-----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, IQA5RX/A3B9nskmfvZla1GEInpYkmOSsW9Px5d4zMPS1p6WHHScV8BCi0ol5Jl0R kcVrZ/SoJ1iQLALvK78BaA== 0000906555-96-000026.txt : 19960515 0000906555-96-000026.hdr.sgml : 19960515 ACCESSION NUMBER: 0000906555-96-000026 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960403 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXCEL INDUSTRIES INC CENTRAL INDEX KEY: 0000740868 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 351551685 STATE OF INCORPORATION: IN FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08684 FILM NUMBER: 96562206 BUSINESS ADDRESS: STREET 1: 1120 N MAIN ST STREET 2: P O BOX 3118 CITY: ELKHART STATE: IN ZIP: 46515-3118 BUSINESS PHONE: 2192642131 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT No. 1 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 3, 1996 EXCEL INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Indiana 1-8684 35-1551685 (State of (I.R.S. Employer incorporation) (Commission File Number) Identification No.) 1120 North Main Street Elkhart, Indiana 46514 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (219) 264-2131 N/A (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets On March 4, 1996, the registrant, Excel Industries, Inc., an Indiana corporation ("Excel") agreed to purchase all of the outstanding capital stock of Anderson Industries, Inc., a Delaware corporation ("Anderson") from the stockholders of Anderson ("Anderson Stockholders"), pursuant to a stock purchase agreement among Excel, Anderson and the Anderson Stockholders (the "Agreement"). The stock purchase transaction was consummated on April 3, 1996 (the "Closing"). Anderson's only operating asset is its wholly-owned subsidiary, Atwood Industries, Inc., an Illinois corporation ("Atwood"), Atwood is a diversified manufacturer which, directly and through its subsidiaries, has three primary business [operations] [units]: Atwood Mobile Products ("Mobile Products"); Atwood Automotive ("Atwood Automotive"); and Mark I Molded Plastics ("Mark I"). Mobile Products is a leading manufacturer of appliances and accessories for RVs, vehicle conversions, pleasure boats and trailers. Atwood's management believes it to be the world's largest supplier of appliances and accessories to the RV industry. Primary products include: appliances such as water heaters, furnaces, stoves and ranges; hardware such as jacks, couplers and surge brake actuators; and seating frames for van conversions. In the last ten years Mobile Products has tripled in size with 1995 net sales of approximately $149 million. Mobile Products' growth is attributable to several strategic acquisitions, market share gains and successful new product introductions. Mobile Products operates five domestic facilities and one European manufacturing facility. Mobile Products is well known in the RV industry for its product quality and new product innovation. Mobile Products' major customers include Fleetwood, Jayco, Thor and Coachmen. Mobile Products will be continued as a separate business unit by Excel. Atwood Automotive develops and produces engineered systems and components for the North American automotive industry. The product line is primarily composed of: seat systems, which include seat and height adjusters, and recliner mechanisms; hinge systems which include door, hood and deck hinges; and control systems, which include hand and foot operated parking brakes, and transmission selectors. In 1995 Atwood Automotive had sales in excess of $212 million, which is almost twice its 1991 sales of $114 million. Atwood Automotive operates six domestic facilities and one Mexican manufacturing facility. Atwood Automotive's customer base includes Chrysler, Ford, General Motors, Douglas & Lomason, Johnson Controls and Lear Seating. Atwood Automotive believes it is the largest supplier of manual seat tracks to the US automotive industry with an estimated 30% market share and the second largest supplier of door hinges to the US automotive market with an estimated 15% market share. Excel plans to incorporate Atwood Automotive's business into Excel's existing automotive business unit. Mark I designs, develops and manufactures injection molded plastic components for automotive original equipment manufacturers and suppliers and for the consumer electronics industry. Automotive components include headlight and taillight lenses, and interior trim parts. Consumer electronics components include front and rear television cabinets. In 1995 Mark I had sales of approximately $39 million. Mark I operates two domestic manufacturing facilities. Excel plans to incorporate the Mark I plastics business into Excel's existing Nyloncraft division. Historically, Mobile Products and Atwood Automotive have generated substantial operating profits including $10.0 million and $8.2 million respectively in 1993. However, due to production start-up problems associated with the launching of 22 new product lines in 1994, Atwood Automotive had difficulty in meeting customer requirements and as a result incurred excessive manufacturing costs resulting in an operating loss for 1994 of $11.1 million. Excessive start-up costs continued into 1995 as Atwood Automotive incurred an operating loss of $12.2 million. This loss was attributable to start-up costs, warranty and product replacement costs of $6.8 million in connection with a product recall and operating losses in production of the CDW-27 seat adjuster for Ford which production was discontinued by Atwood in late 1995. Additionally, operating results were negatively impacted by substantial start-up and expansion costs at its Queretaro, Mexico facility. Management at Atwood took significant measures, beginning in 1994, intended to rectify these operating problems. A new management team was brought in for Atwood Automotive. This new management group instituted the following measures: (i) Refocused Atwood Automotive's operations strictly on automotive products; (ii) reorganized the new product launch and manufacturing process to increase operating efficiency; (iii) arranged to discontinue the manufacturing of the CDW-27 seat adjuster systems, effective December 31, 1995; (iv) revised the product mix and reduced the number of products being manufactured at the Queretaro, Mexico facility; and (v) substantially reduced Atwood Automotive's salaried and hourly headcount. As a result of these measures, and excluding the effect of the $6.8 million product recall expense, Atwood Automotive had an operating profit for the four month period August-November 1995. At the Closing, Excel paid (net of the amount received for certain "Excluded Assets" resold, subject to certain "Excluded Liabilities," to the nominee of certain Anderson Stockholders immediately following the Closing) $57,050,000 in cash (the "Cash Purchase Price") and granted warrants (the "Warrants") to purchase an aggregate of 381,000 of Excel's common shares, no par value, (the "Common Shares") at an exercise price of $13.25 per Common Share. The Warrants were granted pursuant to a Warrant Grant and Registration Rights Agreement dated April 3, 1996 among Excel and certain Anderson Stockholders, and expire at the close of business on April 2, 2001. The Warrants have an aggregate present value of approximately $1,500,000. None of the Excluded Assets was used in the principal operations of Anderson and Atwood. The purchase price for the capital stock of Anderson was agreed upon by the parties after arm's-length negotiations as to the fair market value thereof. Immediately prior to the Closing, Excel advanced to Atwood funds sufficient to repay approximately $71 million of its secured indebtedness. To fund the Cash Purchase Price and the advance to Atwood, Excel utilized approximately $30 million of its cash on hand and approximately $100 million borrowed under a $120 million revolving credit facility pursuant to a Credit Agreement dated April 3, 1996 among Excel, certain banks (the "Revolving Lenders") and Society National Bank as agent and Harris Trust and Savings Bank as co-agent. On May 3, 1996, Excel sold to certain qualified institutional investors in a private placement $100 million of its Senior Notes due April 2011. The proceeds of the Senior Notes were used to repay $100 million of the revolving credit borrowings, and the aggregate commitments of the Revolving Lenders were reduced from $120 million to $60 million. Item 7. Financial Statements and Exhibits 7(a) The following consolidated financial statements of Atwood Industries, Inc. are included herein: Report of Independent Accountants Balance Sheets as of December 30, 1995 and December 31, 1994. Consolidated Statements of Operations for the years ended December 30, 1995, December 31, 1994 and January 1, 1994. Consolidated Statements of Changes in Stockholders' Equity for the years ended December 30, 1995, December 31, 1994 and January 1, 1994. Consolidated Statements of Cash Flows for the years ended December 30, 1995, December 31, 1994 and January 1, 1994. Notes to Consolidated Financial Statements. 7(b) The pro forma financial information required by Item 7(b), presented as if Excel had acquired Anderson on January 1, 1995, is included herein. Certain additional adjustments may be made in the final purchase price allocation of Atwood, however, these are not expected to be material in relation to the proforma information presented herein. 7(c) The following exhibits are furnished as required by Item 7(c): Exhibit Number Description 2* Stock Purchase Agreement dated March 4, 1996, among Excel Industries, Inc. and Anderson Industries, Inc. and the stockholders of Anderson Industries, Inc. 4.1* Warrant Grant and Registration Rights Agreement dated April 3, 1996, among Excel Industries, Inc. and certain stockholders of Anderson Industries, Inc. 4.2 Amended and Restated Credit Agreement dated April 29, 1996, among Excel Industries, Inc., certain banks, Society National Bank as agent and Harris Trust and Savings Bank as co-agent. 4.3 Form of Note Purchase Agreement dated May 3, 1996 between Excel Industries, Inc. and each of several institutional investors. 23 Consent of Coopers & Lybrand L.L.P. * Previously filed. 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 hereunto duly authorized. EXCEL INDUSTRIES, INC. Date: May 13, 1996 By: /s/ Joseph A. Robinson Joseph A. Robinson, Secretary, Treasurer and Chief Financial Officer ATWOOD INDUSTRIES, INC. CONSOLIDATED FINANCIAL STATEMENTS for the years ended December 30, 1995, December 31, 1994 and January 1, 1994 I N D E X Pages Report of Independent Accountants 1 Consolidated Financial Statements: Balance Sheets, December 30, 1995 and December 31, 1994 2 Statements of Operations for the years ended December 30, 1995, December 31, 1994 and January 1, 1994 3 Statements of Stockholder's Equity for the years ended December 30, 1995, December 31, 1994 and January 1, 1994 4 Statements of Cash Flows for the years ended December 30, 1995, December 31, 1994 and January 1, 1994 5 Notes to Consolidated Financial Statements 6-17 Coopers &Lybrand Coopers & Lybrand L.L.P. a professional services firm REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors Atwood Industries, Inc. Rockford, Illinois We have audited the accompanying consolidated balance sheets of Atwood Industries, Inc. as of December 30, 1995 and December 31, 1994, and the related consolidated statements of operations, stockholder's equity and cash flows for the three years ended December 30, 1995, December 31, 1994 and January 1, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Atwood Industries, Inc. as of December 30, 1995 and December 31, 1994, and the consolidated results of its operations and its cash flows for the three years ended December 30, 1995, December 31, 1994 and January 1, 1994 in conformity with generally accepted accounting principles. As discussed in Note E to the financial statements, the Company changed its method of accounting for postemployment benefits in 1994. As discussed in Note E and H to the financial statements, the Company changed its method of accounting for postretirement benefits other than pensions and income taxes in 1993. Coopers & Lybrand L.L.P. Rockford, Illinois March 18, 1996, except for Notes D and K, for which the date is April 3, 1996 Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a limited liability association incorporated in Switzerland ATWOOD INDUSTRIES, INC CONSOLIDATED BALANCE SHEETS December 30, 1995 and December 31, 1994 (Dollars in Thousands)

The accompanying notes are an integral part of the consolidated financial statements.

ATWOOD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 30, 1995, December 31, 1994 and January 1, 1994 (Dollars in Thousands, except per share amounts)

The accompanying notes are an integral part of the consolidated financial statements. ATWOOD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY For the years ended December 30, 1995, December 31, 1994 and January 1, 1994 (Dollars in Thousands)

The accompanying notes are an integral part of the consolidated financial statements. ATWOOD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 30, 1995, December 31, 1994 and January 1, 1994 (Dollars in Thousands)

The accompanying notes are an integral part of the consolidated financial statements. A. ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Atwood Industries, Inc. (Company), and its wholly-owned subsidiaries. The Company is a wholly-owned subsidiary of Anderson Industries, Inc. (AI). Description of the Business Atwood Industries' principal lines of business are recreational vehicle products, automotive and truck products and injection-molded plastic parts which are manufactured in the United States, Europe and Mexico. The principal markets for the automotive, truck, and consumer electronics products are within the United States and Mexico, while recreational vehicle products are sold within the United States and Europe. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure associated with contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Fiscal Year The Company's fiscal year ends on the Saturday nearest December 31. Fiscal years 1995, 1994 and 1993 ended on December 30, 1995, December 31, 1994 and January 1, 1994, respectively. Cash Equivalents To the extent that the Company invests cash, in excess of daily operating requirements, in short-term investments with maturities of three months or less, such investments are deemed to be cash equivalents for financial statement purposes. Inventories Inventories are stated at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for the majority of the Company's non-tooling inventories. For all other inventories, cost is determined by the first-in, first-out (FIFO) method. Tooling Tooling inventory represents the cost incurred, net of progress billings, on tools being developed for customers. Generally, revenues are recognized when projects are substantially complete, and generally, losses are recognized when the costs incurred plus estimates to complete, exceed the estimated revenue. Actual costs could differ from the estimates to complete. Tooling revenue, net of costs incurred, is classified in cost of sales. Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over their estimated useful lives. Depreciation on additions is primarily provided using the straight-line method. Upon disposal of an asset, the resulting gain or loss is included in results of operations. Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense when incurred. Intangible Assets Intangible assets consist of the excess of cost over fair value of assets acquired, covenants not-to-compete, patents, trade names and cost incurred in the successful completion of acquisition and financing activities. Intangible assets, subject to impairment write- offs determined by underlying cash flows, are amortized, using the straight-line method, over useful lives ranging from 5 to 20 years. Accumulated amortization, excluding fully amortized intangible assets, was $4,567 and $3,791 at December 30, 1995 and December 31, 1994, respectively. Income Taxes Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109. The provision for income taxes differs from the amounts currently payable or refundable because of temporary differences in the recognition of certain income and expense items for financial reporting and tax reporting purposes. Concentrations of Credit Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade receivables. Sales to the Company's two largest customers totaled approximately $105,225, $103,682 and $85,540 in 1995, 1994 and 1993, respectively. The Company's accounts receivable from these two customers were approximately $28,143 and $24,310 at December 30, 1995 and December 31, 1994, respectively. Interest Rate Cap Interest rate cap agreements are entered into primarily as a hedge against interest exposure of variable rate debt. The differences to be paid or received on cap agreements designated as hedges are included in interest expense as payments are made or received. Foreign Currency Translation The balance sheets of foreign subsidiaries with functional currencies other than the U.S. dollar have been translated at year-end rates of exchange and statements of operations and cash flows at weighted average rates of exchange during the year. The gains and losses from this translation have been accumulated as a separate component of stockholder's equity. Gains or losses resulting from currency transactions (which are not significant) are included in results of operations. The balance sheets and statements of operations of foreign subsidiaries with the U.S. dollar as the functional currency have been remeasured as if the subsidiaries' records were originally maintained in U.S. dollars. Reclassifications Certain reclassifications have been made to conform prior years' data to the current presentation. These reclassifications had no impact on previously reported results of operations. In 1995, the Company elected to rescind the plan approved in 1994 to dispose of its subsidiary, Mark I Molded Plastics. The results from 1994 have been reclassified from discontinued operations to continuing operations. B. BUSINESS ACQUISITION As of January 18, 1993, the Company acquired substantially all of the stock of Hydro Flame Corporation, a manufacturer and distributor of gas fired furnaces to the recreational vehicle industry, for $9,728, including acquisition expenses. The acquisition was accounted for using the purchase method of accounting and the operating results of Hydro Flame are included in the Company's consolidated statements of income from the date of acquisition. The excess of cost over fair value of assets acquired is being amortized over a twenty year period. Unaudited pro forma amounts are not presented as substantially all of Hydro Flame's sales and net earnings were included in the reported 1993 results. In April 1993, an obligation related to a management agreement with a former shareholder for $1,000 was settled in exchange for the stock of Skyline Industries, a subsidiary of Hydro Flame. This transaction had no effect on net income as the amounts were recorded prior to the Hydro Flame acquisition. As of May 31, 1994, the Company purchased substantially all of the assets of Better Products, Inc., a manufacturer and distributor of seat and sofa hardware for the van conversion market, for $10,326, net of cash acquired. The acquisition was accounted for using the purchase method of accounting and the operating results of Better Products are included in the Company's consolidated statements of operations from the date of the acquisition. The excess of cost over fair value of assets acquired of $5,602 is being amortized over a period of fifteen years. Unaudited pro forma amounts are not presented as they are considered immaterial to consolidated sales and net earnings in 1994 and 1993. C. INVENTORIES Inventories are summarized as follows:

Inventories valued using the LIFO method at December 30, 1995 and December 31, 1994 amounted to $15,854 and $20,421 (on a FIFO basis), respectively. D. LONG-TERM DEBT Long-term debt is summarized as follows:

In 1995, Atwood violated certain financial tests and ratios required by the revolving line of credit agreement as amended. In February 1996, Atwood signed a new amendment which revises and waives certain covenants under the previous amendment. Borrowings under the line of credit are limited to the extent of available collateral as defined in the agreement. The agreement provides for a lien on substantially all the assets of Atwood and its subsidiaries. As discussed in Note K, on April 3, 1996, the buyer of the parent company's capital stock borrowed funds under a new revolving line of credit to repay existing obligations under the previous agreement. This agreement has a four-year term and contains covenants and requirements based upon the newly merged Company's financial statements. The term notes mature through the year 2000 and bear interest from 7.3% to 8.0%. The term notes are collateralized by certain machinery and equipment and contain provisions restricting the payment of dividends. The mortgage note bears interest at 10.1%, and matures in 2000. In December 1995, a major automotive customer issued a recall on a component manufactured by the Company. The recall is limited to 170,000 vehicles and will be administered by the customer. The Company estimates the total future cost of this recall at $8,140. Simultaneously, the Company entered into a warranty recovery agreement with the customer which limits the annual payments related to the recall to 1996 - $1,250; 1997 - $1,500; 1998 - $1,750; and the balance due in 1999. The agreement requires quarterly payments and has been discounted at a prevailing market rate of interest (10.0%) as of December 1995. The Company recognized $6,815 of expense related to the recall in 1995. This agreement has been shown as a noncash transaction in the statement of cash flows. Maturities of the long-term debt, other than the revolving line credit, for the next five years are: 1996 - $2,062; 1997 - $2,440; 1998 - $3,417; 1999 - $4,901 and 2000 - $3,850. At December 30, 1995, the Company had outstanding letters of credit totaling $3,425 which are considered a borrowing for purposes of amounts available under the revolving line of credit. The fair value of the long-term debt is $92,166 estimated based on current rates offered to the Company for debt of the same maturities. The fair value of the interest rate cap is $-0- based on a valuation from a major bank. E. RETIREMENT AND BENEFIT PLANS The Company provides defined benefit or defined contribution pension plans, or both in some cases, for substantially all employees. Benefits provided under defined benefit pension plans are principally based upon years of service, compensation and Social Security benefits. Total expense for these plans was $1,303, $1,313 and $976 for 1995, 1994 and 1993, respectively. The net pension expense includes the following components:

The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets:

The projected benefit obligation has been determined using a weighted average discount rate of 7.75% and 8.25% in 1995 and 1994, respectively, and a rate of increase in future compensation of 5.0%. The expected weighted long-term rate of return on plan assets was 8.0%. Plan assets consist principally of U.S. Government securities, corporate stocks, bonds and pooled investment funds. The Company also provides various defined contribution plans. The expense for these plans for 1995, 1994 and 1993 was $1,571, $1,358 and $1,227, respectively. The Company provides certain health care benefits to eligible retired employees and their dependents and survivors. Generally participants become eligible if they meet minimum age and service requirements. The Company has the right to modify or terminate these benefits. During 1993, the Company elected to adopt the provisions of Statement of Financial Accounting Standards (SFAS) No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions." The Statement requires companies to accrue the expected cost of providing postretirement benefits other than pensions over the years that employees render service rather than the cash basis previously used. The Company elected to immediately recognize the accumulated benefit obligation of $8,171 related to prior service cost, measured as of January 3, 1993. This was a noncash charge to income of $4,903 (after reduction for income taxes of $3,268) recognized as a cumulative effect of accounting change as of January 3, 1993. The following table sets forth the plan's obligation and cost for these benefits:

The net periodic postretirement benefit cost includes the following components:

For measurement purposes, a 9.1% and 7.6% annual rate of increase in the per capita cost of covered health care benefits for pre-65 and post-65 participants, respectively, was assumed for 1995; the rate was assumed to decrease gradually to 5.6% by the year 2021. The health care cost trend rate has a significant effect on the amounts reported. A 1.0% increase in the health care trend rate per year would increase the net periodic cost by $36 for the year. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 7.75% in 1995 and 8.25% in 1994. The Company has various deferred compensation agreements with certain members of management. The Company recognized $452, $56 and $560 of compensation expense in 1995, 1994 and 1993, respectively. The deferred compensation accrued as of December 30, 1995 and December 31, 1994 was $2,002 and $1,705, respectively. These arrangements include a deferred appreciation plan which allows key executives to participate in the appreciation of hypothetical shares of stock based on a predetermined formula. Other agreements provide benefits based on length of service and salary at retirement. Payment of benefits under certain of these agreements are accelerated upon certain change of control events. During 1994, the Company adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits." Prior to January 2, 1994, the Company recognized the cost of providing these benefits on a cash basis. The Company recognized the accumulated postemployment benefit obligation of $430 related to prior service costs, measured as of January 2, 1994. This was a noncash charge to income of $260 (after reduction for income taxes of $170) recognized as a cumulative effect of accounting change as of January 2, 1994. F. LEASE COMMITMENTS The Company leases transportation equipment, office space and data processing equipment under certain operating leases. Future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 30, 1995 are: 1996 - $3,005; 1997 - $2,752; 1998 - $1,944; 1999 - $1,441; and thereafter - $120. Rental expense for 1995, 1994 and 1993 was $4,548, $2,221 and $2,972, respectively. G. SALE/LEASEBACK In December 1992, the Company entered into a sale/leaseback arrangement with an unrelated third party. The agreement involved the sale of machinery and equipment for $7,500. The Company is leasing these assets under an operating lease that has an initial term of three years with options to renew for two 24 month periods. The Company has exercised its option to extend the lease for an additional 24 months. The Company has the option to purchase the machinery and equipment at the end of the lease. However, if it does not exercise this option or the option to renew at the end of the 24 months, it has guaranteed the lessor 45.4% of the original sales price upon disposition. The income on the sale of the machinery and equipment of $2,500 was deferred and amortized in proportion to the minimum rental payments over the initial three-year lease term. Deferred income of $833 was recognized in 1995, 1994 and 1993. H. INCOME TAXES The Company and its subsidiaries are included in the consolidated income tax returns of AI. A tax sharing agreement between AI and the Company provides for an allocation of income taxes to the Company on the basis of the Company filing a separate return. The provision for income taxes consists of:

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," which requires a change from the deferred method to the asset and liability method of accounting for income taxes. The Company adopted SFAS No. 109 as of January 3, 1993. The cumulative effect of the accounting change decreased net income by $309, and is reported separately in the consolidated statements of operations for the year ended January 1, 1994. Excluding the amount recognized as the cumulative effect of accounting change, the effect of applying SFAS No. 109 on net income for the year ended January 1, 1994, was a benefit of $117. The components of the deferred tax (benefit) expense were as follows:

The components of the net deferred tax (assets) liabilities as of December 30, 1995 and December 31, 1994, were as follows:

The Company has recorded a valuation allowance to reflect the estimated amount of deferred tax assets which may not be realized due to foreign net operating loss carryforward limitations. The change in the valuation allowance is as follows:

In January 1993, the Company acquired Hydro Flame which generated capital loss carryforwards expiring in 1998. During 1994, the Company determined that the remaining carryforward benefit will be utilized prior to expiration and, accordingly, eliminated the valuation allowance and reduced the excess cost over fair value of assets acquired by $617 in 1994. The reasons for the difference between the effective tax rate of the Company and the United States statutory federal income tax rate are as follows:

I. RELATED-PARTY TRANSACTIONS The Company is charged certain corporate fees from AI. These fees totaled $1,000, $2,000 and $1,983 in 1995, 1994 and 1993, respectively, and have been included in the financial statements as a component of selling and administrative expense. In December 1993, the Company advanced AI $1,718. An additional $115 was advanced during 1994 and $103 of interest was accrued at December 30, 1995. These amounts mature over ten years and bear interest at 5.8%. The fair value of the note is $1,005 estimated by discounting future cash flows using current rates of interest at which similar loans would be made to borrowers with similar credit ratings. The Company leases certain assets from a related party under operating leases expiring in 1996. Rental expense was $339 in 1995 and $276 in 1994 and 1993. J. COMMITMENTS AND CONTINGENCIES The Company is a party to a number of lawsuits and claims arising in the normal course of its business including proceedings with respect to environmental matters, including sites where the Company has been identified as a potentially responsible party under federal and state environmental laws and regulations. Although the outcome of these matters cannot be determined at the present time, the Company has established accruals which management believes adequately provide for all future costs that are expected to be incurred in settling these matters not covered by insurance. It is the opinion of management, after consultation with counsel, that additional liabilities, if any, resulting from these matters are not expected to have a material adverse effect on the financial condition of the Company, although such matters could have a material effect on annual results of operations when resolved in a future period. K. SUBSEQUENT EVENT On April 3, 1996, the parent company's capital stock was sold to Excel Industries, Inc. Upon completion of the sale, compensation agreements totaling $445 will be paid to members of Atwood's management. The revolving line of credit was repaid upon acquisition of the parent company, with Excel obtaining a new revolving line of credit agreement on a long-term basis. On April 3, 1996, the Registrant acquired all of the outstanding capital stock of Anderson. Anderson's only operating asset is Atwood, its wholly owned subsidiary. Under the terms of the Agreement, all non-operating assets of Anderson totaling approximately $1 million were immediately repurchased by the former shareholders of Anderson. The proforma balance sheet and income statement presented on the following pages combine the accounts of the Registrant and Atwood as of and for the fiscal year ending December 31, 1995. Excel Industries, Inc. Pro-Forma Balance Sheet (Amounts in thousands)

Description of pro-forma adjustments: 1 Record estimated purchase price of Atwood and eliminate $8,411 of goodwill recorded in Atwood's historical financial statements. 2 Write-up inventory to current value. 3 Record revaluation of fixed assets. 4 Record unrecognized actuarial amounts for Atwood pension plans. 5 Record unrecognized actuarial amounts for Atwood's postemployment benefit plans other than pensions. 6 Write-down note receivable from Anderson Industries, Inc. to agreed upon repayment amount. 7 Record product recall liability at gross value of $8,140 and to reclassify from debt to accruals. 8 Reclassify debt according to terms of new agreement. 9 Record tax impact of the above adjustments. Excel Industries, Inc. Pro-Forma Statement of Income Fiscal Year Ended December 30, 1995 (Amounts in thousands, except per share amounts)

