-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K34VkHnV7ypX13QaavrExsTbwjloXVvqKGna/oo2BXIdPR0zSh4J0/WTyxT2Cc8f pirGallNUN79FIbBCPntHA== 0000034879-97-000004.txt : 19970815 0000034879-97-000004.hdr.sgml : 19970815 ACCESSION NUMBER: 0000034879-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERAL MOGUL CORP CENTRAL INDEX KEY: 0000034879 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 380533580 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01511 FILM NUMBER: 97661319 BUSINESS ADDRESS: STREET 1: 26555 NORTHWESTERN HGWY CITY: SOUTHFIELD STATE: MI ZIP: 48034 BUSINESS PHONE: 3133547700 10-Q 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Period Ended June 30, 1997 ---------------------------------------------------- Commission File Number 1-1511 -------------------------------------------------- FEDERAL-MOGUL CORPORATION - -------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Michigan 38-0533580 - ------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 26555 Northwestern Highway, Southfield, Michigan 48034 - -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (248) 354-7700 - --------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Stock - 35,648,269 shares as of August 11, 1997 2 FORWARD-LOOKING STATEMENTS INFORMATION CONTAINED OR INCORPORATED IN THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WHICH ARE NOT HISTORICAL FACTS AND WHICH INVOLVE CERTAIN RISKS AND UNCERTAINTIES AND, ACCORDINGLY, ACTUAL RESULTS EVENTS AND PERFORMANCE COULD DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY THESE FORWARD-LOOKING STATEMENTS. 3 PART I - FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) Three Months Ended Six Months Ended June 30 June 30 -------------------- ---------------------- 1997 1996 1997 1996 -------- -------- ---------- ---------- (Millions of Dollars, Except Per Share Amounts) Net sales $ 481.8 $ 536.4 $ 967.4 $1,058.3 Cost of products sold 366.5 419.1 740.0 828.8 ------- ------- ------- ------- Gross margin 115.3 117.3 227.4 229.5 Selling, general and administrative expenses 73.5 81.0 151.9 164.0 Interest expense 9.0 10.6 18.8 21.8 Interest income (1.1) (.7) (1.8) (1.5) International currency exchange losses (gains) (.1) 1.4 - 2.3 Other, net (.4) .2 1.6 1.1 ------- ------- ------- ------- Earnings Before Income Taxes and Extraordinary Item 34.4 24.8 56.9 41.8 Income taxes 5.9 9.0 14.5 15.4 ------- ------- ------- ------- Net Earnings Before Extraordinary Item 28.5 15.8 42.4 26.4 Extraordinary item - loss on early retirement of debt, net of applicable income tax benefit 2.6 - 2.6 - ------- ------- ------- ------- Net Earnings 25.9 15.8 39.8 26.4 Preferred stock dividends, net of tax benefits 2.1 2.2 4.3 4.4 ------- ------- ------- ------- Net Earnings Available for Common Shares $ 23.8 $ 13.6 $ 35.5 $ 22.0 ======= ======= ======= ======= Earnings Per Common Share Primary Income before extraordinary item $ .74 $ .39 $1.08 $ .63 Extraordinary item - loss on early retirement of debt, net of applicable income tax benefit (.07) - (.07) - ---- ---- ---- ---- Net Earnings $ .67 $ .39 $1.01 $ .63 ==== ==== ==== ==== Fully Diluted Income before extraordinary item $ .67 $ .36 $ .99 $ .59 Extraordinary item - loss on early retirement of debt, net of applicable income tax benefit (.06) - (.06) - ---- ---- ---- ---- Net Earnings $ .61 $ .36 $ .93 $ .59 ==== ==== ==== ==== See accompanying notes.
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FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Millions of Dollars) June 30 December 31, 1997 1996 ------------ ------------ (Unaudited) Assets Current Assets: Cash and equivalents $ 19.6 $ 33.1 Accounts receivable (net of allowance for doubtful accounts of $16.9 million and $16.3 million) 232.8 231.3 Inventories 303.5 417.0 Prepaid expenses and income tax benefits 83.4 81.5 ------- ------- Total Current Assets 639.3 762.9 Property, Plant and Equipment 319.0 350.3 Goodwill 148.4 154.0 Other Intangible Assets 62.5 63.1 Business Investments and Other Assets 130.9 124.9 ------- ------- Total Assets $1,300.1 $1,455.2 ======= ======= Liabilities and Shareholders' Equity Current Liabilities: Short-term debt $ 66.9 $ 280.1 Accounts payable 123.1 142.7 Accrued compensation 40.1 37.6 Other accrued liabilities 189.4 203.4 ------- ------- Total Current Liabilities 419.5 663.8 Long-Term Debt 279.7 209.6 Postemployment Benefits 201.1 207.1 Other Accrued Liabilities 64.8 56.2 ------- ------- Total Liabilities 965.1 1,136.7 Shareholders' Equity: Series D preferred stock 76.6 76.6 Series C ESOP preferred stock 50.6 53.1 Unearned ESOP compensation (25.3) (28.4) Common stock 177.5 175.7 Additional paid-in capital 293.9 283.5 Accumulated deficit (166.6) (193.0) Currency translation and other (71.7) (49.0) ------- ------- Total Shareholders' Equity 335.0 318.5 ------- ------- Total Liabilities and Shareholders' Equity $1,300.1 $1,455.2 ======= ======= See accompanying notes.
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FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30 -------------------- 1997 1996 -------- -------- (Millions of Dollars) Cash Provided From (Used By) Operating Activities Net earnings $ 39.8 $ 26.4 Adjustments to reconcile net earnings to net cash provided from operating activities Depreciation and amortization 27.3 30.6 Deferred income taxes 5.2 (.7) Postemployment benefits 2.0 1.6 Increase in accounts receivable (30.9) (21.7) Decrease in inventories 40.5 25.5 Decrease in accounts payable (1.0) (.6) Increase in current liabilities and other 15.3 20.1 Loss on early retirement of debt 4.1 - Payments against restructuring and reengineering reserves (12.5) (8.9) ----- ----- Net Cash Provided From Operating Activities 89.8 72.3 Cash Provided From (Used By) Investing Activities Expenditures for property, plant and equipment (20.8) (24.2) Proceeds from sale of business investments 66.6 - Purchases of business investments - (.3) Other - .7 ----- ----- Net Cash Provided From (Used By) Investing Activities 45.8 (23.8) Cash Provided From (Used By) Financing Activities Issuance of common stock 9.7 .4 Fees for early retirement of debt (4.1) - Net decrease in debt (138.8) (11.7) Dividends (13.5) (13.6) Other (2.4) (3.1) ----- ----- Net Cash Used By Financing Activities (149.1) (28.0) ----- ----- Increase (Decrease) in Cash and Equivalents (13.5) 20.5 Cash and Equivalents at Beginning of Period 33.1 19.4 ----- ----- Cash and Equivalents at End of Period $ 19.6 $ 39.9 ===== ===== See accompanying notes.
6 FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) June 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and six-month periods ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1996. 2. EARNINGS PER COMMON SHARE The computation of primary earnings per share is based on the weighted average number of outstanding common shares during the period plus, when their effect is dilutive, common stock equivalents consisting of certain shares subject to stock options. Fully diluted earnings per share additionally assumes the conversion of outstanding Series C ESOP and Series D preferred stock and the contingent issuance of common stock to satisfy the Series C ESOP preferred stock redemption price guarantee when their effect is dilutive. The number of contingent shares used in the fully diluted calculation is based on the market price of the common stock on June 30, 1997 and the number of preferred shares held by the Employee Stock Ownership Plan (ESOP) that were allocated to participants' accounts as of June 30 of each of the respective years. The primary weighted average number of common and equivalent shares outstanding (in thousands) was 35,414 and 35,297 for the three- and six-month periods ended June 30, 1997, and 35,099 and 35,081 for the three- and six-month periods ended June 30, 1996. The fully diluted weighted average number of common and equivalent shares outstanding (in thousands) was 41,576 and 41,537 for the three- and six-month periods ended June 30, 1997, and 41,989 and 37,543 for the three- and six-month periods ended June 30, 1996, respectively. Net earnings used in the computations of primary earnings per share are reduced by preferred stock dividend requirements. Net earnings used in the computation of fully diluted earnings per share are reduced by amounts representing the preferred stock dividends when their effect is anti-dilutive and amounts representing the additional after-tax contribution that would be necessary to meet ESOP debt service requirements under an assumed conversion of the Series C ESOP preferred stock when their effect is dilutive. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". SFAS No. 128 is effective for financial statements issued for periods ending after December 15, 1997. The adoption of SFAS No. 128 would not impact the results of the earnings per share calculation for the three months and the six months ended June 30, 1997 and 1996 and is not expected to impact the results of the earnings per share calculation for the year ended December 31, 1997. Quarterly dividends of $.12 per common share were declared for both the first and second quarters of 1997 and 1996. 7 3. INVENTORIES At June 30, 1997 and December 31, 1996, inventories consisted of the following:
1997 1996 ------ ------ Finished products $283.7 $417.0 Work-in-process 22.5 28.0 Raw materials 15.0 20.0 ------ ------ 321.2 465.0 Reserve for inventory valuation (17.7) (48.0) ----- ------ $303.5 $417.0 ====== ======
4. DEBT In June 1997, the Company entered into a new $350 million multicurrency revolving credit facility agreement with a consortium of international banks which matures in June 2002. This new agreement replaces the exiting U.S. and European revolving credit facilities and has similar pricing terms. The revolving credit facility contains restrictive covenants that, among other matters, require the Company to maintain certain financial ratios. As of June 30, 1997, the Company had $25 million borrowed against the revolving credit facility at a rate of 6.19%. The revolving credit facility is included in long-term debt. In April 1997, the Company issued $125 million of 10-year 8.8% senior notes. 5. ADJUSTMENT OF ASSETS HELD FOR SALE The results of operations have been included in the Company's consolidated statements of earnings through the date of sale for the following transactions. The Company received $66.6 million in cash in the first six months of 1997 related to the following transactions with an additional $10.7 million to be received in July 1997, while the purchaser assumed certain liabilities. In January 1997, the Company completed the previously announced sale of its heavy wall bearing division in Germany and Brazil to Zollern BHW Gleitlager GmbH, a member of Fuerstlich Hohenzollernsche Werke Laucherthal GmbH Co. On May 13, 1997, the Company completed the previously announced sale of its Australian replacement operations to Automotive Components Limited. On June 3, 1997, the Company completed the previously announced sale of its South African replacement operations. The Company sold the distribution operations to Chariots Holding Limited and the retail operations to Lexshell 16 Investment Holdings (Proprietary) Limited. During the second quarter of 1997, in addition to the above transactions, the Company reviewed and updated its impairment reserves related to the divestiture of its remaining retail/wholesale replacement operations and adjusted the reserve components to approximate the net fair value of its remaining businesses held for sale. There was no material net effect on the statement of earnings related to the above events. 8 6. INCOME TAXES During the second quarter of 1997, the Company recognized an income tax benefit of $6.8 million related to the sales of the South African and Australian businesses. 7. EXTRAORDINARY ITEM During the second quarter of 1997, the Company retired $64.7 million in private placement debt. The early retirement of the debt required a make-whole payment of $4.1 million, which was recorded as an extraordinary item of $2.6 million, net of the related tax benefit. 8. SUBSEQUENT EVENT On August 8, 1997, the Company announced its call for the redemption of all its outstanding $3.875 Series D Convertible Exchangeable Preferred Stock to be redeemed on August 28, 1997. Each share of preferred stock is convertible into 2.778 shares of common stock and the Company expects all shares to be converted to common stock. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996 NET SALES Sales for the second quarter of 1997 were $481.8 million compared to $536.4 million in the same 1996 quarter. North American original equipment sales were $118.7 million in the second quarter of 1997 compared to $118.2 million in 1996. Excluding the electrical products and ball bearing operation divestitures, North American original equipment sales were up 17.9% largely due to strong sealing system product sales. International original equipment sales decreased 19.3% to $44.8 million from $55.5 million in the same 1996 quarter. Excluding the sale of the heavy wall bearing operations in Germany and Brazil and foreign currency effects, International original equipment sales increased 13% primarily due to increased sales of conventional engine bearings as the weak Deutsche mark contributed to higher car production volumes. The sputter bearing business also added to the increase due to higher diesel engine production demands. North American replacement sales decreased 12% to $185.8 million from $211.2 million in the second quarter of 1996. The decrease was attributable to softness in the North American replacement market, particularly in engine and chassis products. International replacement second quarter 1997 sales were $132.5 million compared to $151.4 million for the second quarter of 1996. Excluding the divestitures in Turkey, Australia and South Africa, International replacement sales were relatively flat quarter over quarter. COST OF PRODUCTS SOLD Cost of products sold as a percent of net sales decreased to 76.1% for the second quarter of 1997 from 78.1% for the second quarter of 1996. The decrease in cost of products sold as a percent of net sales is attributable to productivity improvements, cost controls and streamlined operations. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES While declining $7.5 million, selling, general and administrative expenses as a percent of net sales were relatively flat for the second quarter of 1997 compared to the same 1996 period. ADJUSTMENT OF ASSETS HELD FOR SALE The results of operations have been included in the Company's consolidated statements of earnings through the date of the sale for the following transactions. The Company received $56.2 million in the second quarter of 1997 related to the following transactions with an additional $10.7 million to be received in July 1997, while the purchaser assumed certain liabilities. On May 13, 1997, the Company completed the previously announced sale of its Australian replacement operations to Automotive Components Limited. 10 On June 3, 1997, the Company completed the previously announced sale of its South African replacement operations. The Company sold the distribution operations to Chariots Holding Limited and the retail operations to Lexshell 16 Investment Holdings (Proprietary) Limited. During the second quarter of 1997, in conjunction with the above events, the Company reviewed and updated its impairment reserve components related to the divestiture of its remaining retail/wholesale replacement operations and adjusted the reserves to approximate the net fair value of its remaining businesses held for sale. There was no material net effect on the statement of earnings related to the above transactions. INCOME TAXES During the second quarter of 1997, the Company recognized an income tax benefit of $6.8 million related to the sales of the South African and Australian businesses. EXTRAORDINARY ITEM During the second quarter of 1997, the Company retired $64.7 million in private placement debt. This eliminated 10% coupon debt and potentially restrictive covenants and will provide the Company greater financial flexibility. The early retirement of debt required a make-whole payment of $4.1 million, which was recorded as an extraordinary item of $2.6 million, net of the related tax benefit. SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996 NET SALES Sales for the six-month period ended June 30, 1997 were $967.4 million compared to $1,058.3 million for the same 1996 period. North American original equipment sales were $229.3 million for the six-month period ended June 30, 1997 compared to $231 million in 1996. Excluding the electrical products and ball bearing operation divestitures, North American original equipment sales were up 14.3% largely due to strong sealing system product sales. International original equipment sales decreased 22.3% to $89 million for the six-month period ended June 30, 1997 from $114.5 million in the same 1996 period. Excluding the sale of the heavy wall bearing operations in Germany and Brazil and foreign currency effects, International original equipment sales increased 10%. North American replacement sales decreased 8.5% to $372 million from $406.4 million for the six-month period ended June 30, 1996. The decrease was attributable to softness in the North American replacement market, particularly in engine and chassis products. International replacement sales for the six-month period ended June 30, 1997 were $277.2 million compared to $306.3 million for the same 1996 period. Excluding the divestitures in Turkey, Australia and South Africa, International replacement sales were relatively flat. COST OF PRODUCTS SOLD Cost of products sold as a percent of net sales decreased to 76.5% for the six-month period ended June 30, 1997 from 78.3% for the same 1996 period. The decrease in cost of products sold as a percent of net sales is attributable to productivity improvements, cost controls and streamlined operations. 11 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES While declining $12.1 million, selling, general and administrative expenses as a percent of net sales were relatively flat for the six-month period ended June 30, 1997 compared to the same 1996 period. ADJUSTMENT OF ASSETS HELD FOR SALE The results of operations have been included in the Company's consolidated statements of earnings through the date of sale for the following transactions. The Company received $66.6 million in cash in the first six months of 1997 related to the following transactions with an additional $10.7 million to be received in July 1997, while the purchaser assumed certain liabilities. In January 1997, the Company completed the previously announced sale of its heavy wall bearing division in Germany and Brazil to Zollern BHW Gleitlager GmbH, a member of Fuerstlich Hohenzollernsche Werke Laucherthal GmbH Co. On May 13, 1997, the Company completed the previously announced sale of its Australian replacement operations to Automotive Components Limited. On June 3, 1997, the Company completed the previously announced sale of its South African replacement operations. The Company sold the distribution operations to Chariots Holding Limited and the retail operations to Lexshell 16 Investment Holdings (Proprietary) Limited. During the second quarter of 1997, in addition to the above transactions, the Company reviewed and updated its impairment reserves related to the divestiture of its remaining retail/wholesale replacement operations and adjusted the reserve components to approximate the net fair value of its remaining businesses held for sale. There was no material net effect on the statement of earnings related to the above events. INCOME TAXES During the second quarter of 1997, the Company recognized an income tax benefit of $6.8 million related to the sales of the South African and Australian businesses during the second quarter. EXTRAORDINARY ITEM During the second quarter of 1997, the Company retired $64.7 million in private placement debt. This eliminated 10% coupon debt and potentially restrictive covenants and will provide the Company greater financial flexibility. The early retirement of the debt required a make-whole payment of $4.1 million, which was recorded as an extraordinary item of $2.6 million, net of the related tax benefit. 12 LIQUIDITY AND CAPITAL RESOURCES Cash flow from operations of $89.8 million for the six-month period ended June 30, 1997 increased 24.2% from $72.3 million for the same 1996 period. The increase in cash flow from operations is due to increased earnings combined with working capital productivity improvements. Inventory reduction increased over the 1996 period due to a decrease in lead times and lot sizes and an increase in fill rates in the North American replacement business. Cash flow from investing activities of $45.8 million for the six-month period ended June 30, 1997 includes $66.6 million of proceeds from the sales of the heavy wall bearing division in Germany and Brazil, and 64 retail stores and 17 warehouse locations in Turkey, Australia and South Africa. Cash flow from investing activities also includes capital expenditures of $20.8 million for property, plant and equipment and equipment to implement process improvements, information technology and new product introductions. Cash flow used by financing activities of $(149.1) million for the six-month period ended June 30, 1997 reflects a reduction in borrowings of $138.8 million. The cash used to reduce borrowings was primarily generated from operations and proceeds from the sales of businesses noted above. In April 1997, the Company issued $125 million of 10-year 8.8% senior notes. Proceeds from the senior notes were used to pay down the revolving credit facility. Also during the six-month period ended June 30, 1997, the Company retired $64.7 million in private placement debt using its revolving credit facility. This eliminated 10% coupon debt and potentially restrictive covenants and will provide the Company greater financial flexibility. The early retirement of debt required a make-whole payment of $4.1 million which decreased cash from financing activities. Also in the first quarter of 1997, the Company entered into a new $100 million accounts receivable securitization program, and in the second quarter of 1997, the Company entered into a new 5-year $350 million revolving credit agreement which expires in June 2002. On August 8, 1997, the Company announced its call for the redemption of all of its outstanding $3.875 Series D Convertible Exchangeable Preferred Stock to be redeemed on August 28, 1997. Each share of preferred stock is convertible into 2.778 shares of common stock and the Company expects all shares to be converted to common stock. The Company believes that cash flow from operations, together with borrowings available under the Company's revolving credit facility, will continue to be sufficient to meet its ongoing working capital requirements. 13 PART II - OTHER INFORMATION - --------------------------- Item 4. Submission of Matters to a Vote of Security Holders The Company held its Annual Meeting of Shareholders on April 23, 1997, at which the shareholders considered and voted on (i) the election of seven directors, (ii) the approval of the appointment of Ernst & Young LLP as independent accountants for 1997, and (iii) the approval of the 1997 Long Term Incentive Plan. Each of the nominees for director at the meeting was an incumbent and all nominees were elected. The following table sets forth the number of votes for and withheld with respect to each nominee:
Nominee Votes For Votes Withheld J. J. Fannon 27,656,481 309,384 R. M. Hills 27,596,631 369,234 A. Madero 27,462,121 503,743 R. S. Miller, Jr. 27,674,114 291,751 J. C. Pope 27,609,408 356,457 H. M. Sekyra 27,679,056 286,809 R. A. Snell 27,702,976 262,888
