10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF   THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended  June 30, 2003
Commission File Number   1-9764
Harman International Industries, Incorporated
(Exact name of registrant as specified in its charter)
Delaware		11-2534306
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1101 Pennsylvania Ave., N.W., Suite 1010, Washington, D.C.		20004
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code: (202) 393-1101
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class		Name of Exchange on which registered
Common Stock, par value $.01 per share		New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:  None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
              [X] Yes                [   ] No

The aggregate market value of the voting stock held by nonaffiliates of the Registrant as of December 31, 2002 was $2,154,059,401.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:  32,724,977 shares of common stock, par value $.01 per share, as of September 15, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 2003, are incorporated by reference in Part I, Item 1, and Part II, Items 5, 7, 7A and 8.  Portions of the Registrant's definitive Proxy Statement relating to the 2003 Annual Meeting of Shareholders are incorporated by reference in Part III, Items 10 (as related to Directors), 11, 12, 13 and 14.

TABLE OF CONTENTS

	Item		Item
Part I
	1	Business	3
	2	Properties	13
	3	Legal Proceedings	13
	4	Submission of Matters to a Vote of Security Holders Executive Officers of the Registrant	13
Part II
	5	Market for Registrant's Common Equity and Related Stockholder Matters	14
	6	Selected Consolidated Financial Data	15
	7	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
	7A	Quantitative and Qualitative Disclosures About Market Risk	15
	8	Consolidated Financial Statements and Supplementary Data	16
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	16
	9A	Controls and Procedures	16
Part III
	10	Directors and Executive Officers of the Registrant	16
	11	Executive Compensation	16
	12	Security Ownership of Certain Beneficial Owners and Management and Related Shareholders Matters	17
	13	Certain Relationships and Related Transactions	17
	14	Principal Accountant Fees and Services	17
Part IV
	15	Exhibits, Financial Statement Schedules and Reports on Form 8-K	18
		Signatures	19
		List of Financial Statements and Financial Statement Schedules	21
		Independent Auditors' Report	22
		Schedule II Valuation and Qualifying Accounts	23
		Exhibit Index	24

Part I

Item 1.   Business

Overview

Harman International Industries, Incorporated is a Delaware corporation, incorporated in 1980.

We believe we are a worldwide leader in the manufacture of high-quality, high fidelity audio and electronic products for consumer and professional use.  We have developed, both internally and through a series of strategic acquisitions, a broad range of product offerings sold under renowned brand names in our principal markets and a substantial and experienced digital engineering capability.  We believe that we have become a leader in digitally integrated infotainment systems for the automotive industry.  We believe our JBL, Infinity, Harman/Kardon, Mark Levinson and Becker brand names are well-known worldwide for premium quality and performance. We have built these brands by developing our world-class engineering, manufacturing and marketing competence and have employed those resources to establish worldwide leadership in these fields.

We organize our businesses by the end-user markets they serve.  Our Consumer Systems Group designs, manufactures and markets loudspeakers and audio, video and electronic products systems for home, vehicle, and computer applications.  Our Professional Group designs, manufactures and markets loudspeakers, microphones, electronics and systems used by audio professionals in concert halls, stadiums, airports and other buildings and for recording, broadcast, cinema and music reproduction applications.

We believe significant growth opportunities continue to exist with our automotive original equipment manufacturer customers through higher penetration levels within existing models, increases in the number of models offering our audio systems, supply agreements with additional automakers and increases in per-vehicle content through the provision of integrated infotainment systems and additional hardware and software licensing agreements.  In fiscal 2003, we successfully launched Harman infotainment systems for the Porsche Cayenne, Porsche Carerra, Audi A8 and BMW 5 series. We expect to launch Harman infotainment systems for the new Mercedes Benz C Class and the Audi A6 in fiscal 2004.

Our primary manufacturing facilities are located in Germany, California, Indiana, Utah, Kentucky, the United Kingdom, Mexico, France, Austria, Switzerland, China and Hungary.

Consumer Systems Group

Our Consumer Systems Group designs, manufactures and markets loudspeakers and audio, video and electronic systems for home, vehicle and computer applications.  These products and systems are marketed under brand names including JBL, Infinity, Harman/Kardon, Lexicon, Becker, Mark Levinson and Revel.  We believe that we have a unique portfolio of brand names and range of product offerings in the consumer audio market, and that the JBL, Infinity and Harman/Kardon brands are recognized throughout the world for superior sound quality and excellent value.  High-end products bearing the Lexicon, Mark Levinson and Revel brands are acclaimed for their state-of-the-art sound reproduction.

Our Consumer Systems Group offers premium, branded audio systems to retail automobile purchasers through engineering and supply agreements with original equipment manufacturers, including DaimlerChrysler, BMW, Toyota, Lexus, Mitsubishi, Land Rover, Saab, Hyundai and the PSA Group complemented by non-branded loudspeaker supply agreements with other automakers including Audi, Porsche, Volvo, Fiat and DaimlerChrysler.

Our Consumer Systems Group supplies car audio, video, navigation and integrated infotainment systems.  These systems include integrated infotainment systems for the automobile and manage functions like high-quality audio and video reproduction, voice activation systems, GPS navigation, diagnostics and internet access.  We have become a leading designer and manufacturer of these systems.  We continue to receive purchase commitments for integrated infotainment systems to be installed in 2004, 2005 and 2006 model year vehicles manufactured by Chrysler, Mercedes-Benz, Porsche, Audi and BMW.  DaimlerChrysler, our largest automotive customer, offers Infinity branded car audio systems in the majority of its Chrysler, Dodge and Jeep lines as well as Harman/Kardon Logic 7 systems for Mercedes Benz vehicles.  In fiscal 2004, Chrysler will introduce a redesigned Durango equipped with a choice of two levels of Infinity audio systems.  Mitsubishi also offers Infinity branded car audio systems.  We produce JBL branded audio systems for Toyota, Hyundai and the PSA Group.  BMW, Saab, Land Rover and Mercedes Benz offer our Harman/Kardon systems.  Lexus offers our high-end Mark Levinson audio systems and the new Rolls Royce comes standard with a high performance Lexicon Audio System.

Our Consumer Systems Group offers its home and automotive aftermarket audio and electronic products primarily through audio/video specialty stores and audio/video chain stores, such as Circuit City and Best Buy in North America and MediaMarket in Europe.  These products include audio/video receivers, amplifiers, DVD and CD players in addition to different types of loudspeakers and navigation devices for cars.  Our dealers are knowledgeable about the features and capabilities of our audio and video products and emphasize the high-quality of our products and systems to consumers.  Sales and marketing activities for these products include dealer education programs, point-of-sale displays, participation in consumer audio trade shows, comprehensive product literature and mass-media advertising.  We currently offer home consumer products under the Harman/Kardon, JBL, Mark Levinson, Infinity, Lexicon and Revel brands.

Our Consumer Systems Group also offers branded audio products to personal computer users through supply and license agreements with customers such as Apple, Toshiba and Compaq and aftermarket sales to retailers and distributors such as Best Buy, the Apple Store and Fry's. We believe that these audio systems enhance the appeal and capability of the personal computer as an entertainment device.

Professional Group

Our Professional Group designs, manufactures and markets loudspeakers and electronics used by audio professionals in concert halls, stadiums, airports and other buildings and for recording, broadcast, cinema and music reproduction applications.  We provide high-quality products to the sound reinforcement, music instrument support and broadcast and recording segments of the professional audio market. We offer complete systems solutions for professional installations and users around the world. The professional group includes the JBL Professional, Soundcraft, Crown, DigiTech, dbx, AKG, Lexicon, BSS and Studer brands.

We believe that our Professional Group is uniquely equipped to provide turnkey systems solutions for professional audio applications that offer the customer improved performance, reliability, ease of installation and reduced cost.  Our professional products are installed or used in stadiums, opera houses, concert halls, recording studios, broadcast studios, theaters, houses of worship and cinemas.  Our professional equipment is also used on tour by performing artists throughout the world.  Sound systems incorporating components manufactured by JBL, Crown, Lexicon, AKG, Studer and Soundcraft are in use around the world in such places as the new Walt Disney Hall in Los Angeles, the Grand Ole Opry in Nashville, the Kennedy Center in Washington, D.C., Pacific Bell Park in San Francisco, Experience Music Project in Seattle, the Great Hall of the People in Beijing, China, the Royal Danish Theater in Copenhagen and the Sydney Opera House in Sydney, Australia.

Our professional audio products are marketed worldwide through professional sound equipment dealers, including sound system contractors that directly assist major users.  Our professional product sales and marketing group is separate and independent of our consumer product sales and marketing group.  Professional audio sales and marketing activities include dealer education programs, point-of-sale displays, participation in professional audio trade shows and professional audio media advertising.

We believe that JBL Professional is a leader in the sound reinforcement and cinema markets, serving customers such as AMC Theatres, Loew's Cineplex, Edwards Cinemas and United Artist Theaters.  Stadiums, concert halls, houses of worship and major concert tours rely on our JBL loudspeakers, JBL, Crown and BSS amplifiers, BSS loudspeaker system management products, AKG microphones, dbx signal processing equipment and Soundcraft mixing consoles to produce high-quality sound.

Our AKG business manufactures high-quality microphones and headphones. Our expertise in the design and manufacture of miniature transducers for special microphone applications has led to market opportunities in the mobile telecommunications equipment and hands-free automotive communications markets, as well as for traditional professional audio activities. We manufacture the earpiece and mouthpiece transducer capsules for mobile telephone manufacturers including Nokia, Kyocera, Ericsson and Sony. We also manufacture miniature transducers for hands-free communications applications in Mercedes-Benz automobiles and for General Motors automobiles that are equipped with the OnStar system.

Professional customers in the recording and broadcast market include radio and television stations, recording studios, postproduction houses, digital editing suites and home studios such as Lucasfilm's Skywalker Ranch, Polygram Records and Walt Disney Imagineering and are primarily served by our Studer, JBL, Crown, Lexicon, Soundcraft, AMEK and AKG divisions.

Our JBL, Crown, Lexicon and DigiTech businesses also serve the music instrument support segment of the professional audio market. JBL manufactures and markets loudspeakers, monitors and amplifiers. Crown manufactures professional amplifiers.  DigiTech and dbx sell sound effects and other signal processors, portable mixing consoles and guitar amplifiers. The music instrument support market also provides portable digital signal processing components, guitar amplifiers and portable loudspeaker systems used by touring performers. Music instrument support products are sold through music retail stores such as Guitar Center and Sam Ash.

Products

Consumer Products. We believe that we are a leading global manufacturer of premium branded audio, video and electronic systems for home, vehicle and computer applications.  We have developed the technical competencies to offer highly integrated multimedia systems to automobile manufacturers.  Our infotainment systems integrate and manage audio, video, navigation, voice activation, diagnostics and internet access for automobiles.  We continue to leverage our expertise in the design and manufacture of high-quality loudspeakers, radios and electronics, as well as the reputation for quality associated with our JBL, Infinity, Harman/Kardon, Mark Levinson, Lexicon and Becker brand names.  As a result of our well established relationship with vehicle manufactures, our engineers are engaged early in the vehicle design process to develop systems that optimize acoustic performance and minimize weight and space requirements.

Our Infinity and Harman/Kardon branded car audio systems are offered by DaimlerChrysler's Mercedes Benz, Chrysler, Dodge and Jeep lines as well as by Mitsubishi.  Toyota, the PSA Group and Hyundai offer JBL branded audio systems.  BMW, Saab, Land Rover and Mercedes offer our Harman/Kardon branded systems.  Our Mark Levinson branded systems are offered by Lexus and the new Rolls Royce comes standard with a Lexicon branded system.  We also supply navigation systems, head units and other automotive electronics to numerous vehicle manufacturers worldwide.

We manufacture loudspeakers under the JBL, Infinity and Revel brand names for the consumer home audio market.  These loudspeaker lines include models designed for two-channel stereo and multi-channel surround sound applications in the home in a wide range of choices, including floorstanding, bookshelf, powered, low frequency, in-wall, wireless and all-weather, in styles and finishes ranging from high gloss lacquers to genuine wood veneers. The JBL and Infinity product lines also include car loudspeakers, amplifiers and crossover products sold in the aftermarket.

We offer a broad range of consumer audio electronics. Our Harman/Kardon home electronics line includes audio/video receivers featuring Dolby Digital^Òand DTS^Ò surround sound processing capabilities and multi-channel amplifiers, multi-disc DVD players and CD recorders. Becker manufactures and sells navigation systems and Becker On-Line Pro systems, which provide radio, navigation, telephone and internet access.

We design and manufacture high-end electronics, including amplifiers, pre-amplifiers, digital signal processors, compact disc players and transports, DVD transports, amplifiers and surround sound processors that we market under the renowned Mark Levinson brand.  Our Revel loudspeaker systems complement the superior performance of our Mark Levinson branded electronic products for both music and home theater applications.

We believe that we are a leader in the design and manufacture of high-quality home theater surround sound processors and amplifiers under the Lexicon name. Lexicon was a pioneer in the development of digital signal processors for the professional audio market and has successfully transferred its professional audio expertise to produce excellent consumer products.

Harman/Kardon branded premium audio systems are offered with personal computers manufactured by Apple, Toshiba and Compaq.  We participate in this market through design and brand name licensing as well as direct sourcing. These audio systems enhance the appeal and capability of the personal computer as an entertainment system.

Professional Products. Our professional products include loudspeaker and audio equipment that is marketed under what we believe are some of the most respected brand names in the industry, including JBL Professional, Soundcraft, Crown, Lexicon, DigiTech, AKG, BSS, dbx and Studer.

The professional market is increasingly involved in digital technology. We believe that our Professional Group is a leader in this market. Our Professional Group derives value from its ability to share research and development, engineering talent and other digital resources among its divisions. Our Soundcraft, Studer, Crown, Lexicon and Harman Music Group businesses each have substantial digital engineering resources and work together to achieve common goals by sharing resources and technical expertise.

Our Professional Group loudspeaker products are well known for high-quality and superior sound.  The JBL Professional portfolio of products includes studio monitors, loudspeaker systems, power amplifiers, sound reinforcement systems, bi-radial horns, theater systems, surround systems and industrial loudspeakers.

We believe that we are a leading manufacturer and marketer of audio electronics equipment for professional use. We market these products on a worldwide basis under various trade names, including Soundcraft, Crown, Lexicon, DigiTech, AKG, BSS, dbx and Studer.  These products are often sold in conjunction with our professional loudspeakers.

Our Soundcraft lines of high-quality sound mixing consoles extend from automated multi-track consoles for professional recording studios to compact professional mixers for personal recording and home studios. Soundcraft products span four main market areas: sound reinforcement, recording studios, broadcast studios and musical instrument dealers.

Our Harman Music Group product lines are marketed under the dbx and DigiTech brand names, and are sold primarily to professional audio and musical instrument dealers.  Harman Music Group products include signal processing equipment, equalizers, mixers and special effects devices.

We believe that we are a leading manufacturer of high-quality microphones and headphones.  The AKG product line includes microphones, audio headphones, surround-sound headphones and other professional audio products marketed under the AKG brand name. AKG has leveraged its engineering and manufacturing expertise to enter the telecommunications market, supplying miniature transducers to mobile phone makers Nokia, Sony/Ericsson and Kyocera as well as the automotive hands-free communications market, supplying microphone arrays to DaimlerChrysler and General Motors.

We believe that our Crown business is a leading professional amplifier manufacturer and enhances our ability to provide complete systems solutions to the professional audio market. Our Lexicon digital signal processing products are used in live sound applications and in recording studios to produce sound effects and refine final mixes. Our Studer Professional Audio recording and broadcast products are recognized for their high-quality and reliability.  Studer Professional products include analog and digital mixing consoles, switching systems, digital audio workstations and turnkey broadcasting studio installations.

Operating and Geographic Segment Information

Our company is organized into reportable segments by the end-user markets we serve – consumer and professional.  Financial information about our operating and geographic segments required to be included in this report is incorporated by reference to Note 13 of the Notes to Consolidated Financial Statements contained in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

Manufacturing

We believe that our manufacturing capabilities are essential to maintaining and improving product quality and performance.  Other than certain Harman/Kardon electronic components and computer loudspeakers, we manufacturer most of the products we sell.

We believe that our facilities in Germany, California, Indiana, Kentucky, Mexico, China and Hungary that manufacture automobile loudspeakers, electronics and infotainment systems for automobile manufactures are world class.  In each of these facilities, we have shifted from traditional manual assembly lines to software-driven, highly-automated lines designed to provide improved efficiency and flexibility.

Our loudspeaker manufacturing capabilities include the production of high-gloss lacquer and wooden veneer loudspeaker enclosures, wire milling, voice coil winding and the use of computer controlled lathes and other machine tools to produce precision components.  Our high degree of manufacturing integration enables us to maintain consistent quality levels, resulting in reliable, high-performance products.  We capitalize on opportunities to transfer technology and material developments across product lines to maximize the utility of engineering, design, development and procurement resources.

We have a strong manufacturing presence in Europe.  We manufacture infotainment systems, car radios, navigation systems, amplifiers and other electronics primarily in Germany for automotive customers.  European automotive loudspeaker and electronics manufacturing includes the production of loudspeakers and amplifiers in the United Kingdom, Germany, Sweden, France and Hungary.  We manufacture cabinet enclosures and assemble complete JBL and Infinity loudspeakers in Denmark.  European professional electronics manufacturing includes Soundcraft in the United Kingdom (mixing consoles), Studer in Switzerland (professional recording and broadcast equipment) and AKG in Austria (microphones and headphones).  We also have engineering and design facilities in the U.S. and Germany.

At our principal U.S. manufacturing facility in Northridge, California, we manufacture JBL and Infinity loudspeakers and audio electronics for home, car and professional applications.  We also manufacture loudspeakers and assemble sound systems for the OEM automotive market in Indiana, Kentucky and Mexico.  Harman Music Group manufactures professional electronics products at its facility in Salt Lake City, Utah. Crown International manufactures professional amplifiers at its Elkhart, Indiana facility.

Suppliers

We use externally-sourced microchips in many of our products.  A significant disruption in our microchip supply chain and an inability to obtain alternative sources would have a material impact on our consolidated sales and earnings.

Several independent suppliers manufacture products designed by Harman/Kardon.  The loss of any one of these suppliers would not have a material impact on our consolidated earnings or consolidated financial position.

We utilize certain third-party suppliers to manufacture loudspeakers sold to personal computer manufacturers. Production difficulties at these third-party suppliers or the loss of any one of these suppliers would not have a material impact on our  consolidated earnings.

Trademarks and Patents

We market our products under numerous brand names that are protected by both pending and registered trademarks around the world.  A sample of our brands include JBL^Ò, Infinity^Ò, Harman/Kardon^Ò, Lexicon^Ò, Mark Levinson^Ò, Revel^Ò, Crown^Ò, Becker^Ò, Soundcraft^Ò, Spirit^Ò, DigiTech^Ò, AKG^Ò, Studer^Ò, BSS^Òand dbx^Ò.  Our trademark registrations cover use of trademark rights in connection with various products, such as loudspeakers, speaker systems, speaker system components and other electrical and electronic devices.  We have registered or taken other protective measures for many of these trademarks in substantially all major industrialized countries.  As of June 30, 2003, we had approximately 1,064 pending and 2,230 issued trademark registrations around the world.

As of June 30, 2003, we also had approximately 1,251 pending and 945 issued United States and foreign patents covering various audio and infotainment products.

Seasonality

Our sales and earnings fluctuate seasonally.  The first fiscal quarter is generally the weakest due to automotive model changeovers and the summer holidays in Europe.  Variations in seasonal demands among end-user markets may cause our operating results to vary from quarter to quarter.

Customers

Sales to DaimlerChrysler and BMW accounted for 26 percent and 10 percent, respectively, of our consolidated net sales for the fiscal year ended June 30, 2003.  Accounts receivable due from DaimlerChrysler and BMW were 22 percent and 8 percent, respectively, of consolidated accounts receivable at June 30, 2003.  The loss of sales to DaimlerChrysler or BMW would have a material adverse effect on our consolidated sales, earnings and financial position.  For the fiscal year ended June 30, 2003, approximately 62 percent of our sales were to automotive customers.

Backlog Orders

Because our practice is to produce automotive products and systems on a just-in-time basis and maintain sufficient inventories of finished goods to fill orders promptly, we do not consider the level of backlog to be an important index of our future performance.  Our order backlog was approximately $17.5 million at June 30, 2003.

Warranties

We warrant our home products to be free from defects in materials and workmanship for a period ranging from 90 days to five years from the date of purchase, depending on the product.  The warranty is a limited warranty, and it imposes certain shipping costs on the customer and excludes deficiencies in appearance except for those evident when the product is delivered.  Our dealers normally perform warranty service for loudspeakers in the field, using parts supplied on an exchange basis.  Warranties in international markets are generally similar to those in the U.S. market.

Competition

The audio industry is fragmented and competitive with many manufacturers, large and small, domestic and international, offering audio products that vary widely in price and quality and are distributed through a variety of channels.  Consumer products are offered through channels including audio specialty stores, discount stores, department stores, mail order firms and internet merchants.  Automotive and computer manufacturers also offer branded audio products as OEM options.  Music instrument retailers, professional audio dealers, contractors and installers all offer professional products and customers can also purchase such products on a contract bid basis.  We concentrate on the higher-quality, higher-priced segments of the audio market and compete based upon the strength of our brand names, the quality and breadth of our product lines and comprehensive marketing, engineering and manufacturing resources.

We believe that we currently have a significant share of the consumer market for home, automotive and computer loudspeakers, primarily as a result of the strength of our brand names.  We believe JBL and Infinity are two of the most recognized loudspeaker brands in the world.  By developing our high-end loudspeaker brand, Revel, over the past several years, we have extended our market position and complemented our Mark Levinson high-end electronic line.  Our principal competitors in the consumer loudspeaker market include Bose, Boston Acoustics, B&W, KEF, Celestion, Paradigm, Klipsch, Cambridge SoundWorks and Polk Audio.

Competition in the consumer electronics market remains intense, dominated by large Asian competitors.  This market is characterized by the short life cycle of products and a need for continuous design and development efforts.  Our competitive strategy is to compete in the higher-quality segments of this market and to continue to emphasize our ability to provide system solutions to customers, including a combination of loudspeakers and electronics products and integrated surround sound and home theater systems.  Our principal electronic competitors include Marantz, Kenwood, Sony, Denon, Onkyo, Nakamichi, Pioneer and Yamaha.  We compete in the high-end consumer electronics market with our Mark Levinson and Lexicon brands.  Our principal competitors in this high-end market include Krell, McIntosh, Audio Research, Meridian, Linn and Accuphase.

In the personal computer audio market, Apple and Toshiba offer our Harman/Kardon products while Compaq offers our JBL products.  Our principal competitors in this segment include Creative Labs, Altec-Lansing, LabTec/Logitich, Klipsch and Cyber Acoustics.

In the OEM automotive market, we compete against Bose, Pioneer ASK, Foster Electric and Panasonic in the sale of loudspeaker systems to automotive manufacturers and Alpine, Bosch, Panasonic, Siemens VDO, Delphi,Visteon and Denso in the sale of electronics and electronic systems to automotive manufacturers.  We compete based upon the strength of our brand name recognition and the quality of our products.  We believe our competitive position is enhanced by our technical expertise in designing and integrating acoustics, navigation, speech recognition and man-machine interfaces into complete infotainment systems uniquely adapted to fulfill the specific requirements of each automobile model.

The market for professional sound systems is highly competitive.  We believe that we have historically held a leading market position in the professional loudspeaker market and have complemented our professional loudspeaker line by adding digital professional electronic products and broadcast and recording equipment.  We compete using our ability to provide systems solutions to meet the complete audio requirements of our professional customers.  We offer products for most professional audio applications.

We compete in the sound reinforcement market using many of our brand names, including JBL Professional, AKG, Crown, Soundcraft and BSS.  Our principal competitors in the sound reinforcement market include the Electro Voice division of Telex, Eastern Acoustic Works/Mackie, QSC, Sennheiser, Tannoy, Peavey, Shure, Audio Technica, Fender, Marshall, Sony and Yamaha.  We compete in the broadcast and recording markets with our Studer, AKG, Soundcraft and Lexicon brands.  Principal recording and broadcast competitors include Sony, Yamaha, Neve, Sennheiser, Denon, SSL, Shure, Tascam, Alesis and Audio Technica.  In the music instrument market, competitors for our JBL, DigiTech, dbx, Lexicon and Spirit products include Yamaha, Peavey, Rane, Roland, Alesis, Marshall, Fender, Sony, Mackie and T.C. Electronics.

We also compete in the industrial and architectural sound market.  Competitors within this market include Siemens, Peavey and Tannoy.

Environmental Matters

We are subject to various federal, state, local and international environmental laws and regulations, including those governing the use, discharge and disposal of hazardous materials.  We believe that our facilities are in substantial compliance with current laws and regulations.  The cost of compliance with current environmental laws and regulations has not been, and is not expected to be, material.

Research and Development

Expenditures for research and development were $143.1 million, $109.9 million and $88.7 million for the fiscal years ending June 30, 2003, 2002 and 2001, respectively.

Number of Employees

At June 30, 2003, we had 10,776 full-time employees, including 3,253 domestic employees and 7,523 international employees.

Forward Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and 21E of the Exchange Act of 1934.  You should not place undue reliance on these statements.  Forward-looking statements include information concerning possible or assumed future results of operations, capital expenditures, the outcome of pending legal proceedings and claims, including environmental matters, goals and objectives for future operations, including descriptions of our business strategies and purchase commitments from customers, among other things.  These statements are typically identified by words such as “believe”, “anticipate”, “expect”, “plan”, “intend”, “estimate” and similar expressions.  We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances.  As you read and consider the information in this report, you should understand that these statements are not guarantees of performance or results.  They involve risks, uncertainties and assumptions.  In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in, or incorporated by reference into, this report will in fact transpire. 

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements.  Some of these factors are described below.

Failure to maintain relationships with our largest customers and failure by our customers to continue to purchase expected quantities of our products due to changes in market conditions could have an adverse effect on our operations.

Sales to DaimlerChrysler accounted for 26 percent of consolidated net sales and sales to BMW accounted for 10 percent of consolidated net sales for the year ended, June 30, 2003.  We anticipate that DaimlerChrysler and BMW will continue to account for a significant portion of our sales for the foreseeable future.  DaimlerChrysler and BMW are not obligated to any long-term purchases of our products. The loss of sales to DaimlerChrysler and/or BMW would have a material adverse effect on our consolidated sales, earnings and financial position.