Description of pro-forma adjustments: 1 Eliminate goodwill amortization included in Atwood's historical financial statements. 2 Record amortization of goodwill resulting from Excel's acquisition of Atwood. Goodwill is being amortized on a straight line basis over a thirty-five year period. 3 Record additional depreciation resulting from the write-up of fixed assets to the estimated fair value. 4 Eliminate interest expense in the historical accounts of Atwood. 5 Record additional interest expense on borrowings resulting from Excel's acquisition of Atwood. 6 Eliminate estimated lost investment income due to liquidating marketable securities to pay a portion of the acquisition costs. 7 Eliminate write-off of deferred debt issuance costs included in Atwood's historical financial statements. 8 Record amortization of deferred debt issuance costs resulting from Excel's acquisition of Atwood. 9 Eliminate management fees paid to Anderson Industries, Inc. recorded in Atwood's historical financial statements. 10 Record the tax impact of the above adjustments. EXHIBIT INDEX Exhibit Page Number Description Number 2* Stock Purchase Agreement dated March 4, 1996, among Excel Industries, Inc. and Anderson Industries, Inc. and the stockholders of Anderson Industries, Inc. 4.1* Warrant Grant and Registration Rights Agreement dated April 3, 1996 among Excel Industries, Inc. and certain stockholders of Anderson Industries, Inc. 4.2 Amended and Restated Credit Agreement dated April 29, 1996 among Excel Industries, Inc., certain banks, Society National Bank as agent and Harris Trust and Savings Bank as co-agent 4.3 Form of Note Purchase Agreement dated May 3, 1996 between Excel Industries, Inc. and each of several institutional investors. 23 Consent of Coopers & Lybrand L.L.P. * Previously filed. EX-4.2 2 EXCEL INDUSTRIES, INC. THE BANKS NAMED HEREIN SOCIETY NATIONAL BANK, as Agent HARRIS TRUST AND SAVINGS BANK, as Co-Agent ___________________________________________ U.S. $120,000,000 Amended and Restated Credit Agreement dated as of April 29, 1996 ___________________________________________ TABLE OF CONTENTS Page SECTION 1.DEFINITIONS AND ACCOUNTING TERMS.. . . . . . . . . . 1 1.1. Certain Defined Terms. . . . . . . . . . . . . . . . 1 1.2. Computation of Time Periods. . . . . . . . . . . . . 10 1.3. Accounting Terms . . . . . . . . . . . . . . . . . . 10 1.4. Other Definitional Provisions. . . . . . . . . . . . 10 SECTION 2.AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT. 10 2.1. Revolving Advances, Swing Line Advances and Letters of Credit 10 2.2. Procedures for Making Advances and Issuance of Letters of Credit 12 2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . 15 2.4. Reduction of the Commitments . . . . . . . . . . . . 16 2.5. Repayment of the Revolving Advances and the Swing Line Advances 17 2.6. Interest on Advances . . . . . . . . . . . . . . . . 17 2.7. Interest Rate Determination. . . . . . . . . . . . . 18 2.8. Prepayments of Advances. . . . . . . . . . . . . . . 18 2.9. Increased Costs. . . . . . . . . . . . . . . . . . . 18 2.10.Payments and Computations. . . . . . . . . . . . . . 19 2.11.Taxes. . . . . . . . . . . . . . . . . . . . . . . . 21 2.12.Sharing of Payments, etc.. . . . . . . . . . . . . . 22 2.13.Evidence of Debt . . . . . . . . . . . . . . . . . . 22 2.14.Obligations Absolute . . . . . . . . . . . . . . . . 23 SECTION 3.CONDITIONS.. . . . . . . . . . . . . . . . . . . . . 23 3.1. Conditions Precedent at Restatement Effective Date.. 23 3.2.Conditions Precedent to Each Extension of Credit . . 24 SECTION 4.REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . 24 4.1. Representations and Warranties of the Borrower . . . 24 SECTION 5.COVENANTS OF THE BORROWER. . . . . . . . . . . . . . 27 5.1. Affirmative Covenants. . . . . . . . . . . . . . . . 27 5.2. Negative Covenants . . . . . . . . . . . . . . . . . 31 SECTION 6.EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 36 6.1. Events of Default. . . . . . . . . . . . . . . . . . 36 SECTION 7.THE AGENT. . . . . . . . . . . . . . . . . . . . . . 38 7.1. Authorization and Action . . . . . . . . . . . . . . 38 7.2. Agent's Reliance, etc. . . . . . . . . . . . . . . . 38 7.3. Society and Affiliates . . . . . . . . . . . . . . . 38 7.4. Lender Credit Decision . . . . . . . . . . . . . . . 39 7.5. Indemnification. . . . . . . . . . . . . . . . . . . 39 7.6. Successor Agent. . . . . . . . . . . . . . . . . . . 39 7.7. Agent's Fee. . . . . . . . . . . . . . . . . . . . . 39 7.8. Co-Agent . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 8.MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 39 8.1. Amendments, etc. . . . . . . . . . . . . . . . . . . 39 8.2. Notices, etc.. . . . . . . . . . . . . . . . . . . . 40 8.3. No Waiver; Remedies. . . . . . . . . . . . . . . . . 40 8.4. Costs, Expenses and Taxes. . . . . . . . . . . . . . 40 8.5. Right of Set-off . . . . . . . . . . . . . . . . . . 41 8.6. Binding Effect. . . . . . . . . . . . . . . . . . . 41 8.7. Assignments and Participations . . . . . . . . . . . 41 8.8. Governing Law. . . . . . . . . . . . . . . . . . . . 43 8.9. Limitations on Liability of the Issuing Bank . . . . 43 8.10.Collateral . . . . . . . . . . . . . . . . . . . . . 43 8.11.Survival of Warranties and Agreements. . . . . . . . 44 8.12.Limitation of Liability. . . . . . . . . . . . . . . 44 8.13.No Duty. . . . . . . . . . . . . . . . . . . . . . . 44 8.14.Lenders and Agent Not Fiduciary to Borrower, etc.. . 44 8.15.Confidentiality. . . . . . . . . . . . . . . . . . . 44 8.16.Certain Consents and Waivers of the Borrower. . . . 44 8.17.Waiver of Jury Trial . . . . . . . . . . . . . . . 45 8.18.Execution in Counterparts. . . . . . . . . . . . . 45 Schedule I - Information as to Lenders Schedule II - Schedule of Existing Liens Schedule III - Schedule of Existing Debt Schedule IV - Schedule of Outstanding Letters of Credit EXHIBIT A-1 - Form of Revolving Note EXHIBIT A-2 - Form of Swing Line Note EXHIBIT B-1 - Form of Notice of Revolving Borrowing EXHIBIT B-2 - Form of Notice of Swing Line Borrowing EXHIBIT B-3 - Form of Confirmation of Swing Line Borrowing EXHIBIT C - Form of Assignment and Acceptance EXHIBIT D - Form of Opinion of Sommer & Barnard, Counsel for the Borrower EXHIBIT E - Form of Guaranty AMENDED AND RESTATED CREDIT AGREEMENT THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 29, 1996 (as amended, supplemented or otherwise modified from time to time, "this Agreement"), among the following: (i) EXCEL INDUSTRIES, INC., an Indiana corporation (herein, together with its successors and assigns, the "Borrower"); (ii) the financial institutions (the "Banks") listed on the signature pages hereof; (iii) SOCIETY NATIONAL BANK ("Society"), a national banking association, as agent (together with any successor Agent appointed hereunder, the "Agent") for the Lenders hereunder; and (iv) HARRIS TRUST AND SAVINGS BANK ("Harris"), as co-agent (together with any successor co-Agent appointed hereunder, the "Co-Agent") for the Lenders hereunder: PRELIMINARY STATEMENTS: (1) The parties hereto entered into a Credit Agreement, dated as of April 1, 1996 (the "Original Agreement"). (2) The parties hereto desire to amend and restate in its entirety the Original Agreement in order, among other things, to provide for a letter of credit subfacility of up to $10,000,000 as part of the Commitments hereunder. NOW, THEREFORE, the parties hereto hereby amend and restate the Original Agreement in its entirety as provided herein and hereby agree as follows: SECTION 1.DEFINITIONS AND ACCOUNTING TERMS. 1.1. Certain Defined Terms. In addition to the terms defined above, as used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Adjusted Eurodollar Rate" means, for any Interest Period for each Adjusted Eurodollar Rate Advance comprising part of the same Revolving Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate of interest determined by the Agent to be the average (rounded upward to the nearest whole multiple of 1/16 of it per annum, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered to the principal offshore office of each of the Reference Banks by prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to such Reference Bank's Adjusted Eurodollar Rate Advance comprising part of such Revolving Borrowing and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Adjusted Eurodollar Rate Reserve Percentage for such Interest Period. The Adjusted Eurodollar Rate for any Interest Period for each Adjusted Eurodollar Rate Advance comprising part of the same Revolving Borrowing shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of section 2.7. "Adjusted Eurodollar Rate Advance" means a Revolving Advance which bears interest as provided in section 2.6(a)(ii). "Adjusted Eurodollar Rate Reserve Percentage" for any Interest Period for any Adjusted Eurodollar Rate Advance means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for any financial institution subject to such regulations with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. "Advance" means a Revolving Advance or a Swing Line Advance, as the case may be. "Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. "Agent Fee Letter" means the letter dated as of the date of the Original Agreement from Society addressed to and acknowledged by the Borrower relating to certain fees payable to Society and/or the Lenders. "Agent Syndication Letter" means the letter dated as of the date of the Original Agreement from Society addressed to and acknowledged by the Borrower relating to certain possible syndication arrangements. "Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Prime Rate Advance and such Lender's Eurodollar Lending Office in the case of an Adjusted Eurodollar Rate Advance. "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto. "Borrowing" means a Revolving Borrowing or a Swing Line Borrowing, as the case may be. "Business Day" means a day of the year on which banks are not required or authorized to close in Cleveland, Ohio or Chicago, Illinois and, if the applicable Business Day relates to any Adjusted Eurodollar Rate Advances, on which dealings are carried on in the London interbank market. "Cash Equivalents" means any of the following, to the extent owned by any Person free and clear of all Liens and having a maturity of not greater than 180 days from the date of acquisition thereof; (i) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (ii) insured certificates of deposit of or time deposits with any commercial bank that is a Lender or is a bank or trust company which is organized under the laws of the United States or any State thereof, has combined capital and surplus of at least $500 million, is a member of the Federal Reserve System and which issues (or the parent of which issues) commercial paper rated as described in clause (iii), or (iii) commercial paper in an aggregate amount of no more than $1,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States, rated at least "Prime-1" (or the then equivalent grade) by Moody's Investors Services, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's Corporation. "Claim" means any claim or demand, by any Person, of whatsoever kind or nature for any alleged Liabilities and Costs, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, Permit, ordinance or regulation, common law or otherwise. "Closing Date" means April 3, 1996, which was the date on which the Agent received the documents specified in or pursuant to section 3.1 of the Original Agreement and the conditions specified in section 3.1 of the Original Agreement were satisfied. "Commitment" has the meaning specified in section 2.1(a). "Commitment Fee" has the meaning specified in section 2.3(b). "Confirmation of Swing Line Borrowing" has the meaning specified in section 2.2(c). "Consolidated" refers to the consolidation of accounts in accordance with GAAP, including principles of consolidation, consistent with those applied in the preparation of the Consolidated financial statements referred to in section 4.1(e). "Consolidated Interest Expense" means, for any period, with respect to the Borrower and its Subsidiaries on a Consolidated basis, total interest expense, whether paid or accrued (without duplication), including the interest component of obligations in respect of capital leases. "Consolidated Net Income" means for any period the consolidated net income (loss) of the Borrower and its consolidated subsidiaries for such period, determined in accordance with GAAP. "Consolidated Net Worth" means at any date the Consolidated stockholders' equity of the Borrower and its Consolidated Subsidiaries, determined as of such date in accordance with GAAP. "Contaminant" means any pollutant, hazardous substance, radioactive substance, toxic substance, hazardous waste, radioactive waste, special waste, petroleum or petroleum derived substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any hazardous or toxic constituent thereof and includes, but is not limited to, these terms as defined in Environmental, Health or Safety Requirements of Law. "Debt" of any Person means at any date (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though he rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (iv) all obligations of such Person as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (v) all obligations of such Person as an account party in respect of letters of credit and bankers' acceptances, (vi) all obligations of such Person under direct or indirect guaranties in respect of, and all obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, Debt of others and (vii) all other Debt secured by a lien, mortgage or security interest on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person. For the avoidance of doubt, in no event shall the obligations of a Person as lessee or sublessee under an Operating Leases be considered Debt of such Person. "Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both. "Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower nd the Agent. "EBIT" means, for any period on a Consolidated basis for the Borrower and its Consolidated Subsidiaries, the sum of the amounts for such period of: (i) Consolidated Net Income, provided that: (A) all gains and all losses realized by such person and its subsidiaries upon thesale or other disposition (including, without limitation, pursuant to sale and leaseback transactions) of property or assets which are not sold or otherwise disposed of in the ordinary course of business, or pursuant to the sale of any capital stock of such person or any subsidiary, shall be excluded from such Consolidated Net Income, (B) net income or net loss of any person combined with such person on a "pooling of interests" basis attributable to any period prior to the date of such combination shall be excluded from such Consolidated Net Income, (C) all items of gain or loss which are properly classified as extraordinary in accordance with GAAP shall be excluded from such Consolidated Net Income, (D) all items which are properly classified in accordance with GAAP as cumulative effects of accounting changes shall be excluded from such Consolidated Net Income, (E) net income of any person which is not a subsidiary of such person and which is consolidated with such person or is accounted for by such person by the equity method of accounting shall be included in such Consolidated Net Income only to the extent of the amount of dividends or distributions paid to such person or a subsidiary, and (F) net loss of any person which is not a subsidiary of such person and which is consolidated with such person or is accounted for by such person by the equity method of accounting shall be excluded from such Consolidated Net Income; (ii) Consolidated Interest Expense; and (iii)charges for federal, state, local and foreign income taxes. "Eligible Assignee" means (i) any commercial bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $1,000,000,000 and a combined capital and surplus of at least $100,000,000; (ii) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $1,000,000,000 and a combined capital and surplus of at least $100,000,000; (iii) a commercial bank or savings and loan association not meeting both the total assets and combined capital and surplus requirements of clause (i) or (ii) which, together with any Lender, is under the common control of a single parent corporation; (iv) a commercial bank organized under the laws of any another country which is a member of the OECD, or a political subdivision of any such country, and that either (x) has total assets in excess of $3,000,000,000 and a combined capital and surplus of at least $150,000,000 or (y) is approved by the Agent and, unless an Event of Default shall have occurred and be continuing or any of the terms or provisions of this Agreement have been modified because of financial difficulties of the Borrower, the Borrower (whose approval will not be unreasonably withheld), provided in each case that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (v) the central bank of any country which is a member of the OECD; (vi) a finance company, insurance company or other financial institution (whether a corporation, partnership, limited liability company, trust or other entity) that is domiciled in the United States and is engaged in making, purchasing or otherwise investing in business loans or commercial loans in the ordinary course of its business and having total assets in excess of $500,000,000; and (vii) any other person (other than an Affiliate of the Borrower) approved by the Agent and, unless an Event of Default shall have occurred and be continuing or any of the terms or provisions of this Agreement, as originally in effect, have been modified because of financial difficulties of the Borrower or breaches or potential breaches of any of the terms or provisions hereof by the Borrower, the Borrower (whose approval will not be unreasonably withheld). "Environmental, Health or Safety Requirements of Law" means all valid and enforceable Requirements of Law derived from or relating to federal, state and local laws or regulations relating to or addressing the environment, health or safety, including but not limited to any law, regulation, or order relating to the use, handling, or disposal of any Contaminant, any law, regulation, or order relating to Remedial Action and any law, regulation, or order relating to workplace or worker safety and health, and such Requirements of Law as are promulgated by the specifically authorized agent responsible for administering such requirements. "Environmental Lien" means a Lien in favor of any Governmental Authority for any (i) liabilities under any Environmental, Health or Safety Requirements of Law or (ii) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. "ERISA" means the Employee Retirement Income Security Act of 1974 and the rules and regulations thereunder, collectively, as the same may from time to time be supplemented or amended and remain in effect. "ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the Borrower's controlled group, or under common control with the Borrower, within the meaning of section 414 of the Internal Revenue Code and the regulations promulgated and rulings issued thereunder. "ERISA Event" means (a) a reportable event, within the meaning of section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (b) the imposition of an obligation on the Borrower or any ERISA Affiliate to provide affected parties with written notice of intent to terminate a Plan in a distress termination described in section 4041(c) of ERISA; (c) the partial or complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan; (d) the withdrawal by the Borrower or an ERISA Affiliate from a Plan during a plan year for which the Borrower or any ERISA Affiliate was a substantial employer, as defined in section 4001(a)(2) of ERISA; (e) the failure by the Borrower or any ERISA Affiliate to make a payment to a plan required under section 302(f)(1) of ERISA; (f) the adoption of an amendment to a Plan requiring the provision of security to such Plan, pursuant to section 307 of ERISA; or (g) the institution by the PBGC of proceedings to terminate a Plan, pursuant to section 4042 of ERISA, or the occurrence of any event or condition that reasonably could constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Plan. "ERISA Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under section 414 of the Internal Revenue Code. "Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Federal Reserve Board, as in effect from time to time. "Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent. "Events of Default" has the meaning specified in section 6.1. "Existing Liens" means the Liens existing on April 1, 1996 upon or with respect to Property owned by the Borrower and its Subsidiaries and specified on Schedule II hereto. "Facility Fee" has the meaning specified in section 2.3(a). "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any successor thereto. "Fixed Rate Advance" means a Swing Line Advance which bears interest at a fixed rate as specified in the Confirmation of Swing Line Borrowing related thereto. "GAAP" has the meaning specified in section 1.3. "Governmental Authority" means any nation or government, any federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Insufficiency" means, with respect to any Plan, the amount, if any, by which the present value of the vested accrued benefits under such Plan, as determined using the actuarial assumptions then used for the purpose of determining the contributions to be made to such Plan, exceeds the fair market value of the assets of such Plan allocable to such benefits, provided that, with respect to any Multiple Employer Plan with respect to which an election under section 412(c)(4)(A) of the Internal Revenue Code has been made, Insufficiency shall mean the portion of any such excess that is allocable to the Borrower or any ERISA Affiliate pursuant to the procedures in effect from time to time with respect to such Multiple Employer Plan for the allocation of such excess among the employers with respect to such Multiple Employer Plan. "Interest Period" means, for each Advance comprising part of the same Revolving Borrowing, the period commencing on the date of such Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be (a) in the case of any Swing Line Advance, any number of days up to 30 days or 1 month, (b) in the case of any Revolving Advance which is a Prime Rate Advance, the period commencing on the date of such Advance and ending on the last day of the calendar quarter in which such Advance is made, and (c) in the case of any Revolving Advance which is an Adjusted Eurodollar Rate Advance, 1, 2, 3 or 6 months, in each case as the Borrower may select in the Notice of Borrowing for such Advance; provided, however, that: (i) the Borrower may not select any Interest Period which would end after the Termination Date; (ii) Interest Periods commencing on the same date for Revolving Advances comprising part of the same Revolving Borrowing shall be of the same duration; and (iii)whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, in the case of any Interest Period for an Adjusted Eurodollar Rate Advance, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended, or any successor statute. "Issuing Bank" means Society, as the issuer of Letters of Credit hereunder, and its successors and assigns in such capacity, except that with reference to letters of credit previously issued by Harris and deemed issued hereunder as Letters of Credit pursuant to the provisions of section 2.2(d)(v), the term Issuing Bank means Harris and its successors and assigns. "Lenders" means the Banks listed on the signature pages hereof and each Eligible Assignee that shall become a party hereto pursuant to section 8.7. Unless the context indicates otherwise, the term Lender includes a Lender in its capacity as a Swing Line Lender and a Lender in its capacity as the Issuing Bank. "Letter of Credit" has the meaning specified in section 2.1(e). "Letter of Credit Commitment" has the meaning specified in section 2.1(e). "Letter of Credit Document" has the meaning specified in section 2.14. "Letter of Credit Facility" has the meaning specified in section 2.1(e). "Letter of Credit Participation Fee" has the meaning specified in section 2.3(c). "Liabilities and Costs" means all direct or indirect, absolute or contingent, past, present or future liabilities, costs, expenses, obligations, responsibilities, damages (including, without limitation, punitive, economic, consequential and treble damages) and losses (including, without limitation, attorney, expert and consulting fees and costs of investigation, feasibility or Remedial Action studies, and fines, penalties and monetary sanctions and interest) with respect to or arising out of any of the following: personal injury, death, intentional, willful or wanton injury, damage or threat to the environment, natural resources or public health or welfare. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale agreement, deposit arrangement, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever in respect of any property of a Person, whether granted voluntarily or imposed by law, and includes the interest of a lessor under a lease which shall have been or should be, in accordance with GAAP, recorded as a capital lease, and the filing of any financing statement or similar notice (other than a financing statement filed by a "true" lessor pursuant to Section 9-408 of the Uniform Commercial Code), naming the lessee of such property as debtor or "lessee", under the Uniform Commercial Code or other comparable law of any jurisdiction with respect to any of the foregoing. For the avoidance of doubt, in the case of any Operating Lease under which a Person is the lessee or sublessee of real or tangible personal property (or mixed real and tangible personal property), the term Lien does not include the rights of the lessor or sublessor in such property or any financing statement covering such property (including any additions thereto, replacements thereof, or substitutions therefor, or any proceeds thereof) filed against such Person as debtor or as "lessee" or "sublessee". "Loan Documents" means (i) this Agreement, (ii) the Notes, (iii) the Agent Fee Letter, (iv) the Agent Syndication Letter, (v) each Subsidiary Guaranty, (vi) each Letter of Credit Document, (vii) any intercreditor agreement or similar document which the Agent and/or the Lenders may be requested to enter into in connection with the completion of the private placement referred to in section 5.2(b)(iv), and (viii) all other written agreements between any Loan Party and the Agent or any Lender delivered to the Agent or such Lender pursuant to or in connection with this Agreement. "Loan Party" means the Borrower or any of its Subsidiaries which has executed and delivered any Loan Document to or for the benefit of the Agent and the Lenders in connection herewith. "Majority Lenders" means at any time Lenders holding at least 66-2/3% of the then aggregate unpaid principal amount of the Revolving Advances held by Lenders, or, if no such principal amount is then outstanding, Lenders having at least 66-2/3% of the Commitments (provided that, for purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender, shall be included in (i) the Lenders holding such amount of the Revolving Advances or having such amount of the Commitments or (ii) determining the aggregate unpaid principal amount of the Revolving Advances or the total Commitments). "Margin Stock" shall have the meaning assigned to that term in Regulation G and Regulation U. "Material Adverse Effect" means a material adverse effect upon (i) the condition (financial or otherwise), operations or Property of the Borrower, individually, or of the Borrower and its Subsidiaries, taken as a whole or (ii) the legality, validity or enforceability of this Agreement, any Note or any of the other Loan Documents. "Multiemployer Plan" means a multiemployer plan, as defined in section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding three plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" means an employee benefit plan, other than a Multiemployer Plan, subject to Title IV of ERISA to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or any ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan. "Note" means a Revolving Note or a Swing Line Note, as the case may be. "Notice of Borrowing" means a Notice of Revolving Borrowing or a Notice of Swing Line Borrowing, as the case may be. "Notice of Revolving Borrowing" has the meaning specified in section 2.2(a). "Notice of Issuance" has the meaning specified in section 2.2(d). "Notice of Swing Line Borrowing" has the meaning specified in section 2.2(c). "OECD" means the Organization for Economic Cooperation and Development. "Operating Lease" means a lease of real and/or tangible personal Property as to which the obligations of the lessee or sublessee are not required to be capitalized under GAAP. "Original Agreement" has the meaning specified in the Preliminary Statements hereof. "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Permits" means any permit, approval, authorization license, variance, or permission required from a Governmental Authority under an applicable Requirement of Law. "Person" or "person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means a pension plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA and (i) with respect to which the Borrower or any ERISA Affiliate is or has been accruing or is or has been obligated to accrue contributions or (ii) which is providing benefits for employees (including former employees) of the Borrower or any ERISA Affiliate in respect of such employees' or former employees' employment with the Borrower or an ERISA Affiliate. "Prime Rate" means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the greater of (i) the rate of interest established by Society in Cleveland, Ohio, from time to time, as Society's prime rate, whether or not publicly announced, which interest rate may or may not be the lowest rate charged by Society for commercial loans or other extensions of credit; and (ii) the Federal Funds Rate in effect from time to time plus 1/2 of 1% per annum. "Prime Rate Advance" means a Revolving Advance which bears interest as provided in section 2.6(a)(i). "Property" means any real or personal property, plant, building, facility, structure, underground storage tank or unit, equipment, inventory, general intangible, or other asset owned, leased or operated by the Borrower or any of its Subsidiaries, as applicable (including any surface water thereon or adjacent thereto, and soil and groundwater thereunder). "Reference Banks" means (i) Society, (ii) Harris, and (iii) if required by the Majority Lenders, one additional Lender designated by the Majority Lenders. "Register" has the meaning specified in section 8.7(d). "Regulation G" means Regulation G of the Federal Reserve Board, as in effect from time to time; "Regulation T" means Regulation T of the Federal Reserve Board, as in effect from time to time; "Regulation U" means Regulation U of the Federal Reserve Board, as in effect from time to time; and "Regulation X" means Regulation X of the Federal Reserve Board, as in effect from time to time. "Release" means release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment or into or out of any Property, including the movement of Contaminants through or in the air, soil, surface water, groundwater or Property. "Remedial Action" means actions required to (i) clean up, remove, treat or in any other way address Contaminants in the indoor or outdoor environment; (ii) prevent the Release or threat of Release or minimize the further Release of Contaminants; or (iii) investigate and determine if a remedial response is needed and to design such a response and post- remedial investigation, monitoring, operation and maintenance and care. "Requirements of Law" means, as to any Person, the charter and by- laws or other organizational or governing documents of such Person, and any law, 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 including, without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, as amended, Regulation G, Regulation T, Regulation U and Regulation X, ERISA, the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance, building, or land use requirement or Permit or labor or employment rule or regulation, including Environmental, Health or Safety Requirements of Law. "Restatement Effective Date" has the meaning specified in section 8.6. "Revolving Advance" means an advance by a Lender to the Borrower as part of a Revolving Borrowing. A Revolving Advance may be either a Prime Rate Advance or an Adjusted Eurodollar Rate Advance, each of which shall be a "Type" of Revolving Advance. "Revolving Borrowing" means a borrowing consisting of simultaneous Revolving Advances of the same Type made by each of the Lenders pursuant to section 2.1(a). "Revolving Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Advances made by such Lender. "Stock Purchase Agreement" means the Stock Purchase Agreement, dated as of March 4, 1996, by and among (i) the Borrower, as the purchaser; (ii) Anderson Industries, Inc., a Delaware corporation; and (iii) the stockholders of Anderson Industries, Inc., as sellers, providing, among other things for the acquisition by the Borrower of Anderson Industries, Inc. and its Subsidiaries by means of the purchase by the Borrower of all of the issued and outstanding capital stock of Anderson Industries, Inc. "Subsidiary" of any Person means any corporation, partnership, joint venture, trust or estate of which (or in which) more than 50% of (a) the outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether or not at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership or joint venture, or (c) the beneficial interest of such trust or estate, is at the time directly or indirectly (through one or more other Subsidiaries of such Person) owned or controlled by such Person. "Subsidiary Guaranty" has the meaning specified in section 5.1(j). "Swing Line Advance" means an advance by a Swing Line Lender to the Borrower as part of a Swing Line Borrowing. "Swing Line Borrowing" means a borrowing consisting of simultaneous Swing Line Advances made by each of the Swing Line Lenders pursuant to section 2.1(b). "Swing Line Commitment" has the meaning specified in section 2.1(b). "Swing Line Lenders" means the Banks listed on the signature pages hereof which have Swing Line Commitments as specified in Schedule I hereto and each Eligible Assignee that shall become a party hereto pursuant to section 8.7 and shall succeed to all or part of such Swing Line Commitment. "Swing Line Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Swing Line Advances made by such Lender. "Termination Date" means the fourth anniversary of the Closing Date, unless all of the Lenders and the Borrower agree in writing to extend such date, or the earlier date of termination in whole of the Commitments pursuant to section 2.4 or section 6.1. "Wholly-Owned Subsidiary" means any Subsidiary, all of the equity securities (except directors' qualifying shares, where required by law to be owned by directors) of which, or all of the other equity interests in which, are owned directly or indirectly by the Borrower or one or more Wholly-Owned Subsidiaries. "Withdrawal Liability" means a liability in respect of a complete withdrawal or partial withdrawal from a Multiemployer Plan, as described in Part I of Subtitle E of Title IV of ERISA. 1.2. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding". 1.3. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in section 4.1(e) ("GAAP"). 