subordinated Debt
Payments"), except that if no Event of Default exists and no notice




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described below has been received by the Guarantor, the Guarantor shall be
entitled to accept and receive any and all payments. During the existence of
an Event of Default (or if any Event of Default would exist immediately after
the making of a Subordinated Debt Payment), and upon receipt by the Company of
notice from the Guaranteed Parties (or the Collateral Agent on their behalf)
of such Default, and until such Event of Default is cured or waived, pursuant
to the terms of the applicable Credit Documents, the Company shall not make,
accept or receive any Subordinated Debt Payment. In the event that,
notwithstanding the provisions of this Section 7, any Subordinated Debt
Payments shall be received in contravention of this Section 7 by the Guarantor
before all Guaranteed Obligations are paid in full in cash or cash
equivalents, such Subordinated Debt Payments shall be held in trust for the
benefit of the Guaranteed Parties and shall be paid over or delivered to the
Guaranteed Parties (or the Collateral Agent on their behalf) for application
to the payment in full in cash or cash equivalents of all Guaranteed
Obligations remaining unpaid to the extent necessary to give effect to this
Section 7, after giving effect to any concurrent payments or distributions to
the Guaranteed Parties in respect of the Guaranteed Obligations.

        (c)    Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):

                      (i)    accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect
of the Subordinated Debt;

                      (ii)   exercise any rights under or with respect to (A)
any guaranties of the Subordinated Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Company or
asserting any claim or interest in any insurance with respect to any
collateral, or attempt to do any of the foregoing;

                      (iii)  exercise any rights to set-offs and counterclaims
in respect of any indebtedness, liabilities or obligations of the Guarantor to
the Company against any of the Subordinated Debt; or

                      (iv)   commence, or cause to be commenced, or join with
any creditor other than the Guaranteed Parties in commencing, any proceeding
under any Debtor Relief Laws as against Company.

        (d)    Subordination Upon Any Distribution of Assets of the Company.
In the event of any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Company, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim
in any such proceeding, shall first be paid in full in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt
Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt Payment to which the Guarantor would be entitled except for
the provisions hereof, shall be paid






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or delivered by the trustee in bankruptcy, receiver, assignee for the benefit
of creditors or other liquidating agent making such payment or distribution
directly to the Guaranteed Parties (or the Collateral Agent acting on their
behalf) for application to the payment of the Guaranteed Obligations in
accordance with clause (i), after giving effect to any concurrent payment or
distribution or provision therefor to the Guaranteed Parties in respect of
such Guaranteed Obligations.

        (e)    Authorization to Guaranteed Parties.  If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws
is commenced by or against the Company or its property:

                      (i)    the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name
of the Guarantor or otherwise), but shall have no obligation, to demand, sue
for, collect and receive every payment or distribution in respect of the
Subordinated Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Debt)
as they may deem necessary or advisable for the exercise or enforcement of any
of the rights or interests of the Guaranteed Parties; and

                      (ii)   the Guarantor shall promptly take such action as
any of the Guaranteed Parties may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to the Guaranteed Parties (or the Collateral Agent
acting on their behalf), such powers of attorney, assignments and other
instruments as they may request to enable them to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any and
all Subordinated Debt Payments.

        SECTION 8  Continuing Guaranty; Reinstatement.

        (a)    Continuing Guaranty.  This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding
upon the Guarantor until the payment and performance in full of all Guaranteed
Obligations.

        (b)    Reinstatement. This Guaranty shall continue to be effective or
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Company (or
receipt of any proceeds of collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to the Company, its estate, trustee, receiver or any
other Person (including under any Debtor Relief Laws or other state or federal
law), or must otherwise be restored by the Guaranteed Parties, whether as a
result of proceedings under any Debtor Relief Laws or otherwise. To the extent
any payment is so rescinded, set aside, voided or otherwise repaid or
restored, the Guaranteed Obligations shall be revived in full force and effect
without reduction or discharge for such payment. All losses, damages, costs
and expenses that the Guaranteed Parties may suffer or incur as a result of
any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Guaranteed Parties contained in Section 15.



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        SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the
foregoing provisions of this Guaranty and not in limitation of any other right
which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor
shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties
(or the Collateral Agent on their behalf) an amount equal to the amount of the
Guaranteed Obligations then due as aforesaid (including interest which, but
for the filing of a petition in any proceeding under any Debtor Relief Laws
with respect to the Company, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Company for such
interest in any such proceeding under any Debtor Relief Laws). The Guarantor
shall make each payment hereunder, unconditionally in full without set-off,
counterclaim or other defense, or deduction for any Taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Collateral
Agent at such office or account of any Guaranteed Party as any of the
Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All
such payments shall be promptly applied from time to time by the Guaranteed
Parties as provided in the Credit Documents.

        SECTION 10 Representations and Warranties. The Guarantor represents
and warrants to the Guaranteed Parties that:

        (a)    Organization and Powers. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business
and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would have a Material Adverse Effect and has
all requisite power and authority: (i) to own its assets and carry on its
business, and (ii) to execute, deliver and perform its obligations under the
Guarantor Documents and Spin-Off Documents.

        (b)    Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor
Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly
authorized by all necessary corporate action of the Guarantor, and do not and
will not: (i) contravene the terms of the Guarantor's organization documents
or (ii) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which the Guarantor is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Guarantor or its property is
subject, or (iii) violate any Laws.

        (c)    Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

        (d)    Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the




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due execution, delivery or performance by, or enforcement against, the
Guarantor of the Guarantor Documents, (ii) the execution, delivery or
performance by or enforcement against the Guarantor of the Spin-Off Documents
or (iii) the consummation of the Spin-Off Transaction.

        (e)    No Prior Assignment. The Guarantor has not previously assigned
any interest in the Subordinated Debt or any collateral relating thereto, no
Person other than the Guarantor owns an interest in the Subordinated Debt or
any such collateral (whether as joint holders of the Subordinated Debt,
participants or otherwise), and the entire Subordinated Debt is owing only to
the Guarantor.

        (f)    Solvency. Immediately prior to and after and giving effect to
(i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.

        (g)    Consideration. The Guarantor has received at least "reasonably
equivalent value" (as such phrase is used in Section 548 of the Bankruptcy
Code) and "fair consideration" (as such phrase is used in Section 272 of the
New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is
a party.

        (h)    Independent Investigation. The Guarantor hereby acknowledges
that it has undertaken its own independent investigation of the financial
condition of the Company and all other matters pertaining to this Guaranty and
further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto.
The Guarantor represents and warrants that it has received and reviewed copies
of the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information
concerning the financial condition of the Company and any other matters
pertinent hereto that the Guarantor may desire. The Guarantor is not relying
upon or expecting the Guaranteed Parties to furnish to the Guarantor any
information now or hereafter in the Guaranteed Parties' possession concerning
the financial condition of the Company or any other matter.

        SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.

        SECTION 12 Additional Covenants. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that:

        (a)    Preservation of Existence, Etc. The Guarantor shall, and shall
cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the
case of this clause (ii) where the non-preservation could not reasonably be
expected to have a Material Adverse Effect.




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        (b)    Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and
assurances and perform such acts as any of the Guaranteed Parties shall deem
reasonably necessary or appropriate to effectuate the purposes of this
Guaranty and the other Guarantor Documents, and promptly provide the
Guaranteed Parties with evidence of the foregoing satisfactory in form and
substance to the Guaranteed Parties.

        SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or to such replacement Swap Provider may be
appointed from time to time consistent with the Intercreditor Agreement),
according to the information listed in Schedule 10.02 of the Credit Agreement
for such party as a Lender and (b) any notice to the Lenders shall be
delivered to the address specified for such Persons in the Note Purchase
Agreement (or to such replacement Lenders as may be appointed from time to
time consistent with the Intercreditor Agreement). Notices to the Guarantor
shall be sent or delivered to the address set forth in the Credit Agreement
for the Company. All such notices, requested and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.

        SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of
any Guaranteed Party to exercise, and no delay in exercising on the part of
any Guaranteed Party, any right, remedy, power or privilege hereunder or under
any other Guarantor Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.

        SECTION 15 Costs and Expenses; Indemnification.

        (a)    Costs and Expenses.  The Guarantor shall:

                      (i)    whether or not the transactions contemplated
hereby are consummated, pay or reimburse each of the Guaranteed Parties for
all costs and expenses incurred by them in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Guaranty, any other Guarantor Document and any other
documents prepared in connection herewith or therewith and the consummation of
the transactions contemplated hereby and thereby; and

                      (ii)   pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Notes (including
in connection with any "workout" or restructuring regarding the Notes, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).






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        (b)    Indemnification. The Company shall indemnify, defend and hold
each of the Guaranteed Parties and each Lender and Note Holder and each of its
respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suites, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in favor of any
third-party in any way relating to or arising out of this Guaranty or any
document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under
or in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any proceeding under any
Debtor Relief Laws or appellate proceeding) related to or arising out of this
Guaranty or relating to the Collateral, whether or not any Indemnified Person
is a party thereto (the "Indemnified Liabilities"); provided that the
Guarantor shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting from the gross negligence or
willful misconduct of such Indemnified Person.

        (c)    Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at
the sole cost and expense of the Guarantor.

        (d)    Interest. Any amounts payable to the Guaranteed Parties under
this Section 15 if not paid upon demand shall bear interest from the date of
such demand until paid in full, at the Default Rate.

        SECTION 16 Right of Set-Off. In addition to any rights and remedies of
the Guaranteed Parties and the Lenders provided by law, if an Event of Default
exists or any reimbursement or payment obligation under any of the Credit
Documents has been accelerated, each of the Guaranteed Parties and Lenders is
hereby authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Person to or for the credit or the account of the
Guarantor against any and all of the obligations of the Guarantor then due and
owing, irrespective of whether or not such Person shall have made any demand
upon the Company or the Guarantor under any of the Credit Documents. Each
Lender and the Guaranteed Parties shall promptly notify the Guarantor (through
the Collateral Agent) after any such set-off and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders and
Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which such Persons may have.

        SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the
Lenders, or the Guaranteed Parties shall be under any obligation to marshal
any assets in favor of the Guarantor or any other Person or against or in
payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set




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aside or required (including pursuant to any settlement entered into by the
Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief
Laws or otherwise, then (a) to the extent of such recovery the obligation or
part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Collateral Agent upon demand its pro rata share of any amount so recovered
from or repaid by the Collateral Agent.

        SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the
sole protection and benefit of the Lenders, the Lenders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person
(other than any Indemnified Person specified herein) shall be a direct or
indirect beneficiary of, or shall have any direct or indirect cause of action
or claim in connection with, this Guaranty. The Guaranteed Parties, by their
acceptance of this Guaranty, shall not have any obligations under this
Guaranty to any Person other than the Guarantor, and such obligations shall be
limited to those expressly stated herein.

        SECTION 19  Binding Effect; Assignment.

        (a)    Successors and Assigns. The provisions of this Guaranty shall
be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.

        (b)    Assignment. The Guarantor shall not have the right to assign or
transfer its rights and obligations hereunder or under any other Guarantor
Documents without the prior written consent of the Required Lenders. Each of
the Guaranteed Parties, the Lenders and the Lenders may, without notice to or
consent by the Guarantor, sell, assign, transfer or grant participations in
all or any portion of such Person's rights and obligations hereunder and under
the other Guarantor Documents in connection with any sale, assignment,
transfer or grant of a participation by such Person in accordance with Section
10.07 of the Credit Agreement or in its rights and obligations thereunder and
under any of the other Credit Documents. The Guarantor agrees that in
connection with any such sale, assignment, transfer or grant by any Lender,
such Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Guarantor and its
Subsidiaries.

        SECTION 20 Governing Law and Jurisdiction.

        (a)    THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES




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CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL
COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR
OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

        SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        SECTION 22 Entire Agreement; Amendments. This Guaranty, together with
the other Guarantor Documents, embodies the entire agreement of the Guarantor
with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be
amended only by written agreement between the Guarantor and the Guaranteed
Party to whom such amendment relates. Any such amendment shall not effect any
guaranty of the Guarantor granted hereunder to any other Guaranteed Party.

        SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed
Party shall not in any way affect or impair the legality or enforceability of
that or any other provision of this Guaranty or any instrument or agreement
required hereunder in respect of any other Guaranteed Party. The parties
acknowledge that this Guaranty has, solely for reasons of convenience, been
prepared and executed as a single document, but that the legal effect shall be
in all respects as thought the Guarantor had executed separate guaranties, in
favor of each Guaranteed Party. Any provision of this Agreement and the other
Credit Documents to which the Grantor is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such




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jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

        SECTION 24 Termination. This Guaranty shall terminate in all respects
on the Spin-Off Consummation Date, provided, that (i) as of the Spin-Off
Consummation Date, there exists no Default or Event of Default, and (ii) all
of the representations and warranties of the Company contained in Article V of
the Credit Agreement, or which were contained in any Note Document or Spin-Off
Documents furnished prior to the Spin-Off Consummation Date are true and
correct on and as of the Spin-Off Consummation Date, except to the extent that
such representations and warranties specifically refer to any earlier date, in
which case they shall be true and correct as of such earlier date, and (iii)
the Administrative Agent shall have received a certificate of a Responsible
Officer of the Company, dated as of the Spin-Off Consummation Date, certifying
that (A) the Spin-Off Consummation Date has occurred, (B) as of the Spin-Off
Consummation Date there exists no Default or Event of Default, and (C) all of
the representations and warranties of the Company contained in Article V of
the Credit Agreement, or which were contained in any Note Documents or
Spin-Off Documents furnished prior to the Spin-Off Consummation Date, are true
and correct on and as of the Spin-Off Consummation Date, except to the extent
that such representations and warranties specifically refer to an earlier
date, in which case they shall be certified as being true and correct as of
such earlier date.



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        IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of
the date first above written.

                                                  NEW CERIDIAN CORPORATION


                                                  By:
                                                     -------------------------
                                                  Title:
                                                        ----------------------

                                                  Address:
                                                  New Ceridian Corporation
                                                  3311 East Old Shakopee Road
                                                  Minneapolis, MN 55425-1640

                                                  Attn: John H. Grierson
                                                  Fax No.: (952) 853-3932




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                                                                     EXHIBIT E

                         FORM OF SUBSIDIARY GUARANTY

        THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made
by each of the Subsidiaries listed on Schedule 1 hereto (collectively, the
"Guarantor"), in favor (a) of the financial institutions (each a "Lender" and,
collectively, the "Lenders") from time to time party to that certain Credit
Agreement dated as of January 31, 2001 (as renewed, extended, modified,
amended or restated from time to time, the "Credit Agreement"), among CERIDIAN
CORPORATION, a Delaware corporation (the "Company"), the Lenders and BANK OF
AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the
"Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c)
the Lenders (as defined herein) (collectively, the "Guaranteed Parties" and
each, individually, a "Guaranteed Party").

                                   RECITALS

        WHEREAS, it is a requirement under of the Credit Agreement and the
Note Purchase Agreement that Guarantor shall be bound by the terms and
conditions of this Guaranty pending the Spin-Off Consummation Date; and

        WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Company pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;

        WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Company being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;

        NOW, THEREFORE, in consideration of the Administrative Agent and
Lenders entering into the Credit Agreement, the Guarantor hereby agrees as
follows:

        SECTION 1 Definitions; Interpretation.

        (a)    Terms Defined in Credit Agreement.  All capitalized terms used
in this Guaranty and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

        (b)    Certain Defined Terms.  As used in this Guaranty, the following
terms shall have the following meanings:

        "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time
pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A.,
in its capacity as Administrative Agent for the benefit of itself and the
other Lenders from time to time party to the Credit Agreement, and the L/C
Issuer; (b) the Lenders for


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the benefit of itself and the other Lenders from time to time party to the
Note Purchase Agreement; and (c) the Swap Provider.

        "Credit Documents" means, collectively, the Note Documents, the Swap
Documents, and the Note Purchase Documents.

        "Guaranteed Obligations" has the meaning set forth in Section 2(a).

        "Guaranteed Parties" and "Guaranteed Party" have the meanings assigned
to them in the first paragraph hereof.

        "Guarantor Documents" means this Guaranty, and all other certificates,
documents, agreements and instruments delivered to the Guaranteed Parties
under or in connection with this Guaranty.

        "Indemnified Liabilities" has the meaning set forth in Section 15(b).

         "Indemnified Person" has the meaning set forth in Section 15(b).

        "Intercreditor Agreement" means that Intercreditor Agreement dated as
of January ___, 2001 among the Collateral Agent, the Administrative Agent, the
Swap Provider, and the Lenders Agent.

               "Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Lenders), (b) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (c) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (d) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.

               "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.

               "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.

               "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.

               "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Lenders and the other
Lenders party thereto.

        "Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of






   155







Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes
of the New York Uniform Fraudulent Conveyance Act; (b) the present fair
saleable value of the property of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course
of business; (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital.

        "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into
between the Company and the Swap Provider as swap counterparties.

        "Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting
a "Specified Swap Contract" as defined in the Credit Agreement.

        "Subordinated Debt" has the meaning set forth in Section 7(a).

        "Subordinated Debt Payments" has the meaning set forth in Section
7(b).

        "Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider), (ii) all Account Control Agreements executed by any Note Party
under any Swap Document, (iii) all documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (iv) all
licenses, UCC financing statements, notices and other documents executed from
time to time or in connection with any of the foregoing.

        "Swap Documents" means, collectively, (a) any Specified Swap
Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties.

        "Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.

        "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        (c)    Interpretation. The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and
are incorporated herein by this reference.

        SECTION 2  Guaranty.

        (a)    Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to the Guaranteed Parties, and their respective successors,
endorsees, transferees and assigns, the






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full and prompt payment when due (whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise) and performance of
the indebtedness, liabilities and other obligations of the Company to each
such Guaranteed Party, whether created under, arising out of or in connection
with any of the Credit Documents, including all Obligations (as independently
defined in each of the Credit Agreement and the Note Purchase Agreement); and
any obligations under any Specified Swap Agreement to the extent arising out
of any one or more Specified Swap Contracts. The terms "indebtedness,"
"liabilities" and "obligations" are used herein in their most comprehensive
sense and include any and all advances, debts, obligations and liabilities,
now existing or hereafter arising, whether voluntary or involuntary and
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether recovery upon such indebtedness,
liabilities and obligations may be or hereafter becomes unenforceable or shall
be an allowed or disallowed claim under the Bankruptcy Code or other
applicable law. The foregoing indebtedness, liabilities and other obligations
of the Company, and all other indebtedness, liabilities and obligations to be
paid or performed by the Guarantor in connection with this Guaranty (including
any and all amounts due under Section 15), shall hereinafter be collectively
referred to as the "Guaranteed Obligations."

        (b)    Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's
liability with respect to any of the Guaranteed Obligations which any of the
Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by
their acceptance hereof accept such limitation on the amount of the
Guarantor's liability hereunder to the extent needed to make this Guaranty and
the Guarantor Documents fully enforceable and nonavoidable.

        SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional,
and shall not be affected by any circumstance which might constitute a
discharge of a surety or guarantor other than the indefeasible payment and
performance in full of all Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, the Guarantor agrees as
follows:

        (i)    the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent
upon the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Company or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;

        (ii)   this Guaranty is a guaranty of payment when due and not merely
of collectibility;

        (iii)  the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and

        (iv)   the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:




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               (A)    any proceeding under any Debtor Relief Laws with respect
to the Company, any other guarantor or any other Person;

               (B)    any limitation, discharge, or cessation of the liability
of the Company, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity
or unenforceability in whole or in part of any of the Guaranteed Obligations
or the Note Documents;

               (C)    any merger, acquisition, consolidation or change in
structure of the Company, the Guarantor or any other guarantor or Person, or
any sale, lease, transfer or other disposition of any or all of the assets or
shares of the Company, the Guarantor, any other guarantor or other Person;

               (D)    any assignment or other transfer, in whole or in part,
of any of the Guaranteed Parties' interests in and rights under this Guaranty
or the other Credit Documents, including the Guaranteed Parties' right to
receive payment of the Guaranteed Obligations;

               (E)    any claim, defense, counterclaim or setoff, other than
that of prior performance, that the Company, the Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the
Credit Documents;

               (F)    the Guaranteed Parties' amendment, modification,
renewal, extension, cancellation or surrender of any Credit Document;

               (G)    the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;

               (H)    any impairment or invalidity of any collateral securing
any of the Guaranteed Obligations or any failure to perfect any of the Liens
of the Guaranteed Parties thereon or therein; and

               (I)    any other guaranty, whether by the Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Company to the Guaranteed
Parties.

        SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from the
Guarantor:

        (i)    the principal amount of the Guaranteed Obligations in respect
of any of the Guaranteed Parties may be increased or decreased as to such
Guaranteed Party and additional indebtedness or obligations of the Company
under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Document;

        (ii)   the time, manner, place or terms of any payment under any
Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any





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Guaranteed Obligation or any fee or other amount payable under such Credit
Documents, by an amendment, modification or renewal of any Credit Documents or
otherwise;

        (iii)  the time for the Company's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;

        (iv)   any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Guaranteed Obligations owing
to such Guaranteed Parties, and may permit or consent to any such action or
any result of such action, and shall not be obligated to demand or enforce
payment upon any collateral, nor shall the Guaranteed Parties be liable to the
Guarantor for any failure to collect or enforce payment or performance of the
Guaranteed Obligations from any Person or to realize on any collateral
therefor;

        (v)    the Guaranteed Parties may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of
any such action, and may apply such security and direct the order or manner of
sale thereof;

        (vi)   the Guaranteed Parties may request and accept other guaranties
of the Guaranteed Obligations and any other indebtedness, obligations or
liabilities of the Company to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to
any such action or the result of any such action; and

        (vii)  the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege
(including the right to accelerate the maturity of any Note and any power of
sale) granted by any Credit Document or other security document or agreement,
or otherwise available to the Guaranteed Parties, with respect to the
Guaranteed Obligations or any collateral, even if the exercise of such right,
remedy, power or privilege affects or eliminates any right of subrogation or
any other right of the Guarantor against the Company;

        all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.

        SECTION 5 Guarantor's Waivers.

        (a)    Certain Waivers.  The Guarantor waives and agrees not to assert:

                      (i)    any right to require any of the Guaranteed
Parties to marshal assets in favor of the Company, the Guarantor, any other
guarantor or any other Person, to proceed against the Company, any other
guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or
private sale of




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personal property security constituting the Collateral or other collateral for
the Guaranteed Obligations or comply with any other provisions of Section
9-504 of the New York UCC (or any equivalent provision of any other applicable
law) or to pursue any other right, remedy, power or privilege of the
Guaranteed Parties whatsoever;

                      (ii)   the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;

                      (iii)  any defense arising by reason of any lack of
corporate or other authority or any other defense of the Company, the
Guarantor or any other Person;

                      (iv)   any defense based upon the Guaranteed Parties' or
any Lender's errors or omissions in the administration of the Guaranteed
Obligations;

               (v)    any rights to set-offs and counterclaims;

                      (vi)   any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Company or any other obligor of the
Guaranteed Obligations for reimbursement; and

                      (vii)  without limiting the generality of the foregoing,
to the fullest extent permitted by law, any defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of
this Guaranty, including any and all benefits that otherwise might be
available to the Guarantor under New York Laws. This means, among other
things: (A) the Guaranteed Parties may collect from the Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Company; and (B) if the Guaranteed Parties forecloses on any real property
collateral pledged by the Company: (1) the amount of the debt may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price, and (2) the
Guaranteed Parties may collect from the Guarantor even if the Administrative
Agent, by foreclosing on the real property collateral, has destroyed any right
the Guarantor may have to collect from the Company. This is an unconditional
and irrevocable waiver of any rights and defenses the Guarantor may have
because the Company's debt is secured by real property.

        (b)    Additional Waivers. The Guarantor waives any and all notice of
the acceptance of this Guaranty, and any and all notice of the creation,
renewal, modification, extension or accrual of the Guaranteed Obligations, or
the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of
any right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and
permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Company,
the Guarantor or any other Person with respect to the Guaranteed Obligations.

        (c)    Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Company
and any other guarantor. Upon




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the occurrence and during the continuance of any Event of Default, a separate
action or actions may be brought against the Guarantor, whether or not the
Company or any such other guarantor is joined therein or a separate action or
actions are brought against the Company or any such other guarantor.

        (d)    Financial Condition of Company. The Guarantor shall not have
any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Company or the ability of the Company to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.

        SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that
it may acquire by way of subrogation under this Guaranty, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Guaranty or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of the Guaranteed Parties as against the Company or
other guarantors, whether in connection with this Guaranty, any of the other
Credit Documents or otherwise. If any amount shall be paid to the Guarantor on
account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Guaranteed Parties and shall forthwith be paid to
the Guaranteed Parties (or the Collateral Agent on their behalf) to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents (and subject
to the Intercreditor Agreement).

        SECTION 7  Subordination.

        (a)    Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Company to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions
to the Company or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts
payable by the Company to the Guarantor in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (the
"Subordinated Debt") shall be subject, subordinate and junior in right of
payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.

        (b)    No Payments. As long as any of the Guaranteed Obligations shall
remain outstanding and unpaid, the Guarantor shall not accept or receive any
payment or distribution by or on behalf of the Company, directly or
indirectly, of assets of the Company of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the




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Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of
Default exists and no notice described below has been received by the
Guarantor, the Guarantor shall be entitled to accept and receive any and all
payments. During the existence of an Event of Default (or if any Event of
Default would exist immediately after the making of a Subordinated Debt
Payment), and upon receipt by the Company of notice from the Guaranteed
Parties (or the Collateral Agent on their behalf) of such Default, and until
such Event of Default is cured or waived, pursuant to the terms of the
applicable Credit Documents, the Company shall not make, accept or receive any
Subordinated Debt Payment. In the event that, notwithstanding the provisions
of this Section 7, any Subordinated Debt Payments shall be received in
contravention of this Section 7 by the Guarantor before all Guaranteed
Obligations are paid in full in cash or cash equivalents, such Subordinated
Debt Payments shall be held in trust for the benefit of the Guaranteed Parties
and shall be paid over or delivered to the Guaranteed Parties (or the
Collateral Agent on their behalf) for application to the payment in full in
cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the
extent necessary to give effect to this Section 7, after giving effect to any
concurrent payments or distributions to the Guaranteed Parties in respect of
the Guaranteed Obligations.

        (c)    Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):

                      (i)    accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect
of the Subordinated Debt;

                      (ii)   exercise any rights under or with respect to (A)
any guaranties of the Subordinated Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Company or
asserting any claim or interest in any insurance with respect to any
collateral, or attempt to do any of the foregoing;

                      (iii)  exercise any rights to set-offs and counterclaims
in respect of any indebtedness, liabilities or obligations of the Guarantor to
the Company against any of the Subordinated Debt; or

                      (iv)   commence, or cause to be commenced, or join with
any creditor other than the Guaranteed Parties in commencing, any proceeding
under any Debtor Relief Laws as against Company.

        (d)    Subordination Upon Any Distribution of Assets of the Company.
In the event of any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Company, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim
in any such proceeding, shall first be paid in full in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt
Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt






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Payment to which the Guarantor would be entitled except for the provisions
hereof, shall be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Guaranteed Parties (or the Collateral
Agent acting on their behalf) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any
concurrent payment or distribution or provision therefor to the Guaranteed
Parties in respect of such Guaranteed Obligations.

        (e)    Authorization to Guaranteed Parties.  If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws
is commenced by or against the Company or its property:

                      (i)    the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name
of the Guarantor or otherwise), but shall have no obligation, to demand, sue
for, collect and receive every payment or distribution in respect of the
Subordinated Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Debt)
as they may deem necessary or advisable for the exercise or enforcement of any
of the rights or interests of the Guaranteed Parties; and

                      (ii)   the Guarantor shall promptly take such action as
any of the Guaranteed Parties may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to the Guaranteed Parties (or the Collateral Agent
acting on their behalf), such powers of attorney, assignments and other
instruments as they may request to enable them to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any and
all Subordinated Debt Payments.

        SECTION 8  Continuing Guaranty; Reinstatement.

        (a)    Continuing Guaranty.  This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding
upon the Guarantor until the payment and performance in full of all Guaranteed
Obligations.

        (b)    Reinstatement. This Guaranty shall continue to be effective or
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Company (or
receipt of any proceeds of collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to the Company, its estate, trustee, receiver or any
other Person (including under any Debtor Relief Laws or other state or federal
law), or must otherwise be restored by the Guaranteed Parties, whether as a
result of proceedings under any Debtor Relief Laws or otherwise. To the extent
any payment is so rescinded, set aside, voided or otherwise repaid or
restored, the Guaranteed Obligations shall be revived in full force and effect
without reduction or discharge for such payment. All losses, damages, costs
and expenses that the Guaranteed Parties may suffer or incur as a result of
any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Guaranteed Parties contained in Section 15.




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        SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the
foregoing provisions of this Guaranty and not in limitation of any other right
which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor
shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties
(or the Collateral Agent on their behalf) an amount equal to the amount of the
Guaranteed Obligations then due as aforesaid (including interest which, but
for the filing of a petition in any proceeding under any Debtor Relief Laws
with respect to the Company, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Company for such
interest in any such proceeding under any Debtor Relief Laws). The Guarantor
shall make each payment hereunder, unconditionally in full without set-off,
counterclaim or other defense, or deduction for any Taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Collateral
Agent at such office or account of any Guaranteed Party as any of the
Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All
such payments shall be promptly applied from time to time by the Guaranteed
Parties as provided in the Intercreditor Documents.

        SECTION 10 Representations and Warranties. The Guarantor represents
and warrants to the Guaranteed Parties that:

        (a)    Organization and Powers. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business
and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would have a Material Adverse Effect and has
all requisite power and authority: (i) to own its assets and carry on its
business, and (ii) to execute, deliver and perform its obligations under the
Guarantor Documents and Spin-Off Documents.

        (b)    Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor
Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly
authorized by all necessary corporate action of the Guarantor, and do not and
will not: (i) contravene the terms of the Guarantor's organization documents
or (ii) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which the Guarantor is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Guarantor or its property is
subject, or (iii) violate any Laws.

        (c)    Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

        (d)    Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the





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due execution, delivery or performance by, or enforcement against, the
Guarantor of the Guarantor Documents, (ii) the execution, delivery or
performance by or enforcement against the Guarantor of the Spin-Off Documents
or (iii) the consummation of the Spin-Off Transaction.

        (e)    The Guarantor has not previously assigned any interest in the
Subordinated Debt or any collateral relating thereto, no Person other than the
Guarantor owns an interest in the Subordinated Debt or any such collateral
(whether as joint holders of the Subordinated Debt, participants or
otherwise), and the entire Subordinated Debt is owing only to the Guarantor.

        (f)    Solvency. Immediately prior to and after and giving effect to
(i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.

        (g)    Consideration. The Guarantor has received at least "reasonably
equivalent value" (as such phrase is used in Section 548 of the Bankruptcy
Code) and "fair consideration" (as such phrase is used in Section 272 of the
New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is
a party.

        (h)    Independent Investigation. The Guarantor hereby acknowledges
that it has undertaken its own independent investigation of the financial
condition of the Company and all other matters pertaining to this Guaranty and
further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto.
The Guarantor represents and warrants that it has received and reviewed copies
of the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information
concerning the financial condition of the Company and any other matters
pertinent hereto that the Guarantor may desire. The Guarantor is not relying
upon or expecting the Guaranteed Parties to furnish to the Guarantor any
information now or hereafter in the Guaranteed Parties' possession concerning
the financial condition of the Company or any other matter.

        SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.

        SECTION 12 Additional Covenants. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that:

        (a)    Preservation of Existence, Etc. The Guarantor shall, and shall
cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the
case of this clause (ii) where the non-preservation could not reasonably be
expected to have a Material Adverse Effect.

        (b)    Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements,




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instruments, certificates, documents and assurances and perform such acts as
any of the Guaranteed Parties shall deem reasonably necessary or appropriate
to effectuate the purposes of this Guaranty and the other Guarantor Documents,
and promptly provide the Guaranteed Parties with evidence of the foregoing
satisfactory in form and substance to the Guaranteed Parties.

        SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or such replacement Swap Provider as the
Swap Provider may direct in writing), according to the information listed in
Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any
notice to the Lenders be delivered to the address specified for such Persons
in the Note Purchase Agreement (or to such replacement Lenders as may be
appointed from time to time consistent with the Intercreditor Agreement).
Notices to the Guarantor shall be sent or delivered to the address set forth
in the Credit Agreement for the Company. All such notices, requested and
communications shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or transmitted in
legible form by facsimile machine, respectively, or if mailed, upon receipt by
the addressee, or if delivered, upon delivery.

        SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of
any Guaranteed Parties to exercise, and no delay in exercising on the part of
any Guaranteed Parties, any right, remedy, power or privilege hereunder or
under any other Guarantor Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege.

        SECTION 15 Costs and Expenses; Indemnification.

        (a)    Costs and Expenses.  The Guarantor shall:

                      (i)    whether or not the transactions contemplated
hereby are consummated, pay or reimburse each of the Guaranteed Parties for
all costs and expenses incurred by them in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Guaranty, any other Guarantor Document and any other
documents prepared in connection herewith or therewith and the consummation of
the transactions contemplated hereby and thereby; and

                      (ii)   pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Notes (including
in connection with any "workout" or restructuring regarding the Notes, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).

        (b)    Indemnification. The Company shall indemnify, defend and hold
each of the Guaranteed Parties, and each Lender and Note Holder and each of
its respective officers,




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directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suites, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Guaranty or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any proceeding under any Debtor Relief Laws or appellate
proceeding) related to or arising out of this Guaranty or relating to the
Collateral, whether or not any Indemnified Person is a party thereto (the
"Indemnified Liabilities"); provided that the Guarantor shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person.

        (c)    Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at
the sole cost and expense of the Guarantor.

        (d)    Interest. Any amounts payable to the Guaranteed Parties under
this Section 15 if not paid upon demand shall bear interest from the date of
such demand until paid in full, at the Default Rate.

        (e)    Survival.  The agreements in this Section shall survive payment
of all other Guaranteed Obligations.

        SECTION 16 Right of Set-Off. In addition to any rights and remedies of
the Guaranteed Parties and the Lenders provided by law, if an Event of Default
exists or any reimbursement or payment obligation under any of the Credit
Documents has been accelerated, each Guaranteed Parties and Lenders is hereby
authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Person to or for the credit or the account of the
Guarantor against any and all of the obligations of the Guarantor then due and
owing, irrespective of whether or not such Person shall have made any demand
upon the Company or the Guarantor under any of the Credit Documents. Each
Lender and the Guaranteed Parties shall promptly notify the Guarantor (through
the Collateral Agent) after any such set-off and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders and
Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which the such parties may have.

        SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the
Lenders, or the Guaranteed Parties shall be under any obligation to marshal
any assets in favor of the Guarantor or any other Person or against or in
payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-





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off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Guaranteed Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each
Lender severally agrees to pay to the Collateral Agent upon demand its pro
rata share of any amount so recovered from or repaid by the Collateral Agent.

        SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the
sole protection and benefit of the Lenders, the Lenders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person
(other than the Collateral Agent and any Indemnified Person specified herein)
shall be a direct or indirect beneficiary of, or shall have any direct or
indirect cause of action or claim in connection with, this Guaranty. The
Guaranteed Parties, by their acceptance of this Guaranty, shall not have any
obligations under this Guaranty to any Person other than the Guarantor, and
such obligations shall be limited to those expressly stated herein.

        SECTION 19  Binding Effect; Assignment.

        (a)    Successors and Assigns. The provisions of this Guaranty shall
be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.

        (b)    Assignment. The Guarantor shall not have the right to assign or
transfer its rights and obligations hereunder or under any other Guarantor
Documents without the prior written consent of the Required Lenders. Each of
the Guaranteed Parties, the Lenders, and the Lenders may, without notice to or
consent by the Guarantor, sell, assign, transfer or grant participations in
all or any portion of such Person's rights and obligations hereunder and under
the other Guarantor Documents in connection with any sale, assignment,
transfer or grant of a participation by such Person in accordance with Section
10.07 of the Credit Agreement in its rights and obligations thereunder and
under any of the Credit Documents. The Guarantor agrees that in connection
with any such sale, assignment, transfer or grant by any Lender, such Lender
may deliver to the prospective participant or assignee financial statements
and other relevant information relating to the Guarantor and its Subsidiaries.

        SECTION 20 Governing Law and Jurisdiction.

        (a)    THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF







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THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT
SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED
THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

        SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        SECTION 22 Entire Agreement; Amendments. This Guaranty, together with
the other Guarantor Documents, embodies the entire agreement of the Guarantor
with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be
amended only by written agreement between the Guarantor and the Guaranteed
Party to whom such amendment relates. Any such amendment shall not effect any
guaranty of the Guarantor granted hereunder to any other Guaranteed Party.

        SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed
Party shall not in any way affect or impair the legality or enforceability of
that or any other provision of this Guaranty or any instrument or agreement
required hereunder in respect of any other Guaranteed Party. The parties
acknowledge that this Guaranty has, solely for reasons of convenience, been
prepared and executed as a single document, but that the legal effect shall be
in all respects as thought the Guarantor had executed separate guaranties, in
favor of each Guaranteed Party. Any provision of this Agreement and the other
Credit Documents to which






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the Grantor is a party that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

        SECTION 24 Multiple Guarantors; Joint and Several Liability. When this
Guaranty is executed by more than one Guarantor, the word "Guarantor" shall
mean all and any one or more of them, and the obligations of all Persons
signing this Guaranty shall be joint and several.

                 [remainder of page intentionally left blank]



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        IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of
the date first above written.