The appointment of Ernst & Young LLP as independent accountants for 1997 was approved, with 27,765,598 votes cast "For", 152,723 votes cast "Against" and 102,702 abstentions. The 1997 Long Term Incentive Plan was approved with 25,865,640 votes cast "For", 1,089,857 votes cast "Against" and 211,666 abstentions. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: *10 $350,000,000 Revolving Credit, Competitive Advance and Multicurrency Facility, dated June 16, 1997. *11.1 Statement Re Computation of Per Share Earnings for the three months ended June 30, 1997. *11.2 Statement Re Computation of Per Share Earnings for the six months ended June 30, 1997. (b) Reports on Form 8-K: No reports on Form 8-K were filed by the Company during the three months ended June 30, 1997. - -------------------- *Filed herewith. 14 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FEDERAL-MOGUL CORPORATION By: (Thomas W. Ryan) --------------------------- THOMAS W. RYAN Senior Vice President and Chief Financial Officer FEDERAL-MOGUL CORPORATION By: (Kenneth P. Slaby) --------------------------- KENNETH P. SLABY Vice President and Controller and Chief Accounting Officer Dated: August 14, 1997 EX-10 2 AGREEMENT 1 EXHIBIT 10 REVOLVING CREDIT, COMPETITIVE ADVANCE AND MULTICURRENCY FACILITY AGREEMENT, dated as of June 16, 1997, among FEDERAL-MOGUL CORPORATION, a Michigan corporation (the "Company"), each FOREIGN SUBSIDIARY BORROWER (as hereinafter defined) (together with the Company, the "Borrowers"), the Co-Agents named on the signature pages hereof (the "Co-Agents"), the several banks and other financial institutions from time to time parties hereto (the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking corporation (as hereinafter defined, the "Administrative Agent"), as administrative agent for the Lenders hereunder. W I T N E S S E T H : WHEREAS, the Company is party to the Revolving Credit and Competitive Advance Facility Agreement, dated as of June 30, 1994, as amended (the "Existing Domestic Credit Agreement") with the several banks and other financial institutions party thereto, the Co-Agents named therein and The Chase Manhattan Bank (f/k/a Chemical Bank), as the administrative agent; WHEREAS, the Company and certain of its Subsidiaries are parties to the Credit Agreement, dated as of September 14, 1994, as amended (the "Existing Multicurrency Credit Agreement") with the several banks and other financial institutions party thereto and Union Bank of Switzerland, as agent; and WHEREAS, the Company has requested the Lenders to establish the credit facility provided for herein (the "Facility") to refinance the Existing Domestic Credit Agreement and the Existing Multicurrency Credit Agreement, to pay the fees incurred by the Borrowers in connection with this Agreement and for other general corporate purposes of the Borrowers and their Subsidiaries, including investments and acquisitions to the extent permitted hereunder; NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Accumulated Funding Deficiency": any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA. "Adjusted Aggregate Committed Outstandings": with respect to each Lender, the Aggregate Committed Outstandings of such Lender, plus the amount of any participating interests purchased by such Lender pursuant to subsection 14.8, minus the amount of any participating interests sold by such Lender pursuant to subsection 14.8. "Administrative Agent": Chase, together with its affiliates, as arranger of the Commitments and as administrative agent for the Lenders under this Agreement or any successor thereto appointed pursuant to subsection 13.9. 2 "Affiliate": of any Person, shall mean any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. "Aggregate Available Multicurrency Commitments": as at any date of determination with respect to all Multicurrency Lenders, an amount in U.S. Dollars equal to the Available Multicurrency Commitments of all Multicurrency Lenders on such date. "Aggregate Available Revolving Credit Commitments": as at any date of determination with respect to all Lenders, an amount in U.S. Dollars equal to the Available Revolving Credit Commitments of all Lenders on such date. "Aggregate Committed Outstandings": as at any date of determination with respect to any Lender, an amount in U.S. Dollars equal to the sum of (a) the Aggregate Revolving Credit Outstandings of such Lender on such date, (b) the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of such Lender on such date and (c) the U.S. Dollar Equivalent of the Aggregate Local Currency Outstandings of such Lender on such date. "Aggregate Local Currency Outstandings": as at any date of determination with respect to any Lender, an amount in the applicable Local Currencies equal to the aggregate unpaid principal amount of such Lender's Local Currency Loans. "Aggregate Multicurrency Outstandings": as at any date of determination with respect to any Lender, an amount in the applicable Available Foreign Currencies equal to the aggregate unpaid principal amount of such Lender's Multicurrency Loans. "Aggregate Revolving Credit Commitments": the aggregate amount of the Revolving Credit Commitments of all of the Lenders. "Aggregate Revolving Credit Outstandings": as at any date of determination with respect to any Lender, the aggregate unpaid principal amount of such Lender's Revolving Credit Loans on such date. "Aggregate Total Outstandings": as at any date of determination with respect to any Lender, an amount in U.S. Dollars equal to the sum of (a) the Aggregate Revolving Credit Outstandings of such Lender on such date, (b) the aggregate unpaid principal amount of such Lender's CAF Advances on such date, (c) the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of such Lender on such date and (d) the U.S. Dollar Equivalent of the Aggregate Local Currency Outstandings of such Lender on such date. "Agreement": this Revolving Credit, Competitive Advance and Multicurrency Facility Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Agreement Currency": as defined in subsection 14.18(b). "Applicable Margin": for each day and each Multicurrency Loan or Eurodollar Loan, the rate per annum set forth below opposite the applicable S&P Bond Rating and Moody's Bond Rating: 3 Bond Rating Applicable (S&P/Moody's) Level Margin BBB-/Baa3 or higher I .3000% BB+/Ba1 II .4250% BB/Ba2 III .5000% BB-/Ba3 or lower IV .6250% provided that if the ratings of such rating agencies do not fall within the same Level, the Applicable Margin applicable to such day will be (a) if the lower rating is one Level lower than the higher rating, the rate opposite such lower Level, and (b) if the lower rating is two or more Levels lower than the higher rating, the rate opposite the next higher Level from such lower Level, provided, further, that in the event a rating is not available from either rating agency, such rating agency will be deemed to have assigned its lowest rating. "Assignee": as defined in subsection 14.6(c). "Available Foreign Currencies": Deutsche Marks, Pounds Sterling, French Francs, Italian Lira, Australian Dollars and any other available and freely-convertible non-U.S. Dollar currency selected by the Company and approved by the Administrative Agent and the Majority Multicurrency Lenders. "Available Multicurrency Commitment": as at any date of determination with respect to any Multicurrency Lender (after giving effect to the making and payment of any Revolving Credit Loans required on such date pursuant to subsection 2.5), an amount in U.S. Dollars equal to the lesser of (a) the excess, if any, of (i) such Multicurrency Lender's Multicurrency Commitment in effect on such date over (ii) the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of such Multicurrency Lender on such date and (b) the excess, if any, of (i) the amount of such Lender's Revolving Credit Commitment in effect on such date over (ii) the Aggregate Committed Outstandings of such Lender on such date. "Available Revolving Credit Commitment": as at any date of determination with respect to any Lender (after giving effect to the making and payment of any Revolving Credit Loans required on such date pursuant to subsection 2.5), an amount in U.S. Dollars equal to the excess, if any, of (a) the amount of such Lender's Revolving Credit Commitment in effect on such date over (b) the Aggregate Committed Outstandings of such Lender on such date. "Base Rate": for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. "Base Rate Loans": Revolving Credit Loans the rate of interest applicable to which is based upon the Base Rate. "Benefitted Lender": as defined in subsection 14.7. "Board": the Board of Governors of the Federal Reserve System (or any successor thereto). "Borrowers": as defined in the preamble hereto. 4 "Borrowing Date": any Business Day specified in a notice pursuant to subsection 2.3, 3.2 or 4.3 as a date on which a Borrower requests the Lenders to make Loans hereunder or, with respect to Local Currency Loans, the date on which a Local Currency Borrower requests Local Currency Lenders to make Local Currency Loans to such Local Currency Borrower pursuant to the Local Currency Facility to which such Local Currency Borrower and Local Currency Lenders are parties. "Business": as defined in subsection 7.16. "Business Day": (a) when such term is used in respect of a day on which a Loan denominated in an Available Foreign Currency or Local Currency is to be made, a payment is to be made in respect of such Loan, an Exchange Rate is to be set in respect of such Available Foreign Currency or Local Currency or any other dealing in such Available Foreign Currency or Local Currency is to be carried out pursuant to this Agreement, such term shall mean a London Banking Day which is also a day on which banks are open for general banking business in the city which is the principal financial center of the country of issuance of such Available Foreign Currency or Local Currency, (b) when such term is used to describe a day on which a borrowing, payment or interest rate determination is to be made in respect of a Eurodollar Loan or a LIBO Rate CAF Advance, such day shall be a London Banking Day and (c) when such term is used in any context in this Agreement (including as described in the foregoing clauses (a) and (b)), such term shall mean a day which, in addition to complying with any applicable requirements set forth in the foregoing clause (a) and (b), is a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "CAF Advance": each CAF Advance made pursuant to subsection 3.1. "CAF Advance Availability Period": the period from and including the Closing Date until the date which is 14 days prior to the Revolving Credit Termination Date. "CAF Advance Confirmation": each confirmation by the Company of its acceptance of CAF Advance Offers, which confirmation shall be substantially in the form of Exhibit D and shall be delivered to the Administrative Agent by facsimile transmission. "CAF Advance Interest Payment Date": as to each CAF Advance, each interest payment date specified by the Company for such CAF Advance in the related CAF Advance Request. "CAF Advance Maturity Date": as to any CAF Advance, the date specified by the Company pursuant to subsection 3.2(a) in its related CAF Advance Request. "CAF Advance Note": as defined in subsection 3.3(g). "CAF Advance Offer": each offer by a Lender to make CAF Advances pursuant to a CAF Advance Request, which offer shall contain the information specified in Exhibit C and shall be delivered to the Administrative Agent by telephone, immediately confirmed by facsimile transmission. "CAF Advance Request": each request by the Company for Lenders to submit bids to make CAF Advances, which request shall contain the information in respect of such requested CAF Advances specified in Exhibit B and shall be delivered to the Administrative Agent in writing, by facsimile transmission, or by telephone, immediately confirmed by facsimile transmission. "Capital Expenditures": all expenditures of the Company and its Subsidiaries on a consolidated basis for any fixed assets or improvements, or for replacements, substitutions or additions thereto, which have a useful life 5 of more than one year, including, but not limited to, the direct or indirect acquisition of such assets by way of increased product or service charges, offset items or otherwise, including all expenditures under capital leases, all determined in accordance with GAAP. "Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person other than a corporation and any and all warrants or options to purchase any of the foregoing. "Cash Flow Coverage": for any period, the ratio of (a) EBITDA less Capital Expenditures, divided by (b) (i) Interest Expenses plus (ii) dividends paid on any class of the Company's Capital Stock, in each case determined for such period. "Change of Control": (a) any "person" or "group" within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, shall become the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than 50% of the then outstanding voting stock of the Company other than in a transaction having the approval of the board of directors of the Company at least a majority of which members are Continuing Directors or (b) Continuing Directors shall cease to constitute at least a majority of the directors constituting the board of directors of the Company. "Chase": The Chase Manhattan Bank, a New York banking corporation. "Closing Date": the date on which the conditions precedent set forth in subsection 8.1 are satisfied. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Commitments": the collective reference to the Revolving Credit Commitments and the Multicurrency Commitments. "Committed Outstandings Percentage": on any date with respect to any Lender, the percentage which the Adjusted Aggregate Committed Outstandings of such Lender constitutes of the Adjusted Aggregate Committed Outstandings of all Lenders. "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code. "Company": as defined in the preamble hereto. "Company Guaranty: the guarantee contained in Section 11. "Consolidated Net Worth": at any date, shareholders equity (including, but not limited to, Capital Stock, additional paid-in capital and retained earnings after deducting treasury stock and unearned compensation) of the Company and its Subsidiaries on a consolidated basis as at such date determined in accordance with GAAP; provided, that Consolidated Net Worth shall not reflect any additions or deductions resulting from foreign currency translation gains or losses. "Continuing Directors": the collective reference to (a) all members of the board of directors of the Company who have held office continually since the date hereof, and (b) all members of the board of directors of the Company who were elected as directors after the date hereof and whose nomination for election by the Company's shareholders was approved by a vote of at least 50% of the Continuing Directors. 6 "Contractual Obligation": 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. "Conversion Date": any date on which either (a) an Event of Default under Section 12(f) has occurred or (b) the Commitments shall have been terminated and/or the Loans shall have been declared immediately due and payable pursuant to Section 12. "Conversion Sharing Percentage": on any date with respect to any Lender and any Loans of such Lender outstanding in any currency other than U.S. Dollars, the percentage of such Loans such that, after giving effect to the conversion of such Loans to U.S. Dollars and the purchase and sale by such Lender of participating interests as contemplated by subsection 14.8, the Committed Outstandings Percentage of such Lender will equal such Lender's Revolving Credit Commitment Percentage on such date (calculated immediately prior to giving effect to any termination or expiration of the Revolving Credit Commitments on the Conversion Date). "Converted Loans: as defined in subsection 14.8(a). "Debt Ratio": as of the last day of any fiscal quarter, the ratio of (i) Total Debt to (ii) EBITDA for the four consecutive fiscal quarters ended on such date provided that EBITDA for the four consecutive fiscal quarters ending on September 30, 1997 shall be determined by multiplying EBITDA for the period commencing January 1, 1997 and ending as of the end of such fiscal period by 4/3. "Default": any of the events specified in Section 12 whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition has been satisfied. "Dollars", "U.S. Dollars" and "$": dollars in lawful currency of the United States of America. "Domestic Reference Lenders": Chase, Bank of America National Trust and Savings Association and The Bank of New York. "EBITDA": for any period, the sum of (a) the consolidated net income (or loss) of the Company and its Subsidiaries for such period before deduction of income and franchise taxes and depreciation, determined in conformity with GAAP, but excluding the income of any Person (other than Subsidiaries of the Company) in which the Company or any of its Subsidiaries has an ownership interest, until such income has been received by the Company or a Subsidiary in a cash distribution, plus (b) any Interest Expenses reported during such period, plus (c) amortization of Intangible Assets deducted in determining net income for such period. "Environmental Laws": any and all foreign, Federal, state, local or municipal, laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time hereafter be in effect. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurocurrency Base Rate": (a) with respect to each Interest Period pertaining to a Multicurrency Loan denominated in any currency other than Pounds Sterling, the rate per annum determined by the Administrative Agent to be the offered rate for deposits in such currency with a term comparable to such Interest Period that appears on the applicable Telerate Page at approximately 11:00 A.M., London time, two Business Days prior to the 7 beginning of such Interest Period; provided, however, that if at any time for any reason such offered rate for any such currency does not appear on a Telerate Page, "Eurocurrency Base Rate" shall mean, with respect to each day during each Interest Period pertaining to a Multicurrency Loan denominated in such currency, the rate per annum equal to the average (rounded upward to the nearest 1/16th of 1%) of the respective rates notified to the Administrative Agent by each of the Multicurrency Reference Lenders as the rate at which such Multicurrency Reference Lender is offered deposits in such currency at or about 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period in the London interbank market for delivery on the first day of such Interest Period for the number of days comprised therein; and (b) with respect to each day during each Interest Period pertaining to a Multicurrency Loan denominated in Pounds Sterling, the rate per annum equal to the average (rounded upward to the nearest 1/16th of 1%) of the respective rates notified to the Administrative Agent by each of the Multicurrency Reference Lenders as the rate at which such Multicurrency Reference Lender is offered deposits in Pounds Sterling at or about 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period in the Paris interbank market for delivery on the first day of such Interest Period for the number of days comprised therein. "Eurocurrency Rate": with respect to each day during each Interest Period pertaining to a Multicurrency Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%): Eurocurrency Base Rate 1.00 - Eurocurrency Reserve Requirements "Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar Loan or a Multicurrency Loan, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves) under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a member bank of such System. "Eurodollar Base Rate": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum equal to the average (rounded upward to the nearest 1/16th of 1%) of the respective rates notified to the Administrative Agent by each of the Domestic Reference Lenders as the rate at which such Domestic Reference Lender is offered Dollar deposits at or about 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period in the London interbank market for delivery on the first day of such Interest Period for the number of days comprised therein. "Eurodollar Loans": Revolving Credit Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Rate": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%): Eurodollar Base Rate 1.00 - Eurocurrency Reserve Requirements "Event of Default": any of the events specified in Section 12, provided that all requirements for the giving of notice, the lapse of time, or both, or any other condition, have been satisfied. 8 "Exchange Rate": with respect to any non-U.S. Dollar currency on any date, the rate at which such currency may be exchanged into U.S. Dollars, as set forth on such date on the relevant Reuters currency page at or about 11:00 A.M., London time, on such date. In the event that such rate does not appear on any Reuters currency page, the "Exchange Rate" with respect to such non-U.S. Dollar currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Company or, in the absence of such agreement, such "Exchange Rate" shall instead be the Administrative Agent's spot rate of exchange in the interbank market where its foreign currency exchange operations in respect of such non-U.S. Dollar currency are then being conducted, at or about 10:00 A.M., local time, on such date for the purchase of U.S. Dollars with such non-U.S. Dollar currency, for delivery two Business Days later; provided, that if at the time of any such determination, no such spot rate can reasonably be quoted, the Administrative Agent may use any reasonable method as it deems applicable to determine such rate, and such determination shall be conclusive absent manifest error. "Existing Domestic Credit Agreement": as defined in the recitals hereto. "Existing Multicurrency Credit Agreement": as defined in the second recital hereto. "Existing Plan": any Plan existing on the date of this Agreement without giving effect to any amendment thereof made after the date of this Agreement. "Facility": as defined in the third recital hereto. "Federal Funds Effective Rate": for any day, the weighted average of the rates per annum on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it, in each case rounded up to the nearest 1/100th of 1%. "Fixed Rate CAF Advance": any CAF Advance made pursuant to a Fixed Rate CAF Advance Request. "Fixed Rate CAF Advance Request": any CAF Advance Request requesting the Lenders to offer to make CAF Advances at a fixed rate (as opposed to a rate composed of the LIBO Rate plus (or minus) a margin). "Foreign Subsidiary Borrower": each Subsidiary of the Company organized under the laws of a jurisdiction outside the United States listed as a Foreign Subsidiary Borrower in Schedule II as amended from time to time in accordance with subsection 14.1(b). "Foreign Subsidiary Opinion": with respect to any Foreign Subsidiary Borrower, a legal opinion of counsel to such Foreign Subsidiary Borrower addressed to the Administrative Agent and the Lenders concluding that such Foreign Subsidiary Borrower and the Loan Documents to which it is a party substantially comply with the matters listed on Exhibit I, with such assumptions, qualifications and deviations therefrom as the Administrative Agent shall approve (such approval not to be unreasonably withheld). "Funded Debt": all Indebtedness of the Company and its Subsidiaries on a consolidated basis maturing one year or more after incurrence thereof or matures within one year from the date on which it was created, but is renewable or extendible under terms such that under GAAP such Indebtedness would be treated as long-term indebtedness. 9 "Funding Commitment Percentage": as at any date of determination (after giving effect to the making and payment of any Loans made on such date pursuant to subsection 2.5), with respect to any Lender, that percentage which the Available Revolving Credit Commitment of such Lender then constitutes of the Aggregate Available Revolving Credit Commitments. "GAAP": generally accepted accounting principles in the United States of America in effect from time to time; provided, that if at any time after the Closing Date there shall occur any change in respect of such generally accepted accounting principles from those used in the preparation of the audited financial statements referred to in subsection 7.1 in a manner which would have a material effect on any matter which is material to Section 10, the Company and the Administrative Agent will, within five Business Days of a notice from the Administrative Agent or the Company, as the case may be, to that effect, commence, and continue in good faith, negotiations with a view towards making appropriate amendments to the provisions hereof acceptable to the Required Lenders, to reflect as nearly as possible the effect of the provisions of Section 10 as in effect on the date hereof. "Governmental Authority": any nation or government, any state, or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guaranty": any guaranty by any Person of Indebtedness or other obligations of any other Person that is not a consolidated subsidiary of such Person or any assurance with respect to the financial condition of any other Person that is not a consolidated subsidiary of such Person (including, without limitation, any purchase or repurchase agreement, any indemnity or any keep-well, take-or-pay, through-put or other arrangement having the effect of assuring or holding harmless any third Person against loss with respect to any Indebtedness or other obligation of such other Person) except endorsements of negotiable instruments for collection in the ordinary course of business. "Indebtedness": with respect to any Person, (a) all indebtedness of such Person which in accordance with GAAP would be shown as a liability on the balance sheet of such Person and (b) obligations under leases which, in accordance with GAAP, are to be recorded as capital leases; provided, however, that the term "Indebtedness" shall not include short-term obligations payable to suppliers incurred in the ordinary course of business or indebtedness incurred by a special purpose, wholly-owned Subsidiary of the Company that purchases accounts receivable from the Company and its other Subsidiaries to the extent that such indebtedness is nonrecourse to the Company and each such other Subsidiary and is not required under GAAP to be reflected on the consolidated balance sheet of the Company. "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. "Intangible Assets": assets having no physical existence and that, in conformity with GAAP, should be classified as intangible assets, including, without limitation, patents, patent rights, trademarks, trade names, copyrights, franchises, licenses, customer lists, organizational expenses and goodwill. "Intellectual Property": as defined in subsection 7.9. "Interest Expenses": with respect to any period, the aggregate of all interest expense reported by the Company and its Subsidiaries in accordance with GAAP during such period. As used in this definition, the term "interest" shall include, without limitation, all interest, fees and costs 10 payable with respect to the obligations under this Agreement (other than fees and costs which may be capitalized as transaction costs in accordance with GAAP), any discount in respect of sales of accounts receivable and/or related contract rights and the interest portion of capitalized lease payments during such period, all as determined in accordance with GAAP. "Interest Payment Date": (a) as to any Base Rate Loan, the last day of each March, June, September and December to occur while such Loan is outstanding, (b) as to any Eurodollar Loan or Multicurrency Loan having an Interest Period of three months or less, the last day of such Interest Period and (c) as to any Eurodollar Loan or Multicurrency Loan having an Interest Period longer than three months, (i) each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and (ii) the last day of such Interest Period. "Interest Period": with respect to any Eurodollar Loan or Multicurrency Loan: (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan or Multicurrency Loan and ending one, two, three, or six or (if available) twelve months thereafter, as selected by the relevant Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan or Multicurrency Loan and ending one, two, three, six or (if applicable) twelve months thereafter, as selected by the relevant Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period pertaining to a Eurodollar Loan or Multi currency Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) any Interest Period applicable to a Eurodollar Loan or Multicurrency Loan that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date; (iii) any Interest Period pertaining to a Eurodollar Loan or Multicurrency 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 a calendar month; (iv) any Interest Period pertaining to a Multicurrency Loan denominated in an Available Foreign Currency being replaced by the currency of the European Monetary Union that would otherwise extend beyond the date on which such replacement becomes effective shall end on such date; and (v) each Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan or Multicurrency Loan during an Interest Period for such Eurodollar Loan or Multicurrency Loan. "Joinder Agreement": the Joinder Agreement to be entered into by each Foreign Subsidiary Borrower subsequent to the date hereof pursuant to subsection 14.1(b)(i), substantially in the form of Exhibit E hereto. 11 "Judgment Currency": as defined in subsection 14.18(b). "Lenders": as defined in the preamble hereto. "LIBO Rate": in respect of any LIBO Rate CAF Advance, the London interbank offered rate for deposits in Dollars for the period commencing on the date of such CAF Advance and ending on the CAF Advance Maturity Date with respect thereto which appears on Telerate Page 3750 as of 11:00 A.M., London time, two Business Days prior to the beginning of such period. "LIBO Rate CAF Advance": any CAF Advance made pursuant to a LIBO Rate CAF Advance Request. "LIBO Rate CAF Advance Request": any CAF Advance Request requesting the Lenders to offer to make CAF Advances at an interest rate equal to the LIBO Rate plus (or minus) a margin. "Lien": (i) any judgment lien or execution, attachment, levy, distraint or similar legal process and (ii) any mortgage, pledge, hypothecation, assignment, lien, charge, encumbrance or other security interest of any kind or nature whatsoever (including, without limitation, the interest of the lessor under any capital lease and the interest of the seller under any conditional sale or other title retention agreement), which secures or purports to secure any Indebtedness or other indebtedness or obligations. "Loan Documents": this Agreement, any Notes and any document or instrument evidencing or governing any Local Currency Facility. "Loans": the collective reference to the Revolving Credit Loans, the CAF Advances, the Multicurrency Loans and the Local Currency Loans. "Loans to be Converted": as defined in subsection 14.8(a). "Local Currency": any available and freely convertible non-U.S. Dollar currency selected by a Local Currency Borrower and approved by the Administrative Agent. "Local Currency Borrower": each Subsidiary of the Company organized under the laws of a jurisdiction outside the United States that the Company designates as a "Local Currency Borrower" in a Local Currency Facility Addendum. "Local Currency Facility": any Qualified Credit Facility that the Company designates as a "Local Currency Facility" pursuant to a Local Currency Facility Addendum. "Local Currency Facility Addendum": a Local Currency Facility Addendum received by the Administrative Agent, substantially in the form of Exhibit J, and conforming to the requirements of Section 5. "Local Currency Facility Agent": with respect to each Local Currency Facility, the Local Currency Lender acting as agent for the Local Currency Lenders parties thereto (and, in the case of any Local Currency Facility to which only one Lender is a party, such Lender). "Local Currency Facility Maximum Borrowing Amount": as defined in subsection 5.1(b). "Local Currency Lender": any Lender (or, if applicable, any affiliate, branch or agency thereof) party to a Local Currency Facility. "Local Currency Lender Maximum Borrowing Amount": as defined in subsection 5.1(b). "Local Currency Loan": any loan made pursuant to a Local Currency Facility. 