1.4. Other Definitional Provisions. References to "sections", "subsections", "Schedules" and "Exhibits" shall be to sections, subsections, Schedules and Exhibits, respectively, of this Agreement unless otherwise specifically provided. The words "hereof", "herein", and "hereunder" and words of similar import when used in this Agreement shall unless otherwise specifically provided refer to this Agreement as a whole and not to any particular provision of this Agreement. SECTION 2.AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT. 2.1. Revolving Advances, Swing Line Advances and Letters of Credit. (a) Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Advances to the Borrower from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate amount not to exceed at any time outstanding the amount set opposite such Lender's name on Schedule I hereto under the caption "Commitments" or, if such Lender has entered into any Assignment and Acceptance, set forth as such Lender's Commitment in the Register maintained by the Agent pursuant to section 8.7(d), as such amount may be reduced pursuant to section 2.4 (such Lender's "Commitment"), less the sum of (i) such Lender's pro rata share of the aggregate maximum amount available to be drawn under all Letters of Credit then outstanding (assuming compliance with all requirements for drawing), plus (ii) such Lender's pro rata share of the aggregate amount, if any, drawn under Letters of Credit which have been honored, as to which reimbursement obligations have not as of such time either been paid directly or out of the proceeds of Revolving Advances; provided that the aggregate of the unused portions of the Commitments of the Lenders shall at all times equal or exceed the aggregate unpaid principal amount of the Swing Line Advances. Each Revolving Borrowing shall be in an aggregate amount not less than $500,000 or an integral multiple of $100,000 in excess thereof, in the case of a Revolving Borrowing consisting of Prime Rate Advances, and in an aggregate amount not less than $2,000,000 or an integral multiple of $1,000,000 in excess thereof, in the case of a Revolving Borrowing consisting of Adjusted Eurodollar Rate Advances, and shall consist of Revolving Advances made on the same day by the Lenders ratably according to their respective Commitments. No more than three Revolving Borrowings shall be made on any single Business Day. Within the limits of each Lender's Commitment, the Borrower may borrow under this section 2.1(a), repay Revolving Advances pursuant to section 2.5, prepay Revolving Advances pursuant to section 2.8 and reborrow under this section 2.1(a). (b) Each Swing Line Lender severally agrees, on the terms and conditions hereinafter set forth, to make Swing Line Advances to the Borrower from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate amount not to exceed at any time outstanding the amount set opposite such Swing Line Lender's name on Schedule I hereto under the caption "Swing Line Commitments" or, if such Lender has entered into any Assignment and Acceptance, set forth as such Lender's Swing Line Commitment in the Register maintained by the Agent pursuant to section 8.7(d), as such amount may be reduced pursuant to section 2.4 (such Swing Line Lender's "Swing Line Commitment"); provided that (i) the aggregate of the unused portions of the Commitments of the Lenders shall at all times equal or exceed the aggregate unpaid principal amount of the Swing Line Advances; and (ii) no Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall be in an aggregate amount not less than $500,000 nor more than $5,000,000 and shall be in an integral multiple of $250,000, and shall consist of Swing Line Advances made on the same day by the Swing Line Lenders in accordance with the Confirmation of Swing Line Borrowing related thereto, ratably according to their respective Swing Line Commitments. Within the limits of each Swing Line Lender's Swing Line Commitment, the Borrower may borrow under this section 2.1(b), repay Swing Line Advances pursuant to section 2.5, prepay Swing Line Advances pursuant to section 2.8 and reborrow under this section 2.1(b). (c) Notwithstanding anything herein to the contrary, the Swing Line Lenders shall not make any Swing Line Advance at any time when the Swing Line Lenders have actual knowledge that an Event of Default shall have occurred and be continuing which shall not been waived in accordance with the provisions of this Agreement. (d) If as a result of any bankruptcy or similar proceeding or the occurrence of any Default or Event of Default, Revolving Advances are not made pursuant to section 2.1(a) sufficient to repay any amounts owed to the Swing Line Lenders as a result of nonpayment of outstanding Swing Line Advances, each Lender agrees to purchase, and shall be deemed to have purchased, a participation in such outstanding Swing Line Advances in an amount equal to its ratable share (based on the Commitments of all the Lenders to make Revolving Advances) of the unpaid amount thereof together with accrued interest thereon. Upon one Business Day's notice from the Agent, each Lender shall deliver to the Agent for the account of the Swing Line Lenders an amount equal to its respective participation in same day funds at the office of the Agent. In order to evidence such participation each Lender agrees to enter into a participation agreement at the request of the Agent (acting on behalf of the Swing Line Lenders) in form and substance reasonably satisfactory to all parties involved in such participation. In the event any Lender fails to make available to the Agent for the account of the Swing Line Lenders the amount of such Lender's participation as provided above, the Swing Line Lenders shall be entitled to recover such amount on demand from such Lender together with interest at the Federal Funds Rate for the first Business Day following the date such amount is scheduled to be paid and thereafter at the Federal Funds Rate plus 1% per annum. (e) Subject to the terms and conditions of this Agreement, upon request by the Borrower, (i) the Issuing Bank shall issue standby and documentary letters of credit (each a "Letter of Credit") for the account of the Borrower, and (ii) the Issuing Bank may in its discretion (but only with the prior consent of all of the Lenders) issue Letters of Credit for the account of any of the Borrower's Subsidiaries, in each case from time to time on any Business Day during the period from the Restatement Effective Date until 30 Business Days prior to the Termination Date (A) in an aggregate maximum amount available to be drawn under all Letters of Credit then outstanding (assuming compliance with all requirements for drawing) not to exceed at any time $10,000,000 (such amount, as the same may be reduced pursuant to section 2.4, being the Issuing Bank's "Letter of Credit Commitment", the amount of the Letter of Credit Commitment of the Issuing Bank being the "Letter of Credit Facility"), and (B) in a maximum amount available to be drawn under any Letter of Credit to be issued on any date (assuming compliance with all requirements for drawing) not to exceed the sum of (1) the unused portion of the Commitments as of such date, plus (2) the aggregate principal amount of the Swing Line Advances then outstanding. Each issuance of a Letter of Credit shall be deemed to utilize the Letter of Credit Commitment of the Issuing Bank by an amount equal to the maximum available to be drawn under such Letter of Credit (assuming compliance with all requirements for drawing). Immediately upon the issuance of each Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed to have purchased and received from the Issuing Bank, in each case irrevocably and without any further action by any party, an undivided interest and participation in such Letter of Credit, each drawing thereunder, the obligations of the Borrower under this Agreement in respect thereof and the obligations of any Subsidiary in respect of the Letter of Credit Documents related thereto, in an amount equal to the product of (x) a fraction the numerator of which is the amount of the Commitment of such Lender and the denominator of which is the aggregate amount of all Commitments times (y) the maximum amount available to be drawn under such Letter of Credit (assuming compliance with all requirements for drawing). No Letter of Credit shall have an expiration date (including all rights of the Borrower or any Subsidiary or the beneficiary to require renewal) later than two years from the date of issuance or an expiration date later than the Termination Date, whichever is earlier. Within the limits of the Letter of Credit Facility, and subject to the provisions hereof, the Borrower may request (for its own account or, subject to the discretion of the Issuing Bank and the consent of all of the Lenders referred to above, for the account of any Subsidiary) the issuance of Letters of Credit under this section 2.1(e), prepay any Revolving Advances resulting from drawings thereunder pursuant to section 2.8 and request the issuance of additional Letters of Credit (for its own account or for the account of any Subsidiary) under this section 2.1(e). 2.2. Procedures for Making Advances and Issuance of Letters of Credit. (a) Each Revolving Borrowing shall be made on notice, given not later than (i) 11:00 A.M. (Cleveland, Ohio time) on the third Business Day prior to the date of the proposed Revolving Borrowing in the case of Adjusted Eurodollar Rate Advances, and (ii) 1:00 P.M. (Cleveland, Ohio time) on the Business Day of the proposed Revolving Borrowing in the case of Prime Rate Advances, by the Borrower to the Agent, which shall give to each Lender prompt notice thereof by telecopier, telex or cable. Each such notice of a Revolving Borrowing (a "Notice of Revolving Borrowing") shall be by telephone, telecopier, telex or cable, confirmed immediately in writing, and in the case of a telecopy, telex, cable or other written form of notice, shall be in substantially the form of Exhibit B-1 hereto, specifying therein the requested (i) date of such Revolving Borrowing, (ii) aggregate amount of such Revolving Borrowing, and (iii) duration of the Interest Period for each Revolving Advance to be made as part of such Revolving Borrowing. If no Interest Period is selected in a Notice of Revolving Borrowing relating to Prime Rate Advances, the Interest Period therefor shall be deemed to be 30 days. Each Lender shall, before 3:00 P.M. (Cleveland, Ohio time) on the date of such Revolving Borrowing, make available for the account of its Applicable Lending Office to the Agent at its address referred to in section 8.2, in same day funds, such Lender's ratable portion of such Revolving Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in section 3, the Agent will make such funds available to the Borrower at the Agent's aforesaid address. (b) Anything in subsection (a) above to the contrary notwithstanding, (i) if any Lender shall, at least one Business Day before the date of any requested Revolving Borrowing, notify the Agent and the Borrower that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Adjusted Eurodollar Rate Advances or to fund or maintain Adjusted Eurodollar Rate Advances hereunder, (x) the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until such Lender shall notify the Agent that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Prime Rate Advance, and (y) the Borrower shall forthwith prepay in full all Adjusted Eurodollar Rate Advances of all Lenders then outstanding, together with accrued interest thereon; (ii) if fewer than two Reference Banks furnish timely information to the Agent for determining the Adjusted Eurodollar Rate for any Adjusted Eurodollar Rate Advances comprising any requested Revolving Borrowing, the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Prime Rate Advance; and (iii)if the Majority Lenders shall, at least one Business Day before the date of any requested Revolving Borrowing, notify the Agent that the Adjusted Eurodollar Rate for Adjusted Eurodollar Rate Advances comprising such Revolving Borrowing will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Adjusted Eurodollar Rate Advances for such Revolving Borrowing, the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Prime Rate Advance. (c) The Borrower may from time to time request the Agent to furnish to the Borrower interest rate quotations for Swing Line Advances which the Swing Line Lenders would be willing to make at interest rates below the rate which would be applicable to such Borrowing if it were a Revolving Borrowing. Each Swing Line Borrowing shall be made on notice, given not later than 12:00 noon (Cleveland, Ohio time) on the Business Day of the proposed Swing Line Borrowing, by the Borrower to the Agent, which shall give to each Swing Line Lender prompt notice thereof by telecopier, telex or cable. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing") shall be by telephone, telecopier, telex or cable, confirmed immediately in writing, and in the case of a telecopy, telex, cable or other written form of notice, shall be in substantially the form of Exhibit B-2 hereto, specifying therein the requested (i) date of such Swing Line Borrowing, (ii) aggregate amount of such Swing Line Borrowing, and (iii) Swing Line Interest Period for each Swing Line Advance to be made as part of such Swing Line Borrowing. The Agent will consult with the Swing Lenders on the date of its receipt of the Notice of Swing Line Borrowing concerning the Swing Line Advances to be made pursuant to such Notice of Swing Line Borrowing and if the Swing Lenders have previously indicated to the Agent that they are willing to make Swing Line Advances pursuant thereto at an interest rate which is lower than the rate which would be applicable to such Borrowing if it were a Revolving Borrowing, the Agent shall have telephonically communicated such quotation to the Borrower and the Borrower shall have indicated its acceptance of such quotation, the Agent will give to the Borrower a confirmation of Swing Line Borrowing ("Confirmation of Swing Line Borrowing"), substantially in the form attached hereto as Exhibit B-3, not later than 3:00 P.M. (Cleveland, Ohio time) on the date of the proposed Swing Line Borrowing which specifies such lower interest rate and any possible prepayment provisions applicable thereto; otherwise, if the Swing Lenders are not willing to offer such a lower interest rate, the Confirmation of Swing Line Borrowing shall be given by the Agent as aforesaid but the interest rate applicable to the Swing Line Borrowing referred to therein shall be the Prime Rate. Each Swing Line Lender shall, before 3:00 P.M. (Cleveland, Ohio time) on the date of such Swing Line Borrowing, make available for the account of its Applicable Lending Office to the Agent at its address referred to in section 8.2, in same day funds, such Swing Line Lender's ratable portion of such Swing Line Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in section 3, the Agent will make such funds available to the Borrower at the Agent's aforesaid address. (d) (i) Each Letter of Credit shall be issued upon notice, given not later than 12:00 noon (Cleveland, Ohio time) on the third Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to the Issuing Bank and the Agent. Each such notice by the Borrower of the requested issuance of a Letter of Credit (a "Notice of Issuance"), whether for the account of the Borrower or for the account of any Subsidiary, shall be by telephone, telex, telecopier or cable, confirmed immediately in writing, accompanied by a properly completed application for the issuance of a letter of credit (in the form supplied by the Issuing Bank from time to time) and such reimbursement agreements and other documents and materials as may be contemplated thereby, specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B) maximum amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit, and (E) nature (i.e., standby or documentary) of such Letter of Credit. If the requested issuance of such Letter of Credit conforms to the requirements of this Agreement and any applicable Requirements of Law, the Issuing Bank will, unless the Issuing Bank has received notice from any Lender that an Event of Default has occurred and is continuing, but subject to the terms and conditions of this Agreement, issue such Letter of Credit and make it available to the Borrower at its office referred to in section 8.2 or as otherwise agreed with such Borrower in connection with such issuance. Any amendment to an outstanding Letter of Credit requested by the Borrower which extends the expiration date thereof (or any renewal, extension or similar rights of the beneficiary) or which increases the maximum amount of such Letter of Credit shall for all purposes of this Agreement be deemed the issuance of a Letter of Credit. (ii) The Borrower will pay or cause to be paid to the Issuing Bank, in immediately available funds, on the date of each drawing under any Letter of Credit issued for the account of the Borrower, all reimbursement obligations in respect of such Letter of Credit, irrespective of any claim, set-off, defense or other right which the Borrower or any Subsidiary may have against the Issuing Bank, any Lender, or any other person. Such payment, if not so made by the Borrower out of its own funds, may be made out of the proceeds of a Revolving Advance to the Borrower made as provided in section 2.2(d)(iv). In the case of any Letter of Credit issued for the account of any Subsidiary of the Borrower, the applicable Letter of Credit Documents shall provide that such Subsidiary will pay or cause to be paid to the Issuing Bank, in immediately available funds, on the date of each drawing under such Letter of Credit, all reimbursement obligations in respect of such Letter of Credit when due, irrespective of any claim, set-off, defense or other right which the Borrower or any Subsidiary may have against the Issuing Bank, any Lender, or any other person. (iii) The Issuing Bank shall promptly notify the Agent (and the Agent shall promptly notify the Lenders) of the issuance of any Letter of Credit. The Issuing Bank will notify the Agent and the other Lenders promptly of any increase or decrease in the maximum amount available to be drawn under all Letters of Credit outstanding from time to time (assuming compliance with all requirements for drawing). (iv) The payment by the Issuing Bank of a draft drawn under any Letter of Credit issued for the account of the Borrower shall constitute for all purposes of this Agreement the making of a Revolving Advance to the Borrower on the date such draft is drawn in the amount of such draft (but without any requirement for compliance with the provisions of sections 2.1 and 2.2 or the conditions set forth in section 3), if such drawing is not reimbursed by the Borrower in immediately available funds on the day of such drawing. In the event such reimbursement is not made as provided above, the Issuing Bank shall promptly notify each other Lender and the Agent. Each such Lender shall, on the same Business Day (if such notification is received by it on a Business Day prior to 12:00 noon (Cleveland, Ohio time), or by 1:00 P.M. (Cleveland, Ohio time) on the next Business Day (if such notification is received by it on a date which is not a Business Day or is received by it on a Business Day after 12:00 P.M. Cleveland, Ohio time), make a Revolving Advance (which shall be considered a Prime Rate Advance and a Revolving Borrowing by the Borrower) in an amount equal to the amount of its participation in such drawing for application to reimburse the Issuing Bank (but without any requirement for compliance with the provisions of sections 2.1 and 2.2 or the conditions set forth in section 3 and without regard to whether the Commitments have previously been terminated) and shall make available for the account of its Lending Office to the Agent for the account of the Issuing Bank, by deposit to the Agent's account, in same day funds, the amount of such Revolving Advance. If and to the extent that any Lender shall not have so made the amount of such Revolving Advance available to the Agent, such Lender and the Borrower severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Issuing Bank until the date such amount is paid to the Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under section 2.6(i), and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the Agent such amount, such amount so paid shall constitute a Revolving Advance by such Lender for purposes of this Agreement. (v) Schedule IV hereto contains an identification of certain letters of credit issued for the account of the Borrower and certain of its Subsidiaries by Society and Harris prior to the Restatement Effective Date. Each of the Lenders and the Borrower acknowledges and agrees that upon the Restatement Effective Date (A) such letters of credit shall be deemed to be Letters of Credit issued hereunder, subject to the terms and provisions of this Agreement, and (B) the Borrower shall have all obligations hereunder in respect of such Letters of Credit and Society or Harris, as the case may be, shall be deemed to be the Issuing Bank in respect thereof. (vi) The Borrower will use its best efforts to promptly arrange for the issuance, subject to the terms and conditions of this Agreement, of Letters of Credit for the account of the Borrower, in substitution for those Letters of Credit listed on Schedule IV under the heading "Letters of Credit to be Replaced", and which, pursuant to the provisions of section 2.2(d)(v), are deemed issued hereunder on the Restatement Effective Date. (e) If, on the date of any Revolving Borrowing or Swing Line Borrowing, any principal amount of any Advances previously made by a Lender participating in such Borrowing shall be due and payable to such Lender hereunder, such Lender shall, up to an amount equal to such principal amount and upon fulfillment of the applicable conditions set forth in section 3, make its Advance on the occasion of such Borrowing by applying the proceeds of such Advance to the repayment of such principal amount; provided, however, that no Swing Line Advance shall be made by applying the proceeds of such Advance, or any portion thereof, to the payment of principal of any other Swing Line Advance. The amount, if any, by which the Advance to be made by such Lender on the occasion of such Borrowing shall exceed such repaid principal amount shall be made available by such Lender in accordance with subsection (a) or (c) of this section 2.2. (f) The failure of any Lender to make the Advance to be made by it as part of any Revolving Borrowing or Swing Line Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Revolving Borrowing or Swing Line Borrowing. (g) Notwithstanding anything to the contrary contained herein, there shall not at any time be outstanding hereunder more than six Revolving Borrowings consisting of Adjusted Eurodollar Rate Advances. 2.3. Fees. (a) The Borrower has paid to the Agent on the effective date of the Original Agreement as provided in section 8.6 thereof a facility fee ("Facility Fee") in an amount specified in the Agent Fee Letter, for distribution to the Lenders for their own accounts pro rata according to their Commitments. (b) The Borrower agrees to pay to the Agent for the account of each Lender a commitment fee ("Commitment Fee") on the average daily unused portion of such Lender's Commitment from the effective date of the Original Agreement as provided in section 8.6 thereof in the case of any Bank and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date at a fluctuating rate equal to the Commitment Fee Rate in effect from time to time, payable quarterly in arrears on the last day of each June, September, December and March, commencing June 30, 1996, and on the Termination Date. As used herein, "Commitment Fee Rate" means a rate equal to (i) 18.75 basis points per annum, if at such time the Applicable Eurodollar Rate Margin would be 50 basis points per annum; or (ii) 25.00 basis points per annum, if at such time the Applicable Eurodollar Rate Margin would be greater than 50 basis points per annum. (c) The Borrower agrees to pay to the Agent for the pro rata account of each Lender a nonrefundable letter of credit participation fee (a "Letter of Credit Participation Fee"), computed on the maximum amount available to be drawn under all Letters of Credit issued and outstanding for the account of the Borrower or any of its Subsidiaries (assuming compliance with all requirements for drawing) during the period from and including the Restatement Effective Date until no Letters of Credit shall be issued and outstanding hereunder and the Termination Date shall have occurred. The Letter of Credit Participation Fee shall be payable as follows: (i) in the case of the issuance after the Restatement Effective Date of any Letter of Credit, or the increase after the Restatement Effective Date in the maximum amount of any Letter of Credit (assuming compliance with all requirements for drawing), the Letter of Credit Participation Fee shall be payable with respect thereto on the date of issuance or increase, as applicable, for the period from the date of issuance or increase to the last day of the then current calendar quarter (or shorter period ending with the scheduled expiration date thereof (assuming exercise of any renewal or extension rights)); and in the case of any Letters of Credit outstanding on the Restatement Effective Date or on the last day of any calendar quarter thereafter, the Letter of Credit Fee shall be payable with respect thereto on the Restatement Effective Date, in the case of Letters of Credit outstanding or deemed outstanding on the Restatement Effective Date, for the period from the Restatement Effective Date to the end of the current calendar quarter (or shorter period ending with the scheduled expiration date thereof (assuming exercise of any renewal or extension rights)), and thereafter quarterly in advance on the last day of each calendar quarter, commencing June 30, 1996, in the case of any Letters of Credit outstanding on such date, for the next succeeding calendar quarter (or shorter period ending with the scheduled expiration datethereof (assuming exercise of any renewal or extension rights)); in each case at a fluctuating rate equal to, in the case of the period commencing on the Restatement Effective Date, the Applicable Eurodollar Rate Margin per annum in effect at the Restatement Effective Date, and in the case of any other time or period, at a fluctuating rate equal to the Applicable Eurodollar Rate Margin per annum in effect at such time or the commencement of such period, as the case may be. In the case of Letters of Credit deemed issued hereunder on the Restatement Effective Date as provided in section 2.2(d)(v), such Letters of Credit will on the Restatement Effective Date be included in computations of the Letter of Credit Participation Fee; accordingly, on or immediately following the Restatement Effective Date, Society, Harris and the Borrower will settle among themselves their respective accounts in respect of issuance or similar fees for such Letters of Credit which have been paid or were payable prior to the Restatement Effective Date under the applicable documents with respect thereto (other than this Agreement), and the Borrower will simultaneously cause each applicable Subsidiary to settle its similar accounts with Harris. (d) The Borrower shall pay to the Issuing Bank, for its own account, (i) upon each issuance, negotiation, acceptance, transfer or amendment of a Letter of Credit the normal and customary fee or fees, as the case may be, then being charged by the Issuing Bank for the issuance, negotiation, acceptance, transfer or amendment of letters of credit, or such lesser or greater fee or fees in respect thereof as may be agreed upon between the Borrower and the Issuing Bank; and (ii) on demand, sums equal to any and all reasonable charges and expenses for telex, delivery or other services that the Issuing Bank may from time to time impose, pay or incur relative to the issuance of the Letters of Credit issued for the account of the Borrower (or any Subsidiary), or to presentment to, or to a payment by, the Issuing Bank thereunder. 2.4. Reduction of the Commitments. (a) The Borrower shall have the right, upon at least three Business Days' notice to the Agent, to terminate in whole or permanently reduce ratably in part the unused portions of the respective Commitments of the Lenders; provided, however, that (i) each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) no such reduction shall reduce the Commitments below the sum of the aggregate principal amount of the Revolving Advances then outstanding, plus the maximum aggregate amount available to be drawn under all outstanding Letters of Credit (assuming compliance with all requirements for drawing), plus the amount of the unused Letter of Credit Commitment, plus the Swing Line Commitments of the Swing Line Lenders, and (iii) any such notice of termination shall be accompanied by a notice of termination of the Swing Line Commitments delivered pursuant to subsection (b) below. (b) The Borrower shall have the right, upon at least three Business Days' notice to the Agent, to terminate in whole or permanently reduce ratably in part the unused portions of the respective Swing Line Commitments of the Swing Line Lenders; provided, however, that each such partial reduction shall be in the aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof. (c) The Borrower shall have the right, upon at least three Business Days' notice to the Agent, to terminate in whole or permanently reduce ratably in part the unused portion of the Letter of Credit Commitment of the Issuing Bank; provided, however, that each such partial reduction shall be in the aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof. (d) On each date after the date hereof that the Borrower receives proceeds of any underwritten public offering or private placement with one or more institutional investors of any equity securities of the Borrower or any debt securities of the Borrower having a weighted average life to maturity (computed in accordance with standard financial practice) of at least 6 years, the Borrower will, regardless of the amount of proceeds received by the Borrower in such offering or private placement, immediately (i) elect to permanently reduce ratably in part the aggregate Commitments of the Lenders to $60,000,000 or less, and (ii) elect to prepay the outstanding Revolving Borrowings, in accordance with section 2.8(b), so that after giving effect thereto the outstanding principal amount of the Revolving Advances do not exceed the aggregate amount of the Commitments as so reduced. 2.5. Repayment of the Revolving Advances and the Swing Line Advances. The Borrower shall repay the principal amount of each Revolving Advance made by each Lender and each Swing Line Advance made by each Swing Line Lender on the last day of the Interest Period for such Advance. 2.6. Interest on Advances. (a) Ordinary Interest. The Borrower shall pay interest on the unpaid principal amount of each Advance made by each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum: (i) Prime Rate Revolving Advances. If such Revolving Advance is a Prime Rate Advance, a rate per annum equal at all times to the Prime Rate in effect from time to time, payable quarterly on the last day of each calendar quarter and on the date such Prime Rate Advance shall be paid in full. (ii) Adjusted Eurodollar Rate Revolving Advances. If such Revolving Advance is an Adjusted Eurodollar Rate Advance, a rate per annum equal at all times during the Interest Period for such Revolving Advance to the sum of the Adjusted Eurodollar Rate for such Interest Period plus the Applicable Eurodollar Rate Margin in effect from time to time, payable on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day which occurs during such Interest Period every three months from the first day of such Interest Period. (iii)Swing Line Advances. If such Advance is a Swing Line Advance, a rate per annum equal at all times to the rate quoted by the Agent to the Borrower for such Swing Line Advance in the Confirmation of Swing Line Borrowing related thereto, or if no such rate is quoted, at the interest rate referred to in clause (i) above, payable on the last day of the Interest Period for such Swing Line Advance. As used herein, the term "Applicable Eurodollar Rate Margin" means 100 basis points per annum; provided, that, subsequent to June 30, 1996, if no Default or Event of Default shall have occurred and be continuing the Applicable Eurodollar Rate Margin will change to the number of basis points indicated in the Pricing Grid table which appears below, based on the ratio described in section 5.2(f). Changes in the Applicable Eurodollar Rate Margin based upon changes in such ratio shall become effective on the first day of each applicable Interest Period which commences after the delivery to the Agent pursuant to clause (i) or (ii) of section 5.1(h) of the financial statements of the Borrower, accompanied by the certificate referred to in clause (iii) of section 5.1(h), demonstrating the computation of such ratio, based upon the ratio in effect at the end of the applicable period covered by such financial statements. PRICING GRID Debt to Capitalization Applicable Ratio Eurodollar Rate Margin < 40% 50.00 Greater than or equal to 40% but < 45% 62.50 Greater than or equal to 45% but < 50% 75.00 Greater than or equal to 50% but < 55% 100.00 Greater than or equal to 55% 112.50 (b) Default Interest. If any amount of principal of an Advance is not paid when due (whether at stated maturity, by acceleration or otherwise) or if any interest, fees or other amounts payable hereunder are not paid when due (any such principal, interest, fees or other amounts, the "Defaulted Amount" and any such date, a "Due Date"), then (x) the principal amount of each Advance shall bear interest, from the Due Date until the Defaulted Amount is paid in full, payable on demand, at a rate per annum equal at all times to the greater of (1) 2% per annum above the rate per annum required to be paid on such Advance immediately prior to the date on which the Defaulted Amount became due and (2) 2% per annum above the Prime Rate in effect from time to time and (y) all interest, fees and other amounts payable hereunder which are not paid when due shall bear interest, from the date on which any such amount referred to in this clause (y) is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to 2% per annum above the Prime Rate in effect from time to time. 2.7. Interest Rate Determination. (a) Each Reference Bank agrees to furnish to the Agent timely information for the purpose of determining each Adjusted Eurodollar Rate. If any one of the Reference Banks shall not furnish such timely information to the Agent for the purpose of determining any such interest rate, but subject to section 2.2(b)(ii), the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. (b) The Agent shall give prompt notice to the Borrower and the Lenders or Swing Line Lenders, as the case may be, of the applicable interest rate determined by the Agent for purposes of section 2.6(a)(ii) or (iii), and the applicable rate, if any, furnished by each Reference Bank for the purpose of determining the applicable interest rate under section 2.6(a)(ii). 2.8. Prepayments of Advances. (a) The Borrower shall have no right to prepay any principal amount of (i) any Revolving Advances other than as provided in subsection (b) below, or (ii) any Swing Line Advances other than as specified in the Confirmation of Swing Line Borrowing relating to such Swing Line Advances. (b) The Borrower may, upon at least three Business Days' notice to the Agent (in the case of Adjusted Eurodollar Rate Advances), and upon one Business Day's notice to the Agent (in the case of Prime Rate Advances), in each case stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal amounts of the Advances comprising part of the same Revolving Borrowing, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment of Adjusted Eurodollar Rate Advances shall be in an aggregate principal amount not less than $2,000,000 and shall be an integral multiple of $1,000,000 in excess thereof, (y) each partial prepayment of Prime Rate Advances shall be in an aggregate principal amount not less than $250,000 and shall be an integral multiple of $250,000 in excess thereof, and (z) in the case of any such prepayment of an Adjusted Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to section 8.4(b). 