                                                  [NAME OF SUBSIDIARY]

                                                  By:
                                                    -------------------------
                                                         Title

                                                  Address:
                                                  --------
                                                  [             ]
                                                   -------------
                                                  Attn:  [        ]
                                                          --------
                                                  Fax No.  [      ]
                                                            ------

                                                  [NAME OF SUBSIDIARY]

                                                  By:
                                                     -------------------
                                                         Title

                                                  Address:
                                                  --------
                                                  [             ]
                                                   -------------
                                                  Attn:  [        ]
                                                          --------
                                                  Fax No.  [      ]
                                                            ------

                                                  [NAME OF SUBSIDIARY]

                                                  By:
                                                     -------------------
                                                         Title

                                                  Address:
                                                  --------

                                                  [             ]
                                                   -------------
                                                  Attn:  [        ]
                                                          --------
                                                  Fax No.  [      ]
                                                            ------

                                                  [NAME OF SUBSIDIARY]

                                                  By:
                                                     -------------------
                                                         Title

                                                  Address:
                                                  --------
                                                  [             ]
                                                   -------------

                                                  Attn:  [        ]
                                                          --------
                                                  Fax No.  [      ]
                                                            ------





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                                  SCHEDULE 1
                          to the Subsidiary Guaranty

                                 SUBSIDIARIES



   172


                                                                     EXHIBIT F


                         [COMPANY] SECURITY AGREEMENT

        THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __,
2001, is made by and among CERIDIAN CORPORATION, a Delaware corporation (the
"Grantor") in favor of the "Collateral Agent" (as defined herein) for the
benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such
capacity, the "Administrative Agent") for itself and the financial
institutions (the "Lenders" and, individually, a "Lender") from time to time
party to that certain Credit Agreement dated as of January 31, 2001 (as
renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), (b) the "Swap Provider" (as defined herein); and (c) the
Lenders party from time to time to the Note Purchase Agreement.

                                   RECITALS

        WHEREAS, it is a condition precedent to the borrowings under the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and grant to the Collateral Agent, for the ratable benefit of
the Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.

        NOW, THEREFORE, the parties hereto agree as follows:

        SECTION 1     Definitions; Interpretation.

        (a)    Terms Defined in Credit Agreement.  All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement.

        (b)    Certain Defined Terms.  As used in this Agreement, the
following terms shall have the following meanings:

        "Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit account for purposes of Article 9 of the UCC or
applicable law.

        "Accounts" means any and all accounts of Grantor, whether now existing
or hereafter acquired or arising, and in any event includes all accounts
receivable, contract rights, royalties, Rights to Payment and other
obligations of any kind owed to Grantor arising out of or in connection with
the sale, lease, license or other transfer of Intellectual Property,
merchandise, goods or commodities or the rendering of services or arising from
any other transaction, however evidenced, and whether or not earned by
performance, all guaranties, indemnities and security with respect to the
foregoing, and all letters of credit relating thereto, in each case whether
now existing or hereafter acquired or arising.

        "Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such a way as to permit selective search and
retrieval using electronic, electromagnetic,





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manual or mechanical methods, which relate to Grantor's business, and wherever
maintained, collected or accessed.

        "Books" means all books, records and other written, electronic or
other documentation in whatever form maintained now or hereafter by or for
Grantor in connection with the ownership of its assets or the conduct of its
business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing
Grantor's assets (including Inventory and Rights to Payment), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts
and output of whatever kind; (vi) any other computer prepared or
electronically stored, collected or reported information and equipment of any
kind; and (vii) any and all other rights now or hereafter arising out of any
contract or agreement between Grantor and any service bureau, computer or data
processing company or other Person charged with preparing or maintaining any
of Grantor's books or records or with credit reporting, including with regard
to Grantor's Accounts.

        "Chattel Paper" means all writings of whatever sort which evidence a
monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.

        "Collateral" has the meaning set forth in Section 2.

        "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the
Lenders from time to time party to the Note Purchase Agreement; and (c) the
Swap Provider.

        "Copyright Office" means the United States Copyright Office.

               "Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Lenders and (c) the Swap Provider.

               "Credit Documents" means, collectively, the Note Documents, the
Note Holder Documents and the Swap Documents.

               "Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.

        "Database Copyright Filing" has the meaning specified in Section
5(q)(v)(A).

        "Debt Participant" means a "Debt Participant" under, and as defined
in, the Intercreditor Agreement.

        "Deposit Account" means any demand, time, savings, passbook or like
account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and Note association,





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credit union or like organization (including Bank of America) and all funds
and amounts therein, whether or not restricted or designated for a particular
purpose.

        "Documents" means any and all documents of title, bills of lading,
dock warrants, dock receipts, warehouse receipts and other documents of
Grantor, whether or not negotiable, and includes all other documents which
purport to be issued by a bailee or agent and purport to cover goods in any
bailee's or agent's possession which are either identified or are fungible
portions of an identified mass, including such documents of title made
available to Grantor for the purpose of ultimate sale or exchange of goods or
for the purpose of loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with goods in a manner
preliminary to their sale or exchange, in each case whether now existing or
hereafter acquired or arising.

        "Equipment" means all now existing or hereafter acquired equipment of
Grantor in all of its forms, wherever located, and in any event includes any
and all machinery, furniture, equipment, furnishings and fixtures in which
Grantor now or hereafter acquires any right, and all other goods and tangible
personal property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other
electronic data processing equipment and other office equipment, computer
programs and related data processing software, and all additions,
substitutions, replacements, parts, accessories, and accessions to and for the
foregoing, now owned or hereafter acquired, and including any of the foregoing
which are or are to become fixtures on real property.

        "Filing Offices" has the meaning set forth in Section 3(a).

        "General Intangibles" means all general intangibles of Grantor, now
existing or hereafter acquired or arising, and in any event includes: (i) all
tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract
or tort and however arising; (iii) all Intellectual Property; (iv) all rights
of stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority;
(vi) all indemnity agreements, guaranties, insurance policies and other
contractual, equitable and legal rights of whatever kind or nature; and (vii)
all rights to receive payment and other rights arising under any Swap
Contracts; in each case whether now existing or hereafter acquired or arising.

        "Grantor" has the meaning set forth in the first paragraph hereof.

               "Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.

        "Instruments" means any and all negotiable instruments and every other
writing which evidences a right to the payment of money, wherever located and
whether now existing or hereafter acquired.




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        "Intellectual Property" means the following properties and assets
owned or held by Grantor or in which Grantor otherwise has any interest, now
existing or hereafter acquired or arising:

        (i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and
patent licenses as described in Schedule 2), all rights to sue for past,
present or future infringement thereof, all rights arising in connection with
any of the foregoing and pertaining thereto and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof; all
copyrights and applications for copyright (including with respect to the
Arbitron Databases and the Material Arbitron Software), domestic or foreign,
together with the underlying works of authorship (including titles), whether
or not the underlying works of authorship have been published and whether said
copyrights are statutory or arise under the common law, and all other rights
and works of authorship (including the copyrights and copyright applications
described in Schedule 2), all rights, claims and demands in any way relating
to any such copyrights or works, including royalties and rights to sue for
past, present or future infringement, and all rights of renewal and extension
of copyright;

        (ii) all state (including common law), federal and foreign trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names, all licenses relating to any of the
foregoing and all income and royalties with respect to any licenses (including
such marks, names, applications and licenses as described in Schedule 2),
whether registered or unregistered and wherever registered, all rights to sue
for past, present or future infringement or unconsented use thereof, all
rights arising therefrom and pertaining thereto and all reissues, extensions
and renewals thereof;

        (iii) all trade secrets, trade dress, trade styles, logos, other
source of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and Material
Software Additions), confidential information, customer lists, license rights,
advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and
catalogs;

        (iv) the entire goodwill of or associated with the businesses now or
hereafter conducted by Grantor connected with and symbolized by any of the
aforementioned properties and assets; and

        (v) all intellectual property rights and property of the Grantor now
existing or hereafter arising, covered by any Supplemental IP Security
Agreement executed by Grantor from time to time in accordance with Section
3(c).

        "Intercreditor Agreement" means that Intercreditor Agreement dated as
of January _____, 2001 among the Collateral Agent, the Administrative Agent,
the Swap Provider, and the "Lenders" (as defined therein).




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        "Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration
or out on lease or consignment or to be furnished under a contract of service,
or which are raw materials, work in process, finished goods or materials used
or consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or
otherwise, and all additions and accessions thereto, and any Document
representing or relating to any of the foregoing at any time.

        "Investment Property" means any and all investment property of
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts and commodity
accounts, and all financial assets held in any securities account or
otherwise, wherever located, and whether now existing or hereafter acquired or
arising.

        "Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.

        "Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.

        "Material Software Addition" means any update, release, version,
patch, debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs,
including all object and source code and all copies and encodings thereof,
purchased, created or otherwise acquired by Grantor after the Closing Date.

               "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or other wise changed in respect
of, the Lenders), (ii) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (iii) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (iv) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.

               "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.

               "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.

               "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.




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               "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Lenders party thereto.

        "Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.

        "Patent and Trademark Office" means the United States Patent and
Trademark Office.

        "Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to or for the account
of Grantor from time to time with respect to any of the Collateral, any and
all payments (in any form whatsoever) made or due and payable to Grantor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority), any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral or for or on account of any damage or injury to or
conversion of any Collateral by any Person, any and all other tangible or
intangible property received upon the sale or disposition of Collateral, and
all proceeds of proceeds.

        "Rights to Payment" means all Accounts and any and all rights and
claims to the payment or receipt of money or other forms of consideration of
any kind in, to and under all Chattel Paper, Documents, General Intangibles,
Instruments, Investment Property and Proceeds.

        "Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent, any of the Credit Agents
and any Debt Participant, whether now existing or hereafter arising, and
whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, now or hereafter created under,
arising out of, or in connection with any of the Credit Documents, including
all Obligations (as independently defined in each of the Credit Agreement and
the Note Purchase agreement), and any obligations under any of the Swap
Documents.

        "Software Copyright Filing" has the meaning specified in Section
5(q)(v)(B).

        "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into
between the Grantor and the Swap Provider as swap counterparties.

        "Specified Swap Contract" means any interest rate swap entered into
between the Grantor and the Swap Provider as swap counterparties constituting
a "Specified Swap Contract" as defined in the Credit Agreement.

        "Supplemental IP Security Agreement" means a Supplemental IP Security
Agreement substantially in the form of Exhibit I of the Credit Agreement,
executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit
Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.







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               "Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider, (b) all Account Control Agreements executed by any Note
Party under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.

               "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

               "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed
in respect of, the Swap Provider.

               "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.

        "UCC Financing Statements" has the meaning specified in Section 4(f).

        (c)    Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned
to them in the UCC.

        (d)    Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.

        SECTION 2     Security Interest.

        (a)    Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby grants to the Collateral
Agent (for the benefit of the Credit Agents, and each of them), a security
interest in all of Grantor's right, title and interest in, to and under the
following property, wherever located and whether now existing or owned or
hereafter acquired or arising (collectively, the "Collateral"):

        (i)    all Accounts;

        (ii)   all Chattel Paper;



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        (iii)  all Deposit Accounts;

        (iv)   all Documents;

        (v)    all Equipment;

        (vi)   all General Intangibles;

        (vii)  all Inventory;

        (viii) all Books;

        (ix)   all products and Proceeds of any and all of the foregoing; and

        (x)    all Letter of Credit Proceeds.

Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, any Intellectual Property which is now held or hereafter held by
Grantor as licensee, lessee or otherwise, to the extent such Intellectual
Property consists of: (i) ordinary shrinkwrap licenses governing software
products that Grantor purchased for use in the Ordinary Course of Business; or
(ii) licenses listed on Schedule 5.17 of the Credit Agreement.

        (b)    Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts,
agreements and other documents included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by
the Collateral Agent of any of the rights hereunder shall not release Grantor
from any of its duties or obligations under such contracts, agreements and
other documents included in the Collateral, and (iii) none of the Collateral
Agent or any Credit Party shall have any obligation or liability under any
contracts, agreements and other documents included in the Collateral by reason
of this Agreement, nor shall any such Person be obligated to perform any of
the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in
the Collateral hereunder.

        (c)    Continuing Security Interest. Grantor agrees that this
Agreement shall create continuing security interests in the Collateral which
shall remain in effect until terminated in accordance with Section 23.

        SECTION 3 Perfection Procedures. Grantor shall duly complete, execute
and deliver to the Collateral Agent and each of the Credit Agents concurrently
with the execution of this Agreement, and at any time and from time to time,
all Supplemental IP Security Agreements, financing statements, continuation
statements, termination statements, security agreements, chattel mortgages,
assignments, patent, copyright and trademark collateral assignments, fixture
filings, warehouse receipts, Account Control Agreements, documents of title,
affidavits, reports, notices, schedules of account, letters of authority and
all other documents and instruments, in form satisfactory to the
Administrative Agent, and take all other action, as the Collateral Agent (upon
instruction of the Instructing Group) may request, to perfect and continue
perfected,






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maintain the priority of or provide notice of the Collateral Agent's security
interests in the Collateral for the benefit of each of the Credit Agents and
to accomplish the purposes of this Agreement. Without limiting the generality
of the foregoing, Grantor shall from time to time take the following actions:

        (a)    Filing of Security Agreements; Financing Statements. On or
prior to the Closing Date Grantor shall execute, notarize and deliver (i) an
original of this Agreement, (ii) such original UCC Financing Statements and
(iii) such original Supplemental IP Security Agreements as the Collateral
Agent at the instruction of the Instructing Group may reasonably request; all
duly completed and in final form for recordation at the offices described in
Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor
shall execute, notarize and deliver original completed UCC Financing
Statements for filing or recording in the appropriate filing office or offices
in any state identified by a Grantor in a notice delivered pursuant to Section
5(e).

        (b)    Deposit Accounts. On or prior to the Closing Date Grantor shall
execute such Account Control Agreements, notices, and shall take such other
action, as the Collateral Agent at the instruction of the Instructing Group
may reasonably request, to perfect and continue perfected, maintain the
priority of or provide notice of the Collateral Agent's security interests in
Collateral for the benefit of each of the Credit Agents consisting of Deposit
Accounts and to accomplish the purposes of this Agreement.

               (c)    Intellectual Property Collateral.

               (i)    Patents; etc. Promptly following any submission, filing
or recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record
such duly completed, signed and notarized Supplemental IP Security Agreement
with the Patent and Trademark Office or Copyright Office, as applicable, and
take such other action as may be necessary, or as the Collateral Agent at the
instruction of the Instructing Group may reasonably request, to perfect or
protect the Collateral Agent's security interests in such Intellectual
Property for the benefit of each of the Credit Agents. Grantor shall promptly,
but in any event not later than ten days after any such recordation, deliver
to the Collateral Agent and each Credit Agent true and complete copies of all
file-stamped applications, disclosure documents and amendments, and all
file-stamped Supplemental IP Security Agreements recorded at the Patent and
Trademark Office.

        (ii)  Copyrights.  Grantor shall:

        (A)   Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright
Office and take such other actions as may be necessary or appropriate in the
discretion of the Collateral Agent at the instruction of the Instructing Group
to perfect or protect the Collateral Agent's security interests in (I) all
Database Copyright Filings for such quarter, and (II) all Software Copyright
Filings made since the most recently filed Supplemental IP Security Agreement;
and




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        (B)    take such other action as may be necessary, or the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property.

        (iii)  The Grantor hereby authorizes the Collateral Agent to modify,
amend or supplement the Schedules hereto and to reexecute this Agreement and
any Supplemental IP Security Agreement from time to time on the Grantor's
behalf and as its attorney-in-fact to include any such future Collateral and
to cause to such reexecuted Agreement, Supplemental IP Security Agreement or
such modified, amended or supplemented Schedules to be filed with the
Copyright Office or the Patent and Trademark Office.

        (d)    Documents, Etc. Within five calendar days after receipt,
Grantor shall deliver to the Collateral Agent, or an agent designated by it,
for the benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to
deliver any Document, Chattel Paper, promissory note, trade acceptance or
other instrument having a face amount not in excess of $100,000. Upon the
request of the Collateral Agent, Grantor shall mark all Documents and Chattel
Paper with such legends as the Collateral Agent shall reasonably specify.

        SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit
Agreement, which are incorporated and restated herein by this reference, and
which are true and correct as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:

        (a)    Location of Chief Executive Office and Collateral. Grantor's
chief executive office and principal place of business is located at the
address set forth in Schedule 1, and all other locations where Grantor
conducts business or Collateral is kept are set forth in Schedule 1.

        (b)    Locations of Books. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing
such Books and the names and addresses of all service bureaus, computer or
data processing companies and other Persons keeping any Books or collecting
Rights to Payment for Grantor, are set forth in Schedule 1.

        (c)    Trade Names and Trade Styles. All trade names and trade styles
under which Grantor presently conducts the Arbitron Business operations are
set forth in Schedule 1, and, except as set forth in Schedule 1 and in
connection with the Transaction, Grantor has not, at any time in the past
year: (i) been known as or used any other corporate, trade or fictitious name;
(ii) changed its name; (iii) been the surviving or resulting corporation in a
merger or consolidation; or (iv) acquired through asset purchase or otherwise
any business of any Person.

        (d)    Ownership of Collateral. Grantor is, and, subject to Section
5(i), will continue to be, the sole and complete owner of the Collateral, or
has a valid and enforceable leasehold or licensee's interest in such
Collateral as set forth in Schedule 2 and in accordance with subsection





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(i) of this Section 4 (or, in the case of after-acquired Collateral, at the
time Grantor acquires rights in such Collateral, will be the sole and complete
owner thereof, or will have a valid and enforceable leasehold or licensee's
interest in such Collateral, to the extent permitted hereunder or under the
Credit Agreement), free from any Lien other than Permitted Liens.

        (e)    Enforceability; Priority of Security Interest. (i) This
Agreement together with such Supplemental IP Security Agreements as have been
executed by Grantor and filed at the Copyright Office or Patent and Trademark
Office in respect of the Intellectual Property create security interests which
are enforceable against the Collateral in which Grantor now has rights and
will create security interests which are enforceable against any Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights.

        (ii)   The Collateral Agent has a perfected and first priority
security interest in the Collateral in which Grantor now has rights, and will
have a perfected and first priority security interest in the Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights, in each case for the Credit Agent's benefit and, subject only to
Permitted Liens, securing the payment and performance of the Secured
Obligations.

        (f)    Other Financing Statements. Other than (i) financing statements
or other filings naming the owner of the asset to which such Lien relates as
debtor, under the UCC, copyright, patent, or trademark or any comparable law
("UCC Financing Statements") disclosed to the Administrative Agent prior to
the Effective Date and listed on Schedule 5.17 of the Credit Agreement, and
(ii) UCC Financing Statements in favor of the Collateral Agent for itself and
the Credit Agents pursuant to the Credit Documents, no effective UCC Financing
Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or
the like or covering all or any part of the Collateral is on file in any
filing or recording office in any jurisdiction, except in connection with
Permitted Liens.

        (g)    Rights to Payment.

        (i)    The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with
the terms and provisions contained in any documents related thereto, and are
and will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the
extent reflected by the Grantor's reserves for uncollectible Rights to Payment
or to the extent, if any, that such account debtors or other Persons may be
entitled to normal and ordinary course trade discounts, returns, adjustments
and allowances in accordance with Section 5(m), or as otherwise disclosed to
the Credit Agents in writing or occurring in the ordinary course of business;

        (ii)   to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their
debts as they come due, except to the extent that Grantor has established
adequate reserves therefor in accordance with GAAP;





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        (iii)  all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit
laws;

        (iv)   Grantor has not assigned any of its rights under the Rights to
Payment except as provided in this Agreement or as set forth in the other
Credit Documents;

        (v)    all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and

        (vi)   Grantor has no knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights
to Payment, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;

        (h)    Inventory. No Inventory is stored with any bailee, warehouseman
or similar Person or on any premises leased to Grantor, nor has any Inventory
been consigned to Grantor or consigned by Grantor to any Person or is held by
Grantor for any Person under any "bill and hold" or other arrangement, except
at locations listed in Schedule 1.

        (i)    Intellectual Property.

        (i)    As of the Closing Date, except as set forth in Schedule 2, (A)
Grantor (directly or through any Subsidiary) does not own, possess or use
under any licensing arrangement (other than ordinary shrinkwrap licenses
governing software products that Grantor purchased for use in the Ordinary
Course of Business) Intellectual Property materially related to the Arbitron
Business, and (B) Grantor (directly or through any Subsidiary) has no
registrations or applications therefor pending before any Governmental
Authority, that are or may be materially related to the Arbitron Business, for
any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron
Software, Material Software Additions or Arbitron Databases for which any such
application was submitted after December 31, 1998, (III) copyrights in respect
of "Radio Market Reports" of Grantor for which any such application was
submitted after December 1, 2000, or (IV) any other copyrights for which such
application was submitted after December 31, 1999.

        (ii)   All Grantor's Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable in whole or in part.

        (iii)  All maintenance fees required to be paid by Grantor on account
of any of its patents have been timely paid for maintaining such patents in
force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.

        (iv)   To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.

        (v)    Grantor is the owner or licensee of its Intellectual Property
and the past, present and contemplated future use of such Intellectual
Property by Grantor has not, does not and will




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not infringe or violate any right, privilege or license agreement of or with
any other Person in any material respect.

        (vi)   Grantor owns, has material rights under, is a party to, or an
assignee of a party to all Intellectual Property necessary and appropriate to
continue to conduct the Arbitron Business.

        (vii)  The Arbitron Databases purchased developed or otherwise
acquired by Grantor since December 31, 1998 are protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.

        (viii) The Material Arbitron Software is protected under current,
valid and enforceable copyright registrations (or applications therefor) at
the Copyright Office and under the U.S. copyright laws.

        (ix)   Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications
therefor issued by the Patent and Trademark Office and under the U.S. patent
laws (except with respect to such patents that have expired of their own
terms, and not as the result of any abandonment, dispute or settlement).

        (j)    Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered
to the Collateral Agent or as otherwise disclosed to the Administrative Agent
and the other Credit Agents.

        (k)    Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule
1. No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Credit Agents.

        (l)    Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on
or before the date hereof), (ii) no Person other than Grantor owns an interest
in the Instruments (whether as joint holders, participants or otherwise),
(iii) all Instruments are owing only to Grantor, and (iv) no material default
exists under or in respect of the Instruments.

        (m)    Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.

        SECTION 5 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this
reference, so long as any of the Secured Obligations remain unsatisfied,
Grantor agrees that:

        (a)    Defense of Collateral. Grantor shall appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Collateral Agent's rights or interest in, the
Collateral.



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        (b)    Preservation of Collateral. Grantor shall do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.

        (c)    Compliance with Laws, Etc. Grantor shall comply in all material
respects with all laws, regulations and ordinances (including with respect to
the Fair Labor Standards Act), and with all policies of insurance, relating in
a material way to the possession, operation, maintenance and control of the
Collateral.

        (d)    Location of Books and Chief Executive Office. Grantor shall:
(i) keep all Books pertaining to the Rights to Payment at the locations set
forth in Schedule 1; and (ii) give at least 30 days' prior written notice to
the Collateral Agent and each Credit Agent of (A) any changes in any such
location where Books pertaining to the Rights to Payment are kept, including
any change of name or address of any service bureau, computer or data
processing company or other Person preparing or maintaining any Books or
collecting Rights to Payment for Grantor or (B) any changes in the location of
Grantor's chief executive office or principal place of business.

        (e)    Location of Collateral. If any Collateral of Grantor shall be
physically relocated to, or otherwise be physically located in, a state of the
United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one
Business Day after becoming aware thereof).

        (f)    Change in Name, Identity or Structure. Grantor shall give at
least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any
changes in, additions to or other modifications of its trade names used as the
name of Grantor set forth in Schedule 1, and (iv) any changes in its identity
or structure in any manner which might make any financing statement filed
hereunder incorrect or misleading.

        (g)    Maintenance of Records. Grantor shall keep accurate and
complete Books with respect to the Collateral, disclosing the Collateral
Agent's security interests hereunder for the benefit of the Credit Agents.

        (h)    Invoicing of Sales. The Grantor will invoice all of its sales
upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.

        (i)    Disposition of Collateral. Grantor shall not surrender or lose
possession of (other than to a Credit Agent), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent expressly permitted by the Credit Agreement.

        (j)    Liens.  (i)  Grantor shall keep the Collateral free of all
Liens except Permitted Liens.

        (ii)   Notwithstanding any other provision contained herein or in the
Credit Agreement, no Disposition of any assets of the Grantor shall be deemed
a transfer of goods free of the Collateral Agent's security interests under
Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and
7.06(j)






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thereof shall be free of such security interests. Accordingly, all
non-excluded Dispositions shall be subject at all times to the Liens of the
Collateral Agent.

        (k)    Expenses.  The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.

        (l)    Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which
any Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Administrative Agent may reasonably require, in
form and substance satisfactory to the Administrative Agent.

        (m)    Rights to Payment.  Grantor shall:

        (i)    with such frequency as the Collateral Agent may reasonably
require, furnish to the Collateral Agent (A) master customer listings,
including all names and addresses, together with copies or originals (as
requested by the Administrative Agent) of documents, customer statements,
repayment histories and present status reports relating to the Accounts; (B)
accurate records and summaries of Accounts, including detailed agings
specifying the name, face value and date of each invoice, and listings of
Accounts that are disputed or have been cancelled; and (C) such other
information relating to the Accounts as the Collateral Agent shall from time
to time reasonably request;

        (ii)   give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their terms or pursuant to Grantor's
Ordinary Course of Business, and during the existence of an Event of Default,
take all such action to such end as may from time to time be reasonably
requested by the Collateral Agent, except that Grantor may at any time grant
any extension of the time for payment or enter into any agreement to make a
rebate or otherwise to reduce the amount owing on or with respect to, or
compromise or settle for less than the full amount thereof, any Account or
other Right to Payment, in the Ordinary Course of Business, according to
normal trade practices;

        (iii)  if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing
on, or compromise or settle, an Account or other Right to Payment exists or
occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim,
counterclaim or defense exists or has been asserted or threatened with respect
to an Account or other Right to Payment, disclose such fact to the Collateral
Agent in the Books relating to such Account or other Right to Payment when
such Books are requested for inspection by the Collateral Agent, and in
connection with any invoice or report furnished by Grantor to the Collateral
Agent relating to such Account or other Right to Payment;

        (iv)   if Accounts in an amount in excess of $500,000 for any and all
such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent
thereof and execute any documents and instruments and take any other steps
reasonably requested by the Collateral Agent in order that all monies due and
to become due thereunder shall be assigned to the Collateral Agent and notice
thereof given



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to the federal authorities under the Federal Assignment of Claims Act
(provided that such assignment and notice shall not be required if the
applicable contract prohibits assignment);

        (v)    in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the
Accounts and other Rights to Payment;

        (vi)   subject to Section 7, upon the request of the Collateral Agent
(A) at any time, notify all or any designated portion of the account debtors
and other obligors on the Rights to Payment of the security interests
hereunder, and (B) if there exists any Default or Event of Default, notify the
account debtors and other obligors on the Rights to Payment or any designated
portion thereof that payment shall be made directly to the Collateral Agent or
to such other Person or location as the Collateral Agent shall specify; and

        (vii)  if there exists any Default or Event of Default, establish such
lockbox or similar arrangements for the payment of the Accounts and other
Rights to Payment as the Administrative Agent shall require.

        (n)    Deposit Accounts and Securities Accounts.  Grantor shall give
the Collateral Agent immediate notice of the establishment of any new Deposit
Account and any new securities account with respect to any Investment
Property.

        (o)    Inventory.  Grantor shall:

        (i)    at such times as the Collateral Agent shall reasonably request,
prepare and deliver to the Collateral Agent a report of all Inventory, in form
and substance reasonably satisfactory to the Collateral Agent ;

        (ii)   upon the request of the Collateral Agent, take a physical
listing of the Inventory and promptly deliver a copy of such physical listing
to the Collateral Agent; and

        (iii)  not store any Inventory with a bailee, warehouseman or similar
Person or on premises leased to Grantor, nor dispose of any Inventory on a
bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar basis, nor acquire any Inventory from any Person on any such basis,
except in the ordinary course of business and in accordance with its normal
practices.

        (p)    Equipment. Grantor shall, upon the Collateral Agent's request,
deliver to the Collateral Agent a report of each item of Equipment, in form
and substance reasonably satisfactory to the Collateral Agent.

        (q)    Intellectual Property Collateral.  Grantor shall:

        (i)    not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired
or dedicated to the public, except for Intellectual Property having negligible
commercial value;

        (ii)   not enter into any agreements or transactions (including any
license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of



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business, or enter into any exclusive license or sublicense of any
Intellectual Property, except in a transaction permitted under the Credit
Documents;

        (iii)  promptly give the Collateral Agent notice of any rights Grantor
may obtain to any new patentable inventions, copyrightable works or other new
Intellectual Property, prior to the registration or recordation thereof
(including pursuant to this Section 5(q)) as to which Grantor (a) has received
gross royalty or license payments from any and all third parties in an
aggregate amount excess of $1,000,000 during any of the five fiscal years
preceding such time or (b) reasonably projects that it will receive gross
royalty or license payments from any and all third parties in an aggregate
amount excess of $1,000,000 during the any of the subsequent five fiscal
years; provided that Grantor shall have no obligation to provide notice under
this subsection (iii) to the extent that Grantor has satisfied, or within the
immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);

        (iv)   not less frequently than once every three calendar months and,
additionally, upon the purchase, creation or other acquisition of any Material
Software Addition, diligently record, register or prosecute, as applicable,
all applications for patents, copyrights and trademarks, and diligently
record, register and prosecute, as applicable, any and all continuations,
continuations-in-part, applications for reissue, applications for certificate
of correction and like matters in respect of Grantor's Intellectual Property
as shall be reasonable and appropriate in accordance with prudent business
practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with
any Intellectual Property; and, without limiting the generality of the
foregoing,

        (v)    (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms
to the Copyright Office and take such other actions as necessary to register
under the U.S. copyright laws any and all additions, modifications or other
changes to the Arbitron Databases (each, a "Database Copyright Filing") since
the Closing Date; and (B) not less frequently than once every three calendar
months and, additionally, promptly after any purchase, creation or other
acquisition of any Material Software Addition, submit such duly completed,
signed and notarized copyright registration forms to the Copyright Office and
take such other actions as necessary to register under the U.S. copyright laws
each Material Software Addition (each, a "Software Copyright Filing"); and

        (vi)   not less frequently than once ever three calendar months, and
promptly but in any event not later than ten days after any and all
recordations described in subsections (iv) and (v) of this Section 5(q), and
after any and all recordations described in Section 3(c), deliver to the
Collateral Agent and each Credit Agent all such duly completed, file-stamped
(or otherwise certificated or acknowledged) and recorded documents together
with such other documents and information as the Collateral Agent or any
Credit Agent may reasonably request.

        (r)    Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of
any change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the



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Collateral and such other reports and other information in connection with the
Collateral as the Collateral Agent at the instruction of the Instructing Group
may reasonably request, all in reasonable detail; and (iii) upon reasonable
request of the Collateral Agent or any Credit Agent make such demands and
requests for information and reports as Grantor is entitled to make in respect
of the Collateral.

        (s)    Insurance. (i) Grantor shall carry and maintain in full force
and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent
for the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified
in the Credit Agreement. Upon the request of the Collateral Agent, at the
instruction of the Instructing Group, and in any event not less often than
annually, Grantor shall furnish the Collateral Agent and each Credit Agent
with full information as to the insurance carried by it and, if so requested,
copies of all such insurance policies. All insurance policies required under
this subsection (s) shall provide that they shall not be terminated or
cancelled nor shall any such policy be materially changed without at least 30
days' prior written notice to the Grantor and the Collateral Agent (or 10
days' prior written notice if the Collateral Agent consents to such shorter
notice). Receipt of notice of termination or cancellation of any such
insurance policies or reduction of coverages or amounts thereunder shall
entitle the Collateral Agent to renew any such policies, cause the coverages
and amounts thereof to be maintained at levels required pursuant to the first
sentence of this subsection (s) or otherwise to obtain similar insurance in
place of such policies, in each case at the expense of the Grantor.

        (ii)   If Collateral of Grantor with a value exceeding $1,000,000 (the
"Settlement Consent Threshold") shall be materially damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on
account of any loss on any Collateral covered by insurance shall be made for
less than insured value without the consent of the Collateral Agent (with the
consent of the Instructing Group), unless, so long as there exists no Default
or Event of Default, the total value of each such loss or series of related
losses so compromised does not exceed the Settlement Consent Threshold. Unless
there exists any Default or Event of Default, the Collateral Agent (upon
instruction of the Instructing Group) shall promptly execute such necessary
consents, waivers and endorsements to permit Grantor to settle losses the
total aggregate value of which is in an amount less than the Settlement
Consent Threshold, and to receive payment therefor, as reasonably requested by
Grantor. After the occurrence and during the continuance of an Event of
Default, or as otherwise required under any of the Credit Documents, all sums
payable to Grantor by any insurer with respect to a casualty relating to all
or any part of the Collateral shall be paid to the Collateral Agent (upon
instruction of the Instructing Group). If Grantor shall receive any insurance
proceeds which are to be paid to the Collateral Agent pursuant to the previous
sentence, Grantor shall hold such proceeds in trust for the Collateral Agent
and shall segregate such proceeds from other funds of Grantor, and shall
immediately forward such proceeds in the form received to the Collateral Agent
(appropriately indorsed by Grantor to the order of the Collateral Agent or in
such other manner as shall be satisfactory to the Collateral Agent, upon
instruction of the Instructing Group). All such insurance proceeds may be
retained by the Collateral Agent as part of Collateral hereunder and held in
the Proceeds Account, applied by the Collateral Agent toward payment of all or
part of the Secured Obligations in such order as






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is provided herein, or released to Grantor upon its request with the consent
of the Instructing Group.

        (t)    Other Swap Obligations.  Grantor shall not enter into any swap
contract under or subject to a Specified Swap Agreement, other than a
Specified Swap Contract.

        SECTION 6     Administration of the Rights to Payment.

        (a)    Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists
at such time any Event of Default, all remittances received by Grantor shall
be held in trust for the Collateral Agent and, in accordance with the
Collateral Agent's instructions, remitted to the Collateral Agent or deposited
to an account with the Collateral Agent in the form received (with any
necessary endorsements or instruments of assignment or transfer).

        (b)    Investment Property and Instruments. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists
at such time any Event of Default, the Collateral Agent shall be entitled,
subject to the Intercreditor Agreement, to receive all distributions and
payments of any nature with respect to any Investment Property or Instruments,
and all such distributions or payments received by Grantor shall be held in
trust for the Collateral Agent and, in accordance with any of the its
instructions (with the consent of the Instructing Group), remitted to the
Collateral Agent or deposited to an account with the Administrative Agent in
the form received (with any necessary endorsements or instruments of
assignment or transfer). If there exists any Default or Event of Default any
such distributions and payments with respect to any Investment Property held
in any securities account shall be held and retained in such securities
account, in each case as part of the Collateral hereunder. Additionally, the
Collateral Agent shall have the right, if there exists any Default or Event of
Default, following prior written notice to Grantor, to vote and to give
consents, ratifications and waivers with respect to any Investment Property
and Instruments, and to exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining thereto, as
if the Collateral Agent was the absolute owner thereof; provided that the
Collateral Agent shall have no duty to exercise any of the foregoing rights
afforded to it and shall not be responsible to Grantor or any other Person for
any failure to do so or delay in doing so.

        (e)    Distributions to Be Held for Administrative Agent.
Distributions and other payments which are received by the Grantor but which
it is not entitled to retain as a result of the operation of this Section 6
shall be held in trust for the benefit of the Collateral Agent and be
segregated from the other property or funds of Grantor, and be forthwith paid
over or delivered to the Collateral Agent in the same form as so received.

        SECTION 7 Authorization; Appointment as Attorney-in-Fact. The
Collateral Agent shall have the right to, in the name of Grantor, or in the
name of any of the Credit Parties or otherwise, without notice to or assent by
Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and
any officers or employees or agents designated by the Collateral Agent) as
Grantor's true and lawful attorney-in-fact, with full power and authority to:




   191





        (i)    sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security
interests in the Collateral of the Collateral Agent (for the benefit of the
Credit Agents) and file any such financing statements and Supplemental IP
Security Agreements by electronic means with or without a signature as
authorized or required by applicable law or filing procedures;

        (ii)   take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;

        (iii)  sign and endorse any invoice or bill of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices
to customers or other obligors;

        (iv)   notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to Grantor to such address
as Collateral Agent may designate (provided that the Collateral Agent agrees
it will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights
to Payment;

        (v)    receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);

        (vi)   send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;

        (vii)  contact, or direct Grantor to contact, all account debtors and
other obligors on the Rights to Payment and instruct such account debtors and
other obligors to make all payments directly to the Collateral Agent;

        (viii) assert, adjust, sue for, compromise or release any claims under
any policies of insurance;

        (ix)   exercise dominion and control over, and refuse to permit
further withdrawals from, Deposit Accounts maintained with Bank of America or
any other bank, financial institution or other Person;

        (x)    notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Collateral Agent;

        (xi)   ask, demand, collect, receive and give acquittances and
receipts for any and all Rights to Payment, enforce payment or any other
rights in respect of the Rights to Payment and other Collateral, grant
consents, agree to any amendments, modifications or waivers of the agreements
and documents governing the Rights to Payment and other Collateral, and
otherwise file any claims, take any action or institute, defend, settle or
adjust any actions, suits or proceedings with respect to the Collateral, as
the Collateral Agent (upon instruction of the






   192







Instructing Group) may deem necessary or desirable to maintain, preserve and
protect the Collateral, to collect the Collateral or to enforce the rights of
the Collateral Agent with respect to the Collateral;

        (xii)  execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual
Property and grant or issue any exclusive or non-exclusive license or
sublicense with respect to any Intellectual Property;

        (xiii) execute any and all endorsements, assignments or other
documents and instruments necessary to sell, lease, assign, convey or
otherwise transfer title in or dispose of the Collateral;

        (xiv)  execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interest of the Collateral therein; and

        (xv)   execute any and all such other documents and instruments, and
do any and all acts and things for and on behalf of Grantor, which the
Collateral Agent (upon instruction of the Instructing Group) may deem
necessary or advisable (A) to realize upon the Collateral, and (B) to
maintain, protect and preserve the Collateral and security interests of the
Collateral Agent therein and to accomplish the purposes of this Agreement.

The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent pursuant to clauses (ii) through (xiii), (xiv)(A) and
(xv)(A). The foregoing power of attorney is coupled with an interest and
irrevocable so long as any of the Secured Obligations has not been paid and
performed in full. Grantor hereby ratifies, to the extent permitted by law,
any and all acts that the Collateral Agent shall lawfully and in good faith do
or cause to be done by virtue of and in compliance with this Section 7.