12 "London Banking Day": any day on which banks in London are open for general banking business, including dealings in foreign currency and exchange. "Majority Multicurrency Lenders": at any time, Multicurrency Lenders the Multicurrency Commitment Percentages of which aggregate at least 51%. "Material Adverse Effect": a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, (b) the ability of any Borrower to perform its obligations under this Agreement or any of the Notes or any of the other Loan Documents to which it is a party or (c) the validity or enforceability of this Agreement or any of the Notes or any of the other Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder. "Material Environmental Amount": an amount payable by the Company (net of the proceeds of any applicable insurance and amount reasonably expected to be paid by Persons that are not Affiliates of the Company and that are jointly liable with the Company in respect of such amount) and/or its Subsidiaries in excess of $20,000,000 in any year or $100,000,000 in the aggregate for remedial costs, compliance costs, compensatory damages, punitive damages, fines, penalties or any combination thereof. "Materials of Environmental Concern": any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation. "Minority Interest": the minority interest of Persons other than the Company and its Subsidiaries in the Company's Subsidiaries as shown from time to time in the most recent consolidated balance sheet of the Company and its Subsidiaries. "Moody's Bond Rating": for any day, the rating of the Company's senior long-term unsecured debt by (i) Moody's Investor Service, Inc. ("Moody's") in effect at 11:00 A.M., New York City time, on such day or (ii) (if Moody's shall cease to publish such a rating in respect of the Company) either of Duff & Phelps Credit Rating Co. or Fitch Investors Service LLP, as determined by the Company. "Multicurrency Commitment": as to any Multicurrency Lender at any time, its obligation to make Multicurrency Loans to the Borrowers in an aggregate amount in Dollars or in Available Foreign Currencies of which the U.S. Dollar Equivalent does not exceed at any time outstanding the amount set forth opposite such Multicurrency Lender's name in Schedule I under the heading "Multicurrency Commitment", as such amount may be reduced from time to time as provided in subsection 4.4 and the other applicable provisions hereof. "Multicurrency Commitment Percentage": as to any Multicurrency Lender at any time, the percentage which such Multicurrency Lender's Multicurrency Commitment then constitutes of the aggregate Multicurrency Commitments (or, if the Multicurrency Commitments have terminated or expired, the percentage which (a) the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of such Multicurrency Lender at such time constitutes of (b) the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of all Multicurrency Lenders at such time). "Multicurrency Lender": each Lender having an amount greater than zero set forth opposite such Lender's name in Schedule I under the heading "Multicurrency Commitment"; provided that any Lender may cause an affiliate of such Lender to become a party to this Agreement as a Multicurrency Lender, 13 whereupon such affiliate shall, on behalf of such Lender, fulfill such Lender's obligations and enjoy such Lender's rights, as a Multicurrency Lender, and the term "Multicurrency Lender" shall, when the context requires, be deemed to refer to such affiliate. "Multicurrency Loans": as defined in subsection 4.1. "Multicurrency Reference Lenders": Chase, Bank of America National Trust and Savings Association and The Bank of New York. "Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA or any successor statute. "Non-Excluded Taxes": as defined in subsection 6.11(a). "Non-Multicurrency Lender": each Lender which is not a Multicurrency Lender. "Notes": the collective reference to the Revolving Credit Notes and the CAF Advance Notes. "Notice of Local Currency Outstandings": with respect to each Local Currency Facility Agreement, a notice from the relevant Local Currency Facility Agent containing the information, delivered to the Person, in the manner and by the time, specified for a Notice of Local Currency Outstandings in Schedule V. "Obligations": collectively, the unpaid principal of and interest on the Loans and all other obligations and liabilities of (a) each Foreign Subsidiary Borrower under this Agreement and the other Loan Documents and (b) each Local Currency Borrower under any Local Currency Facility to which it is a party and under this Agreement and the other Loan Documents (including, without limitation, interest accruing at the then applicable rate provided in this Agreement or any other applicable Loan Document after the maturity of the Loans and interest accruing at the then applicable rate provided in this Agreement or any other applicable Loan Document after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company, any Foreign Subsidiary Borrower or any Local Currency Borrower, as the case may be, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, the Notes, the other Loan Documents or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by any Borrower or Local Currency Borrower pursuant to the terms of this Agreement or any other Loan Document). "Participants": as defined in subsection 14.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor corporation. "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. 14 "Prime Rate": the rate of interest per annum publicly announced from time to time by Chase as its prime rate in effect at its principal office in New York City (each change in the Prime Rate to be effective on the date such change is publicly announced). The Prime Rate is not intended to be the lowest rate of interest charged by Chase in connection with extensions of credit to debtors. "Prohibited Transaction": any "prohibited transaction" as defined in Section 406 of ERISA or Section 4975 of the Code. "Properties": as defined in subsection 7.16(a). "Qualified Credit Facility": a credit facility (a) providing for one or more Local Currency Lenders to make loans denominated in a Local Currency to a Local Currency Borrower, (b) providing for such loans to bear interest at a rate or rates determined by the Company and such Local Currency Lender or Local Currency Lenders and (c) otherwise conforming to the requirements of Section 5. "Reference Lenders": the collective reference to the Domestic Reference Lenders and the Multicurrency Reference Lenders. "Register": as defined in subsection 14.6(d). "Regulation U": Regulation U of the Board as in effect from time to time. "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Replacement Lender": a bank or financial institution (other than a Subsidiary of the Company) acceptable to the Administrative Agent and the Company. "Reportable Event": any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder. "Requested Local Currency Loans": as defined in subsection 2.5(b). "Requested Multicurrency Loans": as defined in subsection 2.5(a). "Required Lenders": (a) at any time prior to the termination of the Revolving Credit Commitments, Lenders, the Revolving Credit Commitment Percentages of which aggregate at least 51%; and (b) at any time after the termination of the Revolving Credit Commitments, Lenders whose Aggregate Total Outstandings aggregate at least 51% of the Aggregate Total Outstandings of all Lenders; provided that for purposes of this definition the Aggregate Total Outstandings of each Lender shall be adjusted up or down so as to give effect to any participations purchased or sold pursuant to subsection 14.8. "Requirement of Law": as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer": (i) as to the Company, the chief executive officer, the president, the chief financial officer, the treasurer, any assistant treasurer or the controller of the Company and (ii) as to any other Borrower, those of its officers or representatives whose signatures and incumbency shall have been certified to the Administrative Agent and the Lenders pursuant to subsection 8.1(c) or 8.2(e). 15 "Revolving Credit Commitment": as to any Lender at any time, its obligation to make Revolving Credit Loans to the Company in an aggregate amount not to exceed at any time outstanding the U.S. Dollar amount set forth opposite such Lender's name in Schedule I under the heading "Revolving Credit Commitment", as such amount may be reduced from time to time pursuant to subsection 2.4 and the other applicable provisions hereof. "Revolving Credit Commitment Percentage": as to any Lender at any time, the percentage which such Lender's Revolving Credit Commitment then constitutes of the aggregate Revolving Credit Commitments of all Lenders (or, if the Revolving Credit Commitments have terminated or expired, the percentage which (a) the Aggregate Revolving Credit Outstandings of such Lender at such time then constitutes of (b) the Aggregate Revolving Credit Outstandings of all Lenders at such time). "Revolving Credit Commitment Period": the period from and including the Closing Date to but not including the Revolving Credit Termination Date, or such earlier date on which the Revolving Credit Loans shall terminate as provided herein. "Revolving Credit Loan": as defined in subsection 2.1. "Revolving Credit Note": as defined in subsection 2.2(e). "Revolving Credit Termination Date": the date which is five years after the Closing Date. "Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "S&P Bond Rating": for any day, the rating of the Company's senior long-term unsecured debt by (i) Standard & Poor's Ratings Service ("S&P") in effect at 11:00 A.M., New York City time, on such day or (ii) (if S&P shall cease to publish such a rating in respect of the Company) either of Duff & Phelps Credit Rating Co. or Fitch Investors Service LLP, as determined by the Company. "Subsidiary": at any particular time, any Person which could be included as a consolidated subsidiary of the Company in the financial statements prepared and filed with the Company's annual reports on Form 10-K under the Securities Exchange Act of 1934, as amended, if such financial statements were prepared at, and as of, such time. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "Total Debt": all Indebtedness of the Company and its Subsidiaries, determined on a consolidated basis. "Tranche": the collective reference to Eurodollar Loans or Multicurrency Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day). "Transferee": as defined in subsection 14.6(f). "Type": as to any Revolving Credit Loan, its nature as a Base Rate Loan or a Eurodollar Loan. "U.S. Dollar Equivalent": with respect to an amount denominated in any currency other than U.S. Dollars, the equivalent in U.S. Dollars of such amount determined at the Exchange Rate on the date of determination of such equivalent. In making any determination of the U.S. Dollar Equivalent for purposes of calculating the amount of Loans to be borrowed from the respective Lenders on any Borrowing Date, the Administrative Agent shall use the relevant Exchange Rate in effect on the date on which the interest rate for such Loans 16 is determined pursuant to the provisions of this Agreement and the other Loan Documents. 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes, the other Loan Documents or any certificate or other document made or delivered pursuant hereto. (b) As used herein and in the Notes and any other Loan Document, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Company and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS 2.1 Revolving Credit Commitments. (a) Subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans (each, a "Revolving Credit Loan") in U.S. Dollars to the Company from time to time during the Revolving Credit Commitment Period so long as after giving effect thereto and to any concurrent repayment or prepayment of Loans (i) the Available Revolving Credit Commitment of each Lender is greater than or equal to zero and (ii) the Aggregate Total Outstandings of all Lenders do not exceed the Aggregate Revolving Credit Commitments. During the Revolving Credit Commitment Period the Company may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. (b) The Revolving Credit Loans may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the Company and notified to the Administrative Agent in accordance with subsections 2.3 and 6.2, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date. 2.2 Repayment of Revolving Credit Loans; Evidence of Debt. (a) The Company hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender on the Revolving Credit Termination Date and on such other dates and in such other amounts as may be required from time to time pursuant to this Agreement. The Company hereby further agrees to pay interest on the unpaid principal amount of the Revolving Credit Loans from time to time outstanding until payment thereof in full at the rates per annum, and on the dates, set forth in subsection 6.1. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Company to such Lender resulting from each Revolving Credit Loan of such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement. (c) The Administrative Agent shall maintain the Register pursuant to subsection 14.6(d), and a subaccount therein for each Lender, in which 17 Register and subaccounts shall be recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Company to each Lender hereunder in respect of the Revolving Credit Loans and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Company in respect of the Revolving Credit Loans and each Lender's share thereof. (d) The entries made in the Register and the accounts of each Lender maintained pursuant to subsection 2.2(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Company therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) the Revolving Credit Loans made to the Company by such Lender in accordance with the terms of this Agreement. (e) The Company agrees that, upon the request to the Administrative Agent by any Lender, the Company will execute and deliver to such Lender a promissory note of the Company evidencing the Revolving Credit Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate insertions as to date and principal amount (each, a "Revolving Credit Note"); provided, that the delivery of such Revolving Credit Notes shall not be a condition precedent to the Closing Date. 2.3 Procedure for Revolving Credit Borrowing. The Company may borrow under the Revolving Credit Commitments during the Revolving Credit Commitment Period on any Business Day, provided that the Company shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00 A.M., New York City time, (a) three Business Days prior to the requested Borrowing Date, if all or any part of the requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b) on the requested Borrowing Date, otherwise), specifying in each case (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the amount of such Type of Loan and the length of the initial Interest Periods therefor. Each borrowing under the Revolving Credit Commitments (other than a borrowing under subsection 2.5) shall be in an amount equal to (A) in the case of Base Rate Loans, $1,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Aggregate Available Revolving Credit Commitments are less than $1,000,000, such lesser amount) and (B) in the case of Eurodollar Loans, $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from the Company, the Administrative Agent shall promptly notify each Lender thereof. Not later than 11:00 A.M., New York City time, on each requested Borrowing Date each Lender shall make an amount equal to its Funding Commitment Percentage of the principal amount of the Revolving Credit Loans requested to be made on such Borrowing Date available to the Administrative Agent at its New York office specified in subsection 14.2 in U.S. Dollars and in immediately available funds. Except as otherwise provided in subsection 2.5, the Administrative Agent shall on such date credit the account of the Company on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. 2.4 Termination or Reduction of Revolving Credit Commitments. The Company shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Revolving Credit Commitments or, from time to time, to reduce the amount of the Revolving Credit Commitments; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, either (a) the Aggregate Available Revolving Credit 18 Commitments would not be greater than or equal to zero or (b) the Available Revolving Credit Commitments of any Lender would not be greater than or equal to zero. Any such reduction shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Revolving Credit Commitments then in effect. 2.5 Borrowings of Revolving Credit Loans and Refunding of Loans. (a) If on any Borrowing Date on which a Borrower has requested the Multicurrency Lenders to make Multicurrency Loans (the "Requested Multicurrency Loans"), (i) the aggregate principal amount of the Requested Multicurrency Loans exceeds the Aggregate Available Multicurrency Commitments on such Borrowing Date (before giving effect to the making and payment of any Loans required to be made pursuant to this subsection 2.5 on such Borrowing Date) and (ii) the U.S. Dollar Equivalent of the amount of such excess is less than or equal to the aggregate Available Revolving Credit Commitments of all Non-Multicurrency Lenders (before giving effect to the making and payment of any Loans pursuant to this subsection 2.5 on such Borrowing Date), each Non-Multicurrency Lender shall make a Revolving Credit Loan to the Company on such Borrowing Date, and the proceeds of such Revolving Credit Loans shall be simultaneously applied to repay outstanding Revolving Credit Loans and/or Local Currency Loans of the Multicurrency Lenders (as directed by the Company), in each case in amounts such that, after giving effect to (1) such borrowings and repayments and (2) the borrowing from the Multicurrency Lenders of the Requested Multicurrency Loans, the Committed Outstandings Percentage of each Lender will equal (as nearly as possible) its Revolving Credit Commitment Percentage. To effect such borrowings and repayments, (x) not later than 11:00 A.M., New York City time, on such Borrowing Date, the proceeds of such Revolving Credit Loans shall be made available by each Non-Multicurrency Lender to the Administrative Agent at its office specified in subsection 14.2 in U.S. Dollars and in immediately available funds and the Administrative Agent shall apply the proceeds of such Revolving Credit Loans toward repayment of outstanding Revolving Credit Loans and/or Local Currency Loans of the Multicurrency Lenders (as directed by the Company) and (y) concurrently with the repayment of such Loans on such Borrowing Date, (I) the Multicurrency Lenders shall, in accordance with the applicable provisions hereof, make the Requested Multicurrency Loans in an aggregate amount equal to the amount so requested by such Borrower (but not in any event greater than the Aggregate Available Multicurrency Commitments after giving effect to the making of such repayment of any Loans on such Borrowing Date) and (II) the relevant Borrower or Local Currency Borrower shall pay to the Administrative Agent for the account of the Lenders whose Loans to such Borrower or Local Currency Borrower are repaid on such Borrowing Date pursuant to this subsection 2.5 all interest accrued on the amounts repaid to the date of repayment, together with any amounts payable pursuant to subsection 6.12 in connection with such repayment. (b) If on any Borrowing Date on which a Local Currency Borrower has requested Local Currency Lenders to make Local Currency Loans (the "Requested Local Currency Loans") under a Local Currency Facility to which such Local Currency Borrower and Local Currency Lenders are parties (i) the aggregate principal amount of the Requested Local Currency Loans exceeds the aggregate available amount of the commitments of such Local Currency Lenders under such Local Currency Facility on such Borrowing Date (before giving effect to the making and payment of any Revolving Credit Loans required to be made pursuant to this subsection 2.5 on such Borrowing Date), (ii) after giving effect to the Requested Local Currency Loans, the U.S. Dollar Equivalent of the aggregate outstanding principal amount of Local Currency Loans of such Local Currency Borrower will be less than or equal to the aggregate commitments of such Local Currency Lenders under such Local Currency Facility and (iii) the U.S. Dollar Equivalent of the amount of the excess described in clause (i) above is less than or equal to the Aggregate Available Revolving Credit Commitments of all Lenders other than such Local Currency Lenders (before giving effect to the making and payment of any Revolving Credit Loans pursuant to this subsection 2.5 on such Borrowing Date), each such other Lender shall make a Revolving Credit Loan to the Company, on such Borrowing Date, and the proceeds of such Revolving Credit Loans shall be simultaneously applied to 19 repay outstanding Revolving Credit Loans, Multicurrency Loans and/or Local Currency Loans of such Local Currency Lenders (as directed by the Company) in each case in amounts such that, after giving effect to (1) such borrowings and repayments and (2) the borrowing from such Local Currency Lenders of the Requested Local Currency Loans, the Committed Outstandings Percentage of each Lender will equal (as nearly as possible) its Revolving Credit Commitment Percentage. To effect such borrowings and repayments, (x) not later than 12:00 Noon, New York City time, on such Borrowing Date, the proceeds of such Revolving Credit Loans shall be made available by each such other Lender to the Administrative Agent at its office specified in subsection 14.2 in U.S. Dollars and in immediately available funds and the Administrative Agent shall apply the proceeds of such Revolving Credit Loans toward the repayment of outstanding Revolving Credit Loans, Multicurrency Loans and/or Local Currency Loans of such Local Currency Lenders (as directed by the Company) and (y) concurrently with the repayment of such Loans on such Borrowing Date, (I) such Local Currency Lenders shall, in accordance with the applicable provisions hereof, make the Requested Local Currency Loans in an aggregate amount equal to the amount so requested by such Local Currency Borrower and (II) the relevant Borrower or Local Currency Borrower shall pay to the Administrative Agent for the account of the Lenders whose Loans to such Borrower or Local Currency Borrower are repaid on such Borrowing Date pursuant to this subsection 2.5 all interest accrued on the amounts repaid to the date of repayment, together with any amounts payable pursuant to subsection 6.12 in connection with such repayment. (c) If any borrowing of Revolving Credit Loans is required pursuant to this subsection 2.5, the Company shall notify the Administrative Agent in the manner provided for Revolving Credit Loans in subsection 2.3, except that the minimum borrowing amounts set forth in subsection 2.3 shall not be applicable to the extent that such minimum borrowing amounts exceed the amounts of Revolving Credit Loans required to be made pursuant to this subsection 2.5. SECTION 3. AMOUNT AND TERMS OF CAF ADVANCES 3.1 CAF Advances. Subject to the terms and conditions of this Agreement, the Company may borrow CAF Advances in U.S. Dollars from time to time on any Business Day during the CAF Advance Availability Period. CAF Advances may be borrowed in amounts such that the Aggregate Total Outstandings of all the Lenders at any time shall not exceed the Aggregate Revolving Credit Commitments at such time. Within the limits and on the conditions hereinafter set forth with respect to CAF Advances, the Company from time to time may borrow, repay and reborrow CAF Advances. 3.2 Procedure for CAF Advance Borrowing. (a) The Company shall request CAF Advances by delivering a CAF Advance Request to the Administrative Agent, not later than 12:00 Noon, New York City time, four Business Days prior to the proposed Borrowing Date (in the case of a LIBO Rate CAF Advance Request), and not later than 10:00 A.M., New York City time one Business Day prior to the proposed Borrowing Date (in the case of a Fixed Rate CAF Advance Request). Each CAF Advance Request in respect of any Borrowing Date may solicit bids for CAF Advances on such Borrowing Date in an aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and having not more than three alternative CAF Advance Maturity Dates. The CAF Advance Maturity Date for each CAF Advance shall be the date set forth therefor in the relevant CAF Advance Request, which date shall be (i) not less than 14 days nor more than 360 days after the Borrowing Date therefor, in the case of a Fixed Rate CAF Advance, (ii) one, two, three or six months after the Borrowing Date therefor, in the case of a LIBO CAF Advance and (iii) not later than the Revolving Credit Termination Date, in the case of any CAF Advance. The Administrative Agent shall notify each Lender promptly by facsimile transmission of the contents of each CAF Advance Request received by the Administrative Agent. 