2.9. Increased Costs. (a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Adjusted Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii)the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Adjusted Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that, before making any such demand, each Lender agrees to use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate as to the amount of such increased cost, submitted to the Borrower and the Agent by such Lender, shall be conclusive and binding for all purposes, in the absence of manifest error. (b) If any Lender determines that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrower shall immediately pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. A certificate as to such amounts submitted to the orrower and the Agent by such Lender shall be conclusive and binding for all purposes, in the absence of manifest error. (c) If any of the events referred to in clauses (i) and (ii) of section 2.9(a) shall either (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit issued by, or assets held by, or deposits in or for the ccount of the Issuing Bank or any Lender, or (ii) impose on the Issuing Bank or any Lender any other condition regarding this Agreement or such Lender, in either case as it pertains to the Letters of Credit or any Letter of Credit, and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase the cost to the Issuing Bank of issuing or maintaining any Letter of Credit or to any Lender of purchasing any participation therein (which increase in cost shall be determined by the Issuing Bank's or such Lender's, as the case may be, reasonable allocation of the aggregate of such cost increases resulting from such event), then, upon demand by the Issuing Bank or such Lender, the Borrower shall immediately pay to the Issuing Bank or such Lender, from time to time as specified by the Issuing Bank or such Lender, additional amounts that shall be sufficient to compensate the Issuing Bank or such Lender for such increased cost. A certificate as to such increased cost incurred by the Issuing Bank or such Lender as a result of any event mentioned in clause (i) or (ii) above and identifying the event giving rise thereto, submitted by the Issuing Bank or such Lender to the Borrower in good faith, shall, in the absence of manifest error, be conclusive as to the amount thereof. (d) Except as provided in this subsection (d), failure on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any period shall not constitute a waiver of such Lender's right to demand compensation with respect to any other period. The protection of this section 2.9 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed so long as it shall be customary for Lenders affected thereby to comply therewith. No Lender shall be entitled to compensation under this section 2.9 for any costs incurred or reductions suffered with respect to any date unless it shall have notified the Borrower that it will demand compensation for such costs or reductions not more than 90 days after the later of (i) such date and (ii) the date on which it shall have become aware of such costs or reductions. In the event the Borrower shall reimburse any Lender pursuant to this section 2.9 for any cost and the Lender shall subsequently receive a refund in respect thereof, the Lender shall so notify the Borrower and promptly pay to the Borrower the portion of such refund which it shall determine in good faith to be allocable to the cost so reimbursed. 2.10.Payments and Computations. (a) The Borrower shall make each payment hereunder not later than 11:00 A.M. (Cleveland, Ohio time) on the day when due in U.S. dollars to the Agent at its address referred to in section 8.2 in same day funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or commitment or other fees ratably (other than amounts payable pursuant to section 2.9 or 2.11) to the Lenders or Swing Line Lenders, as the case may be, for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender or Swing Line Lender, as the case may be, to such Lender or Swing Line Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to section 2.13(b), from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. (b) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such Lender is not made when due hereunder, to charge from time to time against any or all of the Borrower's accounts with such Lender any amount so due. (c) All computations of interest based on the Prime Rate, the Adjusted Eurodollar Rate, any interest rate specified in a Confirmation of Swing Line Borrowing or the Federal Funds Rate and of the Commitment Fee and Letter of Credit Participation Fee shall be made by the Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or Commitment Fee or Letter of Credit Participation Fee is payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, in the absence of manifest error. (d) Each Notice of Revolving Borrowing or Notice of Swing Line Borrowing and each Confirmation of Swing Line Borrowing shall be irrevocable and binding on the Borrower. In the case of any Revolving Borrowing and any Swing Line Borrowing which the related Notice of Revolving Borrowing or Confirmation of Swing Line Borrowing specifies is to be comprised of Adjusted Eurodollar Rate Advances or (in the case of Swing Line Advances) Fixed Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in the applicable Notice of Revolving Borrowing or Notice of Swing Line Borrowing, as the case may be, the applicable conditions set forth in section 3, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Revolving Borrowing or Swing Line Borrowing when such Advance, as a result of such failure, is not made on such date. (e) Unless the Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Agent the amount required to be made available by such Lender as part of such Borrowing, the Agent may assume that such Lender has made such amount available to the Agent on the date of such Borrowing in accordance with section 2.2(a) or 2.2(c), as the case may be, and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such amount available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate or rates applicable to such amount and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance or Advances as part of such Borrowing for purposes of this Agreement. (f) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment fee, as the case may be, provided, that, if such extension would cause payment of interest on or principal of Adjusted Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day. (g) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate. 2.11.Taxes. (a) Any and all payments by the Borrower hereunder or under the Notes shall be made, in accordance with section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this section 2.11) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as "Other Taxes"). (c) The Borrower will indemnify each Lender and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this section 2.11) paid by such Lender or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor. (d) Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Agent, at its address referred to in section 8.2, the original or a certified copy of a receipt evidencing payment thereof. (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each initial Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from "Taxes" as defined in section 2.11(a). (f) For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in section 2.11(e) (other than if such failure is due to a change in law occurring subsequent to the date on which a form originally was required to be provided, or if such form otherwise is not required under the first sentence of subsection (e) above), such Lender shall not be entitled to indemnification under section 2.11(a) with respect to Taxes imposed by the United States to the extent such Taxes would not be due if such form had been provided; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes. (g) Notwithstanding any contrary provisions of this Agreement, in the event that a Lender that originally provided such form as may be required under section 2.11(e) thereafter ceases to qualify for complete exemption from United States withholding tax, such Lender may assign its interest under this Agreement to any assignee and such assignee shall be entitled to the same benefits under this section 2.11 as the assignor provided that the rate of United States withholding tax applicable to such assignee shall not exceed the rate then applicable to the assignor. (h) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this section 2.11 shall survive the payment in full of principal and interest hereunder and under the Notes. (i) Any Lender claiming any additional amounts payable pursuant to this section 2.11 shall use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts which may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate of any Lender claiming compensation under this section 2.11 shall be conclusive and binding for all purposes, in the absence of manifest error. 2.12.Sharing of Payments, etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Advances or Swing Line Advances made by it (other than pursuant to section 2.9 or 2.11) in excess of its ratable share of payments on account of the Revolving Advances or Swing Line Advances obtained by all the Lenders or Swing Line Lenders, as the case may be, such Lender shall forthwith purchase from the other Lenders or Swing Line Lenders, as the case may be, such participations in the Revolving Advances or Swing Line Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this section may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. 2.13.Evidence of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Advance owing to such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (b) The Register maintained by the Agent pursuant to section 8.7(d) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and the Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iv) the amount of any sum received by the Agent from the Borrower hereunder and each Lender's share thereof. (c) The entries made in the Register shall be conclusive and binding for all purposes, absent manifest error. 2.14.Obligations Absolute. The obligations of the Borrower under this Agreement in respect of any Letter of Credit issued for the account of the Borrower and under any other agreement or instrument relating to any such Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) and such other agreement or instrument under all circumstances, including, without limitation, to the extent permitted by law, the following circumstances (except as limited by section 8.9): (i) any lack of validity or enforceability of any Letter of Credit or any other agreement or instrument relating thereto (collectively, the "Letter of Credit Documents") or any other Loan Document; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower (or any Subsidiary) in respect of the Letters of Credit or any other amendment or waiver of or any consent to departure from all or any of the Letter of Credit Documents or any other Loan Document; (iii)any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the obligations of the Borrower (or any Subsidiary) in respect of the Letters of Credit; (iv) the existence of any claim, set-off, defense or other right that the Borrower (or any Subsidiary) may have at any time against any beneficiary or any transferee of a Letter of Credit (or any persons for whom any such beneficiary or any such transferee may be acting), the Issuing Bank, or any other person, whether in connection with the Loan Documents, the transactions contemplated hereby or by the Letter of Credit Documents or any unrelated transaction; (v) any statement or any other document presented under or in connection with any Letter of Credit or other Loan Document proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, provided that payment by the Issuing Bank under such Letter of Credit against presentation of such statement or document shall not have constituted gross negligence or willful misconduct; (vi) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of the Letter or Credit, except any such payment resulting solely from the gross negligence or willful misconduct of the Issuing Bank; and (vii)any other circumstance or happening whatsoever other than the payment in full of all obligations hereunder in respect of any Letter of Credit or any agreement or instrument relating to any Letter of Credit, whether or not similar to any of the foregoing, that might otherwise constitute a defense available to, or a discharge of, the Borrower. SECTION 3.CONDITIONS. 3.1. Conditions Precedent at Restatement Effective Date. On or prior to the Restatement Effective Date the following conditions shall be satisfied (a) all fees and expenses and other amounts payable to the Agent, for its own account or for the account of the Lenders, pursuant to the Original Agreement on or prior to the Restatement Effective Date shall have been paid in full; and (b) the Agent shall have received on or before the Restatement Effective Date the following, each in form and substance satisfactory to the Agent and (except for the Notes) in sufficient copies for each Lender: (i) A Revolving Note payable to the order of each Lender in the principal amount of such Lender's Commitment, in exchange for the Revolving Note issued to such Lender pursuant to the Original Agreement. (ii) A Swing Line Note payable to the order of each Swing Line Lender in the principal amount of such Lender's Swing Line Commitment, in exchange for the Swing Line Note issued to such Lender pursuant to the Original Agreement. (iii)A certificate of the Secretary or an Assistant Secretary of the Borrower, dated the Closing Date, certifying (A) the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder, and (B) copies of the resolutions of the Board of Directors of the Borrower approving this Agreement and the Notes, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Notes. (iv) A Subsidiary Guaranty of each of Anderson Industries, Inc. and Atwood Industries, Inc., amending and restating in its entirety the Subsidiary Guaranty previously executed and delivered by such person. (v) A favorable opinion of Sommer & Barnard, counsel for the Borrower, substantially in the form of Exhibit D hereto and as to such other matters as any Lender through the Agent may reasonably request. 3.2. Conditions Precedent to Each Extension of Credit. The obligation of each Lender to make an Advance on the occasion of each Borrowing (including the initial Borrowing) and the obligation of the Issuing Bank to issue any Letter of Credit shall be subject to the further conditions precedent that the Agent shall have received the Notice of Borrowing or Notice of Issuance with respect thereto and that on the date of such Borrowing or such issuance of a Letter of Credit (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing, or the giving of the applicable Notice of Issuance and the issuance of the Letter of Credit related thereto, as the case may be, shall constitute a representation and warranty by the Borrower that on the date of such Borrowing or the issuance of such Letter of Credit, as the case may be, such statements are true): (i) the representations and warranties contained in section 4.1 (excluding (except with respect to any Advance which would increase the outstanding Advances hereunder) those contained in subsections (f) and (h) thereof) are correct on and as of the date of such Borrowing, before and after giving effect to such Revolving Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, and (ii) no Default has occurred and is continuing, or would result from such Revolving Borrowing or from the application of the proceeds therefrom; and (b) the Agent shall have received such other approvals, opinions or documents as any Lender through the Agent may reasonably request; provided, however, that the obligation of each Lender to make a Revolving Advance on the occasion of a Revolving Borrowing in an aggregate amount equal to or less than the aggregate amount of the Swing Line Advances maturing on the date of such Revolving Borrowing shall, unless and only to the extent that such Swing Line Advances were made at a time when the Swing Line Lenders had actual knowledge that an Event of Default had occurred and was continuing which had not been waived in accordance with the provisions of this Agreement, not be subject to any of the conditions precedent referred to above. SECTION 4.REPRESENTATIONS AND WARRANTIES. 4.1. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a) Corporate Existence. The Borrower is a corporation duly organized and validly existing under the laws of the State of Indiana. (b) Corporate Authorization. The execution, delivery and performance by the Borrower of this Agreement, the Notes and the other Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene, or constitute a default under, (i) the Borrower's charter or by-laws, or (ii) any other Requirement of Law or (iii) any agreement, contractual restriction or other instrument binding on or affecting the Borrower; or result in the creation or imposition of any Lien on any Property of the Borrower or any of its Subsidiaries. (c) Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Borrower of this Agreement, the Notes or any other Loan Document. (d) Binding Effect. This Agreement is, and the Notes and the other Loan Documents when delivered hereunder will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. (e) Financial Information. The Borrower has furnished to the Lenders and the Agent complete and correct copies of the consolidated balance sheets of the Borrower and its consolidated subsidiaries as at December 31, 1994 and December 30, 1995 and the related consolidated statements of operations, shareholders' equity and cash flows of the Borrower and its consolidated subsidiaries for the years then ended, all certified without qualification by Price Waterhouse LLP, as contained in the Form 10-K Annual Report of the Borrower for its fiscal year ended December 30, 1995, filed with the Securities and Exchange Commission, as amended through the date hereof (such Report, as so amended, the "Form 10-K"). The Borrower has also delivered to the Lenders and the Agent complete and correct copies of the Form 10-K, including all Exhibits and schedules attached thereto and filed therewith. All such financial statements contained in the Form 10-K have been prepared in accordance with GAAP, consistently applied (except as stated therein), and fairly present the financial position of the Borrower and its consolidated subsidiaries as at the respective dates indicated and the consolidated results of their operations and cash flows for the respective periods indicated. (f) No Changes, etc. Since December 30, 1995, there has occurred no event which has had or might have a Material Adverse Effect. (g) Financial Projections. The Borrower has delivered to the Agent prior to the execution and delivery of this Agreement a complete and correct copy of certain financial projections prepared by management of the Borrower (the "Financial Projections"). The Financial Projections were prepared by management of the Borrower in good faith after taking into account the existing and historical levels of the Borrower's and its Subsidiaries' business activity, known trends, including general economic trends, and all other information, assumptions and estimates pertinent thereto. The Financial Projections were considered by management of the Borrower, as of the date of preparation thereof, to be realistically achievable and to include in written form all material assumptions and premises underlying the financial information set forth in the Financial Projections; provided, that no representation or warranty is made as to the impact of future general economic conditions or as to whether the Borrower's projected results as set forth in the Financial Projections will actually be realized. No facts are known to the Borrower at the date hereof which, if reflected in the Financial Projections, would result in a Material Adverse Effect as compared to the assets, liabilities, results of operations or cash flows reflected therein. (h) Litigation. There is no pending or threatened action or proceeding affecting the Borrower or any of its Subsidiaries before any Governmental Authority or arbitrator, which (taking into account the provisions for reserves and other matters disclosed in footnote 7 to the financial statements referred to in section 4.1(e) hereof) has had or is reasonably likely to have a Material Adverse Effect. (i) Compliance with Margin Regulations. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance have been used in violation of any Requirement of Law (including, without limitation, Regulation G, Regulation T, Regulation U and Regulation X). At no time would more than 25% of the value of the assets of the Borrower or the Borrower and its Consolidated Subsidiaries that are subject to any "arrangement" (as such term is used in section 221.2(g) of Regulation U) hereunder be represented by Margin Stock. (j) Investment Company, etc. Neither the Borrower nor any of its Subsidiaries is subject to regulation with respect to the creation or incurrence of unsecured Debt under the Investment Company Act of 1940, as amended, the Interstate Commerce Act as amended, the Federal Power Act, as amended, or any applicable state public utility law. (k) ERISA Matters. (i) Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code. (ii) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan which would constitute an Event of Default under section 6.1(h) hereof. (iii)Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan whose liabilities are in excess of its assets by an amount greater than $100,000, copies of which have been filed with the Internal Revenue Service prior to the date hereof and furnished to the Agent and the Lenders listed on the signature pages hereof, is complete and accurate and fairly presents the funding status and financial condition of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status or financial condition which constitutes a Material Adverse Effect. (iv) As of the date of this Agreement, neither the Borrower nor any ERISA Affiliate has incurred, or is reasonably expected to incur, any Withdrawal Liability which has not been paid in full to any Multiemployer Plan (other than Withdrawal Liabilities, if any, which in the aggregate are immaterial or nominal). (v) As of the date of this Agreement, neither the Borrower nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated within the meaning of Title IV of ERISA, which reorganization or termination would result in any liability of the Borrower or any ERISA Affiliate (other than liabilities, if any, which in the aggregate are immaterial or nominal). (l) Environmental Matters. Neither the Borrower nor any of its Subsidiaries has received notice or otherwise obtained knowledge of any Claim, demand, action, event, condition, report or investigation indicating or concerning any potential or actual liability which (taking into account the provisions for reserves and other matters disclosed in footnote 7 to the financial statements referred to in section 4.1(e) hereof) individually or in the aggregate has had or is reasonably likely to have a Material Adverse Effect arising in connection with (i) any non-compliance with or violation of any Environmental, Health or Safety Requirements of Law or (ii) the Release or threatened Release of any Contaminant into the environment. None of the Borrower or its Subsidiaries or any of their respective operations or present or past Property are subject to any investigation by, or any judicial or administrative proceeding, order, judgment, decree or settlement alleging or addressing (i) a violation of any Environmental, Health or Safety Requirement of Law; (ii) any Remedial Action; or (iii) any Claims or Liabilities and Costs arising from the Release or threatened Release of a Contaminant into the environment, which (in any such case referred to in the preceding clauses (i), (ii) or (iii)), and taking into account the provisions for reserves and other matters disclosed in footnote 7 to the financial statements referred to in section 4.1(e) hereof, has had or is reasonably likely to have a Material Adverse Effect, nor has the Borrower or any of its Subsidiaries received any notice of any of the foregoing which the Borrower in good faith believes is reasonably likely (taking into account the provisions for reserves and other matters disclosed in footnote 7 to the financial statements referred to in section 4.1(e) hereof) to have a Material Adverse Effect. No Environmental Lien has attached to any Property of the Borrower or any of its Subsidiaries which has had or is reasonably likely to have a Material Adverse Effect. (m) Acquisition Documents, etc. The Stock Purchase Agreement is a valid and binding agreement of the respective parties thereto, is enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the rights of creditors generally, and by principles of equity, does not violate or result in any violation of any license, permit or other authorization, judgment, decree, order, law, statute, ordinance or governmental rule or regulation, and does not require the consent or authorization, as a condition to its valid execution, delivery or performance, pursuant to any contract, agreement, lease or other instrument, or any law, statute, rule, regulation or ordinance, of any governmental or regulatory authority, other than such consents and authorizations as have been duly obtained and are in full force and effect. The Borrower has delivered to the Agent and each Lender prior to the execution of this Agreement a true, correct and complete copy of the Stock Purchase Agreement and all Exhibits, Schedules and other documents including, without limitation, all side letters, which embody any material arrangements related to the transactions contemplated thereby. The transactions contemplated by the Stock Purchase Agreement were consummated on April 3, 1996. SECTION 5.COVENANTS OF THE BORROWER. 5.1. Affirmative Covenants. So long as any Note shall remain unpaid or any Lender shall have any Commitment or Swing Line Commitment hereunder, the Borrower agrees that, unless the Majority Lenders shall otherwise consent in writing: (a) Compliance with Laws, etc. The Borrower will comply, and cause each of its Subsidiaries to comply, in all material respects with all applicable Requirements of Law. (b) Preservation of Corporate Existence. The Borrower will preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence, corporate rights (charter and statutory), and corporate franchises; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the preservation thereof is no longer necessary or desirable in the conduct of the business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower, such Subsidiary or the Lenders. Nothing in this section 5.1(b) shall be deemed to prohibit any merger or consolidation involving the Borrower or any of its Subsidiaries which is permitted by sections 5.2(d), 5.2(h) and 5.2(k). (c) Accuracy of Information Given to Lenders. The Borrower will use its best efforts to ensure that (i) all written information, exhibits or reports furnished by the Borrower or any of its Subsidiaries to the Agent or any Lender in connection herewith (other than financial projections) will at the time so furnished contain no untrue statement of a material fact and will not at such time omit to state any material fact or any fact necessary to make the statements contained therein not misleading, and (ii) all financial projections, if any, prepared by the Borrower and furnished by the Borrower to the Agent or any Lender in connection herewith will be prepared in good faith based upon reasonable assumptions (it being understood that any such projections will be subject to significant uncertainties and contingencies, and that no assurance can be given that any such projections will be realized). (d) Insurance. The Borrower will maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates. (e) Books and Records. The Borrower will keep proper books of record and account in which entries in conformity with generally accepted accounting principles (and all legal requirements) shall be made of all dealings and transactions in relation to their businesses and activities. (f) Use of Proceeds. The proceeds of the Advances made under this Agreement will be used by the Borrower for any lawful purposes not prohibited by the terms of this Agreement, including, without limitation, acquisitions of companies and fees and expenses related to such acquisitions. None of such proceeds will be used in violation of any applicable Requirement of Law, including, without limitation, Regulation G, Regulation T, Regulation U and Regulation X. (g) Payment of Taxes, etc. The Borrower will pay and discharge, and will cause each Subsidiary of the Borrower to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon it or upon its Property, and (ii) all lawful claims which, if unpaid, (x) might by law become a Lien upon its Property or (y) would otherwise be reasonably likely to have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge, levy or claim which is being contested in good faith by proper proceedings and as to which appropriate reserves are being maintained in accordance with GAAP. (h) Reporting Requirements. The Borrower will furnish to the Lenders: (i) as soon as practicable and in any event within 45 days after the end of each of the first three quarterly fiscal periods in each fiscal year of the Borrower, unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated subsidiaries as at the end of such fiscal quarter and the related unaudited consolidated and consolidating statements of income and of cash flows for such period, and (in the case of the second and third such quarterly periods) for the portion of the fiscal year ended with the last day of such quarterly period, setting forth in each case in comparative form the figures for the corresponding periods of the previous fiscal year, all in reasonable detail and certified, subject to normal year-end audit adjustments, by a responsible financial officer of the Borrower; provided that such requirement for the furnishing of such quarterly consolidated financial statements may be fulfilled by the furnishing the report of the Borrower on Form 10-Q, as filed with the Securities and Exchange Commission, for the applicable quarterly period, accompanied by a certificate of a responsible financial officer of the Borrower to the effect specified above; (ii) as soon as practicable and in any event within 90 days after the end of each of its fiscal years, consolidated and consolidating balance sheets of the Borrower and its consolidated subsidiaries as at the end of such fiscal year, together with related consolidated and consolidating statements of income, of cash flows and of stockholders' equity for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by the opinion with respect to such consolidated financial statements of independent public accountants of recognized national standing selected by the Borrower, which opinion shall be unqualified and shall (A) state that such accountants audited such consolidated financial statements in accordance with generally accepted auditing standards, that such accountants believe that such audit provides a reasonable basis for their opinion, and that in their opinion such consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Borrower and its consolidated subsidiaries as at the end of such fiscal year and the consolidated results of their operations and cash flows for such fiscal year in conformity with generally accepted accounting principles, or (B) contain such statements as are customarily included in unqualified reports of independent accountants in conformity with the recommendations and requirements of the American Institute of Certified Public Accountants (or any successor organization); provided that such requirement for the furnishing of such annual consolidated financial statements may be fulfilled by the furnishing the report of the Borrower on Form 10-K, as filed with the Securities and Exchange Commission, for the applicable fiscal year; (iii)together with delivery of the financial statements referred to in clauses (i) and (ii), a certificate of a responsible financial or accounting officer of the Borrower as to the existence of any Event of Default and as to a schedule in form reasonably satisfactory to the Agent showing compliance with the requirements and covenants contained in sections 5.2(a)(i), (vi), (viii), (x) and (xi); 5.2(b); 5.2(e);, 5.2(f); 5.2(g); 5.2(h); and 5.2(k); (iv) as soon as possible and in any event within two days after the occurrence of each Default continuing on the date of such statement, a statement of the chief financial or accounting officer of the Borrower setting forth details of such Default and the action which the Borrower has taken and proposes to take with respect thereto; (v) as soon as practicable and in any event within 45 days after the commencement of each fiscal year of the Borrower, a consolidated operating and capital budget (in form reasonably satisfactory to the Agent) prepared by the Borrower on a monthly or quarterly basis for such fiscal year (and if normally prepared by the Borrower, any subsequent fiscal years), accompanied by the statement of a responsible financial or accounting officer of the Borrower to the effect that, to the best of his knowledge, such budget is a good faith forecast of the consolidated balance sheet, income statement, operating cash flows and capital expenditures of the Borrower and its consolidated subsidiaries for the period covered thereby; (vi) as soon as possible and in any event (i) within thirty days after the Borrower or any ERISA Affiliate knows or has reason to know that any ERISA Event described in clause (a) of the definition of ERISA Event with respect to any Plan has occurred which reasonably could result in liability to the PBGC (other than liabilities, if any, which are immaterial or nominal in the aggregate) and (ii) within 10 days after the Borrower or any ERISA Affiliate knows or has reason to know that any other ERISA Event with respect to any Plan has occurred which reasonably could result in liability to the PBGC (other than liabilities, if any, which are immaterial or nominal in the aggregate), a statement of a responsible chief financial or accounting officer of the Borrower describing such ERISA Event and the action, if any, that the Borrower or such ERISA Affiliate has taken or proposes to take with respect thereto; (vii)promptly after the receipt thereof by the Borrower or any ERISA Affiliate, (A) copies of all reports and notices which could result in an adverse financial effect on the Borrower or any of its Subsidiaries which the Borrower or any ERISA Affiliate receives from the PBGC, the Internal Revenue Service or the U.S. Department of Labor with respect to any Plan, Multiemployer Plan or Multiple Employer Plan, (B) copies of each notice from the PBGC received by the Borrower or any ERISA Affiliate of the PBGC's intention to terminate any Plan or to have a trustee appointed to administer any Plan and (C) a copy of each notice from the sponsor of a Multiemployer Plan received by the Borrower or any ERISA Affiliate concerning (I) the imposition of Withdrawal Liability by a Multiemployer Plan, (II) the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA, (III) the termination of a Multiemployer Plan within the meaning of Title IV of ERISA or (IV) the amount of liability incurred, or expected to be incurred, by the Borrower or any ERISA Affiliate in connection with any event described in clause (I), (II) or (III) above; (viii)promptly after the commencement thereof, notice of all actions, suits and proceedings before any domestic or foreign court or Governmental Authority affecting the Borrower or any of its Subsidiaries, of the type described in section 4.1(h); (ix) promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that the Borrower or any of its Subsidiaries sends to its stockholders generally, and copies of all regular, periodic and special reports, and all registration statements (other than any registration statement on Form S-8 or any successor form thereto), that the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any Governmental Authority that may be substituted therefor, or with any national securities exchange; and (x) such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request. (i) Inspection. The Borrower will permit the Agent and each Lender or any other holder of any Note, upon its reasonable request and at its expense, at any reasonable time and from time to time upon reasonable notice, to visit and inspect its properties and the properties of its Subsidiaries and to examine and make copies of, and abstracts from its records and books of account and the records and books of account of its Subsidiaries and to discuss its affairs, finances and accounts with its Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer or Treasurer, and any other officer or employee identified by the Agent or any such Lender or holder by position or function, and with its independent accountants (the Borrower by this sentence authorizes such officers, employees and accountants to discuss the same, at the expense of and upon prior notice to the Borrower, providing the Borrower with an opportunity to be present at any such discussion), all at such reasonable times and as often as may be reasonably requested. (j) Certain Subsidiaries to Merge into Borrower or Guarantee Advances. In the event any Subsidiary of the Borrower has at any time assets with a net book value, or fair market value, whichever is greater, in excess of $5,000,000, the Borrower will (i) promptly and in any event within 30 days following the occurrence of such event, notify the Agent in writing of such event, identifying the Subsidiary in question and referring specifically to the rights of the Agent and the Lenders under this subsection; and (ii) within 30 days following request therefor from the Agent or any Lender, either (A) cause such Subsidiary to be merged into the Borrower in compliance with section 5.2(d), and provide the Agent with evidence that such merger has been effected; or (B) cause such Subsidiary to deliver to the Agent, in sufficient quantities for the Lenders, (1) a guaranty (a "Subsidiary Guaranty"), satisfactory in form and substance to the Agent and the Majority Lenders, duly executed by such Subsidiary, substantially in the form attached hereto as Exhibit E, pursuant to which such Subsidiary unconditionally and absolutely guarantees payment of all Advances made hereunder, and (2) resolutions of the Board of Directors of such Subsidiary, certified by the Secretary or an Assistant Secretary of such Subsidiary as duly adopted and in full force and effect, authorizing the execution and delivery of such Subsidiary Guaranty. (k) Most Favorable Covenant Status. Should the Borrower, while this Agreement is in effect or any Note remains unpaid, issue any Debt for money borrowed or represented by bonds, notes, debentures or similar securities, in an aggregate amount exceeding $5,000,000, to any lender or group of lenders acting in concert with one another, or an institutional investor or investors, pursuant to a loan agreement, credit agreement, note purchase agreement, indenture or other similar instrument, which instrument includes affirmative or negative financial or business covenants or similar restrictions, warranties, representations, or defaults or events of default (or any other type of restriction which would have the practical effect of any of the foregoing, including, without limitation, any "put" or mandatory prepayment of such Debt) other than those set forth herein or in any of other Loan Documents, the Borrower shall promptly so notify the Agent and the Lenders and, if the Agent shall so request by written notice to the Borrower (after a determination has been made by the Majority Lenders that any of such documents or instruments contain any provisions, which either individually or in the aggregate, are more favorable to any such lender, group of lenders or institutional investor or investors than any of the provisions set forth herein), the Borrower, the Agent and the Lenders shall promptly amend this Agreement to incorporate some or all of such provisions, in the discretion of the Agent and the Majority Lenders, into this Agreement and, to the extent necessary and reasonably desirable to the Agent and the Majority Lenders, into any of the other Loan Documents, all at the election of the Agent and the Majority Lenders. (l) Senior Debt. The Borrower will at all times ensure that (i) the claims of holders of the Notes under the Notes and this Agreement will not be subordinate to, and will in all respects at least rank pari passu with, the claims of every other senior unsecured creditor of the Borrower, and (ii) any Debt subordinated in any manner to the claims of any other senior unsecured creditor of the Borrower will be subordinated in like manner to the claims of holders of the Notes. 