        SECTION 8 Performance of Grantor Obligations. The Collateral Agent may
perform or pay any obligation which Grantor has agreed to perform or pay under
or in connection with this Agreement, and which Grantor has failed to perform
or pay as and when due, and Grantor shall reimburse the Collateral Agent on
demand for any amounts paid by the Collateral Agent pursuant to this Section
8.

        SECTION 9 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to
exercise any of the rights, privileges or powers afforded to such party and
shall not be responsible to Grantor or any other Person for any failure to do
so or delay in doing so. Beyond the exercise of reasonable care to assure the
safe custody of Collateral in the Collateral Agent's possession, and the
accounting for moneys actually received by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Collateral.

        SECTION 10.   Remedies.





   193




        (a)    Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to in this Agreement, the Credit Agreement or any other Credit
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, Grantor
agrees that:

        (i)    The Collateral Agent may peaceably and without notice enter any
premises of Grantor; take possession of any Collateral; remove, prohibit
access to or use of, or dispose of all or part of the Collateral on any
premises of Grantor or elsewhere; or, in the case of Equipment, render it
nonfunctional, and otherwise collect, receive, appropriate and realize upon
all or any part of the Collateral, and demand, give receipt for, settle,
renew, extend, exchange, compromise, adjust, or sue for all or any part of the
Collateral, as the Collateral Agent (upon instruction of the Instructing
Group) may determine.

        (ii)   The Collateral Agent may require Grantor to assemble all or any
part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.

        (iii)  The Collateral Agent may use or transfer any of Grantor's
rights and interests in any Intellectual Property, by license, by sublicense
(to the extent permitted by an applicable license) or otherwise, on such
conditions and in such manner as the Collateral Agent (upon instruction of the
Instructing Group) may determine.

        (iv)   The Collateral Agent may secure the appointment of a receiver
of the Collateral or any part thereof (to the extent and in the manner
provided by applicable law).

        (v)    The Collateral Agent may withdraw (or cause to be withdrawn)
any and all funds from any Deposit Accounts or securities accounts.

        (vi)   The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at
the same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction
of the Instructing Group) deem advisable; provided, however, that Grantor
shall be credited with the net proceeds of sale only when such proceeds are
finally collected by the Collateral Agent. The Collateral Agent shall have the
right upon any such public sale, and, to the extent permitted by law, upon any
such private sale, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption, which right or equity of
redemption Grantor hereby releases, to the extent permitted by law. Grantor
hereby agrees that the sending of notice by ordinary mail, postage prepaid, to
the address of Grantor set forth in the Credit Agreement, of the place and
time of any public sale or of the time after which any private sale or other
intended disposition is to be made, shall be deemed reasonable notice thereof
if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent





   194





may provide Grantor shorter notice or no notice, to the extent permitted by the
UCC or other applicable law.

        (b)    License. For the purpose of enabling the Collateral Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to Collateral Agent for
the benefit of the Credit Agents an irrevocable, non-exclusive and assignable
license (exercisable without payment or royalty or other compensation to
Grantor) to use, license or sublicense any Intellectual Property.

        (c)    Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent, at
its election, (i) retain the proceeds of any sale, collection, disposition or
other realization upon the Collateral (or any portion thereof) in a special
purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for the benefit of
the Credit Agents for such purpose (which shall constitute a Deposit Account
included within the Collateral hereunder) until such time as the Collateral
Agent may elect to apply such proceeds to the Secured Obligations, and Grantor
agrees that such retention of such proceeds by the Collateral Agent shall not
be deemed strict foreclosure with respect thereto; (ii) in any manner elected
by the Collateral Agent (upon instruction of the Instructing Group), estimate
the liquidated amount of any such contingent, unmatured or unliquidated claims
and apply the proceeds of the Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable law. Grantor agrees
that the Proceeds Account shall be a blocked account and that upon the
irrevocable deposit of funds into the Proceeds Account, Grantor shall not have
any right of withdrawal with respect to such funds. Accordingly, Grantor
irrevocably waives until the termination of the security interests granted
under this Agreement in accordance with Section 23 the right to make any
withdrawal from the Proceeds Account and the right to instruct the Collateral
Agent or any of the Credit Parties to honor drafts against the Proceeds
Account.

        (d)    Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by
the applicable Credit Parties or the Collateral Agent against all or any part
of the Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

        SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties
(A) to proceed against any Person, (B) to exhaust any other collateral or
security for any of the Secured Obligations, (C) to pursue any remedy, or (D)
to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (iii) all claims, damages, and
demands



   195




against the Collateral Agent, or any of the Credit Parties arising out of the
repossession, retention, sale or application of the proceeds of any sale of
the Collateral.

        SECTION 12 Notices. All notices or other communications hereunder
shall be given in the manner and to the addresses specified in, and shall be
effective as provided in, the Credit Agreement; provided, however, that
notices hereunder to (a) the Swap Provider shall be delivered to Fleet
National Bank using the information listed in Schedule 10.02 of the Credit
Agreement for such party as a Lender or such replacement Swap Provider as may
be appointed from time to time pursuant to the terms of the Intercreditor
Agreement, and (b) the Lenders shall be delivered to such Persons at the
address specified in the Note Purchase Agreement, or to such replacement
Lenders as may be appointed from time to time consistent with the terms of the
Intercreditor Agreement.

        SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of
the Collateral Agent, or any of the Credit Parties to exercise, and no delay
in exercising, any right, remedy, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, remedy, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights and remedies under this Agreement are cumulative and not exclusive of
any rights, remedies, powers and privileges that may otherwise be available to
the Collateral Agent, or any of the Credit Parties.

        SECTION 14    Indemnification; Other Charges.

        (a)    Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and the other Lenders, and their
respective directors, officers, employees, agents, counsel and other advisors
(each an "Indemnified Person") against, and hold each of them harmless from,
any and all liabilities, obligations, losses, claims, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including the reasonable fees and disbursements of counsel
to an Indemnified Person (including allocated costs of internal counsel),
which may be imposed on, incurred by, or asserted against any Indemnified
Person, in any way relating to or arising out of this Agreement or the
transactions contemplated hereby or any action taken or omitted to be taken by
it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not
be liable to any Indemnified Person with respect to Indemnified Liabilities
resulting from such Indemnified Person's gross negligence or willful
misconduct. If and to the extent that the foregoing indemnification is for any
reason held unenforceable, Grantor agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

        (b)    Other Charges. The Grantor agrees to indemnify the Collateral
Agent and the Credit Parties against and hold each of them harmless from any
and all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by reason
of the execution, delivery, performance and enforcement of this Agreement.

        (c)    Interest. Any amounts payable to the any Indemnified Person
under this Section 14 or otherwise under this Agreement if not paid upon
demand shall bear interest from




   196




the date of such demand until paid in full, at the applicable rate, (a) for
the Administrative Agent and any Lender, as set forth in Section 2.08(b) of
the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified
Swap Agreement, and (c) for the Lenders as set forth in Section 2.08(b) of the
Note Purchase Agreement.

        SECTION 15 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Grantor, each Indemnified Person
referred to in Section 14 and their respective successors and assigns.

        SECTION 16 Governing Law and Jurisdiction.

        (a)    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE
COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.

        (b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF
THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT
AND EACH OF THE CREDIT PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.

        SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN








   197



EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

        SECTION 18 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.

        SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the
benefit of each Credit Agent. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
with respect to any Credit Agent shall not in any way affect or impair the
legality or enforceability of that or any other provision of this Agreement or
any instrument or agreement required hereunder in respect to any other Credit
Agent. The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the
legal effect shall be in all respects as though the Grantor had executed
separate security interests, for the benefit of each of the Credit Agents. Any
provision of this Agreement and the other Credit Documents to which the
Grantor is a party that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

        SECTION 20 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party
hereto or thereto either in the form of an executed original or an executed
original sent by facsimile transmission to be followed promptly by mailing of
a hard copy original, and that receipt by the Collateral Agent or any Credit
Agent of a facsimile transmitted document purportedly bearing the signature of
a Grantor shall bind Grantor with the same force and effect as the delivery of
a hard copy original. Any failure by the Collateral Agent or any Credit Agent
to receive the hard copy executed original of such document shall not diminish
the binding effect of receipt of the facsimile transmitted executed original
of such document of the party whose hard copy page was not received by the
Collateral Agent or such Credit Party.

        SECTION 21 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to
the Credit Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.



   198





        SECTION 22 No Inconsistent Requirements. Grantor acknowledges that
this Agreement and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters,
and agrees that all such covenants, terms and provisions are cumulative and
all shall be performed and satisfied in accordance with their respective
terms.

        SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Grantor under the Credit Agreement and payment and performance
in full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination
of all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.

        (ii)   Concurrently with any permitted disposition of Collateral under
the Credit Documents, the security interests hereunder shall automatically be
released from the Collateral so disposed of, subject to Section 5(j);
provided, however, that the security interests shall continue in the Proceeds
thereof. Upon satisfaction to all conditions precedent to any permitted
disposition set forth herein or in the other Credit Documents, the Collateral
Agent and all Credit Agents shall execute and deliver any releases or other
documents reasonably requested by the relevant Grantor to accomplish or
confirm the release of Collateral provided by this Section. Any such release
shall specifically describe the portion of the Collateral to be released,
shall be expressed to be unconditional and shall be without recourse or
warranty (other than a warranty that the Collateral Agent and the Credit
Agents have not assigned their rights and interests to any other Person).

        SECTION 24 Assumption. Upon execution and delivery to the
Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of
the Grantor as provided in Section 6.14 of the Credit Agreement, effective as
of the effective date of such Subsidiary Security Agreement, such Subsidiary
shall be deemed a Grantor party hereto, and this Agreement shall be deemed
amended to include any amendments to the Schedules provided by such Subsidiary
in connection therewith.

        SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                 [remainder of page intentionally left blank]



   199


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



                                      CERIDIAN CORPORATION
                                      Grantor


                                      By:
                                           --------------------------------
                                           Name:
                                           Title:


                                      BANK OF AMERICA, N.A.,
                                      as Collateral


                                      By:
                                           --------------------------------
                                           Name:
                                           Title:






   200


                                  SCHEDULE 1
                          to the Security Agreement


1.      LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
        COLLATERAL

        a.      Chief Executive Office and Principal Place of Business:








Other locations where Grantor conducts business or Collateral is kept:








2.      LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT









3.      TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS
        NAMES; ETC.









4.      DEPOSIT ACCOUNTS



   201





5.      INVESTMENT PROPERTY









6.      INSTRUMENTS









7.      LEASED EQUIPMENT









8.      MATERIAL SOFTWARE











   202


                                  SCHEDULE 2
                          to the Security Agreement



(a)     ISSUED PATENTS OF GRANTOR


                                                                   
    Grantor        Patent No.     Issue Date      Inventors         Title          Agent
    -------        ----------     ----------      ---------         -----          -----






(b)     PENDING PATENT APPLICATIONS OF GRANTOR

                                                                 
Grantor               Application No.    Filing Date        Inventors           Title
- -------               ---------------    -----------        ---------           -----






(c)     TRADEMARKS OF GRANTOR


                                                                   
                   Registration    Registration                   Registered
     Grantor            No.            Date        Filing Date       Owner           Mark
     -------            ---            ----        -----------       -----           ----






(d)     PENDING TRADEMARK APPLICATIONS OF GRANTOR

                                                        
                  Application
     Grantor          No.          Filing Date       Applicant           Mark
     -------          ---          -----------       ---------           ----






(e)     COPYRIGHTS OF GRANTOR


                                                                     
      Grantor                    Copyright Title                 Reg. No.       Date of Issue
      -------                    ---------------                 --------       -------------




   203

(f)     COPYRIGHT APPLICATIONS OF GRANTOR


                                                                
         Grantor                   Title                                 Date of Application
         -------                   -----                                 -------------------





(g)     COPYRIGHT LICENSES OF GRANTOR



                                                                   
      Grantor        Title   Copyright Owner                     Reg. No.       Date of Issue
      -------        -----   ---------------                     --------       -------------







   204


                                  SCHEDULE 3
                          to the Security Agreement


                                FILING OFFICES
   205
                                                                       EXHIBIT G


                         [SUBSIDIARY] SECURITY AGREEMENT

        THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __,
2001, is made by and among _____________ (the "Grantor") in favor of the
"Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA,
N.A., as the administrative agent (in such capacity, the "Administrative Agent")
for itself and the financial institutions (the "Lenders" and, individually, a
"Lender") from time to time party to that certain Credit Agreement dated as of
January 31, 2001 (as renewed, extended, modified, amended or restated from time
to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined in
herein); and (c) the Lenders party from time to time to the Note Purchase
Agreement.

                                    RECITALS

        WHEREAS, it is a condition precedent to the borrowings under the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and grant to the Collateral Agent, for the ratable benefit of the
Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.

        NOW, THEREFORE, the parties hereto agree as follows:

        SECTION 1     Definitions; Interpretation.

        (a)     Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement.

        (b)     Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

        "Account Control Agreement" means any account control agreement, deposit
account control agreement, lockbox or other agreement with any securities
intermediary or depository granting control with respect to any investment
property or deposit accounts for purposes of Article 9 of the UCC or applicable
law.

        "Accounts" means any and all accounts of Grantor, whether now existing
or hereafter acquired or arising, and in any event includes all accounts
receivable, contract rights, royalties, Rights to Payment and other obligations
of any kind owed to Grantor arising out of or in connection with the sale,
lease, license or other transfer of Intellectual Property, merchandise, goods or
commodities or the rendering of services or arising from any other transaction,
however evidenced, and whether or not earned by performance, all guaranties,
indemnities and security with respect to the foregoing, and all letters of
credit relating thereto, in each case whether now existing or hereafter acquired
or arising.

        "Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such way as to permit selective search and
retrieval using electronic, electromagnetic,


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manual or mechanical methods, which relate to Grantor's business, and wherever
maintained, collected or accessed.

        "Books" means all books, records and other written, electronic or other
documentation in whatever form maintained now or hereafter by or for Grantor in
connection with the ownership of its assets or the conduct of its business or
evidencing or containing information relating to the Collateral, including: (i)
ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets
(including Inventory and Rights to Payment), business operations or financial
condition; (iii) computer programs and software; (iv) computer discs, tapes,
files, manuals, spreadsheets; (v) computer printouts and output of whatever
kind; (vi) any other computer prepared or electronically stored, collected or
reported information and equipment of any kind; and (vii) any and all other
rights now or hereafter arising out of any contract or agreement between Grantor
and any service bureau, computer or data processing company or other Person
charged with preparing or maintaining any of Grantor's books or records or with
credit reporting, including with regard to Grantor's Accounts.

        "Company" has the meaning specified in the Credit Agreement.

        "Chattel Paper" means all writings of whatever sort which evidence a
monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.

        "Collateral" has the meaning set forth in Section 2.

                "Collateral Agent" means Bank of America, N.A. in its capacity
as "Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders
from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.

                "Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Lenders and (c) the Swap Provider.

                "Credit Documents" means, collectively, the Note Documents, the
Note Holder Documents and the Swap Documents.

                "Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.

        "Database Copyright Filing" has the meaning set forth in Section
5(q)(v)(A).

        "Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.

        "Deposit Account" means any demand, time, savings, passbook or like
account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and Note association,


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credit union or like organization (including Bank of America) and all funds and
amounts therein, whether or not restricted or designated for a particular
purpose.

        "Documents" means any and all documents of title, bills of lading, dock
warrants, dock receipts, warehouse receipts and other documents of Grantor,
whether or not negotiable, and includes all other documents which purport to be
issued by a bailee or agent and purport to cover goods in any bailee's or
agent's possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Grantor for
the purpose of ultimate sale or exchange of goods or for the purpose of loading,
unloading, storing, shipping, transshipping, manufacturing, processing or
otherwise dealing with goods in a manner preliminary to their sale or exchange,
in each case whether now existing or hereafter acquired or arising.

        "Equipment" means all now existing or hereafter acquired equipment of
Grantor in all of its forms, wherever located, and in any event includes any and
all machinery, furniture, equipment, furnishings and fixtures in which Grantor
now or hereafter acquires any right, and all other goods and tangible personal
property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other electronic
data processing equipment and other office equipment, computer programs and
related data processing software, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.

        "Filing Offices" has the meaning set forth in Section 3(a).

        "General Intangibles" means all general intangibles of Grantor, now
existing or hereafter acquired or arising, and in any event includes: (i) all
tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract or
tort and however arising; (iii) all Intellectual Property; (iv) all rights of
stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority; (vi)
all indemnity agreements, guaranties, insurance policies and other contractual,
equitable and legal rights of whatever kind or nature; and (vii) all rights to
receive payment and other rights under any Swap Contracts; in each case whether
now existing or hereafter acquired or arising.

        "Grantor" has the meaning set forth in the first paragraph hereof.

                "Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.

        "Instruments" means any and all negotiable instruments and every other
writing which evidences a right to the payment of money, wherever located and
whether now existing or hereafter acquired.


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        "Intellectual Property" means the following properties and assets owned
or held by Grantor or in which Grantor otherwise has any interest, now existing
or hereafter acquired or arising:

        (i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and patent
licenses as described in Schedule 2), all rights to sue for past, present or
future infringement thereof, all rights arising in connection with any of the
foregoing and pertaining thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; all copyrights and
applications for copyright (including with respect to the Arbitron Databases and
the Material Arbitron Software), domestic or foreign, together with the
underlying works of authorship (including titles), whether or not the underlying
works of authorship have been published and whether said copyrights are
statutory or arise under the common law, and all other rights and works of
authorship (including the copyrights and copyright applications described in
Schedule 2), all rights, claims and demands in any way relating to any such
copyrights or works, including royalties and rights to sue for past, present or
future infringement, and all rights of renewal and extension of copyright;

        (ii) all state (including common law), federal and foreign trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names, all licenses relating to any of the
foregoing and all income and royalties with respect to any licenses (including
such marks, names, applications and licenses as described in Schedule 2),
whether registered or unregistered and wherever registered, all rights to sue
for past, present or future infringement or unconsented use thereof, all rights
arising therefrom and pertaining thereto and all reissues, extensions and
renewals thereof;

        (iii) all trade secrets, trade dress, trade styles, logos, other source
of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and all
Material Software Additions), confidential information, customer lists, license
rights, advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and catalogs;
and

        (iv) the entire goodwill of or associated with the businesses now or
hereafter conducted by Grantor connected with and symbolized by any of the
aforementioned properties and assets; and

        (v) all intellectual property rights and property of the Grantor now
existing or hereafter arising, covered by any Supplemental IP Security Agreement
executed by Grantor from time to time in accordance with Section 3(c).

        "Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the "Lenders" (as defined therein).


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        "Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or otherwise,
and all additions and accessions thereto, and any Document representing or
relating to any of the foregoing at any time.

        "Investment Property" means any and all investment property of Grantor,
including all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever
located, and whether now existing or hereafter acquired or arising.

        "Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.

        "Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.

        "Material Software Addition" means any update, release, version, patch,
debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs, including
all object and source code and all copies and encodings thereof, purchased,
created or otherwise acquired by Grantor after the Closing Date.

                "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.


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                "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Note Holders party thereto.

        "Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.

        "Patent and Trademark Office" means the United States Patent and
Trademark Office.

        "Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of
Grantor from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.

        "Rights to Payment" means all Accounts and any and all rights and claims
to the payment or receipt of money or other forms of consideration of any kind
in, to and under all Chattel Paper, Documents, General Intangibles, Instruments,
Investment Property and Proceeds.

        "Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent, any of the Credit Agents and
any Debt Participant whether now existing or hereafter arising, and whether due
or to become due, absolute or contingent, liquidated or unliquidated, determined
or undetermined, now or hereafter created under, arising out of or in connection
with any of the Credit Documents, including all Obligations (as independently
defined in each of the Credit Agreement and the Note Purchase Agreement), and
any obligations under any of the Swap Documents.

        "Software Copyright Filing" has the meaning set forth in Section
5(q)(v)(B).

        "Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.

        "Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

        "Supplemental IP Security Agreement" means a Supplemental IP Security
Agreement substantially in the form of Exhibit I of the Credit Agreement,
executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit
Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.


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                "Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Note Party
under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.

                "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

                "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.

        "UCC Financing Statements" has the meaning specified in Section 4(f).

        (c)     Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

        (d)     Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.

        SECTION 2     Security Interest.

        (a)     Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby grants to the Collateral
Agent (for the benefit of the Credit Agents, and each of them), a security
interest in all of Grantor's right, title and interest in, to and under the
following property, wherever located and whether now existing or owned or
hereafter acquired or arising (collectively, the "Collateral"):

        (i)     all Accounts;

        (ii)    all Chattel Paper;


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        (iii)   all Deposit Accounts;

        (iv)    all Documents;

        (v)     all Equipment;

        (vi)    all General Intangibles;

        (vii)   all Inventory;

        (viii)  all Books;

        (ix)    all products and Proceeds of any and all of the foregoing; and

        (x)     all Letter of Credit Proceeds.

Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, Intellectual Property which is now or hereafter held by Grantor as
licensee, lessee or otherwise, to the extent such Intellectual Property consists
of: (i) ordinary shrinkwrap licenses governing software products that Grantor
purchased for use in the Ordinary Course of Business; or (ii) licenses listed on
Schedule 5.17 of the Credit Agreement.

        (b)     Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts, agreements
and other documents included in the Collateral, to the extent set forth therein,
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent
of any of the rights hereunder shall not release Grantor from any of its duties
or obligations under such contracts, agreements and other documents included in
the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall
have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall any
such Person be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.

        (c)     Continuing Security Interest. Grantor agrees that this Agreement
shall create continuing security interests in the Collateral which shall remain
in effect until terminated in accordance with Section 23.

        SECTION 3  Perfection Procedures. Grantor shall duly complete, execute
and deliver to the Collateral Agent and each of the Credit Agents concurrently
with the execution of this Agreement, and at any time and from time to time, all
Supplemental IP Security Agreements, financing statements, continuation
statements, termination statements, security agreements, chattel mortgages,
assignments, patent, copyright and trademark collateral assignments, fixture
filings, warehouse receipts, Account Control Agreements, documents of title,
affidavits, reports, notices, schedules of account, letters of authority and all
other documents and instruments, in form satisfactory to the Administrative
Agent, and take all other action, as the Collateral Agent may request, to
perfect and continue perfected, maintain the priority of or provide notice of
the


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Collateral Agent's security interest in the Collateral for the benefit of each
of the Credit Agents and to accomplish the purposes of this Agreement. Without
limiting the generality of the foregoing, Grantor shall from time to time take
the following actions:

        (a)     Filing of Security Agreements; Financing Statements. On or prior
to the Closing Date Grantor shall execute, notarize and deliver (i) an original
of this Agreement; (ii) such original UCC Financing Statements and (iii) such
original Supplemental IP Security Agreements as the Collateral Agent at the
instruction of the Instructing Group may reasonably request; all duly completed
and in final form for recordation at the offices described in Schedule 3 (the
"Filing Offices"), and after the Closing Date the Grantor shall execute,
notarize and deliver completed UCC Financing Statements for filing or recording
in the appropriate filing or recording office or offices in any state identified
by a Grantor in a notice delivered to the Administrative Agent pursuant Section
5(e).

        (b)     Deposit Accounts. On or prior to the Closing Date, Grantor shall
execute such Account Control Agreements, notices, and shall take such other
action, as the Collateral Agent at the instruction of the Instructing Group may
reasonably request, to perfect and continue perfected, maintain the priority of
or provide notice of the Collateral Agent's security interests in Collateral for
the benefit of each of the Credit Agents consisting of Deposit Accounts and to
accomplish the purposes of this Agreement.

        (c)    Intellectual Property Collateral.

        (i)     Patents, Etc. Promptly following any submission, filing or
recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record such
duly completed, signed and notarized Supplemental IP Security Agreement with the
Patent and Trademark Office or Copyright Office, as applicable, and take such
other action as may be necessary, or as the Collateral Agent at the instruction
of the Instructing Group may reasonably request, to perfect or protect the
Collateral Agent's security interests in such Intellectual Property for the
benefit of each of the Credit Agents. Grantor shall promptly, but in any event
not later than ten days after any such recordation, deliver to the Collateral
Agent and each Credit Agent true and complete copies of all file-stamped
applications, disclosure documents and amendments, and all file-stamped
Supplemental IP Security Agreements recorded at the Patent and Trademark Office.

        (ii)    Copyrights. Grantor shall:

        (A)     Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright Office
and take such other actions as may be necessary or appropriate in the discretion
of the Collateral Agent at the instruction of the Instructing Group to perfect
or protect the Collateral Agent's security interests in (I) all Database
Copyright Filings for such quarter, and (II) all Software Copyright Filings made
since the most recently filed Supplemental IP Security Agreement; and


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        (B)     take such other action as may be necessary, or as the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property for the benefit of the Credit
Agents.

        (iii)   The Grantor hereby authorizes the Collateral Agent to modify,
amend or supplement the Schedules hereto and to reexecute this Agreement and any
Supplemental IP Security Agreement from time to time on the Grantor's behalf and
as its attorney-in-fact to include any such future Collateral and to cause to
such reexecuted Agreement, Supplemental IP Security Agreement or such modified,
amended or supplemented Schedules to be filed with the Copyright Office or the
Patent and Trademark Office.

        (d)     Documents, Etc. Within five calendar days after receipt, Grant
shall deliver to the Collateral Agent, or an agent designated by it, for the
benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to deliver
any Document, Chattel Paper, promissory note, trade acceptance or other
instrument having a face amount not in excess of $100,000. Upon the request of
the Collateral Agent, Grantor shall mark all Documents and Chattel Paper with
such legends as the Collateral Agent shall reasonably specify.

        SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit Agreement,
which are incorporated and restated herein by this reference, and which are true
and correct as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:

        (a)     Location of Chief Executive Office and Collateral. Grantor's
chief executive office and principal place of business is located at the address
set forth in Schedule 1, and all other locations where Grantor conducts business
or Collateral is kept are set forth in Schedule 1.

        (b)     Locations of Books. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for Grantor, are set forth in Schedule 1.

        (c)     Trade Names and Trade Styles. All trade names and trade styles
under which Grantor presently conducts the Arbitron Business operations are set
forth in Schedule 1, and, except as set forth in Schedule 1 and in connection
with the Transaction, Grantor has not, at any time in the past year: (i) been
known as or used any other corporate, trade or fictitious name; (ii) changed its
name; (iii) been the surviving or resulting corporation in a merger or
consolidation; or (iv) acquired through asset purchase or otherwise any business
of any Person.

        (d)     Ownership of Collateral. Grantor is, and, subject to Section
5(i), will continue to be, the sole and complete owner of the Collateral, or has
a valid and enforceable leasehold or


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licensee's interest in such Collateral as set forth in Schedule 2 and in
accordance with subsection (i) of this Section 4 (or, in the case of
after-acquired Collateral, at the time Grantor acquires rights in such
Collateral, will be the sole and complete owner thereof, or will have a valid
and enforceable leasehold or licensee's interest in such Collateral, to the
extent permitted hereunder or under the Credit Agreement), free from any Lien
other than Permitted Liens.

        (e)     Enforceability; Priority of Security Interest.

        (i)     This Agreement together with such Supplemental IP Security
Agreements as have been executed by Grantor and filed at the Copyright Office or
the Patent and Trademark Office in respect of the Intellectual Property create
security interests which are enforceable against the Collateral in which Grantor
now has rights and will create security interests which are enforceable against
the Collateral in which Grantor hereafter acquires rights at the time Grantor
acquires any such rights.

        (ii)    The Collateral Agent has a perfected and first priority security
interest in the Collateral in which Grantor now has rights, and will have a
perfected and first priority security interest in the Collateral in which
Grantor now has rights and will create a security interest in any Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights, in each case for the Credit Agents' benefit and, subject only to
Permitted Liens, securing the payment and performance of the Secured
Obligations.

        (f)     Other Financing Statements. Other than (i) financing statements
or similar filings naming the owner of the asset to which such Lien relates as
debtor, under the UCC, copyright, patent, trademark or any comparable law ("UCC
Financing Statements") disclosed to the Administrative Agent prior to the
Effective Date and (i) UCC Financing Statements in favor of the Collateral Agent
for itself and the Credit Agents pursuant to the Credit Documents, no effective
UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor,
pledgor or the like or covering all or any part of the Collateral is on file in
any filing or recording office in any jurisdiction, except in connection with
Permitted Liens.

        (g)     Rights to Payment.

        (i)     The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto, and are and
will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the extent
reflected by the Grantor's reserves for uncollectible Rights to Payment or to
the extent, if any, that such account debtors or other Persons may be entitled
to normal and ordinary course trade discounts, returns, adjustments and
allowances in accordance with Section 5(m), or as otherwise disclosed to the
Credit Agents in writing or occurring in the ordinary course of business;

        (ii)    to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their debts
as they come due, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;


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        (iii)   all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;

        (iv)    Grantor has not assigned any of its rights under the Rights to
Payment except as provided in this Agreement or as set forth in the other Credit
Documents;

        (v)     all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and

        (vi)    Grantor has not any knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights to
Payment, except to the extent that Grantor has established adequate reserves
therefor in accordance with GAAP;

        (h)     Inventory. No Inventory is stored with any bailee, warehouseman
or similar Person or on any premises leased to Grantor, nor has any Inventory
been consigned to Grantor or consigned by Grantor to any Person or is held by
Grantor for any Person under any "bill and hold" or other arrangement, except at
locations listed in Schedule 1.

        (i)     Intellectual Property.

        (i)     As of the Closing Date, except as set forth in Schedule 2, (A)
Grantor (directly or through any Subsidiary) does not own, possess or use under
any licensing arrangement (other than ordinary shrinkwrap licenses governing
software products that Grantor purchased for use in the Ordinary Course of
Business) Intellectual Property materially related to the Arbitron Business, and
(B) Grantor (directly or through any Subsidiary) has no registrations or
applications therefor pending before any Governmental Authority, that are or may
be materially related to the Arbitron Business, for any (I) patents or
trademarks, (II) copyrights in respect of Material Arbitron Software, Material
Software Additions or Arbitron Databases for which any such application was
submitted after December 31, 1998, (III) copyrights in respect of "Radio Market
Reports" of Grantor for which any such application was submitted after December
1, 2000, or (IV) any other copyrights for which such application was submitted
after December 31, 1999.

        (ii)    All Grantor's Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable in whole or in part.

        (iii)   All maintenance fees required to be paid by Grantor on account
of any of its patents have been timely paid for maintaining such patents in
force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.

        (iv)    To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.

        (v)     Grantor is the owner or licensee of its Intellectual Property
and the past, present and contemplated future use of such Intellectual Property
by Grantor has not, does not and will


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not infringe or violate any right, privilege or license agreement of or with any
other Person in any material respect.

        (vi)    Grantor owns, licenses, has material rights under, is a party
to, or an assignee of a party to all other Intellectual Property necessary and
appropriate to continue to conduct the Arbitron Business.

        (vii)   The Arbitron Databases are protected under current, valid and
enforceable copyright registrations (or applications therefor) at the Copyright
Office and under the U.S. copyright laws.

        (viii)  The Material Arbitron Software is protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.

        (ix)    Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications therefor
issued by the Patent and Trademark Office and under the U.S. patent laws (except
with respect to such patents that have expired of their own terms, and not as
the result of any abandonment, dispute or settlement).

        (j)     Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered to
the Collateral Agent or as otherwise disclosed to the Administrative Agent and
the other Credit Agents.

        (k)     Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.
No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Collateral Agent for the benefit of the
Credit Agents.

        (l)     Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on or
before the date hereof), (ii) no Person other than Grantor owns an interest in
the Instruments (whether as joint holders, participants or otherwise), (iii) all
Instruments are owing only to Grantor, and (iv) no material default exists under
or in respect of the Instruments.

        (m)     Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.

        SECTION 5  Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied, Grantor agrees
that:


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        (a)     Defense of Collateral. Grantor shall appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Collateral Agent's right or interest in, the
Collateral.

        (b)     Preservation of Collateral. Grantor shall do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.

        (c)     Compliance with Laws, Etc. Grantor shall comply in all material
respects with all laws, regulations and ordinances (including with respect to
the Fair Labor Standards Act), and with all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.

        (d)     Location of Books and Chief Executive Office. Grantor shall: (i)
keep all Books pertaining to the Rights to Payment at the locations set forth in
Schedule 1; and (ii) give at least 30 days' prior written notice to the
Collateral Agent and each Credit Agent of (A) any changes in any such location
where Books pertaining to the Rights to Payment are kept, including any change
of name or address of any service bureau, computer or data processing company or
other Person preparing or maintaining any Books or collecting Rights to Payment
for Grantor or (B) any changes in the location of Grantor's chief executive
office or principal place of business.

        (e)     Location of Collateral. If any Collateral of Grantor shall be
physically relocated to, or otherwise be physically located in, a state of the
United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one Business
Day after becoming aware thereof).

        (f)     Change in Name, Identity or Structure. Grantor shall give at
least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any changes
in, additions to or other modifications of its trade names used as the name of
Grantor set forth in Schedule 1, and (iv) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.

        (g)     Maintenance of Records. Grantor shall keep accurate and complete
Books with respect to the Collateral, disclosing the Collateral Agent's security
interests hereunder for the benefit of the Credit Agents.

        (h)     Invoicing of Sales. The Grantor will invoice all of its sales
upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.

        (i)     Disposition of Collateral. Grantor shall not surrender or lose
possession of (other than to a Credit Agent), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent expressly permitted by the Credit Documents.

        (j)     Liens.

        (i)     Grantor shall keep the Collateral free of all Liens except
Permitted Liens.


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        (ii)    Notwithstanding any other provision contained herein or in the
Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a
transfer of goods free of the Collateral Agent's security interests under
Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j)
thereof shall be free of such security interests. Accordingly, all non-excluded
Dispositions shall be subject at all times to the Liens of the Collateral Agent
for the benefit of the Credit Agents.

        (k)     Expenses. The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.

        (l)     Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which any
Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Collateral Agent may reasonably require, in form and
substance satisfactory to the Collateral Agent.

        (m)     Rights to Payment. Grantor shall:

        (i)     with such frequency as the Collateral Agent for the benefit of
the Credit Agents may reasonably require, furnish to the Collateral Agent and
each Credit Agent (A) master customer listings, including all names and
addresses, together with copies or originals (as requested by the Collateral
Agent or any Credit Agent) of documents, customer statements, repayment
histories and present status reports relating to the Accounts; (B) accurate
records and summaries of Accounts, including detailed agings specifying the
name, face value and date of each invoice, and listings of Accounts that are
disputed or have been cancelled; and (C) such other information relating to the
Accounts as any of the Credit Agents shall from time to time reasonably request;

        (ii)    give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their terms or pursuant to Grantor's
Ordinary Course of Business, and during the existence of an Event of Default,
take all such action to such end as may from time to time be reasonably
requested by Collateral Agent, except that Grantor may at any time grant any
extension of the time for payment or enter into any agreement to make a rebate
or otherwise to reduce the amount owing on or with respect to, or compromise or
settle for less than the full amount thereof, any Account or other Right to
Payment, in the Ordinary Course of Business, according to normal trade
practices;

        (iii)   if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or
defense exists or has been asserted or threatened with respect to an Account or
other Right to Payment, disclose such fact to the Collateral Agent and the
Credit Parties in the Books relating to such Account or other Right to Payment
when such Books are requested for inspection by the Collateral Agent, and in
connection with any invoice or report furnished by Grantor to the Collateral
Agent relating to such Account or other Right to Payment;


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        (iv)    if Accounts in an amount in excess of $500,000 for any and all
such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent and the
Credit Parties thereof and execute any documents and instruments and take any
other steps reasonably requested by the Collateral Agent in order that all
monies due and to become due thereunder shall be assigned to the Collateral
Agent and notice thereof given to the federal authorities under the Federal
Assignment of Claims Act (provided that such assignment and notice shall not be
required if the applicable contract prohibits assignment);

        (v)     in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the Accounts
and other Rights to Payment;

        (vi)    subject to Section 7, upon the request of the Collateral Agent
(A) at any time, notify all or any designated portion of the account debtors and
other obligors on the Rights to Payment of the security interests hereunder, and
(B) if there exists any Default or Event of Default, notify the account debtors
and other obligors on the Rights to Payment or any designated portion thereof
that payment shall be made directly to the Collateral Agent or to such other
Person or location as the Collateral Agent shall specify; and

        (vii)   if there exists any Default or Event of Default, establish such
lockbox or similar arrangements for the payment of the Accounts and other Rights
to Payment as the Collateral Agent (upon instruction of the Instructing Group)
shall require.

        (n)     Deposit Accounts and Securities Accounts. Grantor shall give the
Collateral Agent and the Credit Parties immediate notice of the establishment of
any new Deposit Account and any new securities account with respect to any
Investment Property.

        (o)     Inventory. Grantor shall:

        (i)     at such times as the Collateral Agent or any Credit Agent shall
reasonably request, prepare and deliver to the Collateral Agent and each Credit
Agent a report of all Inventory, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent;

        (ii)    upon the request of the Collateral Agent or any Credit Agent,
take a physical listing of the Inventory and promptly deliver a copy of such
physical listing to the Collateral Agent and each Credit Agent; and

        (iii)   not store any Inventory with a bailee, warehouseman or similar
Person or on premises leased to Grantor, nor dispose of any Inventory on a
bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar basis, nor acquire any Inventory from any Person on any such basis,
except in the ordinary course of business and in accordance with its normal
practices.

        (p)     Equipment. Grantor shall, upon the Collateral Agent or any
Credit Agent request, deliver to the Collateral Agent and each Credit Agent a
report of each item of Equipment, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent.