20 (b) In the case of a LIBO Rate CAF Advance Request, upon receipt of notice from the Administrative Agent of the contents of such CAF Advance Request, each Lender may elect, in its sole discretion, to offer irrevocably to make one or more CAF Advances at the applicable LIBO Rate plus (or minus) a margin determined by such Lender in its sole discretion for each such CAF Advance. Any such irrevocable offer shall be made by delivering a CAF Advance Offer to the Administrative Agent, before 10:30 A.M., New York City time, on the day that is three Business Days before the proposed Borrowing Date, setting forth: (i) the maximum amount of CAF Advances for each CAF Advance Maturity Date and the aggregate maximum amount of CAF Advances for all CAF Advance Maturity Dates which such Lender would be willing to make (which amounts may, subject to subsection 3.1, exceed such Lender's Revolving Credit Commitment); and (ii) the margin above or below the applicable LIBO Rate at which such Lender is willing to make each such CAF Advance. The Administrative Agent shall advise the Company before 11:00 A.M., New York City time, on the date which is three Business Days before the proposed Borrowing Date of the contents of each such CAF Advance Offer received by it. If the Administrative Agent, in its capacity as a Lender, shall elect, in its sole discretion, to make any such CAF Advance Offer, it shall advise the Company of the contents of its CAF Advance Offer before 10:15 A.M., New York City time, on the date which is three Business Days before the proposed Borrowing Date. (c) In the case of a Fixed Rate CAF Advance Request, upon receipt of notice from the Administrative Agent of the contents of such CAF Advance Request, each Lender may elect, in its sole discretion, to offer irrevocably to make one or more CAF Advances at a rate of interest determined by such Lender in its sole discretion for each such CAF Advance. Any such irrevocable offer shall be made by delivering a CAF Advance Offer to the Administrative Agent before 9:30 A.M., New York City time, on the proposed Borrowing Date, setting forth: (i) the maximum amount of CAF Advances for each CAF Advance Maturity Date, and the aggregate maximum amount for all CAF Advance Maturity Dates, which such Lender would be willing to make (which amounts may, subject to subsection 3.1, exceed such Lender's Revolving Credit Commitment); and (ii) the rate of interest at which such Lender is willing to make each such CAF Advance. The Administrative Agent shall advise the Company before 10:00 A.M., New York City time, on the proposed Borrowing Date of the contents of each such CAF Advance Offer received by it. If the Administrative Agent, in its capacity as a Lender, shall elect, in its sole discretion, to make any such CAF Advance Offer, it shall advise the Company of the contents of its CAF Advance Offer before 9:15 A.M., New York City time, on the proposed Borrowing Date. (d) Before 11:30 A.M., New York City time, three Business Days before the proposed Borrowing Date (in the case of CAF Advances requested by a LIBO Rate CAF Advance Request) and before 10:30 A.M., New York City time, on the proposed Borrowing Date (in the case of CAF Advances requested by a Fixed Rate CAF Advance Request), the Company, in its absolute discretion, shall: (i) cancel such CAF Advance Request by giving the Administrative Agent telephone notice to that effect, or (ii) by giving telephone notice to the Administrative Agent (immediately confirmed by delivery to the Administrative Agent of a CAF Advance Confirmation by facsimile transmission) (A) subject to the provisions of subsection 3.2(e), accept one or more of the offers made by any 21 Lender or Lenders pursuant to subsection 3.2(b) or subsection 3.2(c), as the case may be, and (B) reject any remaining offers made by Lenders pursuant to subsection 3.2(b) or subsection 3.2(c), as the case may be. (e) The Company's acceptance of CAF Advances in response to any CAF Advance Offers shall be subject to the following limitations: (i) the amount of CAF Advances accepted for each CAF Advance Maturity Date specified by any Lender in its CAF Advance Offer shall not exceed the maximum amount for such CAF Advance Maturity Date specified in such CAF Advance Offer; (ii) the aggregate amount of CAF Advances accepted for all CAF Advance Maturity Dates specified by any Lender in its CAF Advance Offer shall not exceed the aggregate maximum amount specified in such CAF Advance Offer for all such CAF Advance Maturity Dates; (iii) the Company may not accept offers for CAF Advances for any CAF Advance Maturity Date in an aggregate principal amount in excess of the maximum principal amount requested in the related CAF Advance Request; and (iv) if the Company accepts any of such offers, it must accept offers based solely upon pricing for each relevant CAF Advance Maturity Date and upon no other criteria whatsoever, and if two or more Lenders submit offers for any CAF Advance Maturity Date at identical pricing and the Company accepts any of such offers but does not wish to (or, by reason of the limitations set forth in subsection 3.1, cannot) borrow the total amount offered by such Lenders with such identical pricing, the Company shall accept offers from all of such Lenders in amounts allocated among them pro rata according to the amounts offered by such Lenders (with appropriate rounding, in the sole discretion of the Company, to assure that each accepted CAF Advance is an integral multiple of $1,000,000); provided that if the number of Lenders that submit offers for any CAF Advance Maturity Date at identical pricing is such that, after the Company accepts such offers pro rata in accordance with the foregoing provisions of this paragraph, the CAF Advance to be made by any such Lender would be less than $5,000,000 principal amount, the number of such Lenders shall be reduced by the Administrative Agent by lot until the CAF Advances to be made by each such remaining Lender would be in a principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. (f) If the Company notifies the Administrative Agent that a CAF Advance Request is cancelled pursuant to subsection 3.2(d)(i), the Administrative Agent shall give prompt telephone notice thereof to the Lenders. (g) If the Borrower accepts pursuant to subsection 3.2(d)(ii) one or more of the offers made by any Lender or Lenders, the Administrative Agent promptly shall notify each Lender which has made such an offer of (i) the aggregate amount of such CAF Advances to be made on such Borrowing Date for each CAF Advance Maturity Date and (ii) the acceptance or rejection of any offers to make such CAF Advances made by such Lender. Before 12:00 Noon, New York City time, on the Borrowing Date specified in the applicable CAF Advance Request, each Lender whose CAF Advance Offer has been accepted shall make available to the Administrative Agent at its New York office set forth in subsection 14.2 the amount of CAF Advances to be made by such Lender, in immediately available funds. The Administrative Agent will make such funds available to the Company as soon as practicable on such date at such office of the Administrative Agent. As soon as practicable after each Borrowing Date, the Administrative Agent shall notify each Lender of the aggregate amount of CAF Advances advanced on such Borrowing Date and the respective CAF Advance Maturity Dates thereof. 22 3.3 CAF Advance Payments; Evidence of Debt. The Company unconditionally promises to pay to the Administrative Agent, for the account of each Lender which has made a CAF Advance, on the applicable CAF Advance Maturity Date the then unpaid principal amount of such CAF Advance. The Company shall not have the right to prepay any principal amount of any CAF Advance without the consent of the Lender to which such CAF Advance is owed. (b) The Company unconditionally promises to pay interest on the unpaid principal amount of each CAF Advance from the Borrowing Date to applicable CAF Advance Maturity Date at the rate of interest specified in the CAF Advance Offer accepted by the Borrower in connection with such CAF Advance (calculated on the basis of a 360-day year for actual days elapsed), payable on each applicable CAF Advance Interest Payment Date. (c) If any principal of, or interest on, any CAF Advance shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such CAF Advance shall, without limiting any rights of any Lender under this Agreement, bear interest from the date on which such payment was due at a rate per annum which is 2% above the rate which would otherwise be applicable to such CAF Advance until the stated CAF Advance Maturity Date of such CAF Advance, and for each day thereafter at a rate per annum which is 2% above the Base Rate, in each case until paid in full (as well after as before judgment). Interest accruing pursuant to this paragraph (c) shall be payable from time to time on demand. (d) Each Lender shall maintain in accordance with its usual practice appropriate records evidencing indebtedness of the Company to such Lender resulting from each CAF Advance of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time in respect of such CAF Advance. (e) The Administrative Agent shall maintain the Register pursuant to subsection 14.6(d), and a record therein for each Lender, in which shall be recorded (i) the amount of each CAF Advance made by such Lender, the CAF Advance Maturity Date thereof, the interest rate applicable thereto and each CAF Advance Interest Payment Date applicable thereto, and (ii) the amount of any sum received by the Administrative Agent hereunder from the Company on account of such CAF Advance. (f) The entries made in the Register and the records of each Lender maintained pursuant to this subsection 3.3 shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Company therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such record, or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) the CAF Advances made by such Lender in accordance with the terms of this Agreement. (g) The Company agrees that, upon the request to the Administrative Agent by any Lender, the Company will execute and deliver to such Lender a promissory note of the Company evidencing the CAF Advances of such Lender, substantially in the form of Exhibit A-2 with appropriate insertions as to date and principal amount (each, a "CAF Advance Note"); provided, that the delivery of such CAF Advance Notes shall not be a condition precedent to the Closing Date. 3.4 Certain Restrictions. A CAF Advance Request may request offers for CAF Advances to be made on not more than one Borrowing Date and to mature on not more than three CAF Advance Maturity Dates. No CAF Advance Request may be submitted earlier than three Business Days after submission of any other CAF Advance Request. 23 SECTION 4. AMOUNT AND TERMS OF MULTICURRENCY COMMITMENT 4.1 Multicurrency Commitments. Subject to the terms and conditions hereof, each Multicurrency Lender severally agrees to make revolving credit loans (each, a "Multicurrency Loan") in U.S. Dollars or any Available Foreign Currency to any Borrower from time to time during the Revolving Credit Commitment Period so long as after giving effect thereto and to any concurrent repayment or prepayment of Loans (a) the Available Multicurrency Commitment of each Multicurrency Lender is greater than or equal to zero, (b) the aggregate outstanding principal amount of Multicurrency Loans does not exceed an amount of which the U.S. Dollar Equivalent is $120,000,000 and (c) the Aggregate Total Outstandings of all Lenders do not exceed the Aggregate Revolving Credit Commitments. During the Revolving Credit Commitment Period, any Borrower may use the Multicurrency Commitments by borrowing, repaying the Multicurrency Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. 4.2 Repayment of Multicurrency Loans; Evidence of Debt. (a) Each Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Multicurrency Lender the then unpaid principal amount of each Multicurrency Loan of such Multicurrency Lender to such Borrower on the Revolving Credit Termination Date and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement. Each Borrower hereby further agrees to pay interest on the unpaid principal amount of the Multicurrency Loans advanced to it and from time to time outstanding until payment thereof in full at the rates per annum, and on the dates, set forth in subsection 6.1. (b) Each Multicurrency Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Multicurrency Lender resulting from each Multicurrency Loan of such Multicurrency Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Multicurrency Lender from time to time under this Agreement. (c) The Administrative Agent shall maintain the Register pursuant to subsection 14.6(d), and a subaccount therein for each Multicurrency Lender, in which shall be recorded (i) the amount of each Multicurrency Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Multicurrency Lender hereunder in respect of the Multicurrency Loans and (iii) both the amount of any sum received by the Administrative Agent hereunder from each Borrower in respect of the Multicurrency Loans and each Multicurrency Lender's share thereof. (d) The entries made in the Register and the accounts of each Multicurrency Lender maintained pursuant to subsection 4.2(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded; provided, however, that the failure of any Multicurrency Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of such Borrower to repay (with applicable interest) the Multicurrency Loans made to such Borrower by such Multicurrency Lender in accordance with the terms of this Agreement. 4.3 Procedure for Multicurrency Borrowing. Any Borrower may request the Multicurrency Lenders to make Multicurrency Loans during the Revolving Credit Commitment Period on any Business Day provided that such Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00 A.M., London time, three Business Days prior to the requested Borrowing Date), specifying in each case (i) the amount and currency to be borrowed, (ii) the requested Borrowing Date and (iii) the length of the initial Interest Period therefor. Each 24 borrowing under the Multicurrency Commitments shall be in an amount in U.S. Dollars equal to, or an amount in an Available Foreign Currency of which the U.S. Dollar Equivalent is equal to, at least $5,000,000 (or, if the then Aggregate Available Multicurrency Commitments are less than $5,000,000, such lesser amount). Upon receipt of any such notice from any Borrower, the Administrative Agent shall promptly notify each Multicurrency Lender thereof. Not later than 12:00 P.M. Noon, London time, on the requested Borrowing Date, each Multicurrency Lender shall make an amount equal to its Multicurrency Commitment Percentage of the principal amount of Multicurrency Loans requested to be made on such Borrowing Date available to the Administrative Agent at the Administrative Agent's funding office for the applicable currency specified by the Administrative Agent from time to time by notice to the Multicurrency Lenders and in immediately available funds. The amounts made available by each Multicurrency Lender will then be made available to the relevant Borrower at the funding office for the relevant Available Foreign Currency specified from time to time by the Administrative Agent by notice to the Multicurrency Lenders and in like funds as received by the Administrative Agent. 4.4 Termination or Reduction of Multicurrency Commitments. The Company shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Multicurrency Commitments or, from time to time, to reduce the amount of the Multicurrency Commitments; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Available Multicurrency Commitment of any Multicurrency Lender would be less than zero. Any such reduction shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Multicurrency Commitments then in effect. SECTION 5. LOCAL CURRENCY FACILITIES 5.1 Terms of Local Currency Facilities. (a) Subject to the provisions of this Section 5, the Company may in its discretion from time to time designate any Subsidiary of the Company organized under the laws of any jurisdiction outside the United States as a "Local Currency Borrower" and any Qualified Credit Facility to which such Local Currency Borrower and any one or more Lenders (or its affiliates, agencies or branches) is a party as a "Local Currency Facility", with the consent of each such Lender in its sole discretion, by delivering a Local Currency Facility Addendum to the Administrative Agent and the Lenders (through the Administrative Agent) executed by the Company, each such Local Currency Borrower and each such Lender, provided, that on the effective date of such designation no Event of Default shall have occurred and be continuing. Concurrently with the delivery of a Local Currency Facility Addendum, the Company or the relevant Local Currency Borrower shall furnish to the Administrative Agent copies of all documentation executed and delivered by such Local Currency Borrower in connection therewith, together with, if applicable, an English translation thereof. Except as otherwise provided in this Section 5 or in the definition of "Qualified Credit Facility" in subsection 1.1, the terms and conditions of each Local Currency Facility shall be determined by mutual agreement of the relevant Local Currency Borrower(s) and Local Currency Lender(s). The documentation governing each Local Currency Facility shall (i) contain an express acknowledgement that such Local Currency Facility shall be subject to the provisions of this Section 5 and (ii) if more than one Lender is a party thereto, designate a Local Currency Facility Agent for such Local Currency Facility. Each of the Company and, by agreeing to any Local Currency Facility designation as contemplated hereby, each relevant Local Currency Lender (if any) party thereto which is an affiliate, branch or agency of a Lender, acknowledges and agrees that each reference in this Agreement to any Lender shall, to the extent applicable, be deemed to be a reference to such Local Currency Lender. In the event of any inconsistency between the terms of this Agreement and the terms of any Local Currency Facility, the terms of this Agreement shall prevail. 25 (b) The documentation governing each Local Currency Facility shall set forth (i) the maximum amount (expressed in U.S. Dollars) available to be borrowed from all Local Currency Lenders under such Local Currency Facility (as the same may be reduced from time to time, a "Local Currency Facility Maximum Borrowing Amount") and (ii) with respect to each Local Currency Lender party to such Local Currency Facility, the maximum amount (expressed in U.S. Dollars) available to be borrowed from such Local Currency Lender thereunder (as the same may be reduced from time to time, a "Local Currency Lender Maximum Borrowing Amount"). (c) Except as otherwise required by applicable law, in no event shall the Local Currency Lenders party to a Local Currency Facility have the right to accelerate the Local Currency Loans outstanding thereunder, or to terminate their commitments (if any) to make such Local Currency Loans prior to the earlier of the stated termination date in respect thereof or the Revolving Credit Termination Date, except, in each case, in connection with an acceleration of the Loans or a termination of the Commitments pursuant to Section 12 hereof, provided, that nothing in this paragraph (c) shall be deemed to require any Local Currency Lender to make a Local Currency Loan if the applicable conditions precedent to the making of such Local Currency Loan set forth in the documentation governing the relevant Local Currency Facility have not been satisfied. No Local Currency Loan may be made under a Local Currency Facility if (i) after giving effect thereto, the conditions precedent in subsection 8.2 hereof would not be satisfied or (ii) after giving effect to the making of such Local Currency Loan and the simultaneous application of the proceeds thereof, the Aggregate Total Outstandings of all Lenders at any time exceed the Aggregate Revolving Credit Commitments. (d) The relevant Local Currency Borrower shall furnish to the Administrative Agent copies of any amendment, supplement or other modification (including any change in commitment amounts or in the Local Currency Lenders participating in any Local Currency Facility) to the terms of any Local Currency Facility promptly after the effectiveness thereof (together with, if applicable, an English translation thereof). If any such amendment, supplement or other modification to a Local Currency Facility shall (i) add a Local Currency Lender as a Local Currency Lender thereunder or (ii) change the Local Currency Facility Maximum Borrowing Amount or any Local Currency Lender Maximum Borrowing Amount with respect thereto, the Company shall promptly furnish an appropriately revised Local Currency Facility Addendum, executed by the Company, the relevant Local Currency Borrower and the affected Local Currency Lenders (or any agent acting on their behalf), to the Administrative Agent and the Lenders (through the Administrative Agent). (e) The Company may terminate its designation of a facility as a Local Currency Facility, with the consent of each Local Currency Lender party thereto in its sole discretion, by written notice to the Administrative Agent, which notice shall be executed by the Company, the relevant Local Currency Borrower and each Local Currency Lender party to such Local Currency Facility (or any agent acting on their behalf). Once notice of such termination is received by the Administrative Agent, such Local Currency Facility and the loans and other obligations outstanding thereunder shall immediately cease to be subject to the terms of this Agreement. 5.2 Reporting of Local Currency Outstandings. (a) On the date of the making of any Local Currency Loan having a maturity of 30 or more days to a Local Currency Borrower and on the last Business Day of each month on which a Local Currency Borrower has any outstanding Local Currency Loans, the Local Currency Facility Agent for such Local Currency Borrower shall deliver to the Administrative Agent a Notice of Local Currency Outstandings. The Administrative Agent will, at the request of any Local Currency Facility Agent, advise such Local Currency Facility Agent of the Exchange Rate used by the Administrative Agent in calculating the U.S. Dollar Equivalent of Local Currency Loans under the related Local Currency Facility on any date. 26 (b) For purposes of any calculation under this Agreement in which the amount of the Aggregate Local Currency Outstandings of any Lender is a component, the Administrative Agent shall make such calculation on the basis of the Notices of Local Currency Outstandings received by it at least two Business Days prior to the date of such calculation. SECTION 6. GENERAL PROVISIONS APPLICABLE TO THE LOANS 6.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such Interest Period plus the Applicable Margin in effect for such day. (b) Each Base Rate Loan shall bear interest for each day that it is outstanding at a rate per annum equal to the Base Rate for such day. (c) Each Multicurrency Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the applicable Eurocurrency Rate determined for such Interest Period plus the Applicable Margin in effect for such day. (d) Each CAF Advance shall bear interest at the rate specified in the CAF Advance Offer accepted by the Borrower in connection with such CAF Advance, on terms set forth in subsection 3.3(b). (e) If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) any fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or, if higher, in the case of amounts required to be paid in U.S. Dollars, the rate described in paragraph (b) of this subsection plus 2%. (f) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (e) of this subsection shall be payable from time to time on demand. 6.2 Conversion and Continuation Options. (a) The Company may elect from time to time to convert outstanding Eurodollar Loans (in whole or in part) to Base Rate Loans by giving the Administrative Agent at least two Business Days' prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Company may elect from time to time to convert outstanding Base Rate Loans (in whole or in part) to Eurodollar Loans by giving the Administrative Agent at least three Business Days' prior irrevocable notice of such election. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. All or any part of outstanding Eurodollar Loans and Base Rate Loans may be converted as provided herein, provided that (i) no Base Rate Loan may be converted into a Eurodollar Loan when any Default or Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders have determined that such conversion is not appropriate, (ii) any such conversion may only be made if, after giving effect thereto, subsection 6.3 shall not have been violated and (iii) no Base Rate Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Revolving Credit Termination Date. (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Company giving notice to the Administrative Agent of the length of the next Interest Period to be applicable to such Loans in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 27 1.1, provided that no Eurodollar Loan may be continued as such (i) when any Default or Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders have determined that such continuation is not appropriate, (ii) if, after giving effect thereto, subsection 6.3 would be contravened or (iii) after the date that is one month prior to the Revolving Credit Termination Date, and provided, further, that if the Company shall fail to give such notice or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. (c) Any Multicurrency Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the relevant Borrower giving the Administrative Agent at least two Business Days' prior irrevocable notice of such election, provided, that if the relevant Borrower shall fail to give such notice or if any Default or Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders have determined that such continuation would not be appropriate, such Multicurrency Loans shall automatically be continued for an Interest Period of one month. 6.3 Minimum Amounts of Tranches. All borrowings, conversions and continuations of Revolving Credit Loans and Multicurrency Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, immediately after giving effect thereto, (a) the aggregate principal amount of the Eurodollar Loans comprising each Tranche shall be equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof, (b) the aggregate principal amount of the Multicurrency Loans comprising each Tranche shall be in an amount which is, or of which the U.S. Dollar Equivalent is, at least $5,000,000 and (c) there shall not be more than twelve Tranches at any one time outstanding. 6.4 Optional and Mandatory Prepayments. (a) The Company may at any time and from time to time prepay Revolving Credit Loans, in whole or in part, upon at least three Business Days' irrevocable notice to the Administrative Agent (in the case of Eurodollar Loans) and at least same-day irrevocable notice to the Administrative Agent (in the case of Base Rate Loans), specifying the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof, and, if a combination thereof, the amount allocable to each. Upon the receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to subsection 6.12. Partial prepayments of the Revolving Credit Loans shall be in an aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof. (b) The Borrowers may at any time and from time to time prepay, without premium or penalty, the Multicurrency Loans, in whole or in part, upon at least three Business Days' irrevocable notice to the Administrative Agent specifying the date and amount of prepayment. Upon the receipt of any such notice, the Administrative Agent shall promptly notify each Multicurrency Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Partial prepayments of Multicurrency Loans shall be in an aggregate principal amount of which the U.S. Dollar Equivalent is at least $5,000,000. (c) (i) If, at any time during the Revolving Credit Commitment Period, for any reason the Aggregate Total Outstandings of all Lenders exceed the Aggregate Revolving Credit Commitments then in effect, (A) the Company shall, without notice or demand, immediately prepay the Revolving Credit Loans and/or (B) the Borrowers shall, without notice or demand, immediately prepay the Multicurrency Loans such that the sum of (I) the aggregate principal amount of the Revolving Credit Loans so prepaid and (II) the U.S. Dollar 28 Equivalent of the aggregate principal amount of the Multicurrency Loans so prepaid, equals or exceeds the amount of such excess. (ii) If, at any time during the Revolving Credit Commitment Period, for any reason either (A) the Aggregate Total Outstandings of all Multicurrency Lenders exceed the aggregate Revolving Credit Commitments of the Multicurrency Lenders or (B) the Aggregate Multicurrency Outstandings exceed the aggregate Multicurrency Commitments, (I) the Company shall, without notice or demand, immediately prepay the Revolving Credit Loans and/or, as applicable, (II) the Borrowers shall, without notice or demand, immediately prepay Multicurrency Loans in amounts such that the sum of (x) the aggregate principal amount of the Revolving Credit Loans so prepaid and (y) the U.S. Dollar Equivalent of the Multicurrency Loans so prepaid, equals or exceeds the amount of such excess. (d) Each prepayment of Loans pursuant to this subsection 6.4 shall be accompanied by accrued and unpaid interest on the amount prepaid to the date of prepayment and any amounts payable under subsection 6.12 in connection with such prepayment. (e) Notwithstanding the foregoing, mandatory prepayments of Revolving Credit Loans or Multicurrency Loans that would otherwise be required pursuant to this subsection 6.4 solely as a result of fluctuations in Exchange Rates from time to time shall only be required to be made pursuant to this subsection 6.4 on the last Business Day of each month on the basis of the Exchange Rate in effect on such Business Day. (f) Prepayments of the Loans pursuant to this subsection 6.4 shall be applied as follows: (i) in the case of prepayments made by the Company, first, to prepay Base Rate Loans then outstanding and second, to prepay Eurodollar Loans then outstanding and (ii) in case of prepayments made by a Borrower, to prepay Multicurrency Loans borrowed by such Borrower. 