5.2. Negative Covenants. So long as any Note or any amount due hereunder shall remain unpaid or any Lender shall have any Commitment or Swing Line Commitment hereunder, the Borrower will not, without the written consent of the Majority Lenders: (a) Liens, etc. Create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien upon or with respect to any of its Property, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income in each case to secure or provide for the payment of any Debt of any Person; excluding, however, from the operation of the foregoing restrictions: (i) Existing Liens (including the replacement, extension or renewal of any such Existing Lien upon the same Property theretofore subject thereto and the replacement, extension or renewal (without increase of principal amount) of the Debt secured thereby); (ii) Liens for taxes, assessments or governmental charges or levies, not yet due and payable, or being contested in good faith and against which reserves have been established by the Borrower to the extent required under GAAP; (iii)Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's, and repairmen's Liens and other similar Liens arising in the ordinary course of business securing obligations (other than Debt) which are not overdue for a period of more than 30 days; (iv) pledges or deposits to secure obligations under workmen's compensation laws or similar legislation or to secure statutory obligations of the Borrower or any of its Subsidiaries, provided such Liens do not result in a Material Adverse Effect; (v) Liens of landlords arising by operation of law or pursuant to leases entered into in the ordinary course of business securing rental obligations which are not overdue for a period of more than 30 days; (vi) Liens on property (including, without limitation, shares of capital stock) of a corporation existing at the time such corporation is merged with or into or consolidated with the Borrower or any of its Subsidiaries or at the time such corporation becomes a Subsidiary or at the time of a sale, lease or other disposition of the properties of such corporation as an entirety or substantially as an entirety to the Borrower or any of its Subsidiaries, provided, that (A) such Liens are not incurred in anticipation of such merger, consolidation or such corporation becoming a Subsidiary, or sale, lease or other disposition with or into the Borrower or any of its Subsidiaries, (B) such Liens do not extend to any other Property of the Borrower or any of its Subsidiaries and (C) the aggregate principal amount of the Debt secured by Liens permitted by this clause (vi) and clauses (x) and (xi) below does not exceed at any time an amount equal to 15% of Consolidated Net Worth; (vii)Liens created in the ordinary course of business in favor of the United States of America or any State thereof, or any department, agency or political subdivision of the United States of America or any State thereof, to secure partial, progress, advance or other payments pursuant to any contract (other than for borrowed money) or statute; (viii)Liens created in the ordinary course of business by or resulting from any litigation or proceedings which are being contested in good faith, Liens arising in the ordinary course of business out of judgments or awards against the Borrower or any of its Subsidiaries with respect to which the Borrower or such Subsidiary is in good faith prosecuting an appeal or proceedings for review, or Liens incurred in the ordinary course of business by the Borrower or any of its Subsidiaries for the purpose of obtaining a stay or discharge in the course of any legal proceeding to which the Borrower or such Subsidiary is a party; provided, that the aggregate amount secured by all such Liens referred to in this clause (viii) shall not exceed $5,000,000 at any time; (ix) easements, rights of way and other encumbrances on title to real property that do not render title to the Property encumbered thereby unmarketable or materially adversely affect the use of such Property for its intended purposes; (x) purchase money Liens upon or in Property acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such Property or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such Property to be subject to such Liens, or Liens existing on any such Property at the time of acquisition, or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that no such Lien shall extend to or cover any Property other than the Property being acquired, constructed or improved, and no such extension, renewal or replacement shall extend to or cover any Property not theretofore subject to the Lien being extended, renewed or replaced, and provided, further, that the aggregate principal amount of the Debt at any one time outstanding secured by Liens permitted by this clause (x), clause (vi) above and clause (xi) below does not exceed at any time an amount equal to 15% of Consolidated Net Worth; and (xi) Liens not otherwise permitted hereunder securing Debt of the Borrower or any Subsidiary, provided, that the aggregate principal amount of the Debt at any one time outstanding secured by Liens permitted by this clause (xi) and clauses (vi) and (x) above does not exceed at any time an amount equal to 15% of Consolidated Net Worth. (b) Debt. Create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Debt other than: (i) Debt outstanding hereunder and under the Notes and other Loan Documents (including, without limitation, any Letters of Credit and any Subsidiary Guaranty); (ii) the existing Debt of the Borrower and its Subsidiaries listed on Schedule III hereto (to the extent not refinanced by this Agreement as indicated herein or therein) and any guaranty issued by any Subsidiary in respect of the existing $30 million principal amount of Convertible Subordinated Notes of the Borrower referred to in Schedule III, issued pursuant to the requirements of the Note Purchase Agreements relating to such Notes; (iii)upon completion of the transactions contemplated by the Stock Purchase Agreement, the existing Debt of Anderson Industries, Inc. and its Subsidiaries (including guarantees) as disclosed pursuant to the Stock Purchase Agreement, but after giving effect to the retirement of a portion of such Debt as contemplated by section 3.1 hereof; and any extension, renewal or refinancing of the portion of such Debt remaining outstanding following such retirement, including the issuance by an existing guarantor of a replacement guaranty in connection therewith, provided such extension, renewal or refinancing does not involve an increase in the then principal amount of such portion of such Debt; (iv) additional unsecured Debt of the Borrower of up to $100 million incurred as contemplated by the private placement currently being marketed by KeyCorp Investment Banking to institutional investors, and any guaranty by any Subsidiary of such Debt of the Borrower, if at the time of creation thereof the aggregate Commitments hereunder are permanently reduced to not more than $60 million; (v) Debt of any Wholly-Owned Subsidiary owed to the Borrower or to another Wholly-Owned Subsidiary of the Borrower; and unsecured Debt of the Borrower owed to any of its Wholly-Owned Subsidiaries, provided that such Debt is subordinated to the Notes and the other obligations of the Borrower under the Loan Documents pursuant to subordination provisions satisfactory in form and substance to the Majority Lenders; (vi) guarantees by the Borrower or any Subsidiary, not otherwise permitted by any of the above clauses, of any Debt of any Person (including, without limitation, any Subsidiary), provided that the aggregate principal amount of Debt so guaranteed, together with the aggregate amount of the Debt referred to in clause (iii) above and clauses (vii) and (viii) below, does not (without duplication) exceed 15% of Consolidated Net Worth;; (vii)Debt incurred to finance not more than 100% of the purchase price of any real or personal property purchased after the date hereof, provided that the aggregate amount of such Debt, together with the aggregate amount of the Debt referred to in clauses (iii) and (vi) above and clause (viii) below, does not (without duplication) exceed 15% of Consolidated Net Worth; (viii)Debt of any Subsidiary of the Borrower (exclusive of any such Debt owed to the Borrower or another Wholly-Owned Subsidiary of the Borrower), not otherwise permitted by any of the foregoing clauses of this section 5.2(b), provided that the aggregate amount of such Debt, together with the aggregate amount of the Debt referred to in the clauses (iii), (vi) and (vii) above, does not (without duplication) exceed 15% of Consolidated Net Worth; and (ix) additional unsecured Debt of the Borrower not otherwise permitted by the foregoing clauses of this section 5.2(b), provided that at the time of creation of any such Debt, no event has occurred and is continuing, or would result from the creation of such Debt or from the application of the proceeds thereof, which constitutes a Default (including, without limitation, a Default by reason of a violation of section 5.2(f). (c) Guarantees. Guarantee, or permit any of its Subsidiaries to, guarantee, directly or indirectly, any obligation of any other person, except by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, and except for guarantees permitted by section 5.2(b). (d) Mergers, etc. Merge or consolidate with or into (unless the Borrower is the surviving corporation of such merger or consolidation), or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so, except that (i) any Person may merge with and into the Borrower, (ii) any Subsidiary of the Borrower may merge with or into any other Person and (iii) any Subsidiary of the Borrower may sell or otherwise dispose of all or substantially all of its assets, provided that (A) immediately after giving effect to any such merger or sale or other disposition of assets referred to in clause (i), (ii) or (iii), no Default (including, without limitation, any Default under section 5.2(h) or section 5.2(k)) would exist, (B) the surviving corporation of any such merger referred to in clause (i) is, immediately after giving effect to such merger, the Borrower, (C) if the surviving corporation of any merger referred to in clause (ii) is not, immediately after giving effect to such merger, a Subsidiary of the Borrower, the Borrower and/or its Subsidiaries shall have received as consideration for such merger cash, property or securities representing the fair market value of the Borrower's and its Subsidiaries' interest in such Subsidiary immediately prior to such merger (as determined by the Board of Directors of the Borrower), and (D) in the case of any sale or other disposition referred to in clause (iii), the Borrower and/or its Subsidiaries shall have received as consideration for such sale or other disposition cash, property or securities representing the fair market value of such assets immediately prior to such sale or other disposition (as determined by the Board of Directors of the Borrower). (e) Interest Coverage. Permit, on the last day of its fiscal quarter ended closest to March 31, June 30, September 30 and December 31 in each year, commencing with its fiscal quarter ended closest to June 30, 1996, the ratio of (i) Consolidated EBIT of the Borrower and its Consolidated Subsidiaries during the twelve-month period ending on the last day of such fiscal quarter to (ii) Consolidated Interest Expense of the Borrower and its Consolidated Subsidiaries for such twelve-month period to be less than 2.00 to 1.00. (f) Debt to Capitalization Ratio. Permit the ratio of (i) Consolidated Debt of the Borrower and its Consolidated Subsidiaries (exclusive of Debt in respect of the undrawn amount of any letters of credit), divided by (ii) the sum of (A) such Consolidated Debt plus (B) Consolidated Net Worth of the Borrower and its Consolidated Subsidiaries, at the end of any fiscal quarter, to exceed (1) 60% at any time on or prior to March 29, 1997; (2) 55% at any time thereafter through its fiscal quarter ended closest to December 31, 1997; or (3) 50% at any time thereafter. (g) Consolidated Net Worth. Permit Consolidated Net Worth at any time on or after the date hereof to be less than $125,000,000, except that effective as of the end of the Borrower's fiscal quarter ended June 29, 1996, and as of the end of each fiscal quarter of the Borrower thereafter, the foregoing amount (as it may from time to time be increased as herein provided), shall be increased by 50% of the Borrower's Consolidated Net Income for the fiscal quarter ended on such date (there being no reduction in the case of any such Consolidated Net Income which reflects a deficit). (h) Investments, Acquisitions, etc. Do, or permit any Subsidiary to do, any of the following: (i) make any loan or advance to any Person (other than loans to officers, directors and employees or prospective employees in the ordinary course of business in accordance with historical practices), (ii) purchase or otherwise acquire (through merger, consolidation or otherwise), any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, or acquire from any Person any division, plant or other business unit, or (iii) be or become a general partner (or the equivalent) in any Person which is not a Wholly-Owned Subsidiary, other than: (A) investments in Cash Equivalents; (B) the acquisition contemplated by the Stock Purchase Agreement; (C) if no Default or Event of Default has occurred and is continuing or would result therefrom and if at the time the aggregate Commitments hereunder have been permanently reduced to not more than $60 million, (1) purchases or other acquisitions of stock, obligations or securities of, or mergers or consolidations with, any other Person which, as a result thereof, becomes a Wholly-Owned Subsidiary, and (2) acquisitions from any other Person of any division, plant or other business unit, in each case specified in the foregoing clauses (1) and (2) in a negotiated transaction involving a line of business or business activities not prohibited by section 5.2(j); provided, that, not later than five days prior to the consummation of any such transaction referred to in this clause (C), the Borrower shall have delivered to the Lenders a certificate of a responsible financial or accounting officer of the Borrower, accompanied by pro forma financial projections of the Borrower and its consolidated subsidiaries with respect to such transaction, demonstrating projected compliance by the Borrower with the financial covenants contained in this Agreement for a period of at least 12 months; (D) loans, advances and other investments in the Borrower's existing Wholly-Owned Subsidiaries, and loans, advances and other investments in Persons which become Wholly-Owned Subsidiaries in transactions referred to in the foregoing clause (C) or in transactions referred to in clause (ii) of section 5.2(d); (E) loans, advances and other investments by Subsidiaries in the Borrower; and (F) other loans, advances and investments made after the Closing Date, not otherwise permitted by the foregoing clauses of this subsection, in an aggregate amount not in excess of $25,000,000 in the fiscal year ended December 28, 1996, or $5,000,000 in any fiscal year thereafter. (i) Accounting Changes. Make, or permit any of its Subsidiaries to make, any change in its accounting policies or financial reporting practices and procedures, except changes in accounting policies which are required or permitted by GAAP and changes in financial reporting practices and procedures which are required or permitted by GAAP, in each case as to which the Borrower shall have delivered to the Agent prior to the effectiveness of any such change a report prepared by a responsible financial officer of the Borrower describing such change and explaining in reasonable detail the basis therefor and effect thereof. (j) Other Businesses. Engage, or permit any of its Subsidiaries to engage, in any business other than the businesses in which the Borrower and its Subsidiaries are engaged at the date hereof, and the businesses in which the Borrower and its Subsidiaries will be engaged after giving effect to the consummation of the transactions contemplated by the Stock Purchase Agreement, and other similar or reasonably related businesses and activities. (k) Sales of Assets, etc. Sell or otherwise transfer, or permit any Subsidiary to sell or otherwise transfer, directly or indirectly (by merger or otherwise), any assets or other Property (including, without limitation, any shares of capital stock of any Subsidiary) outside of the ordinary course of business, except that (i) the foregoing restriction shall not apply to transfers by a Subsidiary of the Borrower to the Borrower or to a Wholly-Owned Subsidiary of the Borrower, or by the Borrower to a Wholly-Owned Subsidiary of the Borrower; and (ii) if no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower or any Subsidiary may sell or otherwise transfer, outside of the ordinary course of business, assets or other Property having an aggregate fair value (as determined by the Board of Directors of the Borrower) not in excess of $10,000,000 during any fiscal year, provided any such sale or other transfer is for consideration consisting of cash, stock, securities or other property having a fair value at least equal to the assets or other Property so sold or otherwise transferred. (l) Changes in Fiscal Year. Make any change in its Fiscal Year. (m) Plan Terminations. Terminate, or permit any ERISA Affiliate to terminate, any Plan or Plans so as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in excess of $5,000,000 in the aggregate, or permit to exist one or more events or conditions which reasonably present a material risk of a termination by the PBGC of any Plan or Plans with respect to which the Borrower or any ERISA Affiliate would, in the event of such termination, incur liability to the PBGC in excess of $5,000,000 in the aggregate. (n) Employee Benefit Costs and Liabilities. Fail to comply, or permit any ERISA Affiliate to fail to comply, with the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan. SECTION 6.EVENTS OF DEFAULT. 6.1. Events of Default. If any of the following events ("Events of Default") shall occur and be continuing: (a) the Borrower shall fail to pay any principal of any Note when the same becomes due and payable, or shall fail to pay any reimbursement obligation in respect of any Letter of Credit issued for the account of the Borrower when the same shall be due and payable, or shall fail to pay interest on any Note or any other amount payable under this Agreement or any of the other Loan Documents within five days of the due date thereof; or any Subsidiary shall fail to pay any reimbursement obligation in respect of any Letter of Credit issued for the account of such Subsidiary when the same shall be due and payable, or shall fail to pay any other amount payable under any Loan Document to which it is a party within five days of the due date thereof; (b) any representation or warranty made (or deemed made in accordance with section 3.2) by the Borrower herein or by the Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); or (c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in section 5.1(h)(iv), 5.2(a), 5.2(b), 5.2(c), 5.2(d), 5.2(e), 5.2(f), 5.2(g), 5.2(h) or 5.2(k) of this Agreement on its part to be performed or observed; or (d) the Borrower or any other Loan Party shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Loan Document on its part to be performed or observed, if such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to the Borrower by the Agent or any Lender; or (e) the Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt which is outstanding in a principal amount of at least $4,000,000 in the aggregate (but excluding Debt evidenced by the Notes) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or required sinking fund redemption payment), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (f) the Borrower or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its Property; or the Borrower or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or (g) any judgment or order for the payment of money in excess of $5,000,000 shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 20 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (h) any ERISA Event with respect to a Plan shall have occurred and, thirty days after notice thereof shall have been given to the Borrower by the Agent, (i) such ERISA Event shall still exist, (ii) such ERISA Event shall have caused or shall have created a material risk of the termination of or the appointment of a trustee with respect to the affected Plan by or at the request of the PBGC and (iii) the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which the events or circumstances described in the preceding clauses (i) and (ii) shall have occurred and then exist (or in the case of a Plan with respect to which an ERISA Event described in clauses (c) through (f) of the definition of ERISA Event shall have occurred and then exist, the liability related thereto) is equal to or greater than $5,000,000; or (i) the Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts then required to be paid to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date of such notification), exceeds $5,000,000; or (j) the Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrower and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years that include the date hereof by an amount exceeding $5,000,000; or (k) any person or group of persons (within the meaning of section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) or control of 30% or more of the fully diluted outstanding shares of common stock of the Borrower; or during any period of twelve consecutive calendar months, individuals who were directors of the Borrower on the first day of such period or who were elected or nominated by a majority of the directors in office at the beginning of such period, shall cease for any reason to constitute a majority of the board of directors of the Borrower; or (l) if any Subsidiary Guaranty executed and delivered as provided herein shall, for any reason cease to be in full force or effect, or if any guarantor thereunder shall fail to perform any covenant contained therein or assert any limitation upon such guarantor's obligations thereunder; then, and in any such event, the Agent (i) shall at the request, or may with the consent, of Lenders owed more than 50% of the aggregate unpaid principal amount of the Revolving Advances and Swing Line Advances then outstanding or, if no Revolving Advances or Swing Line Advances are then outstanding, Lenders having more than 50% of the Commitments, by notice to the Borrower, declare the obligations of each Lender and the Issuing Bank to make Advances and to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of Lenders owed more than 50% of the aggregate unpaid principal amount of the Revolving Advances and Swing Line Advances then outstanding or, if no Revolving Advances or Swing Line Advances are then outstanding, Lenders having more than 50% of the Commitments, by notice to the Borrower, declare all the Advances then outstanding, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances then outstanding, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower or any of its Subsidiaries under the Federal Bankruptcy Code, (A) the obligation of each Lender and the Issuing Bank to make Advances and to issue Letters of Credit shall automatically be terminated and (B) the Advances then outstanding, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. SECTION 7.THE AGENT. 7.1. Authorization and Action. Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders or all Lenders if required by section 8.1, as applicable, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. 7.2. Agent's Reliance, etc. Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent: (i) may treat the payee of any Note as the holder thereof until the Agent receives and accepts an Assignment and Acceptance entered into by the Lender which is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, as provided in section 8.7; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or to inspect the Property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties. 7.3. Society and Affiliates. With respect to its Commitment, any Swing Line Commitment made by it, the Advances made by it and the Notes issued to it, Society shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Society in its individual capacity. Society and its affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower, any of its subsidiaries and any Person who may do business with or own securities of the Borrower or any such subsidiary, all as if Society were not the Agent and without any duty to account therefor to the Lenders. 7.4. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in section 4.1 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the 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 decisions in taking or not taking action under this Agreement. 7.5. Indemnification. The Lenders agree to indemnify the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Revolving Notes then held by each of them (or if no Revolving Notes are at the time outstanding or if any Revolving Notes are held by Persons which are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent under this Agreement, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Agent is not reimbursed for such expenses by the Borrower. 7.6. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Majority Lenders, removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having total assets in excess of $3,000,000,000 and a combined capital and surplus of at least $150,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this section 7 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. 7.7. Agent's Fee. The Borrower shall pay to Society for its own account the annual agency fee referred to in the Agent Fee Letter. 7.8. Co-Agent. No Bank identified herein or in any of the other Loan Documents as a "Co-Agent" shall have any right, power, obligation, liability, responsibility or duty under any Loan Document other than those applicable to all Lenders as such. Each Lender acknowledges that it has not relied, and will not rely, on any Bank so identified in deciding to enter into this Agreement or in taking or not taking any action hereunder. SECTION 8.MISCELLANEOUS. 8.1. Amendments, etc. No amendment or waiver of any provision of this Agreement or the Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in section 3.1 or 3.2 (if and to the extent that the Borrowing which is the subject of such waiver would involve an increase in the aggregate outstanding amount of Advances over the aggregate amount of Advances outstanding immediately prior to such Borrowing), (b) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Revolving Advances or the Swing Line Advances or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Revolving Advances or the Swing Line Advances or any fees or other amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Revolving Advances or the Swing Line Advances, or the number of Lenders, which shall be required for the Lenders or any of them to take any action hereunder, (f) amend the definition of Majority Lenders or this section 8.1, (g) release any guarantor from any guaranty obligations contained in any Subsidiary Guaranty executed and delivered pursuant to the requirements of this Agreement, or (h) change any term or provision of clause (k) of section 6.1, or waive any Event of Default thereunder; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent under this Agreement or any Note. 8.2. Notices, etc. All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic, telex or cable communication) and mailed, telecopied, telegraphed, telexed, cabled or delivered, if to the Borrower, at its address at 1120 North Main Street, Elkhart, Indiana 46514, Attention: Joseph A. Robinson, Chief Financial Officer, Secretary & Treasurer; if to any Bank, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; and if to the Agent, at its address at Society National Bank, Society Center, 127 Public Square, Cleveland, Ohio 44114-1306, attention: Richard A. Pohle, Vice President and Manager, Large Corporate Group (telephone: (216) 689-4446; facsimile: (216) 689-4981); or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective when deposited in the mails, telecopied, delivered to the telegraph company, confirmed by telex answerback or delivered to the cable company, respectively, except that notices and communications to the Agent pursuant to section 2 or 7 shall not be effective until received by the Agent. 8.3. No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 8.4. Costs, Expenses and Taxes. (a) The Borrower agrees to pay promptly upon request all costs and expenses in connection with the preparation, execution, delivery, administration, interpretation, modification and amendment of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under this Agreement. The Borrower further agrees to pay promptly upon request all costs and expenses, if any, of the Agent and each Lender (including, without limitation, reasonable counsel fees and expenses and allocated costs of internal counsel), (i) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes, the other Loan Documents and the other documents to be delivered hereunder and thereunder, (ii) in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a "work-out" or in any insolvency or bankruptcy proceeding, (iii) in commencing, defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to this Agreement, the Notes, the other Loan Documents, the Property, the Borrower or any of the Borrower's Subsidiaries and related to or arising out of the transactions contemplated hereby or by any of the other Loan Documents and (iv) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described in clauses (i) through (iii) above. (b) If any payment of principal of any Adjusted Eurodollar Rate Advance or Fixed Rate Advance is made other than on the last day of the Interest Period for such Advance, as a result of a prepayment pursuant to section 2.8(b) or pursuant to the terms of any Confirmation of Swing Line Borrowing or acceleration of the maturity of the Notes pursuant to section 6.1 or for any other reason, the Borrower shall, promptly upon request by any Lender (with a copy of such request to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance. (c) The Borrower agrees to indemnify and hold harmless the Agent and each Lender and their respective Affiliates, and each of their respective directors, officers, employees and agents, from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation, fees and disbursements of counsel) which may be incurred by or asserted against the Agent or such Lender or Affiliate or any such director, officer, employee or agent in connection with or arising out of any investigation, litigation, or proceeding, whether or not the Agent or such Lender or Affiliate or any such director, officer, employee or agent is a party thereto, related to this Agreement, any Claim relating to any of the matters referred to in section 4.1(l), without regard to the presence or absence of any Material Adverse Effect referred to therein, or any transaction or proposed transaction (whether or not consummated) in which any proceeds of any Borrowing are applied or proposed to be applied, directly or indirectly, by the Borrower or any of its Subsidiaries, unless such loss, claim, damage, liability or expense is found in a final judgment of a court of competent jurisdiction to have resulted from such indemnified party's gross negligence or wilful misconduct. The obligations of the Borrower under this section 8.4 shall survive the Termination Date. 8.5. Right of Set-off. Nothing herein shall derogate any Lender's right, if any, if and to the extent payment owed to such Lender is not made when due hereunder or under any Note held by such Lender, after giving effect to any applicable grace period specified in section 6 hereof with respect thereto, to set off from time to time against any or all of the Borrower's general deposit accounts with such Lender any amount so due. Each Lender agrees promptly to notify the Borrower 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. The rights of each Lender under this section 8.5 are in addition to other rights and remedies which such Lender may have. 8.6. Binding Effect. This Agreement shall become effective on the date (the "Restatement Effective Date") when it shall have been executed by the Borrower and the Agent and when the Agent shall have been notified by each Bank that such Bank has executed it, and the conditions specified in section 3.1 hereof shall have been satisfied, and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. 