        (q)     Intellectual Property Collateral. Grantor shall:


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        (i)     not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public, except for Intellectual Property having negligible
commercial value;

        (ii)    not enter into any agreements or transactions (including any
license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of business, or enter into any exclusive
license or sublicense of any Intellectual Property, except in a transaction
permitted under the Credit Documents;

        (iii)   promptly give the Collateral Agent and each Credit Agent notice
of any rights Grantor may obtain to any new patentable inventions, copyrightable
works or other new Intellectual Property, prior to the registration or
recordation thereof (including pursuant to this Section 5(q)) as to which
Grantor (a) has received gross royalty or license payments from any and all
third parties in an aggregate amount excess of $1,000,000 during any of the five
fiscal years preceding such time or (b) reasonably projects that it will receive
gross royalty or license payments from any and all third parties in an aggregate
amount excess of $1,000,000 during the any of the subsequent five fiscal years;
provided that Grantor shall have no obligation to provide notice under this
subsection (iii) to the extent that Grantor has satisfied, or within the
immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);

        (iv)    not less frequently than once every three calendar months and,
additionally, upon the purchase, creation or other acquisition of any Material
Software Addition, diligently record, register or prosecute, as applicable, all
applications for patents, copyrights and trademarks, and diligently record,
register and prosecute, as applicable, any and all continuations,
continuations-in-part, applications for reissue, applications for certificate of
correction and like matters in respect of Grantor's Intellectual Property as
shall be reasonable and appropriate in accordance with prudent business
practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with any
Intellectual Property; and, without limiting the generality of the foregoing,

        (v)     (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms to
the Copyright Office and take such other actions as necessary to register under
the U.S. copyright laws any and all additions, modifications or other changes to
the Arbitron Databases (each, a "Database Copyright Filing") since the Closing
Date; and (B) not less frequently than once every three calendar months and,
additionally, promptly after any purchase, creation or other acquisition of any
Material Software Addition, submit such duly completed, signed and notarized
copyright registration forms to the Copyright Office and take such other actions
as necessary to register under the U.S. copyright laws each Material Software
Addition (each, a "Software Copyright Filing");

        (vi)    not less frequently than once every three calendar months, and
promptly but in any event not later than ten days after any and all recordations
described in subsections (iv) and (v) of this Section 5(q), and after any and
all recordations described in Section 3(c), deliver to the Collateral Agent and
each Credit Agent all such duly completed, file-stamped (other otherwise
certificated or acknowledged) and recorded documents together with such other
documents and information as the Collateral Agent or any Credit Agent may
reasonably request.


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        (r)     Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of any
change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the Collateral and such other
reports and other information in connection with the Collateral as the
Collateral Agent at the instruction of the Instructing Group may reasonably
request, all in reasonable detail; and (iii) upon reasonable request of the
Collateral Agent of any Credit Agent make such demands and requests for
information and reports as Grantor is entitled to make in respect of the
Collateral.

        (s)     Insurance. (i) Grantor shall carry and maintain in full force
and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent for
the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified in
the Credit Agreement. Upon the request of any of the Credit Agents, and in any
event not less often than annually, Grantor shall furnish the Collateral Agent
and each Credit Agent with full information as to the insurance carried by it
and, if so requested, copies of all such insurance policies. All insurance
policies required under this subsection (s) shall provide that they shall not be
terminated or cancelled nor shall any such policy be materially changed without
at least 30 days' prior written notice to the Grantor and the Collateral Agent
(or 10 days' prior written notice if the Collateral Agent consents to such
shorter notice). Receipt of notice of termination or cancellation of any such
insurance policies or reduction of coverages or amounts thereunder shall entitle
the Collateral Agent to renew any such policies, cause the coverages and amounts
thereof to be maintained at levels required pursuant to the first sentence of
this subsection (s) or otherwise to obtain similar insurance in place of such
policies, in each case at the expense of the Grantor.

        (ii)    If Collateral of Grantor with a value exceeding $1,000,000 (the
"Settlement Consent Threshold") shall be materially damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on account
of any loss on any Collateral covered by insurance shall be made for less than
insured value without the consent of the Collateral Agent (with the consent of
the Instructing Group), unless, so long as there exists no Default or Event of
Default, the total value of each such loss or series of related losses so
compromised does not exceed the Settlement Consent Threshold. Unless there
exists any Default or Event of Default, the Collateral Agent (upon instruction
of the Instructing Group) shall promptly execute such necessary consents,
waivers and endorsements to permit Grantor to settle losses the total aggregate
value of which is in an amount less than the Settlement Consent Threshold, and
to receive payment therefor, as reasonably requested by Grantor. After the
occurrence and during the continuance of an Event of Default, or as otherwise
required under any of the Credit Documents, all sums payable to Grantor by any
insurer with respect to a casualty relating to all or any part of the Collateral
shall be paid to the Collateral Agent (upon instruction of the Instructing
Group). If Grantor shall receive any insurance proceeds which are to be paid to
the Collateral Agent pursuant to the previous sentence, Grantor shall hold such
proceeds in trust for the Collateral Agent and shall segregate such proceeds
from other funds of Grantor, and shall immediately forward such


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proceeds in the form received to the Collateral Agent (appropriately indorsed by
Grantor to the order of the Collateral Agent or in such other manner as shall be
satisfactory to the Collateral Agent, upon instruction of the Instructing
Group). All such insurance proceeds may be retained by the Collateral Agent as
part of Collateral hereunder and held in the Proceeds Account, applied by the
Collateral Agent toward payment of all or part of the Secured Obligations in
such order as is provided herein, or released to Grantor upon its request with
the consent of the Instructing Group.

        SECTION 6    Administration of the Rights to Payment.

        (a)     Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, if there exists at such time any Event of Default, all
remittances received by Grantor shall be held in trust for the Collateral Agent
and, in accordance with the Collateral Agent's instructions (upon instruction
from the Instructing Group), remitted to the Collateral Agent or deposited in an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).

        (b)     Investment Property and Instruments. At the request of the
Collateral Agent (at the request of the Instructing Group), if there exists at
such time any Event of Default, the Collateral Agent shall be entitled, subject
to the Intercreditor Agreement, to receive all distributions and payments of any
nature with respect to any Investment Property or Instruments, and all such
distributions or payments received by Grantor shall be held in trust for the
Collateral Agent and, in accordance with its instructions (with the consent of
the Instructing Group), remitted to the Collateral Agent or deposited to an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer). If there exists any
Default or Event of Default any such distributions and payments with respect to
any Investment Property held in any securities account shall be held and
retained in such securities account, in each case as part of the Collateral
hereunder. Additionally, the Collateral Agent shall have the right, if there
exists any Default or Event of Default, following prior written notice to
Grantor, to vote and to give consents, ratifications and waivers with respect to
any Investment Property and Instruments, and to exercise all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining thereto, as if the Collateral Agent were the absolute owner thereof;
provided that the Collateral Agent shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to Grantor or any
other Person for any failure to do so or delay in doing so.

        (e)     Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of this Section 6 shall be held
in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of Grantor, and be forthwith paid over or delivered to the
Collateral Agent in the same form as so received.

        SECTION 7    Authorization; Appointed Attorney-in-Fact. The Collateral
Agent shall have the right to, in the name of Grantor, or in the name of the any
of the Credit Parties or otherwise, without notice to or assent by Grantor, and
Grantor hereby constitutes and appoints


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the Collateral Agent (and any of the officers or employees or agents designated
by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with
full power and authority to:

        (i)     sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security interests
and in the Collateral of the Collateral Agent (for the benefit of the Credit
Agents) and file any such financing statements and Supplemental IP Security
Agreements by electronic means with or without a signature as authorized or
required by applicable law or filing procedures;

        (ii)    take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;

        (iii)   sign and endorse any invoice or bill of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;

        (iv)    notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to Grantor to such address the
Collateral Agent may designate (provided that the Collateral Agent agrees it
will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights to
Payment;

        (v)     receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);

        (vi)    send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;

        (vii)   contact, or direct Grantor to contact, all account debtors and
other obligors on the Rights to Payment and instruct such account debtors and
other obligors to make all payments directly to the Collateral Agent;

        (viii)  assert, adjust, sue for, compromise or release any claims under
any policies of insurance;

        (ix)    exercise dominion and control over, and refuse to permit further
withdrawals from, Deposit Accounts maintained with Bank of America or any other
bank, financial institution or other Person;

        (x)     notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Collateral Agent;

        (xi)    ask, demand, collect, receive and give acquittances and receipts
for any and all Rights to Payment, enforce payment or any other rights in
respect of the Rights to Payment and other Collateral, grant consents, agree to
any amendments, modifications or waivers of the


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agreements and documents governing the Rights to Payment and other Collateral,
and otherwise file any claims, take any action or institute, defend, settle or
adjust any actions, suits or proceedings with respect to the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may deem necessary
or desirable to maintain, preserve and protect the Collateral, to collect the
Collateral or to enforce the rights of the Collateral Agent with respect to the
Collateral;

        (xii)   execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual Property
and grant or issue any exclusive or non-exclusive license or sublicense with
respect to any Intellectual Property;

        (xiii)  execute any and all endorsements, assignments or other documents
and instruments necessary to sell, lease, assign, convey or otherwise transfer
title in or dispose of the Collateral;

        (xiv)   execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interests of the Collateral Agent therein; and

        (xv)    execute any and all such other documents and instruments, and do
any and all acts and things for and on behalf of Grantor, which the Collateral
Agent (upon instruction from the Instructing Group) may deem necessary or
advisable (A) to realize upon the Collateral, and (B) to maintain, protect and
preserve the Collateral and the security interests of the Collateral Agent
therein and to accomplish the purposes of this Agreement.

The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent, pursuant to clauses (ii) through (xiii), (xiv)(A) and
(xv)(A). The foregoing power of attorney is coupled with an interest and
irrevocable so long as any of the Secured Obligations has not been paid and
performed in full. Grantor hereby ratifies, to the extent permitted by law, any
and all acts that the Collateral Agent shall lawfully and in good faith do or
cause to be done by virtue of and in compliance with this Section 7.

        SECTION 8    Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which Grantor has agreed to perform or pay
under or in connection with this Agreement, and which Grantor has failed to
perform or pay as and when due, and Grantor shall reimburse the Collateral Agent
on demand for any amounts paid by the Collateral Agent pursuant to this Section
8.

        SECTION 9    Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys


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actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.

        SECTION 10    Remedies.

        (a)     Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to it in this Agreement, the Credit Agreement or any other Credit
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, Grantor
agrees that:

        (i)     The Collateral Agent may peaceably and without notice enter any
premises of Grantor, take possession of any Collateral, remove, prohibit access
to or use of, or dispose of all or part of the Collateral on any premises of
Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or sue for all or any part of the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may determine.

        (ii)    The Collateral Agent may require Grantor to assemble all or any
part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.

        (iii)   The Collateral Agent may use or transfer any of Grantor's rights
and interests in any Intellectual Property, by license, by sublicense (to the
extent permitted by an applicable license) or otherwise, on such conditions and
in such manner as the Collateral Agent (upon instruction of the Instructing
Group) may determine.

        (iv)    The Collateral Agent may secure the appointment of a receiver of
the Collateral or any part thereof (to the extent and in the manner provided by
applicable law).

        (v)     The Collateral Agent may withdraw (or cause to be withdrawn) any
and all funds from any Deposit Accounts or securities accounts.

        (vi)    The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral Agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at the
same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction of
the Instructing Group) deem advisable; provided, however, that Grantor shall be
credited with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall have the right
upon any such public sale, and, to the extent permitted by law, upon any such
private sale, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which right or equity of redemption
Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees
that the sending of notice by ordinary mail, postage prepaid, to the address of
Grantor set forth in the Credit Agreement, of the place and time of any public
sale or of the time after which any private sale or other intended disposition
is to be made, shall be deemed reasonable notice thereof if such notice is sent
ten days prior to the date of such sale or other disposition or the date on or
after which


   227



such sale or other disposition may occur, provided that the Collateral Agent may
provide Grantor shorter notice or no notice, to the extent permitted by the UCC
or other applicable law.

        (b)     License. For the purpose of enabling the Collateral Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to the Collateral Agent
for the benefit of the Credit Agents an irrevocable, non-exclusive and
assignable license (exercisable without payment or royalty or other compensation
to Grantor) to use, license or sublicense any Intellectual Property.

        (c)     Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent for
the benefit of the Credit Agents may, at their election, (i) retain the proceeds
of any sale, collection, disposition or other realization upon the Collateral
(or any portion thereof) in a special purpose non-interest-bearing restricted
deposit account (the "Proceeds Account") created and maintained by the
Collateral Agent for the benefit of the Credit Agents for such purpose (which
shall constitute a Deposit Account included within the Collateral hereunder)
until such time as the Collateral Agent may elect to apply such proceeds to the
Secured Obligations, and Grantor agrees that such retention of such proceeds by
the Collateral Agent shall not be deemed strict foreclosure with respect
thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of
the Instructing Group), estimate the liquidated amount of any such contingent,
unmatured or unliquidated claims and apply the proceeds of the Collateral
against such amount; or (iii) otherwise proceed in any manner permitted by
applicable law. Grantor agrees that the Proceeds Account shall be a blocked
account and that upon the irrevocable deposit of funds into the Proceeds
Account, Grantor shall not have any right of withdrawal with respect to such
funds. Accordingly, Grantor irrevocably waives until the termination of the
security interests granted under this Agreement in accordance with Section 23
the right to make any withdrawal from the Proceeds Account and the right to
instruct the Collateral Agent, or any of the Credit Parties to honor drafts
against the Proceeds Account.

        (d)     Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

        SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties (A)
to proceed against any Person, (B) to exhaust any other collateral or security
for any of the


   228



Secured Obligations, (C) to pursue any remedy, or (D) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral; and (iii) all claims, damages, and demands against the Collateral
Agent, or any of the Credit Parties arising out of the repossession, retention,
sale or application of the proceeds of any sale of the Collateral.

        SECTION 12 Notices. All notices or other communications hereunder shall
be given in the manner and to the addresses specified in, and shall be effective
as provided in, the Credit Agreement; provided, however, that notices hereunder
to (a) the Swap Provider shall be delivered to Fleet National Bank using the
information listed in Schedule 10.02 of the Credit Agreement for such party as a
Lender or such replacement Swap Provider as may be appointed from time to time
pursuant to the terms of the Intercreditor Agreement, and (b) the Note Holders
shall be delivered to such persons at the address specified in the Note Purchase
Agreement, or to such replacement Note Holders as may be appointed from time to
time consistent with the terms of the Intercreditor Agreement.

        SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent, or any of the Credit Parties to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent,
or any of the Credit Parties.

        SECTION 14    Indemnification; Other Charges.

        (a)     Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and their respective directors,
officers, employees, agents, counsel and other advisors (each an "Indemnified
Person") against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to an Indemnified Person (including
allocated costs of internal counsel), which may be imposed on, incurred by, or
asserted against any Indemnified Person, in any way relating to or arising out
of this Agreement or the transactions contemplated hereby or any action taken or
omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided
that Grantor shall not be liable to any Indemnified Person with respect to
Indemnified Liabilities resulting from such Indemnified Person's gross
negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, Grantor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

        (b)     Other Charges. The Grantor agrees to indemnify the Collateral
Agent and the Credit Parties against and hold each of them harmless from any and
all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by reason
of the execution, delivery, performance and enforcement of this Agreement.


   229



        (c)     Interest. Any amounts payable to any Indemnified Person under
this Section 14 or otherwise under this Agreement if not paid upon demand shall
bear interest from the date of such demand until paid in full, at the applicable
rate, (a) for the Administrative Agent and any Lender, as set forth in Section
2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the
Specified Swap Agreement, and (c) for the Note Holders as set forth in Section
2.08(b) of the Note Purchase Agreement.

        SECTION 15 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Grantor, each of the Credit Parties, the
Collateral Agent, each Indemnified Person referred to in Section 14 and their
respective successors and assigns.

        SECTION 16 Governing Law and Jurisdiction.

        (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT AND
EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT
PARTIES WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

        SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A


   230



JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        SECTION 18 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.

        SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

        SECTION 20 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Collateral Agent or any Credit Agent of a
facsimile transmitted document purportedly bearing the signature of a Grantor
shall bind Grantor with the same force and effect as the delivery of a hard copy
original. Any failure by the Collateral Agent or any Credit Agent to receive the
hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Collateral
Agent or such Credit Party.

        SECTION 21 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Credit Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.


   231



        SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this
Agreement and the other Credit Documents may contain covenants and other terms
and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.

        SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Company under the Credit Agreement and payment and performance in
full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination of
all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.

        (ii)    Concurrently with any permitted disposition of Collateral under
the Credit Documents, the security interests hereunder shall automatically be
released from the Collateral so disposed of, subject to Section 5(j); provided,
however, that the security interests shall continue in the Proceeds thereof.
Upon satisfaction to all conditions precedent to any permitted disposition set
forth herein or in the other Credit Documents, the Collateral Agent and all
Credit Agents shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Collateral provided by this Section. Any such release shall
specifically describe the portion of the Collateral to be released, shall be
expressed to be unconditional and shall be without recourse or warranty (other
than a warranty that the Collateral Agent and the Credit Agents have not
assigned their rights and interests to any other Person).

        SECTION 24 Assumption. Upon execution and delivery to the Administrative
Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as
provided in Section 6.14 of the Credit Agreement, effective as of the effective
date of such Subsidiary Security Agreement, such Guarantor shall be deemed a
Grantor party hereto, and this Agreement shall be deemed amended to include any
amendments to the Schedules provided by such Subsidiary in connection therewith.

        SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]



   232



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


                                        [_________________] CORPORATION
                                         Grantor


                                        By:
                                           --------------------------------
                                        Name:
                                        Title:


                                        BANK OF AMERICA, N.A.,
                                        as Collateral Agent


                `                       By:
                                           --------------------------------
                                        Name:
                                        Title:










   233



                                   SCHEDULE 1
                            to the Security Agreement


1.      LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
        COLLATERAL

        a.      Chief Executive Office and Principal Place of Business:




Other locations where Grantor conducts business or Collateral is kept:








2.      LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT





3.      TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS
        NAMES; ETC.






4.      DEPOSIT ACCOUNTS



   234




5.      INVESTMENT PROPERTY






6.      INSTRUMENTS






7.      LEASED EQUIPMENT







   235



                                   SCHEDULE 2
                            to the Security Agreement



(A)     ISSUED PATENTS OF GRANTOR
                                                    
    Grantor    Patent No.   Issue Date    Inventors     Title      Agent
    -------    ----------   ----------    ---------     -----      -----




(B)     PENDING PATENT APPLICATIONS OF GRANTOR
                                                 
Grantor      Application No.    Filing Date    Inventors      Title
- -------      ---------------    -----------    ---------      -----



(C)     TRADEMARKS OF GRANTOR
                                                         
             Registration    Registration                   Registered
 Grantor         No.            Date        Filing Date       Owner       Mark
 -------         ---            ----        -----------       -----       ----




(D)     PENDING TRADEMARK APPLICATIONS OF GRANTOR
                                                    
             Application
 Grantor         No.        Filing Date       Applicant           Mark
 -------         ---        -----------       ---------           ----




(E)     COPYRIGHTS OF GRANTOR
                                          
 Grantor        Copyright Title       Reg. No.       Date of Issue
 -------        ---------------       --------       -------------



   236



(F)     COPYRIGHT APPLICATIONS OF GRANTOR
                                     
 Grantor             Title                  Date of Application
 -------             -----                  -------------------



(G)     COPYRIGHT LICENSES OF GRANTOR
                                                 
  Grantor        Title   Copyright Owner       Reg. No.       Date of Issue
  -------        -----   ---------------       --------       -------------





   237



                                   SCHEDULE 3
                            to the Security Agreement


                                 FILING OFFICES










   238



                                                                       EXHIBIT H


                       SUPPLEMENTAL IP SECURITY AGREEMENT

        THIS SUPPLEMENTAL IP SECURITY AGREEMENT (this "Agreement"), dated as of
_________ __, 2001, is made by and among [____________________], a [________]
corporation (the "Grantor") in favor of BANK OF AMERICA, N.A., as the Collateral
Agent for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent
(in such capacity, the "Administrative Agent") for itself and the financial
institutions (the "Lenders" and, individually, a "Lender") from time to time
party to that certain Credit Agreement dated as of January 31, 2001 (as renewed,
extended, modified, amended or restated from time to time, the "Credit
Agreement"); (b) the "Swap Provider" (as defined in the Security Agreement); and
(c) the Note Holders party from time to time to the Note Purchase Agreement.

                                    RECITALS

        WHEREAS, it is a covenant the satisfaction of which permits borrowings
under the Credit Agreement and the Note Purchase Agreement that the Grantor
enter into this Agreement and grant to the Collateral Agent for the benefit of
the Credit Parties the security interests hereinafter provided to secure the
obligations of the Grantor described below.

        WHEREAS, the Grantor is party to that Security Agreement dated as of
February __, 2001 by and among Grantor[, other Subsidiaries of the Company party
thereto] and the Collateral Agent for the benefit of the Credit Parties (the
"Security Agreement").

        NOW, THEREFORE, the parties hereto agree as follows:

        SECTION 1 Definitions; Interpretation. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them,
respectively, in subsections (a), (b) and (c) of Section 1 of the Security
Agreement. The rules of interpretation set forth in subsection (d) of Section 1
of the Security Agreement shall be applicable to this Agreement and are
incorporated herein by this reference.

        SECTION 2 Grant of Security Interest.

        (a)     As a continuing security for the payment and performance of the
Secured Obligations, the Grantor hereby pledges, assigns, transfers,
hypothecates and sets over to the Collateral Agent (for the benefit of the
Credit Parties, and each of them), and hereby grants to the Collateral Agent
(for the benefit of the Credit Parties, and each of them), a security interest
in all of Grantor's right, title and interest in, to and under the Intellectual
Property, wherever located and whether now existing or owned or hereafter
acquired or arising, including without limitation such Intellectual Property
described and set forth on Schedule 1 hereto.

        (b)     Notwithstanding the foregoing provisions of this Section 2, the
grant of a security interest as provided herein shall not extend to, and the
term "Intellectual Property" shall not include, Intellectual Property which is
now or hereafter held by Grantor as licensee, lessee or otherwise to the extent
such Intellectual Property consists of: (i) ordinary shrinkwrap licenses


   239



governing software products that Grantor purchased in the Ordinary Course of
Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement.

        SECTION 3 Further Assurances; Appointment of Collateral Agent as
Attorney-in-Fact. The Grantor at its expense shall execute and deliver, or cause
to be executed and delivered, to the Collateral Agent any and all documents and
instruments, in form and substance satisfactory to the Collateral Agent (upon
instruction of the Instructing Group), and take any and all action, which the
Collateral Agent (upon instruction of the Instructing Group) may request from
time to time, to perfect and continue perfected, maintain the priority of or
provide notice of the security interest of the Collateral Agent in the
Intellectual Property Collateral and to accomplish the purposes of this
Agreement. The Collateral Agent shall have the right, in the name of the
Grantor, or in the name of the Collateral Agent or any of the Credit Parties or
otherwise, upon notice to but without the requirement of assent by the Grantor,
and the Grantor hereby constitutes and appoints the Collateral Agent (and any of
the Collateral Agent's officers or employees or agents designated by the
Collateral Agent) as the Grantor's true and lawful attorney-in-fact with full
power and authority, to: (i) sign any financing statements and any other
documents and instruments which the Collateral Agent (upon instruction of the
Instructing Group) deems necessary or advisable to perfect or continue
perfected, maintain the priority of or provide notice of the Collateral Agent's
security interest in the Intellectual Property; (ii) assert, adjust, sue for,
compromise or release any claims under any policies of insurance; and (iii)
execute any and all such other documents and instruments, and do any and all
acts and things for and on behalf of the Grantor, which the Collateral Agent
(upon instruction of the Instructing Group) may deem necessary or advisable to
maintain, protect, realize upon and preserve the Intellectual Property and the
Collateral Agent's security interest therein and to accomplish the purposes of
this Agreement, including (A) to defend, settle, adjust or institute any action,
suit or proceeding with respect to the Intellectual Property, (B) to assert or
retain any rights under any license agreement for any of the Intellectual
Property, including without limitation any rights of the Grantor arising under
Section 365(n) of the Bankruptcy Code, and (C) to execute any and all
applications, documents, papers and instruments for the Collateral Agent to use
the Intellectual Property, to grant or issue any exclusive or non-exclusive
license or sub-license with respect to any Intellectual Property and to assign,
convey or otherwise transfer title in or dispose of the Intellectual Property;
provided, however, that the Collateral Agent agrees that, except upon and during
the continuance of an Event of Default, it shall not exercise the power of
attorney pursuant to clauses (ii) and (iii). The power of attorney set forth in
this Section 3, being coupled with an interest, is irrevocable so long as this
Agreement shall not have terminated.

        SECTION 4 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.

        SECTION 5 Credit Parties' Rights and Remedies.


   240



        (a)     Upon and during the continuation of a Default, the Collateral
Agent shall have all rights and remedies available to it under this Agreement,
the Security Agreement and applicable law with respect to the security interests
in any of the Intellectual Property. Grantor agrees that such rights and
remedies include, but are not limited to, the right of the Collateral Agent as a
secured party to sell or otherwise dispose of the Intellectual Property pursuant
to the UCC.

        (b)     The cash proceeds actually received from the sale or other
disposition or collection of Intellectual Property, and any other amounts
received in respect of the Intellectual Property Collateral the application of
which is not otherwise provided for herein, shall be applied as provided in the
Security Agreement.

        SECTION 6 Security Agreement. This Agreement is supplementary to and
entered into in support of the Security Agreement. The terms and provisions of
the Security Agreement are incorporated herein by reference and shall be applied
as if fully set forth herein. The Grantor acknowledges that the rights and
remedies of the Collateral Agent with respect to the security interests in the
Intellectual Property granted hereby are more fully set forth in the Security
Agreement and that all such rights and remedies are cumulative.

        SECTION 7 Independence. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable Laws (including the UCC, patent law, trademark law and copyright
law) and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.

        SECTION 8 Representations and Warranties. The representations and
warranties of the Grantor set forth in the Section 4 of the Security Agreement
and incorporated herein by Section 6 hereof are true and correct as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case such representations and
warranties are true and correct as of such earlier date.

        SECTION 9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

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


   241



                                        CERIDIAN CORPORATION
                                        Grantor


                                        By:
                                           -----------------------------------
                                           Name:
                                           Title:


                                        BANK OF AMERICA, N.A.,
                                        as Administrative Agent


                                        By:
                                           -----------------------------------
                                           Name:
                                           Title:








   242



                                   SCHEDULE 1
                    to the Supplemental IP Security Agreement


(A)     NEW ISSUED PATENTS OF GRANTOR

                                                 
  Grantor    Patent No.    Issue Date    Inventors     Title     Agent
  -------    ----------    ----------    ---------     -----     -----





(B)     PENDING PATENT APPLICATIONS OF GRANTOR
                                                        
Grantor     Application No.   Filing Date       Inventors           Title
- -------     --------------    -----------       ----------          -----





(C)     NEW U.S. TRADEMARKS OF GRANTOR
                                                          
            Registration    Registration                  Registered
  Grantor       No.            Date        Filing Date       Owner        Mark
  -------       ---            ----        -----------       -----        ----





(D)     PENDING TRADEMARK APPLICATIONS OF GRANTOR
                                                            
  Grantor      Application No.     Filing Date       Applicant           Mark
  -------      ---------------     -----------       ---------           ----





(E)     NEW COPYRIGHTS OF GRANTOR
                                                  
   Grantor          Copyright Title          Reg. No.       Date of Issue
   -------          ---------------          --------       -------------




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(F)     NEW COPYRIGHT APPLICATIONS OF GRANTOR
                                        
   Grantor        Title       Application No.     Date of Application
   -------        -----       ---------------     -------------------




(G)     NEW COPYRIGHT LICENSES OF GRANTOR


                                                  
  Grantor        Title   Copyright Owner        Reg. No.       Date of Issue
  -------        -----   ---------------        --------       -------------






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                                                                       EXHIBIT I

                        FORM OF COMPANY PLEDGE AGREEMENT

        THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __,
2001, is made among CERIDIAN CORPORATION, a Delaware corporation (the
"Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent for the benefit of:
(a) BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders from time to time party to
the Credit Agreement, dated as of January 31, 2001 (the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein), and (c) the Note Holders party from
time to time to the Note Purchase Agreement.

        It is a condition precedent to the borrowings under each of the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and pledge to the Collateral Agent the shares of the capital stock of
each of the Subsidiaries set forth in Schedule 1 (collectively, the
"Subsidiaries"), owned by the Grantor, to secure the obligations of the Grantor
described below.

        Accordingly, the parties hereto agree as follows:

        SECTION 1     Definitions; Interpretation.

        (a)     Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.

        (b)     Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

        "Additional Collateral" means any and all (i) additional capital stock
or other equity securities of the Subsidiaries, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in the capital stock or other equity securities of the
Subsidiaries, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.

        "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.


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        "Credit Agents" and each, individually, a "Credit Agent" means (a) the
Administrative Agent (for the benefit of itself and the other Lenders, and the
L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

        "Credit Documents" means, collectively, the Note Documents, the Note
Holder Documents and the Swap Documents.

        "Credit Parties" and each, individually, a "Credit Party" means the
Credit Agents and the Debt Participants.

        "Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.

        "Exchange Act" means the Securities Exchange Act of 1934.

        "Instructing Group" means "Instructing Group" under, and as defined in,
the Intercreditor Agreement.

        "Intercreditor Agreement" means that Intercreditor Agreement dated as of
January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the Note Holders.

        "Investment Property" means any and all investment property of the
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.

                "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.

                "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Note Holders party thereto.


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        "Pledged Collateral" has the meaning set forth in Section 2(a).

        "Pledged Shares" means (a) all of the issued and outstanding shares of
capital stock, whether certificated or uncertificated, of the Subsidiaries now
owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as
more specifically described in Schedule 2, provided, however, that 65% (but no
more than 65%) of the issued and outstanding capital stock of any Subsidiary
which is a Foreign Subsidiary, measured on a non-diluted basis) shall constitute
Pledged Shares hereunder, and (b) all Investment Property.

        "Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent (for the benefit of the
Credit Agents), whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, now or created under, arising out of or in connection with any of
the Credit Documents, including all Obligations (as independently defined in
each of the Credit Agreement and the Note Purchase Agreement), and any
obligations under any Specified Swap Agreement to the extent arising out of any
Specified Swap Contracts.

        "Securities Act" means the Securities Act of 1933.

        "Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Grantor
and the Swap Provider as swap counterparties.

        "Specific Swap Contract" means any interest rate swap entered into
between Grantor and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

                "Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Note Party
under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.

                "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.

                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

                "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in


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any Pledged Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York, the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

        (c)     Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

        (d)     Interpretation. The rules of interpretation set forth in
Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this
Agreement and are incorporated herein by this reference.

        SECTION 2 Security Interest.

        (a)     Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.

        (b)     Delivery of Pledged Shares. The Grantor hereby agrees to deliver
to or for the account of the Collateral Agent, at the address and to the Person
to be designated by theAdministrative Agent, the certificates representing the
Pledged Shares, which shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent (with the
consent of the Instructing Group).

        (c)     Delivery of Additional Collateral. If the Grantor shall become
entitled to receive or shall receive any Additional Collateral, the Grantor
shall accept any such Additional Collateral as the agent for the Collateral
Agent, shall hold it in trust for the Collateral Agent, shall segregate it from
other property or funds of the Grantor, and shall deliver all Additional
Collateral and all certificates, instruments and other writings representing
such Additional Collateral forthwith to or for the account of the Collateral
Agent, at the address and to the Person to be designated by the Collateral Agent
upon instruction from the Instructing Group, which shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent (with consent of the Instructing Group), as the Collateral
Agent shall request, to be held by the Collateral Agent subject to the terms
hereof, as part of the Pledged Collateral.


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Upon accepting any such Additional Collateral hereunder, the Collateral Agent
shall promptly send a notification to the Grantor describing the Additional
Collateral accepted and held as part of the Pledged Collateral hereunder, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.

        (d)     Transfer of Security Interest Other Than by Delivery. If for any
reason Pledged Collateral cannot be delivered to or for the account of the
Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).

        (e)     Continuing Security Interest. The Grantor agrees that this
Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.

        SECTION 3 Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:

        (a)     Valid Issuance of Pledged Collateral. All the Pledged Shares
have been, and upon issuance any Additional Collateral will be, duly and validly
issued, and are and will be fully paid and non-assessable.

        (b)     Ownership of Pledged Collateral. With respect to the Pledged
Shares the Grantor is, and with respect to any Additional Collateral the Grantor
will be, the legal record and beneficial owner thereof, and has and will have
good and marketable title thereto, subject to no Lien except for the pledge and
security interests created by this Agreement.

        (c)     Capitalization of the Subsidiary. The Pledged Shares constitute
100% of the issued and outstanding shares of capital stock of the Subsidiary,
provided, however, that if the Company is a Foreign Subsidiary of the Grantor,
the Pledged Shares constitute no less than 65% of the issued and outstanding
capital stock of the Subsidiary, measured on a non-diluted basis.

        (d)     Options, Warrants, Etc. Other than as set forth in Schedule 2,
no securities convertible into or exchangeable for any shares of capital stock
of the Subsidiary, or any options, warrants or other commitments entitling any
Person to purchase or otherwise acquire any shares of capital stock of the
Subsidiary, are issued and outstanding.

        (e)     Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent .


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        (f)     Shareholders Agreements. There are no shareholders agreements,
voting trusts, proxy agreements or other agreements or understandings which
affect or relate to the voting or giving of written consents with respect to any
of the Pledged Collateral.

        (g)     No Violation of Securities Laws. None of the Pledged Shares has
been transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such transfer may be
subject.

        (h)     Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).

        (i)     Other Financing Statements. Other than (i) financing statements
disclosed to the Collateral Agent and (ii) financing statements in favor of the
Collateral Agent, no effective financing statement naming the Grantor as debtor,
assignor, grantor, mortgagor, pledgor or the like and covering all or any part
of the Pledged Collateral is on file in any filing or recording office in any
jurisdiction.

        (j)     Enforceability; Priority of Security Interest. This Agreement
(i) creates an enforceable perfected and first priority security interest in and
pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b),
and (ii) will create an enforceable perfected and first priority security
interest in and pledge of the Additional Collateral upon delivery thereof
pursuant to Section 2(c) (or upon the taking of such other action with respect
thereto as may be requested by the Collateral Agent pursuant to Section 2(d)),
in each case securing the payment and performance of the Secured Obligations.

        The Grantor agrees that the foregoing representations and warranties
shall be deemed to have been made by it on the date of each delivery of Pledged
Collateral hereunder.

        SECTION 4    Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied or unpaid, the
Grantor agrees that:

        (a)     Defense of Pledged Collateral. The Grantor will, at its own
expense, appear in and defend any action, suit or proceeding which purports to
affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.

        (b)     Preservation of Collateral. The Grantor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Pledged Collateral.

        (c)     Compliance with Laws, Etc. The Grantor will comply with all
laws, regulations and ordinances relating in a material way to the possession,
maintenance and control of the Pledged Collateral.

        (d)     Location of Books and Chief Executive Office. The Grantor will:
(i) keep all books and records pertaining to the Pledged Collateral at the
location set forth in Section 3(h);


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and (ii) give at least 30 days' prior written notice to the Collateral Agent of
(A) any changes in any such location where books and records pertaining to the
Pledged Collateral are kept, or (B) any change in the location of the Grantor's
chief executive office or principal place of business.

        (e)     Change in Name, Identity or Structure. The Grantor will give at
least 30 days' prior written notice to the Collateral Agent of (i) any change in
its name, (ii) any changes in, additions to or other modifications of its trade
names used as the name of Grantor, and (iii) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.

        (f)     Disposition of Pledged Collateral. Except as permitted by the
Credit Agreement, the Grantor will not surrender or lose possession of (other
than to the Collateral Agent or, with the prior consent of the Collateral Agent,
to a depositary or financial intermediary), exchange, sell, convey, assign or
otherwise dispose of or transfer the Pledged Collateral or any right, title or
interest therein.

        (g)     Liens. Except for Permitted Liens, the Grantor will not create,
incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.

        (h)     Shareholders Agreements. The Grantor will not enter into any
shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.

        (i)     Issuance of Additional Shares. The Grantor will not consent to
or approve, or allow the Subsidiary to consent to or approve, the issuance to
any Person of any additional shares of any class of capital stock of the
Subsidiary, or of any securities convertible into or exchangeable for any such
shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.

        (j)     Notices. The Grantor will deliver promptly to the Collateral
Agent all reports and notices received by the Grantor from the Subsidiary in
respect of any of the Pledged Collateral.

        (k)     Further Assurances. The Grantor will promptly, upon the written
request from time to time of the Collateral Agent, execute, acknowledge and
deliver, and file and record, all such financing statements and other documents
and instruments, and take all such action, as shall be reasonably necessary to
carry out the purposes of this Agreement.

        SECTION 5 Administration of the Pledged Collateral.

        (a)     Distributions and Voting Prior to an Event of Default. Unless
there exists any Default or Event of Default: (i) the Grantor shall be entitled
to receive and retain for its own account any cash dividend on or other cash
distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor
shall have the right to vote the Pledged Collateral and to retain the power to
control the direction, management and policies of the Subsidiary to the same
extent as the Grantor would if the Pledged Collateral were not pledged to the
Collateral Agent pursuant to


   251



this Agreement; provided, however, that the Grantor shall not be entitled to
receive (A) cash paid, payable or otherwise distributed in redemption of, or in
exchange for or in substitution of, any Pledged Collateral, or (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 of the
Subsidiary or in connection with a reduction of capital, capital surplus or
paid-in-surplus or any other type of recapitalization involving the Subsidiary;
and provided further, however, that no vote shall be cast or consent, waiver or
ratification given or action taken which would have the effect of impairing the
position or interest of the Collateral Agent in respect of the Pledged
Collateral or which would alter the voting rights with respect to the stock of
the Subsidiary or be inconsistent with or violate any provision of this
Agreement and other Credit Documents. If applicable, the Grantor shall be deemed
the beneficial owner of all Pledged Collateral for purposes of Sections 13 and
16 of the Exchange Act and agrees to file all reports required to be filed by
beneficial owners of securities thereunder. The Collateral Agent shall execute
and deliver (or cause to be executed and delivered) to the Grantor all such
proxies and other instruments as the Grantor may reasonably request for the
purpose of enabling the Grantor to exercise the voting and other rights which it
is entitled to exercise pursuant to this subsection (a) and to receive the
distributions which it is authorized to receive and retain pursuant to this
subsection (a).