A decrease in discretionary spending would likely reduce our sales.

Our sales are dependent to a substantial extent on discretionary spending by consumers, which may be adversely impacted by economic conditions affecting disposable consumer income and retail sales. In addition, our sales of audio products to the automotive OEM market are dependent on the overall success of the automobile industry, as well as the willingness, in many instances, of automobile purchasers to pay for the option of a premium branded automotive audio system or a multi-system digital infotainment system.

Our business could be adversely affected if we are unable to obtain raw materials and components from our suppliers on favorable terms.

We are dependent upon certain unaffiliated domestic and foreign suppliers for various components, parts, raw materials and certain finished products. Some of our suppliers produce products that compete with our products. Although we believe that the loss of any one or more of our suppliers would not have a long-term material adverse effect on our business because other suppliers would be able to fulfill our requirements, the loss of certain suppliers could, in the short term, adversely affect our business until alternative suppliers are able to ship adequate amounts of raw materials or components to us. We use multiple vendors to limit our reliance on any single supplier.

Our business could be adversely affected by a strike or work stoppage at one of our manufacturing plants or at a facility of one of our significant customers.

One of our manufacturing facilities in the U.S. is under a collective bargaining agreement which is scheduled for renegotiation in fiscal 2004.  Certain of our automotive customers are unionized and may incur work stoppages or strikes.  A work stoppage at our facilities or those of our automotive customers could have a material adverse effect on our consolidated sales, earnings and financial condition.

We may lose market share if we are unable to compete successfully against our current and future competitors.

The audio product markets that we serve are fragmented, highly competitive, rapidly changing and characterized by intense price competition.

Many manufacturers, large and small, domestic and foreign, offer audio systems that vary widely in price and quality and are marketed through a variety of channels, including audio specialty stores, discount stores, department stores and mail order firms. Some of our competitors have financial and other resources greater than ours. We cannot assure you that we will continue to compete effectively against existing or new competitors that may enter our markets.  We also compete indirectly with automobile manufacturers that may improve the quality of original equipment sound systems, reducing demand for our aftermarket mobile audio products, or change the designs of their cars to make installation of our aftermarket products more difficult or expensive.

Our products may not satisfy shifting consumer demand or compete successfully with competitors' products.

Our business is based on the demand for audio products and our ability to introduce distinctive new products that anticipate changing consumer demands and capitalize upon emerging technologies. If we fail to introduce new products, misinterpret consumer preferences or fail to respond to changes in the marketplace, consumer demand for our products could decrease and our brand image could suffer. In addition, our competitors may introduce superior designs or business strategies, undermining our distinctive image and our products' desirability. If any of these events occur, our sales could decline.

Currency fluctuations may reduce the profits on our foreign sales or increase our costs, either of which could adversely affect our financial results.

A significant amount of our assets and operations are located outside the United States.  Consequently, we are subject to fluctuations in foreign currency exchange rates. Translation losses resulting from currency fluctuations may adversely affect the profits on our foreign sales and have a negative impact on our financial results. In addition, we purchase certain foreign-made products. Although we hedge a portion of our foreign currency exposure and, due to the multiple currencies involved in our business, foreign currency positions partially offset and are netted against one another to reduce exposure, we cannot assure you that fluctuations in foreign currency exchange rates will not make these products more expensive to purchase. Any increase in our costs of purchasing these products could negatively impact our financial results to the extent we are not able to pass those increased costs on to our customers.

If we do not continue to develop, introduce and achieve market acceptance of new and enhanced products, our sales may decrease.

In order to increase sales in current markets and gain footholds in new markets, we must maintain and improve existing products, while successfully developing and introducing new products.  Our new and enhanced products must respond to technological developments and changing consumer preferences.  We may experience difficulties that delay or prevent the development, introduction or market acceptance of new or enhanced products. Furthermore, despite extensive testing, we may be unable to detect and correct defects in some of our products before we ship them.  Delays or defects in new product introduction may result in loss of sales or delays in market acceptance. Even after we introduce them, our new or enhanced products may not satisfy consumer preferences and product failures may cause consumers to reject our products. As a result, these products may not achieve market acceptance. In addition, our competitors' new products and product enhancements may cause consumers to defer or forego purchases of our products.

Our operations could be harmed by factors including political instability, natural disasters, fluctuations in currency exchange rates and changes in regulations that govern international transactions.

The risks inherent in international trade may reduce our international sales and harm our business and the businesses of our distributors and suppliers. These risks include:

changes in tariff regulations;

political instability, war, terrorism and other political risks;

foreign currency exchange rate fluctuations;

establishing and maintaining relationships with local distributors and dealers;

lengthy shipping times and accounts receivable payment cycles;

import and export licensing requirements;

compliance with a variety of foreign laws and regulations, including unexpected changes in taxation and regulatory requirements;

greater difficulty in safeguarding intellectual property than in the U.S.; and

difficulty in staffing and managing geographically diverse operations.

These and other risks may increase the relative price of our products compared to those manufactured in other countries, reducing the demand for our products.

If we are unable to enforce or defend our ownership and use of our intellectual property, our business may decline.

Our future success will depend, in substantial part, on our intellectual property. We seek to protect our intellectual property rights, but our actions may not adequately protect the rights covered by our patents, patent applications, trademarks and other proprietary rights and prosecution of our claims could be time consuming and costly. In addition, the intellectual property laws of some foreign countries do not protect our proprietary rights as do the laws of the U.S. Despite our efforts to protect our proprietary information, third parties may obtain, disclose or use our proprietary information without our authorization, which could adversely affect our business. From time to time, third parties have alleged that we infringe their proprietary rights. These claims or similar future claims could subject us to significant liability for damages, result in the invalidation of our proprietary rights, limit our ability to use infringing intellectual property or force us to license third-party technology rather than dispute the merits of any infringement claim. Even if we prevail, any associated litigation could be time consuming and expensive and could result in the diversion of our time and resources.

Covenants in our debt agreements could restrict our operations.

The instruments governing our senior notes and our revolving credit facility contain certain provisions that could restrict our operating and financing activities. They restrict our ability to, among other things:

create or assume liens;

enter into sale-leaseback transactions; and

engage in mergers or consolidations.

Because of the restrictions on our ability to create or assume liens, we may have difficulty securing additional financing in the form of additional indebtedness. In addition, our revolving credit facility contains other and more restrictive covenants, including financial covenants that will require us to achieve specified financial and operating results and maintain compliance with specified financial ratios. We may have to curtail some of our operations to maintain compliance with these covenants.

If we fail to comply with the covenants contained in our debt agreements, the related debt incurred under those agreements could be declared immediately due and payable, which could also trigger a default under other agreements.

Our ability to meet the covenants or requirements in our credit facilities and the indentures relating to our outstanding senior notes may be affected by events beyond our control, and we cannot assure you that we will satisfy these covenants and requirements.  A breach of these covenants or our inability to comply with the financial ratios, tests or other restrictions could result in an event of default under our revolving credit facility. Additionally, an event of default under our revolving credit facility is also an event of default under the indentures governing our senior notes. Upon the occurrence of an event of default under our revolving credit facility, the lenders and/or the note holders could elect to declare all amounts outstanding under our revolving credit facility and/or one or both of the indentures, together with accrued interest, to be immediately due and payable. If the payment of our indebtedness was accelerated, there can be no assurance that we will be able to make those payments or borrow sufficient funds from alternative sources to make those payments. Even if we were to obtain additional financing, that financing may be on unfavorable terms.

Harman International is a holding company with no operations of its own and therefore our cash flow and ability to service debt is dependent upon distributions from our subsidiaries.

Our ability to service our debt and pay dividends is dependent upon the operating earnings of our subsidiaries. The distribution of those earnings, or advances or other distributions of funds by those subsidiaries to Harman International, all of which could be subject to statutory or contractual restrictions, are contingent upon the subsidiaries' earnings and are subject to various business considerations.

Item 2.   Properties

Our corporate offices are located at 1101 Pennsylvania Avenue, Washington, D.C. 20002.

Our principal manufacturing facilities are located in Germany, California, Indiana, Utah, Kentucky, the United Kingdom, Switzerland, Mexico, France, Austria and Hungary.  Certain information regarding our principal manufacturing facilities are described in the table below.

Location	Size (Sq. Ft.)	Owned/Lease	Percentage Utilization		Functions
Northridge, California	569,000	Leased		94%	Consumer and   Professional
Ittersbach, Germany	550,000 120,000 29,000	Owned Owned Leased		100% 100% 100%	Consumer
Straubing, Germany	378,000 41,300	Owned Leased		100% 100%	Consumer
Worth-Schaitt, Germany	377,500	Owned		100%	Consumer
Chateau du Loir, France	238,000	Owned		100%	Consumer
Elkhart, Indiana	222,700	Owned		83%	Professional
Martinsville, Indiana	206,000	Owned		100%	Consumer
Tijuana, Mexico	198,000	Leased		97%	Consumer
Vienna, Austria	193,000	Leased		100%	Professional
Schwenningen, Germany	183,000	Owned		100%	Consumer
Potters Bar, UK	160,000	Leased		100%	Professional
Bridgend, U.K.	125,000	Leased		100%	Consumer
Szekesfehervar, Hungary	117,000	Owned		100%	Consumer
Franklin, KY	110,000	Owned		100%	Consumer
Regensdorf, Switzerland	107,600	Leased		100%	Professional
Juarez, Mexico	105,000	Leased		80%	Consumer
Sandy, Utah	100,000	Leased		100%	Professional

We believe we have adequate facilities to meet our currently anticipated requirements and that suitable additional or substitute facilities will be available if required.

Item 3.   Legal Proceedings

We are involved in various legal proceedings in the normal course of business. In our opinion, liabilities arising from these claims would not have a material effect on our financial position or results of operations.

Item 4.   Submission of Matters to a Vote of Security Holders

None.

Executive Officers of the Registrant

Executive officers are elected annually by our Board of Directors and hold office at the pleasure of the Board until the next annual selection of officers or until their successors are elected and qualified.  The current executive officers of Harman International, their ages and their business experience during the past five years are set forth below.

Sidney Harman, Ph.D.– 85

Executive Chairman, July 2000 – present

Chairman of the Board of Directors, Chief Executive Officer and Director, 1980 – July 2000

Bernard A. Girod – 61

Vice Chairman of the Board and Chief Executive Officer, July 2000 – present

Chief Executive Officer, November 1998 – present

President, March 1994 – November 1998

Director, July 1993 – present

Gregory P. Stapleton – 56

President and Chief Operating Officer, July 2000 – present

Chief Operating Officer, November 1998 – present

President of the Harman OEM Group, October 1987 – November 1998

Director, November 1987 – present

Frank Meredith – 46

Executive Vice President, Chief Financial Officer and Secretary, July 2000 – present

Chief Financial Officer, February 1997 – present

Secretary, November 1998 – present

Erich Geiger – 55

Chief Technology Officer, July 2003 – present

Chief Technical Officer, July 1998 – July 2003

Chief Executive Officer, Harman Becker Automotive Systems, January 1996 – July 2003

William S. Palin – 61

Vice President – Controller, March 1994 – present

Sandra B. Robinson – 44

Vice President – Financial Operations, November 1992 – present

Edwin C. Summers – 56

Vice President, General Counsel and Assistant Secretary, July 1998 – present

Vice President, General Counsel and Secretary, First Alliance Corporation, 1996 – July 1998

Floyd E. Toole, Ph.D., 65

Vice President – Acoustics, November 1991 – present

Part II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters

The information required by Part II, Item 5 is incorporated by reference to the information under the caption “Shareholder Information” in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

Item 6.   Selected Financial Data

The following table summarizes certain selected consolidated financial data that should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial Statements and related notes included in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

		June 30,
(In thousands except per share data)				2003		2002		2001		2000 (a)		1999 (a)
Net sales			$	2,228,519	$	1,826,188	$	1,716,547	$	1,677,939	$	1,500,135
Operating income			$	166,894	$	103,221	$	71,228	$	121,722	$	38,663
Income before taxes			$	142,471	$	80,177	$	45,099	$	102,829	$	14,447
Net income			$	105,428	$	57,513	$	32,364	$	72,838	$	11,723
Diluted EPS			$	3.10	$	1.70	$	0.96	$	2.06	$	0.32
Weighted average shares outstanding - diluted				34,024		33,903		33,737		35,300		36,122
Total assets			$	1,703,658	$	1,480,280	$	1,159,385	$	1,137,505	$	1,065,755
Total debt			$	497,759	$	474,679	$	368,760	$	277,324	$	311,575
Shareholders' equity			$	655,785	$	526,629	$	422,942	$	486,333	$	468,187
Dividends per share			$	0.10	$	0.10	$	0.10	$	0.10	$	0.10
(a)	Per share data has been adjusted to reflect the two-for-one stock split in August 2000.

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The information required by Part II, Item 7 is incorporated by reference to the information under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

The Securities and Exchange Commission requires that registrants include information about potential effects of changes in interest rates and currency exchange rates in their financial statements.

The qualitative information required by Part II, Item 7A is incorporated by reference to the information under the captions “Interest Rate Sensitivity” and “Foreign Currency” in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 15 of the Notes to our Consolidated Financial Statements, each contained in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

Interest Rate Risk.  We use interest rate swaps to convert the interest rate on a majority of our borrowings from fixed rates to variable rates.  Including the impact of the swaps, about 20% of our borrowings were on a fixed rate basis as of June 30, 2003; the remaining balance is subject to changes in U.S. short-term interest rates.  In addition, payments on $54 million aggregate amount of our equipment operating leases are subject to fluctuations in U.S. short-term interest rates.

To assess exposure to interest rate changes, we have performed a sensitivity analysis assuming a hypothetical 100 basis point increase or decrease in interest rates across all maturities.  Our analysis indicates that such market movements would reduce fiscal 2003 net income, based on June 2003 positions, by approximately $2.0 million.  Based on June 2002 positions, the effect on fiscal 2002 net income of such an increase and decrease in interest rates was estimated to be $2.3 million.

Foreign Currency Risk.  Our business is subject to market risks arising from changes in foreign currency exchange rates, principally the change in the value of the euro versus the U.S. dollar.

We presently estimate the effect on projected 2004 net income, based upon a recent estimate of foreign exchange transactional exposure, of a uniform strengthening or uniform weakening of the transaction currency pairs of 10 percent will decrease net income by $17.9 million or will increase net income by $17.9 million. As of June 30, 2003, we had hedged a portion of our estimated foreign currency transactions using forward exchange contracts.

We presently estimate the effect on projected 2004 net income, based upon a recent estimate of foreign exchange translation exposure (translating the operating performance of our foreign subsidiaries into U.S. dollars), of a uniform strengthening or weakening of the U.S. dollar by 10 percent would increase or decrease net income $9.4 million.

Actual gains and losses in the future may differ materially from the hypothetical gains and losses discussed above based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and our actual exposure and hedging transactions.

Item 8.   Consolidated Financial Statements and Supplementary Data

The information required by Part II, Item 8 is incorporated by reference to the “Consolidated Financial Statements” in our Annual Report to Shareholders for the fiscal year ended June 30, 2003.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures:  Under the supervision of, and with the participation of management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we have evaluated our disclosure controls and procedures (as defined in SEC Rules 13a - 15(e) and 15d - 15(e)) as of the end of the period covered by this report as required by SEC Rules 13a - 15(b) and 15d - 15(b).  Based on this evaluation, we have concluded that our disclosure controls and procedures were operating effectively as designed.  As required, we will continue to evaluate the effectiveness of these controls and procedures on a quarterly basis.

Changes in Internal Controls over Financial Reporting:  There were no changes in our internal controls over financial reporting (as defined in SEC Rules 13a - 15(f) and 15d - 15(f)) during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART III

Item 10.   Directors and Executive Officers of the Registrant

The information required by Part III, Item 10 with respect to our Directors and Executive Officers is incorporated by reference to the information included under the caption "Election of Directors" in our Proxy Statement dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.  Information required by Item 10 with respect to our executive officers is included in Part I of this report.  The information required by Part III, Item 10 with respect to compliance with Section 16 of the Securities Exchange Act of 1934, as amended, is incorporated by reference to the information included under the caption "Section16(a) Beneficial Ownership Reporting Compliance" in our Proxy Statement dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.  The information required by Part III, Item 10 with respect to our Code of Ethics for Executive and Financial Officers and Directors is incorporated by reference to the information included under the caption "The Board, its Committees and its Compensation" in our Proxy Statement dated September 25, 2003, Annual Meeting of Shareholders.

Item 11.   Executive Compensation

The information required by Part III, Item 11 is incorporated by reference to the information provided under the caption “Compensation of Executive Officers” in our Proxy Statement, dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

The information required by Part III, Item 12 is incorporated by reference to the information provided under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our Proxy Statement, dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.

Item 13.   Certain Relationships and Related Transactions

The information required by Part III, Item 13 is incorporated by reference to the information provided under the caption “Compensation of Executive Officers - Transaction with Executive Chairman” in our Proxy Statement, dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.

Item 14.   Principal Accountant Fees and Services

The information required by Part III, Item 14 with respect to the fees and services of KPMG, LLP, our independent auditor, is incorporated by reference to the information included under the caption "Independent Auditor", in our Proxy Statement, dated September 25, 2003, for the 2003 Annual Meeting of Shareholders.

Website Access to Information

We provide access free of charge through our website, www.harman.com to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, reports filed by our directors, executive officers and certain significant shareholders pursuant to Section 16 of the Securities Exchange Act and all amendments to those reports as soon as reasonably practicable after the reports are electronically filed with or furnished to the Securities and Exchange Commission.  The information on our website is not incorporated by reference into this report.

PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)		Documents filed as part of this Form 10-K:
	1.	The financial statements required to be filed hereunder are indexed on page 21 of this report.
	2.	The financial statement schedules required to be filed hereunder are indexed on page 21 of this report.
	3.	The exhibits required to be filed hereunder are indexed on pages 24, 25, 26 and 27 of this report.
(b)		Reports on Form 8-K
		On April 30, 2003 we filed with the Commission a Current Report on Form 8-K furnishing information under Items 7 and 9 (pursuant to Item 12) relating to our earnings release for the third fiscal quarter of 2003.

SIGNATURES

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

	HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
	(Registrant)
By:	/s/Bernard A. Girod
	Bernard A. Girod,
	Vice Chairman of the Board and Chief Executive Officer
Date:  September 25, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Harman International on September 25, 2003 in the capacities indicated below.

SIGNATURES

/s/ Sidney Harman

Sidney Harman

Executive Chairman of the Board

/s/ Bernard A. Girod

Bernard A. Girod

Vice Chairman of the Board and
    Chief Executive Officer

/s/ Gregory P. Stapleton

Gregory P. Stapleton

President, Chief Operating Officer and Director

/s/ Frank Meredith

Frank Meredith

Executive Vice President, Chief Financial Officer and     Secretary

/s/ Shirley M. Hufstedler

Shirley M. Hufstedler

Director

/s/ Ann McLaughlin Korologos

Ann McLaughlin Korologos

Director

/s/ Edward H. Meyer

Edward H. Meyer

Director

/s/ Stanley A. Weiss

Stanley A. Weiss

Director

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

Index to Item 15(a)
Consolidated Financial Data

                                                                                                            Page Reference

                                                                         --------------------------------------------------------------

                     Annual

                    Report to

                                                                                 Form 10-K                       Shareholders

                                                                        -------------------------               ---------------------------

Consolidated Financial Data (page 17

through 52 of the 2003 Annual Report

to Shareholders herein incorporated by

reference as Exhibit 13.1)

Financial Information Table of Contents                                                                         16

Independent Auditors' Report                                       22                                                        29

Consolidated Balance Sheets as of
June 30, 2003 and June 30, 2002                                                                                             30

Consolidated Statements of Operations for the

years ended June 30, 2003, 2002 and 2001                                                                              31

Consolidated Statements of Cash Flows for the

years ended June 30, 2003, 2002 and 2001                                                                              32

Consolidated Statements of Shareholders'

Equity for the years ended June 30, 2003,

   2002 and 2001                                                                                                                      33

Notes to Consolidated Financial Statements                                                                              34

Schedules for the years ended June 30, 2003, 2002

   and 2001:

II    Valuation and Qualifying Accounts
   and Reserves                                                 23

All other schedules have been omitted because they are not applicable, not required, or the information has been otherwise supplied in the financial statements or notes to the financial statements.

Independent Auditors' Report

The Board of Directors

Harman International Industries, Incorporated:

Under the date of August 15, 2003, we reported on the consolidated balance sheets of Harman International Industries, Incorporated and subsidiaries as of June 30, 2003 and 2002, and the related consolidated statements of operations, cash flows and shareholders' equity for each of the years in the three-year period ended June 30, 2003, as contained in the 2003 annual report to shareholders.  As discussed in notes 1 and 4 to the consolidated financial statements, the Company changed its method of accounting for stock-based compensation and method of accounting for goodwill in the year ended June 30, 2003.  These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended June 30, 2003.  In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule as listed in the accompanying index.  The financial statement schedule is the responsibility of the Company's management.  Our responsibility is to express an opinion on the financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG

-----------------------------

Los Angeles, California

August 15, 2003

Schedule II

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

Valuation and Qualifying Accounts and Reserves

Years Ended June 30, 2003, 2002 and 2001

($000's omitted)

Classification	Balance at Beginning of Period	Charged to Costs and Expenses	Charged to Other Accounts Describe(1)	Deductions	Balance at End of Period
Year ended June 30, 2001
Allowance for doubtful accounts	11,760	5,721	(824)	2,200	14,457
Year ended June 30, 2002
Allowance for doubtful accounts	14,457	7,049	1,037	4,332	18,211
Year ended June 30, 2003
Allowance for doubtful accounts	18,211	6,512	2,187	13,125	13,785

(1)  Net effect of acquisitions, dispositions and foreign currency translation.

EXHIBIT INDEX

There are omitted from the exhibits filed with this Annual Report on Form 10-K certain instruments with respect to long-term debt of the Company, none of which authorizes securities in a total amount that exceeds 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis.  Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Company hereby agrees to furnish to the Commission copies of these omitted instruments as the Commission requests.

Exhibit Number	Description
3.1, 4.1	Restated Certificate of Incorporation of the Company, as amended.  (filed as Exhibit 3.1, 4.1 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2001, and hereby incorporated by reference)
3.2, 4.2	By-Laws of the Company, as amended.  (filed as Exhibit 3.2, 4.5 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference)
4.3	Rights Agreement, dated as of December 13, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent (including a Form of Certificate of Designation of Series A Junior Participating Preferred Stock, a Form of Right Certificate and a Summary of Rights to Purchase Preferred Stock).  (filed as Exhibit 4.1 to the Form 8‑A filed with the Commission on December 16, 1999, and hereby incorporated by reference)
4.4	Certificate of Designation of Series A Junior Participating Preferred Stock of the Company, dated January 11, 2000.  (filed as Exhibit 4.3 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference)
4.5	Amended and Restated Indenture, dated July 1, 1997, between the Company and PNC Bank, National Association, as trustee.  (filed as Exhibit 10.63 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and hereby incorporated by reference)
4.6	Indenture, dated as of February 19, 2002, between the Company and J.P. Morgan Trust Company, National Association, as trustee.  (filed as Exhibit 4.5 to the Registration Statement on Form S-4 (Reg. No. 333-83688) filed with the Commission on March 4, 2002, and hereby incorporated by reference)
10.1	Multi-Currency, Multi-Option Credit Agreement, dated August 14, 2002, among the Company and the several lenders from time to time parties hereto.  (filed as Exhibit 10.10 to the Annual Report on Form 10-K for fiscal year ended June 30, 2002, and hereby incorporated by reference)
10.2	Amended and Restated Equipment Leasing Agreement between BTM Capital Corporation and the Company, dated as of June 30, 2003. +
10.3	Amended and Restated Participation Agreement among the Company, U.S. Bank National Association, BTM Capital Corporation, Bank of Tokyo-Mitsubishi Trust Company and certain lenders, dated as of June 30, 2003. +
10.4	Amended and Restated Equipment Leasing Agreement between BTM Capital Corporation and the Company dated as of June 30, 2003. +
10.5	Amended and Restated Participation Agreement among the Company, U.S. Bank National Association, BTM Capital Corporation, Bank of Tokyo‑Mitsubishi Trust Company and certain lenders, dated as of June 30, 2003. +
10.6	Lease Agreement, dated as of April 28, 1988, by and between Harman International Business Campus Joint Venture and Harman Electronics, Inc.  (filed as Exhibit 10.23 to the Annual Report on Form 10‑K for the fiscal year ended June 30, 1988, and hereby incorporated by reference)
10.7	First Amendment to the Lease Agreement by and between Harman International Business Campus Joint Venture and JBL, Inc., dated October 1995.  (filed as Exhibit 10.58 to the Annual Report on Form 10‑K for the fiscal year ended June 30, 1996, and hereby incorporated by reference)
10.8	Lease, dated as of June 18, 1987, between Harman International Business Campus Joint Venture and JBL Inc.  (filed as Exhibit 10.1 to the Annual Report on Form 10-K for the fiscal year ended June 30, 1987, and hereby incorporated by reference)
10.9	First Amendment to the Lease Agreement by and between Harman International Business Campus Joint Venture and Harman Electronics, Inc., dated October 1995.  (filed as Exhibit 10.57 to the Annual Report on Form 10‑K for the fiscal year ended June 30, 1996, and hereby incorporated by reference)
10.10	Guaranty, dated as of June 18, 1987, by the Company of Lease, dated as of June 18, 1987, between Harman International Business Campus Joint Venture and JBL Inc.  (filed as Exhibit 10.2 to the Annual Report on Form 10-K for the fiscal year ended June 30, 1987, and hereby incorporated by reference)
10.11	Harman International Industries, Incorporated 1987 Executive Incentive Plan.  (filed as Exhibit 10.18 to the Annual Report on Form 10-K for the fiscal year ended June 30, 1988, and hereby incorporated by reference) **
10.12	Harman International Industries, Incorporated 1992 Incentive Plan, as amended and restated.  (filed as Exhibit B to the Company's 1999 Proxy Statement, and hereby incorporated by reference) **
10.13	Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.  (filed as Exhibit B to the Company's 2002 Proxy Statement, and hereby incorporated by reference) **
10.14	Harman International Industries, Incorporated 2002 Key Executive Officers Bonus Plan.  (filed as Exhibit A to the Company's 2002 Proxy Statement, and hereby incorporated by reference) **
10.15	Harman International Industries, Incorporated Retirement Savings Plan, as amended and restated effective as of June 27, 2000.  (filed as Exhibit 10.26 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2001, and hereby incorporated by reference) **
10.16	First Amendment to the Harman International Industries, Incorporated Retirement Savings Plan, dated as of September 12, 2003. ** +
10.17	Second Amendment to the Harman International Industries, Incorporated Retirement Savings Plan, dated as of June 10, 2003. ** +
10.18	Third Amendment to the Harman International Industries, Incorporated Retirement Savings Plan, dated as of September 12, 2003. ** +
10.19	Harman International Industries, Incorporated Supplemental Executive Retirement Plan, as amended and restated as of October 1, 1999.  (filed as Exhibit 10.27 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
10.20	Amendment No. 1 to the Harman International Industries, Incorporated Supplemental Executive Retirement Plan, dated September 24, 2002.  (filed as Exhibit 10.5 to the Quarterly Report on Form 10‑Q for the quarter ended December 31, 2002, and hereby incorporated by reference) **
10.21	Benefit Agreement under the Supplemental Executive Retirement Plan between Bernard A. Girod and the Company, dated June 22, 2000.  (filed as Exhibit 10.72 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
10.22	Benefit Agreement under the Supplemental Executive Retirement Plan between Gregory Stapleton and the Company, dated June 20, 2000.  (filed as Exhibit 10.73 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
10.23	Benefit Agreement under the Supplemental Executive Retirement Plan between Frank Meredith and the Company, dated June 21, 2000.  (filed as Exhibit 10.74 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
10.24	Harman International Industries, Inc. Deferred Compensation Plan, effective June 1, 1997.  (filed as Exhibit 4 to the Registration Statement on Form S-8 (Reg. No. 333-28793) filed with the Commission June 9, 1997, and hereby incorporated by reference) **
10.25	Amendment No. 1 to the Harman International Industries, Inc. Deferred Compensation Plan dated October 1, 1999.  (filed as Exhibit 10.46 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
10.26	Employment Agreement between the Company and William Palin, dated April 4, 2001.  (filed as Exhibit 10.69 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, and hereby incorporated by reference) **
10.27	Employment Agreement between the Company and Dr. Erich A. Geiger, dated as of July 1, 2003. ** +
10.28	Employment Agreement between the Company and William S. Palin, dated as of September 23, 2003. **+
10.29	Restricted Stock Agreement between the Company and Dr. Erich A. Geiger, dated effective August 15, 2001.  (filed as Exhibit 10.4 to the Quarterly Report on Form 10‑Q for the quarter ended December 31, 2002, and hereby incorporated by reference) **
10.30	Form of Severance Agreement between the Company and each of Sidney Harman, Bernard Girod, Gregory Stapleton and Frank Meredith.  (filed as Exhibit 10.71 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and hereby incorporated by reference) **
13.1	Pages 17 through inside back cover of the Company Annual Report to Shareholders for the fiscal year ended June 30, 2003. +
21.1	Subsidiaries of the Company. +
23.1	Consent of Independent Auditors. +
31.1	Certification of Sidney Harman filed pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. +
31.2	Certification of Bernard Girod filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +
31.3	Certification of Frank Meredith filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +
32.1	Certification of Sidney Harman, Bernard Girod, and Frank Meredith filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. +