8.7. Assignments and Participations. (a) Each Lender may assign, with (except in the case of any assignment to an Affiliate of such Lender) the consent of the Agent (which consent shall not be unreasonably withheld or delayed), to one or more banks or other entities all or a proportionate part of all of its rights and obligations under this Agreement (including, without limitation, all or a proportionate part of all of its Commitment, its Swing Line Commitment (if any), the Revolving Advances and Swing Line Advances (if any) owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000 and shall (unless such amount constitutes the entire remaining amount of the assigning Lender's Commitment) be an integral multiple of $1,000,000, (iii) each such assignment shall be to an Eligible Assignee, and (iv) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note or Notes subject to such assignment and a processing and recordation fee of $3,000. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in section 4.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender. (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Agent in exchange for the surrendered Note or Notes a new Note or Notes to the order of such Eligible Assignee in an amount equal to the Commitment and Swing Line Commitment (if any) assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment and Swing Line Commitment (if any) hereunder, a new Note or Notes to the order of the assigning Lender in an amount equal to the Commitment and Swing Line Commitment (if any) retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or A-2 hereto. (d) The Agent shall maintain at its address referred to in section 8.2 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of each of the Lenders and the Commitment and Swing Line Commitment (if any) of, and principal amount of the Advances owing to, each such Lender from time to time (the "Register"). The Register shall contain the information specified in section 2.13(b), and the entries in the Register shall be conclusive and binding for the purposes of this Agreement, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for the purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and Swing Line Commitment (if any), the Advances owing to it and the Note or Notes held by it); provided, however, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment and Swing Line Commitment (if any) to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, and (iv) the Borrower, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that any participation agreement may provide that the relevant Lender will not agree to any modification, amendment or waiver of this Agreement which (i) increases or decreases the Commitment or Swing Line Commitment (if any) of such Lender, (ii) reduces the principal of or rate of interest on any Advance or fees hereunder in which the participant has an interest or (iii) postpones the date fixed for any payment of principal of or interest on any Advance or any fees hereunder in which the participant has an interest without the consent of the participant. The Borrower agrees that each participant shall, to the extent provided in its participation agreement, be entitled to the benefits of sections 2.9, 2.11 and 8.4(b) hereof with respect to its participating interest. No participant or other transferee of such Lender's rights shall be entitled to receive any greater payment under sections 2.9, 2.11 and 8.4(b) hereof than such Lender would have been entitled to receive with respect to the rights transferred. (f) Subject to section 8.13, any Lender may, in connection with any assignment, designation or participation or proposed assignment, designation or participation pursuant to this section 8.7, disclose to the assignee, designee or participant or proposed assignee, designee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower in connection with this Agreement; provided that, prior to any such disclosure, the assignee, designee or participant or proposed assignee, designee or participant shall agree to preserve the confidentiality of any confidential information relating to the Borrower received by it from such Lender. (g) Anything in this section 8.7 to the contrary notwithstanding, any Lender may, upon notice to the Agent and the Borrower, assign and pledge all or any portion of the Advances owing to it to a Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank. 8.8. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of Ohio. 8.9. Limitations on Liability of the Issuing Bank. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letters of Credit. Neither the Issuing Bank nor any of its officers or directors shall be liable or responsible for: the use which may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower which the Borrower proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence in connection with a Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful payment under any Letter of Credit after the presentation to it of documentation strictly complying with the terms and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation. 8.10.Collateral. Each of the Lenders represents to the Agent and each of the other Lenders that it in good faith is not relying upon any Margin Stock as collateral in the extension or maintenance of the credit provided for in this Agreement. 8.11.Survival of Warranties and Agreements. All representations and warranties made herein and all obligations of the Borrower in respect of taxes, indemnification and expense reimbursements shall survive the execution and delivery of this Agreement and the other Loan Documents, the making and repayment of the Advances and the termination of this Agreement and shall not be limited in any way by the passage of time or occurrence of any event and shall expressly cover time periods when the Agent or any of the Lenders may have come into possession or control of any of the Borrower's or its Subsidiaries' Property. 8.12.Limitation of Liability. No claim may be made by the Borrower, any Lender, the Agent or any other Person against the Agent or any other Lender or the Affiliates, directors, officers, employees, attorneys or agents of any of them for any special, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each of the Borrower, each Lender and the Agent hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. 8.13.No Duty. All attorneys, accountants, appraisers, consultants and other professional persons (including the firms or other entities on behalf of which any such person may act) retained by the Agent or any Lender with respect to the transactions contemplated by the Loan Documents shall have the right to act exclusively in the interest of the Agent or such Lender, as the case may be, and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to the Borrower, to any of its Subsidiaries, or to any other person, with respect to any matters within the scope of such representation or related to their activities in connection with such representation. 8.14.Lenders and Agent Not Fiduciary to Borrower, etc. The relationship among the Borrower and its Subsidiaries, on the one hand, and the Agent and the Lenders, on the other hand, is solely that of debtor and creditor, and the Agent and the Lenders have no fiduciary or other special relationship with the Borrower and its Subsidiaries, and no term or provision of any Loan Document, no course of dealing, no written or oral communication, or other action, shall be construed so as to deem such relationship to be other than that of debtor and creditor. 8.15.Confidentiality. Each Lender agrees that during the period through and including the Termination Date it will take normal and reasonable precautions to hold and treat in confidence any information delivered or made available by the Borrower to it which is expressly designated in writing to be confidential; provided, however that nothing herein shall prevent any Lender from disclosing such information (i) to any Affiliate of such Lender, (ii) to any other Lender, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such Lender, (v) which has been publicly disclosed, (vi) to the extent reasonably required in connection with any litigation to which the Agent, any Lender or their respective Affiliates may be a party, (vii) to the extent reasonably required in connection with the exercise of any remedy hereunder, (viii) to such Lender's legal counsel, independent auditors and other professional advisors, (ix) to any actual or proposed participant, assignee or other transferee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this section 8.15, or (x) that is also provided to such Lender by a Person other than the Borrower not in violation, to the actual knowledge of such Lender, of any duty of confidentiality; provided that any Lender's failure to comply with the provisions of this section 8.15 shall not affect the obligations of the Borrower hereunder. 8.16.Certain Consents and Waivers of the Borrower. (a) Personal Jurisdiction. (i) THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY OHIO STATE COURT OR FEDERAL COURT FOR THE NORTHERN DISTRICT OF OHIO, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE. (ii) THE BORROWER AGREES THAT THE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE AGENT AND THE LENDERS TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION. (b) Service of Process. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER'S NOTICE ADDRESS SPECIFIED PURSUANT TO SECTION 8.2, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. 8.17.Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 8.18.Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. [The balance of this page is intentionally blank.] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. EXCEL INDUSTRIES, INC. By: _________________________________ Chief Financial Officer SOCIETY NATIONAL BANK, individually and as Agent By: _________________________________ Vice President HARRIS TRUST AND SAVINGS BANK, individually and as Co-Agent By: _________________________________ Vice President EX-4.3 3 EXCEL INDUSTRIES, INC. $100,000,000 7.78% Senior Notes due April 30, 2011 NOTE PURCHASE AGREEMENT Dated May 3, 1996 TABLE OF CONTENTS Section Page 1. AUTHORIZATION OF NOTES. . . . . . . . . . . . . .1 2. SALE AND PURCHASE OF NOTES. . . . . . . . . . . .1 3. CLOSING . . . . . . . . . . . . . . . . . . . . .2 4. CONDITIONS TO CLOSING . . . . . . . . . . . . . .2 4.1. Representations and Warranties . . . . 2 4.2. Performance; No Default. . . . . . . . 2 4.3. Compliance Certificates. . . . . . . . 3 4.4. Opinions of Counsel. . . . . . . . . . 3 4.5. Purchase Permitted By Applicable Law, etc. . . . . . . . . . . . . . . 3 4.6. Sale of Other Notes. . . . . . . . . . 3 4.7. Payment of Special Counsel Fees. . . . 3 4.8. Private Placement Number . . . . . . . 4 4.9. Changes in Corporate Structure . . . . 4 4.10. Execution and Delivery of Certain Documents . . . . . . . . . . 4 4.11. Credit Agreement and Subordinated Debt Agreement. . . . . . . . . . . . . . . 4 4.12. Proceedings and Documents . . . . . . .4 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . .5 5.1. Organization; Power and Authority. . . 5 5.2. Authorization, etc.. . . . . . . . . . 5 5.3. Disclosure . . . . . . . . . . . . . . 5 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates . . 6 5.5. Financial Statements . . . . . . . . . 6 5.6. Compliance with Laws, Other Instruments, etc.. . . . . . . . . . . 7 5.7. Governmental Authorizations, etc.. . . 7 5.8. Litigation; Observance of Agreements, Statutes and Orders . . . . . . . . . .7 5.9. Taxes. . . . . . . . . . . . . . . . . 7 5.10. Title to Property; Leases . . . . . . .8 5.11. Licenses, Permits, etc. . . . . . . . .8 5.12. Compliance with ERISA . . . . . . . . .9 5.13. Private Offering by the Company . . . 10 5.14. Use of Proceeds; Margin Regulations . 10 5.15. Existing Debt; Future Liens . . . . . 10 5.16. Foreign Assets Control Regulations, etc.. . . . . . . . . . . . . . . . . 11 5.17. Status under Certain Statutes . . . . 11 5.18. Environmental Matters . . . . . . . . 11 5.19. Status as Senior Debt . . . . . . . . 12 6. REPRESENTATIONS OF THE PURCHASER. . . . . . . . 12 6.1. Purchase for Investment. . . . . . . .12 6.2. Source of Funds. . . . . . . . . . . .12 7. INFORMATION AS TO COMPANY . . . . . . . . . . . 13 7.1. Financial and Business Information . .13 7.2. Officer's Certificate. . . . . . . . .16 7.3. Inspection . . . . . . . . . . . . . .17 7.4. Information Required by Rule 144A. . .17 8. PREPAYMENT OF THE NOTES . . . . . . . . . . . . 18 8.1. Required Prepayments . . . . . . . . .18 8.2. Optional Prepayments with Make-Whole Amount. . . . . . . . . . .18 8.3. Allocation of Partial Prepayments. . .19 8.4. Maturity; Surrender, etc.. . . . . . .19 8.5. Change in Control. . . . . . . . . . .19 8.6. Purchase of Notes. . . . . . . . . . .20 8.7. Make-Whole Amount. . . . . . . . . . .21 9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 22 9.1. Compliance with Law. . . . . . . . . .22 9.2. Insurance. . . . . . . . . . . . . . .23 9.3. Maintenance of Properties. . . . . . .23 9.4. Payment of Taxes and Claims. . . . . .23 9.5. Corporate Existence, Etc.. . . . . . .23 9.6. Covenant to Secure Notes Equally . . .24 9.7. Senior Debt. . . . . . . . . . . . . .24 10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . 24 10.1. Consolidated Net Worth. . . . . . . . .24 10.2. Interest Charges Coverage Ratio.. . . .25 10.3. Maintenance of Consolidated Debt. . . .25 10.4. Priority Debt.. . . . . . . . . . . . .25 10.5. Liens.. . . . . . . . . . . . . . . . .25 10.6. Restricted Investments. . . . . . . . .27 10.7. Restrictions on Dividends of Subsidiaries, Etc. . . . . . . . . . . 28 10.8. Sale-and-Leasebacks.. . . . . . . . . .28 10.9. Transactions with Affiliates. . . . . .28 10.10. Merger, Consolidation, Etc.. . . . . . 29 10.11. Sale of Assets, Etc. . . . . . . . . . 29 10.12. Line of Business.. . . . . . . . . . . 30 10.13. Subordinated Debt Restrictions . . . . 30 10.14. Accounting Changes . . . . . . . . . . 30 11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 31 12. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . 33 12.1. Acceleration. . . . . . . . . . . . . . . 33 12.2. Other Remedies. . . . . . . . . . . . . . 34 12.3. Rescission. . . . . . . . . . . . . . . . 34 12.4. No Waivers or Election of Remedies, Expenses, etc. . . . . . . . . . . . . . .35 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES . 35 13.1. Registration of Notes . . . . . . . . . . 35 13.2. Transfer and Exchange of Notes. . . . . . 35 13.3. Replacement of Notes. . . . . . . . . . . 36 14. PAYMENTS ON NOTES . . . . . . . . . . . . . . . 36 14.1. Place of Payment. . . . . . . . . . . . . 36 14.2. Home Office Payment . . . . . . . . . . . 36 15. EXPENSES, ETC . . . . . . . . . . . . . . . . . 37 15.1. Transaction Expenses. . . . . . . . . . . 37 15.2. Survival. . . . . . . . . . . . . . . . . 37 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT . . . . . . . . . . . . . . . .37 17. AMENDMENT AND WAIVER. . . . . . . . . . . . . . 38 17.1. Requirements. . . . . . . . . . . . . . . 38 17.2. Solicitation of Holders of Notes. . . . . 38 17.3. Binding Effect, etc.. . . . . . . . . . . 39 17.4. Notes held by Company, etc. . . . . . . . 39 18. NOTICES . . . . . . . . . . . . . . . . . . . . 39 19. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . 40 20. CONFIDENTIAL INFORMATION. . . . . . . . . . . . 40 21. SUBSTITUTION OF PURCHASER . . . . . . . . . . . 41 22. MISCELLANEOUS . . . . . . . . . . . . . . . . . 41 22.1. Successors and Assigns. . . . . . . . . . 41 22.2. Payments Due on Non-Business Days . . . . 41 22.3. Severability. . . . . . . . . . . . . . . 42 22.4. Construction. . . . . . . . . . . . . . . 42 22.5. Counterparts. . . . . . . . . . . . . . . 42 22.6. Governing Law . . . . . . . . . . . . . . 42 SCHEDULES AND EXHIBITS SCHEDULE A -- Information Relating To Purchasers SCHEDULE B -- Defined Terms SCHEDULE 5.3 -- Certain Additional Disclosure Items SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock SCHEDULE 5.12 -- Accumulated Benefits Obligations and Post-Employment Benefits Obligations SCHEDULE 5.14 -- Use of Proceeds SCHEDULE 5.15 -- Existing Debt SCHEDULE 8.1 -- Required Prepayments SCHEDULE 10.4 -- Existing Priority Debt SCHEDULE 10.5 -- Existing Liens SCHEDULE 10.6 -- Existing Investments EXHIBIT A -- Form of 7.78% Senior Note due April 30, 2011 EXHIBIT B -- Form of Opinion of Special Counsel for the Company EXHIBIT C -- Form of Opinion of Special Counsel for the Purchasers EXHIBIT D -- Form of Intercreditor Agreement EXCEL INDUSTRIES, INC. 1120 North Main Street Elkhart, Indiana 46514 7.78% Senior Notes due April 30, 2011 May 3, 1996 TO EACH OF THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A: Ladies and Gentlemen: Excel Industries, Inc., an Indiana corporation (the "Company"), agrees with you as follows: 1. AUTHORIZATION OF NOTES. The Company will authorize the issue and sale of $100,000,000 aggregate principal amount of its 7.78% Senior Notes due April 30, 2011 (the "Notes", such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements (as hereinafter defined)). The Notes shall be substantially in the form set out in Exhibit A, with such changes therefrom, if any, as may be approved by you and the Company. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. 2. SALE AND PURCHASE OF NOTES. Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof. Contemporaneously with entering into this Agreement, the Company is entering into separate Note Purchase Agreements (the "Other Agreements") identical with this Agreement with each of the other purchasers named in Schedule A (the "Other Purchasers"), providing for the sale at such Closing to each of the Other Purchasers of Notes in the principal amount specified opposite its name in Schedule A. Your obligation hereunder and the obligations of the Other Purchasers under the Other Agreements are several and not joint obligations and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or non-performance by any Other Purchaser thereunder. 3. CLOSING. The sale and purchase of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606, at 10:00 a.m., Central time, at a closing (the "Closing") on May 3, 1996 or on such other Business Day thereafter on or prior to May 9, 1996 as may be agreed upon by the Company, you and the Other Purchasers. At the Closing the Company will deliver to you the Notes to be pur-chased by you in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as you may request) dated the date of the Closing and registered in your name (or in the name of your nominee), against delivery by you to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 120-250-0900 at Key Bank, 301 S. Main, Elkhart, Indiana, ABA No. 071-200-538. If at the Closing the Company shall fail to tender such Notes to you as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonful- fillment. 4. CONDITIONS TO CLOSING. Your obligation to purchase and pay for the Notes to be sold to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing. 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of Default shall have occurred and be continuing. 4.3. Compliance Certificates. (a) Officer's Certificate. The Company shall have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled. (b) Secretary's Certificate. The Company shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agree-ments. 4.4. Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Sommer & Barnard, PC, counsel for the Company, covering the matters set forth in Exhibit B and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you) and (b) from Schiff Hardin & Waite, your special counsel in connection with such transactions, sub-stantially in the form set forth in Exhibit C and covering such other matters incident to such transactions as you may reasonably request. 4.5. Purchase Permitted By Applicable Law, etc. On the date of the Closing your purchase of Notes shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (ii) not violate any applicable law or regulation (including, without limitation, Regulation G, T or X of the Board of Governors of the Federal Reserve System) and (iii) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted. 4.6. Sale of Other Notes. Contemporaneously with the Closing the Company shall sell to the Other Purchasers and the Other Purchasers shall purchase the Notes to be purchased by them at the Closing as specified in Sched-ule A. 4.7. Payment of Special Counsel Fees. Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of your special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing. 4.8. Private Placement Number. A Private Placement number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Notes. 4.9. Changes in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Section 5.5. 4.10. Execution and Delivery of Certain Documents. The following documents shall have been executed by each party thereto and delivered to you, which documents shall be in form and substance satisfactory to you: (a) the Notes to be delivered to you pursuant to Section 2; and (b) the Intercreditor Agreement. 4.11. Credit Agreement and Subordinated Debt Agreement. You shall have received: (a) a copy of the Credit Agreement, the Subordinated Debt Agreement, each guaranty thereof and all other related instruments and agreements as you may request, certified as accurate and complete and as in effect on the date of the Closing by a Senior Financial Officer, all of which shall be in form and substance acceptable to you; and (b) evidence satisfactory to you that the Senior Private Placement Debt constitutes "Senior Debt" as such term is defined (and used) in the Subordinated Debt Agreement and the Subordinated Debt Guaranty. 4.12. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to you that: 5.1. Organization; Power and Authority. The Company is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Other Agreements and the Notes and to perform the provisions hereof and thereof. 5.2. Authorization, etc. This Agreement and the Other Agreements and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 5.3. Disclosure. The Company, through its agent, Key Capital Markets, Inc., has delivered to you and each Other Purchaser a copy of a Private Placement Memorandum (the "Memorandum"), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. This Agreement (including the information set forth on Schedule 5.3), the Memorandum, the Form 8-K filed by the Company with the Securities and Exchange Commission on April 18, 1996, and the other documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements described in Section 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circum-stances under which they were made. Since December 30, 1995, there has been no change in the financial condition, operations, business, properties or prospects of the Company and its Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to a Responsible Officer of the Company after due inquiry that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Memorandum or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby. 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's directors and senior officers. (b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4). (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact. (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed on Schedule 5.4, the limitation set forth in the Certificate of Incorporation of Anderson as in effect on the date hereof and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. 5.5. Financial Statements. The Company has delivered to you and the Other Purchasers copies of complete and correct copies of (a) the consolidated balance sheets of the Company and its consolidated subsidiaries as at December 31, 1994 and December 30, 1995 and the related consolidated statements of income, shareholders' equity and cash flows of the Company and its consolidated subsidiaries for the years then ended, all certified without qualification by Price Waterhouse L.L.P., and (b) the consolidated balance sheets of Atwood and its consolidated subsidiaries as at December 30, 1995 and December 31, 1994 and the related consolidated statements of operations, shareholders' equity and cash flows for the years then ended, all certified by Coopers & Lybrand L.L.P. All such financial statements have been prepared in accordance with GAAP , consistently applied (except as stated therein), and fairly present the consolidated financial position of the Company and Atwood (as applicable) as at the respective dates indicated and the consolidated results of their operations and cash flows for the respective periods indicated. The Company has also delivered to you and the Other Purchasers certain financial projections prepared by management of the Company and set forth in the Memorandum (the "Financial Projections"). The Financial Projections were prepared in good faith after taking into account the existing and historical levels of the Company's and its Subsidiaries' business activity, known trends, including general economic trends, and all other information, assumptions and estimates pertinent thereto; provided, however, that such assumptions and estimates are subject to significant economic and competitive factors beyond the Company's control. The Financial Projections were considered by management of the Company, as of the date of preparation thereof, to be realistically achievable and to include in written form all material assumptions and premises underlying the financial information set forth in the Financial Projections; provided, however, that no representation or warranty is made as to the impact of future general economic conditions or as to whether the Company's projected results as set forth in the Financial Projections will actually be realized. No facts (other than facts of a general economic or political nature that do not affect the Company or its Subsidiaries uniquely) are known to the Company at the date hereof which, if reflected in the Financial Projections, could reasonably be expected to result in a Material Adverse Effect as compared to the assets, liabilities, results or operations or cash flows reflected therein. 5.6. Compliance with Laws, Other Instruments, etc. The execution, delivery and performance by the Company of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. 5.7. Governmental Authorizations, etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes. 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) After taking into account the Company's provisions for reserves as set forth in its financial statements referred to in Section 5.5, there are no actions, suits or proceedings pending or, to the knowledge of any Responsible Officer of the Company after due inquiry, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. No Responsible Officer of the Company after due inquiry knows of any basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate in all material respects. The Federal income tax liabilities of the Company and its Subsidiaries have been audited by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1992, except that the Federal income tax liabilities of Anderson and its Subsidiaries have been audited by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1993. 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. 5.11. Licenses, Permits, etc. (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others. (b) To the best knowledge of the Responsible Officers of the Company after due inquiry, no product of the Company infringes in any material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person. (c) To the best knowledge of the Responsible Officers of the Company after due inquiry, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries. 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggre-gate Material. (b) Except as set forth on Schedule 5.12, the accumulated benefit obligations under each of the Plans (other than Multiemployer Plans), determined as of December 31, 1995 on the basis of FASB No. 87 did not exceed the aggregate fair value of the assets of such Plan. The terms "accumulated benefit obligations" and "fair value" shall have the meaning in Statement of Financial Accounting Standards ("FASB") No. 87 ("Employers' Accounting For Pensions"). (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggre-gate are Material. (d) Except as set forth on Schedule 5.12, the expected post-retirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material. (e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by you. 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than you, the Other Purchasers and not more than 20 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act. 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder will be used, directly or in-directly, for the purpose of buying or carrying any margin stock within the meaning of Regulation G of the Board of Governors of the Federal Reserve System (12 CFR 207), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets. As used in this Section, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation G. 5.15. Existing Debt; Future Liens. (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Debt in excess of $100,000 of the Company and its Subsidiaries as of the date of this Agreement. Neither the Company nor any Subsidiary is in de-fault and no waiver of default is currently in effect, in the payment of any principal or interest on any such Debt of the Company or such Subsidiary and no event or condition exists with respect to any such Debt of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment. (b) Except for Liens permitted under Section 10.5, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien. 5.16. Foreign Assets Control Regulations, etc. Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the Federal Power Act, as amended. 5.18. Environmental Matters. (a) After taking into account the Company's provisions for reserves as set forth in its financial statements referred to in Section 5.5, no Responsible Officer of the Company or any Subsidiary after diligent inquiry has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. (b) No Responsible Officer of the Company or any Subsidiary after diligent inquiry has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. (c) Neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect. (d) All buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. 5.19. Status as Senior Debt. (a) The principal of, Make-Whole Amount, if any, with respect to, and interest on all Notes and all reasonable and verifiable fees and expenses and other amounts payable by the Company arising under this Agreement and the Notes (collectively, the "Senior Private Placement Debt") ranks in priority of payment at least equally with all senior unsecured and unsubordinated indebtedness of the Company. (b) The Senior Private Placement Debt constitutes "Senior Debt" as such term is defined (and used) in the Subordinated Debt Agreement and the Subordinated Debt Guaranty. The Senior Private Placement Debt is senior in right of payment to the Subordinated Debt at least to the extent provided in the Subordinated Debt Agreement as in effect on the date hereof. 6. REPRESENTATIONS OF THE PURCHASER. 6.1. Purchase for Investment. You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds managed by you and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. 6.2. Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source") to be used by you to pay the purchase price of the Notes to be purchased by you hereunder: (a) if you are an insurance company, the Source does not include assets allocated to any separate account maintained by you in which any employee benefit plan (or its related trust) has any interest; or (b) if you are an insurance company, the Source is your "insurance company general account" (as such term is defined under Section V of the United States Department of Labor's Prohibited Transaction Class Exemption ("PTCE") 95- 60), and as of the date of the purchase of the Notes you satisfy all of the applicable requirements for relief under Section I and IV of PTCE 95-60; or (c) the Source is either (i) an insurance company pooled separate account, within the meaning of Prohibited Transaction Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (d) the Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such in- vestment fund have been disclosed to the Company in writing pursuant to this paragraph (d); or (e) the Source is a governmental plan; or (f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (e); or (g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. As used in this Section 6.2, the terms "employee benefit plan", "governmental plan", "party in interest" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 7. INFORMATION AS TO COMPANY. 7.1. Financial and Business Information. The Company shall deliver to each holder of Notes that is an Institutional Investor: (a) Quarterly Statements -- within 45 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of, (i) a consolidating and consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and (ii) consolidating and consolidated statements of income, changes in shareholders' equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, setting forth in each case, and in comparative form for the consolidated statements, the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a) with respect to the consolidated financial statements referred to above; (b) Annual Statements -- within 90 days after the end of each fiscal year of the Company, duplicate copies of, (i) a consolidating and consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and (ii) consolidating and consolidated statements of income, changes in shareholders' equity and cash flows of the Company and its Subsidiaries, for such year, setting forth in each case, and in comparative form for the consolidated statements, the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied (A) by an opinion, as to such consolidated financial statements,of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and (B) a certificate of such accountants stating that they have reviewed this Agreement and stating further whether, in making their audit, they have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if they are aware that any such condition or event then exists, specifying the nature and period of the existence thereof (it being understood that such accountants shall not be liable, directly or indirectly, for any failure to obtain knowledge of any Default or Event of Default unless such accountants should have obtained knowledge thereof in making an audit in accordance with generally accepted auditing standards or did not make such an audit), provided that the delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commis- sion, together with the accountant's certificate described in clause (B) above, shall be deemed to satisfy the requirements of this Section 7.1(b) with respect to the consolidated financial statements referred to above; (c) SEC and Other Reports -- promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission and of all press releases and other statements made available generally by the Company or any Subsidiary to the public concerning developments that are Material; (d) Notice of Default or Event of Default -- promptly after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; (e) ERISA Matters -- promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto: (i) with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or (iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect; (f) Notices from Governmental Authority - -- promptly upon receipt thereof, and in any event within 30 days, after a Responsible Officer becomes aware of any such notice, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; and (g) Requested Information -- with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes. 7.2. Officer's Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth: (a) Covenant Compliance -- the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.11 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and (b) Event of Default -- a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto. 7.3. Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor: (a) No Default -- if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company's officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and (b) Default -- if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company autho- rizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested. 7.4. Information Required by Rule 144A. The Company covenants that it will upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this Section 7.4, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act. 8. PREPAYMENT OF THE NOTES. 8.1. Required Prepayments. (a) Scheduled Payments. The Company will prepay the Notes on such dates and in such principal amounts as is set forth in Schedule 8.1 (or such lesser principal amount as shall then be outstanding) at par and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Notes pursuant to Section 8.5, the principal amount of each required prepayment of the Notes becoming due under this Section 8.1(a) on and after the date of such prepayment shall be reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as a result of such prepayment. (b) Prepayment With Make-Whole Amount Pursuant to Intercreditor Agreement. If amounts are to be applied to the principal of Notes pursuant to the terms of the Intercreditor Agreement, interest owing thereon to the prepayment date and the Make-Whole Amount, if any, with respect thereto shall be due and payable on such date. Any partial prepayment of the Notes pursuant to this clause (b) shall be applied in satisfaction of required prepayments of principal pursuant to Section 8.1(a) in inverse order of the scheduled due dates. 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, plus the Make- Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 10 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepay- ment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. The Company shall, on or before the day on which it gives written notice of prepayment pursuant to this Section 8.2, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Institutional Investor which shall have designated a recipient of such notices in Schedule A attached hereto or by notice in writing to the Company. Any partial prepayment of the Notes pursuant to this Section 8.2 shall be applied in satisfaction of required prepayments of principal pursuant to Section 8.1(a) in the inverse order of the scheduled due dates. 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.1 or 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment. 8.4. Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. 8.5. Change in Control. (a) Notice of Change in Control or Control Event. The Company will, promptly after the occurrence of any Change in Control or Control Event, but in any event within two Business Days thereafter, give written notice of such Change in Control or Control Event to each holder of a Note. In the case that a Change in Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (b) of this Section 8.5 and shall be accompanied by the certificate described in subparagraph (f) of this Section 8.5. (b) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.5 shall be an offer to prepay, in accordance with and subject to this Section 8.5, all, but not less than all, the Notes held by each holder (in this case only, "holder" in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on the later of a date certain, set forth in such offer, which shall not be less than 30 days nor more than 60 days after the date of such offer (the "Proposed Prepayment Date") or, if such prepayment date is extended to a later date pursuant to subparagraph (e)(ii) of this Section 8.5, such later date. (c) Acceptance; Rejection. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.5 by causing a notice of such acceptance to be delivered to the Company at least 7 days prior to the Proposed Prepayment Date; provided that a failure by a holder of any Note to respond to an offer to prepay made pursuant to this Section 8.5 shall be deemed to constitute an acceptance of such offer by such holder. The Company will, immediately after any holder shall be deemed to have accepted an offer pursuant to this subparagraph (c) or, if earlier, immediately after receiving a notice of acceptance pursuant to this subparagraph (c) from any holder of a Note, give written notice thereof to each other holder of any Notes (the date that the first such notice is given by the Company being called the "Acceptance Notice Date"). (d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.5 shall be at 100% of the principal amount of such Notes, plus the Make-Whole Amount determined for the date of prepayment with respect to such principal amount, together with interest on such Notes accrued to the date of prepayment. The prepayment shall be made on the later of the Proposed Prepayment Date or, if such prepayment date is extended to a later date pursuant to subparagraph (e)(ii) of this Section 8.5, such later date. (e) Relinquishment of Rights. Any holder of Notes (a "Relinquishing Holder") may, by notice to the Company invoking the provisions of this subparagraph (e), irrevocably relinquish, for itself only but not for any subsequent holder of such holder's Notes, the right to have its Notes prepaid pursuant to this Section 8.5 unless any other holder of any Notes accepts (or is deemed to have accepted) an offer to prepay Notes pursuant to subparagraph (c) of this Section 8.5. In the event that there is one or more Relinquishing Holders at any time and any other holder of any Notes accepts (or is deemed to have accepted) an offer to prepay Notes pursuant to subparagraph (c) of this Section 8.5, then (i) any such Relinquishing Holder may accept the offer to prepay made pursuant to this Section 8.5 by causing a notice of such acceptance to be delivered to the Company on or before the 15th day after the Acceptance Notice Date, and (ii) the date for the prepayment of the Notes to be prepaid pursuant to this Section 8.5 shall be extended to the 20th day after the Acceptance Notice Date. (f) Officer's Certificate. Each offer to prepay the Notes pursuant to this Section 8.5 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.5; (iii) the principal amount of each Note offered to be prepaid; (iv) the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation; (v) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (vi) that the conditions of this Section 8.5 have been fulfilled; and (vii) in reasonable detail, the nature and date of the Change in Control. 8.6. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. 8.7. Make-Whole Amount. The term "Make-Whole Amount" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: "Called Principal" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.1(b), 8.2 or 8.5 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "Reinvestment Yield" means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page 678" on the Telerate Access Service (or such other display as may replace Page 678 on Telerate Access Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the remaining life closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the remaining life closest to and less than the Remaining Average Life. "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.1(b), 8.2, 8.5 or 12.1. "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.1(b), 8.2 or 8.5 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 9. AFFIRMATIVE COVENANTS. The Company covenants that so long as any of the Notes are outstanding: 9.1. Compliance with Law. The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA and Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.2. Insurance. The Company will and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated. 9.3. Maintenance of Properties. The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.4. Payment of Taxes and Claims. The Company will and will cause each of its Subsidiaries to file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate could not rea-sonably be expected to have a Material Adverse Effect. 9.5. Corporate Existence, Etc. The Company will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.10 and 10.11, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect. 9.6. Covenant to Secure Notes Equally. If the Company or any Subsidiary shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than Liens permitted by the provisions of Section 10.5, the Company will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Debt thereby secured so long as any such other Debt shall be so secured; provided that compliance with this Section 9.7 shall not be deemed to constitute a cure of any breach of the terms of Section 10.5. 9.7. Senior Debt. The Company will at all times ensure that (a) the claims of holders of the Notes under the Notes and this Agreement will not be subordinate to, and will in all respects at least rank pari passu with, the claims of every other senior unsecured creditor of the Company, (b) any Debt subordinated in any manner to the claims of any other senior unsecured creditor of the Company will be subordinated in like manner to the claims of holders of the Notes, and (c) the Senior Private Placement Debt will at all times constitute "Senior Debt" as such term is defined (and used) in the Subordinated Debt Agreement and be senior in right of payment to the Subordinated Debt at least to the extent provided in the Subordinated Debt Agreement as in effect on the date hereof. 10. NEGATIVE COVENANTS. The Company covenants that so long as any of the Notes are outstanding: 10.1. Consolidated Net Worth. The Company will not permit Consolidated Net Worth at any time to be less than $125,000,000, except that effective as of the end of the Company's fiscal quarter ended June 29, 1996, and as of the end of each fiscal quarter of the Company thereafter, the foregoing amount (as it may from time to time be increased as herein provided) shall be increased by 50% of the Company's Consolidated Net Income for the fiscal quarter ended on such date (there being no reduction in the case of any such Consolidated Net Income which reflects a deficit). 10.2. Interest Charges Coverage Ratio. The Company will not permit at any time the ratio of (i) Consolidated EBIT of the Company and its Consolidated Subsidiaries during the twelve-month period ending on the last day of each fiscal quarter of the Company, to (ii) Consolidated Interest Expense of the Company and its Consolidated Subsidiaries for such twelve-month period to be less than 2.00 to 1.00. 10.3. Maintenance of Consolidated Debt. The Company will not permit the ratio of (i) Consolidated Debt of the Company and its Consolidated Subsidiaries (exclusive of Debt in respect of the undrawn amount of any Letters of Credit), divided by (ii) the sum of (A) such Consolidated Debt plus (B) Consolidated Net Worth of the Company and its Consolidated Subsidiaries, at the end of any fiscal quarter, to exceed (1) 60% at any time on or prior to May 3, 1997; (2) 55% at any time thereafter through January 3, 1998; or (3) 50% at any time thereafter. 10.4. Priority Debt. The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any Priority Debt at any time, except: (a) Priority Debt existing on the date hereof (excluding the Additional Letters of Credit), provided that such existing Priority Debt is described on Schedule 10.4 and the aggregate amount of such existing Priority Debt does not exceed the aggregate amount set forth therefor on Schedule 10.4; (b) any refinancing of any item of existing Priority Debt described in clause (a) above, provided that such refinancing does not increase the principal amount of such item of existing Priority Debt outstanding at the time of such refinancing; (c) the Additional Letters of Credit, provided that the aggregate amount of such Additional Letters of Credit does not exceed the aggregate amount set forth therefor on Schedule 10.4; and (d) other Priority Debt, provided that (i) the aggregate amount of all such other Priority Debt outstanding at any time does not exceed the Permitted Priority Debt Amount at such time and (ii) the creation, incurrence or assumption of such other Priority Debt is permitted by Section 10.3. 10.5. Liens. The Company will not, and will not permit any Subsidiary to, create, assume, incur or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except: (a) Existing Liens (including the replacement, extension or renewal of any such Existing Lien upon the same property theretofore subject thereto and the replacement, extension or renewal (without increase of principal amount) of the Debt secured thereby); (b) Liens for taxes, assessments or governmental charges or levies, not yet due and payable, or being contested in good faith and against which reserves have been established by the Company to the extent required under GAAP; (c) Liens imposed by law, such as materialmen's mechanics', carriers', workmen's, and repairmen's Liens and other similar Liens arising in the ordinary course of business securing obligations (other than Debt) which are not overdue for a period of more than 30 days; (d) pledges or deposits to secure obligations under workmen's compensation laws or similar legislation or to secure statutory obligations of the Company or any of its Subsidiaries, provided such Liens do not result in a Material Adverse Effect; (e) Liens of landlords arising by operation of law or pursuant to leases entered into in the ordinary course of business securing rental obligations which are not overdue for a period of more than 30 days; (f) Liens on property (including, without limitation, shares of capital stock) of a corporation existing at the time such corporation is merged with or into or consolidated with the Company or any of its Subsidiaries or at the time such corporation becomes a Subsidiary or at the time of a sale, lease or other disposition of the properties of such corporation as an entirety or substantially as an entirety to the Company or any of its Subsidiaries, provided, that (i) such Liens are not incurred in anticipation of such merger, consolidation or such corporation becoming a Subsidiary, or sale, lease or other disposition with or into the Company or any of its Subsidiary, (ii) such Liens do not extend to any other property of the Company or any of its Subsidiaries and (iii) the aggregate principal amount of the Debt secured by Liens permitted by this clause (f) and clauses (j) and (k) below is permitted to exist under Section 10.4; (g) Liens created in the ordinary course of business in favor of the United States of America or any State thereof, or any department, agency or political subdivision of the United States of America of any State thereof, to secure partial, progress, advance or other payments pursuant to any contract (other than for borrowed money) or statute; (h) Liens created in the ordinary course of business by or resulting from any litigation or proceedings which are being contested in good faith, Liens arising in the ordinary course of business out of judgments or awards against the Company or any of its Subsidiaries with respect to which the Company or such Subsidiary is in good faith prosecuting an appeal or proceedings for review, or Liens incurred in the ordinary course of business by the Company or any of its Subsidiaries for the purpose of obtaining a stay or discharge in the course of any legal proceeding to which the Company or such Subsidiary is a party; provided, that the aggregate amount secured by all such Liens referred to in this clause (h) shall not exceed $5,000,000 at any time; (i) easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its intended purposes; (j) purchase money Liens upon or in property acquired or held by the Company or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such property to be subject to such Liens, or Liens existing on any such property at the time of acquisition, or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that no such Lien shall extend to or cover any property other than the property being acquired, constructed or improved, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced, and provided, further, that the aggregate principal amount of the Debt at any one time outstanding secured by Liens permitted by this clause (j), clause (f) above and clause (k) below is permitted to exist under Section 10.4; and (k) Liens not otherwise permitted hereunder securing Debt of the Company or any Subsidiary, provided that the aggregate principal amount of the Debt at any one time outstanding secured by Liens permitted by this clause (k) and clauses (f) and (j) above is permitted to exist under Section 10.4. 10.6. Restricted Investments. (a) Limitation. The Company will not, and will not permit any of its Subsidiaries to, declare, make or authorize any Restricted Investment unless immediately after giving effect to such action: (i) the aggregate value of all Restricted Investments of the Company and its Subsidiaries (valued immediately after such action) would not exceed the sum of: (A) $25,000,000, plus (B) $10,000,000 per year for each completed fiscal year of the Company commencing with the Company's fiscal year beginning on or about December 29, 1996 (calculated on a cumulative basis); and (ii) no Default or Event of Default would exist. (b) Investments of Subsidiaries. Each Person which becomes a Subsidiary of the Company after the date of the Closing will be deemed to have made, on the date such Person becomes a Subsidiary of the Company, all Restricted Investments of such Person in existence on such date. Investments in any Person that ceases to be a Wholly-Owned Subsidiary of the Company after the date of the Closing (but in which the Company or another Subsidiary continues to maintain an Investment) will be deemed to have been made on the date on which such Person ceases to be a Wholly-Owned Subsidiary of the Company. (c) General Partnerships. Notwithstanding anything to the contrary herein set forth, the Company will not, and will not permit any Subsidiary to, become a general partner in any general or limited partnership other than such a partnership that is a Wholly-Owned Subsidiary. 10.7. Restrictions on Dividends of Subsidiaries, Etc. The Company will not, and will not permit any of its Subsidiaries to, enter into any agreement which would restrict any Subsidiary's ability or right to pay dividends to, or make advances to or Investments in, the Company or, if such Subsidiary is not directly owned by the Company, the "parent" Subsidiary of such Subsidiary. 10.8. Sale-and-Leasebacks. The Company will not, and will not permit any Subsidiary to, enter into any Sale-and-Leaseback Transaction unless, immediately after giving effect thereto, the aggregate amount of all outstanding Attributable Debt of the Company and its Subsidiaries does not exceed 5% of Consolidated Net Worth determined at such time. 10.9. Transactions with Affiliates. The Company will not and will not permit any Subsidiary to enter into directly or indirectly any transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except in the ordinary course 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 would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate. 10.10. Merger, Consolidation, Etc. The Company will not, and will not permit any Subsidiaries to, consolidate with or merge with any other corporation or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person (except that a Wholly-Owned Subsidiary of the Company may (x) consolidate with or merge with, or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to, the Company or another Wholly-Owned Subsidiary of the Company and (y) convey, transfer or lease all of its assets in compliance with the provisions of Section 10.11), provided that the foregoing restriction does not apply to the consolidation or merger of the Company with, or the conveyance, transfer or lease of all or substantially all of the assets of the Company in a single transaction or series of transactions to, any Person so long as: (a) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of the Company as an entirety, as the case may be (the "Successor Corporation"), shall be a solvent corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia; (b) if the Company is not the Successor Corporation, such corporation shall have executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), and the Company shall have caused to be delivered to each holder of Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and (c) immediately after giving effect to such transaction no Default or Event of Default would exist. No such conveyance, transfer or lease of all or substantially all of the assets of the Company shall have the effect of releasing the Company or any Successor Corporation from its liability under this Agreement (including Section 8.5) or the Notes. 10.11. Sale of Assets, Etc. Except as permitted under Section 10.10, the Company will not, and will not permit any of its Subsidiaries to, make any Asset Disposition unless: (a) in the good faith opinion of the Company, the Asset Disposition is in exchange for consideration having a Fair Market Value at least equal to that of the property exchanged and is in the best interest of the Company or such Subsidiary; and (b) immediately after giving effect to the Asset Disposition, no Default or Event of Default would exist; and (c) immediately after giving effect to the Asset Disposition, (i) the Disposition Value of all property that was the subject of any Asset Disposition occurring in the most recent thirty-six calendar months then ended (together with the assets proposed to be so disposed) would not exceed 15% of Consolidated Assets as of the end of the then most recently ended fiscal year of the Company and (ii) all of such property did not account for more than 15% of Consolidated Net Income for any of the three most recently ended fiscal years of the Company. 10.12. Line of Business. The Company will not, and will not permit any of its Subsidiaries to, engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum. 10.13. Subordinated Debt Restrictions. The Company will not, and will not permit any of its Subsidiaries to, repay or prepay any principal amount of, any premium, penalty or make-whole payment with respect to or any interest, fees or other charges on any Subordinated Debt (including any sinking fund payments, defeasance payments or similar payments with respect thereto), directly or indirectly, or amend or otherwise modify any provision of any instrument or agreement evidencing any Subordinated Debt in any manner which may reasonably be expected to be adverse to any holder of a Note; provided, however, that the Company may make (a) regularly scheduled prepayments of principal of, and interest on, the Subordinated Debt in accordance with the express terms of the Subordinated Debt Agreement as in effect on the date of the Closing (and as certified pursuant to Section 4.11) and (b) optional prepayments of Subordinated Debt pursuant to Section 9.2 of the Subordinated Debt Agreement as in effect on the date of the Closing (and as certified pursuant to Section 4.11), in each case (with respect to the foregoing clauses (a) and (b)) so long as no Default or Event of Default exists or would exist as a result thereof; provided, further, that this Section 10.13 shall not be deemed to prohibit the conversion of Subordinated Debt solely into common stock of the Company. 10.14. Accounting Changes. The Company will not (a) change its fiscal year, or (b) make, or permit any of its Subsidiaries to make, any change in its accounting policies of financial reporting practices and procedures, except changes in accounting policies which are required or permitted by GAAP and changes in financial reporting practices and procedures which are required or permitted by GAAP, in each case as to which the Company shall have delivered to each holder prior to the effectiveness of any such change a report prepared by a responsible financial officer of the Company describing such change and explaining in reasonable detail the basis therefor and effect thereof. 10.15. Issuance of Stock by Subsidiaries. The Company will not permit any Subsidiary, directly or indirectly, to issue or sell any of its capital stock, except (a) to the Company or to a Wholly-Owned Subsidiary of the Company, or (b) sales of common stock to the extent expressly permitted under Section 10.11. 11. EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or (b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or (c) the Company defaults in the performance of or compliance with any term contained in Sections 7.1(d), 9.2, 9.5, 9.6, 9.7 or any subsection of Section 8 or Section 10; or (d) the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a "notice of default" and to refer specifically to this paragraph (d) of Sec- tion 11); or (e) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt that is outstanding in an aggregate principal amount of at least $4,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or com- pliance with any term of any evidence of any Debt in an aggre- gate outstanding principal amount of at least $4,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared (or one or more Persons are entitled to declare such Debt to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay Debt before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $4,000,000, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Debt; or (g) the Company or any Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or (h) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, or any such petition shall be filed against the Company or any of its Subsidiaries and such petition shall not be dismissed within 60 days; or (i) a final judgment or judgments for the payment of money aggregating in excess of $5,000,000 are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or (j) the Company shall fail to comply with or to perform any provision of, or otherwise be in default beyond any applicable grace period under, the Credit Agreement or the Subordinated Debt Agreement (whether or not such failure or default is subsequently waived, consented to or rescinded); or (k) any guarantor shall fail to comply with or to perform any provision of, or otherwise be in default beyond any applicable grace period under the Bank Guaranty; or the Bank Guaranty shall fail to remain in full force and effect in accordance with its terms or any guarantor thereunder shall take any action to disaffirm any of its obligations thereunder or terminate any provisions thereof; or (l) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate amount of unfunded accumulated benefit obligations (within the meaning of FASB No. 87, and in any event determined without giving effect to any overfunding) shall exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect. As used in Section 11(l), the terms "employee benefit plan" and "employee welfare benefit plan" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 12. REMEDIES ON DEFAULT, ETC. 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in paragraph (g) or (h) of Section 11 has occurred, all the Notes then outstanding shall automatically become immediately due and payable. (b) Without limiting paragraph (c) below, if any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable. Upon any Notes becoming due and payable under this Sec-tion 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without pre-sentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from prepayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of De-fault, is intended to provide compensation for the deprivation of such right under such circumstances. 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 50% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non- payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. 12.4. No Waivers or Election of Remedies, Expenses, etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements. 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all regis-tered holders of Notes. 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit A. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2. 13.3. Replacement of Notes. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. 14. PAYMENTS ON NOTES. 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make- Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Chicago, Illinois at the principal office of a bank or trust company in such jurisdiction which the Company agrees to designate at any time when there is a holder of any Note not entitled to the benefits of Section 14.2 hereof. 14.2. Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2. 15. EXPENSES, ETC. 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys' fees of Schiff Hardin & Waite, as your special counsel) incurred by you and each Other Purchaser or holder of a Note in connection with such transactions and all costs and expenses (including reasonable attorneys' fees) incurred by you and each Other Purchaser or holder of a Note in connection with any amendments, waivers or consents under or in respect of this Agree-ment or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agree-ment or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes. The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you). 15.2. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement. 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investi-gation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. 17. AMENDMENT AND WAIVER. 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20. 17.2. Solicitation of Holders of Notes. (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. (b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment. 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, De-fault or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. 17.4. Notes held by Company, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding. 18. NOTICES. All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: (i) if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing, (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or (iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing. Notices under this Section 18 will be deemed given only when actually received. 19. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduc-tion shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction. 20. CONFIDENTIAL INFORMATION. For the purposes of this Section 20, "Confidential Information" means information delivered to you in writing by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will use your best efforts to maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, employ-ees, agents, attorneys and affiliates (to the extent such disclo-sure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20. 21. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement. 22. MISCELLANEOUS. 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date of payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such next succeeding Business Day. 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. 22.4. Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 22.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. 22.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. * * * * * [Signature page to follow] If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. Very truly yours, EXCEL INDUSTRIES, INC. By: Title: The foregoing is hereby agreed to as of the date thereof. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: Title: SCHEDULE A INFORMATION RELATING TO PURCHASERS Name and Address of Purchaser Principal Amount of Notes to be Purchased (A) THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon New York time, to: Account No.: 050-54-526 Morgan Guaranty Trust Company of New York 23 Wall Street New York, New York 10015 (ABA No. 021-000-238) Each such wire transfer shall set forth the name of the Company, a reference to "7.78% Senior Notes due April 30, 2011, Security No. !INV5388!, and the application (as among principal, interest and Make-Whole Amount) of the payment being made. $47,500,000 (2) All notices of payments and written confirmations of such wire transfers: The Prudential Insurance Company of America c/o Prudential Capital Group Gateway Center Three 100 Mulberry Street Newark, New Jersey 07102 Attention: Manager, Investment Operations Group Telephone: (201) 802-5260 Telecopy: (201) 802-8055 (3) All other communications: The Prudential Insurance Company of America c/o Prudential Capital Group Two Prudential Plaza, 180 North Stetson Street Suite 5600 Chicago, Illinois 60601-6716 Attention: Managing Director Telephone: (312) 540-0931 Telecopy: (312) 540-4222 (4) Recipient of telephonic prepayment notices: Attention: Manager, Investment Structuring and Pricing Telephone: (201) 802-6660 Telecopy: (201) 802-9425 (5) Tax Identification No. 22-1211670 (B) JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: The First National Bank of Boston ABA No. 011000390 Boston, Massachusetts 02110 Account of: John Hancock Mutual Life Insurance Company Private Placement Collection Account Account Number: 541-55417 On Order of: Excel Industries, Inc. [PPN No.] $28,500,000 (2) Contemporaneous with the above wire transfer, advice setting forth: (a) the full name, interest rate and maturity date of the Notes or other obligations; (b) allocation of payment between principal and interest and any special payment; and (c) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or mailed to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Securities Accounting Division T-10 (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Securities Accounting Division T-10 (4) All other communications to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Dept. T-57 (5) All securities shall be registered in the name of John Hancock Mutual Life Insurance Company. (6) Tax I.D. No. 04-1414660 (C) THE MARITIME LIFE ASSURANCE COMPANY (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, Halifax time, to: Bank: Bank of Nova Scotia New York Agency New York ABA No. 026002532 Beneficiary Bank: Bank of Nova Scotia Transit: 70003 Halifax Commercial Banking Center Halifax, N.S. Beneficiary Name: The Maritime Life Assurance Company Account No. 2018-12 On Order of: Excel Industries, Inc. [PPN No.] $3,000,000 (2) Contemporaneous with the above wire transfer, advice setting forth: (a) the full name, interest rate and maturity date of the Notes or other obligations; (b) allocation of payment between principal and interest and any special payment; and (c) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered or mailed to: The Maritime Life Assurance Company 2701 Dutch Village Road Halifax, NS B3J 2X5 Canada Attention: Supervisor of Investment Accounting (3) All other communications to: with a copy to: John Hancock Mutual Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Dept., T-57 (4) All securities shall be registered in the name of The Maritime Life Assurance Company. (5) All securities shall be delivered to: The Maritime Life Assurance Company 2701 Dutch Village Road Halifax, NS B3J 2X5 Canada Attention: Director, Bonds and Corporate Finance (6) Executed private placement documents, original closing papers and conformed copies shall be delivered to, and executed by: The Maritime Life Assurance Company 2701 Dutch Village Road Halifax, NS B3J 2X5 Canada Attention: Director, Bonds and Corporate Finance (D) MELLON BANK, N.A., AS TRUSTEE FOR AT&T MASTER PENSION TRUST (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: Mellon Bank, N.A. ABA No. 043000261 Credit to: CC3971-8 Further credit to Account No.: 179-168 Pittsburgh, Pennsylvania 15230 $2,000,000 (2) Contemporaneous with the above wire transfer, advice setting forth: (a) the full name, interest rate and maturity date of the Notes or other obligations; (b) allocation of payment between principal and interest and any special payment; and (c) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered or mailed to: Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania 15230 (3) All other communications to: John Hancock Mutual Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Stephen A. MacLean Bond and Corporate Finance Dept., T-57 with a copy to: Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania 15258 Attention: Bernadette Rist (4) All securities acquired for the AT&T Master Pension Trust shall be registered in the name of MELLON BANK, N.A., TRUSTEE UNDER MASTER TRUST AGREEMENT OF AT&T CORPORATION DATED JANUARY 1, 1984 FOR EMPLOYEE PENSION PLANS-AT&T-JOHN HANCOCK-PRIVATE PLACEMENT and execution documents shall be executed by Mellon Bank, N.A., as Trustee for AT&T Master Pension Trust. (5) All securities acquired for the AT&T Master Pension Trust shall be delivered to: Mellon Securities Trust company 120 Broadway - 13th Floor New York, New York 10271 Attn: Robert A. Ferraro (6) Executed private placement documents, original closing papers and conformed copies shall be delivered to: Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania 15258 Attention: Ms. Bernadette Rist (7) Tax I.D. No. 13-3187026 (E) JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: The First National Bank of Boston ABA No. 011000390 Boston, Massachusetts 02110 Account of: John Hancock Mutual Life Insurance Company Private Placement Collection Account Account Number 541-55417 On Order of: Excel Industries, Inc. [PPN No.] $2,000,000 (2) Contemporaneous with the above wire transfer, advice setting forth: (a) the full name, interest rate and maturity date of the Notes or other obligations; (b) allocation of payment between principal and interest and any special payment; and (c) name and address of Bank (or Trustee) from which wire transfer was sent shall be delivered or mailed to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Securities Accounting Division T-10 (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Securities Accounting Division T-10 (4) All other communications to: John Hancock Mutual Life Insurance Company John Hancock Place 200 Clarendon Street Boston, MA 02117 Attention: Bond and Corporate Finance Dept. T-57 (5) All securities shall be registered in the name of John Hancock Variable Life Insurance Company. (6) Tax I.D. No. 04-2664016 (F) MELLON BANK, N.A., AS TRUSTEE FOR NYNEX MASTER PENSION TRUST (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, Boston time, to: Federal Reserve Bank of Boston A/C Boston Safe Deposit and Trust Company ABA: 011001234 DDA: 16-229-9 Reference: NYNEX: NYXF 1783332 $2,000,000 (2) Contemporaneous with the above wire transfer, advice setting forth: (a) the full name, interest rate and maturity date of the Notes or other obligations; (b) allocation of payment between principal and interest and any special payment; and (c) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered or mailed to: Mellon Bank, N.A. One Mellon Bank Center, Room 3346 Pittsburgh, Pennsylvania 15258-0001 Attention: Fran Sistek (3) All other communications to: John Hancock Mutual Life Insurance Company 200 Clarendon Street Boston, MA 02117 Attention: Stephen A. MacLean Bond and Corporate Finance Dept., T-57 with a copy to: Mellon Bank, N.A. One Mellon Bank Center, Room 1935 Pittsburgh, Pennsylvania 15258-0001 Attention: Bernadette T. Rist (4) All securities acquired for the NYNEX Master Pension Trust shall be registered in the name of MELLON BANK, N.A., TRUSTEE UNDER MASTER TRUST AGREEMENT OF NYNEX CORPORATION DATED JANUARY 1, 1984 FOR EMPLOYEE PENSION PLANS-NYNEX-JOHN HANCOCK-PRIVATE PLACEMENT and execution documents shall be executed by Mellon Bank, N.A., as Trustee for NYNEX Master Pension Trust. (5) All securities acquired for the NYNEX Master Pension Trust shall be delivered to: Mellon Securities Trust Company 120 Broadway - 13th Floor New York, New York 10271 ATT: SECURITIES TELLER WINDOW, REF: NYNEX - NYXF 1783332 (6) Executed private placement documents, original closing papers and conformed copies shall be delivered to: Mellon Bank, N.A. One Mellon Bank Center, Room 1935 Pittsburgh, Pennsylvania 15258-0001 Attention: Bernadette T. Rist (7) Tax I.D. No. 35-1448308 (G) CENTURY INDEMNITY COMPANY $3,000,000 (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, New York time, to: Chase NYC/CTR/ BNF=CIGNA Private Placements/ AC=9009001802 ABA# 021000021 (2) Contemporaneous with the above wire transfer, advice setting forth: OBI=[name of company; description of security; interest rate, maturity date; PPN; due date and application (as among principal, premium and interest of the payment being made; contact name and phone.] (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: CIG & Co. % CIGNA Investments, Inc. Attention: Securities Processing S-206 900 Cottage Grove Road Hartford, Connecticut 06152-2206 with a copy to: Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box 1508 Bowling Green Station New York, New York 10081 Attention: CIGNA Private Placements FAX: 212-552-3107/1005 (4) All other communications to: CIG & Co. % CIGNA Investments, Inc. Attention: Private Securities Division -S-307 900 Cottage Grove Road Hartford, Connecticut 06152-2307 FAX: 860-726-7203 (5) All securities shall be registered in the name of CIG & Co. (6) Tax I.D. No. 13-3574027 (H) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one or more separate accounts $3,000,000 (1) All payments shall be made by wire transfer of immediately available funds for credit,not later than 12 noon, New York time, to: Chase NYC/CTR/ BNF=CIGNA Private Placements/ AC=9009001802 ABA# 021000021 (2) Contemporaneous with the above wire transfer, advice setting forth: OBI=[name of company; description of security; interest rate, maturity date; PPN; due date and application (as among principal, premium and interest of the payment being made; contact name and phone.] (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: CIG & Co. % CIGNA Investments, Inc. Attention: Securities Processing S-206 900 Cottage Grove Road Hartford, Connecticut 06152-2206 with a copy to: Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box 1508 Bowling Green Station New York, New York 10081 Attention: CIGNA Private Placements FAX: 212-552-3107/1005 (4) All other communications to: CIG & Co. % CIGNA Investments, Inc. Attention: Private Securities Division -S-307 900 Cottage Grove Road Hartford, Connecticut 06152-2307 FAX: 860-726-7203 (5) All securities shall be registered in the name of CIG & Co. (6) Tax I.D. No. 13-3574027 (I) CONNECTICUT GENERAL LIFE INSURANCE COMPANY $3,000,000 (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, New York time, to: Chase NYC/CTR/ BNF=CIGNA Private Placements/ AC=9009001802 ABA# 021000021 (2) Contemporaneous with the above wire transfer, advice setting forth: OBI=[name of company; description of security; interest rate, maturity date; PPN; due date and application (as among principal, premium and interest of the payment being made; contact name and phone.] (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: CIG & Co. % CIGNA Investments, Inc. Attention: Securities Processing S-206 900 Cottage Grove Road Hartford, Connecticut 06152-2206 with a copy to: Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box 1508 Bowling Green Station New York, New York 10081 Attention: CIGNA Private Placements FAX: 212-552-3107/1005 (4) All other communications to: CIG & Co. % CIGNA Investments, Inc. Attention: Private Securities Division -S-307 900 Cottage Grove Road Hartford, Connecticut 06152-2307 FAX: 860-726-7203 (5) All securities shall be registered in the name of CIG & Co. (6) Tax I.D. No. 13-3574027 (J) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one or more separate accounts $3,000,000 (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, New York time, to: Chase NYC/CTR/ BNF=CIGNA Private Placements/ AC=9009001802 ABA# 021000021 (2) Contemporaneous with the above wire transfer, advice setting forth: OBI=[name of company; description of security; interest rate, maturity date; PPN; due date and application (as among principal, premium and interest of the payment being made; contact name and phone.] (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: CIG & Co. % CIGNA Investments, Inc. Attention: Securities Processing S-206 900 Cottage Grove Road Hartford, Connecticut 06152-2206 with a copy to: Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box 1508 Bowling Green Station New York, New York 10081 Attention: CIGNA Private Placements FAX: 212-552-3107/1005 (4) All other communications to: CIG & Co. % CIGNA Investments, Inc. Attention: Private Securities Division -S-307 900 Cottage Grove Road Hartford, Connecticut 06152-2307 FAX: 860-726-7203 (5) All securities shall be registered in the name of CIG & Co. (6) Tax I.D. No. 13-3574027 (K) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one or more separate accounts $3,000,000 (1) All payments shall be made by wire transfer of immediately available funds for credit, not later than 12 noon, New York time, to: Chase NYC/CTR/ BNF=CIGNA Private Placements/ AC=9009001802 ABA# 021000021 (2) Contemporaneous with the above wire transfer, advice setting forth: OBI=[name of company; description of security; interest rate, maturity date; PPN; due date and application (as among principal, premium and interest of the payment being made; contact name and phone.] (3) All notices with respect to prepayments, both scheduled and unscheduled, whether partial or in full, and notice of maturity shall be delivered or mailed to: CIG & Co. % CIGNA Investments, Inc. Attention: Securities Processing S-206 900 Cottage Grove Road Hartford, Connecticut 06152-2206 with a copy to: Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box 1508 Bowling Green Station New York, New York 10081 Attention: CIGNA Private Placements FAX: 212-552-3107/1005 (4) All other communications to: CIG & Co. % CIGNA Investments, Inc. Attention: Private Securities Division -S-307 900 Cottage Grove Road Hartford, Connecticut 06152-2307 FAX: 860-726-7203 (5) All securities shall be registered in the name of CIG & Co. (6) Tax Identification No. 13-3574027 SCHEDULE B DEFINED TERMS As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term: "Acceptable Bank" means any bank or trust company (i) which is organized under the laws of the United States of America or any State thereof, (ii) which has capital, surplus and undivided profits aggregating at least $100,000,000, and (iii) whose long-term unsecured debt obligations (or the long-term unsecured debt obligations of the bank holding company owning all of the capital stock of such bank or trust company) shall have been given a rating of "A" or better by S&P, "A2" or better by Moody's or an equivalent rating by any other credit rating agency of recognized national standing. "Acceptable Broker-Dealer" means any Person other than a natural person (i) which is registered as a broker or dealer pursuant to the Exchange Act and (ii) whose long-term unsecured debt obligations shall have been given a rating of "A" or better by S&P, "A2" or better by Moody's or an equivalent rating by any other credit rating agency of recognized national standing. "Additional Letters of Credit" means the letters of credit existing on the date hereof and identified on Schedule 10.4 under the heading "Additional Letters of Credit." "Affiliate" means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by con-tract or otherwise. Unless the context otherwise clearly requires, any reference to an "Affiliate" is a reference to an Affiliate of the Company. "Anderson" means Anderson Industries, Inc., a Delaware corporation, and its successors and assigns. "Asset Disposition" means any Transfer except (a) any Transfer from a Subsidiary to the Company or a Wholly-Owned Subsidiary; and (b) any Transfer made in the ordinary course of business and involving only property that is either (i) inventory held for sale or (ii) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or any of its Subsidiaries or that is obsolete. "Attributable Debt" means, as to any particular lease relating to a Sale-and-Leaseback Transaction, the greater of (i) the present value of all Lease Rentals required to be paid by the Company or any Subsidiary under such lease during the remaining term thereof (determined in accordance with generally accepted financial practice using a discount factor equal to the interest rate implicit in such lease if known or, if not known, of 8% per annum) and (ii) the Fair Market Value of the property subject to such Sale-and- Leaseback Transaction as determined at the time of consummation of such Sale-and-Leaseback Transaction. "Atwood" means Atwood Industries, Inc., an Illinois corporation, and its successors and assigns. "Bank Guaranty" means each Guaranty that is a "Guaranty Agreement" as such term is defined in the Intercreditor Agreement. "Business Day" means (a) for the purposes of Section 8.7 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, Illinois or Indiana are required or authorized to be closed. "Capital Lease" means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. "Capital Lease Obligation" means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person. "Change in Control" means the occurrence of any of the following: (a) any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act) becoming the "beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing), directly or indirectly, of (i) more than 30% of the total voting power of all classes then outstanding of the Company's Voting Stock, or (ii) all or substantially all of the properties and assets of the Company; (b) during any period of twelve consecutive calendar months, individuals who were directors of the Company on the first day of such period or who were elected or nominated by a majority of directors in office at the beginning of such period, shall cease for any reason to constitute a majority of the board of directors of the Company; or (c) any "Change in Control" as such term is defined in the Credit Agreement or the Subordinated Debt Agreement (or any similar event that gives rise to a right of any creditor thereunder to require a prepayment or purchase of the debt held by it thereunder). "Closing" is defined in Section 3. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time. "Company" means Excel Industries, Inc., an Indiana corporation. "Confidential Information" is defined in Section 20. "Consolidated" refers to the consolidation of accounts in accordance with GAAP, including principles of consolidation, consistent with those applied in the preparation of the Consolidated financial statements referred to in Section 5.5. "Consolidated Assets" means, at any time, the total assets of the Company and its Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries. "Consolidated Interest Expense" means, for any period, with respect to the Company and its Subsidiaries on a Consolidated basis, total interest expense, whether paid or accrued (without duplication), including the interest component of obligations in respect of capital leases. "Consolidated Net Income" means for any period the consolidated net income (loss) of the Company and its consolidated subsidiaries for such period, determined in accordance with GAAP. "Consolidated Net Worth" means at any date the Consolidated stockholders' equity of the Company and its Consolidated Subsidiaries, determined as of such date in accordance with GAAP. "Consolidated Tangible Net Worth" means, as of any time of determination thereof, Consolidated Net Worth at such time minus (a) the net book amount of all assets of the Company and its Subsidiaries (after deducting any reserves applicable thereto) which would be shown as intangible assets on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP and (b) any net gains or losses attributable to cumulative foreign currency translation adjustments. "Control Event" means (i) the execution by the Company or any of its Subsidiaries or Affiliates of any agreement or letter of intent with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate, may reasonably be expected to result in a Change in Control, (ii) the execution of any written agreement which, when fully performed by the parties thereto, would result in a Change in Control, or (iii) the making of any written offer by any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act as in effect on the date of the Closing) to the holders of the common stock of the Company, which offer, if accepted by the requisite number of such holders, would result in a Change in Control. "Credit Agreement" means that certain Credit Agreement dated as of April 1, 1996 among the Company, the financial institutions party thereto ("Lenders"), Society National Bank, as agent for the Lenders, and Harris Trust and Savings Bank, as co- agent for the Lenders, as amended, restated, extended, renewed, supplemented or otherwise modified from time to time. "Debt" of any Person means at any date (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (iv) all obligations of such Person as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (v) all obligations of such Person as an account party in respect of letters of credit and bankers' acceptances, (vi) all obligations of such Person under direct or indirect guaranties in respect of, and all obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, Debt of others and (vii) all other Debt secured by a lien, mortgage or security interest on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person. For the avoidance of doubt, in no event shall the obligations of a Person as lessee or sublessee under an Operating Leases be considered Debt of such Person. "Default" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "Default Rate" means that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York, New York as its "base" or "prime" rate. "Disposition Value" means, at any time, with respect to any property (a) in the case of property that does not constitute Subsidiary Stock, the book value thereof, valued at the time of such disposition in good faith by the Company, and (b) in the case of property that constitutes Subsidiary Stock, an amount equal to that percentage of book value of the assets of the Subsidiary that issued such stock as is equal to the percentage that the book value of such Subsidiary Stock represents of the book value of all of the outstanding capital stock of such Subsidiary (assuming, in making such calculations, that all Securities convertible into such capital stock are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion) determined at the time of the disposition thereof, in good faith by the Company. "EBIT" means, for any period on a Consolidated basis for the Company and its Consolidated Subsidiaries, the sum of the amounts for such period of: (i) Consolidated Net Income, provided that: (A) all gains and all losses realized by such person and its subsidiaries upon the sale or other disposition (including, without limitation, pursuant to sale and leaseback transactions) of property or assets which are not sold or otherwise disposed of in the ordinary course of business, or pursuant to the sale of any capital stock of such person or any subsidiary, shall be excluded from such Consolidated Net Income, (B) net income or net loss of any person combined with such person on a "pooling of interests" basis attributable to any period prior to the date of such combination shall be excluded from such Consolidated Net Income, (C) all items of gain or loss which are properly classified as extraordinary in accordance with GAAP shall be excluded from such Consolidated Net Income, (D) all items which are properly classified in accordance with GAAP as cumulative effects of accounting changes shall be excluded from such Consolidated Net Income, (E) net income of any person which is not a subsidiary of such person and which is consolidated with such person or is accounted for by such person by the equity method of accounting shall be included in such Consolidated Net Income only to the extent of the amount of dividends or distributions paid to such person, and (F) net loss of any person which is not a subsidiary of such person and which is consolidated with such person or is accounted for by such person by the equity method of accounting shall be excluded from such Consolidated Net Income; (ii) Consolidated Interest Expense; and (iii) charges for federal, state, local and foreign income taxes. "Environmental Laws" means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. "ERISA Affiliate" means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code. "Event of Default" is defined in Section 11. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Liens" means the Liens existing on the date hereof upon or with respect to property owned by the Company and its Subsidiaries and specified on Schedule 10.5. "Fair Market Value" means, at any time and with respect to any property, the sale value of such property that would be realized in an arm's-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell). "Foreign Subsidiary" means any Subsidiary that is not organized under the laws of a State of the United States or the District of Columbia. "GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America. "Governmental Authority" means (a) the government of (i) the United States of America or any State or other political subdivision thereof, or (ii) any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government. "Guaranty" means, with respect to any Person, any obli-gation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether di-rectly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or (d) otherwise to assure the owner of such indebt- edness or obligation against loss in respect thereof. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. "Hazardous Material" means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polycholorinated biphenyls). "holder" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1. "Institutional Investor" means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. "Intercreditor Agreement" means that certain Intercreditor Agreement dated as of the date of the Closing by and among you, the Other Purchasers and the parties to the Credit Agreement, substantially in the form of Exhibit D, as amended, restated, extended, renewed, supplemented, or otherwise modified from time to time. "Investment" means any investment, made in cash or by delivery of property, by the Company or any of its Subsidiaries (i) in any Person, whether by acquisition of stock, indebtedness or other obligation or Security, or by loan, Guaranty, advance, capital contribution or otherwise, or (ii) in any property. "Lease Rentals" means, with respect to any period, the sum of the rental and other obligations required to be paid during such period by the Company or any Subsidiary as lessee under all leases of real or personal property (other than Capital Leases), excluding any amount required to be paid by the lessee (whether or not therein designated as rental or additional rental) on account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges, provided that, if at the date of determination, any such rental or other obligations (or portion thereof) are contingent or not otherwise definitely determinable by the terms of the related lease, the amount of such obligations (or such portion thereof) (i) shall be assumed to be equal to the amount of such obligations for the period of 12 consecutive calendar months immediately preceding the date of determination or (ii) if the related lease was not in effect during such preceding 12-month period, shall be the amount estimated by a Senior Financial Officer of the Company on a reasonable basis and in good faith. "Letters of Credit" means letters of credit issued under the Credit Agreement, provided that the undrawn amount thereof does not exceed $10,000,000. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale agreement, deposit arrangement, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever in respect of any property of a Person, whether granted voluntarily or imposed by law, and includes the interest of a lessor under a lease which shall have been or should be, in accordance with GAAP, recorded as a capital lease, and the filing of any financing statement or similar notice (other than a financing statement filed by a "true" lessor pursuant to Section 9-408 of the Uniform Commercial Code), naming the lessee of such property as debtor or "lessee", under the Uniform Commercial Code or other comparable law of any jurisdiction with respect to any of the foregoing. For the avoidance of doubt, in the case of any Operating Lease under which a Person is the lessee or sublessee of real or tangible personal property (or mixed real and tangible personal property), the term Lien does not include the rights of the lessor or sublessor in such property or any financing statement covering such property (including any additions thereto, replacements thereof, or substitutions therefor, or any proceeds thereof) filed against such Person as debtor or as "lessee" or "sublessee". "Make-Whole Amount" is defined in Section 8.7. "Material" means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole. "Material Adverse Effect" means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, or (c) the validity or enforceability of this Agreement or the Notes. "Memorandum" is defined in Section 5.3. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA). "Notes" is defined in Section 1. "Officer's Certificate" means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. "Operating Lease" means a lease of real and/or tangible personal property as to which the obligations of the lessee or sublessee are not required to be capitalized under GAAP. "Other Agreements" is defined in Section 2. "Other Purchasers" is defined in Section 2. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. "Permitted Priority Debt Amount" means (a) during the period of the date hereof through March 31, 1997, the greater of (i) $10,000,000 and (ii) 10% of Consolidated Tangible Net Worth; and (b) after March 31, 1997, 10% of Consolidated Tangible Net Worth. "Person" means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof. "Plan" means an "employee benefit plan" (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability. "Priority Debt" means, without duplication, the sum of (a) all Debt of the Company secured by any Lien with respect to any property owned by the Company or any of its Subsidiaries, and (b) all secured and unsecured Debt of Subsidiaries (including, without limitation, any Debt of the Company with respect to which a Subsidiary has provided a Guaranty; provided, however, that Priority Debt shall not include: (i) unsecured Debt of Subsidiaries owed to the Company; (ii) Debt evidenced by the Bank Guaranty so long as the Intercreditor Agreement is in full force and effect; and (iii) Debt evidenced by the Subordinated Debt Guaranty so long as the Senior Private Placement Debt constitutes "Senior Debt" as such term is defined (and used) in the Subordinated Debt Agreement and the Subordinated Debt Guaranty. "property" or "properties" means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate. "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor. "Repurchase Agreement" means any written agreement (a) that provides for (i) the transfer of one or more United States Governmental Securities in an aggregate principal amount at least equal to the amount of the Transfer Price (defined below) to the Company or any of its Subsidiaries from an Acceptable Bank or an Acceptable Broker- Dealer against a transfer of funds (the "Transfer Price") by the Company or such Subsidiary to such Acceptable Bank or Acceptable Broker-Dealer, and (ii) a simultaneous agreement by the Company or such Subsidiary, in connection with such transfer of funds, to transfer to such Acceptable Bank or Acceptable Broker-Dealer the same or substantially similar United States Governmental Securities for a price not less than the Transfer Price plus a reasonable return thereon at a date certain not later than 365 days after such transfer of funds, (b) in respect of which the Company or such Subsidiary shall have the right, whether by contract or pursuant to applicable law, to liquidate such agreement upon the occurrence of any default thereunder, and (c) in connection with which the Company or such Subsidiary, or an agent thereof, shall have taken all action required by applicable law or regulations to perfect a Lien in such United States Governmental Securities. "Required Holders" means, at any time, the holder or holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates). "Responsible Officer" means, with respect to the Company and each Subsidiary (respectively), Senior Financial Officer, chief executive officer, President and any other officer of the Company with responsibility for the administration of, or matters referred to in, the relevant portion of this Agreement. "Restricted Investments" means all Investments except the following: (a) property to be used in the ordinary course of business of the Company and its Subsidiaries; (b) current assets arising from the sale of goods and services in the ordinary course of business of the Company and its Subsidiaries; (c) Investments in one or more Wholly-Owned Subsidiaries or any Person that concurrently with such investment becomes a Wholly-Owned Subsidiary; (d) Investments existing on the date of the Closing and disclosed in Schedule 10.6; (e) Investments in United States Governmental Securities, provided that such obligations mature within 365 days from the date of acquisition thereof; (f) Investments in certificates of deposit or banker's acceptances issued by an Acceptable Bank, provided that such obligations mature within 365 days from the date of acquisition thereof; (g) Investments in commercial paper given the highest rating by a credit rating agency of recognized national standing and maturing not more than 270 days from the date of creation thereof, (h) Investments in Repurchase Agreements; and (i) Investments in tax-exempt obligations of any state of the United States of America, or any municipality of any such state, in each case rated "AA" or better by S&P, "Aa2" or better by Moody's or an equivalent rating by any other credit rating agency of recognized national standing, provided that such obligations mature within 365 days from the date of acquisition thereof. As of any date of determination, each Restricted Investment shall be valued at the greater of: (x) the amount at which such Restricted Investment is shown on the books of the Company or any of its Subsidiaries (or zero if such Restricted Investment is not shown on any such books); and (y) either (i) in the case of any Guaranty of the obligation of any Person, the amount which the Company or any of its Subsidiaries has paid on account of such obligation less any recoupment by the Company or such Subsidiary of any such payments, or (ii) in the case of any other Restricted Investment, the excess of (x) the greater of (A) the amount originally entered on the books of the Company or any of its Subsidiaries with respect thereto and (B) the cost thereof to the Company or its Subsidiary over (y) any return of capital (after income taxes applicable thereto) upon such Restricted Investment through the sale or other liquidation thereof or part thereof or otherwise. "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. "Sale-and-Leaseback Transaction" means a transaction or series of transactions pursuant to which the Company or any Subsidiary shall sell or transfer to any Person (other than the Company or a Subsidiary) any property, whether now owned or hereafter acquired, and, as part of the same transaction or series of transactions, the Company or any Subsidiary shall rent or lease as lessee (other than pursuant to a Capital Lease), or similarly acquire the right to possession or use of, such property or one or more properties which it intends to use for the same purpose or purposes as such property. "Security" has the meaning set forth in Section 2(1) of the Securities Act of 1933, as amended. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Senior Financial Officer" means, with respect to the Company and each Subsidiary (respectively), its chief financial officer, principal accounting officer, treasurer or comptroller. "Senior Private Placement Debt" is defined in Section 5.19. "Subordinated Debt" means the principal of and all interest and premium (if any) on all liabilities of the Company arising under the Subordinated Debt Agreement and all promissory notes issued pursuant thereto, whether such liabilities are direct or contingent, joint, several or independent, now or hereafter existing, due or to become due and whether created directly or acquired by assignment or otherwise. "Subordinated Debt Agreement" means those certain Note Purchase Agreements, dated as of December 1, 1989, between the Company and CIGNA Mezzanine Partners II, L.P., Connecticut General Life Insurance Company, Life Insurance Company of North America, The Paul Revere Life Insurance Company, The Paul Revere Protective Life Insurance Company and Rhode Island Hospital Trust National Bank and Balboa Insurance Company, respectively, as amended, restated, extended, renewed, supplemented or otherwise modified from time to time. "Subordinated Debt Guaranty" means, collectively, each of (a) that certain Subordinated Guaranty Agreement, dated as of January 2, 1990, made by certain Subsidiaries of the Company (of which Excel Corporation is, as of the date hereof, the only such existing Subsidiary) in favor of the Subordinated Debt Holders and (b) that certain Subordinated Guaranty Agreement, dated as of April 29, 1996 hereof, made by certain other Subsidiaries of the Company in favor of the Subordinated Debt Holders. "Subordinated Debt Holders" means the holder or holders of the Subordinated Debt. "Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the Company. "Subsidiary Stock" means, with respect to any Person, the stock (or any options or warrants to purchase stock or other Securities exchangeable for or convertible into stock) of any Subsidiary of such Person. "Transfer" means, with respect to any Person, any transaction in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including, without limitation, Subsidiary Stock. "United States Governmental Security" means any direct obligation of, or obligation guaranteed by, the United States of America, or any agency controlled or supervised by or acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States of America, so long as such obligation or guarantee shall have the benefit of the full faith and credit of the United States of America which shall have been pledged pursuant to authority granted by the Congress of the United States of America. "Voting Stock" shall mean capital stock of any class or classes of a corporation having power under ordinary circumstances to vote for the election of members by the board of directors of such corporations, or persons performing similar functions (irrespective of whether or not at the time stock of any of the class or classes shall have or might have special voting power or rights by reason of the happening of any contingency). "Wholly-Owned Subsidiary" means, at any time, any Subsidiary, other than a Foreign Subsidiary, one hundred percent (100%) of all of the equity interests (except directors' qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company's other Wholly-Owned Subsidiaries at such time. SCHEDULE 8.1 REQUIRED PREPAYMENTS Date of Prepayment Amount of Prepayment April 30, 2000 $3,947,368.42 April 30, 2001 $5,000,000.00 April 30, 2002 $5,000,000.00 April 30, 2003 $5,210,526.32 April 30, 2004 $8,000,000.00 April 30, 2005 $8,000,000.00 April 30, 2006 $8,000,000.00 April 30, 2007 $8,000,000.00 April 30, 2008 $12,000,000.00 April 30, 2009 $12,210,526.32 April 30, 2010 $12,210,526.32 The remaining outstanding principal balance of all Notes shall be due and payable at maturity thereof. EX-23 4 Coopers &Lybrand Coopers & Lybrand L.L.P. a professional services firm CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements of Excel Industries, Inc. on Form S-8 (File No. 2-91986) effective July 19, 1984, Form S-8 (File No. 33-14508) effective June 11, 1987 and Form S-8 (File No. 33-53543) effective May 9, 1994 of our report dated March 18, 1996 (except for Notes D and K, for which the date is April 3, 1996), on our audits of the consolidated financial statements of Atwood Industries, Inc. as of December 30, 1995 and December 31, 1994, and for the three years ended December 30, 1995, December 31, 1994 and January 1, 1994, which report is included in this Form 8-K/A. Coopers & Lybrand L.L.P. Rockford, Illinois May 13, 1996 -----END PRIVACY-ENHANCED MESSAGE-----