        (b)     General Authority upon an Event of Default. If there exists any
Default or Event of Default:

                (i)     the Collateral Agent shall be entitled to receive all
distributions and payments of any nature with respect to the Pledged Collateral,
to be held by the Collateral Agent as part of the Pledged Collateral;

                (ii)    the Collateral Agent shall have the right following
prior written notice to the Grantor to vote or consent to take any action with
respect to the Pledged Shares and exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if the Collateral Agent were the absolute owner thereof;
and

                (iii)   the Collateral Agent shall have the right, for and in
the name, place and stead of the Grantor, to execute endorsements, assignments
or other instruments of conveyance or transfer with respect to all or any of the
Pledged Collateral, to endorse any checks, drafts, money orders and other
instruments relating thereto, to sue for, collect, receive and give acquittance
for all moneys due or to become due in connection with the Pledged Collateral
and otherwise to file any claims, take any action or institute, defend, settle
or adjust any actions, suits or proceedings with respect to the Pledged
Collateral, execute any and all such other documents and instruments, and do any
and all such acts and things, as the Collateral Agent may deem necessary or
desirable to protect, collect, realize upon and preserve the Pledged Collateral,
to enforce the Collateral Agent's rights with respect to the Pledged Collateral
and to accomplish the purposes of this Agreement.

        (c)     Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of subsection (a) or (b) shall
be held in trust for the benefit of the Collateral Agent, be


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segregated from the other property or funds of the Grantor, and be forthwith
paid over or delivered to the Collateral Agent in the same form as so received.

        (d)     Certain Other Administrative Matters. At any time and from time
to time, the Collateral Agent may cause any of the Pledged Collateral to be
transferred into its name or into the name of its nominee or nominees (subject
to the revocable rights specified in subsection (a)). The Collateral Agent shall
at all times have the right to exchange uncertificated Pledged Collateral for
certificated Pledged Collateral, and to exchange certificated Pledged Collateral
for certificates of larger or smaller denominations, for any purpose consistent
with this Agreement.

        (e)     Appointment of Collateral Agent as Attorney-in-Fact. For the
purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with
regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this subsection (e). The foregoing power of attorney is coupled with
an interest and irrevocable so long as the Secured Obligations have not been
paid and performed in full. Grantor hereby ratifies, to the extent permitted by
law, all that the Collateral Agent shall lawfully and in good faith do or cause
to be done by virtue of and in compliance with this Section 5.

        SECTION 6    Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which the Grantor has agreed to perform or pay
under or in connection with this Agreement, and the Grantor shall reimburse the
Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant
to this Section 6.

        SECTION 7    Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to it and shall not be
responsible to the Grantor or any other Person for any failure to do so or delay
in doing so. Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Collateral while held hereunder and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Pledged Collateral.



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        SECTION 8     Remedies.

        (a)     Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to it in this or any Credit Document, all rights and remedies of a
secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted by the UCC or other applicable law. The
Grantor recognizes that the Collateral Agent may be unable to make a public sale
of any or all of the Pledged Collateral, by reason of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent and each Credit Party shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Pledged Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption the Grantor
hereby releases to the extent permitted by law.

        (b)     Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the liquidated amount of any
such contingent, unmatured or unliquidated claims and apply the proceeds of the
Pledged Collateral against such amount; or (iii) otherwise proceed in any manner
permitted by applicable law. The Grantor agrees that the Proceeds Account shall
be a blocked account and that upon the irrevocable deposit of funds into the
Proceeds Account, the Grantor shall not have any right of withdrawal with
respect to such funds. Accordingly, the Grantor irrevocably waives until the
termination of this Agreement in accordance with Section 22 the right to make
any withdrawal from the Proceeds Account and the right to instruct the
Collateral Agent to honor drafts against the Proceeds Account.


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        (c)     Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

        SECTION 9    Registration Rights.

        (a)     Registration of Pledged Collateral. If the Collateral Agent at
the request of the Instructing Group shall determine to exercise its right to
sell any or all of the Pledged Collateral pursuant to Section 8, and if the
Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and
the Grantor's and the Subsidiary's respective directors and officers to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things as may, in the view of the Collateral Agent, be
advisable to register such Pledged Collateral under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the view of the Collateral Agent
(with the consent of the Instructing Group), are necessary or be necessary or
advisable, all in conformity with the requirements of the Securities and
Exchange Commission applicable thereto. The Grantor agrees to comply, and to
cause the Subsidiary to comply, with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to
cause the Subsidiary to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which shall
satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall
cause to be furnished to the Collateral Agent and each of the Credit Agents such
number of copies of each preliminary prospectus and prospectus, shall promptly
notify the Collateral Agent of the happening of any event (upon becoming aware
thereof) as a result of which any then effective prospectus includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of then existing circumstances and shall cause the Collateral Agent and
each Credit Agent to be furnished with such number of copies as any such Person
may reasonably request of such supplement to or amendment of such prospectus as
is necessary to eliminate such untrue statement or correct such omission.

        (b)     No Obligation to Delay Private Sale. Neither the Collateral
Agent nor the Credit Parties shall be under any obligation to delay a private
sale of any of the Pledged Collateral (as contemplated by subsection (a)) for
the period of time necessary to permit the issuer thereof to register such
Pledged Collateral for public sale under the Securities Act, or under applicable
state securities laws, even if such issuer would agree to do so.

        (c)     Further Acts. The Grantor further agrees to do or to use its
best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion


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of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding
and in compliance with any and all applicable laws (including the Exchange Act),
regulations, orders, writs, injunctions, decrees or awards of any and all
Governmental Authorities having jurisdiction over any such sale or sales.

        (d)     Equitable Relief. The Grantor acknowledges that a breach of any
of the covenants contained in this Section 9 will cause irreparable injury to
the Collateral Agent and the Credit Parties, that the Collateral Agent and
Credit Parties have no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.

        (e)     Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.

        SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in the Collateral
Agent's power, or (D) to make or give any presentments, demands for performance,
notices of nonperformance, protests, notices of protests or notices of dishonor
in connection with any of the Pledged Collateral; and (iii) all claims, damages,
and demands against the Collateral Agent arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Pledged
Collateral.

        SECTION 11 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; provided, however, that notices hereunder (a) to the Swap
Provider shall be delivered to Fleet National Bank using the information listed
in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such
replacement Swap Provider as may be appointed from time to time consistent with
the terms of the Intercreditor Agreement), and (b) to the Note Holders as set
forth in the Note Purchase Agreement (or such replacement Note Holders as may be
appointed from time to time consistent with the terms of the Intercreditor
Agreement). All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.

        SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent or any Credit Party to exercise, and no delay in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.


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        SECTION 13 Costs and Expenses; Indemnification; Other Charges.

        (a)     Costs and Expenses. The Grantor agrees to pay on demand:

                (i)     the out-of-pocket costs and expenses of the Collateral
Agent and any of the Credit Parties' attorney costs, in connection with the
negotiation, preparation, execution, delivery and administration of this
Agreement, and any amendments, modifications or waivers of the terms thereof,
and the custody of the Pledged Collateral;

                (ii)    all title, appraisal (including the allocated cost of
internal appraisal services), survey, audit, consulting, search, recording,
filing and similar costs, fees and expenses incurred or sustained by the
Collateral Agent or any Credit Party in connection with this Agreement or the
Pledged Collateral; and

                (iii)   all costs and expenses of the Collateral Agent or any
Credit Party, including Attorney Costs, in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interest under, this
Agreement, any out-of-court workout or other refinancing or restructuring or in
any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Pledged Collateral, including any and all losses,
costs and expenses sustained by the Collateral Agent and any Credit Party as a
result of any failure by the Grantor to perform or observe its obligations
contained herein.

        (b)     Indemnification. The Grantor shall indemnify, defend and hold
the Collateral Agent, Agent-Related Persons and each Credit Party and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful


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misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

        (c)     Other Charges. The Grantor agrees to indemnify the Indemnified
Persons against and hold each of them harmless from any and all present and
future stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.

        (d)     Interest. Any amounts payable to the Collateral Agent or any
Credit Party under this Section 13 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in full,
at the applicable rate of interest (a) for the Administrative Agent or any
Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the
Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any
Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement.

        SECTION 14 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the Grantor, the Collateral Agent and
each Credit Party and their respective successors and assigns.

        SECTION 15 Governing Law and Jurisdiction.

        (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS
HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL
AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE


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COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.

        SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

        SECTION 17 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.

        SECTION 18 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

        SECTION 19 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so


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executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.

        SECTION 20 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Note Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.

        SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that
this Agreement, and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.

        SECTION 22 Termination. Upon termination of the Commitments of the
Lenders, surrender of all Letters of Credit and payment and performance in full
of all Secured Obligations, this Agreement shall terminate and the Collateral
Agent shall (with the consent of the Instructing Group) promptly redeliver to
the Grantor any of the Pledged Collateral in its possession and shall execute
and deliver to the Grantor such documents and instruments reasonably requested
by the Grantor as shall be necessary to evidence termination of all security
interests given by the Grantor to the Collateral Agent hereunder; provided,
however, that the obligations of the Grantor under Sections 9(e) and 13 shall
survive such termination. Upon satisfaction to all conditions precedent to any
permitted disposition set forth herein or in the other Credit Documents, the
Collateral Agent shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Pledged Shares provided by this Section.

        SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]



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


                                         CERIDIAN CORPORATION
                                         THE GRANTOR


                                         By:
                                            ------------------------------
                                            Name:
                                            Title:


                                         BANK OF AMERICA, N.A.
                                         THE COLLATERAL AGENT


                                         By:
                                            ------------------------------
                                            Name:
                                            Title:







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                                   SCHEDULE 1
                          to the Stock Pledge Agreement

                                  SUBSIDIARIES








   262



                                   SCHEDULE 2
                          to the Stock Pledge Agreement

                                 PLEDGED SHARES

_______ stock of _________________ being represented by stock certificates as

follows:

Certificate No.               Certificate Date              No. of Shares
- ---------------               ----------------              -------------









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                                   SCHEDULE 3
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                      OF CAPITAL STOCK OF THE SUBSIDIARIES










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                                                                       EXHIBIT J

                       FORM OF SUBSIDIARY PLEDGE AGREEMENT


        THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __,
2001, is made among ___________________, a _______________ corporation (the
"Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent on behalf of, and for
the benefit of, (a) BANK OF AMERICA, N.A. in its capacity as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders from time
to time party to the Credit Agreement dated as of January 31, 2001 (as amended,
modified, renewed or extended from time to time, the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein), and (c) the "Note Holders" (as defined
herein) party to the Note Purchase Agreement.

        It is a condition precedent to the borrowings under each of the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and pledge to the Collateral Agent the shares of the capital stock of
___________________________, a ____________ corporation (the "Subsidiary"),
owned by the Grantor, to secure the obligations of the Company described below.

        Accordingly, the parties hereto agree as follows:

        SECTION 1 Definitions; Interpretation.

        (a)     Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.

        (b)     Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

        "Additional Collateral" means any and all (i) additional capital stock
or other equity securities of the Subsidiary, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in capital stock or other equity securities of the
Subsidiary, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.

        "Company" means CERIDIAN CORPORATION, a Delaware corporation.

        "Credit Documents" means the Note Documents together with the Swap
Documents.

        "Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be


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appointed from time to time thereunder) on behalf and for the benefit of, (a)
Bank of America, N.A. in its capacity as the Administrative Agent for the
benefit of itself and the other Lenders from time to time party to the Credit
Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to
the Note Purchase Agreement; and (c) the Swap Provider.

        "Credit Agents" and each, individually, a "Credit Agent" means (a) the
Administrative Agent (for the benefit of itself and the other Lenders, and the
L/C Issuer), (b) the Note Holders and (c) the Swap Provider.

        "Credit Parties" and each, individually, a "Credit Party" means the
Credit Agents and the Debt Participants.

        "Credit Documents" means, collectively, the Note Documents, the Note
Holder Documents and the Swap Documents.

        "Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.

        "Exchange Act" means the Securities and Exchange Act of 1934.

        "Instructing Group" means "Instructing Group" under, and as defined in,
the Intercreditor Agreement.

        "Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider and the Note Holders.

                "Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.

        "Note Purchase Agreement" means that Note Purchase Agreement dated as of
January 31, 2001 among the Company and the Note Holders party thereto.


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        "Intercreditor Agreement" means that Intercreditor Agreement dated as of
__________ _____, 2001 among the Collateral Agent, the Administrative Agent, the
Swap Provider, and the Note Holders.

        "Investment Property" means any and all investment property of the
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.

        "Pledged Collateral" has the meaning set forth in Section 2(a).

        "Pledged Shares" mean (a) all of the issued and outstanding shares of
capital stock, whether certificated or uncertificated, of the Subsidiary now
owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as
more specifically described in Schedule 1, provided, however, that if the
Subsidiary is a Foreign Subsidiary of the Grantor, 65% (but no more than 65%) of
the issued and outstanding capital stock of the Subsidiary, measured on a
non-diluted basis, shall constitute Pledged Shares, and (b) all Investment
Property.

        "Secured Obligations" means all indebtedness, liabilities and other
obligations of the Company to the Collateral Agent, whether now existing or
hereafter arising, and whether due to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, nor or created under,
arising out of or in connection with any of the Credit Documents, including all
Obligations (as independently defined in each of the Credit Agreement and the
Note Purchase Agreement), and any of the obligations under any Swap Documents.

        "Securities Act" means the Securities Act of 1933.

        "Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.

        "Specific Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.

        "Swap Collateral Documents" means, collectively, (a) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider, (b) all Account Control Agreements executed by any Note Party under
any Swap Document, (c) any documents executed by any Note Party to accomplish
cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC
financing statements, notices and other documents executed from time to time in
connection with any of the foregoing.

               "Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.


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                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

        "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York: provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.

        (c)     Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

        (d)     Interpretation. The rules of interpretation set forth in Section
1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and
are incorporated herein by this reference.

        SECTION 2 Security Interest.

        (a)     Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.

        (b)     Delivery of Pledged Shares. The Grantor hereby agrees to deliver
to or for the account of the Collateral Agent, at the address and to the Person
to be designated by theAdministrative Agent, the certificates representing the
Pledged Shares, which shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent (with the
consent of the Instructing Group).

        (c)     Delivery of Additional Collateral. If the Grantor shall become
entitled to receive or shall receive any Additional Collateral, the Grantor
shall accept any such Additional Collateral as the agent for the Collateral
Agent, shall hold it in trust for the Collateral Agent,


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shall segregate it from other property or funds of the Grantor, and shall
deliver all Additional Collateral and all certificates, instruments and other
writings representing such Additional Collateral forthwith to or for the account
of the Collateral Agent, at the address and to the Person to be designated by
the Collateral Agent upon instruction from the Instructing Group, which shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent (with consent of the Instructing
Group), as the Collateral Agent shall request, to be held by the Collateral
Agent subject to the terms hereof, as part of the Pledged Collateral. Upon
accepting any such Additional Collateral hereunder, the Collateral Agent shall
promptly send a notification to the Grantor describing the Additional Collateral
accepted and held as part of the Pledged Collateral hereunder, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.

        (d)     Transfer of Security Interest Other Than by Delivery. If for any
reason Pledged Collateral cannot be delivered to or for the account of the
Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).

        (e)     Continuing Security Interest. The Grantor agrees that this
Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.

        SECTION 3    Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:

        (a)     Valid Issuance of Pledged Collateral. All the Pledged Shares
have been, and upon issuance any Additional Collateral will be, duly and validly
issued, and are and will be fully paid and non-assessable.

        (b)     Ownership of Pledged Collateral. With respect to the Pledged
Shares the Grantor is, and with respect to any Additional Collateral the Grantor
will be, the legal record and beneficial owner thereof, and has and will have
good and marketable title thereto, subject to no Lien except for the pledge and
security interests created by this Agreement.

        (c)     Capitalization of the Subsidiary. The Pledged Shares constitute
100% of the issued and outstanding shares of capital stock of the Subsidiary,
provided, however, that if the Company is a Foreign Subsidiary of the Grantor,
the Pledged Shares constitute no less than 65% of the issued and outstanding
capital stock of the Subsidiary, measured on a non-diluted basis.


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        (d)     Options, Warrants, Etc. Other than as set forth in Schedule 2,
no securities convertible into or exchangeable for any shares of capital stock
of the Subsidiary, or any options, warrants or other commitments entitling any
Person to purchase or otherwise acquire any shares of capital stock of the
Subsidiary, are issued and outstanding.

        (e)     Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent .

        (f)     Shareholders Agreements. There are no shareholders agreements,
voting trusts, proxy agreements or other agreements or understandings which
affect or relate to the voting or giving of written consents with respect to any
of the Pledged Collateral.

        (g)     No Violation of Securities Laws. None of the Pledged Shares has
been transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such transfer may be
subject.

        (h)     Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).

        (i)     Other Financing Statements. Other than (i) financing statements
disclosed to the Collateral Agent and (ii) financing statements in favor of the
Collateral Agent, no effective financing statement naming the Grantor as debtor,
assignor, grantor, mortgagor, pledgor or the like and covering all or any part
of the Pledged Collateral is on file in any filing or recording office in any
jurisdiction.

        (j)     Enforceability; Priority of Security Interest. This Agreement
(i) creates an enforceable perfected and first priority security interest in and
pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b),
and (ii) will create an enforceable perfected and first priority security
interest in and pledge of the Additional Collateral upon delivery thereof
pursuant to Section 2(c) (or upon the taking of such other action with respect
thereto as may be requested by the Collateral Agent pursuant to Section 2(d)),
in each case securing the payment and performance of the Secured Obligations.

        The Grantor agrees that the foregoing representations and warranties
shall be deemed to have been made by it on the date of each delivery of Pledged
Collateral hereunder.

        SECTION 4 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied or unpaid, the
Grantor agrees that:

        (a)     Defense of Pledged Collateral. The Grantor will, at its own
expense, appear in and defend any action, suit or proceeding which purports to
affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.


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        (b)     Preservation of Collateral. The Grantor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Pledged Collateral.

        (c)     Compliance with Laws, Etc. The Grantor will comply with all
laws, regulations and ordinances relating in a material way to the possession,
maintenance and control of the Pledged Collateral.

        (d)     Location of Books and Chief Executive Office. The Grantor will:
(i) keep all books and records pertaining to the Pledged Collateral at the
location set forth in Section 3(h); and (ii) give at least 30 days' prior
written notice to the Collateral Agent of (A) any changes in any such location
where books and records pertaining to the Pledged Collateral are kept, or (B)
any change in the location of the Grantor's chief executive office or principal
place of business.

        (e)     Change in Name, Identity or Structure. The Grantor will give at
least 30 days' prior written notice to the Collateral Agent of (i) any change in
its name, (ii) any changes in, additions to or other modifications of its trade
names used as the name of Grantor, and (iii) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.

        (f)     Disposition of Pledged Collateral. Except as permitted by the
Credit Agreement, the Grantor will not surrender or lose possession of (other
than to the Collateral Agent or, with the prior consent of the Collateral Agent,
to a depositary or financial intermediary), exchange, sell, convey, assign or
otherwise dispose of or transfer the Pledged Collateral or any right, title or
interest therein.

        (g)     Liens. Except for Permitted Liens, the Grantor will not create,
incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.

        (h)     Shareholders Agreements. The Grantor will not enter into any
shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.

        (i)     Issuance of Additional Shares. The Grantor will not consent to
or approve, or allow the Subsidiary to consent to or approve, the issuance to
any Person of any additional shares of any class of capital stock of the
Subsidiary, or of any securities convertible into or exchangeable for any such
shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.

        (j)     Notices. The Grantor will deliver promptly to the Collateral
Agent all reports and notices received by the Grantor from the Subsidiary in
respect of any of the Pledged Collateral.

        (k)     Further Assurances. The Grantor will promptly, upon the written
request from time to time of the Collateral Agent, execute, acknowledge and
deliver, and file and record, all such financing statements and other documents
and instruments, and take all such action, as shall be reasonably necessary to
carry out the purposes of this Agreement.


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        SECTION 5 Administration of the Pledged Collateral.

        (a)     Distributions and Voting Prior to an Event of Default. Unless
there exists any Default or Event of Default: (i) the Grantor shall be entitled
to receive and retain for its own account any cash dividend on or other cash
distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor
shall have the right to vote the Pledged Collateral and to retain the power to
control the direction, management and policies of the Subsidiary to the same
extent as the Grantor would if the Pledged Collateral were not pledged to the
Collateral Agent pursuant to this Agreement; provided, however, that the Grantor
shall not be entitled to receive (A) cash paid, payable or otherwise distributed
in redemption of, or in exchange for or in substitution of, any Pledged
Collateral, or (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 of the Subsidiary or in connection with a reduction
of capital, capital surplus or paid-in-surplus or any other type of
recapitalization involving the Subsidiary; and provided further, however, that
no vote shall be cast or consent, waiver or ratification given or action taken
which would have the effect of impairing the position or interest of the
Collateral Agent in respect of the Pledged Collateral or which would alter the
voting rights with respect to the stock of the Subsidiary or be inconsistent
with or violate any provision of this Agreement and other Credit Documents. If
applicable, the Grantor shall be deemed the beneficial owner of all Pledged
Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to
file all reports required to be filed by beneficial owners of securities
thereunder. The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantor all such proxies and other instruments as
the Grantor may reasonably request for the purpose of enabling the Grantor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this subsection (a) and to receive the distributions which it is authorized
to receive and retain pursuant to this subsection (a).

        (b)     General Authority upon an Event of Default. If there exists any
Default or Event of Default:

                (i)     the Collateral Agent shall be entitled to receive all
distributions and payments of any nature with respect to the Pledged Collateral,
to be held by the Collateral Agent as part of the Pledged Collateral;

                (ii)    the Collateral Agent shall have the right following
prior written notice to the Grantor to vote or consent to take any action with
respect to the Pledged Shares and exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if the Collateral Agent were the absolute owner thereof;
and

                (iii)   the Collateral Agent shall have the right, for and in
the name, place and stead of the Grantor, to execute endorsements, assignments
or other instruments of conveyance or transfer with respect to all or any of the
Pledged Collateral, to endorse any checks, drafts, money orders and other
instruments relating thereto, to sue for, collect, receive and give acquittance
for all moneys due or to become due in connection with the Pledged Collateral
and otherwise to file any claims, take any action or institute, defend, settle
or adjust any actions, suits or proceedings with respect to the Pledged
Collateral, execute any and all such



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other documents and instruments, and do any and all such acts and things, as the
Collateral Agent may deem necessary or desirable to protect, collect, realize
upon and preserve the Pledged Collateral, to enforce the Collateral Agent's
rights with respect to the Pledged Collateral and to accomplish the purposes of
this Agreement.

        (c)     Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of subsection (a) or (b) shall
be held in trust for the benefit of the Collateral Agent, be segregated from the
other property or funds of the Grantor, and be forthwith paid over or delivered
to the Collateral Agent in the same form as so received.

        (d)     Certain Other Administrative Matters. At any time and from time
to time, the Collateral Agent may cause any of the Pledged Collateral to be
transferred into its name or into the name of its nominee or nominees (subject
to the revocable rights specified in subsection (a)). The Collateral Agent shall
at all times have the right to exchange uncertificated Pledged Collateral for
certificated Pledged Collateral, and to exchange certificated Pledged Collateral
for certificates of larger or smaller denominations, for any purpose consistent
with this Agreement.

        (e)     Appointment of Collateral Agent as Attorney-in-Fact. For the
purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with
regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this subsection (e). The foregoing power of attorney is coupled with
an interest and irrevocable so long as the Secured Obligations have not been
paid and performed in full. Grantor hereby ratifies, to the extent permitted by
law, all that the Collateral Agent shall lawfully and in good faith do or cause
to be done by virtue of and in compliance with this Section 5.

        SECTION 6    Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which the Grantor has agreed to perform or pay
under or in connection with this Agreement, and the Grantor shall reimburse the
Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant
to this Section 6.


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        SECTION 7    Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to it and shall not be
responsible to the Grantor or any other Person for any failure to do so or delay
in doing so. Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Collateral while held hereunder and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Pledged Collateral.

        SECTION 8    Remedies.

        (a)          Remedies. If there exists any Default or Event of
Default, the Collateral Agent shall have, in addition to all other rights and
remedies granted to it in this or any Credit Document, all rights and remedies
of a secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted by the UCC or other applicable law. The
Grantor recognizes that the Collateral Agent may be unable to make a public sale
of any or all of the Pledged Collateral, by reason of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent and each Credit Party shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Pledged Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption the Grantor
hereby releases to the extent permitted by law.

        (b)     Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the


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liquidated amount of any such contingent, unmatured or unliquidated claims and
apply the proceeds of the Pledged Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable law. The Grantor agrees
that the Proceeds Account shall be a blocked account and that upon the
irrevocable deposit of funds into the Proceeds Account, the Grantor shall not
have any right of withdrawal with respect to such funds. Accordingly, the
Grantor irrevocably waives until the termination of this Agreement in accordance
with Section 22 the right to make any withdrawal from the Proceeds Account and
the right to instruct the Collateral Agent to honor drafts against the Proceeds
Account.

        (c)     Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.

        SECTION 9    Registration Rights.

        (a)     Registration of Pledged Collateral. If the Collateral Agent at
the request of the Instructing Group shall determine to exercise its right to
sell any or all of the Pledged Collateral pursuant to Section 8, and if the
Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and
the Grantor's and the Subsidiary's respective directors and officers to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things as may, in the view of the Collateral Agent, be
advisable to register such Pledged Collateral under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the view of the Collateral Agent
(with the consent of the Instructing Group), are necessary or be necessary or
advisable, all in conformity with the requirements of the Securities and
Exchange Commission applicable thereto. The Grantor agrees to comply, and to
cause the Subsidiary to comply, with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to
cause the Subsidiary to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which shall
satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall
cause to be furnished to the Collateral Agent and each of the Credit Agents such
number of copies of each preliminary prospectus and prospectus, shall promptly
notify the Collateral Agent of the happening of any event (upon becoming aware
thereof) as a result of which any then effective prospectus includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of then existing circumstances and shall cause the Collateral Agent and
each Credit Agent to be furnished with such number of copies as any such Person
may reasonably request of such supplement to or amendment of such prospectus as
is necessary to eliminate such untrue statement or correct such omission.


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        (b)     No Obligation to Delay Private Sale. Neither the Collateral
Agent nor the Credit Parties shall be under any obligation to delay a private
sale of any of the Pledged Collateral (as contemplated by subsection (a)) for
the period of time necessary to permit the issuer thereof to register such
Pledged Collateral for public sale under the Securities Act, or under applicable
state securities laws, even if such issuer would agree to do so.

        (c)     Further Acts. The Grantor further agrees to do or to use its
best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion of the Pledged Collateral
pursuant to subsections (a) and (b) valid and binding and in compliance with any
and all applicable laws (including the Exchange Act), regulations, orders,
writs, injunctions, decrees or awards of any and all Governmental Authorities
having jurisdiction over any such sale or sales.

        (d)     Equitable Relief. The Grantor acknowledges that a breach of any
of the covenants contained in this Section 9 will cause irreparable injury to
the Collateral Agent and the Credit Parties, that the Collateral Agent and
Credit Parties have no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.

        (e)     Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.

        SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in Collateral Agent's
power, or (D) to make or give any presentments, demands for performance, notices
of nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Pledged Collateral; and (iii) all claims, damages,
and demands against the Collateral Agent arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Pledged
Collateral.

        SECTION 11 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; provided, however, that notices hereunder (a) to the Swap
Provider shall be delivered to Fleet National Bank using the information listed
in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such
replacement Swap Provider as may be appointed from time to time consistent with
the terms of the Intercreditor Agreement), and (b) to the Note Holders as set
forth in the Note Purchase Agreement (or such replacement Note Holders as may be
appointed from time to time consistent with the terms of the Intercreditor
Agreement). All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.


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        SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent or any Credit Party to exercise, and no delay in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.

        SECTION 13 Costs and Expenses; Indemnification; Other Charges.

        (a)     Costs and Expenses.  The Grantor agrees to pay on demand:

                (i)     the out-of-pocket costs and expenses of the Collateral
Agent and any of the Credit Parties' attorney costs, in connection with the
negotiation, preparation, execution, delivery and administration of this
Agreement, and any amendments, modifications or waivers of the terms thereof,
and the custody of the Pledged Collateral;

                (ii)    all title, appraisal (including the allocated cost of
internal appraisal services), survey, audit, consulting, search, recording,
filing and similar costs, fees and expenses incurred or sustained by the
Collateral Agent or any Credit Party in connection with this Agreement or the
Pledged Collateral; and

                (iii)   all costs and expenses of the Collateral Agent or any
Credit Party, including Attorney Costs, in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interest under, this
Agreement, any out-of-court workout or other refinancing or restructuring or in
any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Pledged Collateral, including any and all losses,
costs and expenses sustained by the Collateral Agent and any Credit Party as a
result of any failure by the Grantor to perform or observe its obligations
contained herein.

        (b)     Indemnification. The Grantor shall indemnify, defend and hold
the Collateral Agent, Agent-Related Persons and each Credit Party and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on


   277



the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

        (c)     Other Charges. The Grantor agrees to indemnify the Indemnified
Persons against and hold each of them harmless from any and all present and
future stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.

        (d)     Interest. Any amounts payable to the Collateral Agent or any
Credit Party under this Section 13 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in full,
at the applicable rate of interest (a) for the Administrative Agent or any
Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the
Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any
Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement.

        SECTION 14 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the Grantor, the Collateral Agent and
each Credit Party and their respective successors and assigns.

        SECTION 15 Governing Law and Jurisdiction.

        (a)     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS
HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL
AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT

   278


PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

        SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

        SECTION 17 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.

        SECTION 18 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or
   279


unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

        SECTION 19 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

        SECTION 20 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Note Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.

        SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that
this Agreement, and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.

        SECTION 22 Termination. Upon termination of the Commitments of the
Lenders, surrender of all Letters of Credit and payment and performance in full
of all Secured Obligations, this Agreement shall terminate and the Collateral
Agent shall (with the consent of the Instructing Group) promptly redeliver to
the Grantor any of the Pledged Collateral in its possession and shall execute
and deliver to the Grantor such documents and instruments reasonably requested
by the Grantor as shall be necessary to evidence termination of all security
interests given by the Grantor to the Collateral Agent hereunder; provided,
however, that the obligations of the Grantor under Sections 9(e) and 13 shall
survive such termination. Upon satisfaction to all conditions precedent to any
permitted disposition set forth herein or in the other Credit Documents, the
Collateral Agent shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Pledged Shares provided by this Section.

        SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.

                  [remainder of page intentionally left blank]



   280



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

                                   [                                   ]
                                    -----------------------------------
                                   THE GRANTOR


                                   By:
                                      ---------------------------------

                                      Name:
                                      Title:


                                   BANK OF AMERICA, N.A.
                                   THE COLLATERAL AGENT


                                   By:
                                      ---------------------------------

                                      Name:
                                      Title:







   281



                                   SCHEDULE 1
                          to the Stock Pledge Agreement

                                 PLEDGED SHARES

_______ stock of _________________ being represented by stock certificates as
follows:

Certificate No.                Certificate Date                  No. of Shares
- --------------                 ----------------                  -------------







   282



                                   SCHEDULE 2
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                      OF CAPITAL STOCK OF THE SUBSIDIARIES










   283



                                   SCHEDULE 3
                          to the Stock Pledge Agreement

             SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
                       OF CAPITAL STOCK OF THE SUBSIDIARY








   284



                                                                       EXHIBIT K

                 FORM OF EFFECTIVENESS DATE OPINIONS OF COUNSEL
                                (CONTENT SUMMARY)

1.      Each Note Party is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with the corporate power
and authority and all material governmental licenses, authorizations, consents
and approvals to own and operate (or lease, as the case may be) its properties
and to carry on its business as it is now conducted. Each Note Party is
qualified as a foreign corporation, licensed and in good standing in each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license, except where the failure
to be so qualified, licensed or in good standing would not adversely affect the
business or operations of such Note Party in any significant manner.

2.      Each Note Party has the corporate power and authority to enter into and
perform the Note Documents to which it is a party, and has taken all necessary
corporate action to authorize the execution, delivery and performance of such
Note Documents.

3.      No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Note Party of the Note Documents to which it is a
party.

4.      The Note Documents to which each Note Party is a party have been duly
executed and delivered by such Note Party and constitute the legal, valid and
binding obligations of such Note Party, enforceable against such Note Party in
accordance with their respective terms.

5.      The execution, delivery and performance by each Note Party of the Note
Documents to which it is a party will not (i) violate or be in conflict with any
provision of the certificate or articles of incorporation, as the case may be,
or by-laws of such Note Party, (ii) violate or be in conflict with any law or
regulation having applicability to such Note Party, (iii) violate or contravene
any judgment, decree, injunction, writ or order of any court, or any arbitrator
or other Governmental Authority, having jurisdiction over such Note Party or
such Note Party's properties or by which such Note Party may be bound, or (iv)
violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
Note or credit agreement (including the Existing Credit Facility), or any other
agreement for borrowed money or any other material agreement, lease or
instrument to which such Note Party is a party or by which it or such Note
Party's properties may be bound, or result in the creation of any Lien upon any
of the assets or properties of such Note Party.

6.      The provisions of the Company Security Agreement and the Subsidiary
Security Agreement (collectively, the "Security Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Collateral described in such Security
Agreements and the financing statements related thereto. The financing
statements filed with the ____________ (the "Filing Offices") are in appropriate
form for filing in the Filing Offices, (ii) the Filing Offices are the
appropriate filing offices in order to


   285



perfect a security interest in such Collateral, subject only to the provisions
of the Intercreditor Agreement, (iii) the Administrative Agent has a perfected
security interest in such Collateral, and (iv) no other action is necessary
under the Uniform Commercial Code or other laws (including without limitation
the U.S. copyright laws, the U.S. patent laws and the U.S. trademark laws) as in
effect in ______________ to perfect a security interest in such Collateral.

7.      The provisions of the Company Stock Pledge Agreement and the Subsidiary
Stock Pledge Agreement (collectively, the "Stock Pledge Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Pledged Collateral described therein.
The security interest in the Pledged Collateral created under the Stock Pledge
Agreements will become perfected upon delivery to and possession by the
Administrative Agent of the certificates representing the Pledged Collateral,
indorsed to the Administrative Agent or in blank by an effective indorsement.

8.      Based solely on our review of the minute books and stock records of the
Note Parties, to our knowledge, the authorized, issued and outstanding capital
stock of each Note Party (other than Ceridian) as set forth on Schedule __
hereto constitutes all of the authorized, issued and outstanding capital stock
of such Note Party, and all of such issued and outstanding capital stock is
owned of record by the Persons indicated on such Schedule __.

9.      No filings, registrations, recordings, or other actions are necessary
under the laws of _______________ to create, preserve, perfect, and protect the
Administrative Agent's Lien in the Pledged Securities under the Stock Pledge
Agreements, and no consent, approval, or authorization of any Person is required
under the laws of _______________ in order for the Administrative Agent's Lien
to be created, preserved, perfected, and protected.

10.     The extension of credit under the Credit Agreement does not violate the
provisions of Regulations T, U or X of the Federal Reserve Board.

11.     No Note Party is an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940.

12.     No Note Party 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 Public Utility Holding
Company Act of 1935.

13.     The offer, issue, sale and delivery of the Notes under the circumstances
contemplated by the Note Purchase Agreement constitute exempted transactions
under the Securities Act of 1933 (the "1933 Act"), as amended, and neither the
registration thereunder nor the qualification of an indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended, is required in
connection with such offer, issue, sale or delivery.


   286



                                                                       EXHIBIT L

                    FORM OF CLOSING DATE OPINIONS OF COUNSEL
                                (CONTENT SUMMARY)

1.      Each Note Party has the corporate power and authority to enter into and
perform the Spin-Off Transaction and each of the Spin-Off Documents to which it
is a party, and has taken all necessary corporate action to authorize the
execution, delivery and performance of each Spin-Off Document and to consummate
the Spin-Off Transaction.

2.      No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Note Party of any Spin-Off Document to which it is a
party, or to consummate the Spin-Off Transaction, except as have been obtained
prior to the Closing Date.

3.      The Spin-Off Documents to which each Note Party is a party have been
duly executed and delivered by such Note Party and constitute the legal, valid
and binding obligations of such Note Party, enforceable against such Note Party
in accordance with their respective terms.

4.      The execution, delivery and performance by each Note Party of each
Spin-Off Document to which it is a party, and the consummation of the Spin-Off
Transaction, will not (i) violate or be in conflict with any provision of the
certificate or articles of incorporation, as the case may be, or by-laws of such
Note Party, (ii) violate or be in conflict with any law or regulation having
applicability to such Note Party, (iii) violate or contravene any judgment,
decree, injunction, writ or order of any court, or any arbitrator or other
Governmental Authority, having jurisdiction over such Note Party or such Note
Party's properties or by which such Note Party may be bound, or (iv) violate or
conflict with, or constitute a default under or result in the termination of, or
accelerate the performance required by, any indenture, any Note or credit
agreement, or any other agreement for borrowed money or any other material
agreement, lease or instrument to which such Note Party is a party or by which
it or such Note Party's properties may be bound, or result in the creation of
any Lien upon any of the assets or properties of such Note Party.

5.      The Distribution is legal under the Delaware General Corporation Law.



   287



                                                                       EXHIBIT M

                FORM OF ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT



                              Date: ______________




To each of the Lenders party to the Credit Agreement referred to below, and to
Bank of America, N.A., as the Administrative Agent


Ladies and Gentlemen:

        This agreement ("Additional Guarantor Assumption Agreement") is made and
delivered pursuant to Section 6.14 of that certain Credit Agreement dated as of
January 31, 2001 (as renewed, extended, amended or restated, the "Credit
Agreement"), among CERIDIAN CORPORATION (the "Company"), the several financial
institutions from time to time party thereto (each a "Lender" and together with
the Assignor, the "Lenders") and BANK OF AMERICA, N.A., as administrative agent
(in such capacity, the "Administrative Agent"). All capitalized terms used in
this Additional Guarantor Assumption Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.

        _____________, a _____________ corporation (the "Subsidiary") hereby
confirms, represents and warrants to the Administrative Agent and the Lenders
that the Subsidiary is a Subsidiary of the Company effective as of
________________. [The Subsidiary further represents that it is a Foreign
Subsidiary.]

        The documents, resolutions, incumbency and officer's certificates,
opinions of counsel, UCC-1 financing statements, Supplemental IP Security
Agreements and other documents and certificates required to be delivered to the
Administrative Agent under subsections (b) and (c) of Section 6.14 and Section
6.16 of the Credit Agreement will be furnished to the Administrative Agent in
accordance with the requirements of the Credit Agreement.