** Management contract, compensatory plan or arrangement.
+ Filed herewith.

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT

between

BTM CAPITAL CORPORATION,
as Corporate Obligee

and

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED,
as Obligor

Dated as of June 30, 2003

(1999)

TO THE EXTENT, IF ANY, THAT THIS DOCUMENT CONSTITUTES
CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE,
NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED
THROUGH THE TRANSFER AND POSSESSION OF ANY
COUNTERPART OTHER THAN COUNTERPART NO. 1.

COUNTERPART NO. 8  OF8 SERIALLY NUMBERED
           MANUALLY EXECUTED COUNTERPARTS.           

TABLE OF CONTENTS

				Page
Section	1.	Definitions.		1
Section	2.	Agreement for Financing of Equipment.		1
Section	3.	Acknowledgment of Financed Equipment.		2
Section	4.	Delivery, Acceptance and Leasing of Equipment.		2
Section	5.	Term.		2
Section	6.	Return of Equipment.		2
		Section 6.1.	Redelivery.	2
		Section 6.2.	Storage.	4
		Section 6.3.	Holdover Equipment Payment.	4
		Section 6.4.	Specific Performance.	4
Section	7.	Payments.		4
		Section 7.1.	Interim Equipment Payment.	4
		Section 7.2.	Basic Equipment Payment.	4
		Section 7.3.	[Intentionally Deleted.]	5
		Section 7.4.	Supplemental Payments.	5
		Section 7.5.	Method of Payment.	5
		Section 7.6.	Applicable Debt Rate.	5
		Section 7.7.	[Intentionally Deleted.]	5
Section	8.	Net Financing Agreement.		5
Section	9.	Grant of Security Interest; Equipment to be and Remain Personal Property.		6
Section	10.	Use of Equipment; Compliance with Laws.		6
Section	11.	Maintenance and Repair of Equipment.		7
Section	12.	Alterations; Modifications; Replacements		8
Section	13.	Identification Marks; Inspection.		8
Section	14.	Assignment and Leasing.		9
		Section 14.1.	By Obligor.	9
		Section 14.2.	By Corporate Obligee.	10
		Section 14.3.	Registration.	10
Section	15.	Liens.		10
Section	16.	Loss, Damage or Destruction.		11
		Section 16.1.	Risk of Loss, Damage or Destruction.	11
		Section 16.2.	Payment of Casualty Loss Value Upon an Event of Loss.	11
		Section 16.3.	Application of Payments Not Relating to an Event of Loss.	11
Section	17.	Insurance.		12
Section	18.	NO CORPORATE OBLIGEE WARRANTIES.		13
Section	19.	Assignment of Manufacturer Warranties.		13
Section	20.	Events of Default.		14
Section	21.	Remedies Upon Default.		15
Section	22.	Corporate Obligee's Right to Perform for Obligor.		17
Section	23.	Late Charges.		17
Section	24.	Notices.		17
Section	25.	Obligor's Renewal and Transfer Options.		17
		Section 25.1.	Obligor's Renewal Option.	17
		Section 25.2.	Obligor's End of Term Transfer Option.	18
		Section 25.3.	Third Party Sale of Equipment.	19
		Section 25.4.	Obligor's Early Transfer Options.	19
Section	26.	End of Term Equipment Payment Adjustment		20
		Section 26.1.	Third Party Sale of Equipment.	20
		Section 26.2.	Obligor Payment.	21
Section	27.	Governing Law, Jurisdiction and Venue; Waiver of Jury.		21
Section	28.	Miscellaneous.		22
		Section 28.1.		22
		Section 28.2.		22
Section	29.	Payments.		23
Section	30.	Concerning Corporate Obligee.		23
EXHIBIT A-1
EXHIBIT A-2

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT dated as of June 30, 2003 (herein, as amended, supplemented and otherwise modified from time to time, called  “this Equipment Agreement”), between BTM CAPITAL CORPORATION, a Delaware corporation (together with its successors and assigns, “Corporate Obligee”) and HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (together with its successors and assigns, “Obligor”).

WHEREAS, pursuant to that certain Participation Agreement dated as of September  30, 1999 (as amended, the “Original Participation Agreement”) among State Street Bank and Trust Company of Connecticut, National Association, not in its individual capacity but as Trustee (“Original Trustee”), as “Obligee” thereunder (“Original Obligee”), Obligor, BTM Capital Corporation (“BTM Capital”), as “LC Issuer”, Four Winds Funding Corporation, a Delaware corporation, as “Lender”, Bank of Tokyo-Mitsubishi Trust Company, as “Owner Participant” and Commerzbank Aktiengesellschaft, New York Branch, as “Agent” and as “Security Trustee”, the Original Obligee and Obligor entered into that certain Equipment Financing Agreement dated as of September 30, 1999 (as amended, the “Original Equipment Agreement”); and

WHEREAS, Corporate Obligee has succeeded to the interests of Original Obligee with respect to the Original Participation Agreement and the Original Equipment Agreement and, as part of the transactions contemplated under the Amended and Restated Participation Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Participation Agreement”) among Corporate Obligee, BTM Capital, as “Owner Participant”, U.S. Bank National Association (“Trust Company”), not in its individual capacity but solely as trustee (“Trust Obligee”) under a Trust Agreement dated as of the date hereof (the “Trust Agreement”), Obligor, the financial institutions named therein as Lenders and Bank of Tokyo-Mitsubishi Trust Company, as “Security Trustee” and “Agent”.

In consideration of the mutual covenants and agreements set forth herein and in the Participation Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

            Section 1.         Definitions.  Unless the context otherwise requires, capitalized terms used herein and not otherwise defined herein shall have meanings set forth or referred to in Appendix A to the Participation Agreement which Appendix A also contains the rules of usage that shall apply hereto.

            Section 2.         Agreement for Financing of Equipment.  Subject to, and upon all of the terms and conditions of this Equipment Agreement, Corporate Obligee hereby agrees to finance for Obligor and Obligor hereby agrees to finance for Corporate Obligee each Item of Equipment for the Term with respect to such Item.  So long as no Equipment Agreement Event of Default has occurred and is continuing hereunder, Corporate Obligee agrees that it shall not interfere with Obligor’s quiet enjoyment and use of any Item of Equipment financed hereunder during the Term thereof.

            Section 3.         Acknowledgment of Financed Equipment.  Corporate Obligee and Obligor acknowledge and agree that all Items of Equipment have been financed for Obligor pursuant to Section 3.1 of the Original Participation Agreement and in accordance with the other Original Operative Documents and no further duty or obligation exists on the part of Corporate Obligee to finance any additional Items of Equipment thereunder.

            Section4.          Delivery, Acceptance and Leasing of Equipment.  Corporate Obligee and Obligor hereby acknowledge and agree that (a) all Original Items of Equipment have been delivered to and accepted by Obligor in accordance with the terms and provisions of the Original Equipment Agreement; (b) Obligor has inspected each such Original Item so delivered and neither provided Original Obligee with written notice of any defect nor objected to any such Original Item in accordance with Section 4 of the Original Equipment Agreement; and (c) Obligor has executed and delivered to Original Obligee an Equipment Agreement Supplement, dated the Acceptance Date thereof, for each such Original Item of Equipment.  Corporate Obligee and Obligor hereby further acknowledge and agree that (x) each Equipment Agreement Supplement executed by Original Obligee and Obligor for each Original Item of Equipment evidences that such Original Item is leased under, and is subject to, all of the terms, provisions and conditions of this Equipment Agreement, and (y) constitutes Obligor’s unconditional and irrevocable acceptance of such Original Item for all purposes of this Equipment Agreement.  Corporate Obligee and Obligor hereby further acknowledge and agree that (x) all Original Items of Equipment and all Original Items shall for all purposes constitute the Items of Equipment and Items, respectively, hereunder and under the other Operative Documents; (y) each Equipment Agreement Supplement executed and delivered in connection with the Original Equipment Agreement shall in all respects and for all purposes constitute the Equipment Agreement Supplement hereunder and under the other Operative Documents; and (z) all Items of Equipment shall be conclusively deemed to relate to the particular Related Exhibit A attached to the Original Equipment Agreement and made a part thereof that is so identified on the Related Equipment Agreement Supplement of such Original Item, and, each Related Exhibit A attached to the Original Equipment Agreement are herein incorporated by reference as if such Related Exhibit A were attached hereto.

            Section 5.         Term.  The Interim Term (if any) for each Item of Equipment shall commence on the Acceptance Date thereof, and, unless sooner terminated pursuant to the provisions hereof, shall end on the date immediately prior to the Basic Term Commencement Date therefor.  The Basic Term for each Item of Equipment shall commence on the Basic Term Commencement Date thereof and, unless this Equipment Agreement is sooner terminated with respect to such Item (or all Equipment) pursuant to the provisions hereof, shall end on the last day of such Basic Term.  If not sooner terminated pursuant to the provisions hereof, the Term for each Item of Equipment shall end on the last day of the Basic Term thereof, or if this Equipment Agreement is renewed with respect to such Item of Equipment pursuant to Section 25.1 hereof, on the last day of the last Renewal Term thereof.

            Section 6.         Return of Equipment.

                                    Section 6.1       Redelivery.  Upon the expiration or earlier termination of the Term with respect to each Item of Equipment (unless Obligor has exercised its transfer option with respect thereto pursuant to Sections 25.2 or 25.4 hereof or a third party sale thereof acceptable to Corporate Obligee is consummated on the Termination Date with respect thereto pursuant to Section 25.3 hereof), Obligor will, at its expense, dismantle, surrender and deliver possession of each Item of Equipment to Corporate Obligee at the Redelivery Location with a certificate executed by a Responsible Officer of Obligor certifying that the Item of Equipment is in the condition required hereunder, a copy of an inventory list for each Item, proof of payment by Obligor to the Person from whom Obligor acquired such Item of Equipment in the form of a canceled check or wire transfer confirmation, all then current plans, specifications and operating, maintenance, and repair manuals and logs relating to each Item that have been prepared or received by Obligor, and with respect to any Item of Equipment which qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy, a statement or certificate that has been signed by an authorized representative of the manufacturer attesting to such condition.  At the time of such return to Corporate Obligee, each Item of Equipment (and each part or component thereof) shall (a) meet the original design specifications and operating standards of such Item, (b) be in as good operating condition, state of repair and appearance as when delivered to Obligor hereunder, ordinary wear and tear excepted, and in the condition required by Section 11 hereof, (c) have no missing or damaged components such that its value, utility or remaining useful life will be reduced, (d) comply with all laws and rules referred to in Section 11 hereof, (e) have attached or affixed thereto any addition, modification or improvement considered an accession thereto as provided in Section 12 hereof and (f) have had removed therefrom in a workmanlike manner, (i) any addition, modification or improvement which, as provided in Section 12 hereof, is owned by Obligor, and (ii) any insignia or marking permitted pursuant to Section 13 hereof, and (g) be free and clear of all Liens, other than a Lien granted or placed thereon by Corporate Obligee, Lender, or any Assignee pursuant to Section 14.2 hereof.  With respect to any Item of Equipment which has an hour meter or similar device affixed to or relating to such Equipment, Obligor must provide evidence of the total operating hours on such Item at redelivery, as evidenced by such meter or similar device.  The total operating hours for each such Item of Equipment in excess of 3000 hours per year shall be billed to Obligor at a rate set by Corporate Obligee (which rate shall be reasonable in all the circumstances).  All operating licenses and agreements pertinent to operation of each Item of Equipment, whether or not included in the original Agreement (other than non-transferable licenses to use software), that are capable of being transferred, shall be fully transferable upon the expiration of the Term to Corporate Obligee or its designee.  Obligor shall transfer any such transferable license or agreement upon return of the Item of Equipment at Obligor’s cost and expense.  Each Item of Equipment that qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy must be properly deinstalled in a manner consistent with such policy and in such a way that the Item remains eligible for or subject to such policy, as appropriate, and Obligor shall provide or shall cause a representative of the manufacturer of such Item a certificate certifying that each Item of Equipment was deinstalled in a manner consistent with such policy and remains eligible for or subject to such policy, as appropriate.  Upon deinstallation each Item of Equipment shall be secured properly for air or overland transport.  Each Item of Equipment originally delivered to Obligor, secured for shock proof and minimum vibration travel or delivered via air ride van shall be redelivered in a similar manner, and each other Item of Equipment shall be delivered in the manner in which it was delivered to Obligor or such other manner as is customary for such Item of Equipment.  Obligor shall pay for any repairs necessary to restore any Item of Equipment to the condition required by this Section 6.1.  The term “ordinary wear and tear” as used herein shall not be construed as permitting any material broken,damaged or missing items or components of any Item of Equipment.  Upon redelivery, Obligor shall provide any additional documentation reasonably requested by Corporate Obligee, at Corporate Obligee’s cost, relating to the redelivery of or Corporate Obligee’s interest in each Item of Equipment.

            Section 6.2       Storage.  For the purpose of delivering possession of any Item of Equipment to Corporate Obligee as above required, Obligor shall at its own cost, expense and risk cause each such Item of Equipment to be insured in accordance with Section 17 hereof and stored at the Redelivery Location identified therefor by Corporate Obligee at the risk of Obligor without charge to Corporate Obligee or any Assignee for insurance, rent or storage until all such Items of Equipment have been sold, leased or otherwise disposed of by Corporate Obligee; provided however, Obligor’s obligations under this Section 6.2 shall terminate with respect to each Item of Equipment on the 90^th day after delivery of such Item to the Redelivery Location in the condition required by Section 6.1 hereof.

            Section 6.3.      Holdover Equipment Payment.  Each Item of Equipment shall be deemed redelivered upon satisfaction of the obligations and conditions set forth in Section 6.1 hereof.  Until each such Item of Equipment has been returned to Corporate Obligee in the condition and as otherwise provided in this Section 6, Obligor shall continue to pay Corporate Obligee, on the same dates on which an Equipment Payment for such Item was payable during the Term thereof 125% of the Equipment Payment for such Item that was payable on the last Payment Date of the Term thereof; provided, that during such holdover period, Obligor shall use its best efforts to secure the return of the Equipment as required under this Section 6.  The provision for payment pursuant to this Section 6 shall not abrogate Corporate Obligee’s right under this Section 6 to have such Equipment returned to it hereunder.

            Section 6.4.      Specific Performance.  The provisions of this Section 6 are of the essence of this Equipment Agreement, and upon application to any court of equity having jurisdiction in the premises, Corporate Obligee shall be entitled to a decree against Obligor requiring specific performance of the covenants of Obligor set forth in this Section 6.

            Section 7.         Payments.

                                    Section 7.1       Interim Equipment Payment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment on each Payment Date during the Interim Term therefor, in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item (b) an amount calculated by multiplying the Outstanding Debt Amount for such Item immediately prior to such payment by the Applicable Debt Rate and (c) an amount calculated by multiplying the Equity Component for such Item by the Equity Rate and in the case of clauses (b) and (c) for the number of days elapsed since the immediately preceding Payment Date, or in the case of the first payment of an Equipment Payment during the Interim Term, the Acceptance Date thereof.

                                    Section 7.2.      Basic Equipment Payment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment on each Payment Date during the Basic Term therefor, in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item (b) an amount calculated by multiplying the Outstanding Debt Amount immediately prior to such payment by the Applicable Debt Rate and (c) an amount calculated by multiplying the Equity Component for such Item by the Equity Rate and in the case of clauses (b) and (c) for the number of days elapsed since the immediately preceding Payment Date, or in the case of the first payment of an Equipment Payment during the Basic Term, the Basic Term Commencement Date thereof.

                        Section 7.3.      [Intentionally Deleted.]

                        Section 7.4.      Supplemental Payments.  Obligor also agrees to pay to Corporate Obligee, or to whoever shall be entitled thereto as expressly provided herein, all Supplemental Payments, promptly as the same shall become due and owing, and in the event of any failure on the part of Obligor so to pay any such Supplemental Payment hereunder Corporate Obligee shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Equipment Payments.

                        Section 7.5.      Method of Payment.  All payments of Equipment Payments and Supplemental Payments required to be made by Obligor to Corporate Obligee (or, in the case of Supplemental Payments, any other Person entitled thereto) shall be made in immediately available funds.  In the event of any assignment to an Assignee pursuant to Section 14.2 hereof, all payments which are assigned to such Assignee, whether Equipment Payments, Supplemental Payments or otherwise, shall be paid in such manner as shall be designated by Corporate Obligee or such Assignee.  Subject to the security assignment and the obligations of Obligor with respect thereto in Section 7 of the Participation Agreement, all payments of Equipment Payments required to be made by Obligor to Corporate Obligee hereunder shall be paid at the address or bank account as Corporate Obligee may hereafter designate in writing to Obligor.  Time is of the essence in connection with the payment of Equipment Payments, and Supplemental Payments.

                        Section 7.6.      Applicable Debt Rate.  The Applicable Debt Rate for each Item of Equipment shall be the LIBOR Rate then in effect for the Notes issued by Obligees under the Participation Agreement; provided however, upon the occurrence of any Illegality Event, the Applicable Debt Rate will be the Alternate Rate as of the date interest on such Notes commences to accrue at the Applicable Debt Rate in accordance with Section 5.5.9 of the Participation Agreement.  At least three (3) Business Days before each Payment Date, Corporate Obligee or its designee shall advise Obligor of the total amount due on such Payment Date.   Except as may otherwise be provided herein, no Equipment Payments or portion thereof may be prepaid.

                        Section 7.7.      [Intentionally Deleted.]

            Section 8.         Net Financing Agreement.  This Equipment Agreement is a net financing agreement.  Obligor acknowledges and agrees that its obligations hereunder, including, without limitation, its obligations to pay Equipment Payments and all Supplemental Payments payablehereunder, shall be unconditional and irrevocable under any and all circumstances, shall not be subject to cancellation, termination, modification or repudiation by Obligor, and shall be paid and performed by Obligor without notice or demand and without any abatement, reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever, including, without limitation, any abatement, reduction, diminution, setoff, defense, counterclaim, withholding orrecoupment due or alleged to be due to, or by reason of, any past, present or future claims which Obligor may have against Corporate Obligee, Owner Participant, Trust Company, any Assignee, any Lender, any manufacturer or supplier of any Item of Equipment or any part thereof, or any other Person for any reason whatsoever, or any defect in any Item of Equipment or any part thereof, or the condition, design, operation or fitness for use thereof, any damage to, or any loss or destruction of, any Item of Equipment or any part thereof, or any Liens or rights of others with respect to any Item of Equipment or any part thereof, or any prohibition or interruption of or other restriction against Obligor’s use, operation, possession, maintenance, insurance, improvement or return of the Equipment or any Item thereof, for any reason whatsoever, or any interference with such use, operation or possession by any Person or entity, or any default by Corporate Obligee in the performance of any of its obligations herein contained, or any other indebtedness or liability, howsoever and whenever arising, of Corporate Obligee, Trust Company or of any Assignee, or of Obligor to any other Person, or by reason of insolvency, bankruptcy or similar proceedings by or against Corporate Obligee, Trust Company, any Assignee or Obligor, or for anyother reason whatsoever, whether similar or dissimilar to any of the foregoing, any present or future law to the contrary notwithstanding; it being the intention of the parties hereto that all Equipment Payments and Supplemental Payments payable by Obligor hereunder shall continue to be payable in all events and in the manner and at the times herein provided, without notice or demand, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Equipment Agreement.

            Section 9.         Grant of Security Interest; Equipment to be and Remain Personal Property. This Equipment Agreement is a financing agreement intended as security.  Obligor hereby grants, bargains, assigns, transfers, conveys and pledges to Corporate Obligee a security interest in and Lien upon all of its right, title and interest in, to and under the Equipment, this Equipment Agreement, each Subsidiary Equipment Agreement and each Security Document to which it is a party and all proceeds thereof as collateral security for the payment and performance by Obligor of Obligor’s obligations as Obligor under the Operative Documents.   For each Item of Equipment located in the United States, France, Germany or England, Obligor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to Corporate Obligee from time to time such confirmatory assignments, conveyances, financing and continuation statements, transfer endorsements, powers of attorney, notes, reports and other assurances or instruments and take such further actions which are appropriate or advisable to perfect, preserve or protect Corporate Obligee’s security interest granted hereunder or which Corporate Obligee deems necessary or advisable in order to obtain the full benefits of the Liens created or intended to be created hereunder, and will take such other actions reasonably requested by Corporate Obligee to effectuate the intent of the Operative Documents.  Obligor will pay all applicable filing fees and related expenses.  It is the intention and understanding of both Corporate Obligee and Obligor, and Obligor shall take all such actions as may be required to assure, that the Equipment shall be and at all times remain personal property, notwithstanding the manner in which the Equipment may be attached or affixed to realty.  Obligor shall obtain and record such instruments and take such steps as may be necessary to prevent any Person fromacquiring any rights in the Equipment by reason of the Equipment being claimed or deemed to be real property.

            Section 10.       Use of Equipment; Compliance with Laws.  Obligor agrees that each Item of Equipment will be used and operated solely in the conduct of its business or that of itsSubsidiaries in the manner for which it was intended, in accordance with the license or certificate, if any, provided by the manufacturer thereof and in compliance with any and all insurance policy terms, conditions and provisions and with all Applicable Laws of any Governmental Entity applicable to the use and operation of the Equipment, including, without limitation, environmental, noise and pollution laws (including notifications and reports).  Obligor shall procure and maintain in effect all licenses, registrations, certificates, permits, approvals and consents required by federal, national, state or local laws or by any governmental body, agency or authority in connection with the ownership, delivery, installation, use and operation of each Item of Equipment, including, without limitation, those required by environmental, noise and pollution laws (including notifications and reports) and including, in the case of any Item subject to titling and registration laws, all titles, registrations, registration plates, permits, licenses, and all renewals thereof.  Other than as expressly set forth in the following sentence, no Item of Equipment shall be used or located at a location other than that identified therefor on the Related Equipment Agreement Supplement and in no event shall any Item of Equipment be used or located outside of the United States, England, Wales, France, Switzerland, Germany, Hungary,Austria, Belgium, Denmark, Sweden or the Netherlands; provided, however, that Items of Equipment, the aggregate of the Acquisition Costs for which does not exceed $1,500,000 may, subject to the prior written consent of the Corporate Obligee and the Majority Lenders, be located in Mexico.  Obligor shall use reasonable precautions to prevent loss or damage to each Item of Equipment from fire and other hazards.  Obligor shall not permit any Item of Equipment to be used in any unlawful trade or in any manner that would violate any law that would expose such Item of Equipment to penalty, forfeiture or capture.