6.5 Facility Fees; Other Fees. (a) The Company agrees to pay to the Administrative Agent for the account of each Lender, a facility fee for the period from and including the Closing Date to but excluding the Revolving Credit Termination Date (or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein), computed at a variable rate on the average daily amount of the Revolving Credit Commitment of such Lender during the period for which payment is made, which rate will vary according to the S&P Bond Rating and the Moody's Bond Rating as follows: Bond Rating Facility (S&P/Moody's) Level Fee Rate BBB-/Baa3 or higher I .1500% BB+/Ba1 II .2000% BB/Ba2 III .2500% BB-/Ba3 or lower IV .3750%; provided that if the ratings of such rating agencies do not fall within the same Level, the rate applicable to such day will be (i) if the lower rating is one Level lower than the higher rating, the rate opposite such lower Level, and (ii) if the lower rating is two or more Levels lower than the higher rating, the rate opposite the next higher Level from such lower Level, provided, further, that in the event a rating is not available from either rating agency, such rating agency will be deemed to have assigned its lowest rating. Such facility fees shall be payable quarterly in arrears on the last day of each March, June, September and December and on the Revolving Credit Termination Date or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein, commencing on the first of such dates to occur after the date hereof. 29 (b) The Company shall pay (without duplication of any other fee payable under this subsection 6.5) to Chase, for its accounts, all fees separately agreed to by the Company and Chase. (c) The Company shall (without duplication of any other fee payable under this subsection 6.5) pay to the Administrative Agent all fees separately agreed to by the Company and the Administrative Agent. 6.6 Computation of Interest and Fees. (a) Interest based on the Eurodollar Rate, the Eurocurrency Rate or (when it is based on the Federal Funds Effective Rate) the Base Rate shall be calculated on the basis of a 360-day year for the actual days elapsed; and facility fees and interest (other than as specified above) shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Company and the Lenders of each determination of a Eurodollar Rate or a Eurocurrency Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or a change in the Prime Rate shall become effective as of the opening of business on the day on which such change becomes effective provided that such change becomes effective prior to 5:00 p.m., New York City time, on such day. The Administrative Agent shall as soon as practicable notify the Company and the Lenders of the effective date and the amount of each such change in the Base Rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of a Borrower or any Lender, deliver to such Borrower or such Lender a statement showing in reasonable detail the quotations and calculations used by the Administrative Agent in determining any interest rate pursuant to subsection 6.1(a) or (c). (c) (i) If any Domestic Reference Lender shall for any reason no longer have a Revolving Credit Commitment or any Revolving Credit Loans, such Domestic Reference Lender shall thereupon cease to be a Domestic Reference Lender, and if, as a result, there shall only be one Domestic Reference Lender remaining, the Administrative Agent (after consultation with the Company and the Lenders) shall, by notice to the Company and the Lenders, designate another Lender as a Domestic Reference Lender so that there shall at all times be at least two Domestic Reference Lenders. (ii) If any Multicurrency Reference Lender shall for any reason no longer have a Multicurrency Commitment or any Multicurrency Loans, such Multicurrency Reference Lender shall thereupon cease to be a Multicurrency Reference Lender, and if, as a result, there shall only be one Multicurrency Reference Lender remaining, the Administrative Agent (after consultation with the Company and the Lenders) shall, by notice to the Company and the Lenders, designate another Multicurrency Lender as a Multicurrency Reference Lender so that there shall at all times be at least two Multicurrency Reference Lenders. (d) Each Reference Lender shall use its best efforts to furnish quotations of rates to the Administrative Agent as contemplated hereby. If any of the Reference Lenders shall be unable or shall otherwise fail to supply such rates to the Administrative Agent upon its request, the rate of interest shall, subject to the provisions of subsection 6.7, be determined on the basis of the quotations of the remaining Reference Lenders or Reference Lender, as applicable. 6.7 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market generally, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate or the 30 Eurocurrency Rate with respect to the currency in which a Loan or a requested Loan is denominated (the "Affected Currency"), as the case may be, for such Interest Period, or (b) the Administrative Agent has received notice from the Required Lenders or the Majority Multicurrency Lenders, as the case may be, that the Eurodollar Rate or Eurocurrency Rate, as the case may be, determined or to be determined with respect to the Affected Currency for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as certified by such Lenders) of making or maintaining their Eurodollar Loans or Multicurrency Loans, as the case may be, during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Company and the Lenders as soon as practicable thereafter. If such notice is given (i) any Eurodollar Loans or Multicurrency Loans, as the case may be, requested to be made on the first day of such Interest Period shall be made as Base Rate Loans in U.S. Dollars, (ii) any Revolving Credit Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as Base Rate Loans, (iii) any outstanding Eurodollar Loans shall be converted on the first day of such Interest Period to Base Rate Loans and (iv) any Multicurrency Loans to which such Interest Period relates shall be repaid on the first day of such Interest Period. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans or Multicurrency Loans shall be made or continued as such, nor shall the Company have the right to convert Base Rate Loans to Eurodollar Loans, as the case may be, provided that Loans may continue to be made, converted or continued, as the case may be, in U.S. Dollars or Available Foreign Currencies other than the Affected Currency. (c) In the event that the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Company) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining the LIBO Rate with respect to a proposed CAF Advance to be made pursuant to a LIBO Rate CAF Advance Request, the Administrative Agent shall forthwith give notice of such determination to the Company and the affected Lenders at least two Business Days prior to the proposed Borrowing Date, and such CAF Advances shall not be made as LIBO Rate CAF Advances on such Borrowing Date. Until any such notice has been withdrawn by the Administrative Agent, no further LIBO Rate CAF Advance Requests shall be submitted by the Company. 6.8 Pro Rata Treatment and Payments. (a) (i) Except as provided in subsection 2.5, each borrowing of Revolving Credit Loans by the Company from the Lenders hereunder shall be made pro rata according to the Funding Commitment Percentages of the Lenders in effect on the date of such borrowing. Each payment by the Company on account of any facility fee hereunder shall be allocated by the Administrative Agent among the Lenders in accordance with the respective amounts which such Lenders are entitled to receive pursuant to subsection 6.5(a). Any reduction of the Revolving Credit Commitments of the Lenders shall be allocated by the Administrative Agent among the Lenders pro rata according to the Revolving Credit Commitment Percentages of the Lenders. Except as provided in subsection 2.5, each payment (other than any optional prepayment) by the Company on account of principal of the Revolving Credit Loans or the CAF Advances shall be allocated by the Administrative Agent pro rata according to the respective principal amounts thereof then due and owing to each Lender. Each optional prepayment by the Company on account of principal of or interest on the Revolving Credit Loans shall be allocated by the Administrative Agent pro rata according to the respective outstanding principal amounts thereof. All payments (including prepayments) to be made by the Company hereunder in respect of amounts denominated in Dollars, whether on account of principal, interest, fees or otherwise, shall be made without set-off or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Administrative Agent's office specified in subsection 14.2, in 31 Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders entitled to receive the same promptly upon receipt in like funds as received. (ii) Each borrowing of Multicurrency Loans by any Borrower shall be made, and any reduction of the Multicurrency Commitments shall be allocated by the Administrative Agent, pro rata according to the Multicurrency Commitment Percentages of the Multicurrency Lenders in effect on the date of such Loans or reductions. Each payment (including each prepayment) by a Borrower on account of principal of and interest on Multicurrency Loans shall be allocated by the Administrative Agent pro rata according to the respective principal amounts of the Multicurrency Loans then due and owing by such Borrower to each Multicurrency Lender. All payments (including prepayments) to be made by a Borrower on account of Multicurrency Loans hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set-off or counterclaim and shall be made prior to 12:00 P.M. Noon, London time, on the due date thereof to the Administrative Agent, for the account of the Multicurrency Lenders, at the payment office for the currency of such Multicurrency Loans specified from time to time by the Administrative Agent by notice to the Multicurrency Lenders, in the currency of such Multicurrency Loans and in immediately available funds. The Administrative Agent shall distribute such payments to the Multicurrency Lenders entitled to receive the same promptly upon receipt in like funds as received. (iii) If any payment hereunder (other than payments on the Eurodollar Loans or the Multicurrency Loans) becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a Eurodollar Loan or a Multicurrency Loan becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day (and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension) unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a Borrowing Date that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate per annum equal to (i) the daily average Federal Funds Effective Rate (in the case of a borrowing of Revolving Credit Loans or CAF Advances) and (ii) the Administrative Agent's reasonable estimate of its average daily cost of funds (in the case of a borrowing of Multicurrency Loans), in each case for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Lender's share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the applicable Borrower shall repay such Lender's share of such borrowing (together with interest thereon from the date such amount was made available to such Borrower (i) at the rate per annum applicable to Base Rate Loans hereunder (in the case of a borrowing of Revolving Credit Loans or CAF Advances) or (ii) the Administrative Agent's reasonable estimate of its average daily cost of funds plus the Applicable Margin applicable to Multicurrency Loans (in the case of a borrowing of Multicurrency Loans)) to 32 the Administrative Agent not later than three Business Days after receipt of written notice from the Administrative Agent specifying such Lender's share of such borrowing that was not made available to the Administrative Agent. 6.9 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans or Multicurrency Loans, as the case may be, as contemplated by this Agreement, (a) such Lender shall immediately notify the Company and the Agent, (b) the commitment of such Lender hereunder to make Eurodollar Loans or Multicurrency Loans, as the case may be, continue Eurodollar Loans or Multicurrency Loans, as the case may be, as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended until such time as it shall no longer be unlawful for such Lender to make or maintain the affected Loans, (c) as applicable, such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Eurodollar Loans or within such earlier period as may be required by law and (d) as applicable, such Lender's Multicurrency Loans shall be prepaid on the last day of the then current Interest Period with respect thereto. If any such conversion of a Eurodollar Loan or a Multicurrency Loan, as the case may be, occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 6.12. 6.10 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, made subsequent to the date hereof: (i) shall subject such Lender to any tax of any kind whatsoever with respect to this Agreement, any Note, any Eurodollar Loan made by it or any Multicurrency Loan made by it or its obligation to make any Eurodollar Loan or Multicurrency Loan or change the basis of taxation of payments to such Lender in respect thereof (except for taxes covered by subsection 6.11 and changes in rate of tax on the overall net income of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate or the Eurocurrency Rate hereunder, including, without limitation, the imposition of any reserves with respect to Eurocurrency Liabilities under Regulation D of the Board; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or Multicurrency Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the applicable Borrower shall promptly pay such Lender, upon its demand, any additional amount or amounts as will compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Company (with a copy to the Administrative Agent) of the event by reason of which it becomes so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender to the Company (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 33 (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Company (with a copy to the Administrative Agent) of a prompt written request therefor, the Company shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (c) No Lender shall be entitled to compensation under this subsection 6.10 for any costs incurred or reductions suffered with respect to any date that it has such costs unless it shall have notified the Company that it will demand compensation for such costs or reductions under paragraph (a) or (b) above, not more than 120 days after the later of (i) such date and (ii) the date on which it shall have become aware of such costs or reductions; provided that the foregoing shall in no way operate in derogation of the undertaking contained in the penultimate sentence of this paragraph (c). Notwithstanding any other provision of this subsection 6.10, no Lender shall demand compensation for any increased cost or reduction referred to above if it shall not at the time be the general policy or practice of such Lender to demand such compensation in similar circumstances under comparable provisions of other credit agreements. In the event that any Lender determines that any event or circumstances that will lead to a claim under this subsection 6.10 has occurred or will occur, such Lender will use its best efforts to so notify the Company; provided, that any failure to provide such notice shall in no way impair the rights of any Lender to demand and receive compensation under this subsection 6.10, but without prejudice to any claims of the Company for compensation for actual damages sustained as a result of any failure to observe this undertaking. The agreements of this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 6.11 Taxes. (a) All payments of principal and interest made by the Borrowers under this Agreement and any Note shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding income taxes and franchise taxes (imposed in lieu of income taxes) imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement, any Note or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder or under any Note, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates and in the amounts specified in this Agreement, provided, however, that (i) the Company shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof if 34 such Lender fails to comply with the requirements of paragraph (b) of this subsection, and (ii) a Foreign Subsidiary Borrower shall not be required to increase any such amounts payable to any Lender if such Lender fails to comply with the requirements of paragraph (c) of this subsection. Whenever any Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender that is not incorporated or organized under the laws of the United States of America or a state thereof shall: (i) at least five Business Days before the date of the initial payment to be made by the Company under this Agreement to such Lender, deliver to the Company and the Administrative Agent (A) two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, or successor applicable form, as the case may be, certifying that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax; (ii) deliver to the Company and the Administrative Agent two further copies of any such form or certification at least five Business Days before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Administrative Agent and the Company; (iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the Company or the Administrative Agent; and (iv) file amendments to such forms as and when required; and each Lender (or Transferee) that is incorporated or organized under the laws of the United States of America or a State thereof shall provide two properly completed and duly executed copies of Form W-9, or successor applicable form, at the times specified for delivery of forms under paragraph (b)(i) of this subsection, in each case unless an event (including, without limitation, any change in treaty, law or regulation) has occurred after the date such Person becomes a Lender hereunder which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Company and the Administrative Agent; provided, however, that the Company may rely upon such forms provided to the Company for all periods prior to the occurrence of such event. Each Person that shall become a Lender or a Participant pursuant to subsection 14.6 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this subsection, provided that in the case of such Participant, the obligations of such Participant pursuant to this subsection 6.11(b) shall be determined as if such Participant were a Lender, except that such Participant shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased. 35 (c) Each Lender that is not incorporated or organized under the laws of the jurisdiction under which a Foreign Subsidiary Borrower is incorporated or organized shall, upon request by such Foreign Subsidiary Borrower, within a reasonable period of time after such request, deliver to such Foreign Subsidiary Borrower or the applicable governmental or taxing authority, as the case may be, any form or certificate required in order that any payment by such Foreign Subsidiary Borrower under this Agreement or any Notes to such Lender may be made free and clear of, and without deduction or withholding for or on account of any Non-Excluded Tax (or to allow any such deduction or withholding to be at a reduced rate) imposed on such payment under the laws of the jurisdiction under which such Foreign Subsidiary Borrower is incorporated or organized, provided that such Lender is legally entitled to complete, execute and deliver such form or certificate and such completion, execution or submission would not materially prejudice the legal position of such Lender. (d) No Lender shall be entitled to payment under this subsection 6.11 unless it shall have notified the applicable Borrower that it will demand such payment not more than 120 days after the date on which it shall become aware that it was entitled to such payment provided that such notice requirement shall in no way operate in derogation of the undertaking contained in the second following sentence of this subsection 6.11(d). Notwithstanding any other provision of this subsection 6.11, no Lender shall demand any payment under this subsection 6.11 if it shall not at the time be the general policy or practice of such Lender to demand such compensation in similar circumstances under comparable provisions of other credit agreements. In the event that any Lender determines that any event or circumstance that will lead to a claim by it under this subsection 6.11 has occurred or will occur, such Lender will use its best efforts to so notify the Company provided that any failure to provide such notice shall in no way impair the rights of any Lender to demand and receive compensation under this subsection 6.11, but without prejudice to any claims of the Company for failure to observe this undertaking. 6.12 Indemnity. Each Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by such Borrower in payment when due of the principal amount of or interest on any Eurodollar Loan or Multicurrency Loan or LIBO Rate CAF Advance, (b) default by such Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans or Multicurrency Loans or LIBO Rate CAF Advance after such Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (c) default by such Borrower in making any prepayment after such Borrower has given a notice thereof in accordance with the provisions of this Agreement or (d) the making by such Borrower of a prepayment of Eurodollar Loans or Multicurrency Loans on a day which is not the last day of an Interest Period with respect thereto, including, without limitation, in each case, any such loss or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. All payments required to be made by any Borrower to any Lender under this subsection 6.12 shall be made no later than 30 days after receipt by such Borrower of a written notice from such Lender setting forth in reasonable detail the basis upon which such Lender is entitled to 36 receive such payments. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 6.13 Use of Proceeds. The proceeds of the Loans shall be used (a) to refinance the Existing Domestic Credit Agreement and the Existing Multicurrency Credit Agreement, (b) to pay fees and expenses incurred by the Borrowers in connection with this Agreement and (c) for working capital and other general corporate purposes of the Borrowers and their Subsidiaries, including investments and acquisitions. 6.14 Change of Lending Office; Replacement of Lenders. (a) Each Lender agrees that if it makes any demand for payment under subsection 6.10 or 6.11, or if any adoption or change of the type described in subsection 6.9 shall occur with respect to it, it shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its sole discretion) to designate a different lending office if the making of such a designation would reduce or obviate the need for the Borrowers to make payments under subsection 6.10 or 6.11, or would eliminate or reduce the effect of any adoption or change described in subsection 6.9. (b) If at any time Lender makes any demand for payment under subsection 6.10 or 6.11 as a result of any condition described in any such subsection, then the Borrowers may, if such condition continues to exist after such Lender shall have used reasonable efforts pursuant to paragraph (a) of this subsection 6.14 and on 10 Business Days' prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall) assign pursuant to subsection 14.6(c) all of its rights and obligations under this Agreement to another Lender or other bank or financial institution selected by the Company and acceptable to the Administrative Agent for a purchase price equal to the outstanding principal amount of all Loans, accrued interest, fees and other amounts owing to such Lender; provided that (i) the Borrowers shall have no right to replace the Administrative Agent, (ii) neither the Administrative Agent nor any Lender shall have any obligation to the Borrowers to find a replacement Lender or other bank or financial institution, (iii) such replacement must take place no later than 180 days after such Lender shall have made any such demand for payment, (iv) in no event shall any Lender hereby replaced be required to pay or surrender to such replacement Lender or other bank or financial institution any of the fees received by such Lender pursuant to this Agreement, (v) the Borrowers shall pay such amounts demanded under subsection 6.10 or 6.11 to such Lender, together with any amounts as may be required pursuant to subsection 6.12, prior to such Lender being replaced and the payment of such amounts shall be a condition to the replacement of such Lender and (vi) such Lender shall not be required to pay any fees required by subsection 14.6(e) in connection with such replacement, which fees shall be paid by the Company. SECTION 7. REPRESENTATIONS AND WARRANTIES Each of the Company and the Foreign Subsidiary Borrowers (insofar as the representations and warranties set forth below relate respectively to such Foreign Subsidiary Borrower) represents and warrants to the Administrative Agent and each Lender that: 7.1 Financial Condition. The consolidated balance sheets of the Company and its consolidated Subsidiaries as at December 31, 1995 and December 31, 1996, respectively, and the related consolidated statements of earnings, cash flows and shareholders' equity for the fiscal years ended on such dates, reported on by Ernst & Young LLP, copies of which have heretofore been furnished to each Lender, are complete and correct in all material respects and present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such dates, and the consolidated results of their operations and their consolidated cash flows for the fiscal years then ended. The unaudited consolidated balance sheet of the Company and its 37 consolidated Subsidiaries as at March 31, 1997 and the related unaudited consolidated statements of earnings and of cash flows for the three-month period ended on such date, certified by a Responsible Officer, copies of which have heretofore been furnished to each Lender, are complete and correct and present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the three-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein). Neither the Company nor any of its consolidated Subsidiaries (taken as a whole) had, at the date of the most recent balance sheet referred to above, any material Guaranty, contingent liability or liability for taxes, or any long-term lease or unusual forward or long-term commitment, including, without limitation, any interest rate or foreign currency swap or exchange transaction, which is not reflected in the foregoing statements or in the notes thereto. During the period from December 31, 1996 to and including the date hereof there has been no sale, transfer or other disposition by the Company or any of its consolidated Subsidiaries of any material part of its business or property and no purchase or other acquisition of any business or property (including any capital stock of any other Person) material in relation to the consolidated financial condition of the Company and its consolidated Subsidiaries at December 31, 1996, other than any such sale, transfer or other disposition that would have been permitted by this Agreement if this Agreement had been in effect at all times during such period. 