        The Subsidiary hereby confirms that with effect from the date hereof,
the Subsidiary shall (i) be a party to the Guaranty, dated as of January 31,
2001 (the "Subsidiary Guaranty"), given by certain Subsidiaries of the Company,
as Guarantor, in favor of the Administrative Agent, to the Security Agreement,
dated as of January 31, 2001, (the "Subsidiary Security Agreement"), among
certain Subsidiaries of the Company, as Grantors, and the Administrative Agent
and to the Supplemental IP Security Agreements dated as of ______, ____, and
______; and (ii) shall have the same obligations, duties and liabilities towards
the Administrative Agent and Lenders as those which the Subsidiary would have
had if the Subsidiary had been an original party to the Subsidiary Guaranty, as
a Guarantor, and the Subsidiary Security Agreement, as a Grantor (and pursuant
to Section 2(a) of the Subsidiary Security Agreement, the Subsidiary hereby
grants to the Administrative Agent a security interest in all its "Collateral"
(as defined therein) as security


   288



for the payment and performance of the Secured Obligations (as defined
therein)). The Subsidiary hereby confirms its acceptance of, and consents to,
all representations and warranties, covenants, and other terms and provisions of
the Subsidiary Guaranty applicable to Guarantors, and the Subsidiary Security
Agreement applicable to Grantors, and to any other Note Documents to which the
Guarantors are parties.

        Without limiting the generality of the foregoing, the Subsidiary
confirms that effective as of the date hereof it shall be liable as a Guarantor
pursuant to Section 8.01(n) of the Credit Agreement.

        This Additional Guarantor Assumption Agreement shall constitute a Note
Document under the Credit Agreement.

        THIS ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        IN WITNESS WHEREOF, the Subsidiary has caused this Additional Guarantor
Assumption Agreement to be duly executed and delivered in _____________,
______________, by its proper and duly authorized officer as of the day and year
first above written.

                                  [SUBSIDIARY]

                                   By:
                                     ----------------------------------

                                   Name:
                                        -------------------------------

                                   Title:
                                         ------------------------------



   289



                                                                       EXHIBIT N

                 FORM OF ADDITIONAL GUARANTOR OPINION OF COUNSEL
                                (CONTENT SUMMARY)

        1.      The Additional Guarantor is a ___________ duly organized,
validly existing and in good standing under the laws of [the State of
__________] [the country of _________] with the power and authority to own and
operate (or lease, as the case may be) its properties and to carry on its
business as it is now conducted. The Additional Guarantor is qualified and in
good standing in ___________________.

        2.      The Additional Guarantor has the power and authority to enter
into and perform the Additional Guarantor Documents, and has taken all necessary
action to authorize the execution, delivery and performance of the Additional
Guarantor Documents.

        3.      No authorization, consent, approval, license, exemption of, or
filing or registration with, any Governmental Authority, or approval or consent
of any other Person, is required for the due execution, delivery or performance
by the Additional Guarantor of the Additional Guarantor Documents[, except for
recordings or filings in connection with the perfection of the Liens on the
Collateral in favor of the Administrative Agent on behalf of the Lenders].

        4.      The Additional Guarantor Documents have been duly executed and
delivered by the Additional Guarantor and constitute the legal, valid and
binding obligations of the Additional Guarantor enforceable against the
Additional Guarantor in accordance with their respective terms.

        5.      The execution, delivery and performance by the Additional
Guarantor of the Additional Guarantor Documents will not (i) violate or be in
conflict with any provision of the _______________ [specify applicable
Organization Documents reviewed] of the Additional Guarantor or any, (ii)
violate or be in conflict with any law or regulation having applicability to the
Additional Guarantor, (iii) violate or contravene any judgment, decree,
injunction, writ or order of any court, or any arbitrator or other Governmental
Authority, having jurisdiction over the Additional Guarantor or the Additional
Guarantor's properties or by which the Additional Guarantor may be bound, or
(iv) violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
Note or credit agreement, or any other agreement for borrowed money or any other
material Contractual Obligation to which the Additional Guarantor is a party or
by which it or the Additional Guarantor's properties may be bound, or result in
the creation of any Lien upon any of the assets or properties of the Additional
Guarantor.

        6.      The provisions of the Security Agreement [and Supplemental IP
Security Agreement] are in form sufficient to create, in favor of the
Administrative Agent on behalf of the Lenders, as secured party, a valid
security interest in and lien on the Collateral of the Additional Guarantor
described in the Security Agreement and the financing statements. Upon the
filing of the financing statements with the filing offices and the delivery of
the Pledged Collateral, the


   290



Administrative Agent will have a valid and perfected security interest in and
lien on all of such Collateral described in the Security Agreement and the
financing statements.

        7.      Except as specifically disclosed in __________________________,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best of our knowledge, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Additional
Guarantor or any of its properties which (i) purport to affect or pertain to the
Additional Guarantor Documents, or any of the transactions contemplated thereby;
or (ii) if determined adversely to the Additional Guarantor, would be likely to
have a Material Adverse Effect.

        8.      Our opinion set forth in paragraph 4 above is subject to the
qualification that the enforceability of the Additional Guarantor Documents may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
equity principles.

EX-10.8

   1
                                                                    EXHIBIT 10.8




               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               JOHN HANCOCK LIFE INSURANCE COMPANY, THE ORIGINAL HOLDER OF THIS
               NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF
               THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
               PROVISIONS OF THE INTERCREDITOR AGREEMENT.


                              CERIDIAN CORPORATION

                 9.96% Senior Secured Note due January 31, 2008



No. R-1
$31,500,000                                                   January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to JOHN HANCOCK LIFE INSURANCE COMPANY, or
registered assigns, the principal amount of THIRTY ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($31,500,000) on January 31, 2008, with interest (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid balance of
such principal amount at a rate per annum equal to 9.96%, from the date hereof,
payable quarterly on the last day of each January, April, July and October after
the date hereof, commencing on April 30, 2001, until the principal hereof shall
have become due and payable (whether at maturity or at a date fixed for
prepayment or by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and (to the extent
permitted by applicable law) premium, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate per annum
equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of
the holder hereof, on demand, and, upon acceleration of this Note, together with
the Make-Whole Amount specified in the Note Purchase Agreement hereinafter
referred to, as liquidated damages and not as a penalty; provided that in no
event shall the amount payable by the Company as interest on this Note exceed
the highest lawful rate permissible under any law applicable hereto. Payments of
principal, premium, if any, and interest hereon shall be made in lawful money of
the United States of America by the method and at the address for such purpose
specified in the Note Purchase Agreement hereinafter referred to, and such
payments shall be overdue for purposes hereof if not made on the originally
scheduled date of payment therefor, without







                                      -1-
   2

giving effect to any applicable grace period.

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


            [The remainder of this page is intentionally left blank.]






                                      -2-
   3



      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                   CERIDIAN CORPORATION

                                   By /s/ William J. Walsh
                                     -----------------------------
                                                                  (Title)

                                     William J. Walsh
                                     Executive Vice President of
                                     Finance and Planning of
                                     Arbitron and Vice President
                                     of Ceridian





                                      -3-
   4



                               FORM OF ASSIGNMENT

                    [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                   the within Note, and
appoints               Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                         ......................................................
                         (Signature must conform in all respects to name of
                         Holder as specified on the face of the Note)


Signed in the presence of



 .........................










                                      -4-

   5
                  THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT
                  CERTAIN INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR
                  OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR
                  AGREEMENT") DATED AS OF JANUARY 31, 2001 BETWEEN AND AMONG
                  CERIDIAN CORPORATION, JOHN HANCOCK LIFE INSURANCE COMPANY, THE
                  ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED
                  THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE
                  HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR
                  AGREEMENT.


                            CERIDIAN CORPORATION

               9.96% Senior Secured Note due January 31, 2008



No. R-2
$4,500,000                                                   January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to JOHN HANCOCK LIFE INSURANCE COMPANY, or
registered assigns, the principal amount of FOUR MILLION FIVE HUNDRED THOUSAND
DOLLARS ($4,500,000) on January 31, 2008, with interest (computed on the basis
of a 360-day year of twelve 30-day months) on the unpaid balance of such
principal amount at a rate per annum equal to 9.96%, from the date hereof,
payable quarterly on the last day of each January, April, July and October after
the date hereof, commencing on April 30, 2001, until the principal hereof shall
have become due and payable (whether at maturity or at a date fixed for
prepayment or by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and (to the extent
permitted by applicable law) premium, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate per annum
equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of
the holder hereof, on demand, and, upon acceleration of this Note, together with
the Make-Whole Amount specified in the Note Purchase Agreement hereinafter
referred to, as liquidated damages and not as a penalty; provided that in no
event shall the amount payable by the Company as interest on this Note exceed
the highest lawful rate permissible under any law applicable hereto. Payments of
principal, premium, if any, and interest hereon shall be made in lawful money of
the United States of America by the method and at the address for such purpose
specified in the Note Purchase Agreement hereinafter referred to, and such
payments shall be overdue for







                                      -1-
   6

purposes hereof if not made on the originally scheduled date of payment
therefor, without giving effect to any applicable grace period.

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


          [The remainder of this page is intentionally left blank.]





                                      -2-
   7



      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                                 CERIDIAN CORPORATION


                                                 By /s/ William J. Walsh
                                                   ---------------------
                                                                        (Title)
                                                   William J. Walsh
                                                   Executive Vice President of
                                                   Finance and Planning of
                                                   Arbitron and Vice President
                                                   of Ceridian





                                      -3-
   8



                             FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                  the within Note, and
appoints                Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                           .....................................................
                           (Signature must conform in all respects to name of
                           Holder as specified on the face of the Note)


Signed in the presence of



 .........................





                                      -4-
   9
               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, THE ORIGINAL HOLDER
               OF THIS NOTE, AND THE COLLATERAL AGENT NAMED THEREIN, AND EACH
               HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY
               THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.


                            CERIDIAN CORPORATION

               9.96% Senior Secured Note due January 31, 2008



No. R-3
$2,000,000                                                    January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to JOHN HANCOCK VARIABLE LIFE INSURANCE
COMPANY, or registered assigns, the principal amount of TWO MILLION DOLLARS
($2,000,000) on January 31, 2008, with interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid balance of such principal
amount at a rate per annum equal to 9.96%, from the date hereof, payable
quarterly on the last day of each January, April, July and October after the
date hereof, commencing on April 30, 2001, until the principal hereof shall have
become due and payable (whether at maturity or at a date fixed for prepayment or
by declaration or otherwise), and with interest on any overdue principal
(including any overdue prepayment of principal) and (to the extent permitted by
applicable law) premium, if any, and (to the extent permitted by applicable law)
on any overdue installment of interest, at a rate per annum equal to 11.96%
until paid, payable quarterly as aforesaid or, at the option of the holder
hereof, on demand, and, upon acceleration of this Note, together with the
Make-Whole Amount specified in the Note Purchase Agreement hereinafter referred
to, as liquidated damages and not as a penalty; provided that in no event shall
the amount payable by the Company as interest on this Note exceed the highest
lawful rate permissible under any law applicable hereto. Payments of principal,
premium, if any, and interest hereon shall be made in lawful money of the United
States of America by the method and at the address for such purpose specified in
the Note Purchase Agreement hereinafter referred to, and such payments shall be
overdue for purposes hereof if not made







                                      -1-
   10

on the originally scheduled date of payment therefor, without giving effect to
any applicable grace period.

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


          [The remainder of this page is intentionally left blank.]





                                      -2-
   11



      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.

                                                 By /s/ William J. Walsh
                                                    --------------------
                                                                        (Title)
                                                   William J. Walsh
                                                   Executive Vice President of
                                                   Finance and Planning of
                                                   Arbitron and Vice President
                                                   of Ceridian





                                      -3-
   12


                             FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                   the within Note, and
appoints               Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                           .....................................................
                           (Signature must conform in all respects to name of
                           Holder as specified on the face of the Note)


Signed in the presence of



 .........................








                                      -4-
   13
               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES' RETIREMENT SYSTEM,
               THE ORIGINAL HOLDER OF THIS NOTE, AND THE COLLATERAL AGENT NAMED
               THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF,
               SHALL BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.


                            CERIDIAN CORPORATION

               9.96% Senior Secured Note due January 31, 2008



No. R-4
$3,000,000                                                    January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYES'
RETIREMENT SYSTEM, or registered assigns, the principal amount of THREE MILLION
DOLLARS ($3,000,000) on January 31, 2008, with interest (computed on the basis
of a 360-day year of twelve 30-day months) on the unpaid balance of such
principal amount at a rate per annum equal to 9.96%, from the date hereof,
payable quarterly on the last day of each January, April, July and October after
the date hereof, commencing on April 30, 2001, until the principal hereof shall
have become due and payable (whether at maturity or at a date fixed for
prepayment or by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and (to the extent
permitted by applicable law) premium, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate per annum
equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of
the holder hereof, on demand, and, upon acceleration of this Note, together with
the Make-Whole Amount specified in the Note Purchase Agreement hereinafter
referred to, as liquidated damages and not as a penalty; provided that in no
event shall the amount payable by the Company as interest on this Note exceed
the highest lawful rate permissible under any law applicable hereto. Payments of
principal, premium, if any, and interest hereon shall be made in lawful money of
the United States of America by the method and at the address for such purpose
specified in the Note Purchase Agreement hereinafter referred to, and such
payments shall be overdue for







                                      -1-
   14

purposes hereof if not made on the originally scheduled date of payment
therefor, without giving effect to any applicable grace period.

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


          [The remainder of this page is intentionally left blank.]






                                      -2-
   15


      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                                 CERIDIAN CORPORATION

                                                 By /s/ William J. Walsh
                                                    --------------------
                                                                        (Title)
                                                   William J. Walsh
                                                   Executive Vice President of
                                                   Finance and Planning of
                                                   Arbitron and Vice President
                                                   of Ceridian





                                      -3-
   16



                             FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                   the within Note, and
appoints                Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                         .......................................................
                         (Signature must conform in all respects to name of
                         Holder as specified on the face of the Note)


Signed in the presence of



 .........................







                                      -4-
   17
               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               SIGNATURE 4 LIMITED, THE ORIGINAL HOLDER OF THIS NOTE, AND THE
               COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY
               ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
               INTERCREDITOR AGREEMENT.


                              CERIDIAN CORPORATION

                 9.96% Senior Secured Note due January 31, 2008



No. R-5
$2,000,000                                                    January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to SIGNATURE 4 LIMITED, or registered assigns,
the principal amount of TWO MILLION DOLLARS ($2,000,000) on January 31, 2008,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
on the unpaid balance of such principal amount at a rate per annum equal to
9.96%, from the date hereof, payable quarterly on the last day of each January,
April, July and October after the date hereof, commencing on April 30, 2001,
until the principal hereof shall have become due and payable (whether at
maturity or at a date fixed for prepayment or by declaration or otherwise), and
with interest on any overdue principal (including any overdue prepayment of
principal) and (to the extent permitted by applicable law) premium, if any, and
(to the extent permitted by applicable law) on any overdue installment of
interest, at a rate per annum equal to 11.96% until paid, payable quarterly as
aforesaid or, at the option of the holder hereof, on demand, and, upon
acceleration of this Note, together with the Make-Whole Amount specified in the
Note Purchase Agreement hereinafter referred to, as liquidated damages and not
as a penalty; provided that in no event shall the amount payable by the Company
as interest on this Note exceed the highest lawful rate permissible under any
law applicable hereto. Payments of principal, premium, if any, and interest
hereon shall be made in lawful money of the United States of America by the
method and at the address for such purpose specified in the Note Purchase
Agreement hereinafter referred to, and such payments shall be overdue for
purposes hereof if not made on the originally scheduled date of payment
therefor, without giving effect to any applicable grace period.







                                      -1-
   18

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


            [The remainder of this page is intentionally left blank.]






                                      -2-
   19



      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                                 CERIDIAN CORPORATION
                                                 By /s/ William J. Walsh
                                                    --------------------
                                                                        (Title)
                                                   William J. Walsh
                                                   Executive Vice President of
                                                   Finance and Planning of
                                                   Arbitron and Vice President
                                                   of Ceridian





                                      -3-
   20



                               FORM OF ASSIGNMENT

                    [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                   the within Note, and
appoints                Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                          ......................................................
                          (Signature must conform in all respects to name of
                          Holder as specified on the face of the Note)


Signed in the presence of



 .........................






                                      -4-
   21
               THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
               INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
               MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
               AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
               SIGNATURE 5 L.P., THE ORIGINAL HOLDER OF THIS NOTE, AND THE
               COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY
               ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
               INTERCREDITOR AGREEMENT.


                            CERIDIAN CORPORATION

               9.96% Senior Secured Note due January 31, 2008



No. R-6
$7,000,000                                                    January 31, 2001


      CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to SIGNATURE 5 L.P., or registered assigns, the
principal amount of SEVEN MILLION DOLLARS ($7,000,000) on January 31, 2008, with
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid balance of such principal amount at a rate per annum equal to 9.96%,
from the date hereof, payable quarterly on the last day of each January, April,
July and October after the date hereof, commencing on April 30, 2001, until the
principal hereof shall have become due and payable (whether at maturity or at a
date fixed for prepayment or by declaration or otherwise), and with interest on
any overdue principal (including any overdue prepayment of principal) and (to
the extent permitted by applicable law) premium, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at a rate
per annum equal to 11.96% until paid, payable quarterly as aforesaid or, at the
option of the holder hereof, on demand, and, upon acceleration of this Note,
together with the Make-Whole Amount specified in the Note Purchase Agreement
hereinafter referred to, as liquidated damages and not as a penalty; provided
that in no event shall the amount payable by the Company as interest on this
Note exceed the highest lawful rate permissible under any law applicable hereto.
Payments of principal, premium, if any, and interest hereon shall be made in
lawful money of the United States of America by the method and at the address
for such purpose specified in the Note Purchase Agreement hereinafter referred
to, and such payments shall be overdue for purposes hereof if not made on the
originally scheduled date of payment therefor, without giving effect to any
applicable grace period.






                                      -1-
   22

      This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.

      This Note is subject to prepayment only as specified in the Note Purchase
Agreement.

      Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.

      This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.

      In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.

      The parties hereto, including the makers and all guarantors and endorsers
of this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.

      This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.


          [The remainder of this page is intentionally left blank.]







                                      -2-
   23



      IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.


                                                 CERIDIAN CORPORATION
                                                 By /s/ William J. Walsh
                                                    --------------------
                                                                        (Title)
                                                   William J. Walsh
                                                   Executive Vice President of
                                                   Finance and Planning of
                                                   Arbitron and Vice President
                                                   of Ceridian





                                      -3-
   24



                               FORM OF ASSIGNMENT

                    [To be signed only upon transfer of Note]

                                           For value received, the undersigned
hereby sells, assigns and transfers unto                   the within Note, and
appoints                Attorney to transfer such Note on the books of CERIDIAN
CORPORATION with full power of substitution in the premises.

Date:                ,     .



                           .....................................................
                           (Signature must conform in all respects to name of
                           Holder as specified on the face of the Note)


Signed in the presence of



 .........................








                                      -4-

EX-10.9

   1

                                                                    EXHIBIT 10.9


                               SUBSIDIARY GUARANTY

                THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001,
is made by ARBITRON HOLDINGS INC. (the "Guarantor"), in favor (a) of the
financial institutions (each a "Lender" and, collectively, the "Lenders") from
time to time party to that certain Credit Agreement dated as of January 31, 2001
(as renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the
"Borrower"), the Lenders and BANK OF AMERICA, N.A., as administrative agent for
such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap
Provider" (as defined herein); and (c) the Note Holders (as defined herein)
(collectively, the "Guaranteed Parties" and each, individually, a "Guaranteed
Party").

                                    RECITALS

                WHEREAS, it is a requirement under of the Credit Agreement and
the Note Purchase Agreement that Guarantor shall be bound by the terms and
conditions of this Guaranty pending the Spin-Off Consummation Date; and

                WHEREAS, the Guarantor will derive substantial direct and
indirect benefits from the credit extensions to the Borrower pursuant to the
Credit Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;

                WHEREAS, the Guarantor will derive substantial direct and
indirect benefits from the Borrower being party to the Specified Swap Contracts,
which benefits are hereby acknowledged;

                NOW, THEREFORE, in consideration of the Administrative Agent and
Lenders entering into the Credit Agreement, the Guarantor hereby agrees as
follows:

                SECTION 1 Definitions; Interpretation.

                (a)     Terms Defined in Credit Agreement. All capitalized terms
used in this Guaranty and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

                (b)     Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings:

                "Collateral Agent" means Bank of America, N.A. in its capacity
as "Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time pursuant
thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its
capacity as Administrative Agent for the benefit of itself and the other Lenders
from time to time party to the Credit Agreement, and the L/C Issuer; (b) the
Note Holders for the benefit of itself and the other Note Holders from time to
time party to the Note Purchase Agreement; and (c) the Swap Provider.



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                "Credit Documents" means, collectively, the Loan Documents, the
Swap Documents, and the Note Purchase Documents.

                "Guaranteed Obligations" has the meaning set forth in Section
2(a).

                "Guaranteed Parties" and "Guaranteed Party" have the meanings
assigned to them in the first paragraph hereof.

                "Guarantor Documents" means this Guaranty, and all other
certificates, documents, agreements and instruments delivered to the Guaranteed
Parties under or in connection with this Guaranty.

                "Indemnified Liabilities" has the meaning set forth in Section
15(b).

                "Indemnified Person" has the meaning set forth in Section 15(b).

                "Intercreditor Agreement" means that Intercreditor Agreement
dated as of January 31, 2001 among the Collateral Agent, the Administrative
Agent, the Swap Provider, and the Note Holders Agent.

                "Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Note Holders, (b) all Account Control Agreements executed by any Loan Party
under any Note Document, (c) all documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Note Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time or in connection with any of the foregoing.

                "Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.

                "Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.

                "Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.

                "Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Borrower, the Note Holders and the other
Note Holders party thereto.

                "Solvent" means, as to any Person at any time, that (a) the fair
value of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the New
York Uniform Fraudulent Conveyance Act; (b) the present fair saleable



                                       2
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value of the property of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.

                "Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into between
the Borrower and the Swap Provider as swap counterparties.

                "Specified Swap Contract" means any interest rate swap entered
into between the Borrower and the Swap Provider as swap counterparties
constituting a "Specified Swap Contract" as defined in the Credit Agreement.

                "Subordinated Debt" has the meaning set forth in Section 7(a).

                "Subordinated Debt Payments" has the meaning set forth in
Section 7(b).

                "Swap Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider), (ii) all Account Control Agreements executed by any Loan Party
under any Swap Document, (iii) all documents executed by any Loan Party to
accomplish cash collateralization pursuant to any Swap Document, and (iv) all
licenses, UCC financing statements, notices and other documents executed from
time to time or in connection with any of the foregoing.

                "Swap Documents" means, collectively, (a) any Specified Swap
Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties.

                "Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.

                "Swap Provider" has the meaning specified in the Intercreditor
Agreement.

                (c)     Interpretation. The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and
are incorporated herein by this reference.

                SECTION 2 Guaranty.

                (a)     Guaranty. The Guarantor hereby unconditionally and
irrevocably guarantees to the Guaranteed Parties, and their respective
successors, endorsees, transferees and assigns, the full and prompt payment when
due (whether at stated maturity, by required



                                       3
   4


prepayment, declaration, acceleration, demand or otherwise) and performance of
the indebtedness, liabilities and other obligations of the Borrower to each such
Guaranteed Party, whether created under, arising out of or in connection with
any of the Credit Documents, including all Obligations (as independently defined
in each of the Credit Agreement and the Note Purchase Agreement); and any
obligations under any Specified Swap Agreement to the extent arising out of any
one or more Specified Swap Contracts. The terms "indebtedness," "liabilities"
and "obligations" are used herein in their most comprehensive sense and include
any and all advances, debts, obligations and liabilities, now existing or
hereafter arising, whether voluntary or involuntary and whether due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
and whether recovery upon such indebtedness, liabilities and obligations may be
or hereafter becomes unenforceable or shall be an allowed or disallowed claim
under the Bankruptcy Code or other applicable law. The foregoing indebtedness,
liabilities and other obligations of the Borrower, and all other indebtedness,
liabilities and obligations to be paid or performed by the Guarantor in
connection with this Guaranty (including any and all amounts due under Section
15), shall hereinafter be collectively referred to as the "Guaranteed
Obligations."

                (b)     Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's liability
with respect to any of the Guaranteed Obligations which any of the Guaranteed
Parties can enforce under this Guaranty, such Guaranteed Parties by their
acceptance hereof accept such limitation on the amount of the Guarantor's
liability hereunder to the extent needed to make this Guaranty and the Guarantor
Documents fully enforceable and nonavoidable.

                SECTION 3 Liability of Guarantor. The liability of the Guarantor
under this Guaranty shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
payment and performance in full of all Guaranteed Obligations. In furtherance of
the foregoing and without limiting the generality thereof, the Guarantor agrees
as follows:

                (i)     the Guarantor's liability hereunder shall be the
immediate, direct, and primary obligation of the Guarantor and shall not be
contingent upon the Guaranteed Parties' exercise or enforcement of any remedy it
may have against the Borrower or any other Person, or against any collateral now
or hereafter securing any of the Guaranteed Obligations;

                (ii)    this Guaranty is a guaranty of payment when due and not
merely of collectibility;

                (iii)   the Guarantor's payment of a portion, but not all, of
the Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and



                                       4
   5


                (iv)    the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:

                        (A)     any proceeding under any Debtor Relief Laws with
respect to the Borrower, any other guarantor or any other Person;

                        (B)     any limitation, discharge, or cessation of the
liability of the Borrower, any other guarantor or any other Person for any
Guaranteed Obligations due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of any of the Guaranteed
Obligations or the Loan Documents;

                        (C)     any merger, acquisition, consolidation or change
in structure of the Borrower, the Guarantor or any other guarantor or Person, or
any sale, lease, transfer or other disposition of any or all of the assets or
shares of the Borrower, the Guarantor, any other guarantor or other Person;

                        (D)     any assignment or other transfer, in whole or in
part, of any of the Guaranteed Parties' interests in and rights under this
Guaranty or the other Credit Documents, including the Guaranteed Parties' right
to receive payment of the Guaranteed Obligations;

                        (E)     any claim, defense, counterclaim or setoff,
other than that of prior performance, that the Borrower, the Guarantor, any
other guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the Credit
Documents;

                        (F)     the Guaranteed Parties' amendment, modification,
renewal, extension, cancellation or surrender of any Credit Document;

                        (G)     the Guaranteed Parties' vote, claim,
distribution, election, acceptance, action or inaction in any proceeding under
any Debtor Relief Laws related to the Guaranteed Obligations;

                        (H)     any impairment or invalidity of any collateral
securing any of the Guaranteed Obligations or any failure to perfect any of the
Liens of the Guaranteed Parties thereon or therein; and

                        (I)     any other guaranty, whether by the Guarantor or
any other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Borrower to the Guaranteed
Parties.

                SECTION 4 Consents of Guarantor. The Guarantor hereby
unconditionally consents and agrees that, without notice to or further assent
from the Guarantor:

                (i)     the principal amount of the Guaranteed Obligations in
respect of any of the Guaranteed Parties may be increased or decreased as to
such Guaranteed Party and additional indebtedness or obligations of the Borrower
under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Document;



                                       5
   6


                (ii)    the time, manner, place or terms of any payment under
any Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any Guaranteed Obligation or any fee or other
amount payable under such Credit Documents, by an amendment, modification or
renewal of any Credit Documents or otherwise;

                (iii)   the time for the Borrower's (or any other Person's)
performance of or compliance with any term, covenant or agreement on its part to
be performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;

                (iv)    any of the Guaranteed Parties may discharge or release,
in whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Guaranteed Obligations owing
to such Guaranteed Parties, and may permit or consent to any such action or any
result of such action, and shall not be obligated to demand or enforce payment
upon any collateral, nor shall the Guaranteed Parties be liable to the Guarantor
for any failure to collect or enforce payment or performance of the Guaranteed
Obligations from any Person or to realize on any collateral therefor;

                (v)     the Guaranteed Parties may take and hold other security
(legal or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale
thereof;

                (vi)    the Guaranteed Parties may request and accept other
guaranties of the Guaranteed Obligations and any other indebtedness, obligations
or liabilities of the Borrower to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to any
such action or the result of any such action; and

                (vii)   the Guaranteed Parties may exercise, or waive or
otherwise refrain from exercising, any other right, remedy, power or privilege
(including the right to accelerate the maturity of any Loan and any power of
sale) granted by any Credit Document or other security document or agreement, or
otherwise available to the Guaranteed Parties, with respect to the Guaranteed
Obligations or any collateral, even if the exercise of such right, remedy, power
or privilege affects or eliminates any right of subrogation or any other right
of the Guarantor against the Borrower;

                all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.



                                       6
   7


                SECTION 5 Guarantor's Waivers.

                (a)     Certain Waivers. The Guarantor waives and agrees not to
assert:

                        (i)     any right to require any of the Guaranteed
Parties to marshal assets in favor of the Borrower, the Guarantor, any other
guarantor or any other Person, to proceed against the Borrower, any other
guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or private
sale of personal property security constituting the Collateral or other
collateral for the Guaranteed Obligations or comply with any other provisions of
Section 9-504 of the New York UCC (or any equivalent provision of any other
applicable law) or to pursue any other right, remedy, power or privilege of the
Guaranteed Parties whatsoever;

                        (ii)    the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;

                        (iii)   any defense arising by reason of any lack of
corporate or other authority or any other defense of the Borrower, the Guarantor
or any other Person;

                        (iv)    any defense based upon the Guaranteed Parties'
or any Lender's errors or omissions in the administration of the Guaranteed
Obligations;

                        (v)     any rights to set-offs and counterclaims;

                        (vi)    any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Borrower or any other obligor of the
Guaranteed Obligations for reimbursement; and

                        (vii)   without limiting the generality of the
foregoing, to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of this
Guaranty, including any and all benefits that otherwise might be available to
the Guarantor under New York Laws. This means, among other things: (A) the
Guaranteed Parties may collect from the Guarantor without first foreclosing on
any real or personal property collateral pledged by the Borrower; and (B) if the
Guaranteed Parties forecloses on any real property collateral pledged by the
Borrower: (1) the amount of the debt may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price, and (2) the Guaranteed Parties may collect from the
Guarantor even if the Administrative Agent, by foreclosing on the real property
collateral, has destroyed any right the Guarantor may have to collect from the
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses the Guarantor may have because the Borrower's debt is secured by real
property.

                (b)     Additional Waivers. The Guarantor waives any and all
notice of the acceptance of this Guaranty, and any and all notice of the
creation, renewal, modification, extension or accrual of the Guaranteed
Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or
the exercise of any right, power or privilege hereunder. The Guaranteed


                                       7
   8


Obligations shall conclusively be deemed to have been created, contracted,
incurred and permitted to exist in reliance upon this Guaranty. The Guarantor
waives promptness, diligence, presentment, protest, demand for payment, notice
of default, dishonor or nonpayment and all other notices to or upon the
Borrower, the Guarantor or any other Person with respect to the Guaranteed
Obligations.

                (c)     Independent Obligations. The obligations of the
Guarantor hereunder are independent of and separate from the obligations of the
Borrower and any other guarantor. Upon the occurrence and during the continuance
of any Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Borrower or any such other guarantor is joined
therein or a separate action or actions are brought against the Borrower or any
such other guarantor.

                (d)     Financial Condition of Borrower. The Guarantor shall not
have any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Borrower or the ability of the Borrower to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.

                SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it
may acquire by way of subrogation under this Guaranty, by any payment hereunder
or otherwise, (ii) any rights of contribution, indemnification, reimbursement or
similar suretyship claims arising out of this Guaranty or (iii) any other right
which it might otherwise have or acquire (in any way whatsoever) which could
entitle it at any time to share or participate in any right, remedy or security
of the Guaranteed Parties as against the Borrower or other guarantors, whether
in connection with this Guaranty, any of the other Credit Documents or
otherwise. If any amount shall be paid to the Guarantor on account of the
foregoing rights at any time when all the Guaranteed Obligations shall not have
been paid in full, such amount shall be held in trust for the benefit of the
Guaranteed Parties and shall forthwith be paid to the Guaranteed Parties (or the
Collateral Agent on their behalf) to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Documents (and subject to the Intercreditor Agreement).

                SECTION 7 Subordination.

                (a)     Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Borrower to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions to
the Borrower or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts payable
by the Borrower to the Guarantor in connection therewith, whether now existing
or hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined (the "Subordinated Debt")
shall be subject, subordinate and junior in right of



                                       8
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payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.

                (b)     No Payments. As long as any of the Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not accept
or receive any payment or distribution by or on behalf of the Borrower, directly
or indirectly, of assets of the Borrower of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the Subordinated Debt ("Subordinated Debt
Payments"), except that if no Event of Default exists and no notice described
below has been received by the Guarantor, the Guarantor shall be entitled to
accept and receive any and all payments. During the existence of an Event of
Default (or if any Event of Default would exist immediately after the making of
a Subordinated Debt Payment), and upon receipt by the Borrower of notice from
the Guaranteed Parties (or the Collateral Agent on their behalf) of such
Default, and until such Event of Default is cured or waived, pursuant to the
terms of the applicable Credit Documents, the Borrower shall not make, accept or
receive any Subordinated Debt Payment. In the event that, notwithstanding the
provisions of this Section 7, any Subordinated Debt Payments shall be received
in contravention of this Section 7 by the Guarantor before all Guaranteed
Obligations are paid in full in cash or cash equivalents, such Subordinated Debt
Payments shall be held in trust for the benefit of the Guaranteed Parties and
shall be paid over or delivered to the Guaranteed Parties (or the Collateral
Agent on their behalf) for application to the payment in full in cash or cash
equivalents of all Guaranteed Obligations remaining unpaid to the extent
necessary to give effect to this Section 7, after giving effect to any
concurrent payments or distributions to the Guaranteed Parties in respect of the
Guaranteed Obligations.

                (c)     Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):

                        (i)     accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect of
the Subordinated Debt;

                        (ii)    exercise any rights under or with respect to (A)
any guaranties of the Subordinated Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Borrower or
asserting any claim or interest in any insurance with respect to any collateral,
or attempt to do any of the foregoing;

                        (iii)   exercise any rights to set-offs and
counterclaims in respect of any indebtedness, liabilities or obligations of the
Guarantor to the Borrower against any of the Subordinated Debt; or

                        (iv)    commence, or cause to be commenced, or join with
any creditor other than the Guaranteed Parties in commencing, any proceeding
under any Debtor Relief Laws as against Borrower.



                                       9
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                (d)     Subordination Upon Any Distribution of Assets of the
Borrower. In the event of any payment or distribution of assets of the Borrower
of any kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Borrower, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim in
any such proceeding, shall first be paid in full in cash, or payment provided
for in cash or in cash equivalents, before any Subordinated Debt Payment is
made; and (ii) to the extent permitted by applicable law, any Subordinated Debt
Payment to which the Guarantor would be entitled except for the provisions
hereof, shall be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Guaranteed Parties (or the Collateral
Agent acting on their behalf) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any concurrent
payment or distribution or provision therefor to the Guaranteed Parties in
respect of such Guaranteed Obligations.

                (e)     Authorization to Guaranteed Parties. If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws is
commenced by or against the Borrower or its property:

                        (i)     the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name of
the Guarantor or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution in respect of the Subordinated
Debt and give acquittance therefor and to file claims and proofs of claim and
take such other action (including voting the Subordinated Debt) as they may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Guaranteed Parties; and

                        (ii)    the Guarantor shall promptly take such action as
any of the Guaranteed Parties may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to the Guaranteed Parties (or the Collateral Agent acting
on their behalf), such powers of attorney, assignments and other instruments as
they may request to enable them to enforce any and all claims with respect to
the Subordinated Debt, and (C) to collect and receive any and all Subordinated
Debt Payments.

                SECTION 8 Continuing Guaranty; Reinstatement.

                (a)     Continuing Guaranty. This Guaranty is a continuing
guaranty and agreement of subordination and shall continue in effect and be
binding upon the Guarantor until the payment and performance in full of all
Guaranteed Obligations.

                (b)     Reinstatement. This Guaranty shall continue to be
effective or shall be reinstated and revived, as the case may be, if, for any
reason, any payment of the Guaranteed Obligations by or on behalf of the
Borrower (or receipt of any proceeds of collateral) shall be rescinded,
invalidated, declared to be fraudulent or preferential, set aside, voided or
otherwise required to be repaid to the Borrower, its estate, trustee, receiver
or any other Person (including



                                       10
   11


under any Debtor Relief Laws or other state or federal law), or must otherwise
be restored by the Guaranteed Parties, whether as a result of proceedings under
any Debtor Relief Laws or otherwise. To the extent any payment is so rescinded,
set aside, voided or otherwise repaid or restored, the Guaranteed Obligations
shall be revived in full force and effect without reduction or discharge for
such payment. All losses, damages, costs and expenses that the Guaranteed
Parties may suffer or incur as a result of any voided or otherwise set aside
payments shall be specifically covered by the indemnity in favor of the
Guaranteed Parties contained in Section 15.

                SECTION 9 Payments. The Guarantor hereby agrees, in furtherance
of the foregoing provisions of this Guaranty and not in limitation of any other
right which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), the Guarantor shall forthwith
pay, or cause to be paid, in cash, to the Guaranteed Parties (or the Collateral
Agent on their behalf) an amount equal to the amount of the Guaranteed
Obligations then due as aforesaid (including interest which, but for the filing
of a petition in any proceeding under any Debtor Relief Laws with respect to the
Borrower, would have accrued on such Guaranteed Obligations, whether or not a
claim is allowed against the Borrower for such interest in any such proceeding
under any Debtor Relief Laws). The Guarantor shall make each payment hereunder,
unconditionally in full without set-off, counterclaim or other defense, or
deduction for any Taxes, on the day when due in Dollars and in same day or
immediately available funds, to the Collateral Agent at such office or account
of any Guaranteed Party as any of the Guaranteed Parties (or the Collateral
Agent on their behalf) may direct. All such payments shall be promptly applied
from time to time by the Guaranteed Parties as provided in the Intercreditor
Documents.

                SECTION 10 Representations and Warranties. The Guarantor
represents and warrants to the Guaranteed Parties that:

                (a)     Organization and Powers. The Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would have a Material Adverse Effect and has all requisite
power and authority: (i) to own its assets and carry on its business, and (ii)
to execute, deliver and perform its obligations under the Guarantor Documents
and Spin-Off Documents.