            Section 11.       Maintenance and Repair of Equipment.  Obligor agrees, at its own cost and expense, to keep, repair, maintain, service and preserve the Equipment in good repair, operating and serviceable condition and shall keep the Equipment in order and condition equal to or better than other equipment of the same type owned by Obligor, and in compliance with all requirements of law applicable to the maintenance and condition of the Equipment, including, without limitation, environmental, noise and pollution laws and regulations (including notifications and reports) of any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Equipment, to the extent that such laws and rules affect the title, operation, maintenance or use of the Equipment, and in the event that such laws or rules require any alteration, replacement or addition of or to any part on any Equipment, Obligor will conform therewith at its own expense.  With respect to any Item of Equipment which qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy, such maintenance or repair will be only performed in a manner consistent with such policy.  Obligor agrees to prepare and deliver to Corporate Obligee and any Assignee within a reasonable time prior to the required date of filing (or, to the extent permissible, file on behalf of Corporate Obligee and any Assignee) any and all reports (other than income tax returns) to be filed by Corporate Obligee or any Assignee with any Governmental Entity by reason of the ownership by Corporate Obligee or any Assignee of the Items of Equipment or the leasingthereof to Obligor.  Obligor agrees to maintain all records, logs and other materials required by any Governmental Entity havingjurisdiction over the Items of Equipment or Obligor, to be maintained in respect of each Item of Equipment.  Obligor hereby waives any right now or hereafter conferred by law to make repairs on the Equipment at the expense of Corporate Obligee.

            Section 12.       Alterations; Modifications; Replacements.  In case any Item of Equipment (or any equipment, part or appliance therein) is required to be altered, added to, replaced or modified in order to comply with any laws, regulations, requirements or rules (“Required Alteration”) pursuant to Sections 10 or 11 hereof, Obligor agrees to make such Required Alteration at its own expense and the same shall, without further act, immediately be and become the property of, and title shall vest in, Corporate Obligee free and clear of all Liens other than Liens granted or placed thereon by Corporate Obligee or any Assignee pursuant to Section 14.2 hereof or other Permitted Liens and subject to the terms of this Equipment Agreement.  Obligor may make any optional alteration to any Item of Equipment (“Optional Alteration”) provided such Optional Alteration does not impair the value, use or remaining useful life of such Item of Equipment.  In the event such Optional Alteration is readily removable without impairing the value, use or remaining useful life of the Item of Equipment, and is not a part, item of equipment or appliance which replaces any part, item of equipment or appliance originally incorporated or installed in or attached to such Item of Equipment on the Acceptance Date therefor or any part, item of equipment or appliance in replacement of or substitution for any such original part, item of equipment or appliance, any such Optional Alteration shall be and remain the property of Obligor.  To the extent such Optional Alteration isnot readily removable without impairing the value, use or remaining useful life of the Item of Equipment to which such Optional Alteration has been made, or is a part, item of equipment or appliance which replaces any part, item of equipment or appliance originally incorporated or installed in or attached to such Item of Equipment on the Acceptance Date therefor or any part, item of equipment or appliance in replacement of or substitution for any such original part, item of equipment or appliance, the same shall, without further act, immediately be and become the property of, and title shall vest in, Corporate Obligee free and clear of all Liens other than Liens granted or placed thereon by Corporate Obligee or any Assignee pursuant to Section 14.2 hereof and subject to the terms of this Equipment Agreement.  Any parts installed or replacements made by Obligor upon any Item of Equipment pursuant to its obligation to maintain and keep the Equipment in good and serviceable operating condition and repair under Section 11 hereof shall be considered accessions to such Item of Equipment and title thereto or security interest therein shall be immediately vested in Corporate Obligee.  Except as required or permitted by the provisions of this Section 12, Obligor shall not modify an Item of Equipment without the prior written authority and approval of Corporate Obligee.  Subject to the prior written consent of Corporate Obligee and the Majority Lenders (which consent shall be at the sole and absolute discretion of each of Corporate Obligee and the Majority Lenders) and on terms acceptable to such Persons, Obligor may from time to time replace an Item of Equipment with other equipment.

            Section 13.       Identification Marks; Inspection.  Obligor shall use commercially reasonable efforts to keep and maintain, plainly, distinctly and conspicuously marked on each Item, the words “Financed by BTM Capital Corporation, subject to a security interest in favor of Bank of Tokyo-Mitsubishi Trust Company as Security Trustee” or other appropriate words designated by Corporate Obligee, with appropriate changes thereof and additions thereto as from time to time may be required by law in order to protect Corporate Obligee’s and any Assignee’sinterests in such Item and the rights of Corporate Obligee and of any Assignee unless the size orcharacteristics of such Item would make such obligation unduly burdensome or commercially impracticable.  Obligor shall not allow the name of any Person, to be placed upon any Item of Equipment as a designation that might be interpreted as indicating a claim of ownership thereto or a security interest therein by any Person other than Corporate Obligee or any Assignee.  Uponthe request of Corporate Obligee, Obligor shall (i) make the Equipment and Obligor’s books, records and accounts available to Corporate Obligee, Assignee or any of their designees for inspection and, for the purpose of inspecting any Items of Equipment for which Obligor’s end of term transfer option set forth in Section 25.2 has expired, such inspection may include, the use of photographic and video equipment and (ii) make a good faith effort to discuss with Corporate Obligee or its designees from time to time as Corporate Obligee or its designees deem reasonably necessary the Obligor’s affairs, finances and accounts.  If Obligor does not elect to renew this Equipment Agreement and does not elect to acquire rights and interests in the Equipment in accordance with the provisions and deadlines contained herein, Obligor shall, at any time prior to thirty (30) days prior to the Termination Date, permit Corporate Obligee or any designee thereof to inspect each Item of Equipment in full operation.  The location for the inspection or demonstration of any Item of Equipment shall be the location designated for such Item on the Related Equipment Agreement Supplement; provided, however, if at the time of Corporate Obligee’s or Assignee’s request an Equipment Agreement Event of Default has occurred and is continuing, Obligor shall make the Equipment available to Corporate Obligee or Assignee for inspection at a location in the United States or Europe reasonably determined by Corporate Obligee.

            Section 14.       Assignment and Leasing.

                                    Section 14.1     By Obligor.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 9 OR THIS SECTION 14.1, OBLIGOR WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF CORPORATE OBLIGEE, LEASE ANY ITEM OF EQUIPMENT, OR ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER.  ANY ATTEMPTED LEASE IN VIOLATION HEREOF AND ANY ASSIGNMENT, TRANSFER OR ENCUMBERING BY OBLIGOR OF ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER IN VIOLATION HEREOF SHALL BE NULL AND VOID.  Obligor may, without Corporate Obligee’s consent, lease any Item of Equipment to Subsidiaries of Obligor in the ordinary course of business.  Any such lease or financing agreement (together will all amendments, modifications and supplements thereto, a “Subsidiary Equipment Agreement”) shall be, and shall expressly state that it is, subject and subordinate in all respects to this Equipment Agreement and the rights of Corporate Obligee (and any Assignee) hereunder including Corporate Obligee’s right to possession of the Equipment upon an Equipment Agreement Event of Default, shall prohibit subleasing, shall not have a term that may exceed the remaining portion of the Term of such Item of Equipment, and shall be secured by a first priority security interest granted by such Subsidiary in favor of Obligor, which security interest shall be a perfected security interest for all Equipment located in the United States.  Obligor and Corporate Obligee hereby acknowledge and agree that Obligor leased certain of the Original Equipment to certain of its Subsidiaries under Subsidiary Equipment Agreements in accordance with the terms of the Original Equipment Agreement and that Obligor shall amend such Subsidiary Equipment Agreements within ten (10) days hereof to the extent necessary as a result of the amendments, assignments and assumptions that occurred on the Restructuring Date.  Obligor shall promptly deliver to Security Trustee the original counterpart of each Subsidiary Equipment Agreement and shall provide prompt notice to Corporate Obligee (including the name and address of the lessee) of any lease or sublease to or financing agreement with a third party having a term coterminous with the then current Term of the Items of Equipment subject to such lease, sublease or financing agreement.  Obligor shall deliver a certified schedule of all such leases, subleases and financing agreements to Corporate Obligee by March 31 and September 30 of each year during the Term that were in effect at any time during the preceding calendar year and otherwise at Corporate Obligee’s reasonable request.  No such leasing by Obligor will reduce any of the obligations of Obligor hereunder or the rights of Corporate Obligee (and any Assignee) hereunder, and all of the obligations of Obligor hereunder shall be and remain primary and shall continue in full force and effect as the obligations of a principal and not of a guarantor or surety.

                                    Section 14.2     By Corporate Obligee.  Corporate Obligee may sell, assign, transfer or grant a security interest in all or any part of Corporate Obligee’s rights, obligations, title or interest in, to and under the Equipment or any Item(s) thereof, this Equipment Agreement, any Equipment Agreement Supplement and/or any Equipment Payment and Supplemental Payments payable under this Equipment Agreement or any Equipment Agreement Supplement without Obligor’s consent. Any entity to whom any such sale, assignment, transfer or grant of security interest is made is herein called an “Assignee” and any such sale, assignment, transfer or grant of security interest is herein called an “assignment”.  An Assignee may re-assign and/or grant a security interest in any of such rights, obligations, title or interest assigned to such Assignee without Obligor’s consent.  Obligor agrees to execute related acknowledgments and other documents that may be reasonably requested by Corporate Obligee or an Assignee.  Each Assignee shall have and may enforce all of the rights and benefits of Corporate Obligee hereunder with respect to the Item(s) of Equipment and related Equipment Agreement Supplement(s) covered by the assignment, including, without limitation, the provisions of Section 8 hereof.  Each such assignment shall be subject to Obligor’s rights hereunder so long as no Equipment Agreement Event of Default has occurred and is continuing.  Obligor shall be under no obligation to any Assignee except upon written notice of such assignment from Corporate Obligee or, in the case of a reassignment, from the Assignee.  Upon written notice to Obligor of an assignment in accordance with this Section 14.2, Obligor agrees to pay the Equipment Payments and Supplemental Payments with respect to the Item(s) of Equipment covered by such assignment to such Assignee in accordance with the instructions specified in such notice without any abatement, defense, setoff, counterclaim or recoupment whatsoever, and to otherwise comply with all notices, directions and demands which may be given by Corporate Obligee or such Assignee with respect to such Item(s), in accordance with the provisions of this Equipment Agreement. Notwithstanding any such assignment, all obligations of Corporate Obligee to Obligor under this Equipment Agreement shall be and remain enforceable by Obligor against Corporate Obligee and any Assignee to whom an assignment has been made.

                                    Section 14.3.    Registration.  This Equipment Agreement is a registered instrument.  Corporate Obligee will establish and maintain registration books in which it will register, and register any assignment effected in compliance with Section 14 hereof of, each of Corporate Obligee’s and Obligor’s interest in this Equipment Agreement or any portion thereof and which identifies each registered holder of any interest in this Equipment Agreement or any portion thereof.  No transfer by Corporate Obligee or Obligor of any interest in this Equipment Agreement shall be effective unless and until such transfer is made upon the registration books maintained by Corporate Obligee.

            Section 15.       Liens.  Obligor will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to (a) any Item of Equipment or any part thereof,Corporate Obligee’s title thereto, or any interest therein or proceeds thereof, or (b) this EquipmentAgreement or any of Corporate Obligee’s interests hereunder, except (i) Permitted Liens or (ii) any Lien granted or placed thereon by Corporate Obligee, any Lender, or any Assignee pursuant to Section 14.2 hereof or any Person with a claim against Corporate Obligee or any Assignee.  Obligor, at its own expense, will promptly pay, satisfy and otherwise take such actions as may be necessary to keep this Equipment Agreement and each Item of Equipment free and clear of, and to duly discharge or eliminate or bond in a manner satisfactory to Corporate Obligee and each Assignee, any such Lien not excepted above if the same shall arise at any time. Obligor will notify Corporate Obligee and each Assignee in writing promptly upon becoming aware of any tax or other Lien (other than any Lien excepted above) that shall attach to the Equipment or any Item of Equipment, and of the full particulars thereof.

            Section 16.       Loss, Damage or Destruction.

                                    Section 16.1.    Risk of Loss, Damage or Destruction.  Obligor hereby assumes all risk of loss, damage, theft, taking, destruction, confiscation, requisition or commandeering, partial or complete, of or to each Item of Equipment, however caused or occasioned, such risk to be borne by Obligor with respect to each Item of Equipment from the date of this Equipment Agreement, and continuing until such Item of Equipment has been returned to Corporate Obligee in accordance with the provisions of Section 6 hereof, the rights and interests in which have been transferred to Obligor in accordance with the provisions of Sections 25.2 or 25.4 hereof, or has been sold in accordance with Section 25.3 hereof.  Obligor agrees that no occurrence specified in the preceding sentence shall impair, in whole or in part, any obligation of Obligor under this Equipment Agreement, including, without limitation, the obligation to pay Equipment Payments.

                                    Section 16.2.    Payment of Casualty Loss Value Upon an Event of  Loss.  If an Event of Loss occurs with respect to an Item of Equipment during the Term thereof, Obligor shall give Corporate Obligee prompt written notice thereof and shall pay to Corporate Obligee on the corresponding Casualty Loss Value Payment Date the sum of (a) all unpaid Equipment Payments payable for such Item of Equipment for the entire Equipment Payment Period in which the Event of Loss has occurred, plus (b) the Casualty Loss Value of such Item of Equipment determined as of the Casualty Loss Value Payment Date, plus (c) all other Supplemental Payments due for such Item of Equipment as of the date of payment of the amounts specified in the foregoing clauses (a) and (b).  Any payments received at any time by Corporate Obligee or by Obligor from any insurer or other party (except Obligor) as a result of the occurrence of such Event of Loss will be applied in reduction of Obligor’s obligation to pay the foregoing amounts, if not already paid by Obligor, or, if already paid by Obligor, will be applied to reimburse Obligor for its payment of such amount, unless an Equipment Agreement Event of Default shall have occurred and be continuing.  Upon payment in full of such Casualty Loss Value, Equipment Payments and Supplemental Payments, (a) the obligation of Obligor to pay Equipment Payments hereunder with respect to such Item of Equipment shall terminate and the Term of such Item shall terminate, and (b) Corporate Obligee shall renounce all title and rights to such Item of Equipment.

                                    Section 16.3.    Application of Payments Not Relating to an Event of Loss.  Any payments (including, without limitation, insurance proceeds) received at any time by Corporate Obligee or Obligor from any Governmental Entity or other party with respect to any loss or damage to any Item or Items of Equipment not constituting an Event of Loss, will be applied directly in payment of repairs or for replacement of property in accordance with the provisions of Sections 11 and 12 hereof, if not already paid by Obligor, or if already paid by Obligor and no Equipment Agreement Event of Default shall have occurred and be continuing, shall be applied to reimburse Obligor for such payment, and any balance remaining after compliance with the provisions of said Sections with respect to such loss or damage shall be retained by Obligor.  If any Equipment Agreement Event of Default shall have occurred and is continuing, all payments hereunder shall be paid to Corporate Obligee or its Assignee in accordance with Section 14.2 hereof.

            Section 17.       Insurance.  Obligor will cause to be carried and maintained, at its sole expense, with respect to each Item of Equipment at all times during the Term thereof and for the geographic area in which such Item is at any time located and until such Item of Equipment has been returned to Corporate Obligee pursuant to Section 6 hereof, the rights and interests therein have been transferred to Obligor pursuant to Section 25.2 or 25.4 hereof or sold to a third party pursuant to Section 25.3.2 hereof (a) physical damage insurance (including theft and collision insurance) insuring against all risks of physical loss or damage to the Equipment (“Property Insurance”), in an amount not less than the greater of the Casualty Loss Value of such Item of Equipment and the replacement value of the Equipment, and (b) insurance against liability for bodily injury, death and property damage resulting from the use and operation of the Equipment (including sudden and accidental environmental pollution coverage) (“Liability Insurance”) in an amount not less than $25,000,000 per occurrence, but in no event shall the insurance coverage described in clauses (a) and (b) above provide less coverage than the insurance coverage on any other similar equipment owned or leased by Obligor.  The insurance coverage described in the preceding sentence shall have deductibles no greater than those applicable to insurance on similar equipment owned or leased by Obligor.  Such Property Insurance policy or policies will name Obligor and Corporate Obligee as the sole loss payees and Corporate Obligee and each Assignee as additional insureds. Such Liability Insurance policy or policies will name each Obligor Indemnified Person as an additional insured.  All such policies will provide that the insurers waive any claim for premiums and any right of subrogation or setoff against the Obligor Indemnified Parties and thatthe same may not be invalidated against any Obligor Indemnified Person by reason of any violation of a condition or breach of warranty of the policies or the application therefor by Obligor, that the policies may be canceled or materially altered or reduced in coverage (except as otherwise permitted under the terms of this Equipment Agreement) by the insurer only after thirty (30) days’ prior written notice from Obligor’s insurance broker to Corporate Obligee, Trust Company, Owner Participant and each Assignee, and that the insurer will give written notice to Corporate Obligee, Trust Company, Owner Participant, Agent and each Assignee in the event of nonpayment of premium by Obligor whendue. The policies of insurance required under this Section 17 shall be valid and enforceable policies issued by insurers of recognized responsibility and shall provide coverage with respect to incidents occurring anywhere in the United States or Canada or Europe.  In the event that any of such Liability Insurance policies shall now or hereafter provide coverage on a “claims‑made” basis, Obligor shall continue to maintain such policies in effect for a period of not less than three (3) years after the expiration of the Term of the last Item of Equipment financed hereunder.  Upon the execution of this Equipment Agreement and thereafter not less than thirty (30) days prior to the expiration dates of any expiring policies required under this Section 17,Obligor shallfurnish Corporate Obligee with certificates of the insurance coverage required by this Section 17.  If requested by any Obligor Indemnified Person in connection with a claim made or any suit, action or proceeding brought against any Obligor Indemnified Person, copies of the policies evidencing such insurance coverage, shall be delivered by Obligor to such Obligor Indemnified Person. Any certificate of insurance issued with respect to a blanket policy covering other equipment not subject to this Equipment Agreement shall specifically describe the Equipment as being included therein and covered thereby to the full extent of the coverages and amounts required hereunder.  If Obligor shall fail to cause the insurance required under this Section 17 to be carried and maintained, Corporate Obligee, Trust Company, Owner Participant, any Lender or any Assignee may, but shall not be required to, provide such insurance and Obligor shall reimburse Corporate Obligee, Trust Company, Owner Participant, any Lender or any such Assignee, as the case may be, upon demand for the cost thereof as a Supplemental Payment hereunder together with interest thereon at the Overdue Rate from the date such cost was incurred.

            Section 18.       NO CORPORATE OBLIGEE WARRANTIES.  CORPORATE OBLIGEE HEREBY FINANCES THE EQUIPMENT FOR OBLIGOR AS‑IS WHERE-IS, WITH ALL FAULTS AND IN WHATEVER CONDITION IT MAY BE IN, AND EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF, OR ANY OTHER MATTER CONCERNING, THE EQUIPMENT.  OBLIGOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST CORPORATE OBLIGEE OR OWNER PARTICIPANT FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY THE EQUIPMENT OR BY OBLIGOR’S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER, INCLUDING COMPLIANCE WITH ENVIRONMENTAL LAWS (WHICH ITEMS OF EQUIPMENT, OBLIGOR ACKNOWLEDGES, WERE SELECTED BY OBLIGOR ON THE BASIS OF ITS OWN JUDGMENT WITHOUT RELIANCE ON ANY STATEMENTS, REPRESENTATIONS, GUARANTIES OR WARRANTIES MADE BY CORPORATE OBLIGEE).

            Section 19.       Assignment of Manufacturer Warranties.  So long and only so long as an Equipment Agreement Event of Default shall not have occurred and be continuing, and so long and only so long as the Equipment shall be subject to this Equipment Agreement and Obligor shall be entitled to possession of the Equipment hereunder, Corporate Obligee authorizes Obligor, at Obligor’s expense, to assert for Corporate Obligee’s account, all rights and powers of Corporate Obligee under any manufacturer’s, vendor’s or dealer’s warranty on the Equipment orany part thereof and Corporate Obligee agrees to use reasonable efforts at Obligor’s expense to assist Obligor in obtaining the benefits of such warranties; provided, however, that Obligor shall indemnify, protect, save, defend and hold harmless Corporate Obligee from and against any and all claims, and all costs, expenses, damages, losses and liabilities incurred or suffered by Corporate Obligee in connection therewith, as a result of, or incident to, any action by Obligor pursuant to the foregoing authorization. 

            Section 20.       Events of Default.  Any of the following events shall constitute an Equipment Agreement Event of Default:

                                    (a)        Obligor shall fail to make any payment of an Equipment Payment within five (5) days after the same is due and payable or any Supplemental Payment within fifteen (15) days after the same is due and payable; or

                                    (b)        Obligor shall fail to observe or perform any of the covenants, agreements or obligations of Obligor set forth in the Sections 14.1 or 17 hereof or in Section 6.7 of the Participation Agreement; or

                                    (c) Obligor shall fail to perform or observe any other covenant, condition, or agreement to be performed or observed by it under this Equipment Agreement, any Equipment Agreement Supplement, the Participation Agreement, or in any agreement or certificate furnished to Original Obligee, Corporate Obligee or any Assignee in connection herewith or therewith, and such failure shall continue unremedied for thirty (30) days after written notice to Obligor specifying such failure and demanding the same to be remedied; or

                                    (d)        (i) Obligor shall default under the Multi-Currency Credit Agreement, or (ii) Obligor shall default under any agreements or instruments relating to any Indebtedness or Material Obligations of Obligor, or any other event shall occur and shall continue after the applicable notice requirements or grace period, if any, specified in such agreements or instruments, but only if (x) such default is a payment default that occurs upon the scheduled maturity of such Indebtedness or Material Obligations or (y) the effect of such default or event is to permit the acceleration of the maturity of such Indebtedness or Material Obligations and in either the case of (x) or (y), the aggregate principal amount of all such Indebtedness or Material Obligations is equal to or greater than $25,000,000, or (iii) any one or more Subsidiaries of Obligor shall default under any agreements or instruments relating to any Indebtedness or Material Obligations of such Subsidiary or Subsidiaries, or any other event shall occur and shall continue after the applicable grace period, if any, specified in such agreements or instruments, but only if (x) such default is a payment default that occurs upon the scheduled maturity of such Indebtedness or Material Obligations or (y) the effect of such default or event is to accelerate the maturity of such Indebtedness or Material Obligations and in either the case of (x) or (y), the aggregate principal amount of all such Subsidiary Indebtedness or Subsidiary Material Obligations is equal to or greater than $25,000,000; or

                                    (e)        Obligor shall become insolvent; or Obligor or any Subsidiary thereof shall make an assignment for the benefit of creditors or consent to the appointment of a trustee or receiver; or a trustee or a receiver shall be appointed for Obligor or any Subsidiary thereof or for a substantial part of the property of Obligor or any Subsidiary thereof without its consent and shall not be dismissed for a period of sixty (60) days; or any petition for the relief, reorganization or arrangement of Obligor or any Subsidiary thereof or any other petition in bankruptcy or for the liquidation, insolvency or dissolution of Obligor or any Subsidiary thereof, shall be filed by or against Obligor or any Subsidiary thereof and, if filed against Obligor or any Subsidiary thereof, shall be consented to or be pending and not dismissed for a period of sixty (60) days, or an order for relief under any bankruptcy or insolvency law shall be entered by any court or Governmental Entity of competent jurisdiction with respect to Obligor or any Subsidiary thereof; or any execution or writ or process shall be issued under any action or proceeding against Obligor or any Subsidiary thereof whereby any of the Equipment may be taken or restrained and such execution or writ or process is not stayed within sixty (60) days; or Obligor’s corporate existence shall cease; or

                                    (f)         any representation, warranty, statement or certification made by Obligor under this Equipment Agreement, in any Equipment Agreement Supplement, the Participation Agreement or in any document or certificate furnished to Original Obligee, Corporate Obligee or any Assignee in connection herewith or therewith, or pursuant hereto or thereto, shall prove to be untrue or incorrect when made (or deemed made) except for inaccuracies or misstatements when made (or deemed made) that would not have a material effect on Obligor’s ability to fulfill its obligations under this Equipment Agreement or the Participation Agreement; or

                                    (g)        final judgments or orders for the payment of money in the aggregate in excess of $25,000,000 shall be rendered against Obligor or any Subsidiary and Obligor or such Subsidiary shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof, within sixty (60) days after the date of entry thereof and within said period of sixty (60) days (or such longer period during which execution of such judgment shall have been stayed) appeal therefrom and cause the execution thereof to be stayed during such appeal;

            Section 21.       Remedies Upon Default.  Upon the occurrence of any Equipment Agreement Event of Default and at any time thereafter so long as the same shall be continuing, Corporate Obligee may (except in the case of an Equipment Agreement Event of Default of the type described in Section 20(e) hereof, in which case Corporate Obligee shall be deemed automatically without further act to have elected the remedy set forth in clause (d) below) exercise one or more of the following remedies as Corporate Obligee in its sole discretion shall elect:

                                    (a)        Corporate Obligee may terminate or cancel this Equipment Agreement, without prejudice to any other remedies of Corporate Obligee hereunder, with respect to all or any Item of Equipment, and whether or not this Equipment Agreement has been so terminated, may enter the premises of Obligor, subject to Obligor’s normal safety and security concerns, including standard confidentiality requirements, or any other party to take immediate possession of the Equipment and remove all or any Item of Equipment by summary proceedings or otherwise, or may cause Obligor, at Obligor’s expense, to store, maintain, surrender and deliver possession of the Equipment or such Item in the same manner as provided in Section 6 hereof;

                                    (b)        Corporate Obligee may hold, keep idle or lease to others the Equipment or any Item of Equipment, as Corporate Obligee in its sole discretion may determine, free and clear of any rights of Obligor and without any duty to account to Obligor with respect to such action or inaction or for any proceeds with respect thereto, except that Obligor’s obligation to pay Equipment Payments for any Equipment Payment Periods commencing after Obligor shall have been deprived of possession pursuant to this Section 21 shall be reduced by the net proceeds, if any, received by Corporate Obligee from leasing the Equipment or such Item to any Person other than Obligor for the same Equipment Payment Periods or any portion thereof;

                                    (c)        Corporate Obligee may sell the Equipment or any Item of Equipment at public or private sale as Corporate Obligee may determine, free and clear of any rights of Obligor, and Obligor shall pay to Corporate Obligee, as liquidated damages for loss of a bargain and not as a penalty (in lieu of the Equipment Payments due for the Equipment or Item(s) so sold for any Equipment Payment Period commencing after the date on which such sale occurs), the sum of (i) all unpaid Equipment Payments payable for each Item of Equipment for all Equipment Payment Periods through the date on which such sale occurs, plus (ii) an amount equal to the excess, if any, of (x) the Casualty Loss Value of the Item(s) of Equipment so sold, computed as of the Payment Date coincident with or next preceding the date of such sale, over (y) the net proceeds of such sale, plus interest at the rate specified in Section 23 hereof on the amount of such excess from the Payment Date as of which such Casualty Loss Value is computed until the date of actual payment, plus (iii) all unpaid Supplemental Payments due with respect to each Item of Equipment so sold;

                                    (d)        whether or not Corporate Obligee shall have exercised, or shall thereafter at any time exercise, any of its rights under subsection (a) or (b) above with respect to any Item(s) of Equipment, Corporate Obligee, by written notice to Obligor specifying a payment date, may demand that Obligor pay to Corporate Obligee, and Obligor shall pay to Corporate Obligee, on the payment date specified in such notice, as liquidated damages for loss of a bargain and not as a penalty (in lieu of the Equipment Payment due for any Item(s) of Equipment for any Equipment Payment Period commencing after the payment date specified in such notice and in lieu of the exercise by Corporate Obligee of its remedies under subsection (b) above in the case of a re‑lease of such Item(s) or under subsection (c) above with respect to a sale of such Item(s)), the sum of (i) all unpaid Equipment Payments payable for such Item(s) for all Equipment Payment Periods through the payment date specified in such notice, plus (ii) all unpaid Supplemental Payments due with respect to such Item(s) as of the payment date specified in such notice, plus (iii) an amount equal to any Prepayment Premium owed or paid by Corporate Obligee to Lender as a result of Equipment Agreement Event of Default, plus (iv) an amount, with respect to each such Item, equal to the Casualty Loss Value of such Item(s) computed as of the Payment Date coincident with or next preceding the payment date specified in such notice; provided, however, that with respect to any such Item(s) returned to or repossessed by Corporate Obligee, the amount recoverable by Corporate Obligee pursuant to the foregoing shall be reduced (but not below zero) by an amount equal to the fair market sales value of such Item(s) as of the date on which Corporate Obligee has obtained possession of such Item(s); and

                                    (e)        Corporate Obligee may exercise any other right or remedy which may be available to it under Applicable Law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof or to rescind this Equipment Agreement.