7.2 No Change. Since December 31, 1996, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect, except as disclosed in the Company's Annual Report on Form 10-K for fiscal year 1996. 7.3 Corporate Existence; Compliance with Law. Each of the Company and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization except to the extent that, with respect to those Subsidiaries that are not Borrowers hereunder, the lack of such organization, existence or good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (b) has the corporate or other power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged except to the extent that, with respect to those Subsidiaries that are not Borrowers hereunder, the lack of such power, authority or legal right could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (c) is duly qualified as a foreign corporation or other entity 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 except to the extent that the failure to qualify or be in good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.4 Corporate Power; Authorization; Enforceable Obligations. Each Borrower has the corporate or other power and authority, and the legal right, to execute, deliver and perform the Loan Documents to which it is a party and to borrow hereunder and has taken all necessary corporate or other action to authorize the borrowings on the terms and conditions of this Agreement and the Notes to which it is a party and to authorize the execution, delivery and performance of the Loan Documents to which it is a party. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required with respect to the Company or any of its Subsidiaries in connection with the borrowings hereunder or, with the execution, delivery, performance, validity or enforceability of 38 the Loan Documents to which it is a party except for consents which have been obtained and are in full force and effect. This Agreement has been, and each other Loan Document has been or when executed pursuant hereto will be, duly executed and delivered on behalf of each of the applicable Borrowers. This Agreement and each other Loan Document to which a Borrower is a party constitutes a legal, valid and binding obligation of such Person enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and by an implied covenant of good faith and fair dealing. 7.5 No Legal Bar. The execution, delivery and performance of the Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or Contractual Obligation of the Company or of any of its Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation. 7.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby, or (b) which could reasonably be expected to have a Material Adverse Effect. 7.7 No Default. Neither the Company nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 7.8 Ownership of Property; Liens. Each of the Company and its Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien except as permitted by subsection 10.4. 7.9 Intellectual Property. Each of the Company its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect (the "Intellectual Property"). No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Company know of any valid basis for any such claim which, in the aggregate, could reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by the Company and its Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 7.10 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation of the Company or any of its Subsidiaries could reasonably be expected to have a Material Adverse Effect. 7.11 Taxes. Each of the Company and its Subsidiaries has filed or caused to be filed all U.S. tax returns and all other material tax returns which, to the knowledge of the Borrowers, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (i) with respect to which the failure to pay, in the 39 aggregate, would not reasonably be expected to have a Material Adverse Effect or (ii) the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Company or its Subsidiaries, as the case may be); no tax Lien has been filed, and, to the knowledge of the Company, no claim is being asserted, with respect to any such tax, fee or other charge. 7.12 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the United States Federal Reserve System as now and from time to time hereafter in effect or for any purpose which violates the provisions of the Regulations of such Board of Governors (including but not limited to the provisions of Regulation U and Regulation X) or any similar rule of any other Governmental Authority. If any Borrower is requested by any Lender or the Administrative Agent, such Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. 7.13 ERISA. Neither a Reportable Event nor an Accumulated Funding Deficiency has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by an amount which could reasonably be expected to have a Material Adverse Effect, either individually or in the aggregate with all other Single Employer Plans under which such accrued benefits exceed such assets. Neither the Company nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan during the five-year period prior to the date on which this representation is made or deemed made which could, in the aggregate with other such withdrawals during such period, reasonably be expected to have a Material Adverse Effect, and neither the Company nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Company or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or is Insolvent. 7.14 Investment Company Act; Other Regulations. No Borrower is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. No Borrower is subject to any law or regulation which limits its ability to incur Indebtedness. 7.15 Subsidiaries. As of the date hereof, neither the Company nor any other Borrower has any Subsidiary except those Subsidiaries identified on Schedule II to this Agreement. 7.16 Environmental Matters. (a) The facilities and properties owned, leased or operated by the Company and/or any of its Subsidiaries (the "Properties") do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could reasonably be expected to give rise to liability under, any Environmental Law except in either case insofar as such violation or liability, or any aggregation thereof, is not reasonably likely to result in the payment of a Material Environmental Amount. 40 (b) The Properties and all operations at the Properties are in compliance, and have in the last five years been in compliance, in all material respects with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by the Company or any of its Subsidiaries (the "Business") which could materially interfere with the continued operation of the Properties or materially impair the aggregate fair saleable value of the Properties. (c) Neither the Company nor any of its Subsidiaries has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor does the Company or any of its Subsidiaries have knowledge or reason to believe that any such notice will be received or is being threatened except insofar as such notice or threatened notice, or any aggregation thereof, does not involve a matter or matters that is or are reasonably likely to result in the payment of a Material Environmental Amount. (d) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, any Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability on the part of the Company or any Subsidiary under, any applicable Environmental Law except insofar as any such violation or liability referred to in this paragraph, or any aggregation thereof, is not reasonably likely to result in the payment of a Material Environmental Amount. (e) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Company, threatened, under any Environmental Law to which the Company or any Subsidiary is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business except insofar as such proceeding, action, decree, order or other requirement, or any aggregation thereof, is not reasonably likely to result in the payment of a Material Environmental Amount. (f) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of the Company or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably give rise to liability under Environmental Laws except insofar as any such violation or liability referred to in this paragraph, or any aggregation thereof, is not reasonably likely to result in the payment of a Material Environmental Amount. 7.17 Accuracy and Completeness of Information. All information heretofore furnished by each Borrower to the Lenders for purposes of or in connection with this Agreement does not, and all such information hereafter furnished by such Borrower to any Lender for purposes of this Agreement will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made or to be made, in the light of the circumstances under which they were or will be made, not misleading. Prior to the date hereof, each Borrower has disclosed to the Lenders in writing any and all facts which materially and adversely affect (to the extent such Borrower can as of the date hereof reasonably foresee), the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole, or the ability of such Borrower to perform its obligations under the Loan Documents. It is understood that no representation or warranty is made concerning the forecasts, estimates, pro forma information, projections and statements as to anticipated future performance 41 or conditions, and the assumptions on which they were based, contained in any such information, reports, financial statements, exhibits or schedules, except that as of the date such forecasts, estimates, pro forma information, projections and statements were generated, (a) such forecasts, estimates, pro forma information, projections and statements were based on the good faith assumptions of the management of the Company and (b) such assumptions were believed by such management to be reasonable. 7.18 Other Unsecured Indebtedness. The obligations of each of the Borrowers under this Agreement and the Notes and the other Loan Documents rank at least pari passu in right of payment with all other unsecured and unsubordinated Indebtedness of such Borrowers. 7.19 Foreign Subsidiary Borrowers. (a) Each Foreign Subsidiary Borrower will be a direct or indirect, wholly-owned Subsidiary of the Company (excluding director qualifying shares) (or, with the consent of the Majority Multicurrency Lenders, which consent shall not be unreasonably withheld, a direct or indirect, majority-owned Subsidiary of the Company); and (b) Each Foreign Subsidiary Borrower will have, upon becoming a party hereto, full right and authority to enter into this Agreement and each other Loan Document to which it is a party, and to perform all of its obligations under this and each other Loan Document to which it is a party; all of the foregoing actions will have been, prior to any request for Loans by such Borrower, duly authorized by all necessary action on the part of such Borrower; and when such Foreign Subsidiary Borrower becomes a party hereto, this Agreement and each other Loan Document to which it is a party will constitute valid and binding obligations of such Borrower enforceable in accordance with their respective terms except as such terms may be limited by the application of bankruptcy, moratorium, insolvency and similar laws affecting the rights of creditors generally and by equitable principles affecting the availability of specific performance and other remedies. SECTION 8. CONDITIONS PRECEDENT 8.1 Conditions to Initial Loans. The obligation of each Lender to make its initial Loans hereunder is subject to the satisfaction of the following conditions precedent: (a) Loan Documents. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer (or a duly authorized representative) of the Company and each Foreign Subsidiary Borrower that is a party hereto on the Closing Date, with a counterpart or copy for each Lender. (b) Corporate Proceedings. The Administrative Agent shall have received, with a counterpart or copy for each Lender, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of the Company and each other Borrower that is a party hereto on the Closing Date, authorizing (i) the execution, delivery and performance by it of this Agreement and the Loan Documents to which it is a party and (ii) the borrowings by it contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company or such other Borrower, as the case may be, as of the Closing Date, which certificate shall be in form and substance satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (c) Incumbency Certificate. The Administrative Agent shall have received, with a counterpart or copy for each Lender, a certificate of the Company, dated the Closing Date, as to the incumbency and signature of the officers or representatives of each Borrower executing any Loan Document on the Closing Date, satisfactory in form and substance to the Administrative Agent, executed by any of the Chief Executive Officer, the President, the 42 Chief Financial Officer, the Treasurer or the Controller of the Company and the Secretary or any Assistant Secretary (or a duly authorized representative, if such representative is also a duly authorized officer of the Company or otherwise authorized by the Company) of the Company. (d) Corporate Documents. The Administrative Agent shall have received, with a counterpart or copy for each Lender, true and complete copies of the certificate of incorporation and by-laws of the Company and each other Borrower that is a party hereto on the Closing Date, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary or a duly authorized representative of the Company or such other Borrower, as the case may be. (e) Fees. The Administrative Agent shall have received the fees to be received on the Closing Date in connection with this Agreement. (f) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender, the executed legal opinion of Diane L. Kaye, general counsel of the Company, given upon the express instructions of the Company, substantially in the form of Exhibit H. (g) Existing Credit Agreements. All loans, accrued interest and other fees and any other amounts owing to the respective lenders and agents under each of the Existing Domestic Credit Agreement and Existing Multicurrency Credit Agreement shall have been paid in full, and the commitments to make loans thereunder shall have been cancelled. 8.2 Conditions to Each Loan. The agreement of each Lender to make any Loan requested to be made by it on any date (including, without limitation, its initial Loan) is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by the Company and other Borrowers in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date. (c) Foreign Subsidiary Opinion. If such Loan is the initial Loan to a Foreign Subsidiary Borrower, the Administrative Agent shall have received a Foreign Subsidiary Opinion in respect of such Foreign Subsidiary Borrower. (d) Corporate Proceedings. If such Loan is the initial Loan to a Foreign Subsidiary Borrower, the Administrative Agent shall have received, with a counterpart for each Lender, if applicable, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of such Borrower authorizing (i) the execution, delivery and performance by it of this Agreement and the Loan Documents to which it is a party and (ii) the borrowings by it contemplated hereunder, certified by the Secretary or an Assistant Secretary of such Borrower as of the date on which such Loan is requested to be made, which certificate shall be in form and substance satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (e) Incumbency Certificate. If such Loan is the initial Loan to a Foreign Subsidiary Borrower, the Administrative Agent shall have received, with a counterpart for each Lender, a certificate of such Borrower, dated the date on which such Loan is requested to be made, as to the incumbency and signature of the officers or representatives of such Borrower executing any Loan Document, satisfactory in form and substance to the Administrative Agent, executed by any Responsible Officer such Borrower and the Secretary or any 43 Assistant Secretary (or a duly authorized representative, if such representative is also a duty authorized officer of such Borrower or otherwise authorized by such Borrower). (f) Corporate Documents. If such Loan is the initial Loan to a Foreign Subsidiary Borrower, the Administrative Agent shall have received, with a counterpart for each Lender, true and complete copies of the organic documents of such Borrower, certified as of the date on which such Loan is required to be made as complete and correct copies thereof by the Secretary or an Assistant Secretary or a duly authorized representative of such Borrower. (g) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. Each borrowing by a Borrower hereunder shall constitute a representation and warranty by the Company and such Borrower as of the date of such Loan that the conditions contained in this subsection 8.2 have been satisfied. SECTION 9. AFFIRMATIVE COVENANTS The Company and, to the extent related thereto, each Foreign Subsidiary Borrower, hereby covenant and agree that so long as the Commitments remain in effect, any Note remains outstanding and unpaid or any other amount is owing to any Lender or the Administrative Agent hereunder: 9.1 Financial Statements. The Company will furnish to each Lender: (a) as soon as available, but in any event within 120 days after the end of each fiscal year of the Company, a copy of the consolidated balance sheet of the Company and its Subsidiaries as at the end of such year and the related consolidated statements of income and cash flows for such year, setting forth in each case in comparative form the figures for the previous year, certified without qualification or exception by independent public accountants of nationally recognized standing selected by the Company, it being understood and agreed that the delivery of the Company's Annual Report on Form 10-K for such fiscal year signed by a Responsible Officer will satisfy the requirement set forth in this clause; and (b) as soon as available, but in any event within 60 days after the end of each of the first three quarterly periods of each fiscal year of the Company, a copy of the unaudited consolidated condensed balance sheet of the Company and its Subsidiaries as at the end of each such quarter and the related unaudited consolidated condensed statements of income and cash flows of the Company and its Subsidiaries for the portion of the fiscal year through such date, setting forth in each case in comparative form such figures for the previous year, certified by a Responsible Officer, it being understood and agreed that the delivery of the Company's Quarterly Report on Form 10-Q for the relevant fiscal quarter signed by a Responsible Officer will satisfy the requirement set forth in this clause; all such financial statements to be complete and correct in all material respects and prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except for such changes in accounting principles as may be approved by such Responsible Officer and concurred in by the Company's independent public accountants and disclosed therein). 44 9.2 Certificates; Other Information. The Company will furnish to each Lender: (a) concurrently with each delivery of the financial statements referred to in subsections 9.1(a) and (b), a certificate of a Responsible Officer in the form of Exhibit F (i) stating that such officer has no knowledge of any Default or Event of Default except as specified in such certificate and (ii) showing in reasonable detail the calculations supporting such statement in respect of subsections 10.1, 10.2 and 10.3; (b) on or prior to February 28 of each year, a copy of the projections by the Company of the operating budget and cash flow budget of the Company and its Subsidiaries for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer to the effect that such projections have been prepared on a reasonable basis and in good faith, it being understood that no representation or warranty shall be deemed to be made concerning the projections and budgets and the assumptions on which they were based, except that as of the date on which such projections and budgets were generated, (a) they were based on the good faith assumptions of the management of the Company and (b) such assumptions were believed by such management to be reasonable; (c) promptly after the same are sent, copies of all financial statements and reports which the Company sends to its common or preferred stockholders as a class, and promptly after the same are filed, copies of all regular, periodic and special reports which the Company may file with the Securities and Exchange Commission or any successor or analogous Governmental Authority; (d) if requested by the Administrative Agent or by any Lender through the Administrative Agent, promptly after the same is furnished to PBGC, copies of all information furnished by the Company, any Subsidiary or any Commonly Controlled Entity to PBGC, except, in each case, information furnished as to ordinary operational aspects of the business of the Company or any Subsidiary and not relating to any deviation by the Company or any Subsidiary from rules and regulations of PBGC; and (e) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 9.3 Accrual of Liabilities; Payment of Obligations. The Company will maintain, and cause each of its Subsidiaries to maintain, in accordance with GAAP, appropriate reserves for the accrual of taxes and all other obligations, liabilities and claims and pay, discharge or otherwise satisfy, and cause each of its Subsidiaries to pay, discharge or otherwise satisfy, at or before their maturity or before they become delinquent, as the case may be, all obligations except (a) where the same are being contested in good faith by appropriate proceedings diligently pursued or (b) where the failure so to pay, discharge or otherwise satisfy obligations would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.4 Maintenance of Corporate Existence; Maintenance of Properties. The Company will (a) maintain its corporate existence, rights and franchises necessary to continue its business and the corporate existence, rights and franchises necessary to continue the business of each of its Subsidiaries, provided that the foregoing shall not be a limitation (i) on the right of the Company to discontinue any operations if in the opinion of the Company such discontinuance is in the best interest of the Company and would not materially affect the ability of the Company to pay its debts as they become due, (ii) on asset sales permitted under subsection 10.8 and (iii) on the right of any Subsidiary of the Company to merge with or be liquidated into the Company or another Subsidiary of the Company if a Default does not then exist and would not result therefrom; and (b) maintain, and cause each Subsidiary to maintain, the properties which are used or useful in its respective operations in good working order and condition. 45 Insurance. The Company will maintain, and cause each of its Subsidiaries to maintain, insurance with financially sound and reputable companies in such form and upon such terms and in such amounts and against such risks (including liability for bodily injury and property damage) and subject to such deductibles or retentions as in the reasonable opinion of the Company is available on commercially reasonable terms and will provide sound and reasonable protection for the Company's or such Subsidiary's assets and operations. At the Administrative Agent's request, the Company will furnish to the Administrative Agent (with copies for each Lender) certificates of insurance or other evidence that such insurance is being maintained. 9.6 Notices. The Company will (a) promptly give notice in writing to the Administrative Agent (which shall promptly notify each Lender) of the occurrence of any Default or Event of Default under this Agreement, or of the commencement of (i) any material litigation or proceedings affecting the Company or any Subsidiary or (ii) any dispute between the Company or any Subsidiary and any Governmental Authority or any other party if such litigation, proceedings or dispute could reasonably be expected to result in a Material Adverse Effect; and (b) as soon as possible and in any event within 45 days after the Company knows or has reason to know that any Reportable Event (other than a Reportable Event not subject to the provision for 30-day notice to PBGC pursuant to the regulations issued under ERISA) has occurred with respect to any Single Employer Plan or that PBGC or any Borrower or any Commonly Controlled Entity has instituted or will institute proceedings under Title IV of ERISA to terminate any Single Employer Plan, deliver to the Administrative Agent (which shall promptly notify each Lender) a certificate of a Responsible Officer of the Company setting forth details as to such Reportable Event and the action that the Company proposes to take with respect thereto, together with a copy of any notice of such Reportable Event that may be required to be filed with PBGC, or any notice delivered by PBGC evidencing its intent to institute such proceedings or any notice to PBGC that such Plan is to be terminated, as the case may be. For all purposes of clause (b) of this subsection 9.6, the Company shall be deemed to have all knowledge or knowledge of all facts attributable to the administrator of a Single Employer Plan. 9.7 Compliance with Contractual Obligations and Laws. The Company will, and will cause each of its Subsidiaries to, comply with all provisions of any Contractual Obligation, applicable law, rule, regulation, order, writ, judgment, injunction, decree, award or ordinance to which it is subject, except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.8 Access to Books and Inspection. The Company shall keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and give the Administrative Agent and any reasonable number of representatives of the Lenders access, at the Company's principal office, upon reasonable notice during normal business hours to, and permit any such representatives to examine, copy or make excerpts from, any and all books, records and documents in the possession of the Company relating to its affairs and the affairs of the Subsidiaries, and to inspect any of the properties of the Company or the Subsidiaries. Notwithstanding any provision in this subsection, the Company (i) shall be given a reasonable opportunity upon reasonable notice to have an officer or officers of the Company accompany any such representative during any such visit, and (ii) shall not be responsible for any expenses incurred by any such representative. 