                (b)     Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor Documents
and Spin-Off Documents, and the Spin-Off Transaction, have been duly authorized
by all necessary corporate action of the Guarantor, and do not and will not: (i)
contravene the terms of the Guarantor's organization documents or (ii) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, any document evidencing any material Contractual Obligation to which the
Guarantor is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Guarantor or its property is subject, or
(iii) violate any Laws.



                                       11
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                (c)     Binding Obligation. This Guaranty and the other
Guarantor Documents constitute the legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.

                (d)     Governmental Consents. No authorization, consent,
approval, license, exemption of, or filing or registration with, any
Governmental Authority, or approval or consent of any other Person, except as
have been obtained on or before the Closing Date, is required for (i) the due
execution, delivery or performance by, or enforcement against, the Guarantor of
the Guarantor Documents, (ii) the execution, delivery or performance by or
enforcement against the Guarantor of the Spin-Off Documents or (iii) the
consummation of the Spin-Off Transaction.

                (e)     The Guarantor has not previously assigned any interest
in the Subordinated Debt or any collateral relating thereto, no Person other
than the Guarantor owns an interest in the Subordinated Debt or any such
collateral (whether as joint holders of the Subordinated Debt, participants or
otherwise), and the entire Subordinated Debt is owing only to the Guarantor.

                (f)     Solvency. Immediately prior to and after and giving
effect to (i) the incurrence of the Guarantor's obligations under this Guaranty,
and (ii) the Spin-Off Transaction, the Guarantor will be Solvent.

                (g)     Consideration. The Guarantor has received at least
"reasonably equivalent value" (as such phrase is used in Section 548 of the
Bankruptcy Code) and "fair consideration" (as such phrase is used in Section 272
of the New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is a
party.

                (h)     Independent Investigation. The Guarantor hereby
acknowledges that it has undertaken its own independent investigation of the
financial condition of the Borrower and all other matters pertaining to this
Guaranty and further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto. The
Guarantor represents and warrants that it has received and reviewed copies of
the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information concerning
the financial condition of the Borrower and any other matters pertinent hereto
that the Guarantor may desire. The Guarantor is not relying upon or expecting
the Guaranteed Parties to furnish to the Guarantor any information now or
hereafter in the Guaranteed Parties' possession concerning the financial
condition of the Borrower or any other matter.

                SECTION 11 Reporting Covenant. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.



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   13


                SECTION 12 Additional Covenants. So long as any Guaranteed
Obligations shall remain unsatisfied or any Lender shall have any Commitment,
the Guarantor agrees that:

                (a)     Preservation of Existence, Etc. The Guarantor shall, and
shall cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the case
of this clause (ii) where the non-preservation could not reasonably be expected
to have a Material Adverse Effect.

                (b)     Further Assurances and Additional Acts. The Guarantor
shall execute, acknowledge, deliver, file, notarize and register at its own
expense all such further agreements, instruments, certificates, documents and
assurances and perform such acts as any of the Guaranteed Parties shall deem
reasonably necessary or appropriate to effectuate the purposes of this Guaranty
and the other Guarantor Documents, and promptly provide the Guaranteed Parties
with evidence of the foregoing satisfactory in form and substance to the
Guaranteed Parties.

                SECTION 13 Notices. All notices, requests or other
communications hereunder shall be given in the manner and to the addresses
specified in the Credit Agreement; except that (a) any notices to the Swap
Provider shall be delivered to Fleet National Bank (or such replacement Swap
Provider as the Swap Provider may direct in writing), according to the
information listed in Schedule 10.02 of the Credit Agreement for such party as a
Lender and (b) any notice to the Note Holders be delivered to the address
specified for such Persons in the Note Purchase Agreement (or to such
replacement Note Holders as may be appointed from time to time consistent with
the Intercreditor Agreement). Notices to the Guarantor shall be sent or
delivered to the address set forth in the Credit Agreement for the Borrower. All
such notices, requested and communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine, respectively, or
if mailed, upon receipt by the addressee, or if delivered, upon delivery.

                SECTION 14 No Waiver; Cumulative Remedies. No failure on the
part of any Guaranteed Parties to exercise, and no delay in exercising on the
part of any Guaranteed Parties, any right, remedy, power or privilege hereunder
or under any other Guarantor Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

                SECTION 15 Costs and Expenses; Indemnification.

                (a)     Costs and Expenses. The Guarantor shall:

                        (i)     whether or not the transactions contemplated
hereby are consummated, pay or reimburse each of the Guaranteed Parties for all
costs and expenses incurred by them in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether



                                       13
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or not consummated), this Guaranty, any other Guarantor Document and any other
documents prepared in connection herewith or therewith and the consummation of
the transactions contemplated hereby and thereby; and

                        (ii)    pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).

                (b)     Indemnification. The Borrower shall indemnify, defend
and hold each of the Guaranteed Parties, and each Lender and Note Holder and
each of its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suites, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in favor of any
third-party in any way relating to or arising out of this Guaranty or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any proceeding under any Debtor Relief Laws
or appellate proceeding) related to or arising out of this Guaranty or relating
to the Collateral, whether or not any Indemnified Person is a party thereto (the
"Indemnified Liabilities"); provided that the Guarantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person.

                (c)     Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel satisfactory
to such Indemnified Person in such Person's sole discretion, at the sole cost
and expense of the Guarantor.

                (d)     Interest. Any amounts payable to the Guaranteed Parties
under this Section 15 if not paid upon demand shall bear interest from the date
of such demand until paid in full, at the Default Rate.

                (e)     Survival. The agreements in this Section shall survive
payment of all other Guaranteed Obligations.

                SECTION 16 Right of Set-Off. In addition to any rights and
remedies of the Guaranteed Parties and the Lenders provided by law, if an Event
of Default exists or any reimbursement or payment obligation under any of the
Credit Documents has been accelerated, each Guaranteed Parties and Lenders is
hereby authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Person to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor then due and



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owing, irrespective of whether or not such Person shall have made any demand
upon the Borrower or the Guarantor under any of the Credit Documents. Each
Lender and the Guaranteed Parties shall promptly notify the Guarantor (through
the Collateral Agent) after any such set-off and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders and
Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which the such parties may have.

                SECTION 17 Marshalling; Payments Set Aside. None of the Lenders,
the Note Holders, or the Guaranteed Parties shall be under any obligation to
marshal any assets in favor of the Guarantor or any other Person or against or
in payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Guaranteed Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of
such recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Lender severally
agrees to pay to the Collateral Agent upon demand its pro rata share of any
amount so recovered from or repaid by the Collateral Agent.

                SECTION 18 Benefits of Guaranty. This Guaranty is entered into
for the sole protection and benefit of the Lenders, the Note Holders, the
Guaranteed Parties, and their respective successors and assigns, and no other
Person (other than the Collateral Agent and any Indemnified Person specified
herein) shall be a direct or indirect beneficiary of, or shall have any direct
or indirect cause of action or claim in connection with, this Guaranty. The
Guaranteed Parties, by their acceptance of this Guaranty, shall not have any
obligations under this Guaranty to any Person other than the Guarantor, and such
obligations shall be limited to those expressly stated herein.

                SECTION 19 Binding Effect; Assignment.

                (a)     Successors and Assigns. The provisions of this Guaranty
shall be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.

                (b)     Assignment. The Guarantor shall not have the right to
assign or transfer its rights and obligations hereunder or under any other
Guarantor Documents without the prior written consent of the Required Lenders.
Each of the Guaranteed Parties, the Note Holders, and the Lenders may, without
notice to or consent by the Guarantor, sell, assign, transfer or grant
participations in all or any portion of such Person's rights and obligations
hereunder and under the other Guarantor Documents in connection with any sale,
assignment, transfer or grant of a participation by such Person in accordance
with Section 10.07 of the Credit Agreement in its rights and obligations
thereunder and under any of the Credit Documents. The Guarantor agrees that in
connection with any such sale, assignment, transfer or grant by any Lender, such
Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Guarantor and its
Subsidiaries.


                                       15
   16


                SECTION 20 Governing Law and Jurisdiction.

                (a)     THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED
PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

                (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

                SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS
GUARANTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                SECTION 22 Entire Agreement; Amendments. This Guaranty, together
with the other Guarantor Documents, embodies the entire agreement of the
Guarantor with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be amended
only by written agreement between the Guarantor and the Guaranteed Party to whom
such



                                       16
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amendment relates. Any such amendment shall not effect any guaranty of the
Guarantor granted hereunder to any other Guaranteed Party.

                SECTION 23 Independence. This Guaranty sets forth independent
and separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed Party
shall not in any way affect or impair the legality or enforceability of that or
any other provision of this Guaranty or any instrument or agreement required
hereunder in respect of any other Guaranteed Party. The parties acknowledge that
this Guaranty has, solely for reasons of convenience, been prepared and executed
as a single document, but that the legal effect shall be in all respects as
thought the Guarantor had executed separate guaranties, in favor of each
Guaranteed Party. Any provision of this Agreement and the other Credit Documents
to which the Grantor is a party that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                SECTION 24 Multiple Guarantors; Joint and Several Liability.
When this Guaranty is executed by more than one Guarantor, the word "Guarantor"
shall mean all and any one or more of them, and the obligations of all Persons
signing this Guaranty shall be joint and several.

                  [remainder of page intentionally left blank]




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        IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the
date first above written.

                                ARBITRON HOLDINGS INC., as Guarantor

                                By:  /s/ JOHN H. GRIERSON
                                    -------------------------------------------

                                Name:    John H. Grierson
                                      -----------------------------------------

                                Title:  Vice President & Treasurer
                                      ------------------------------------------





                                       18

EX-10.10

ex10-10

EX-10.11

   1
                                                                   EXHIBIT 10.11
                                                               (March 2001 Form)



                     ARBITRON INC. 1999 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT


        THIS AGREEMENT is entered into and effective as of APRIL __, 2001 (the
"Date of Grant"), by and between Ceridian Corporation (the "Company") and [NAME]
(the "Optionee").

        A.     The Company has adopted the Arbitron Inc. 1999 Stock Incentive
Plan (as may be amended or supplemented, the "Plan") authorizing the Board of
Directors of the Company, or a committee as provided for in the Plan (the Board
or such a committee to be referred to as the "Committee"), to grant stock
options to employees of the Company and its Subsidiaries (as defined in the
Plan).

        B. The Company desires to give the Optionee an inducement to acquire a
proprietary interest in the Company and an added incentive to advance the
interests of the Company by granting to the Optionee an option to purchase
shares of common stock of the Company pursuant to the Plan.

        Accordingly, the parties agree as follows:

1.      Grant of Option.

        The Company hereby grants to the Optionee the right, privilege and
option (the "Option") to purchase [SHARES] shares (the "Option Shares") of the
Company's common stock, $0.50 par value (the "Common Stock"), according to the
terms and subject to the conditions hereinafter set forth and as set forth in
the Plan. The Option granted hereunder shall not be an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").

2.      Option Exercise Price.

        The per share price to be paid by Optionee in the event of an exercise
of the Option will be $______.

3.      Duration of Option and Time of Exercise.

        3.1    Initial Period of Exercisability. Except as provided in Sections
3.2 and 3.3 hereof, the Option shall become exercisable with respect to
one-third of the Option Shares on each of the first, second and third
anniversaries of the Date of Grant. The foregoing rights to exercise the Option
will be cumulative with respect to the Option Shares becoming exercisable on
each such date, but in no event will the Option be exercisable after, and the
Option will become void and expire as to all unexercised Option Shares at, 5:00
p.m. (New York City time) on the fifth anniversary of the Date of Grant (the
"Time of Option Termination").

        3.2    Termination of Employment.

               (a)    Termination Due to Death, Disability or Retirement. In the
        event the Optionee's employment with the Company and all Subsidiaries is
        terminated by reason of death, Disability (as defined in the Plan) or
        Retirement (as defined in the Plan), the Option will become immediately
        exercisable in full and remain exercisable until the Time of Option
        Termination.
   2

               (b)    Termination for Reasons Other Than Death, Disability or
        Retirement. In the event that the Optionee's employment with the
        Company and all Subsidiaries is terminated for any reason other than
        death, Disability or Retirement, or the Optionee is in the employ of a
        Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company
        (unless the Optionee continues in the employ of the Company or another
        Subsidiary), all rights of the Optionee under the Plan and this
        Agreement will immediately terminate without notice of any kind, and
        the Option will no longer be exercisable; provided, however, that, if
        such termination is due to any reason other than termination by the
        Company or any Subsidiary for Cause (as defined in Section 9 of this
        Agreement), the Option will remain exercisable to the extent
        exercisable as of such termination for a period of three months after
        such termination (but in no event after the Time of Option
        Termination).

        3.3    Change in Control.

               (a)    Impact of Change in Control.  If a Change in Control
        (as defined in Section 9 of this Agreement) of the Company occurs, and
        the Option has been outstanding for at least two months, the Option will
        become immediately exercisable in full and will remain exercisable until
        the Time of Option Termination, regardless of whether the Optionee
        remains in the employ of the Company or any Subsidiary. In addition, if
        a Change in Control of the Company occurs, the Committee, in its sole
        discretion and without the consent of the Optionee, may determine that
        the Optionee will receive, with respect to some or all of the Option
        Shares, as of the effective date of any such Change in Control of the
        Company, cash in an amount equal to the excess of the Fair Market Value
        (as defined in the Plan) of such Option Shares immediately prior to the
        effective date of such Change in Control of the Company over the option
        exercise price per share of the Option.

               (b)    Authority to Modify Change of Control Provisions. Prior to
        a Change of Control, the Optionee will have no rights under this Section
        3.3, and the Committee will have the authority, in its sole discretion,
        to rescind, modify or amend this Section 3.3 without the consent of the
        Optionee.

4.      Manner of Option Exercise.

        4.1    Notice. This Option may be exercised by the Optionee in whole or
in part from time to time, subject to the conditions contained in the Plan and
in this Agreement, by delivery, in person, by facsimile or electronic
transmission or through the mail, to the Company at its principal executive
office in New York, New York (Attention: Corporate Secretary), of a written
notice of exercise. Such notice must be in a form satisfactory to the Committee,
must identify the Option, must specify the number of Option Shares with respect
to which the Option is being exercised, and must be signed by the person or
persons so exercising the Option. Such notice must be accompanied by payment in
full of the total exercise price for the Option Shares to be purchased. In the
event that the Option is being exercised, as provided by the Plan and Section
3.2 of this Agreement, by any person or persons other than the Optionee, the
notice must be accompanied by appropriate proof of right of such person or
persons to exercise the Option. If the Optionee retains the Option Shares
purchased, as soon as practicable after the effective exercise of the Option,
the Optionee will be recorded on the stock transfer books of the Company as the
owner of the Option Shares purchased, and the Company will deliver to the
Optionee one or more duly issued stock certificates evidencing such ownership.

        4.2    Payment. At the time of exercise of the Option, the Optionee
must pay the total exercise price of the Option Shares to be purchased entirely
in cash (including a check, bank draft or money order,

                                       2
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payable to the order of the Company); provided, however, that the Committee, in
its sole discretion and upon terms and conditions established by the Committee,
may allow such payment to be made, in whole or in part, by tender of a full
recourse promissory note or a Broker Exercise Notice (as such terms are defined
in the Plan), or by a combination of such methods.

5.  Rights and Restrictions of Optionee; Transferability.

        5.1    Employment. Nothing in this Agreement will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment of the Optionee at any time, nor confer upon the Optionee any right
to continue in the employ of the Company or any Subsidiary at any particular
position or rate of pay or for any particular period of time.

        5.2    Rights as a Stockholder. The Optionee will have no rights as a
stockholder unless and until all conditions to the effective exercise of the
Option (including, without limitation, the conditions set forth in Sections 4
and 6 of this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for dividends or
distributions with respect to the Option Shares as to which there is a record
date preceding the date the Optionee becomes the holder of record of such Option
Shares, except as may otherwise be provided in the Plan or determined by the
Committee in its sole discretion.

        5.3    Restrictions on Transfer. Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly permitted by
the Plan, no right or interest of the Optionee in the Option prior to exercise
may be assigned or transferred, or subjected to any lien, during the lifetime of
the Optionee, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. The Optionee will, however, subject to applicable
laws be entitled to designate a beneficiary to receive the Option upon such
Optionee's death in the manner provided by the Plan, and, in the event of the
Optionee's death, exercise of the Option (to the extent permitted pursuant to
Section 3.2(a) of this Agreement) may be made by the Optionee's designated
beneficiary.

        5.4    Restrictions Regarding Employment.

               (a)    The Optionee agrees that he or she will not take any
        Adverse Actions (as defined below) against the Company or any Subsidiary
        at any time during the period that the Option is or may yet become
        exercisable in whole or in part or at any time before one year following
        the Optionee's termination of employment with the Company or any
        Subsidiary, whichever is later (the "Restricted Period"). The Optionee
        acknowledges that damages which may arise from a breach of this Section
        5.4 may be impossible to ascertain or prove with certainty.
        Notwithstanding anything in this Agreement or the Plan to the contrary,
        in the event that the Company determines in its sole discretion that the
        Optionee has taken Adverse Actions against the Company or any Subsidiary
        at any time during the Restricted Period, in addition to other legal
        remedies which may be available, (i) the Company will be entitled to an
        immediate injunction from a court of competent jurisdiction to end such
        Adverse Action, without further proof of damage, (ii) the Committee will
        have the authority in its sole discretion to terminate immediately all
        rights of the Optionee under the Plan and this Agreement without notice
        of any kind, and (iii) the Committee will have the authority in its sole
        discretion to rescind the exercise of all or any portion of the Option
        to the extent that such exercise occurred within six months prior to the
        date the Optionee first commences any such Adverse Actions and require
        the Optionee to disgorge any profits (however defined by the Committee)
        realized by the Optionee relating to such exercised portion of the
        Option or any Option Shares issued or issuable upon such exercise. Such
        disgorged profits paid to the Company must be

                                       3

   4

        made in cash (including check, bank draft or money order) or, with the
        Committee's consent, shares of Common Stock with a Fair Market Value on
        the date of payment equal to the amount of such payment. The Company
        will be entitled to withhold and deduct from future wages of the
        Optionee (or from other amounts that may be due and owing to the
        Optionee from the Company or a Subsidiary) or make other arrangements
        for the collection of all amounts necessary to satisfy such payment
        obligation.

               (b)    For purposes of this Agreement, an "Adverse Action" will
        mean any of the following: (i) engaging in any commercial activity in
        competition with any part of the business of the Company or any
        Subsidiary as conducted during the Restricted Period for which the
        Optionee has or had access to trade secrets and/or confidential
        information; (ii) diverting or attempting to divert from the Company or
        any Subsidiary any business of any kind, including, without limitation,
        interference with any business relationships with suppliers, customers,
        licensees, licensors, clients or contractors; (iii) participate in the
        ownership, operation or control of, be employed by, or connected in any
        manner with any person or entity which solicits, offers or provides any
        services or products similar to those which the Company or any
        Subsidiary offers to its customers or prospective customers, (iv)
        making, or causing or attempting to cause any other person or entity to
        make, any statement, either written or oral, or convey any information
        about the Company or any Subsidiary that is disparaging or that in any
        way reflects negatively on the Company or any Subsidiary; or (v)
        engaging in any other activity that is hostile, contrary or harmful to
        the interests of the Company or any Subsidiary, including, without
        limitation, influencing or advising any person who is employed by or in
        the service of the Company or any Subsidiary to leave such employment or
        service to compete with the Company or any Subsidiary or to enter into
        the employment or service of any actual or prospective competitor of the
        Company or any Subsidiary, influencing or advising any competitor of the
        Company or any Subsidiary to employ to otherwise engage the services of
        any person who is employed by or in the service of the Company or any
        Subsidiary, or improperly disclosing or otherwise misusing any trade
        secrets or confidential information regarding the Company or any
        Subsidiary.

               (c)    Should any provision of this Section 5.4 of the Agreement
        be held invalid or illegal, such illegality shall not invalidate the
        whole of this Section 5.4 of the Agreement, but, rather, the Agreement
        shall be construed as if it did not contain the illegal part or narrowed
        to permit its enforcement, and the rights and obligations of the parties
        shall be construed and enforced accordingly. In furtherance of and not
        in limitation of the foregoing, the Optionee expressly agrees that
        should the duration of or geographical extent of, or business activities
        covered by, any provision of this Agreement be in excess of that which
        is valid or enforceable under applicable law, then such provision shall
        be construed to cover only that duration, extent or activities that may
        validly or enforceably be covered. The Optionee acknowledges the
        uncertainty of the law in this respect and expressly stipulates that
        this Agreement shall be construed in a manner that renders its
        provisions valid and enforceable to the maximum extent (not exceeding
        its express terms) possible under applicable law. This Section 5.4 of
        the Agreement does not replace and is in addition to any other
        agreements the Optionee may have with the Company or any of its
        Subsidiaries on the matters addressed herein.


6.  Securities Law and Other Restrictions.

        Notwithstanding any other provision of the Plan or this Agreement, the
Company will not be required to issue, and the Optionee may not sell, assign,
transfer or otherwise dispose of, any Option

                                       4

   5

Shares, unless (a) there is in effect with respect to the Option Shares a
registration statement under the Securities Act of 1933, as amended, and any
applicable state or foreign securities laws or an exemption from such
registration, and (b) there has been obtained any other consent, approval or
permit from any other regulatory body which the Committee, in its sole
discretion, deems necessary or advisable. The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Option Shares, as may be deemed necessary or advisable by the
Company in order to comply with such securities law or other restrictions.

7. Withholding Taxes.

        The Company is entitled to (a) withhold and deduct from future wages of
the Optionee (or from other amounts that may be due and owing to the Optionee
from the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any federal or provincial withholding tax
requirements attributable to the Option, or (b) require the Optionee promptly to
remit the amount of such withholding to the Company before acting on the
Optionee's notice of exercise of the Option. In the event that the Company is
unable to withhold such amounts, for whatever reason, the Optionee agrees to pay
to the Company an amount equal to the amount the Company would otherwise be
required to withhold under federal, state or local law.

8. Adjustments.

        In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off), or any other change in the corporate structure or shares
of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Optionee, will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property (including
cash) subject to, and the exercise price of, the Option.

9. Certain Definitions.  For purposes of this Agreement, the following
additional definitions will apply:

               (a)    "Benefit Plan" means any formal or informal plan, program
        or other arrangement heretofore or hereafter adopted by the Company or
        any Subsidiary for the direct or indirect provision of compensation to
        the Optionee (including groups or classes of participants or
        beneficiaries of which the Optionee is a member), whether or not such
        compensation is deferred, is in the form of cash or other property or
        rights, or is in the form of a benefit to or for the Optionee.

               (b)    "Cause" will have the meaning set forth in any employment
        or other agreement or policy applicable to the Optionee or, if no such
        agreement or policy exists, will mean (i) dishonesty, fraud,
        misrepresentation, theft, embezzlement or injury or attempted injury, in
        each case related to the Company or any Subsidiary, (ii) any unlawful or
        criminal activity of a serious nature, (iii) any breach of duty,
        habitual neglect of duty or unreasonable job performance, or (iv) any
        material breach of any employment, service, confidentiality or
        noncompete agreement entered into with the Company or any Subsidiary.

               (c)    "Change of Control" will have the meaning set forth in the
        Plan plus such other event or transaction as the Board shall determine
        constitutes a Change of Control, or such other meaning as may be adopted
        by the Committee from time to time in its sole discretion.


                                       5

   6

10. Subject to Plan.

        The Option and the Option Shares granted and issued pursuant to this
Agreement have been granted and issued under, and are subject to the terms of,
the Plan. The terms of the Plan are incorporated by reference in this Agreement
in their entirety, and the Optionee, by execution of this Agreement,
acknowledges having received a copy of the Plan. The provisions of this
Agreement will be interpreted as to be consistent with the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. In
the event that any provision of this Agreement is inconsistent with the terms of
the Plan, the terms of the Plan will prevail.

11. Miscellaneous.

        11.1   Binding Effect.  This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this Agreement.

        11.2   Governing Law. This Agreement and all rights and obligations
under this Agreement will be construed in accordance with the Plan and governed
by the laws of the State of Delaware, without regard to conflicts or choice of
law rule or principle that might otherwise refer construction or interpretation
of this Agreement to the substantive laws of another jurisdiction.

        11.3   Entire Agreement. This Agreement and the Plan set forth the
entire agreement and understanding of the parties to this Agreement with respect
to the grant and exercise of the Option and the administration of the Plan and
supersede all prior agreements, arrangements, plans and understandings relating
to the grant and exercise of the Option and the administration of the Plan.

        11.4   Amendment and Waiver. Other than as provided in the Plan, this
Agreement may be amended, waived, modified or canceled only by a written
instrument executed by the parties to this Agreement or, in the case of a
waiver, by the party waiving compliance.

                                       6

   7


         The parties to this Agreement have executed this Agreement effective
the day and year first above written.

                                     
                                        ARBITRON INC.


                                        By
                                          --------------------------------------
                                        Name
                                             -----------------------------------
                                        Title
                                              ----------------------------------


By execution of this Agreement,         OPTIONEE
the Optionee acknowledges having
received a copy of the Plan.
                                        ----------------------------------------

                                        Print Name:
                                                    ----------------------------
                                        Address:
                                                  ------------------------------

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

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


                                        Social Security Number:
                                                                ----------------
                                        Arbitron Stock Option Identifier:
                                                                           -----




                                       7

EX-10.16

   1
                                                                   EXHIBIT 10.16

                    STATION LICENSE AGREEMENT TO RECEIVE AND
                     USE ARBITRON RADIO LISTENING ESTIMATES

                                        Date of Proposal: November 20, 1998
                                                         ----------------------

THIS AGREEMENT is between The Arbitron Company, a division of Ceridian
Corporation, ("Arbitron") and the undersigned radio broadcaster ("Station"), a
Nevada Corporation. Arbitron hereby grants to Station, for the radio stations
listed below, a limited license to receive and use Arbitron data and listening
estimates ("Arbitron Data" or "Data") for the survey(s) and for the geographic
area ("Market") described in Section 1. This license is personal,
nontransferable and nonexclusive. Such Arbitron Data may be furnished to Station
in printed or other form ("Reports"), at Arbitron's option, but title thereto
will remain with Arbitron at all times.

1.  SERVICES PROVIDED; TERM:

This Agreement shall become effective when countersigned by Arbitron's Contract
Manager and shall be for a period of * years beginning and ending on the dates
described below (the "Term"). This Agreement will continue without regard to
Station's ownership of the radio station(s) licensed hereunder absent a valid
Assignment pursuant to Section 11 of this Agreement.

Broadcaster ("Station"): Clear Channel Radio, Inc.
                        ------------------------------------------------------

- ------------------------------------------------------------------------------
For use only by radio station(s): SEE ATTACHMENT "A"
                                 ---------------------------------------------

- ------------------------------------------------------------------------------
Arbitron Radio Geographic Area ("Market"):
                                          ------------------------------------
          SEE ATTACHMENT "A"
- ------------------------------------------------------------------------------
Term Begins  January 1, 1999              ; ends               *              .
            ------------------------------      ------------------------------
Number of surveys currently provided during first Term year:    *             .
                                                            ------------------
Number of copies currently provided per survey:        *                      .
                                               -------------------------------
Reports currently
    shall be titled:   [ ]Spring  [ ]Fall   [ ]Winter  [ ]Summer

First Report:   See ATTACHMENT "A"
                --------------------------------------------------------------

All representations in this Section regarding number of surveys, number of
printed copies and Report titles are subject to qualifications set forth in
Section 6(a) herein.

2.  ANNUAL RATE:

A License Charge in the form of a Net Annual Rate for each year of the Term,
which may be subject to adjustments and discounts pursuant to Sections 3, 4, 6,
11 and 16 of this Agreement, shall be paid by Station; with payments due Monthly
(the "Periodic Charge" or "Charge").

The Gross Annual Rate for the first Term year is $         *          .

Subject to Sections 3, 4, 6 and 11 hereof, neither the Gross nor the Net Annual
Rate will change during a Term year.

For each succeeding Term year, the Gross Annual Rate shall be the Gross Annual
Rate for the previous Term year increased by a factor of * percent. Any
applicable discounts or other adjustments will be applied thereafter to the
Annual Rate so derived.

3.  DISCOUNTS:

(a) Continuous Service Discount: A discount of ten percent (10%) in calculating
    the Periodic Charge shall be allowed for each month in excess of 12
    consecutive months that Station is continuously licensed to use the Arbitron
    Data for this Market, provided that such discount shall no longer apply if
    Station fails to sign and return this Agreement to Arbitron within 45 days
    after the termination of a prior Arbitron Radio License Agreement.

(b) Group Discount: If Station owns two or more radio stations located in
    different markets and such radio stations are under common ownership as
    defined by Arbitron, Station may be entitled to a Group Discount based on
    the number of subscribing radio stations owned at the time this Agreement is
    executed, which discount may vary and be adjusted during the Term of this
    Agreement in accordance with Arbitron's Group Discount Schedule should the
    number of subscribing commonly owned radio stations change.

(c) Long-Term Discount:  A discount of

        20 % in months 1-12,              20 % in months 13-24,
    ------                            -------
           % in months 25-36,                % in months 37-48,
    ------                            -------
           % in months 49-60,                % in months 61-72,
    ------                            -------
           % in months 73-84
    ------

    shall be allowed in calculating the Net Annual Rate charged during the
    applicable months.

4.  PERIODIC CHARGE:

The Periodic Charge, due and payable by Station on the first day of each billing
period, shall be: (a) the Gross Annual Rate plus any adjustments; (b) less any
applicable Continuous Service Discount; (c) less, from the amount thereby
derived, any applicable Group Discount; (d) less, from the amount thereby
derived, any applicable Long-Term Discount; (e) with such amount prorated
equally between the number of payments for the Term year.


In addition to and together with the above payments, Station shall pay to
Arbitron any sales, excise, gross-receipts, service, use or other taxes, however
designated, now or hereafter imposed upon or required to be collected by
Arbitron by any authority having jurisdiction over the Market being surveyed or
over any location to which Station directs Arbitron to deliver Data, or by any
other taxing jurisdiction, and such obligation shall survive the termination of
this Agreement.

5. LATE PAYMENT CHARGE AND RIGHT TO SUSPEND REPORT DELIVERY OR TERMINATE
AGREEMENT:

A late payment charge of one and one-half percent (1.5%) per month will be
charged on all Periodic Charges, as adjusted, which are not paid within 60 days
after due hereunder, but in no event will the applicable per-month late payment
charge exceed one-twelfth of the maximum annual percentage allowed to be charged
by applicable state usury law. Any failure to impose a late payment charge shall
not prejudice Arbitron's right to do so should the default continue or should a
subsequent payment not be made when due. In addition, Arbitron may, without
terminating, breaching or committing a default under this Agreement: (a)
accelerate or modify in any way the payment schedule of Periodic Charges for the
duration of this Agreement to a number of installments to be determined by
Arbitron in its discretion; and/or (b) suspend delivery to Station of any Data
or Report(s), in any form, due under this Agreement until such time as Station
is current in its payments of all sums due hereunder; and/or (c) send Station
written notice that Station's license hereunder is suspended, in which case
Station further expressly agrees that it thereafter shall not use Arbitron Data
and/or Reports previously received by Station until such time as Station becomes
current in its payments of all sums due under this Agreement. Arbitron's
suspension hereunder of delivery of Data and/or Reports to Station, and of this
License, shall not relieve Station of any of its obligations hereunder. Station
further agrees to reimburse Arbitron for all collection costs and expenses
(including reasonable attorneys' fees) incurred hereunder. This Agreement may be
terminated immediately by Arbitron should Station default in payment of any sum
due or should Station default in any other condition or obligation of this
Agreement.

6.  CHANGES IN RADIO MARKET SERVICE:

Modification of Rates, Surveys, Report Content or Report Format:

(a) While Arbitron will use professional research efforts to conduct its surveys
    and produce its Data in accordance with its Description of Methodology, and
    the Minimum Standards for Broadcast Rating Research of the Electronic Media
    Rating Council, Arbitron reserves the right to change at any time the
    geographical territory comprising the Market, its policies and procedures,
    survey dates, survey length, survey frequency, sampling procedures,
    methodology, method of Data delivery, number of printed copies of Reports,
    Report content, Report titles, Report format, and to cancel surveys and the
    preparation of Arbitron Data, or any other aspect of the Data services
    supplied.

    Arbitron need not produce any Data or Reports whenever, in its judgment,
    insufficient data are available to meet its minimum research standards or
    any event has jeopardized the reliability of the data. In the event that
    Data and/or Reports are not produced, Station shall receive credit
    reflecting the pro rata value of the Net Annual Rate for said Data and/or
    Report(s). Without limiting the foregoing, Station expressly understands and
    agrees that Arbitron may, at any time

                                                                          /s/GLS
                                   [ARBITRON LOGO]                --------------
                                                                   Initials here


* = See ATTACHMENT "A"
   2


    during the Term of this Agreement, reduce the number of surveys conducted
    and/or Reports published for this Market and consequently reduce the number
    of Reports provided to Station and that, in the event such reduction occurs,
    Station is not relieved of any of its obligations under this Agreement.

(b) In the event that any cause(s) prevents Arbitron from conducting any survey
    in accordance with its Description of Methodology, schedules or other
    publications, Arbitron reserves the right to produce abbreviated Report(s).
    Station hereby consents to publication of such abbreviated Report(s) under
    such circumstances. In the event that such an abbreviated Report covers a
    substantially decreased geographic area, or deletes twenty-five percent
    (25%) or more of the survey days from the aggregate number of days
    scheduled, Station shall be entitled to either a proportionate refund for
    the abbreviated Report, or a full refund for the abbreviated Report, upon
    return of the abbreviated Report within 10 days, at Station's option.
    Further, Arbitron reserves the right in its sole discretion to augment
    available data by means of expanded or extended samples and Station agrees
    it shall not be entitled to any refund in such event.

(c) Arbitron may increase the Gross Annual Rate hereunder at any time. If
    Arbitron increases the Rate for a reason other than as permitted elsewhere
    in this Agreement, it shall give prior written notice to Station. Station
    may, within a 30-day period following such notice, cancel the unexpired Term
    of the Agreement, by written notice pursuant to Section 15(a), without
    cancellation charge or other cost, effective on the date the new Gross
    Annual Rate would have become effective. In the absence of such timely
    cancellation, this Agreement shall continue and the new Gross Annual Rate
    shall become payable in the month stated in Arbitron's notice and
    thereafter.

7.  PERMITTED USES AND CONFIDENTIALITY:

Subject to the limitations stated herein, Station agrees to limit its uses of
the Arbitron Data and Report(s) to such uses as are necessary in the ordinary
course of Station's broadcasting business for programming and media selling.
Station understands and agrees that this use is limited exclusively to the radio
station(s) specified in Section 1 of this Agreement and only for the Term of
this Agreement. In this connection, Station agrees that the Arbitron Data and
Report(s) will only be disclosed:

(a) directly or through its Station representatives to advertisers, prospective
    advertisers and their agencies for the purpose of obtaining and retaining
    advertising accounts; and

(b) through advertising or other promotional literature.

All such disclosures shall identify Arbitron as the source of the disclosed
Arbitron Data and Report(s) and should identify the Market, survey period and
type of audience estimate, daypart and survey area and shall state that the
Arbitron Data and Report(s) quoted therein are copyrighted by Arbitron and are
subject to all limitations and qualifications disclosed in the Data and
Report(s) ("Sourcing").* At all times during the Term of this Agreement and
thereafter, Station agrees to keep the Arbitron Data and Report(s) supplied by
Arbitron confidential and not to disclose the same except as permitted by this
Agreement. Station agrees to use its best efforts to prevent the unauthorized
disclosure of Arbitron Data and Report(s) by Station's employees and/or its
radio station(s)'s employees and agents, by its radio station(s)'s
representatives, by its advertisers and their advertising agencies, by data
processing firms, and by all other persons who obtain the Arbitron Data from
Station or its radio station(s)'s employees or agents. For Station or its radio
station(s) to divulge any Arbitron Data and/or Report(s) to a nonsubscribing
station or to lend and/or give an original copy or any reproduction of any part
of any Data and/or Report(s) or any Arbitron estimates or data to any
nonsubscriber, not authorized by this Agreement, constitutes a breach of this
Agreement and an infringement of Arbitron's copyright.

In the event that a Report listed in Section 1 of this Agreement is delivered
after the expiration of the Term of this License Agreement, Licensee's license
to use that Report shall continue under the terms and conditions of this License
until the release of the next Survey Report in this Market.

Subject to the following conditions, Station may authorize a third party to
process the Arbitron data and estimates licensed hereunder on Station's behalf.
Station understands and agrees that it may do so only on condition: 1) that said
third party is a then current Arbitron licensee in good standing who is
authorized to process Arbitron data and estimates; and 2) that all restrictions
concerning the use of the data and estimates provided under this Agreement shall
apply with full force and effect to any data, estimates, reports or other
output, in any form, containing or derived from the Arbitron data and estimates,
produced by said third party for Station.

8.  CONFIDENTIALITY OF ARBITRON RESPONDENTS:

Station agrees that it will not try either before, during or after a survey, or
in connection with any litigation, to determine or discover the identity or
location of any Arbitron survey participant. Station will under no circumstances
directly or indirectly attempt to contact any such persons. Station agrees to
promptly report to Arbitron any evidence or indication that has come to
Station's attention regarding the identity or location of any such persons.
Station agrees to abide by Minimum Standard A9 (or any successor provision
concerning confidentiality of survey respondents) of the Electronic Media Rating
Council and shall abide by any determination of the Electronic Media Rating
Council concerning respondent confidentiality. Station further agrees that
Arbitron may enjoin any breach of the above-stated obligations and shall have
the right to damages or other remedies (including costs, expenses and reasonable
attorneys' fees) available to it at law or hereunder.

9.  METHODOLOGY

ARBITRON MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, CONCERNING:

(A) DATA GATHERED OR OBTAINED BY ARBITRON FROM ANY SOURCE;

(B) THE PRESENT OR FUTURE METHODOLOGY EMPLOYED BY ARBITRON IN PRODUCING ARBITRON
    DATA AND REPORT(S); OR

(C) THE ARBITRON DATA AND REPORT(S) LICENSED HEREUNDER.