In addition, Obligor shall be liable for all costs and expenses, including reasonable attorney’s fees, incurred by Corporate Obligee or any Assignee by reason of the occurrence of any Equipment Agreement Event of Default or the exercise of Corporate Obligee’s remedies with respect thereto, including all reasonable costs and expenses incurred in connection with the return of the Equipment in accordance with Section 6 hereof or in placing the Equipment in the condition required by said Section. For the purpose of subsection (d) above, the “fair market sales value” of any Item of Equipment shall mean such value as has been determined by an independent qualified appraiser selected jointly by Corporate Obligee and Obligor and in the absence of agreement on an independent qualified appraiser, each of Corporate Obligee and Obligor shall select an appraiser who together shall select the independent qualified appraiser.  Except as otherwise expressly provided above, no remedy referred to in this Section 21 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Corporate Obligee at law or in equity; and the exercise or beginning of exercise by Corporate Obligee of any one or more of such remedies shall not constitute the exclusive election of such remedies and shall not preclude the simultaneous or later exercise by Corporate Obligee of any or all of such other remedies.  No express or implied waiver by Corporate Obligee of any Equipment Agreement Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Equipment Agreement Event of Default.  To the extent permitted by Applicable Law, Obligor hereby waives any rights now or hereafter conferred by statute or otherwise which may require Corporate Obligee to sell, lease or otherwise use the Equipment in mitigation of Corporate Obligee’s damages as set forth in this Section 21 or which may otherwise limit or modify any of Corporate Obligee’s rights and remedies in this Section 21.

            Section 22.       Corporate Obligee’s Right to Perform for Obligor.  If Obligor fails to make any Supplemental Payment required to be made by it hereunder or fails to perform or comply with any of its agreements contained herein, Corporate Obligee may itself, after notice to Obligor, make such payment or perform or comply with such agreement, and the amount of such payment and the amount of the reasonable expenses of Corporate Obligee incurred in connection with such payment or the performance of or compliance with such agreement, as the case may be, together with interest thereon at the rate specified in Section 23 hereof, shall, if not paid by Obligor to Corporate Obligee on demand, be deemed a Supplemental Payment hereunder;  provided, however, that no such payment, performance or compliance by Corporate Obligee shall be deemed to cure any Equipment Agreement Event of Default hereunder.

            Section 23.       Late Charges.  Obligor shall pay to Corporate Obligee, upon demand, to the extent permitted by Applicable Law, interest on any installment of an Equipment Payment not paid when due, and on any Supplemental Payment or other amount payable under this Equipment Agreement which is not paid when due, for any period for which any of the same is overdue (without regard to any grace period) at a rate equal to the lesser of (a) the Overdue Rate and (b) the maximum rate of interest permitted by law.

            Section 24.       Notices.  All notices provided for or required under the terms and provisions hereof shall be given in accordance with Section 10.4 of the Participation Agreement.

            Section 25.       Obligor’s Renewal and Transfer Options.

                                    Section 25.1     Obligor’s Renewal Option.  If no Equipment Agreement Event of Default shall have occurred and be continuing and this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, to renew this Equipment Agreement with respect to all but not less than all Items of Equipment then subject to this Equipment Agreement, up to the number of Renewal Terms specified on the Related Exhibit A.  The first Renewal Term with respect to each such Item of Equipment will commence at the expiration of the Basic Term of such Item, and each succeeding Renewal Term will commence at the expiration of the next preceding Renewal Term.  All of the provisions of this Equipment Agreement, including the Applicable Debt Rate, shall be applicable during each Renewal Term for each such Item of Equipment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment during each Renewal Term for which Obligor exercises its renewal option therefor in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item (b) an amount calculated by multiplying the Outstanding Debt Amount immediately prior to such payment by the Applicable Debt Rate and (c) an amount calculated by multiplying the Equity Component for such Item by the Equity Rate, and in the case of clauses (b) and (c), such amounts shall be multiplied by a fraction, the numerator of which is the number of days elapsed since the immediately preceding Payment Date, and the denominator of which is 360.  If, with respect to any Renewal Term, Obligor intends to not exercise said renewal option, Obligor shall give written notice to Corporate Obligee to such effect at least 180 days prior to the expiration of the Basic Term of the Item(s) of Equipment whose Renewal Term first expires hereunder, in the case of the first Renewal Term, and at least 180 days prior to the expiration of the then current Renewal Term of the Item(s) of Equipment whose Basic Term first expires hereunder, in the case of the then next succeeding Renewal Term.  If Obligor fails to give such written notice to Corporate Obligee with respect to any of said Renewal Terms, it shall be conclusively presumed that Obligor has irrevocably elected to exercise said renewal option with respect to all Items of Equipment for said Renewal Term.  In the event Obligor elects not to exercise said renewal option with respect to all Items of Equipment (unless Corporate Obligee has otherwise agreed in writing or Obligor has exercised its transfer option under Section 25.2 hereof or its early transfer option pursuant to Section 25.4 hereof), each Item of Equipment shall be returned to Corporate Obligee in accordance with the provisions of Section 6 hereof (unless delivered to a bidder in accordance with Section 25.3 hereof) and until each such Item has been so returned or delivered Obligor shall continue to pay Corporate Obligee the Equipment Payment for each such Item as specified in Section 6.3 hereof.

                                    Section 25.2     Obligor’s End of Term Transfer Option.  On any Termination Date, if (a) no Equipment Agreement Event of Default shall have occurred and be continuing, and (b) this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, upon written notice to Corporate Obligee, as hereinafter provided, to acquire all, but not less than all, of Corporate Obligee’s rights and interests in the Items of Equipment the Term for which is scheduled to expire (if not otherwise renewed in accordance with Section 25.1 hereof) on such Termination Date for an amount (the “Transfer Option Amount”), with respect to each Item of Equipment, payable in immediately available funds, equal to the sum of (i) the aggregate of the Estimated Residual Values of such Items of Equipment applicable to the Basic Term or Renewal Term thereof then ending, plus (ii) the Equipment Payment due and payable for such Items of Equipment on the Termination Date, plus (iii) any applicable sales, excise or other Taxes imposed as a result of such sale (other than gross or net income taxes attributable to such sale), plus (iv) any Supplemental Payments then due and owing to any Person. Corporate Obligee’s sale of each Item of Equipment shall be on an as-is, where-is basis, without any representation or warranty by, or recourse to, Corporate Obligee.  If Obligor intends to exercise said transfer option, Obligor shall give written notice to Corporate Obligee to such effect at least thirty (30) days prior to the expiration of the Basic Term, or, if Obligor has renewed this Equipment Agreement pursuant to Section 25.1 hereof, then at least thirty (30) days prior to the expiration of the then current Renewal Term.  If Obligor gives such written notice to Corporate Obligee, such notice shall constitute a binding obligation of Obligor to pay Corporate Obligee the Transfer Option Amount with respect thereto on the Termination Date thereof.

                                    Section 25.3     Third Party Sale of Equipment.

25.3.1        Remarketing Obligations.  In the event Obligor does not exercise its option to acquire Corporate Obligee’s rights and interests in all the Equipment pursuant to this Section and does not renew this Equipment Agreement, then Obligor shall have the obligation during the last 180 days of the Basic Term, or the then current Renewal Term, if applicable (the “Remarketing Period”), to solicit bona fide bids for not less than all Items of Equipment from prospective purchasers who are financially capable of purchasing such Items of Equipment for cash on an as-is, where-is basis, without recourse or warranty.  Any bid received by Obligor prior to the end of the Remarketing Period shall be immediately communicated to Corporate Obligee and Owner Participant in writing, setting forth the amount of such bid and the name and address of the person or entity submitting such bid. Notwithstanding the foregoing, Corporate Obligee shall have the right, but not the obligation, to seek bids for the Equipment during the Remarketing Period.

25.3.2        Sale of Equipment to Third Party Buyer.  On the Termination Date, provided that all the conditions set forth in Section 25.3.1 and in clauses (a) and (b) below have been met, Corporate Obligee shall sell (or cause to be sold) all Items of Equipment, for cash to the bidder, if any, who shall have submitted the highest bid during the Remarketing Period on an as-is, where-is basis and without recourse or warranty, and upon receipt by Corporate Obligee of the sales price, Corporate Obligee shall instruct Obligor to deliver and Obligor shall deliver the Equipment to such bidder; provided, that (a) any such sale to a third party shall be consummated, and the sales price for the Equipment shall have been paid to Corporate Obligee in immediately available funds, on or before the Termination Date; and (b) Corporate Obligee shall not be obligated to sell such Equipment (i) if the Net Proceeds of Sale of the Equipment are less than the aggregate Maximum Obligee Risk Amount applicable to the Equipment as of the Termination Date, or (ii) if Corporate Obligee has not received the amounts, if any, payable by Obligor pursuant to Section 26.1.

                                    Section 25.4     Obligor’s Early Transfer Options.  Provided that (a) no Equipment Payment or Supplemental Payment is at the time past due, (b) no Equipment Agreement Event of Default shall have occurred and be continuing and (c) this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, on any Payment Date to acquire all but not less than all of Corporate Obligee’s rights and interests in any Item(s) of Equipment upon written notice to Corporate Obligee, as hereinafter provided, for an amount (the “Payment Date Option Amount”), with respect to each Item of Equipment acquired, payable in immediately available funds, equal to the sum of (i) the Casualty Loss Value of such Item of Equipment applicable for such Payment Date, plus (ii) the Equipment Payment due and payable for such Item of Equipment on such Payment Date, plus (iii) any applicable sales, excise or other Taxes imposed as a result of such sale (other than gross or net income taxes attributable to such sale for any Person other than Corporate Obligee), plus (iv) the amount of Breakage Costs that Corporate Obligee or Trust Obligee shall be liable to pay upon a repayment of the Notes issued with respect to any such Item(s) of Equipment on such Payment Date, plus (v) the amount of Breakage Costs incurred by Corporate Obligee upon a repayment of the Equity Component for such Item on such Payment Date provided that (x) the aggregate Acquisition Costs of all Items of Equipment acquired by Obligor at any time under this Section 25.4 shall not exceed thirty percent (30%) of the total Acquisition Costs for all Equipment at any time financed hereunder, (y) after taking into account any acquisition hereunder, the aggregate Acquisition Costs of all Equipment remaining subject to this Equipment Agreement and located in the United States, Germany and the United Kingdom shall be at least equal to or greater than seventy-five percent (75%) of the aggregate Acquisition Cost of all Equipment at the time subject to this Equipment Agreement and (z) this option may not be exercised more than two (2) times during any twelve (12) month period.  If Obligor intends to exercise said early transfer option, Obligor shall give written notice to Corporate Obligee and Agent to such effect at least thirty (30) and no more than sixty (60) days prior to Payment Date on which such option will be exercised, which notice shall for each Item of Equipment to be acquired identify such Item substantially in the same manner as it is identified on the Equipment Agreement Supplement therefor and identify as of the Payment Date such option is to be exercised in the aggregate and for each such Item the Acquisition Cost, Casualty Loss Value, Unamortized Debt Amount and the Equipment Payment due.  Such notice shall also include replacement Equipment Agreement Supplement Schedule As in form and substance reasonably acceptable to Agent and Owner Participant (“Replacement Schedule As”) identifying all Equipment to remain subject to this Equipment Agreement after any such acquisition.  If Obligor gives such written notice to Corporate Obligee, such notice shall constitute a binding obligation of Obligor to pay Corporate Obligee the Payment Date Option Amount with respect to each Item of Equipment subject to such notice on the applicable Payment Date.  Upon payment in full of all amounts due upon the exercise of Obligors’ option under this Section 25.4, Corporate Obligee will, at the request and cost of Obligor, (i) transfer to or at the direction of Obligor, without recourse or warranty (except as to the absence of Corporate Obligee Liens), all of Corporate Obligee’s right, title and interest in and to such Item(s), “as-is, where-is” and, at the request and cost of Obligor, furnish to or at the direction of Obligor, a bill of sale without recourse or warranty (except as to the absence of Obligee Liens) evidencing such transfer and (ii) execute and deliver such additional agreements and documents and take such further actions as Obligor may reasonably request to release such Item(s) from the Liens granted under the Operative Documents, in each case in form and substance reasonably satisfactory to Obligor and Corporate Obligee.  The Replacement Schedule As shall be deemed a part of the corresponding Equipment Agreement Supplements in replacement of any existing Schedule As thereto.

            Section 26.       End of Term Equipment Payment Adjustment.

                                    Section 26.1     Third Party Sale of Equipment.  This Section 26.1 shall apply only if, with respect to any Non-Renewal Item(s) of Equipment, a sale of such Item(s) to a third party pursuant to Section 25.3 hereof has been consummated on the Termination Date.  If the Net Proceeds of Sale of such Item(s) are less than the aggregate Estimated Residual Value of such Item(s) as of such Termination Date, Obligor shall, on the Termination Date, pay to Corporate Obligee as an end of term Equipment Payment adjustment, in immediately available funds, an amount equal to such deficiency (a “Deficiency”) as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s), plus the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus any Supplemental Payments then due and owing to Corporate Obligee hereunder; provided, however, that if no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, the amount of the Deficiency payable by Obligor with respect to such Item(s) shall not exceed the aggregate Maximum Obligor Risk Amount then applicable to such Item(s).  If the Net Proceeds of Sale of such Item(s) of Equipment exceed the aggregate Estimated Residual Value of such Item(s) and if no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder and Obligor shall have paid Corporate Obligee on or before the Termination Date the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus all Supplemental Payments then due and owing with respect to such Item(s), Corporate Obligee shall pay to Obligor an amount equal to such excess as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s).

                        Section 26.2     Obligor Payment.  If a sale of all Non-Renewal Items of Equipment either to Obligor pursuant to Section 25.2 hereof or to a third party pursuant to Section 25.3 hereof has not been consummated on the Termination Date with respect thereto for any reason, then Obligor shall, on the Termination Date of such Item(s), pay to Corporate Obligee as an end of term Equipment Payment adjustment, in immediately available funds, as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s) that have not been sold pursuant to Sections 25.2, 25.3 or 25.4, an amount equal to the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus all Supplemental Payments then due and owing with respect to such Item(s) plus (a) the Maximum Obligor Risk Amount of all of such Items, if (i) on the Termination Date no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, and (ii) all Items of Equipment then subject to this Equipment Agreement have been returned to Corporate Obligee on the Termination Date in the condition and at the locations required by Section 6 hereof, and (iii) this Equipment Agreement shall not have been terminated prior to the Termination Date, or (b) the Estimated Residual Value of all of such Items, if (i) on the Termination Date an Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, or (ii) all Items of Equipment then subject to this Equipment Agreement have not been returned to Corporate Obligee on the Termination Date in the condition and at the locations required by Section 6 hereof, or (iii) this Equipment Agreement shall have been terminated prior to the Termination Date.  Obligor shall remain liable for the payment of, and upon the consummation by Corporate Obligee of the sale of any Item(s) of Equipment on or after the Termination Date thereof, Obligor shall pay, or reimburse Corporate Obligee for the payment of, all applicable sales, excise or other Taxes imposed as a result of such sale, other than gross or net income taxes attributable to such sale, and such obligation shall survive the termination of this Equipment Agreement.

            Section 27.       Governing Law, Jurisdiction and Venue; Waiver of Jury. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with, and be governed by, the law of the State of New York.  The parties hereto hereby agree that allactions or proceedings initiated by any party hereto arising directly or indirectly out of this Agreement or the other Loan Documents may be litigated in the Supreme Court of the State of New York located in New York City or the District Court or the United States District Court for the Southern District of New York.  Each party hereto hereby expressly submits and consents in advance to such jurisdiction and venue in any action or proceeding commenced by any party hereto in any of such courts, agrees that jurisdiction and venue is proper in such courts, and hereby waives personal service of the summons and complaint, or other process or papers issued therein, and agrees that such service of the summons and complaint may be made by registered mail, return receipt requested, addressed to the party hereto being served at the address for such party set forth in Section 10.4 of the Participation Agreement.  Each party hereto waives any claim that New York City or the Southern District of New York is an inconvenient forum or an improper forum based on lack of venue.  The choice of forum set forth herein shall not be deemed to preclude the enforcement by Lender or Security Trustee of any judgment in any other appropriate jurisdiction.  Each of Obligor and Corporate Obligee hereby waives trial by jury in any judicial proceeding brought by it, Lender or Security Trustee involving directly or indirectly, any matter in any way arising out of, related to, or connected with this Agreement or the other Operative Documents.

            Section 28.       Miscellaneous.

                                    Section 28.1.    Any provision of this Equipment Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating or diminishing Corporate Obligee’s rights under the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by Applicable Law, Obligor hereby waives any provision of law which renders any provision of this Equipment Agreement prohibited or unenforceable in any respect. All of the covenants, conditions and obligations contained in this Equipment Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of Corporate Obligee and (subject to the restrictions of Sections 14.1 and 14.3 hereof) Obligor.  This Equipment Agreement and the other Operative Documents, and each related instrument, document, agreement and certificate, collectively constitute the complete and exclusive statement of the terms of the agreement between Corporate Obligee and Obligor with respect to the acquisition and leasing of the Equipment, and cancel and supersede any and all prior oral or written understandings with respect thereto.

                                    Section 28.2     Except as otherwise expressly provided and subject to the rights assigned by Obligor, Corporate Obligee and Trust Obligee to Security Trustee under the Participation Agreement, none of this Equipment Agreement, the Notes, the Participation Agreement nor the Security Documents nor any terms hereof or thereof may be amended, supplemented, waived or modified without the written agreement and consent of the parties thereto, Obligor, each Lender, Corporate Obligee and Trustee Obligee, provided that where the consent of any Lender is required, such consent (except as provided below) may be given by Agent acting on behalf of Majority Lenders, and any such consent shall be binding on all Lenders, provided further, that no such amendment, modification, waiver or supplement shall, (i) without the consent of a Lender (A) extend the final scheduled maturity of such Lender’s A Loan or B Loan, as the case may be, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof (except to the extent repaid in cash), (B) release all or substantially all of Security Trustee’s interest in the Collateral (except as expressly provided in the Participation Agreement), (C) reduce the percentage specified in the definition of Majority Lenders or (D) amend this clause (i); (ii) without the consent of Agent, amend, modify or waive any provision relating to the rights or obligations of Agent, or (iii) without the consent of Security Trustee amend, modify or waive any provision relating to the rights or obligations of Security Trustee.

            Section 29.       Payments.  All payments by Obligor under this Agreement shall be made in immediately available funds to such bank and/or account as Corporate Obligee may from time to time notify to Obligor no less than three (3) Business Days prior to the due date of any such payment.

            Section 30.       Concerning Corporate Obligee.  Obligor agrees that as between it and the Corporate Obligee, no recourse shall be had with respect to this Equipment Agreement or the other Operative Documents against the Corporate Obligee, or any officer, director, employee, agent or Affiliate thereof except as expressly set forth in Section 10.15 of the Participation Agreement.

*   *   *   *

IN WITNESS WHEREOF, the parties hereto have caused this Equipment Agreement to be duly executed by their duly authorized representatives as of the date first above written. 

BTM CAPITAL CORPORATION,
as Corporate Obligee

By:  /s/ John F. McCarthy                                
     Name:  John F. McCarthy
     Title:  Vice President

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
as Obligor

By:  /s/ Frank Meredith                        
     Name:  Frank Meredith
     Title:  Executive Vice President and
               Chief Financial Officer

COUNTERPART NO. 8 OF 8 SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.

EXHIBIT A‑1 TO AMENDED AND RESTATED
EQUIPMENT LEASING AGREEMENT
DATED AS OF JUNE 30, 2003

Type(s) of Equipment:   As described on each of the Schedules of  Equipment attached to the Equipment Agreement Supplements made with respect to this Exhibit A-1.

Maximum Acquisition Cost:      $90,000,000

Acquisition Period:        From September 30, 1999 to November 15, 1999, both dates inclusive.

Basic Term Commencement Date:        September 20, 2000

Renewal Terms:            three (3) Renewal Terms of twelve (12) months each.

EXHIBIT A‑2 TO AMENDED AND RESTATED
EQUIPMENT LEASING AGREEMENT
DATED AS OF JUNE 30, 2003

Type(s) of Equipment:   As described on each of the Schedules of  Equipment attached to the Equipment Agreement Supplements made with respect to this Exhibit A-2.

Maximum Acquisition Cost:      $90,000,000

Acquisition Period:        From January 15, 2000 to June 30, 2000, both dates inclusive.

Basic Term Commencement Date:        September 20, 2000

Renewal Term: three (3) Renewal Terms of twelve (12) months each.

APPENDIX A

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT AND AMENDED AND RESTATED PARTICIPATION AGREEMENT

(1999)

The definitions stated herein shall equally apply to both the singular and plural forms of the terms defined.  Any agreement defined or referred to below means such agreement as amended, supplemented or modified from time to time, and includes all exhibits, supplements and appendices thereto.  Any Person defined or referred to below include its successors, permitted transferees  and assigns.  The word “including,” when used below or in any Operative Document, is deemed to be followed by “without limitation,” whether or not such words appear.

“A Lenders” means any holder of an A Note and its successors and assigns.

“A Loan Term Percentage” means, as to each A Lender at any time, the percentage of the aggregate principal amount of the A Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such A Lender’s A Loan at such time.

“A Loan” means, as to each A Lender, the outstanding principal amount of such A Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “A Loans” opposite such A Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an A Note.  The aggregate principal amount of the A Loans on the Restructuring Date is $21,213,540.72.

“A Note” means any A Note issued by Corporate Obligee or Trust Obligee to any A Lender in the form of Exhibit D‑1 to the Participation Agreement.

“A Notes” means the collective reference to each A Note.

“Acceptance Date” for each Item of Equipment means the date on which Obligor financed such Item under the Original Operative Documents, as evidenced by Obligor’s execution and delivery of an Equipment Agreement Supplement for such Item dated such date.

“Acquisition Cost” of each Item of Equipment means an amount equal to the sum of (i) the total cost paid by Original Obligee to Obligor for such Item in accordance with the Original Operative Documents, plus (ii) all sales and excise taxes paid by Original Obligee and/or Obligor as agent for Original Obligee on or with respect to the acquisition of such Item, plus (iii) all costs and expenses approved and paid by Obligor as agent for Original Obligee in connection with the delivery and installation of such Item.

“Acquisition Period” means the period specified as such on each consecutively numbered Related Exhibit A attached to and made a part of the Equipment Agreement.

“Affected Person” means each of the Lenders, any permitted assignee of any Lender or the Agent.

“Affiliate” means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“After-Tax Basis” means in respect of an amount (the “base amount”) with respect to a Person, the base amount supplemented by a future payment, if necessary, to such Person such that, after reduction for all Taxes (other than Taxes based upon a Person’s net income or gross receipts and which are imposed or levied by any Federal, national, state, provincial or local taxing authority in the United States or a foreign country unless such Person would not otherwise have been subject to taxation in such jurisdiction but for such Person’s involvement in this transaction), if any, imposed on such Person in respect of the sum of the base amount and such future payment shall be equal to the base amount.

“Agent” means Bank of Tokyo-Mitsubishi Trust Company.

“Aggregate A Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Aggregate B Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Alternate Rate” means a variable rate equal to the greater of (i) the sum of the Federal Funds Rate from time to time in effect and  ½ of one percent (0.5%) and (ii) the rate of interest from time to time announced by Agent at its New York branch from time to time as its “prime commercial lending rate” (which rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer, and Agent may make commercial loans or other loans at rates of interest at, above or below such reference rate).

“Applicable Debt Rate” (a) for the purpose of calculating Equipment Payment means the rate calculated in accordance with Section 7.6 of the Equipment Agreement, (b) for the purpose of calculating interest due on any A Loan means the LIBOR Rate then in effect as determined by Agent pursuant to Schedule 2 to the Participation Agreement and (c) for the purpose of calculating interest due on any B Loan means the LIBOR Rate then in effect as determined by the Agent pursuant to Schedule 2 to the Participation Agreement.