9.9 Use of Proceeds. The Borrowers shall use the proceeds of the Loans for working capital, acquisitions, refinancing of Indebtedness and other general corporate purposes consistent with the terms of this Agreement. 46 9.10 Environmental Laws. The Company will, and will cause each Subsidiary to, (a) comply with, and ensure compliance by all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws except to the extent that the failure to do so, or any aggregation thereof, is not reasonably likely to result in the payment of a Material Environmental Amount, (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings is not reasonably likely to result in the payment of a Material Environmental Amount and (c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective employees, agents, officers and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Company, any of its Subsidiaries or the Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, investigation and laboratory fees, response costs, court costs, litigation expenses and reasonable attorneys' and consultants' fees, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor. The agreements in clause (c) of this subsection shall survive repayment of the Notes and all other amounts payable hereunder. SECTION 10. NEGATIVE COVENANTS The Company hereby covenants and agrees that so long as the Commitments remain in effect, any Loan remains outstanding and unpaid or any other amount is owing to any Lender or the Administrative Agent hereunder: 10.1 Cash Flow Coverage. The Company will not permit the Cash Flow Coverage to be less than (i) a ratio of 1.25 to 1.00 for (x) the fiscal quarter ended September 30, 1997 or (y) the two consecutive fiscal quarters ended December 31, 1997 or (ii) a ratio of 1.50 to 1.00 for (x) the three consecutive fiscal quarters ended on March 31, 1998 or (y) any period of four fiscal quarters ended on or after June 30, 1998. 10.2 Debt Ratio. The Company will not permit the Debt Ratio at the last day of any fiscal quarter set forth below to be greater than the ratio set forth below for such fiscal quarter: Fiscal Quarter Ending Debt Ratio September 30, 1997 3.75 to 1.00 December 31, 1997 3.75 to 1.00 March 31, 1998 and thereafter 3.50 to 1.00 10.3 Maintenance of Net Worth. The Company will not permit Consolidated Net Worth at any time to be less than $300,000,000. 10.4 Limitation on Liens. The Company will not, nor will it permit any of its Subsidiaries to, create, assume or incur or suffer to be created, assumed or incurred or to exist any Lien on any of its properties or assets, whether now owned or hereafter acquired, provided, however, that the foregoing restriction shall not apply to the following: 47 (a) Liens existing on the Closing Date and described on Schedule III; (b) Liens on property or assets of any corporation existing at the time such corporation becomes a Subsidiary; (c) Liens in favor of the Company or any wholly-owned Subsidiary; (d) Liens in favor of any Governmental Authority to secure progress, advance or other payments pursuant to any contract or provision of any statute; (e) Liens (including, without limitation, the interest of the lessor under any capital lease) on property or assets existing at the time of the acquisition thereof (including acquisition through merger or consolidation) or to secure the payment of all or any part of the purchase price or construction cost thereof or to secure any Indebtedness incurred prior to, at the time of, or within six months after, the acquisition or completion of such property or assets for the purpose of financing all or any part of the purchase price or construction cost thereof; (f) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Lien referred to in the foregoing clauses (a) through (e), inclusive; provided that (i) no such extension, renewal or replacement shall result in an increase in the liabilities secured thereby and (ii) such extension, renewal or replacement Lien shall be limited to all or a part of the same property that secured the Lien so extended, renewed or replaced (plus additions, accessions, replacements and improvements to such property); (g) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently pursued if adequate reserves with respect thereto are maintained on the books of the Company or such Subsidiary, as the case may be, in accordance with GAAP or in the case of a Subsidiary located outside the United States, general accounting principles in effect from time to time in their respective jurisdictions of incorporation; (h) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other like Liens arising in the ordinary course of business (A) which are not overdue for a period of more than 60 days or (B) which are being contested in good faith and by appropriate proceedings diligently pursued if adequate reserves with respect thereto are maintained on the books of the Company or such Subsidiary, as the case may be, in accordance with GAAP; (i) easements, rights-of-way, zoning and similar restrictions and other similar encumbrances or title defects incurred in the ordinary course of business which, in the aggregate, are not greater than $5,000,000 (to the extent the dollar values of such encumbrances are calculable) 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 business of the Company or its Subsidiaries; (j) any attachment or judgment lien, unless the judgment it secures shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 30 days after the expiration of any such stay; (k) pledges or deposits in connection with workers' compensation, unemployment insurance and other social legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements; 48 (l) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (m) liens ratably securing the obligations of the Borrowers to the Lenders hereunder or under the Notes; (n) other Liens incidental to the conduct of the Company's or any Subsidiary's business or the ownership of its property and assets that were incurred in connection with the borrowing of money or the obtaining of advances or credit or capital leases; provided, however, that the indebtedness secured thereby does not exceed in the aggregate for the Company and all Subsidiaries of the Company an amount equal to $30,000,000; and provided, further, that at no time shall the Indebtedness secured by the Liens permitted under this subsection 10.4(n) plus all other Indebtedness of the Company's Subsidiaries be equal to or greater than 40 percent (40%) of Consolidated Net Worth (determined as of the end of the most recent fiscal quarter of the Company); and (o) Liens granted by a special-purpose, wholly-owned Subsidiary of the Company that purchases accounts receivable from the Company and its Subsidiaries to the extent such Liens are granted on such accounts receivable to secure the payment of indebtedness of such wholly-owned Subsidiary. 10.5 Subsidiary Indebtedness. The Company will not permit any Subsidiary to create, incur or suffer to exist any Indebtedness, except Indebtedness incurred by the Borrowers hereunder and Indebtedness of the Company's Subsidiaries which, together with the secured Indebtedness allowed under subsection 10.4(n), shall not exceed forty percent (40%) of Consolidated Net Worth (determined as of the end of the most recent fiscal quarter of the Company). 10.6 Limitation on Mergers. The Company will not, nor will it permit any of its Subsidiaries to, merge or consolidate with or into any other corporation except that any Subsidiary may merge or consolidate (i) with or into the Company (provided that the Company shall be the continuing or surviving corporation), (ii) with or into any one or more wholly-owned Subsidiaries or (iii) with or into any Person to be acquired pursuant to subsection 10.12. 10.7 Multiemployer Plans. The Company will not, as of any date, permit any liability to occur to which the Company or any Commonly Controlled Entity would become subject under ERISA if the Company or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding such date. 10.8 Asset Sales. The Company will not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of all or any portion of its property, assets or business to any Person except for (a) sales of assets in the ordinary course of business, (b) sales of accounts receivable or related contract rights and (c) any other sales of assets, other than the assets set forth on Schedule 10.8, having a book value which, when added to the book value of all other assets sold pursuant to this clause (c) since the date of this Agreement, does not exceed 10% of the Company's Consolidated Net Worth as of the last day of the fiscal quarter ended immediately prior to the date of such sale. 10.9 Limitation on More Restrictive Covenants. The Company shall not enter into any new debt agreement that would contain, nor enter into any amendment, supplement or other modification to any indenture, instrument or other agreement concerning the Funded Debt or any refinancing thereof, if such indenture, instrument or other agreement at the time entered into or after giving effect to any such amendment, supplement or other modification thereto, would contain (a) any covenant or event of default that is more restrictive on 49 any Borrower than those set forth in this Agreement, (b) with respect to the Company, any covenant with respect to financial performance the scope of which is materially different from the covenants respecting such matters set forth in subsections 10.1, 10.2 or 10.3, (c) any covenant which would prohibit the granting of liens on its assets by any Borrower or its Subsidiaries in favor of the Lenders. 10.10 Subsidiary Guaranties. The Company will not, and will not allow any Subsidiary to, make or suffer to exist any Guaranty except (a) any Guaranty existing on the Closing Date listed on Schedule IV attached hereto, including, but not limited to, that certain Guaranty dated as of June 30, 1995 by the Company in favor of Bank of America National Trust and Savings Association, as "Agent" thereunder, and the "Lenders" (as defined therein) and any replacement in whole or in part of any Guaranty listed on Schedule IV in connection with any extension, refinancing or refunding of the Indebtedness guarantied thereby and (b) Guaranties with respect to Indebtedness or other obligations not exceeding $2,000,000 in the aggregate at any one time. 10.11 Affiliates. The Company, will not, nor will it permit any of its Subsidiaries to, enter into any transaction (including, without limitation, the purchase or sale of any property or service) with, or make any payment or transfer to, any Affiliate except in the ordinary course of business and pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arms-length transaction. 10.12 Acquisitions. The Company will not, nor will it permit any of its Subsidiaries to, acquire, in a single transaction or in a series of related transactions, all or substantially all of the equity interests in, or assets of, any other Person, or all or substantially all of the assets constituting a division or business segment of any other Person, except that the Company or any of its Subsidiaries may make any such acquisition if: (a) after giving effect thereto, no Default or Event of Default shall be in existence; and (b) if such acquisition is the acquisition of equity interests of any Person, such acquisition is approved by the board of directors or analogous governing body of such Person. SECTION 11. GUARANTEE 11.1 Guarantee. (a) The Company hereby unconditionally and irrevocably guarantees to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Foreign Subsidiary Borrowers and the Local Currency Borrowers when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. (b) The Company further agrees to pay any and all expenses (including, without limitation, all reasonable fees and disbursements of counsel) which may be paid or incurred by the Administrative Agent, or any Lender in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, the Company under this Section. This Section shall remain in full force and effect until the Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto the Borrowers and the Local Currency Borrower may be free from any Obligations. 50 (c) No payment or payments made by any Borrower or Local Currency Borrower or any other Person or received or collected by the Administrative Agent or any Lender from any Borrower or Local Currency Borrower or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Company hereunder which shall, notwithstanding any such payment or payments, remain liable hereunder for the Obligations until the Obligations are paid in full and the Commitments are terminated. (d) The Company agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any Lender on account of its liability under this Section, it will notify the Administrative Agent and such Lender in writing that such payment is made under this Section for such purpose. 11.2 Right of Set-off. The Administrative Agent and each Lender is hereby irrevocably authorized at any time and from time to time without notice to the Company, any such notice being expressly waived by the Company, to set off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Lender (or any Affiliate of such Lender) to or for the credit or the account of the Company, or any part thereof in such amounts as the Administrative Agent or such Lender may elect, against or on account of the obligations and liabilities of the Company to the Administrative Agent or such Lender hereunder which are then due and payable and claims of every nature and description of the Administrative Agent or such Lender against the Company, in any currency, whether arising hereunder, under any other Loan Document or otherwise in connection therewith, as the Administrative Agent or such Lender may elect, whether or not the Administrative Agent or such Lender has made any demand for payment. The Administrative Agent and each Lender shall notify the Company promptly of any such set-off and the application made by the Administrative Agent or such Lender, as the case may be, of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and each Lender under this subsection are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such Lender may have. 11.3 No Subrogation. Notwithstanding any payment or payments made by the Company hereunder, or any set-off or application of funds of the Company by the Administrative Agent or any Lender, the Company shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Foreign Subsidiary Borrowers or Local Currency Borrowers or against any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Obligations, nor shall the Company seek or be entitled to seek any contribution or reimbursement from such Borrowers in respect of payments made by the Company hereunder, until all amounts owing to the Administrative Agent and the Lenders by such Borrowers on account of the Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to the Company on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Company in trust for the Administrative Agent and the Lenders, segregated from other funds of the Company, and shall, forthwith upon receipt by the Company, be turned over to the Administrative Agent in the exact form received by the Company (duly indorsed by the Company to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Administrative Agent may determine. The provisions of this subsection shall survive the termination of this Agreement and the payment in full of the Obligations and the termination of the Commitments. 51 11.4 Amendments, etc. with respect to the Obligations; Waiver of Rights. The Company shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Company, and without notice to or further assent by the Company, any demand for payment of any of the Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender, and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and any Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, in accordance with the provisions thereof as the Administrative Agent (or the requisite Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. None of the Administrative Agent or any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Agreement or any property subject thereto. When making any demand hereunder against the Company, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on any Borrower or any other guarantor, and any failure by the Administrative Agent or any Lender to make any such demand or to collect any payments from any Foreign Subsidiary Borrower or Local Currency Borrower or any such other guarantor or any release of any Foreign Subsidiary Borrower or Local Currency Borrower or such other guarantor shall not relieve the Company of its obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Administrative Agent or any Lender against the Company. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 11.5 Guarantee Absolute and Unconditional. The Company waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon this Agreement or acceptance of this Agreement; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Agreement; and all dealings between the Foreign Subsidiary Borrower and the Local Currency Borrowers and the Company, on the one hand, and the Administrative Agent and the Lenders, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Agreement. The Company waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Foreign Subsidiary Borrowers and the Local Currency Borrowers and the Company with respect to the Obligations. This Section 11 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of this Agreement, any other Loan Document, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Foreign Subsidiary Borrowers or the Local Currency Borrowers against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Foreign Subsidiary Borrowers or the Local Currency Borrowers or the Company) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Foreign Subsidiary Borrowers or the Local Currency Borrowers for the Obligations, or of the Company under this Section 11, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Company, the Administrative Agent and any Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Foreign Subsidiary Borrowers or the Local Currency Borrowers 52 or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to pursue such other rights or remedies or to collect any payments from the Foreign Subsidiary Borrowers or the Local Currency Borrowers or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Foreign Subsidiary Borrowers or the Local Currency Borrowers or any such other Person or of any such collateral security, guarantee or right of offset, shall not relieve the Company of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against the Company. This Section 11 shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Company and its successors and assigns, and shall inure to the benefit of the Administrative Agent and the Lenders, and their respective successors, indorsees, transferees and assigns, until all the Obligations and the obligations of the Company under this Agreement shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of this Agreement the Foreign Subsidiary Borrowers or the Local Currency Borrowers may be free from any Obligations. 11.6 Reinstatement. This Section 11 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Foreign Subsidiary Borrower or the Local Currency Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Foreign Subsidiary Borrower or the Local Currency Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made. 11.7 Payments. The Company hereby agrees that all payments required to be made by it hereunder will be made to the Administrative Agent without set-off or counterclaim in accordance with the terms of the Obligations, including, without limitation, in the currency in which payment is due. SECTION 12. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) Any Borrower shall fail to pay any principal of any Loan made to it when due in accordance with the terms hereof; or any Borrower shall fail to pay any interest, or any other amount payable by it hereunder, within five days after any such interest or other amount becomes due in accordance with the terms hereof; or (b) Any representation or warranty made or deemed made by any Borrower herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) Any Borrower shall default in the observance or performance of any agreement contained in subsections 9.4(a) or 9.6 or Section 10; or (d) Any Borrower shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after receipt by such Borrower of notice of such default from the Administrative Agent or any Lender; or 53 (e) The Company or any of its Subsidiaries shall (i) default in any payment or payments of principal or interest in an aggregate amount for the Company and its Subsidiaries of more than $10,000,000 (or its equivalent in another currency) at any one time on any Indebtedness (other than the Loans) or in the payment of any Guaranty (other than the Company Guaranty), beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness or Guaranty was created; or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness (other than the Loans) the principal amount of which exceeds $10,000,000 in the aggregate for the Company and its Subsidiaries or any Guaranty (other than the Company Guaranty) guaranteeing\Indebtedness the principal amount of which exceeds $10,000,000 in the aggregate for the Company and its Subsidiaries or contained in any instrument or agreement evidencing, securing or relating to any such Indebtedness or Guaranty, beyond any applicable period of grace (not to exceed 30 days), or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guaranty (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 become due prior to its stated maturity or such Guaranty to become payable; or (f) (i) Any Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Borrower or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Borrower or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Borrower or any of its material Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Borrower or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (g) (i) Any Person shall engage in any Prohibited Transaction involving any Plan, (ii) any Accumulated Funding Deficiency, whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a 54 Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or (h) One or more judgments or decrees shall be entered against the Company or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance as to which the insurance carrier has admitted liability) of $20,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or (i) The validity or enforceability of this Agreement or any of the other documents required to be delivered in connection herewith shall be challenged by the Company or any of its Subsidiaries or shall fail to remain in full force and effect for any reason other than in accordance with its express terms; or (j) A Change of Control shall occur; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Company, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Company declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Company, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 13. THE ADMINISTRATIVE AGENT; THE CO-AGENTS 13.1 Appointment. Each Lender hereby irrevocably designates and appoints Chase as the Administrative Agent of such Lender under this Agreement and the other Loan Documents, and each Lender irrevocably authorizes Chase to act as the Administrative Agent of such Lender, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, 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. 13.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 55 13.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except for its or such Person's gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Borrower or any officer thereof contained in this Agreement or 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 for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of a Borrower to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender 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 the Borrowers. 13.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order 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, without limitation, counsel to the Borrowers or any of them), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or 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 and the other Loan Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 13.5 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 hereunder unless the Administrative Agent has received notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until the Administrative Agent shall have received such directions, 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 in the best interests of the Lenders. 13.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of any Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the 56 Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other documents expressly required to be furnished to the Lenders by an Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrowers which may come into the possession of the Administrative Agent or any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates. 13.7 Indemnification. Each Lender agrees to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to its Revolving Credit Commitment Percentage in effect on the date on which indemnification is sought from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 13.8 Administrative Agent in its Individual Capacity. The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrowers as though the Administrative Agent was not the Administrative Agent hereunder and under the other Loan Documents. With respect to the Loans made or renewed by the Administrative Agent, and any Note issued to it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity. 13.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be approved by the Company (such approval not to be unreasonably withheld), whereupon such successor administrative agent shall succeed to the rights, powers and duties of the resigning Administrative Agent, and the term "Administrative Agent" shall mean such successor administrative agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as the Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to 57 this Agreement or any holders of the Loans. After any resigning Administrative Agent's resignation as the Administrative Agent the provisions of this Section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement and the other Loan Documents. 13.10 The Co-Agents. Each Lender and each Co-Agent acknowledges that the Co-Agents, in such capacities, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement or the other Loan Documents in their respective capacities as such. SECTION 14. MISCELLANEOUS 14.1 Amendments and Waivers. (a) Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this subsection 14.1. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (i) enter into with the Borrowers written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights or obligations of the Lenders or of the Borrowers hereunder or thereunder or (ii) waive at the Borrowers' request, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall: (A) reduce the amount or extend the scheduled date of maturity of any Loan or any scheduled installment thereof, or reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender's Multicurrency Commitment or Revolving Credit Commitment, in each case without the consent of each Lender affected thereby; or (B) amend, supplement, modify or waive any provision of Section 11 or this subsection 14.1 or reduce the percentages specified in the definition of "Required Lenders" or "Majority Multicurrency Lenders" or consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement and the other Loan Documents or release the Company from its obligations under the Company Guaranty, in each case without the consent of all the Lenders. Any such waiver and any amendment, supplement or modification pursuant to this subsection 14.1 shall apply to each of the Lenders and shall be binding upon the Borrowers, the Lenders, the Administrative Agent, and all future holders of the Loans. In the case of any waiver, the Borrowers, the Lenders and the Administrative Agent shall be restored to their former positions and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. (b) In addition to amendments effected pursuant to the foregoing paragraph (a), Schedule II may be amended as follows: (i) Schedule II will be amended to add Subsidiaries of the Company as additional Foreign Subsidiary Borrowers upon (A) execution and delivery by the Company, any such Foreign Subsidiary Borrower and the Administrative Agent, of a Joinder Agreement providing for any such Subsidiary to become a Foreign Subsidiary Borrower, and (B) delivery to the Administrative Agent of (I) a Foreign Subsidiary Opinion in respect of such additional Foreign Subsidiary Borrower and the documents required pursuant to 58 subsections 8.2(d), (e) and (f) and (II) such other documents with respect thereto as the Administrative Agent shall reasonably request. (ii) Schedule II will be amended to remove any Subsidiary as a Foreign Subsidiary Borrower upon (A) written notice by the Company to the Administrative Agent to such effect and (B) repayment in full of all outstanding Loans of such Foreign Subsidiary Borrower. (c) The Administrative Agent shall give prompt notice to each Lender of any amendment effected pursuant to subsection 14.1(b). (d) Notwithstanding the provisions of this subsection 14.1, any Local Currency Facility may be amended, supplemented or otherwise modified in accordance with its terms so long as after giving effect thereto either (i) such Local Currency Facility ceases to be a "Local Currency Facility" and the Company so notifies the Administrative Agent or (ii) the Local Currency Facility continues to meet the requirements of a Local Currency Facility set forth herein. 14.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid (or, if later, the first Business Day after being so deposited), or, in the case of telecopy notice, when received (or if received on a day that is not a Business Day or if received after 5:00 p.m. local time at the place of reception on a Business Day, on the next succeeding Business Day), addressed as follows in the case of the Borrowers and the Administrative Agent, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes: The Company: Federal-Mogul Corporation World Headquarters 26555 Northwestern Highway Southfield, Michigan 48034 Attention: Sandra W. Galac Telephone: 810-354-2653 Telecopy: 810-354-8103 The Foreign Subsidiary Borrowers: c/o Federal-Mogul Corporation World Headquarters 26555 Northwestern Highway Southfield, Michigan 48034 Attention: Sandra W. Galac Telephone: 810-354-2653 Telecopy: 810-354-8103 The Administrative Agent (New York Office): The Chase Manhattan Bank One Chase Manhattan Plaza 8th Floor New York, New York 10081 Attention: James Tabois Telephone: 212-552-7952 Telecopy: 212-552-5650 The Administrative Agent (London Office): Chase Manhattan International Ltd. 9 Thomas Moore Street London, E1 (YT) Attention: Steven Hurford Telephone: 011-44-171-777-2347 Telecopy: 011-44-171-777-2367 59 provided that any notice, request or demand to or upon (i) the Administrative Agent or the Lenders pursuant to subsection 2.3, 2.5, 3.2, 4.3, 6.2, 6.4, 6.7 or 6.11, shall not be effective until received. All notices to the Administrative Agent in respect of Multicurrency Loans shall be delivered to the Administrative Agent's London Office specified above. 14.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Borrower, the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents 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 provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 14.4 Survival of Representations and Warranties. All representations and warranties made hereunder and in any certificate delivered pursuant hereto shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans hereunder. 14.5 Payment of Expenses and Taxes. The Company agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, execution and delivery of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel (and any special or local counsel retained by such counsel to assist it) to the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, (c) to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent (and their respective directors, officers, employees, agents, affiliates and successors) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents (regardless of whether the Administrative Agent or any Lender is a party to the litigation or other proceeding giving rise thereto), (all the foregoing in this clause (d), collectively, the "indemnified liabilities"), provided, that the Company shall have no obligation hereunder to the Administrative Agent or any Lender with respect to (i) indemnified liabilities arising from the gross negligence or willful misconduct of the party seeking indemnification or (ii) expenses incurred by the Administrative Agent or any Lender in connection with the assignment of Loans to an assignee (except pursuant to subsection 6.14(b)(vi)) or the sale of any Loan to a Participant. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 14.6 Successors and Assigns; Participations and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrowers, the Lenders, the Administrative Agent, all future holders of the Loans and their respective successors and assigns, except that no Borrower may 60 assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender, any Commitment of such Lender or any other interest of such Lender hereunder and under the other Loan Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and the Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. No Lender shall be entitled to create in favor of any Participant, in the participation agreement pursuant to which the Participant's participating interest shall be created or otherwise, any right to vote on, consent to or approve any matter relating to this Agreement or any other Loan Document except for those specified in clauses (A) and (B) of the proviso to subsection 14.1(a). Each Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in subsection 14.7(a) as fully as if it were a Lender hereunder. Each Borrower agrees that each Participant shall be entitled to the benefits of subsections 6.9, 6.10, 6.11 and 6.12 with respect to its participation in the Commitments and the Loans outstanding from time to time hereunder as if it was a Lender; provided that, in the case of subsection 6.11. such Participant shall have complied with the requirements of said subsection and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time and from time to time assign to any Lender or any Affiliate thereof or, with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld) and, prior to the occurrence and continuance of an Event of Default, the Company (such consent not to be unreasonably withheld), to an additional bank or financial institution (an "Assignee") all or any part of its rights and obligations under this Agreement and the other Loan Documents including, without limitation, its Commitments and Loans, pursuant to an Assignment and Acceptance, substantially in the form of Exhibit G, executed by such Assignee, such assigning Lender (and, in the case of an Assignee that is not then a Lender or an Affiliate thereof, by the Company and the Administrative Agent) and delivered to the Administrative Agent for their acceptance and recording in the Register; provided that (i) if any Lender assigns a part of its rights and obligations in respect of Revolving Credit Loans and/or Revolving Credit Commitment under this Agreement to an Assignee, such Lender shall assign proportionate interests in its respective Revolving Credit Loans and Revolving Credit Commitment and other related rights and obligations hereunder to such Assignee, (ii) if any Lender assigns a part of its rights and obligations under this Agreement in respect of its Revolving Credit Loans and/or Revolving Credit Commitments to an Assignee, such Lender shall assign proportionate interests in its Multicurrency Loans and Multicurrency Commitments, (iii) in the case of any such assignment to an additional bank or financial institution, the aggregate amount of any 61 Revolving Credit Commitment (or, if the Revolving Credit Commitments have terminated or expired, the aggregate principal amount of any Revolving Credit Loans) being assigned shall not be less than $10,000,000 (or (x) if less, the then outstanding amount of such Commitments and/or Loans or (y) such lesser amount as may be agreed by the Borrowers and the Administrative Agent). Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (I) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with Commitments and rights in respect of Loans as set forth therein, and (II) the assigning Lender thereunder shall be released from its obligations under this Agreement to the extent that such obligations shall have been expressly assumed by the Assignee pursuant to such Assignment and Acceptance (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto). (d) The Administrative Agent, on behalf of the Borrowers, shall maintain at its address referred to in subsection 14.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitments of, and principal amounts of the Loans owing to, each Lender from time to time. The entries in the Register shall constitute prima facie evidence of the information recorded therein, and the Borrowers, the Administrative Agent and the Lenders may (and, in the case of any Loan or other obligation hereunder not evidenced by a Note, shall) treat each Person whose name is recorded in the Register as the owner of a Loan or other obligation hereunder as the owner thereof for all purposes of this Agreement and the other Loan Documents, notwithstanding any notice to the contrary. Any assignment of any Loan or other obligation hereunder not evidenced by a Note shall be effective only upon appropriate entries with respect thereto being made in the Register. The Register shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an Affiliate thereof, executed by the Company on behalf of the Borrowers and the Administrative Agent), together with payment to the Administrative Agent by the Lender or the Assignee of a registration and processing fee of $2,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give prompt notice of such acceptance and recordation to the Lenders and the Borrowers. (f) Each Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee any and all financial information in such Lender's possession concerning such Borrower and its Affiliates which has been delivered to such Lender by or on behalf of such Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf of such Borrower in connection with such Lender's credit evaluation of such Borrower and its Affiliates prior to becoming a party to this Agreement. (g) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this subsection concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. (h) If, pursuant to this subsection, any interest in this Agreement or any Loan is transferred to any Transferee (which is not a Lender) which is organized under the laws of any jurisdiction other than the United States or 62 any state thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to agree (for the benefit of the transferor Lender, the Administrative Agent and the Company) to provide the transferor Lender (and, in the case of any Transferee registered in the Register, the Administrative Agent and the Company) the tax forms and other documents required to be delivered pursuant to subsection 6.11(b) and to comply from time to time with all applicable U.S. laws and regulations with regard to such withholding tax exemption. (i) If, pursuant to this subsection, any interest in this Agreement or any Loan is transferred to any Transferee, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to agree (for the benefit of the transferor Lender, the Administrative Agent and the Foreign Subsidiary Borrowers) to provide the transferor Lender, the Administrative Agent and the Foreign Subsidiary Borrowers the tax forms and other documents required to be delivered pursuant to subsection 6.11(c) and to comply from time to time with all applicable laws and regulations with regard to such withholding tax exemption. 14.7 Adjustments; Set-Off. (a) If any Lender (a "Benefitted Lender") shall at any time receive any payment of all or part of its Loans then due and owing to it by any Borrower, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 12(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Loans then due and owing to it by such Borrower, or interest thereon, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Loans owing to it by such Borrower, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to any Borrower, any such notice being expressly waived by the Borrowers to the extent permitted by applicable law, upon any amount becoming due and payable hereunder (whether at the stated maturity thereof, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch, agency or Affiliate thereof to or for the credit or the account of any Borrower. Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. 14.8 Loan Conversion/Participations. (a) (i) On any Conversion Date, to the extent not otherwise prohibited by a Requirement of Law or otherwise, all Loans outstanding in any currency other than U.S. Dollars ("Loans to be Converted") shall be converted into U.S. Dollars (calculated on the basis of the relevant Exchange Rates as of the Business Day immediately preceding the Conversion Date) ("Converted Loans") and (ii) on the Conversion Date (with respect to Loans described in the foregoing clause (i)) (A) each Lender severally, unconditionally and irrevocably agrees that it shall purchase in U.S. Dollars a participating interest in such Converted Loans in an amount equal to its Conversion Sharing Percentage of the outstanding principal amount of the Converted Loans and (B) to the extent necessary to 63 cause the Committed Outstandings Percentage of each Lender to equal its Revolving Credit Commitment Percentage (calculated immediately prior to the termination or expiration of the Revolving Credit Loans), each Lender severally, unconditionally and irrevocably agrees that it shall purchase or sell a participating interest in Revolving Credit Loans then outstanding. Each Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amounts of its participation(s), and the proceeds of such participation(s) shall be distributed by the Administrative Agent to each Lender from which a participating interest is being purchased in the amount(s) provided for in the preceding sentence. All Converted Loans shall bear interest at the rate which would otherwise be applicable to Base Rate Loans. (b) If, for any reason, the Loans to be Converted may not be converted into U.S. Dollars in the manner contemplated by paragraph (a) of this subsection 14.8, (i) effective on such Conversion Date, each Lender severally, unconditionally and irrevocably agrees that it shall purchase a participating interest in such Loans to be Converted, in an amount equal to its Conversion Sharing Percentage of such Loans to be Converted, and (ii) each Lender shall purchase or sell participating interests as provided in paragraph (a)(ii)(B) of this subsection 14.8. Each Lender will immediately transfer to the appropriate Administrative Agent, in immediately available funds, the amount(s) of its participation(s), and the proceeds of such participation(s) shall be distributed by the Administrative Agent to each relevant Lender in the amount(s) provided for in the preceding sentence. (c) To the extent any Non-Excluded Taxes are required to be withheld from any amounts payable by a Lender to another Lender in connection with its participating interest in any Converted Loan, each Borrower, with respect to the relevant Loans made to it, and the Company with respect to Local Currency Loans, shall be required to pay increased amounts to the Lender receiving such payments to the same extent they would be required under subsection 6.11 if such Borrower were making payments directly to such Lender. (d) At any time after the actions contemplated by paragraphs (a) or (b) of this subsection 14.8 have been taken, upon the notice of any Lender to the Borrowers the following shall occur: (i) the Company (through the guarantee contained in Section 11) shall automatically be deemed to have assumed the Converted Loans in which such Lender holds a participation, and (ii) such Loans shall be assigned by the relevant Lender holding such Loans or obligations to the Lender who gave the notice requesting such assumption by the Company. 14.9 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be delivered to the Borrowers and the Administrative Agent. 14.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 14.11 Integration. This Agreement and the other Loan Documents represent the agreement of the Borrowers, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Borrowers, the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 64 14.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 14.13 Submission To Jurisdiction; Waivers. 1. The Company and each Foreign Subsidiary Borrower hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company or such Foreign Subsidiary Borrower, as the case may be, at the address specified in subsection 14.2, or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (v) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages. (b) Each Foreign Subsidiary Borrower hereby irrevocably appoints the Company as its agent for service of process in any proceeding referred to in subsection 14.13(a) and agrees that service of process in any such proceeding may be made by mailing or delivering a copy thereof to it care of Company at its address for notices set forth in subsection 14.2. 14.14 Acknowledgements. Each Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) none of the Administrative Agent or any Lender has any fiduciary relationship with or duty to such Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agents and the Lenders, on the one hand, and the Borrowers, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrowers and the Lenders. 14.15 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 65 14.16 Power of Attorney. Each Foreign Subsidiary Borrower hereby grants to the Company an irrevocable power of attorney to act as its attorney-in-fact with regard to matters relating to this Agreement and each other Loan Document, including, without limitation, execution and delivery of any amendments, supplements, waivers or other modifications hereto or thereto, receipt of any notices hereunder or thereunder and receipt of service of process in connection herewith or therewith. Each Foreign Subsidiary Borrower hereby explicitly acknowledges that each of the Administrative Agent and each Lender has executed and delivered this Agreement and each other Loan Document to which it is a party, and has performed its obligations under this Agreement and each other Loan Document to which it is a party, in reliance upon the irrevocable grant of such power of attorney pursuant to this subsection. The power of attorney granted by each Foreign Subsidiary Borrower hereunder is coupled with an interest. 14.17 Existing Credit Agreements. The Existing Domestic Credit Agreement and the Existing Multicurrency Credit Agreement (collectively, the "Existing Credit Agreements") shall terminate as of the Closing Date. The Required Lenders (as each such term is defined in the Existing Credit Agreements) hereby consent to the termination of the Existing Credit Agreements as provided herein and hereby waive any notice requirements of the Existing Credit Agreements relating to prepayment or termination of commitments to occur on the Closing Date as provided herein. 14.18 Judgment. (a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency in the city in which it normally conducts its foreign exchange operation for the first currency on the Business Day preceding the day on which final judgment is given. (b) The obligation of each Borrower in respect of any sum due from it to any Lender hereunder shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the "Agreement Currency"), be discharged only to the extent that on the Business Day following receipt by such Lender of any sum adjudged to be so due in the Judgment Currency such Lender may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency; if the amount of Agreement Currency so purchased is less than the sum originally due to such Lender in the Agreement Currency, such Borrower agrees notwithstanding any such judgment to indemnify such Lender against such loss, and if the amount of the Agreement Currency so purchased exceeds the sum originally due to any Lender, such Lender agrees to remit to such Borrower such excess. 14.19 Confidentiality. Each Lender agrees to keep confidential any written information (a) provided to it by or on behalf of the Company or any of its Subsidiaries pursuant to or in connection with this Agreement or (b) obtained by such Lender based on a review of the books and records of the Company or any of its Subsidiaries; provided that nothing herein shall prevent any Lender from disclosing any such information (i) to the Administrative Agent or any other Lender, (ii) to any Transferee or prospective Transferee which agrees to comply with the provisions of this subsection, (iii) to its employees, directors, agents, attorneys, accountants and other professional advisors, (iv) upon the request or demand of any Governmental Authority having jurisdiction over such Lender or as shall be required pursuant to any Requirement of Law, (v) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (vi) in connection with any litigation to which such Lender is a party, (vii) which has been publicly disclosed other than in breach of this Agreement, or (viii) to the extent reasonably necessary, in connection with the exercise of any remedy hereunder. 66 14.20 Unification of Certain Currencies. If the "Euro" (or some other similar unit of account) becomes a currency in its own right in connection with European monetary union contemplated by the Maastricht Treaty, then each of the Borrowers, the Lenders and the Administrative Agent agrees to negotiate in good faith an amendment to this Agreement satisfactory in form and substance to the Borrowers, the Lenders and the Administrative Agent to account therefor. EX-11.1 3 STATEMENT 1 EXHIBIT 11.1 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES FOR THE THREE MONTHS ENDED PRIMARY FULLY DILUTED -------------- --------------- JUNE 30 1997 1996 1997 1996 - ------------------------------------------ ------ ------ ------ ------ EARNINGS: (In Millions) Net earnings before extraordinary item $ 28.5 $ 15.8 $ 28.5 $ 15.8 Series C preferred dividend requirements (.6) (.6) Series D preferred dividend requirements (1.5) (1.6) Additional required ESOP contribution (.5) (.4) ----- ----- ----- ----- Net earnings before extraordinary item, as adjusted 26.4 13.6 28.0 15.4 Extraordinary item - loss on early retirement of debt, net of applicable tax benefit 2.6 2.6 ----- ----- ----- ----- Net earnings available for common and equivalent shares $ 23.8 $ 13.6 $ 25.4 $ 15.4 ===== ===== ===== ===== WEIGHTED AVERAGE SHARES: (In Millions) Common shares outstanding 35.2 35.1 35.2 35.1 Dilutive stock options outstanding .2 .3 Conversion of Series C preferred stock 1.7 1.7 Contingent issuance of common stock to satisfy the redemption price guarantee .7 Conversion of Series D preferred stock 4.4 4.4 ----- ----- ----- ----- Common and equivalent shares outstanding 35.4 35.1 41.6 41.9 ===== ===== ===== ===== PER COMMON AND EQUIVALENT SHARE: Net earnings before extraordinary item $ .74 $ .39 $ .67 $ .36 Extraordinary item - loss on early retirement of debt, net of applicable tax benefit (.07) (.06) ----- ----- ----- ----- Net earnings $ .67 $ .39 $ .61 $ .36 ===== ===== ===== =====
[FN] Amount represents the additional after-tax contribution that would be necessary to meet the ESOP debt service requirements under an assumed conversion of the Series C preferred stock. Calculations consider the June 30, 1997 common stock market price in accordance with Emerging Issues Task Force Abstract No. 89-12. Amount represents the weighted average number of common shares issued assuming conversion of preferred stock outstanding. Amount represents the additional number of common shares that would be issued in order to satisfy the Series C preferred stock redemption price guarantee. This calculation considers only the number of preferred shares held by the ESOP that have been allocated to participants' accounts as of June 30 of the respective year. EX-11.2 4 STATEMENT 1 EXHIBIT 11.2 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES FOR THE SIX MONTHS ENDED PRIMARY FULLY DILUTED -------------- --------------- JUNE 30 1997 1996 1997 1996 - ------------------------------------------ ------ ------ ------ ------ EARNINGS: (In Millions) Net earnings before extraordinary item $ 42.4 $ 26.4 $ 42.4 $ 26.4 Series C preferred dividend requirements (1.2) (1.3) Series D preferred dividend requirements (3.1) (3.1) (3.1) Additional required ESOP contribution (1.0) (.9) ----- ----- ----- ----- Net earnings before extraordinary items, as adjusted 38.1 22.0 41.4 22.4 Extraordinary item - loss on early retirement of debt, net of applicable tax benefit 2.6 2.6 ----- ----- ----- ----- Net earnings available for common and equivalent shares $ 35.5 $ 22.0 $ 38.8 $ 22.4 ===== ===== ===== ===== WEIGHTED AVERAGE SHARES: (In Millions) Common shares outstanding 35.1 35.1 35.1 35.1 Dilutive stock options outstanding .2 .3 Conversion of Series C preferred stock 1.7 1.7 Contingent issuance of common stock to satisfy the redemption price guarantee .7 Conversion of Series D preferred stock 4.4 ----- ----- ----- ----- Common and equivalent shares outstanding 35.3 35.1 41.5 37.5 ===== ===== ===== ===== PER COMMON AND EQUIVALENT SHARE: Net earnings before extraordinary item $ 1.08 $ .63 $ .99 $ .59 Extraordinary item - loss on early retirement of debt, net of applicable tax benefit (.07) (.06) ----- ----- ----- ----- Net earnings $ 1.01 $ .63 $ .93 $ .59 ===== ===== ===== =====
[FN] Amount represents the additional after-tax contribution that would be necessary to meet the ESOP debt service requirements under an assumed conversion of the Series C preferred stock. Calculations consider the June 30, 1997 common stock market price in accordance with Emerging Issues Task Force Abstract No. 89-12. Amount represents the weighted average number of common shares issued assuming conversion of preferred stock outstanding. Amount represents the additional number of common shares that would be issued in order to satisfy the Series C preferred stock redemption price guarantee. This calculation considers only the number of preferred shares held by the ESOP that have been allocated to participants' accounts as of June 30 of the respective year. EX-27 5 ART.5 FDS FOR 2ND QUARTER 10-Q
5 1,000
6-MOS DEC-31-1997 JUN-30-1997 19,600 0 249,700 16,900 303,500 639,300 528,000 209,000 1,300,100 419,500 279,700 177,500 0 127,200 30,300 1,300,100 967,400 967,400 740,000 151,900 (200) 0 18,800 56,900 14,500 42,400 0 2,600 0 39,800 1.01 .93
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