ALL ARBITRON DATA AND REPORT(S) REPRESENT ONLY THE OPINION OF ARBITRON. RELIANCE
THEREON AND USE THEREOF BY STATION IS AT STATION'S OWN RISK.

10.  LIABILITIES AND LIMITATIONS OF REMEDIES:

THE SOLE AND EXCLUSIVE REMEDY, AT LAW OR IN EQUITY, FOR ARBITRON'S BREACH OF ANY
WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS, AND THE SOLE AND EXCLUSIVE REMEDY FOR ARBITRON'S
LIABILITY OF ANY KIND, INCLUDING WITHOUT LIMITATION LIABILITY FOR NEGLIGENCE OR
DELAY WITH RESPECT TO THE ARBITRON DATA AND REPORTS AND ALL PERFORMANCE PURSUANT
TO THIS AGREEMENT, SHALL BE LIMITED TO A CREDIT (FOR EACH REPORT MATERIALLY
AFFECTED BY ANY SUCH BREACH) TO STATION OF AN AMOUNT EQUAL TO THE NET ANNUAL
CHARGES PAYABLE HEREUNDER BY STATION DIVIDED BY THE NUMBER OF REPORTS PRODUCED
ANNUALLY BY ARBITRON FOR THE MARKET. IN NO EVENT SHALL ARBITRON BE LIABLE FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES, NOR SHALL IT BE SUBJECT TO INJUNCTIVE
RELIEF WITH RESPECT TO THE PUBLICATION OF ANY DATA OR REPORT. STATION
UNDERSTANDS THAT THE DATA AND REPORTS EITHER WOULD NOT BE PREPARED OR WOULD BE
AVAILABLE ONLY AT A SUBSTANTIALLY INCREASED LICENSE FEE WERE IT NOT FOR THE
LIMITATIONS OF LIABILITIES AND REMEDIES AS SET FORTH IN THIS SECTION.

Station agrees that it will notify Arbitron in writing of any alleged defect in
any Data or Report within thirty (30) days after Station learns of said alleged
defect. In the event that Station does not timely notify Arbitron,

- ----------------------------
* Station(s) should refer to current regulations and guidelines of the federal
government for further requirements concerning the manner of quoting audience
estimates.

                                                                        /s/GLS
KPER-UNI 6/97                          2                        --------------
                                                                  Initial here





   3

then Station waives all rights with regard to said alleged defect. Station
further agrees that any action to be brought by it concerning any Data or Report
shall be brought not more than one (1) year after such Data or Report was
originally published by Arbitron.

In the event that either party commences litigation against the other party and
fails to ultimately prevail on the merits of such litigation, the commencing
party shall reimburse and indemnify the other party from any and all costs and
expenses incurred with respect to such litigation, including reasonable
attorneys' fees.

11.   ASSIGNMENTS AND CHANGES IN STATION STATUS:

Station may not assign either its rights or obligations under this Agreement
without the prior written consent of Arbitron, which consent will not be
unreasonably withheld.

Subject to Arbitron's consent, which consent will not be unreasonably withheld,
a successor-in-interest by merger, operation of law, assignment, purchase or
otherwise of the entire business of Station shall acquire all rights and be
subject to all obligations of such party hereunder. In the event that Arbitron
consents to the assignment of this Agreement, Arbitron reserves the right to
redetermine the rate to be charged to the assignee. Arbitron shall be entitled
to assign any of its rights or obligations under this Agreement, including the
right to receive License Charges payable hereunder.

Station acknowledges and agrees that the Charges due and the adjustments and
discounts applied hereunder are based on Station's group ownership status and/or
any joint operating agreement with one or more other radio stations and/or
Station's ownership of radio stations in this Market or other Markets. In the
event Station conveys any one of its radio stations, Station remains fully
obligated for the Charges specified for any radio station covered by the terms
of this Agreement. Station may only be released from such obligations upon valid
assignment of this Agreement and subject to the terms thereof.

Station agrees that if at any time it changes or has changed its ownership,
operating or sales policy, frequency, broadcasting arrangements, group or
business relationships of the station(s) licensed under this Agreement, or if it
enters or has entered into any management or other business relationship with
another radio station in this Market or an adjacent Market, or if it enters or
has entered into any joint operating agreement with one or more other radio
stations, or if it is or was purchased or controlled by an entity owning or
otherwise controlling other radio stations in this Market or an adjacent Market,
or if it purchases, or an entity which is in any manner controlled by it
purchases, at any time, another radio station in this Market or an adjacent
Market, Station and its radio station(s) will report the change and the
effective date thereof to Arbitron within thirty (30) days of such change.

Station further agrees that if the parent company or other controlling entity of
Station, or any entity in any manner related to Station, purchases or otherwise
acquires a controlling interest in a radio station in Station's Market that is
not licensed by Arbitron for the same Data and Reports as that licensed
hereunder, as well as any Supplementary Services, then Arbitron may redetermine
Station's Gross Annual Rate based on such occurrence as described in this
Section 11.

12. SPECIAL SERVICES AND REPORTS:

If, during the Term of this Agreement, Station orders any Special Services or
Report(s) not licensed through any other Arbitron Agreement ("Specials"),
Station hereby agrees that this Agreement shall be applicable with respect to
all such Services with the same force and effect as if printed out at length in
a separate agreement executed by Station; provided, however, that any credit
required when applying Section 10 to any such services shall be limited to the
license fee actually paid for such services.

13. RATINGS DISTORTION ACTIVITY:

(a) Station agrees that it shall not engage in any activities which are
    determined by Arbitron to be ratings distortion. Such prohibited activities
    may include, but are not limited to, activities which could:

    (i) cause any survey participant to record erroneous listening information
        in his or her Arbitron diary; or

    (ii) cause any survey participant to utilize an Arbitron diary for a contest
         or promotion conducted by Station or its radio station(s).

(b) Station further agrees that Arbitron may delete all estimates of listening
    to Station and/or its radio station(s) from any Report, computer tape or
    other Arbitron service or method of delivery where, in its judgment it has
    deemed that Station or its radio station(s) has engaged in such activities.
    Arbitron shall:

    (i) first give Station and its radio station(s) notice setting forth what
        activities it deems Station and its radio station(s) has engaged in
        which allegedly could cause or have caused ratings distortion;

    (ii) present evidence to substantiate the allegations set forth in (i)
         above; and

    (iii)give Station and its radio station(s) reasonable opportunity (in light
         of Arbitron's publication schedule for any Report) to present its
         position both in writing and orally.

In the event that Station or its radio station(s) is notified by Arbitron that
allegations of ratings distortion have been made against Station or its radio
station(s), then Station or its radio station(s) shall submit a written response
to Arbitron's inquiry concerning the allegations within seven (7) days from the
receipt of Arbitron's notice, which time may be shortened by Arbitron for
reasons relating to the Report publication schedule. Arbitron shall then advise
Station or its radio station(s) of its decision or reason for delay within seven
(7) days following its receipt of Station's or its radio station(s)' written
response or oral presentation, whichever is later. All such writings shall be
addressed and sent to the respective party by facsimile, overnight courier
service, or certified mail with return receipt requested. In the event that
estimates of listening to Station and/or its radio station(s) are deleted from a
Report(s) (and/or other Arbitron services) following the procedure set forth
above, Station and its radio station(s) agree that the only remedy for such
deletion shall be a credit of the fee paid by Station for such Report(s) or
other affected services and that in no event shall Arbitron be liable for
incidental or consequential damages or be subject to injunctive relief with
respect to any such deletion of estimates of listening to station and/or its
radio station(s). In the event that estimates of listening to Station and/or its
radio stations are deleted from a Report pursuant to this Section, Arbitron
agrees that it will give Station and its radio station(s) an opportunity to
submit to Arbitron a written statement (not exceeding 200 words) of Station
and/or its radio station(s) views concerning its alleged activities, with such
written statement to be published in the Report subject to such reasonable
editing deemed necessary by Arbitron.

In addition, Station and its radio station(s) agree to abide by the Arbitron
policies and procedures governing various Special Station Activities, including,
but not limited to, ratings bias.

14.   INFORMATION TO BE PROVIDED BY STATION AND ITS RADIO STATION(s):

Station and its radio station(s) agree to provide to Arbitron, within ten (10)
days of receipt of Arbitron's request, such information which Arbitron deems
necessary for the publication of a Report, including, but not limited to,
accurate descriptions of the following information for Station and its radio
station(s): (a) facilities; (b) broadcast station names; (c) broadcast hours;
(d) simulcast hours; (e) radio frequency; (f) operating power; (g) format; (h)
height of antenna above average terrain, and (i) programming schedule and
information. Station and its radio station(s) further understand and agree to
notify Arbitron of any changes to the above-referenced information. Station and
its radio station(s) hereby hold Arbitron harmless and agree to indemnify
Arbitron from and against any and all loss, cost or expense (including
reasonable attorneys' fees) arising out of any omission or error in information
provided to Arbitron by Station and its radio station(s) pursuant to this
Section.

15. GENERAL:

(a) All notices to either party shall be in writing and shall be directed to the
    addresses stated hereafter (unless notice of an address change has
    previously been given).

(b) This Agreement shall be deemed to be an agreement made under, and to be
    construed and governed by, the laws of the State of New York, exclusive of
    its choice of law rules. The parties expressly agree that

                                                                        /s/GLS
KPER-UNI 6/97                          3                        --------------
                                                                  Initial here





   4


    any and all disputes arising out of or concerning this Agreement or the
    Arbitron Data or Reports licensed hereunder shall be litigated and
    adjudicated exclusively in State and/or Federal Courts located in either the
    State of New York or the State of Maryland, at Arbitron's option, and each
    party consents to and submits to both such jurisdictions.

(c) This Agreement constitutes the entire agreement between the parties
    concerning the subject matter hereof, notwithstanding any previous
    discussions and understandings; and shall not be deemed to have been
    modified in whole or in part except by written instruments signed hereafter
    by officers of all of the parties or other persons to whom the parties have
    delegated such authority.

(d) Any litigated question regarding the legality, enforceability or validity of
    any section or part hereof shall not affect any other section, and if any
    section or part hereof is ultimately determined illegal, invalid,
    unconstitutional or unenforceable, that section or part hereof shall be
    severed from this Agreement and the balance of the Agreement shall
    thereafter remain in full force and effect for the remainder of the Term.

(e) In addition to the rights of termination stated elsewhere in this Agreement,
    this Agreement, and the license provided hereunder, may be terminated by
    Arbitron, for any reason, on thirty (30) days' written notice to Station.

16.  CALCULATION OF LICENSE CHARGES:

                                                
First Term Year Gross Annual Rate (Combined) $      SEE ATTACHMENT A
                                                    -----------------

                                                    Combination Rate
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------
Station                    $                        [ ] YES  [ ] NO
        ---------------     -------------------



LESS DISCOUNTS:

[X] Continuous Service (10%):                       $            *
[X] Group (at beginning of Term)
                                                      -----------------------
    [X]10%    [ ]7.5%      [ ]5%     [ ]2.5%        $            *
                                                      -----------------------
[X] Long-Term Discount:
     20% in months 1-12
    (see Section 3(c) above)                        $              *
                                                      -----------------------
FIRST TERM YEAR NET ANNUAL RATE: $                    [              *      ]


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

Station further understands and agrees that the Net Annual Rate payable during
any Term year subsequent to the first Term year will vary in accordance with an
applicable Group Discount, any other applicable discount, or any adjustment as
specified in Sections 2, 3, 4, 6 and 11 of this Agreement.

* = See ATTACHMENT  "A"

==============================================================================
AGREED TO


Clear Channel Radio, Inc.
- --------------------------------------------------------------------------------
BROADCASTER ("STATION")

See ATTACHMENT "A"
- --------------------------------------------------------------------------------
FOR USE ONLY BY STATION(S)

200 Concord Plaza - Suite 600
- --------------------------------------------------------------------------------
ADDRESS

San Antonio                                         TX       78216
- --------------------------------------------------  -------  --------------
CITY                                                STATE    ZIP
- --------------------------------------------------


/s/ GEORGE L. SOSSON
- --------------------------------------------------------------------------------
BY (AUTHORIZED SIGNATURE)

George L. Sosson
- --------------------------------------------------------------------------------
NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE)


Senior Vice President, Operations                             11/30/98
- --------------------------------------------------------------------------------
TITLE                                                            DATE


===============================================================================
ACCEPTED BY

/s/ BARRY BARTH
- --------------------------------------------------------------------------------
CONTRACT MANAGER

12/8/98
- --------------------------------------------------------------------------------
DATE

The Arbitron Company
9705 Patuxent Woods Drive
Columbia, Maryland 21046-1572

A division of Ceridian Corporation


EXTRA SAMPLE CHARGES INCLUDED AS DETAILED ON ATTACHMENT "A"


KPER-UNI 6/97                          4

EX-10.17

   1
                                                                  EXHIBIT 10.17

                    STATION LICENSE AGREEMENT TO RECEIVE AND
                     USE ARBITRON RADIO LISTENING ESTIMATES

                                        Date of Proposal:  June 10, 1997
                                                         ----------------------

THIS AGREEMENT is between The Arbitron Company, a division of Ceridian
Corporation, ("Arbitron") and the undersigned radio broadcaster ("Station"), a
Pennsylvania Corporation. Arbitron hereby grants to Station, for the radio
stations listed below, a limited license to receive and use Arbitron data and
listening estimates ("Arbitron Data" or "Data") for the survey(s) and for the
geographic area ("Market") described in Section 1. This license is personal,
nontransferable and nonexclusive. Such Arbitron Data may be furnished to Station
in printed or other form ("Reports"), at Arbitron's option, but title thereto
will remain with Arbitron at all times.

1.  SERVICES PROVIDED; TERM:

This Agreement shall become effective when countersigned by Arbitron's Contract
Manager and shall be for a period of 5 years beginning and ending on the dates
described below (the "Term"). This Agreement will continue without regard to
Station's ownership of the radio station(s) licensed hereunder absent a valid
Assignment pursuant to Section 11 of this Agreement.

Broadcaster ("Station"):  CBS Radio; a division of
                        -------------------------------------------------------
Westinghouse Electric Corporation
- -------------------------------------------------------------------------------
For use only by radio station(s):
                                 ----------------------------------------------
 See Attachment A
- -------------------------------------------------------------------------------
Arbitron Radio Geographic Area:
                                                    ---------------------------
 See Attachment A                                             ("Market")
- -------------------------------------------------------------------------------
Term Begins   January 1, 1997              ends    December 31, 2001          .
           -------------------------------      -------------------------------

Number of surveys currently provided during first Term year:      4           .
                                                            -------------------
Number of copies currently provided per survey:              30               .
                                               --------------------------------
Reports currently  shall be titled:  Spring, Fall, Winter, Summer.

First Report:    See Attachment A
              -----------------------------------------------------------------

All representations in this Section regarding number of surveys, number of
printed copies and Report titles are subject to qualifications set forth in
Section 6(a) herein.

2.  ANNUAL RATE:

A License Charge in the form of a Net Annual Rate for each year of the Term,
which may be subject to adjustments and discounts pursuant to Sections 3, 4, 6,
11 and 16 of this Agreement, shall be paid by Station; with the first of 60
payments due on January 1, 1997 (the "Periodic Charge" or "Charge").

The Gross Annual Rate for the first Term year is $ See Attachment A. Subject to
Sections 3, 4, 6 and 11 hereof, neither the Gross nor the Net Annual Rate will
change during a Term year.

For each succeeding Term year, the Gross Annual Rate shall be the Gross
Annual Rate for the previous Term year increased by a factor of N/A percent. Any
applicable discounts or other adjustments will be applied thereafter to the
Annual Rate so derived.

3.  DISCOUNTS:

(a) Continuous Service Discount: A discount of ten percent (10%) in calculating
    the Periodic Charge shall be allowed for each month in excess of 12
    consecutive months that Station is continuously licensed to use the Arbitron
    Data for this Market.

(b) Group Discount: If Station owns two or more radio stations located in
    different markets and such radio stations are under common ownership as
    defined by Arbitron, Station may be entitled to a Group Discount based on
    the number of subscribing radio stations owned at the time this Agreement is
    executed, which discount may vary and be adjusted during the Term of this
    Agreement in accordance with Arbitron's Group Discount Schedule should the
    number of subscribing commonly owned radio stations change.

(c) Long-Term Discount:  A discount of 20% in months 1-12,

      20 % in months 13-24,             20 % in months 25-36,
   ------                            ------
      20 % in months 37-48,             20 % in months 49-60,
   ------                            ------
     N/A % in months 61-72,  and       N/A % in months 73-84,
   ------                            ------

shall be allowed in calculating the Net Annual Rate charged during the
applicable months.

4.  PERIODIC CHARGE:

The Periodic Charge, due and payable by Station on the first day of each billing
period, shall be: (a) the Gross Annual Rate plus any adjustments; (b) less any
applicable Continuous Service Discount; (c) less, from the amount thereby
derived, any applicable Group Discount; (d) less, from the amount thereby
derived, any applicable Long-Term Discount; (e) with such amount prorated
equally between the number of payments for the Term year.

In addition to and together with the above payments, excluding taxes imposed
upon Arbitron's net income, gross receipts, capital or similar taxes, Station
shall pay to Arbitron any sales, excise, service, use or other taxes, however
designated, now or hereafter imposed upon or required to be collected by
Arbitron by any authority having jurisdiction over the Market being surveyed or
over any location to which Station directs Arbitron to deliver Data, or by any
other taxing jurisdiction, and such obligation shall survive the termination of
this Agreement.

5.  LATE PAYMENT CHARGE AND RIGHT TO SUSPEND REPORT DELIVERY OR TERMINATE
    AGREEMENT:

In addition, Arbitron may, without terminating, breaching or committing a
default under this Agreement: suspend delivery to Station of any Data or
Report(s), in any form, due under this Agreement until such time as Station is
current in its payments of all sums due hereunder with respect to periodic
charges due and owing at the time of such suspension. Arbitron's suspension
hereunder of delivery of Data and/or Reports to Station, and of this License,
shall not relieve Station of any of its obligations hereunder. This Agreement
may be terminated immediately by Arbitron should Station default in payment of
any sum due or should Station default in any other condition or obligation of
this Agreement for the market or markets so affected if not cured within 90 days
of notice.

6.  CHANGES IN RADIO MARKET SERVICE:

Modification of Rates, Surveys, Report Content or Report Format:

(a) While Arbitron will use professional research efforts to conduct its surveys
    and produce its Data in accordance with its Description of Methodology, and
    the Minimum Standards for Broadcast Rating Research of the Electronic Media
    Rating Council, Arbitron reserves the right to change at any time the
    geographical territory comprising the Market, its policies and procedures,
    survey dates, survey length, survey frequency, sampling procedures,
    methodology, method of Data delivery, number of printed copies of Reports,
    Report content, Report titles, Report format, and to cancel surveys and the
    preparation of Arbitron Data, or any other aspect of the Data services
    supplied.


                                 [ARBITRON LOGO]                   KPER-UNI 6/97

   2


    Arbitron need not produce any Data or Reports whenever, in its judgment,
    insufficient data are available to meet its minimum research standards or
    any event has jeopardized the reliability of the data. In the event that
    Data and/or Reports are not produced, Station shall receive refund
    reflecting the pro rata value of the Net Annual Rate for said Data and/or
    Report(s). Without limiting the foregoing, Station expressly understands and
    agrees that Arbitron may, at any time during the Term of this Agreement,
    reduce the number of surveys conducted and/or Reports published for this
    Market and consequently reduce the number of Reports provided to Station and
    that, in the event such reduction occurs, Station is not relieved of any of
    its obligations under this Agreement except that Licensee's Annual Licensee
    Fee will be reduced by the pro rata amount equal to such reduction in
    service.

(b) In the event that any cause(s) prevents Arbitron from conducting any survey
    in accordance with its Description of Methodology, schedules or other
    publications, Arbitron reserves the right to produce abbreviated Report(s).
    Station hereby consents to publication of such abbreviated Report(s) under
    such circumstances. In the event that such an abbreviated Report covers a
    substantially decreased geographic area, or deletes twenty-five percent
    (25%) or more of the survey days from the aggregate number of days
    scheduled, Station shall be entitled to either a proportionate refund for
    the abbreviated Report, or a full refund for the abbreviated Report, upon
    return of the abbreviated Report within 10 days, at Station's option.
    Further, Arbitron reserves the right in its sole discretion to augment
    available data by means of expanded or extended samples and Station agrees
    it shall not be entitled to any refund in such event.

7.  PERMITTED USES AND CONFIDENTIALITY:

Subject to the limitations stated herein, Station agrees to limit its uses of
the Arbitron Data and Report(s) to such uses as are necessary in the ordinary
course of Station's broadcasting business for programming and media selling.
Station understands and agrees that this use is limited exclusively to the radio
station(s) specified in Section 1 of this Agreement and only for the Term of
this Agreement. In this connection, Station agrees that the Arbitron Data and
Report(s) will only be disclosed:

(a) directly or through its Station representatives to advertisers, prospective
    advertisers and their agencies for the purpose of obtaining and retaining
    advertising accounts; and

(b) through advertising or other promotional literature.

(c) Station may disclose such information to the investment community including
    bankers, potential purchaser of Station, in which case Station will inform
    such party of the confidentiality of the information.

All such disclosures shall identify Arbitron as the source of the disclosed
Arbitron Data and Report(s) and should identify the Market, survey period and
type of audience estimate, daypart and survey area and shall state that the
Arbitron Data and Report(s) quoted therein are copyrighted by Arbitron and are
subject to all limitations and qualifications disclosed in the Data and
Report(s) ("Sourcing").* At all times during the Term of this Agreement and
thereafter, Station agrees to keep the Arbitron Data and Report(s) supplied by
Arbitron confidential and not to disclose the same except as permitted by this
Agreement. Station agrees to use its best efforts to prevent the unauthorized
disclosure of Arbitron Data and Report(s) by Station's employees and/or its
radio station(s)'s employees and agents, by its radio station(s)'s
representatives, by its advertisers and their advertising agencies, by data
processing firms, and by all other persons who obtain the Arbitron Data from
Station or its radio station(s)'s employees or agents. For Station or its radio
station(s) to divulge any Arbitron Data and/or Report(s) to a nonsubscribing
station or to lend and/or give an original copy or any reproduction of any part
of any Data and/or Report(s) or any Arbitron estimates or data to any
nonsubscriber, not authorized by this Agreement, constitutes a breach of this
Agreement and an infringement of Arbitron's copyright.

In the event that a Report listed in Section 1 of this Agreement is delivered
after the expiration of the Term of this License Agreement, Licensee's license
to use all Report shall continue under the terms and conditions of this License
until the release of the next Survey Report in this Market.

Subject to the following conditions, Station may authorize a third party to
process the Arbitron data and estimates licensed hereunder on Station's behalf.
Station understands and agrees that it may do so only on condition: 1) that to
the best of Station's knowledge said third party excluding custom in house
processing of data by Station consultant is a then current Arbitron licensee in
good standing who is authorized to process Arbitron data and estimates; and 2)
that all restrictions concerning the use of the data and estimates provided
under this Agreement shall apply with full force and effect to any data,
estimates, reports or other output, in any form, containing or derived from the
Arbitron data and estimates, produced by said third party for Station.

8.  CONFIDENTIALITY OF ARBITRON RESPONDENTS:

Station agrees that it will not try either before, during or after a survey, or
in connection with any litigation, to determine or discover the identity or
location of any Arbitron survey participant. Station will under no circumstances
directly or indirectly attempt to contact any such persons. Station agrees to
promptly report to Arbitron any evidence or indication that has come to
Station's attention regarding the identity or location of any such persons.
Station agrees to abide by Minimum Standard A9 (or any successor provision
concerning confidentiality of survey respondents) of the Electronic Media Rating
Council and shall abide by any determination of the Electronic Media Rating
Council concerning respondent confidentiality. Station further agrees that
Arbitron may enjoin any breach of the above-stated obligations and shall have
the right to seek damages or other remedies (including costs, expenses and
reasonable attorneys' fees) available to it at law or hereunder.

9.  METHODOLOGY

ARBITRON MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, CONCERNING:

(A) DATA GATHERED OR OBTAINED BY ARBITRON FROM ANY SOURCE;

(B) THE PRESENT OR FUTURE METHODOLOGY EMPLOYED BY ARBITRON IN PRODUCING ARBITRON
    DATA AND REPORT(S); OR

(C) THE ARBITRON DATA AND REPORT(S) LICENSED HEREUNDER.

ALL ARBITRON DATA AND REPORT(S) REPRESENT ONLY THE OPINION OF ARBITRON. RELIANCE
THEREON AND USE THEREOF BY STATION IS AT STATION'S OWN RISK.

10.  LIABILITIES AND LIMITATIONS OF REMEDIES:

THE SOLE AND EXCLUSIVE REMEDY, AT LAW OR IN EQUITY, FOR ARBITRON'S BREACH OF ANY
WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS, AND THE SOLE AND EXCLUSIVE REMEDY FOR ARBITRON'S
LIABILITY OF ANY KIND,

- ---------------------
* STATION(s) SHOULD REFER TO CURRENT REGULATIONS AND GUIDELINES OF THE FEDERAL
GOVERNMENT FOR FURTHER REQUIREMENTS CONCERNING THE MANNER OF QUOTING AUDIENCE
ESTIMATES.



(C)The Arbitron Company                2                         KPER-UNI 6/97

   3
INCLUDING WITHOUT LIMITATION LIABILITY FOR NEGLIGENCE OR DELAY WITH RESPECT TO
THE ARBITRON DATA AND REPORTS AND ALL PERFORMANCE PURSUANT TO THIS AGREEMENT,
SHALL BE LIMITED TO A CREDIT (FOR EACH REPORT MATERIALLY AFFECTED BY ANY SUCH
BREACH) TO STATION OF AN AMOUNT EQUAL TO THE NET ANNUAL CHARGES PAYABLE
HEREUNDER BY STATION DIVIDED BY THE NUMBER OF REPORTS PRODUCED ANNUALLY BY
ARBITRON FOR THE MARKET. IN NO EVENT SHALL ARBITRON BE LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES, NOR SHALL IT BE SUBJECT TO INJUNCTIVE RELIEF WITH RESPECT
TO THE PUBLICATION OF ANY DATA OR REPORT. STATION UNDERSTANDS THAT THE DATA AND
REPORTS EITHER WOULD NOT BE PREPARED OR WOULD BE AVAILABLE ONLY AT A
SUBSTANTIALLY INCREASED LICENSE FEE WERE IT NOT FOR THE LIMITATIONS OF
LIABILITIES AND REMEDIES AS SET FORTH IN THIS SECTION.

Station agrees that it will notify Arbitron in writing of any alleged defect in
any Data or Report within ninety (90) days after Station learns of said alleged
defect. In the event that Station does not timely notify Arbitron, then Station
waives all rights with regard to said alleged defect. Station further agrees
that any action to be brought by it concerning any Data or Report shall be
brought not more than one (1) year after such Data or Report was originally
published by Arbitron.

11.   ASSIGNMENTS AND CHANGES IN STATION STATUS:

Station acknowledges and agrees that the Charges due and the adjustments and
discounts applied hereunder are based on Station's group ownership status and/or
any joint operating agreement with one or more other radio stations and/or
Station's ownership of radio stations in this Market or other Markets. In the
event Station conveys any one of its radio stations, Station remains fully
obligated for the Charges specified for any radio station covered by the terms
of this Agreement. Station may only be released from such obligations upon valid
assignment of this Agreement and subject to the terms thereof.

12. SPECIAL SERVICES AND REPORTS:

If, during the Term of this Agreement, Station orders any Special Services or
Report(s) not licensed through any other Arbitron Agreement ("Specials"),
Station hereby agrees that this Agreement shall be applicable with respect to
all such Services with the same force and effect as if printed out at length in
a separate agreement executed by Station; provided, however, that any credit
required when applying Section 10 to any such services shall be limited to the
license fee actually paid for such services.

13. RATINGS DISTORTION ACTIVITY:

(a) Station agrees that it shall not engage in any activities which are
    determined by Arbitron to be ratings distortion. Such prohibited activities
    may include, but are not limited to, activities which could:

    (i)  cause any survey participant to record erroneous listening information
         in his or her Arbitron diary; or

    (ii) cause any survey participant to utilize an Arbitron diary for a contest
         or promotion conducted by Station or its radio station(s).

(b) Station further agrees that Arbitron may delete all estimates of listening
    to Station and/or its radio station(s) from any Report, computer tape or
    other Arbitron service or method of delivery where, in its judgment it has
    deemed that Station or its radio station(s) has engaged in such activities.
    Arbitron shall:

    (i)  first give Station and its radio station(s) notice setting forth what
         activities it deems Station and its radio station(s) has engaged in
         which allegedly could cause or have caused ratings distortion;

    (ii) present evidence to substantiate the allegations set forth in (i)
         above; and

    (iii)give Station and its radio station(s) reasonable opportunity (in light
         of Arbitron's publication schedule for any Report) to present its
         position both in writing and orally.

In the event that Station or its radio station(s) is notified by Arbitron that
allegations of ratings distortion have been made against Station or its radio
station(s), then Station or its radio station(s) shall submit a written response
to Arbitron's inquiry concerning the allegations within seven (7) days from the
receipt of Arbitron's notice, which time may be shortened by Arbitron for
reasons relating to the Report publication schedule. Arbitron shall then advise
Station or its radio station(s) of its decision or reason for delay within seven
(7) days following its receipt of Station's or its radio station(s)' written
response or oral presentation, whichever is later. All such writings shall be
addressed and sent to the respective party by facsimile, overnight courier
service, or certified mail with return receipt requested. In the event that
estimates of listening to Station and/or its radio station(s) are deleted from a
Report(s) (and/or other Arbitron services) following the procedure set forth
above, Station and its radio station(s) agree that the only remedy for such
deletion shall be a credit of the fee paid by Station for such Report(s) or
other affected services and that in no event shall Arbitron be liable for
incidental or consequential damages or be subject to injunctive relief with
respect to any such deletion of estimates of listening to station and/or its
radio station(s). In the event that estimates of listening to Station and/or its
radio stations are deleted from a Report pursuant to this Section, Arbitron
agrees that it will give Station and its radio station(s) an opportunity to
submit to Arbitron a written statement (not exceeding 200 words) of Station
and/or its radio station(s) views concerning its alleged activities, with such
written statement to be published in the Report subject to such reasonable
editing deemed necessary by Arbitron.

In addition, Station and its radio station(s) agree to abide by the Arbitron
policies and procedures governing various Special Station Activities, including,
but not limited to, ratings bias.

14.   INFORMATION TO BE PROVIDED BY STATION AND ITS RADIO STATION(s):

Station and its radio station(s) agree to provide to Arbitron, consistent with
past requests within ten (10) days of receipt of Arbitron's request, such
information consistent with past requests which Arbitron deems necessary for the
publication of a Report, including, but not limited to, accurate descriptions of
the following information for Station and its radio station(s): (a) facilities;
(b) broadcast station names; (c) broadcast hours; (d) simulcast hours; (e) radio
frequency; (f) operating power; (g) format; (h) height of antenna above average
terrain, and (i) programming schedule and information. Station and its radio
station(s) further understand and agree to notify Arbitron of any changes to the
above-referenced information. Station and its radio station(s) hereby hold
Arbitron harmless and agree to indemnify Arbitron from and against any and all
loss, cost or expense (including reasonable attorneys' fees) arising out of any
omission or error in information provided to Arbitron by Station and its radio
station(s) pursuant to this Section.

15.  GENERAL:

(a) All notices to either party shall be in writing and shall be directed to the
    addresses stated hereafter (unless notice of an address change has
    previously been given).

(b) This Agreement shall be deemed to be an agreement made under, and to be
    construed and governed by, the laws of the State of New York, exclusive of
    its choice of law rules. The parties expressly agree that any and all
    disputes arising out of or concerning this Agreement or the Arbitron Data or
    Reports licensed hereunder shall be litigated and adjudicated exclusively in
    State and/or Federal Courts located in the State of New York, and each party
    consents to and submits to both such jurisdiction.




(C) The Arbitron Company               3                         KPER-UNI 6/97

   4
(c) This Agreement constitutes the entire agreement between the parties
    concerning the subject matter hereof, notwithstanding any previous
    discussions and understandings; and shall not be deemed to have been
    modified in whole or in part except by written instruments signed hereafter
    by officers of all of the parties or other persons to whom the parties have
    delegated such authority.

(d) Any litigated question regarding the legality, enforceability or validity of
    any section or part hereof shall not affect any other section, and if any
    section or part hereof is ultimately determined illegal, invalid,
    unconstitutional or unenforceable, that section or part hereof shall be
    severed from this Agreement and the balance of the Agreement shall
    thereafter remain in full force and effect for the remainder of the Term.

16.  CALCULATION OF LICENSE CHARGES:                      SEE
First Term Year Gross Annual Rate (Combined)  $      SEE ATTACHMENT A
                                                     -----------------

                                                    Combination Rate
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------
Station                     $                     [ ] YES        [ ] NO
        ------------------    ------------------


LESS
DISCOUNTS:    [  ] Continuous
                   Service (10%):            $
                                               ------------------------------
              [  ] Group  [ ] 10%  [ ] 7.5%    [ ] 5%      [ ] 2.5%

              [  ] 2.5% at beginning of Term $
                                               ------------------------------
              [ ]  Long-Term Discount:
                   % in months 1-12
   ---         ---
               (see Section 3(c) above)      $
                                               ------------------------------

FIRST TERM YEAR NET ANNUAL RATE: $           [         SEE ATTACHMENT A    ] *


=============================================================================
AGREED TO

CBS RADIO; A DIVISION OF
WESTINGHOUSE ELECTRIC CORPORATION
- --------------------------------------------------------------------------------
BROADCASTER ("STATION")

SEE ATTACHMENT A
- --------------------------------------------------------------------------------
FOR USE ONLY BY STATION(S)

51 West 52nd Street
- --------------------------------------------------------------------------------
ADDRESS

New York                                            NY         10019
- --------------------------------------------------  -------   --------------
CITY                                                STATE      ZIP
- --------------------------------------------------


/S/ PATRICIA STRATFORD
- -------------------------------------------------------------------------------
BY (AUTHORIZED SIGNATURE)

Patricia Stratford
- -------------------------------------------------------------------------------
NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE)



Attorney
- -------------------------------------------------------------------------------
TITLE                                                    DATE



===============================================================================


ACCEPTED BY

/S/ BARRY BARTH
- --------------------------------------------------------------------------------
CONTRACT MANAGER

3/20/98
- --------------------------------------------------------------------------------
DATE


The Arbitron Company
9705 Patuxent Woods Drive
Columbia, Maryland 21046-1572

A division of Ceridian Corporation


(C) The Arbitron Company               4                         KPER-UNI 6/97
   5


ARBITRON LOCAL MARKET REPORT SERVICES LICENSE AGREEMENT
- -------------------------------------------------------
ATTACHMENT "A" TO LICENSE DATED JUNE 10, 1997:


                                                                
GRAND TOTALS                                           $68,642,698         $44,537,329





                      AGREED TO AND ACCEPTED BY:

                      /s/ Patricia Stratford
                      --------------------------
                      Patricia Stratford        print name of signatory
                      Attorney                  Title of signatory
                      CBS RADIO, a Division of Westinghouse Electric Corporation
                      3/17/98                   (date)
                      --------------------------

EX-21

ex21

EX-23.1

   1
                                                                    Exhibit 23.1




                         Consent of Independent Auditors


The Board of Directors
Arbitron Inc.:


We consent to the incorporation by reference in the Registration Statements on
Form S-8 (File Nos. 33-49601, 33-61551, 33-34035, 2-9757, 33-56833, 33-54379,
33-56325, 33-62319, 33-64913, 333-01793, 333-01887, 333-03661, 333-28069,
333-58143, 333-58145, 333-66643, 333-50757, 333-83455, 333-89565, 333-39384,
333-56296 and 333-56826) of Arbitron Inc. (formerly known as Ceridian
Corporation) of our report dated February 9, 2001, relating to the combined
balance sheets of Arbitron (as defined in Note 2 to the combined financial
statements), a division of Ceridian Corporation, as of December 31, 2000 and
1999 and the related combined statements of income, changes in divisional equity
(deficit) and comprehensive income, and cash flows for each of the years in the
three-year period ended December 31, 2000 and the related combined financial
statement schedule which report appears in the December 31, 2000 annual report
on Form 10-K of Arbitron Inc.


/s/ KPMG LLP

Baltimore, Maryland
March 30, 2001

EX-24

   1
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 23, 2001.



                                    /s/ Erica Farber
                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   2
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 27, 2001.




                                    --------------------------------------------
                                    Erica Farber

                                    /s/ Kenneth F. Gorman
                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   3
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 23, 2001.




                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman

                                    /s/ Philip Guarascio
                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   4
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 27, 2001.



                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio

                                    /s/ Larry E. Kittelberger
                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   5
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 30, 2001.



                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger

                                    /s/ Luis G. Nogales
                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   6
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 30, 2001.




                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales

                                    /s/ Lawrence Perlman
                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   7
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 30, 2001.




                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman

                                    /s/ Richard A. Post
                                    ------------------------------------
                                    Richard A. Post


                                    ------------------------------------
                                    Stephen B. Morris


   8
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

        The undersigned, a Director of Arbitron Inc. (the "Company"), a Delaware
corporation, does hereby make, nominate and appoint WILLIAM J. WALSH and DOLORES
L. CODY, and each of them, to be my attorney-in-fact for three months from the
date hereof, with full power and authority to execute for and on behalf of the
undersigned the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended; provided that such
Form 10-K is first reviewed by the Audit Committee of the Board of Directors of
the Company and by my attorney-in-fact, and his/her name, when thus signed,
shall have the same force and effect as though I had manually signed such Form
10-K.

        I have signed this Power of Attorney as of March 30, 2001.




                                    --------------------------------------------
                                    Erica Farber


                                    ------------------------------------
                                    Kenneth F. Gorman


                                    ------------------------------------
                                    Philip Guarascio


                                    ------------------------------------
                                    Larry E. Kittelberger


                                    ------------------------------------
                                    Luis G. Nogales


                                    ------------------------------------
                                    Lawrence Perlman


                                    ------------------------------------
                                    Richard A. Post

                                    /s/ Stephen B. Morris
                                    ------------------------------------
                                    Stephen B. Morris