“Applicable Law” means, with respect to any Person or Item of Equipment, all provisions of statutes, rules, regulations, orders and requests (whether or not having the force of law) of any Governmental Entity applicable to such Person or Item of Equipment, and all orders and decrees of all courts and arbitrators in proceedings or actions in which such Person is a party.

“Assignee” has the meaning set forth in Section 14.2 of the Equipment Agreement.

“Assignment and Acceptance Agreement” means the form of assignment and acceptance agreement attached as Schedule 5 to the Participation Agreement.

“Assumption and Revocation Agreement” means that certain Assignment, Assumption and Revocation Agreement dated as of June 30, 2003 by and between Original Owner Trustee, Original Obligee and Corporate Obligee, a copy of which is attached as Exhibit B to the Trust Agreement.

“B Lenders” means any holder of a B Note and its successors and assigns.

“B Loan Term Percentage” means, as to each B Lender at any time, the percentage of the aggregate principal amount of the B Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such B Lender’s B Loan at such time.

“B Loan” means, as to each B Lender, the outstanding principal amount of such B Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “B Loans” opposite such B Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an B Note.  The aggregate principal amount of the B Loans on the Restructuring Date is $3,114,771.77.

“B Note” means any B Note issued by Corporate Obligee to any B Lender in the form of Exhibit D-2 to the Participation Agreement.

“B Notes” means a collective reference to each B Note.

“Basic Term” for each Item of Equipment means the period consisting of twelve (12) months commencing on the “Basic Term Commencement Date” set forth on the Related Exhibit A for such Item and terminating on the Payment Date that occurs in the last month of such twelve (12) month period.

“Basic Term Commencement Date” for each Item of Equipment means the date specified as such on the Related Exhibit A.

“Breakage Costs” means any amount or amounts as shall compensate a Lender or Owner Participant for any loss or reasonable cost incurred after using good faith and reasonable efforts to minimize such loss (but excluding loss of margin of profit) or cost by a Lender or Owner Participant directly resulting from repayment by an Obligee of Related Notes (as defined in Appendix A of the Original Participation Agreement) or Equity Components relating to Item(s) of Equipment that Obligor exercises its rights to acquire pursuant to Section 25.4 of the Equipment Agreement, in accordance with the terms of the Operative Documents.  The amount of the loss or cost shall be determined by the Person seeking such, and notice thereof shall be provided to Obligor in the form of a certificate of such Person stating that the calculations set forth therein are in accordance with the terms of the Operative Documents and setting forth in reasonable detail the basis for such calculations, such certificate being conclusive and binding for all purposes absent manifest error.

“Business Day” means any day other than a day on which banking institutions in the State of Connecticut or the State of New York are authorized by law to close.

“Casualty Loss Value” of each Item of Equipment as of any Casualty Loss Value Payment Date means an amount determined by multiplying the Acquisition Cost of such Item of Equipment by the percentage set forth opposite such Casualty Loss Value Payment Date on the Schedule of Casualty Loss Values attached to the Equipment Agreement Supplement for such Item.

“Casualty Loss Value Payment Date” for each Item of Equipment for which an Event of Loss occurs shall mean the Payment Date for such Item next following the date of such Event of Loss and for each Item of Equipment with respect to which Obligor is exercising its option under Section 25.4 of the Equipment Agreement shall mean the Payment Date on which such option is to be exercised in accordance with such Section 25.4.

“Certificate of Costs” means any certificate by Obligor executed by a Responsible Officer certifying Obligor’s original purchase price and date of purchase of the Item of Equipment specified in such certificate sold by Obligor to Original Obligee under the Original Participation Agreement in the form of Exhibit B to the Original Participation Agreement.

“Closing Date” means the first Funding Date.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time, or any comparable successor law.

“Collateral” means the collective reference to the Equipment Collateral and the Transferred Property Collateral.

“Collateral Proceeds” means the amount or amounts constituting all or a portion of the Net Proceeds of Sale received by Corporate Obligee or the Lenders from the sale of any Item or Items of Equipment in accordance with Section 25.3 of the Equipment Agreement to the extent such amounts constitute payments of principal or interest due on the A Loans and the B Loans under Section 5 of the Participation Agreement.

“Commerzbank” means Commerzbank Aktiengesellschaft, New York Branch, the New York branch of a German banking corporation.

“Consolidated Capitalization” means any date, the sum of (a) shareholders’ equity of Obligor and (without duplication) its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (b) Consolidated Total Debt.

“Consolidated EBITDA” means for any period, Consolidated Net Income for such period, plus the amount of taxes, interest, depreciation and amortization deducted from earnings in determining such Consolidated Net Income.

“Consolidated Interest Expense” means for any period, the amount of interest expense deducted from earnings of Obligor and its consolidated Subsidiaries in determining Consolidated Net Income for such period in accordance with GAAP.

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

“Consolidated Total Debt” means at any date, without duplication, the aggregate of all Indebtedness (including the current portion thereof) of Obligor and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Corporate Obligee” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Corporate Obligee Option” has the meaning set forth in Section 9A.1 of the Participation Agreement.

“Cross Receipt” means any cross receipt in the form of Exhibit A to the Original Participation Agreement that was executed and delivered by Obligor to Original Obligee prior to the Restructuring Date in accordance with the Original Operative Documents.

“Debt Amortization Payment” for any Item of Equipment as of any Payment Date means the amount determined by multiplying the Debt Component of such Item by the percentage set forth opposite such Payment Date on the Schedule of Debt Component Amortization attached to the Related Equipment Agreement Supplement.

“Debt Component” for each Item of Equipment means the dollar amount of the Acquisition Cost financed by Original Lender on the Acquisition Date in accordance with the Original Operative Documents therefor calculated as 97.00% of the Acquisition Cost for such Item.

“Deficiency” has the meaning set forth in Section 26.1 of the Equipment Agreement.

“Dollar” means freely transferable, lawful money of the United States.

“EBITDA Ratio” means on any date, the ratio of Consolidated EBITDA to Consolidated Interest Expense for the four consecutive fiscal quarters of Obligor most recently ended prior to such date.

“English Debenture” means each of Debentures among (i) Original Obligee and Original Security Trustee (ii) Corporate Obligee and Security Trustee, (iii) Obligor and Original Security Trustee and (iv) Harman International Industries, Limited and Original Security Trustee.

“Equipment” means the equipment of the type(s) described on the Schedule of Equipment attached to each consecutively numbered Equipment Agreement Supplement made a part of the Equipment Agreement together with any and all related appliances, parts, accessories, appurtenances, accessions, additions, improvements, replacements and other equipment or components of any nature from time to time incorporated or installed therein.

“Equipment Agreement” means the Amended and Restated Equipment Leasing Agreement dated as of June 30, 2003 between Obligor, as lessee, and Corporate Obligee, as lessor, and each Equipment Agreement Supplement as amended, supplemented and modified from time to time in accordance with the terms of the Operative Documents.

“Equipment Agreement Default” means an Equipment Agreement Event of Default or an event which with notice or lapse of time or both would become an Equipment Agreement Event of Default.

“Equipment Agreement Event of Default” has the meaning set forth in Section 20 of the Equipment Agreement.

“Equipment Agreement Supplement” means an Equipment Agreement Supplement substantially in the form attached to the Original Equipment Agreement as Exhibit B, which, prior to the Restructuring Date, was executed by Original Obligee and Obligor with respect to each Item of Equipment as provided in Section 4 of the Original Equipment Agreement and was consented thereto by Original Lender, as the same may be amended or modified from time to time.

“Equipment Collateral” has the meaning set forth in Section 7.1(a) of the Participation Agreement.

“Equipment Payment” means the amount payable during the Interim Term pursuant to Section 7.1 of the Equipment Agreement, during the Basic Term pursuant to Section 7.2 of the Equipment Agreement, during each Renewal Term pursuant to Section 25.1 of the Equipment Agreement and during any holdover period pursuant to Section 6.3 of the Equipment Agreement, any Deficiency and any end of term rent adjustment payable in accordance with Section 26.2 of the Equipment Agreement.

“Equipment Payment Period” for each Item of Equipment means (a) for the Interim Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Interim Term as set forth in Section 7.1 of the Equipment Agreement, (b) for the Basic Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Basic Term thereof as set forth in Section 7.2 of the Equipment Agreement, and (c) for each Renewal Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during such Renewal Term as set forth in Section 25.1 of the Equipment Agreement.

“Equity Component” means, for each Item of Equipment, the difference between the Acquisition Cost and the Debt Component therefor.

“Equity Rate” means, for any Equipment Payment Period, the LIBOR in effect as of the first LIBOR Banking Day of each such Equipment Payment Period plus two hundred fifty (250) basis points.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Residual Value” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Estimated Residual Value Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Event of Loss” with respect to any Item of Equipment means (a) the loss of such Item of Equipment or any substantial part thereof, or (b) the loss of the use of such Item of Equipment due to theft or disappearance for a period in excess of forty-five (45) days during the Term, or existing at the expiration or earlier termination of the Term, or (c) the destruction, damage beyond repair, or rendition of such Item of Equipment or any substantial part thereof permanently unfit for normal use for any reason whatsoever, or (d) the condemnation, confiscation, seizure, or requisition of use or title to such Item of Equipment or any substantial part thereof by any Governmental Entity under the power of eminent domain or otherwise beyond the earlier of sixty (60) days and the end of the Basic Term or Renewal Term, as applicable.

“Excepted Payments” means (a) indemnity payments paid or payable in favor of Trust Company, Owner Participant, or any Assignee, or their successors or assigns, directors, officers, employees, affiliates and agents under the Operative Documents, (b) proceeds of public liability insurance (or government indemnities in lieu thereof) payable to Trust Company, Owner Participant, or any Assignee either pursuant to the Equipment Agreement or the Participation Agreement (which shall include proceeds of any self-insurance by Obligor) or maintained by Obligor, Trust Company, Obligees, Owner Participant, or any Assignee and not required to be maintained under the Equipment Agreement, (c) costs or expenses paid or payable by Obligor to, or for the benefit of, Trust Company, Owner Participant, or any Assignee, (d) all rights of, and payments to, Owner Participant under and pursuant to the Trust Agreement, (e) where any amount payable to Trust Company, Owner Participant, or any Assignee is expressed to be payable on an After-Tax Basis, the increment to the underlying payment obligation arising by virtue of the operation of the definition of “After-Tax Basis,” (f) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (e) above and otherwise required to be paid thereon, (g) all rights to receive the amounts referred to in clauses (a) through (f) above, and (h) the proceeds of enforcement of any right to receive the proceeds of any amount referred to in clauses (a) through (f) above.

“Federal Funds Rate” means for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 a.m. (New York time) for such day on such transactions received by Agent from three federal funds brokers of recognized standing selected by Agent.

“French Commercial Pledge Agreement” means each Commercial Pledge Agreement among Obligor, Corporate Obligee and Audax Industries S.N.C.

“Funding Date” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“Funding Notice” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

“German Chattel Mortgage Agreement” means each of the Agreements on Chattel Mortgage among (i) Becker GMBH and Obligor, (ii) Harman Audio Electronic Systems GMBH and Obligor, (iii) Obligor and Corporate Obligee and (iv) Corporate Obligee and Security Trustee.

“Guaranty Obligation” means as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, derivative instrument or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guaranty Obligation shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business or (y) obligations of the Obligor or any of its Subsidiaries under arrangements entered into in the ordinary course of business whereby Obligor or such Subsidiary sells inventory to other Persons under agreements obligating Obligor or such Subsidiary to repurchase such inventory, at a price not exceeding the original sale price, upon the occurrence of certain specified events.

“Governmental Entity” means any Federal, state, municipal or other governmental department, commission, board, bureau, agency, central bank or instrumentality or any court, in each case whether of the United States or any foreign country.

“Harman Proceeds” means the amount or amounts paid by Obligor to Corporate Obligee pursuant to Section 26.1 or 26.2 of the Equipment Agreement and received by the Lenders to the extent such amounts constitute payments of principal or interest due the A Loans and the B Loans under Section 5 of the Participation Agreement.

“Illegality Event” has the meaning set forth in Section 5.5.9 of the Participation Agreement.

“Indebtedness” means of any Person at any date, all indebtedness or obligations of such Person (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), as reflected on the balance sheet of such Person prepared in accordance with GAAP.

“Interest Coverage Ratio” means for any period of four consecutive fiscal quarters, Consolidated EBITDA divided by Consolidated Interest Expense for such period.

“Interim Term” for each Item of Equipment means the period commencing on the Acceptance Date for such Item (unless the Acceptance Date is the Basic Term Commencement Date, in which case there shall be no Interim Term for such Item) and ending on the date immediately prior to the Basic Term Commencement Date.

“Item of Equipment” or “Item” means any of the items of Equipment separately identified on any of the Schedules of Equipment attached to the Equipment Agreement Supplements currently made a part of the Equipment Agreement.

“Lenders” means the collective reference to the A Lenders and the B Lenders, and their permitted successors and assigns.

“LC Issuer” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“LC Reimbursement Security Agreement” means the Reimbursement Security Agreement between Original Obligee and LC Issuer dated as of June 30, 1999.

“LIBOR” means, in relation to any Equipment Payment Period, the rate per annum for deposits in Dollars for that Equipment Payment Period which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period; provided that if such rate does not appear on the Telerate Screen Page 3750, LIBOR shall mean the rate for deposits of an amount comparable to the aggregate of the Unamortized Debt Balances then financed or refinanced by such Lender by loans on the London interbank Dollar market for that Equipment Payment Period determined by such Lender to be the LIBOR rate offered by Agent to leading banks in the London Eurodollar interbank market at 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period for that relevant Equipment Payment Period adjusted for any reserve requirements in effect on the first day of such Equipment Payment Period.

“LIBOR Banking Day” means any day other than a day on which banking institutions in the State of New York or the City of London are authorized by law to close.

“LIBOR Margin” means, at any time, the liquidity margin then applicable set forth in Schedule 2 to the Participation Agreement, expressed as an annual percentage rate calculated to the seventh decimal place.

“LIBOR Rate” means the sum of LIBOR plus the LIBOR Margin.

“Lien” means liens, mortgages, encumbrances, pledges, charges and security interests of any kind

.

“Liquidity Agreement” means the Amended and Restated Liquidity Asset Purchase Agreement dated as of August 27, 2000, among Original Issuer, as issuer, Commerzbank, as liquidity agent for the purchasers thereunder, and the purchasers party thereto, as amended prior to the date hereof.

“Loans” means a collective reference to the A Loans and the B Loans.

“Loan Commitment Fee”  means the Loan Commitment Fee (as defined in Appendix A to the Original Participation Agreement).

“Loan Default” means an event, which with the giving of notice or lapse of time or both, would become a Loan Event of Default.

“Loan Documents” means the Participation Agreement, Notes and Security Documents.

“Loan Event of Default” has the meaning set forth in section 5.10 of the Participation Agreement.

“Majority Lenders” means Lenders in the aggregate holding Notes representing more than 50% of the aggregate outstanding principal balances of the Loans with each Lender being able to vote all or any portion of its outstanding principal balance.

“Material Obligation” means any capitalized lease, derivative instrument or Guaranty Obligation.

“Maturity Date” for each Loan means the earlier of (a) the last day of the third Renewal Period for the Items of Equipment financed by such Loans and (b) such earlier date on which such Loan becomes due and payable under the Participation Agreement.

“Maximum Obligor Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligor Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Maximum Obligee Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligee Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Multi-Currency Credit Agreement” means the Amended and Restated Multi-Currency, Multi-Option Credit Agreement dated as of August 14, 2002 among Obligor, as “Borrower,” JPMorgan Chase Bank, a New York banking corporation, as “Administrative Agent” and the several lenders party thereto, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, and if such is no longer in effect, any other credit agreement or loan agreement which provides Obligor and all or some of its subsidiaries with their primary source of working capital borrowings and if there is no such credit agreement or loan in effect then such last agreement or loan as in effect immediately prior to its termination or expiration.

“Multi-Currency Negative Covenants” means each and every financial and negative covenant contained in the Multi-Currency Credit Agreement (other than covenants (a) for the maintenance of a ratio of Consolidated Total Debt to Consolidated Capitalization, (b) for the maintenance of an Interest Coverage Ratio or (c) restricting mergers, consolidations, amalgamations, liquidation, winding up or dissolutions) as such covenants are in effect from time to time, which, as of the date hereof, are contained in Section 9 of the Multi-Currency Credit Agreement.

“Net Proceeds of Sale” means with respect to each Item of Equipment sold by Corporate Obligee to a third party pursuant to Section 25.3 of the Equipment Agreement, the net amount of the proceeds of sale of such Item, after deducting from the gross proceeds of such sale (a) all sales taxes and other taxes (excluding income taxes on or measured by Corporate Obligee’s income) as may be applicable to the sale or transfer of such Item, (b) all fees, costs and expenses of such sale incurred by Obligee and (b) any other amounts for which, if not paid, Corporate Obligee would be liable or which, if not paid, would constitute a Lien on such Item.

“Non-Renewal Item of Equipment” means each Item of Equipment with respect to which the Equipment Agreement is not renewed at the end of the Basic Term or any Renewal Term pursuant to timely notice to Corporate Obligee in accordance with the provisions of Section 25.1 of the Equipment Agreement.

“Notes” means the collective reference to the A Notes and the B Notes.

“Obligees” means, collectively, Trust Obligee and Corporate Obligee, and each of their permitted successors and assigns.

“Obligee Indemnified Person” means each of Trust Company, Owner Participant, Lenders, Agent, Security Trustee and any Assignee, their successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Obligee Property” means all of the estate, right, title and interest of Trust Obligee and Corporate Obligee in and to the Equipment, the Participation Agreement, the Equipment Agreement and the other Operative Documents, and all documents related hereto and to the Equipment, and all proceeds thereof, including, without limitation, all Equipment Payments, insurance proceeds and Supplemental Payments, but excluding any Excepted Payments.

“Obligor” means Harman International Industries, Incorporated, a Delaware corporation, and its permitted successors and assigns.

“Obligor Indemnified Person” means each Obligee Indemnified Person and each Obligee, its successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Operative Documents” means the Participation Agreement, the Receivables Purchase Agreement, the Notes, the Equipment Agreement, all Equipment Agreement Supplements, the Trust Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and the Security Documents and in each case, all exhibits, schedules and supplements thereto, and all notices, consents, certificates and other documents from time to time issued or entered into pursuant to or in connection therewith; in each case as amended and modified from time to time.

“Optional Alteration” has the meaning given set forth in Section 12 of the Equipment Agreement.

“Original Agent” means Commerzbank, acting in the capacity as “Agent” under the Original Participation Agreement.

“Original Equipment” means the Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Equipment Agreement” means the Equipment Leasing Agreement dated as of September 30, 1999 between the Original Obligee, as “Obligee”, and Obligor, as “Obligor”, as amended prior to the Restructuring Date.

“Original Issuer” means Four Winds Funding Corporation, a Delaware corporation, as “Issuer” under the Liquidity Agreement.

“Original Items of Equipment” means the Items of Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Lender” means Four Winds Funding Corporation, a Delaware corporation, as “Lender” under the Original Operative Documents.

“Original Loans” means each Loan (as defined in Appendix A to the Original Participation Agreement) made by Original Lender to Original Obligee under the Original Operative Documents.

“Original Notes” means the collective reference to the Notes (as defined in Appendix A to the Original Participation Agreement) issued by Original Obligee to Original Lender to evidence the Original Loans made to it by Original Lender under the Original Operative Documents.

“Original Obligee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), not in its individual capacity but solely as trustee under the Original Trust Agreement.

“Original Operative Documents” means the Operative Documents (as defined in Appendix A to the Original Participation Agreement).

“Original Owner Participant” means Bank of Tokyo-Mitsubishi Trust Company, a New York trust company.

“Original Owner Trustee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), acting in the capacity as “Owner Trustee” under the Original Trust Agreement.

“Original Participation Agreement” means the Participation Agreement dated as of September 30, 1999 between Obligor, Original Obligee, Original Lender, Original Agent, Original Security Trustee and LC Issuer.

“Original Security Trustee” means Commerzbank, acting in the capacity as “Security Trustee” under the Original Participation Agreement.

“Original Trust Agreement” means that certain Trust Agreement by and between Original Owner Trustee and Original Owner Participant, dated as of September 30, 1999, which agreement has been terminated pursuant to the Assumption and Revocation Agreement.

“Original Trust Estate” means the Trust Estate (as defined in Appendix A to the Original Participation Agreement).

“Original Trust Purchase Agreement” means the Purchase, Assignment and Assumption Agreement dated as of June 30, 2003, between Original Owner Participant, as “Seller”, and Corporate Obligee, as “Purchaser”, a copy of which is attached as Exhibit A to the Participation Agreement.

“Outstanding Debt Amount” with respect to each Item of Equipment means the Debt Component therefor less the aggregate of all Debt Amortization Payments, all payments on account of Casualty Loss Value and all Deficiency payments and all payments made by Obligor to Corporate Obligee in accordance with Section 26.2 of the Equipment Agreement paid by Obligor to Corporate Obligee with respect to such Item.

“Overdue Rate” means the Applicable Debt Rate at the time in effect plus two (2) percent (200 basis points).

“Overpayment Memorandum” means that certain memorandum dated June 30, 2003 from Greg Henry of Harman International Industries, Incorporated to the A Lenders.

“Owner Participant” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Participation Agreement” means the Amended and Restated Participation Agreement dated as of June 30, 2003 among Obligor, Corporate Obligee, Trust Obligee, each Lender, Owner Participant, Agent and Security Trustee, as amended and modified from time to time in accordance with the terms thereof.

“Payment and Amortization Schedule” for each Loan means the payment and amortization scheduled attached to the Note relating to and evidencing such Loan.

“Payment Date” the 20^th of each June, September, December and March , provided however, if any such date is not a LIBOR Banking Day, then the Payment Date shall be the next LIBOR Banking Day.

“Permitted Assignee” means any “accredited investor” under Rule 501(a) of the Securities Act of 1933, as amended, which is either a bank, insurance company, mutual fund, trust company, employee benefit plan (as defined in ERISA), or savings and loan company, in each case having total assets of at least $200,000,000 or Corporate Obligee upon exercise of the Corporate Obligee Option.

“Permitted Lien” means (a) any Liens created or granted by (i) Corporate Obligee to Security Trustee with respect to the Equipment Collateral under or in connection with the Participation Agreement, or (ii) by Trust Obligee to Security Trustee with respect to the Transferred Property Collateral under or in connection with the Participation Agreement, (b) any Liens created or granted by Original Obligee with respect to the Collateral (as defined in the Original Operative Documents) under or in connection with the Original Participation Agreement, which Liens have been assumed by Corporate Obligee, Trust Obligee, or both, (c) any interest of Obligor with respect to the Collateral under the Participation Agreement or the Equipment Agreement, and (d) any Lien of a mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings.

“Permitted Transferee” has the meaning specified in Section 10.7(b) of the Participation Agreement.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, trustee(s) of a trust, unincorporated organization, or government or Governmental Entity, agency or political subdivision thereof.

“Pre Effective-Date Financing Statement” means any UCC financing statement filed prior to July 1, 2001 in accordance with the Original Operative Documents to perfect a security interest granted by a Subsidiary of Obligor to Obligor or by Obligor to Original Obligee or by Original Obligee to Original Security Trustee under the Original Equipment Agreement or the Original Participation Agreement, which UCC financing statements were not filed in such Subsidiary’s, Obligor’s or Original Obligee’s UCC Location.

“Prepayment Premium” means with respect to any repayment of a Loan in whole or in part on any day other than a Payment Date the amount (if any) by which (a) the amount of interest payable on the next Payment Date on the amount of the Loan which is repaid, but for it having been so repaid, exceeds (b) the aggregate of the amount of interest accrued to the date such amount is repaid and an amount equal to AR x D x R, where AR equals the amount which is repaid, D equals the number of days from the date of repayment to the next Payment Date and R equals the rate per annum at which the Lender concerned is offering or would offer in the London Interbank Market (based on commercially reasonable criteria) for Dollar deposits of leading banks in an amount substantially equal in the amount repaid for a period from such date to the next Payment Date.

“Program Administration Letter” means the Program Administration Letter (as defined in Appendix A to the Original Participation Agreement).

“Receivables Purchase Agreement” means the Financing Agreement Rights Purchase Agreement dated as of June 30, 2003 between Corporate Obligee, as seller, and Trust Obligee, as purchaser, a copy of which is attached as Exhibit C to the Participation Agreement.

“Redelivery Location” means, with respect to any Item of Equipment that is to be returned by Obligor to Corporate Obligee, a location or locations designated by Corporate Obligee.

“Related Exhibit A” means, with respect to an Item of Equipment, the particular numbered Exhibit A currently attached to the Original Equipment Agreement and made a part thereof to which such Item relates as specified in Section 4 of the Equipment Agreement.

“Related Equipment Agreement Supplement” means, with respect to an Item of Equipment, the particular numbered Equipment Agreement Supplement executed and delivered prior to the Restructuring Date in connection with the Original Operative Documents on which that Item is identified.

“Renewal Term” for each Item of Equipment means each twelve (12) month period following the end of the Basic Term for such Item with respect to which Obligor has the option to renew the Equipment Agreement pursuant to Section 25.1 of the Equipment Agreement, terminating on the Payment Date that occurs in the twelfth month of such Renewal Term.

“Required Alteration” has the meaning set forth in Section 12 of the Equipment Agreement.

“Responsible Officer” means the chief executive officer, the president, the chief financial officer, the Chief operating officer or the vice president for financial or legal affairs of Obligor.

“Restricted Subsidiary” means any Subsidiary identified as a “Restricted Subsidiary” in the Multi-Currency Credit Agreement.

“Restructuring Date” means June 30, 2003.

“Risk Allocation Agreement” means the Risk Allocation Agreement dated as of September 30, 1999 by and among Commerzbank Aktiengesellschaft, New York Branch and each other party referred to therein as a “Purchaser” and Commerzbank Aktiengesellschaft, New York Branch, as agent for itself and the other Purchasers thereunder.

“Secured Obligations” has the meaning set forth in Section 7 of the Participation Agreement.

“Security Documents” means the UCC financing statements referenced in Section 2.1(g) of the Participation Agreement, the French Commercial Pledge Agreements, the German Chattel Mortgage Agreements, the English Debentures, and Subsidiary Equipment Agreements.

“Security Trustee” means Bank of Tokyo-Mitsubishi Trust Company. 

“Special Non-Cash Charges” means any non-cash, non recurring restructuring charges in accordance with GAAP and non-cash charges relating to the implementation of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets, issued by the Financial Accounting Standards Board.

“Standard & Poor’s” means Standard & Poor’s Rating Service, a Division of McGraw Hill Companies, Inc. and any successor or assign.

“Subsidiary” means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“Subsidiary Equipment Agreement” has the meaning set forth in Section 14.1 of the Equipment Agreement.

“Supplemental Payments” means all amounts, liabilities and obligations which Obligor assumes or agrees to pay hereunder to Corporate Obligee or others, including payments of Casualty Loss Value, Estimated Residual Value and indemnities, but excluding Equipment Payment.

“Taxes” has the meaning set forth in Section 8.2 of the Participation Agreement.

“Term” for each Item of Equipment means the period from and including the Acceptance Date thereof and ending on the last day of the Basic Term thereof or, if renewed, the last Renewal Term thereof.

“Termination Date” for each Item of Equipment means the last day of the Basic Term therefor, or if the Term of such Item has been renewed pursuant to Section 25.1 of the Equipment Agreement, the last day of the then current Renewal Term of such Item.

“Transfer Option Amount” has the meaning set forth in Section 25.2 of the Equipment Agreement.

“Transferred Property” has the meaning set forth in Section 1 of the Receivables Purchase Agreement.

“Transferred Property Collateral” has the meaning set forth in Section 7.1(b) of the Participation Agreement.

“Trust” means the trust created by the Trust Agreement.

“Trust Agreement” means that certain Trust Agreement by and between Trust Company and Owner Participant, dated as of June 30, 2003, as amended, supplemented or modified from time to time.

“Trust Collateral” has the meaning set forth in Section 7.1(c) of the Participation Agreement.

“Trust Estate” has the meaning specified in Section 2.6 of the Trust Agreement.

“Trust Company” means U.S. Bank National Association, a national banking association, and its successors and assigns, each in its individual capacity.

“Trust Company Liabilities” means any claims or liabilities resulting from or arising out of the following (i) the willful misconduct or gross negligence of Trust Company; (ii) the liabilities that may result from the breach or inaccuracy of any of the Trust Company’s representations, warranties or agreements made in its individual capacity in Sections 5.6 and 5.14 of the Trust Agreement, or in any Operative Documents or any document delivered in connection therewith; (iii) any failure by Trust Company to perform the obligations expressly undertaken in its individual capacity in the Trust Agreement or in any Operative Document or any document delivered in connection therewith; (iv) Taxes based on or measured by any fees, commissions or compensation received by Trust Company for acting as trustee in connection with any of the transactions contemplated by the Operative Documents; or (v) any failure by Trust Company to use ordinary care in the receipt and disbursement of fund.

“Trust Obligee” means U.S. Bank National Association, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement, and its permitted successors and assigns.

“UCC” means the Uniform Commercial Code, as in effect in any applicable jurisdiction.

“UCC Location” means the jurisdiction in which a “debtor” is located (or deemed located) under the UCC.

“Unamortized Debt Balance” for any Item of Equipment, means the amount calculated by multiplying the unpaid principal balance of the Loans made with respect to such Item of Equipment by a fraction, the numerator of which is the Acquisition Cost of such Item of Equipment as set forth on the Related Equipment Agreement Supplement and the denominator of which is the aggregate of all Acquisition Costs for Items of Equipment as set forth on the Related Equipment Agreement Supplement (including such Item of Equipment with respect to which such calculation is being made) and at the time subject to the Equipment Agreement.

When used in any Operative Document the words “this Agreement”, “herein”, “hereunder”, “hereof” or other like words mean and include such Operative Document and each amendment and supplement thereto, and with respect to the Equipment Agreement, each Exhibit A, each Equipment Agreement Supplement.  All references to sections, schedules and exhibits in any Operative Document are to sections, schedules and exhibits in or to such Operative Document unless otherwise specified.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in effect from time to time in the United States.  All words importing any gender shall be deemed to include the other gender.  All references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to.  Unless otherwise specified, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments, modifications and supplements thereto.

EX-10.3

Exhibit 10.3

AMENDED AND RESTATED PARTICIPATION AGREEMENT

among

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
as Obligor

U.S. BANK NATIONAL ASSOCIATION
in its individual capacity and as trustee,
as Trust Obligee

BTM CAPITAL CORPORATION
as Corporate Obligee and Owner Participant

THE FINANCIAL INSTITUTIONS NAMED HEREIN AS LENDERS
as Lenders

BANK OF TOKYO-MITSUBISHI TRUST COMPANY
as Agent and Security Trustee

Dated as of June 30, 2003
(1999)

TABLE OF CONTENTS

					Page
	1.	Definitions.			2
	2.	Representations and Warranties.			2
		2.1.	Obligor Representations and Warranties.		2
		2.2.	Trust Obligee Representations and Warranties.		6
		2.3.	Further Trust Obligee Representations and Warranties.		7
		2.4.	Trust Company Representations and Warranties		8
		2.5.	Corporate Obligee Representations and Warranties.		9
		2.6.	[Reserved.]		10
	3.	[Reserved.]			10
	4.	Restructuring of Original Loans.			10
		4.1.	Equity Components.		10
		4.2.	Amended and Restated Transaction.		11
		4.3.	Rights in Original Equipment.		12
		4.4.	Original Conditions.		12
	5.	Amount and Terms of Loans.			12
		5.1.	Acknowledgment of Original Loans.		12
		5.2.	A Loans and B Loans.		12
		5.3.	Notes.		13
		5.4.	[Reserved.]		14
		5.5.	Payments.		14
		5.6.	Prepayments Limited.		17
		5.7.	Mandatory Prepayments.		17
		5.8.	Application of Prepayments.		17
		5.9.	Recalculation of Loan Payments and Amortization Schedule.		18
		5.10.	Loan Events of Default.		18
		5.11.	Remedies of Lenders.		20
	6.	Covenants.			23
		6.1.	Obligee Covenants.		23
		6.2.	Further Obligee Covenants.		25
		6.3.	Additional Trust Company Covenants.		26
		6.4.	Owner Participant Covenants.		26
		6.5.	Covenants of the Lenders and Security Trustee.		26
		6.6.	Obligor Covenants.		27
		6.7.	Obligor Negative Covenants.		28
		6.8.	Covenants of Lenders, Obligees, Agent and Security Trustee, Trust Company and Owner Participant.		29
		6.9.	Warranty Disclaimers.		29
	7.	Security.			30
		7.1.	Security Interest.		30
		7.2.	Consent and Agreement of Obligor.		31
		7.3.			32
			7.3.1	Further Corporate Obligee Covenants.	32
			7.3.2	Further Trust Obligee Covenants.	32
		7.4.	Further Assurances.		33
		7.5.	Termination.		33
		7.6.	Other Security.		33
		7.7.	Power of Attorney.		34
		7.8.	Assignment of Rights.		34
		7.9.	Transfer of the Collateral by Lenders.		34
		7.9.	transferee’s distributive share of the transfer price.		35
		7.10.	No Segregation of Monies; No Interest.		35
		7.11.	Distribution of Moneys.		35
		7.12.	Payments after a Loan Event of Default.		36
		7.13.	Application of Certain Other Payments.		37
		7.14.	Other Payments.		37
		7.15.	Retention of Amounts by Security Trustee.		37
	8.	Indemnities.			37
		8.1.	Obligor General Indemnification.		37
		8.2.	Obligor General Tax Indemnity.		39
		8.3.	[Intentionally Deleted.]		42
		8.4.	Survival.		42
	9.	Agent for Lenders.			42
		9.1.	Authorization and Action.		42
		9.2.	Agent’s Reliance, etc.		42
		9.3.	Agents and Affiliates.		43
		9.4.	Lenders Credit Decision.		43
		9.5.	Indemnification.		43
		9.6.	Successor Agent.		44
		9.7.	Holder List; Ownership of Notes.		44
	10.	Miscellaneous.			45
		10.1.	Expenses and Recording.		45
		10.2.	Modification.		46
		10.3.	Governing Law, Jurisdiction and Venue; Waiver of Jury.		46
		10.4.	Notices.		46
		10.5.	Interest in the Equipment.		47
		10.6.	Descriptive Headings, etc.		48
		10.7.	Benefit of Agreement; Assignment.		48
		10.8.	Execution and Effectiveness.		49
		10.9.	Registration.		49
		10.10.	Confidentiality.		50
		10.11.	Survival.		51
		10.12.	Severability.		51
		10.13.	No Broker.		51
		10.14.	Performance by Lenders.		51
		10.15.	Payment from Collateral; Limited Recourse.		51
		10.16.	No Proceedings.		52
		10.17.	Concerning Trust Company.		52
		10.18.	Waiver for Amendment and Restatement and Further Assurances.		52
Schedule 1		[Reserved]
Schedule 2		LIBOR Margins
Schedule 3		Amortization Schedule for the A Loans and the B Loans
Schedule 4		Initial Addresses of Lenders
Schedule 5		Form of Assignment and Acceptance Agreement
Exhibit A		Copy of Original Trust Purchase Agreement
Exhibit B		Copy of Assumption and Revocation Agreement
Exhibit C		Receivables Purchase Agreement
Exhibit D-1		Form of A Note
Exhibit D-2		Form of B Note

AMENDED AND RESTATED
PARTICIPATION AGREEMENT

This AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of June 30, 2003 (together with all amendments and supplements hereto, this “Agreement”) is among HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (together with its successors and permitted assigns “Obligor”), U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee (together with its successors and permitted assigns, “Trust Obligee”) and in its individual capacity, but only where so specified, (together with its successors and permitted assigns, “Trust Company”), BTM CAPITAL CORPORATION, a Delaware corporation (as successor and assignee of U.S. Bank National Association, successor-in-interest to State Street Bank and Trust Company of Connecticut, National Association, as “Owner Trustee”) (together with its successors and permitted assigns, “Corporate Obligee” and, together with Trust Obligee, collectively, “Obligees”), THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, DEN DANSKE BANK A/S, Cayman Island Branch, HSBC BANK USA and THE BANK OF NOVA SCOTIA (each as assignee of Four Winds Funding Corporation) (together with their respective successors and assigns, each as a “Lender” and collectively, the “Lenders”), BANK OF TOKYO-MITSUBISHI TRUST COMPANY, the New York trust company (as assignee of Commerzbank Aktiengesellschaft, New York Branch), as agent for Lenders (together with its successors and permitted assigns, “Agent”) and as security trustee (together with its successors and permitted assigns, “Security Trustee”) and BTM CAPITAL CORPORATION, a Delaware corporation, (together with its successors and permitted assigns, the “Owner Participant”).

W I T N E S S E T H:

WHEREAS, the Original Owner Trustee under the Original Trust Agreement financed certain manufacturing equipment pursuant to the Original Participation Agreement and the Original Equipment Agreement;

WHEREAS, on the date hereof, pursuant to the Original Trust Purchase Agreement, Corporate Obligee shall acquire the beneficial interests of the Original Owner Participant under the Original Trust Agreement with respect to which Original Owner Trustee acted as trustee under the existing financing evidenced by the Original Participation Agreement and the Original Equipment Agreement;

WHEREAS, pursuant to the Assumption and Revocation Agreement, Original Owner Trustee assigned to Corporate Obligee and Corporate Obligee assumed from Original Owner Trustee all of Original Owner Trustee’s right, title, interest and obligations in, to and under the Original Trust Agreement and the Original Trust Estate, including, without limitation, all of Original Owner Trustee’s right, title, interest and obligations under the Original Notes evidencing the Original Loans, and thereupon Corporate Obligee terminated the Original Trust Agreement and revoked the trust created thereunder;

WHEREAS, the Lenders, Trust Obligee and Corporate Obligee have each agreed to restructure the Original Loans into (a) A Loans to Corporate Obligee, subject to the conditions in this Agreement, and (b) B Loans to Corporate Obligee, subject to the conditions in this Agreement;

WHEREAS, Corporate Obligee acquired its right, title and interest in, to and under the Original Trust Agreement and the Original Trust Estate subject to the Liens of the Security Trustee, which Liens are for the benefit of all Lenders to secure the A Notes and B Notes in accordance with the terms hereof;

WHEREAS, pursuant to the Receivables Purchase Agreement, Trust Obligee purchased from Corporate Obligee, and Corporate Obligee sold to Trust Obligee, the Transferred Property subject to the Liens of the A Notes with the purchase price therefor being the assumption by Trust Obligee from Corporate Obligee of the A Loans;

WHEREAS, the Lenders (or their predecessor-in-interest) acquired their respective undivided ownership interests in and to the Original Notes and the Original Loans pursuant to the Liquidity Agreement and the other Original Operative Documents; and

WHEREAS, the parties hereto desire that this Agreement amend and restate the Original Participation Agreement in its entirety to consummate the transactions described in the foregoing recitals and for certain other purposes.

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree to amend and restate the Original Participation Agreement in its entirety as follows:

Definitions.

Unless the context otherwise requires, capitalized terms used herein and not otherwise defined herein shall have the meanings set forth or referred to in Appendix A to this Agreement.

Representations and Warranties.

2.1       Obligor Representations and Warranties.  Obligor hereby represents and warrants as of the Restructuring Date for the benefit of each other party hereto that:

                                    (a)        Obligor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation set forth above, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party and is qualified to do business in and is in good standing in each state or other jurisdiction in which the nature of its business makes such qualification necessary, except where failure to so qualify would not have a material adverse effect on Obligor;

                                    (b)        the financing of the Equipment, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Obligor with the terms hereof and thereof and the payments and performance by Obligor of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate corporate action taken by Obligor, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Obligor’s certificate of incorporation, its by-laws or any provisions relating to the capital stock of Obligor, and (iii) do not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Obligor is a party, or by or under which Obligor or any of Obligor’s property is bound except where such violation or breach would not be expected to have a material adverse effect on Obligor and would not affect Obligees’ respective interests in the Obligee Property, Security Trustee’s interest in the Collateral or any party’s remedies under the Operative Documents, or conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument except where such conflict, breach or default would not be expected to have a material adverse effect on Obligor and would not affect Obligees’ respective interests in the Obligee Property, Security Trustee’s interest in the Collateral or any party’s remedies under the Operative Documents, or result in the creation or imposition of any Lien, other than Permitted Liens, upon any of Obligor’s property or assets and (iv) do not require, on the part of Obligor or any shareholder or Subsidiary thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Governmental Entity except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

                                    (c )       each Operative Document to which it is a party and each Security Document to which a Subsidiary of Obligor is a party has been executed by the duly authorized officer or officers of Obligor or such Subsidiary, respectively, and delivered to the other parties thereto and (assuming due authorization, execution and delivery of the Operative Documents by the other parties thereto) constitutes, or when executed by the duly authorized officer or officers of Obligor or such Subsidiary and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Obligor or such Subsidiary, enforceable against Obligor or such Subsidiary in accordance with their respective terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

                        (d)        Immediately prior to giving effect to each Cross-Receipt under the Original Operative Documents therefor, Obligor had good and marketable title to each Item of Equipment specified in such Cross-Receipt, and Obligor has not granted any Lien on any Item of Equipment or the proceeds thereof, the Equipment Agreement or the insurance required under the Equipment Agreement other than Liens granted by it under the Operative Documents, and no Lien, other than Permitted Liens, has attached to any Item of Equipment, the proceeds thereof or the Equipment Agreement or the insurances required under the Equipment Agreement, or in any manner has affected adversely Corporate Obligee’s, Trust Obligee’s or Security Trustee’s right, title and interest therein;

                                    (e)        each Item of Equipment is personal property and not a fixture attached to realty under Applicable Law, and each Item of Equipment that has a serial number or other identification number set forth therefor on the Related Equipment Agreement Supplement has such serial number or other identification number permanently affixed thereto.

                                    (f)         (i) when the Subsidiary Equipment Agreements were executed, the security interests in the Equipment granted to Obligor by the Subsidiaries pursuant to the Subsidiary Equipment Agreements, (ii) the security interests in the Equipment and in the Subsidiary Equipment Agreements granted to Corporate Obligee by Obligor pursuant to the Equipment Agreement and (iii) the security interests in the Equipment Collateral granted to Security Trustee pursuant to this Agreement, in each case constitute a first priority Lien with respect to such Equipment Collateral under Applicable Law, and Obligor, Corporate Obligee and Security Trustee shall be entitled to all of the rights, benefits and priorities provided to a holder of a first priority Lien under Applicable Law.

                                    (g)        for each Item of Equipment located in the United States for which a serial number or other identification number is identified on the Related Equipment Agreement Supplement, upon the filing of:

(i)         appropriately completed UCC financing statements with the Equipment described in the manner described on the Related Equipment Agreement Supplement (1) naming the relevant Subsidiary of Obligor that is a party to a Subsidiary Equipment Agreement as debtor and the Obligor as secured party, with the Secretary of State of the State of such Subsidiary’s UCC Location, (2) naming Obligor as debtor and Corporate Obligee as secured party, with the Secretary of State of the State of Obligor’s UCC Location, and (3) naming Corporate Obligee as debtor and the Security Trustee as secured party, with the Secretary of State of the State of Corporate Obligee’s UCC Location;

(ii)        appropriately completed UCC “in-lieu” financing statements continuing the effectiveness of the Pre Effective Date Financing Statements (x) naming a Subsidiary of Obligor that is a party to a Subsidiary Equipment Agreement as debtor and Obligor as secured party, filed with the Secretary of State of the relevant Subsidiary of Obligor’s UCC Location, (y) naming Obligor as debtor and Original Obligee as secured party, filed with the Secretary of State of the State of Obligor’s UCC Location and (z) naming Original Obligee as debtor and Original Security Trustee as secured party, filed with the Secretary of State of the State of Original Obligee’s UCC Location;

(iii)       appropriately completed UCC-3 financing statements assigning the Liens evidenced by the UCC financing statements referenced in (ii) above (x) naming Original Obligee as secured party from Original Obligee to and for the benefit of Corporate Obligee and (v) naming Original Security Trustee as secured party to and for the benefit of Security Trustee in each case filed with the Secretary of State of the State of the relevant UCC Location;

(iv)       an appropriately completed UCC-3 financing statements amending the UCC financing statements referenced in (ii) above naming Original Obligee as debtor to reflect Corporate Obligee as the debtor for the benefit of Security Trustee and filed with the Secretary of State of the State of Corporate Obligee’s UCC Location,

the security interest in each such Item of Equipment granted to Obligor by such Subsidiary pursuant to the related Subsidiary Equipment Agreement, the security interests in such Item of Equipment and in the related Subsidiary Equipment Agreement granted by Obligor to Corporate Obligee pursuant to the Equipment Agreement, and the security interests in such Item of Equipment and in the Equipment Agreement granted by Corporate Obligee to Security Trustee pursuant to this Agreement, shall in each case constitute a first priority perfected Lien under the UCC (as applicable) with respect to such Equipment, Subsidiary Equipment Agreement and Equipment Agreement under Applicable Law and Obligor, Corporate Obligee and Security Trustee shall be entitled to all of the rights and benefits and priorities provided to a holder of a perfected first priority Lien under Applicable Law, and on Restructuring Date, all recordations and filings shall have been accomplished with respect to this Agreement in each UCC jurisdiction as may be required by Applicable Law to establish and perfect Obligor’s Liens granted by such Subsidiary of Obligor, Corporate Obligee’s Liens granted by Obligor and Security Trustee’s Liens granted by Corporate Obligee in and to such Item of Equipment, such Subsidiary Equipment Agreement and the Equipment Agreement, and any giving of notice or any other action to such end required by Applicable Law has been given or taken;

                        (h)        for each Item of Equipment located in the United States for which a serial number or other identification number is identified on the Related Equipment Agreement Supplement, (i) the security interests in the Equipment Collateral granted by Corporate Obligee to Security Trustee pursuant to this Agreement constitutes a first priority Lien with respect to the Equipment Collateral under Applicable Law, (ii) upon the filing of appropriately completed UCC financing statement with the Equipment described in the manner described on the Related Equipment Agreement Supplement for the benefit of Security Trustee and filed with the Secretary of State of the State of Corporate Obligee’s UCC Location, the security interests in Corporate Obligee’s interest in each such Item of Equipment granted to Security Trustee pursuant to this Agreement constitutes a first priority perfected Lien with respect to such interest in such Items of Equipment under Applicable Law and Security Trustee shall be entitled to all of the rights and benefits and priorities provided to a holder of a perfected first priority Lien under Applicable Law, and (iii) all recordations and filings shall be accomplished with respect to this Agreement in each jurisdiction in the United States as may be required by law to establish and perfect Security Trustee’s rights in and to such Items of Equipment located in the United States and in the Equipment Agreement and any giving of notice or any other action such end required by Applicable Law has been given or taken;

                        (i)         Obligor’s UCC Location is in the State of Delaware;

                        (j)         no Equipment Agreement Default or Equipment Agreement Event of Default has occurred and is continuing and no Event of Loss or event which with the passage of time, would become or Event of Loss has occurred;

                        (k)        there is no litigation or other proceeding now pending or, to the Obligor’s knowledge, threatened, against or affecting Obligor or any Subsidiary thereof, in any court or before any regulatory commission, board or other administrative governmental agency which will adversely affect or impair the right, title or interest of Corporate Obligee to any Item of Equipment, the Equipment Agreement or any other Operative Document, or the security interest of Security Trustee in any Item of Equipment or the Equipment Agreement, this Agreement or any Operative Document, or which, if decided adversely to Obligor or such Subsidiary, will materially adversely affect the business operations or financial condition of Obligor;

                        (l)         without limiting the generality of the foregoing, the retention of possession by Obligor of the Items of Equipment financed hereunder following the transfer of an interest therein to Corporate Obligee shall not be deemed fraudulent or void as against any present or future creditor of Obligor under Applicable Law, nor would any subsequent bona fide purchaser from Obligor of such Items of Equipment, in the event of any attempted subsequent transfer thereof by Obligor, acquire any title to or rights therein superior to Corporate Obligee’s right, title or interest therein;

                        (m)       Obligor has delivered to each Obligee, Owner Participant, each Lender and Agent its most recent annual report on Form 10-K and quarterly report on Form 10-Q and they are complete and correct in all material respects, accurately present the financial condition of Obligor on the dates for which, and the results of its operations for the periods for which, the same have been furnished and have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods covered thereby; and there has been no material adverse change in the condition of Obligor and its Subsidiaries taken as a whole, financial or otherwise, since the date of such Form 10-Q;

                        (n)        Obligor has not entered into the transactions contemplated herein, directly or indirectly, in connection with any arrangement in any way involving any employee benefit plan or plans or related trust to which it is a party in interest or disqualified person, all within the meaning of ERISA, and the Code, and, assuming the accuracy of the representations made in Sections 2.5(f) and (g) and 2.6(a) and (b) herein, the execution and delivery of, and the consummation of the transactions contemplated by, the Operative Documents, will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code;

                        (o)        Obligor is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended;

                        (p)        Obligor delivered to Original Obligee a true, correct and complete Certificate of Costs evidencing payment for the Items of Equipment specified in such Certificate of Costs financed by Original Obligee;

                        (q)        payment in full has been made by or on behalf of Obligor to the vendor of each Item of Equipment; and

                        (r)        each Item of Equipment is leased to a Subsidiary of Obligor, and the identification of such Subsidiary, the location of its chief executive office and the location of such Item of Equipment are each identified on the Subsidiary Equipment Agreement.

            2.2       Trust Obligee Representations and Warranties.  Trust Obligee hereby represents and warrants as of the Restructuring Date for the benefit of each party hereto that:

                        (a)        Trust Obligee is a trust duly established and validly existing under the laws of the State of Connecticut, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party;

                        (b)        the financing of the Transferred Property, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Trust Obligee with the terms hereof and thereof and the payments and performance by Trust Obligee of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate trust action taken by Trust Obligee, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Trust Obligee’s Trust Agreement, (iii) will not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Trust Obligee is a party, or by or under which Trust Obligee or any of Trust Obligee’s property is bound, or be in conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument, or result in the creation or imposition of any Lien, other than Permitted Liens, upon any of Trust Obligee’s property or assets, and (iv) will not require, on the part of the Trust Company or any Affiliate thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any United States federal or Connecticut local governmental or public commission, board, authority or agency except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

            (c)        each Operative Document to which it is a party has been executed by the duly authorized officer or officers of the Trust Company on behalf of the Trust Obligee and delivered to the other parties thereto and constitutes, or when executed by the duly authorized officer or officers of the Trust Company on behalf of the Trust Obligee and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Trust Obligee, enforceable against it in accordance with their terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

            (d)        there are no outstanding judgments against Trust Obligee and no pending or threatened action (known to Trust Obligee) or proceeding affecting Trust Obligee before any court, governmental agency or arbitrator, in any jurisdiction;

            (e)        there is no tax, levy, impost, deduction, charge or withholding which may be imposed on or asserted against the Transferred Property Collateral or any part thereof or any interest therein, or against Lenders, Agent or Security Trustee under the laws of the State of Connecticut either (i) on or by virtue of the execution or delivery of Operative Documents or any other document contemplated thereby, or (ii) on any payment to be made by Trust Obligee pursuant to the Loan Documents or any other document contemplated thereby to which Trust Obligee is a party; and

            (f)         Trust Obligee has no indebtedness or other liabilities, whether contingent or otherwise, other than its obligations under and as contemplated by the Operative Documents.

            2.3.      Further Trust Obligee Representations and Warranties.  Trust Obligee hereby represents and warrants as of the Restructuring Date for the benefit of Lenders, Agent and Security Trustee that:

            (a)        it has all rights and interests in the Transferred Property Collateral, free and clear of all Liens other than Permitted Liens;

            (b)        (i) the security interests in the Transferred Property Collateral granted by it to Security Trustee pursuant to this Agreement constitute a Lien with respect to such Transferred Property Collateral under Applicable Law, and (ii) all recordations and filings shall have been accomplished with respect to this Agreement in each jurisdiction in the United States as may be required by law to establish and perfect Security Trustee’s rights in and to the Transferred Property Collateral and any giving of notice or any other action to such end required by Applicable Law has been given or taken;

            (c)        its UCC Location is in the State of Ohio; and

            (d)        it makes each of the representations and warranties made by it in each other Operative Document to which it is a party to, and for the benefit of, Lenders, Agent and Security Trustee as if the same were set forth in full herein.

            2.4.      Trust Company Representations and Warranties.  Trust Company hereby represents and warrants as of the Restructuring Date for the benefit of each of the parties hereto that:

                        (a)        it is a national banking association, duly organized, validly existing and in good standing under the laws of the United States of America, and has full power, authority and legal right under such laws to execute, deliver and perform its obligations under this Agreement and the Trust Agreement;

                        (b)        each of the Trust Agreement and (to the extent of the covenants, agreements, representations and warranties of Trust Company in its individual capacity contained herein) this Agreement has been duly executed and delivered by Trust Company, and (assuming due authorization, execution and delivery of the Trust Agreement by Owner Participant) the Trust Agreement and (to the extent of the covenants, agreements, representations and warranties of Trust Company in its individual capacity contained herein) this Agreement constitutes a legal, valid and binding obligation of Trust Company, enforceable against Trust Company in accordance with its terms;

                        (c)        neither the execution or delivery by Trust Company of the Trust Agreement or this Agreement nor the performance by Trust Company of its obligations hereunder or thereunder (i) conflicts or will conflict with or violate in any respect any applicable United States federal law governing the banking or trust powers of Trust Company or any Connecticut law applicable to or binding upon Trust Company or any of its Affiliates, or any of their respective properties, (ii) conflicts or will conflict with or violate Trust Company’s articles of association or by-laws, (iii) conflicts or will conflict with, or contravene, violate or result in a breach of, any indenture, mortgage, loan agreement, lease or any other material agreement or material instrument to which Trust Company or any of its Affiliates is a party or by which any of their respective properties is bound, (iv) results or will result in the creation or imposition of any Lien (other than Permitted Liens) on the Transferred Property Collateral, or (v) requires or will require, on the part of Trust Company or any Affiliate of Trust Company, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Government Entity governing the banking or trust powers of Trust Company, except for filings, if any, made pursuant to any notice reporting requirement applicable to it; provided, that no representation is made as to any laws, rules or regulations applicable to the particular nature of the Transferred Property Collateral;

            (d)        it is not in breach of any covenants or agreements made by it in the Trust Agreement or by it in its individual capacity in this Agreement;

            (e)        its UCC Location is in the State of Ohio; and

            (f)         there are no actions, suits or proceedings pending or, to the best knowledge of Trust Company, threatened before any court or by or before any other Government Entity, or any arbitrator, which (i) either individually or in the aggregate, would have a material adverse effect on the Trust Company or the Trust Estate or on the right, power or authority of Trust Company to perform its obligations under the Operative Documents to which it is, or is to become a party or on Trust Obligee’s ability to perform its obligations under any Operative Document to which it is, or is to become, a party or (ii) call into question the validity or the enforceability of any Operative Document.

            2.5.      Corporate Obligee Representations and Warranties.  Corporate Obligee represents and warrants as of the Restructuring Date for the benefit of each other party hereto that:

            (a)        Corporate Obligee is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party and is qualified to do business in, is in good standing in all material respects in, each state or other jurisdiction in which the nature of its business makes such qualification necessary, except where failure to so qualify would not have a material adverse effect on Corporate Obligee;

            (b)        the financing of the Equipment as contemplated hereby, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Corporate Obligee with the terms hereof and thereof and the payments and performance by Corporate Obligee of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate corporate action taken by Corporate Obligee, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Corporate Obligee’s certificate of incorporation (or equivalent document), its by-laws or any provisions relating to the capital stock of Corporate Obligee, and (iii) will not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Corporate Obligee is a party, or by or under which Corporate Obligee or any of Corporate Obligee’s property is bound, or be in conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument, or result in the creation or imposition of any Lien upon any of Corporate Obligee’s property or assets other than the Lien of the Security Trustee hereunder and any Permitted Liens, and (iv) will not require, on the part of Corporate Obligee or any Affiliate thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any United States federal or Delaware local governmental or public commission, board, authority or agency except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

            (c)        each Operative Document to which it is a party has been executed by the duly authorized officer or officers of Corporate Obligee and delivered to the other parties thereto and constitutes, or when executed by the duly authorized officer or officers of Corporate Obligee and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Corporate Obligee, enforceable in accordance with their terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

            (d)        Corporate Obligee is not in breach of any covenants or agreements made by it in this Agreement or in the Equipment Agreement or in its capacity as Owner Participant in the Trust Agreement;

            (e)        there are no actions, suits or proceedings pending or, to the best knowledge of Corporate Obligee, threatened before any court or by or before any other Government Entity, or any arbitrator, which (i) either individually or in the aggregate, would have a material adverse effect on the Equipment Collateral or on the right, power and authority of Corporate Obligee’s ability to perform its obligations under any Operative Document to which it is, or is to become, a party or (ii) call into question the validity thereof or the enforceability thereof in accordance with the terms thereof;

            (f)         no part of the funds used or to be used by it to make its investment in the Trust Estate contemplated hereby does or will constitute assets of an employee benefit plan, within the meaning of ERISA or any applicable regulation thereunder, or any assets or any plan, as defined in Section 4975(e)(1) of the Code; and

            (g)        Corporate Obligee has all rights and interests that Original Obligee had in each Item of Equipment (including the parts and components thereof) and the Equipment Collateral, free and clear of all Liens arising by, through or under Corporate Obligee other than the Permitted Liens;

            (h)        Security Trustee’s interests in the Equipment Agreement has been registered in accordance with Section 14.3 of the Equipment Agreement; and

            (i)         Corporate Obligee’s UCC Location is in the State of Delaware.

[Reserved.]

3.         [Reserved.]

4.         Restructuring of Original Loans.

            4.1.      Equity Components.  Pursuant to the Original Participation Agreement, the Original Owner Participant advanced Equity Components of each Item of Equipment and each party hereto hereby acknowledges and agrees that all such Equity Components so advanced have been fully and satisfactorily applied pursuant to and in accordance with the Original Operative Documents.

4.2.      Amended and Restated Transaction.  Each party hereto hereby:

                        (a)        acknowledges and agrees that (i) for the benefit of Original Obligee and Original Lender, Obligor transferred all of its right, title and interest in and to the Original Equipment to Original Obligee, pursuant to the Original Operative Documents; (ii) subject to the terms and conditions set forth in the Original Trust Purchase Agreement, a copy of which is attached hereto as Exhibit A, Original Owner Participant transferred all of its right, title and interest in and to the Original Trust Agreement and the Original Trust Estate to Corporate Obligee; and (iii) pursuant to the Assumption and Revocation Agreement, a copy of which is attached hereto as Exhibit B, Original Owner Trustee assigned (subject to the Liens of the Original Security Trustee) to Corporate Obligee, and Corporate Obligee assumed, all of Original Owner Trustee’s right, title, interest and obligations in, to and under the Original Trust Agreement and the Original Trust Estate, including, without limitation, all of Original Owner Trustee’s right, title, interest and obligations under the Original Operative Documents and under the Original Loans evidenced by the Original Notes, and thereupon Corporate Obligee terminated the Original Trust Agreement and revoked the trust created thereunder;

                        (b)        acknowledges and agrees that (i) the Lenders, Trust Obligee and Corporate Obligee have each agreed to restructure the Original Loans into (x) A Loans to Corporate Obligee, subject to the conditions in this Agreement, and (y) B Loans to Corporate Obligee, subject to the conditions in this Agreement; (ii) Corporate Obligee has acquired its rights in the Original Trust Estate subject to the Liens of the Original Security Trustee, which Liens were assigned to the Security Trustee for the benefit of all Lenders, and has granted Security Trustee Liens on the Collateral to secure the A Notes and the B Notes in accordance with the terms of this Agreement; and (iii) pursuant to the Receivables Purchase Agreement, a copy of which is attached hereto as Exhibit C, Trust Obligee purchased from Corporate Obligee, and Corporate Obligee sold to Trust Obligee, the Transferred Property subject to the Lien of the Security Trustee hereunder with the purchase price therefor being the assumption by Trust Obligee from Corporate Obligee of the A Loans;

                        (c)        acknowledges and agrees that on the Restructuring Date, contemporaneously with Trust Obligee’s purchase of the Transferred Property and assumption of the A Loans evidenced by the A Notes from Corporate Obligee pursuant to the Receivables Purchase Agreement, (i) Corporate Obligee shall endorse the A Notes over to Trust Obligee and immediately thereafter such A Notes shall be cancelled by the A Lenders, and (ii) Trust Obligee shall issue replacement A Notes evidencing the A Loans in favor of the A Lenders;

                        (d)        consents to the execution and delivery of the Equipment Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement, the Trust Agreement, the Receivables Purchase Agreement and the other Operative Documents and the performance of the transactions contemplated thereby in respect of the Original Equipment and the Original Trust Estate in all respects and for all purposes; and

                        (e)        consents to the termination of the Risk Allocation Agreement, the Letter of Credit Reimbursement Security Agreement and the Program Administration Letter and the Original Trust Agreement in all respects and for all purposes.

            4.3.      Rights in Original Equipment.  Each party hereto hereby acknowledges and agrees that, as a result of the consummation of the transactions contemplated under this Agreement and the other Operative Documents, Corporate Obligee has and shall have obtained all right, title and interest in and to the Original Trust Estate and the Original Equipment, subject to the Lien of this Agreement and the Equipment Agreement and subject to the terms and conditions set forth herein, including, without limitation, Section 10.15 hereof, and the OriginalEquipment shall for all purposes constitute the “Equipment” hereunder and under the other Operative Documents.

            4.4.      Original Conditions.  Each party (other than U.S. Bank National Association in its individual capacity) hereto hereby acknowledges and agrees that, prior to the Restructuring Date, all of the conditions and obligations set forth in Sections 4.1 through 4.5 of the Original Participation Agreement were either fully satisfied or waived by such party entitled to waive such conditionand, as of the Restructuring Date, all transfers of the Original Equipment contemplated to occur under the Original Operative Documents have occurred and all reimbursements to Obligor therefor have been made.

5.         Amount and Terms of Loans.

            5.1.      Acknowledgment of Original Loans.  Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby acknowledges and agrees that on and as of the Restructuring Date, the entire aggregate outstanding principal amount of all Original Loans is equal to the amount specified under the column entitled “Outstanding Aggregate Principal Balance of Original Loans” on Schedule 3 hereto.

            5.2.      A Loans and B Loans.

(a)        Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby acknowledges and agrees that, contemporaneously with the execution and delivery of the Original Trust Purchase Agreement, the Receivables Purchase Agreement, the Equipment Agreement and this Agreement, the entire aggregate outstanding principal amount of the Original Loans shall be (and shall be deemed to be) continued and divided into (i) A Loans in an aggregate principal amount equal to the amount specified under the column “Aggregate Principal Amount of A Loans” on Schedule 3 hereto (the “Aggregate A Loan Principal Balance”) and (ii) B Loans in an aggregate principal amount equal to the amount specified under the column “Aggregate Principal Amount of B Loans” on Schedule 3 hereto (the “Aggregate B Loan Principal Balance”).

(b)        Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby further acknowledges and agrees that pursuant to the consummation of transactions contemplated by the Original Trust Purchase Agreement, the Receivables Purchase Agreement, the Equipment Agreement and this Agreement, (x) each A Lender shall have on the Restructuring Date (and after assumption thereby by Trust Obligee) an aggregate undivided ownership interest in the A Loans to Trust Obligee in the original principal amount set forth opposite such A Lender’s name under the column entitled “Principal Amount of A Loan” on Schedule 3 hereto, which amount shall be evidenced by an A Note issued by Trust Obligee to such A Lender pursuant to Section 5.3.2 hereof and (y) each B Lender shall have on the Restructuring Date an undivided ownership interest in the B Loans to Corporate Obligee in the original principal amount set forth opposite such B Lender’s name under the column entitled “Principal Amount of B Loan” on Schedule 3 hereto, which amount shall be evidenced by a B Note issued by Corporate Obligee to such B Lender pursuant to Section 5.3.3 hereof.

(c)        Trust Obligee hereby acknowledges and agrees that pursuant to the Receivables Purchase Agreement, this Agreement and the other Operative Documents to which it is a party, it is and shall be validly and justly indebted to the A Lenders for the payment of the A Loans in an amount equal to the Aggregate A Loan Principal Balance.  Corporate Obligee hereby acknowledges and agrees that pursuant to the Original Trust Purchase Agreement, theAssumption and Revocation Agreement, this Agreement and the other Operative Documents to which it is a party, it is and shall be validly and justly indebted to the B Lenders for the payment of the B Loans in an amount equal to the Aggregate B Loan Principal Balance.

            5.3.      Notes.

5.3.1.   Original Notes.  Each Lender (i) consents to the cancellation of each Original Note in all respects and for all purposes; and (ii) directs (x) Corporate Obligee to issue contemporaneously with such cancellation and with the consummation of the transactions contemplated in Section 5.2 the A Notes to the A Lenders; and (y) Corporate Obligee to issue contemporaneously with such cancellation and with the consummation of the transactions contemplated in Section 5.2 the B Notes to the B Lenders.  Each other party hereto hereby consents to the cancellation of the Original Notes and to the issuance of the A Notes and the B Notes hereunder in replacement thereof in all respects and for all purposes.

A Notes.

(a)        The A Loans made by each A Lender to Original Obligee and assumed by Corporate Obligee shall be evidenced by A Notes, duly executed by Corporate Obligee and payable to the order of such A Lender in an original principal amount equal to such A Lender’s A Loan specified in Schedule 3 hereto.  The A Notes shall be dated as of the date hereof and delivered to the A Lenders in accordance with this Agreement.  Each A Note shall be substantially in the form of Exhibit D-1 with blanks and Payment and Amortization Schedules appropriately completed in conformity herewith and shall have the aggregate Debt Amortization Payments with respect to such A Note noted thereon as of the Restructuring Date.

            (b)        On the Restructuring Date, immediately following the issuance of the A Notes by Corporate Obligee, each A Lender (i) consents to the endorsement of the A Notes from Corporate Obligee in favor of Trust Obligee and the cancellation of such A Notes in all respects and for all purposes, and (ii) directs Trust Obligee to issue, and Trust Obligee hereby agrees to issue, contemporaneously with such cancellation and with the consummation of the transactions contemplated in Section 5.2, replacement A Notes to each such A Lender.  The replacement A Notes shall be issued by Trust Obligee to the A Lenders in accordance with the requirements of Section 5.3.2 (a) hereof.

5.3.3.   B Notes.  The B Loans made by each B Lender to Corporate Obligee shall be evidenced by B Notes of Corporate Obligee, duly executed by Corporate Obligee thereof and payable to the order of such B Lender in an original principal amount equal to such B Lender’s B Loan specified in Schedule 3 hereto.  The B Notes shall be dated as of the date hereof anddelivered to the Lenders in accordance with this Agreement.  Each B Note shall be substantially in the form of Exhibit D-2, with blanks and Payment and Amortization Schedules appropriately completed in conformity herewith and shall have the aggregate Debt Amortization Payments with respect to such B Note noted thereon as of the Restructuring Date.

            5.4.      [Reserved.]

            5.5.      Payments.

5.5.1    Principal.  Unless otherwise adjusted in accordance with Section 5.9 hereof, (a) principal on each A Loan shall be payable to each A Lender on each Payment Date in an amount equal to the amount specified for such date on the Payment and Amortization Schedule attached to such A Lender’s A Note; and (b) principal on each B Loan shall be payable to each B Lender on each Payment Date in an amount equal to the amount specified for such date on the Payment and Amortization Schedule attached to such B Lender’s B Note.

Interest.

            (a)        Trust Obligee agrees to pay to the A Lenders interest in respect of the unpaid principal amount of each A Loan assumed by Trust Obligee from Corporate Obligee pursuant to the Receivables Purchase Agreement and this Agreement from the date hereof until the date on which such A Loan (together with accrued and unpaid interest thereon) is repaid in full (whether on the Maturity Date, by acceleration or otherwise) at the Applicable Debt Rate (calculated on the basis of a 360-day year and actual days elapsed).  Accrued (and theretofore unpaid) interest shall be payable in arrears, on each Payment Date, on the date of any prepayment (on the amount prepaid), on the Maturity Date and, after the Maturity Date, on demand.

            (b)        Corporate Obligee agrees to pay to the B Lenders interest in respect of the unpaid principal amount of each B Loan assumed by Corporate Obligee from the date hereof until the date on which such B Loan (together with accrued and unpaid interest thereon) is repaid in full (whether on the Maturity Date, by acceleration or otherwise) at the Applicable Debt Rate (calculated on the basis of a 360-day year and actual days elapsed).  Accrued (and theretofore unpaid) interest shall be payable in arrears, on each Payment Date, on the date of any prepayment (on the amount prepaid), on the Maturity Date and, after the Maturity Date, on demand.

5.5.3    Satisfaction of Commitment Fee.  The parties hereto (other than U.S. Bank National Association in its individual capacity) agree and acknowledge that, prior to the Restructuring Date, the Loan Commitment Fee pursuant to Section 5.5.3 of the Original Participation Agreement has been paid in full and all such obligations to pay the Loan Commitment Fee pursuant to Section 5.5.3 of the Original Participation Agreement have been fully discharged.

5.5.4    Overdue Rate.  Trust Obligee shall pay to each A Lender and Corporate Obligee shall pay to each B Lender interest on any part of the unpaid principal amount of any Note issued by such Obligee to such Lender, if any, and interest on such Note and any other amount payable by such Obligees hereunder which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise) on demand for the period commencing on the due date thereof until the same is paid in full at the Overdue Rate.

5.5.5    Payment Instructions.  All payments by Trust Obligee or Corporate Obligee to the Lenders hereunder or under the other Operative Documents shall be made without defense, set-off or counterclaim to Security Trustee no later than 12:00 noon (New York time) on the date when due and shall be made in lawful money of the United States of America in immediately available funds to the account of Security Trustee maintained at Bank of Tokyo-Mitsubishi Trust Company, ABA No. 026-009-687, Account No. 97770450, F/F/C A/C# 26025906 reference:  Harman International Payment (6-T-277) or such other account as Security Trustee may designate in a written notice to Obligees.

5.5.6    Withholding Tax.  If any amount of principal or interest payable with respect to any Loan becomes subject to any withholding Tax under Applicable Laws, Obligor shall withhold such Tax and shall pay the Lender that made such Loan such additional amounts so that the net amount actually received by such Lender, after reduction for such withholding Tax, shall be equal on an After-Tax Basis to the full amount of principal and interest otherwise due and payable hereunder.

5.5.7    Business Day Convention.  Unless otherwise provided herein, any payment or prepayment of amounts due in accordance with the terms hereof which is due on a date which is not a Business Day shall be payable on the next succeeding Business Day.

5.5.8    Increased Costs.  In the event any Affected Person shall have reasonably determined that any Regulatory Change (as hereinafter defined) shall (a) subject such Affected Person to any tax of any kind whatsoever as a result of this Agreement or any Operative Document or its interest therein or as a result of its commitments hereunder or thereunder or its liquidity or other commitment to any Obligee or any Lender as a result of this Agreement or any Operative Document or its interest therein (any such commitment or commitments, individually or collectively, an “Affected Person Commitment”), or change the basis of taxation of payments as a result thereof (except for Taxes for which Obligor indemnifies Lenders under Section 8.2 hereof); or (b) impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances under this Agreement or any Operative Documents, loans or other extensions of credit by, or any other acquisition of funds by, such Affected Person, and the result of any of the foregoing is to increase the cost to such Affected Person, by an amount which such Affected Person reasonably determines in good faith to be material, of maintaining its interest in this Agreement, the Notes or any Operative Document or to reduce any amount receivable in respect thereof, then in any  such case, after submission by such Affected Person to Obligor of a written request therefor specifying the nature and amount of such cost in reasonable detail Obligor shall pay to such Affected Person any additional amounts necessary to compensate such Affected Person for such increased cost or reduced amount receivable, together with interest on each such amount from the day which is five (5) Business Days after the date such request for compensation under this Section 5.5.8 is received by the Obligor until payment in full thereof (after as well as before judgment) at the Applicable Debt Rate in effect from time to time.  In the event that any Affected Person shall have determined that any Regulatory Change regarding capital adequacy has the effect of reducing the rate of return on such Affected Person's capital or on the capital of any entity controlling such Affected Person as a result of its obligations hereunder or under any liquidity or credit support agreement or under any Operative Document or its maintenance of its Affected Person Commitment or its interest in this Agreement, the Notes or any Operative Document to a level below that which such Affected Person or such entity could have achieved but for such Regulatory Change (taking into consideration such Affected Person's or such entity's policies with respect to capital adequacy) by an amount reasonably determined in good faith by such Affected Person to be material, then, from time to time, after submission by such Affected Person to Obligor of such written request therefor specifying the nature and amount of such cost in reasonable detail, Obligor shall pay to such Affected Person such additional amount or amounts as will compensate such Affected Person for such reduction, together with interest on each such amount from the day which is five (5) Business Days after the date such request for compensation under this Section (b) is received by Obligor until payment in full thereof (after as well as before judgment) at the Applicable Debt Rate in effect from time to time.  It shall be a condition to the right of an Affected Person to receive any compensation under this Section 5.5.8 that it use its reasonable efforts to reduce or eliminate any claim for such compensation, including but not limited to designating a different investing office for its interest in this Agreement, the Notes or the Operative Documents, if such designation will avoid the need for, or reduce the amount of any increased amounts referred to in this Section 5.5.8 and will not in the reasonable opinion of such Affected Person, be unlawful or otherwise disadvantageous to such Affected Person or inconsistent with its policies or result in an unreimbursed cost or expense to such Affected Person or in an increase in the aggregate amounts payable under this Section 5.5.8.  Each Affected Person claiming any increased amounts described in this Section 5.5.8 will furnish to Obligor and Agent together with its request for compensation a certificate prepared in good faith setting forth the basis and the calculation of the amount (in reasonable detail) of each request by such Affected Person for any such increased amounts referred to in this Section 5.5.8.  Failure on the part of any Affected Person to demand compensation for any amount pursuant to this Section 5.5.8 with respect to any period shall not constitute a waiver of such Affected Person’s right to demand compensation with respect to such period.  For purposes of this Section 5.5.8, “Regulatory Change” shall mean as to each Affected Person, any change occurring after the date of the execution and delivery of this Agreement in any (or the adoption after such date of any new) (a) United States Federal or state law or foreign law applicable to such Affected Person; or (b) regulation, interpretation, directive, guideline or request (whether or not having the force of law) applicable to such Affected Person of any court or other judicial authority, or any entity which is exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to the government of any nation or any state or other political subdivision thereof and which is charged with the interpretation or administration of any law referred to in clause (a) or of any fiscal, monetary or other authority or central bank having jurisdiction over such Affected Person.

5.5.9    Illegality.  Notwithstanding any other provision of this Agreement or the other Operative Documents to the contrary, if it becomes unlawful or contrary to an official directive of a Governmental Entity, any Applicable Law, or any interpretation, directive or request or change therein, or change in the administration or enforcement thereof after the date hereof for any Lender to honor any obligation to maintain any Loan funded by Dollar borrowings on the London interbank market or if for any reason any Lender is unable to borrow Dollars on the London interbank market (in either case, an “Illegality Event”, and any Loan affected thereby, an “Illegal Loan”) then  (a) Lenders shall promptly notify Agent, Obligees and Obligor thereof, (b)  if such Illegality Event can be avoided without incurring any consequences which are, in the sole judgment of such Lender, adverse to such Lender, then such Lender shall make reasonable, good faith efforts consistent with its internal policy to effect such avoidance, (c) if, notwithstanding such Lender’s efforts in accordance with clause (b) hereof, any Loan remains an Illegal Loan, then, at the time specified for such in the notice given in accordance with clause (a) above, the interest rate on any such Illegal Loan shall be automatically converted to the Alternate Rate and (d) all Loans made after such Illegality Event shall accrue interest at the Alternate Rate.  Obligor shall compensate such Lender, upon such Lender’s written request, for all reasonable losses, expenses and liabilities incurred which such Lender may sustain as a result of the conversion or any payment of any Illegal Loan on a date other than a Payment Date.

            5.6.      Prepayments Limited.  No prepayment of a Loan may be made except to the extent and in the manner expressly permitted by this Agreement.

            5.7.      Mandatory Prepayments.

5.7.1    Event of Loss.  In the event an Item of Equipment shall suffer an Event of Loss, then on the Casualty Loss Value Payment Date for such Item, Corporate Obligee and Trust Obligee shall prepay and apply, and there shall become due and payable on the Casualty Loss Value Payment Date for such Item, a principal amount of the A Loans and B Loans, pro rata, equal to the Unamortized Debt Balance with respect to such Item of Equipment and all accrued and unpaid interest thereon.

5.7.2    Transfer of Rights and Interests in Items of Equipment.  In the event that Obligor exercises its option to acquire Corporate Obligee’s rights and interests in an Item of Equipment pursuant to Sections 25.2 or 25.4 of the Equipment Agreement, Corporate Obligee and Trust Obligee shall prepay and apply, and there shall become due and payable on the Payment Date designated for such acquisition, Breakage Costs, if any, a principal amount of the A Loans and B Loans, pro rata, equal to the Unamortized Debt Balance with respect to such Item of Equipment and all accrued and unpaid interest thereon.

5.7.3    Other Termination of Equipment Agreement.  In the event that Obligor does not exercise any option to renew the Equipment Agreement with respect to any Item of Equipment pursuant to Section 25.1 thereof or does not exercise on the Termination Date for such Item of Equipment the option to transfer such Item of Equipment pursuant to Section 25.2 or 25.4 of the Equipment Agreement, then on the Termination Date for such Item of Equipment Obligees shall apply, and there shall become due and payable, the Unamortized Debt Balance of the Loan made with respect to such Item of Equipment and all accrued and unpaid interest thereon, which amounts are to be applied in accordance with Section 5.8(b) hereof.

            5.8.      Application of Prepayments.  (a)  The amount of any prepayment described in Sections 5.7.1 and 5.7.2 above shall be applied as follows:  first, ratably to the payment of accrued but unpaid interest on the A Loans and B Loans at the Overdue Rate, if any, to the date of such payment then due hereunder, second, ratably to the payment of accrued but unpaid, interest on the A Loans and B Loans at the Applicable Debt Rate, if any, to the date of such prepayment then due hereunder, third, ratably to the payments of any other amounts due the Lenders under the Operative Documents, and fourth, ratably to the payment of the outstanding principal amount of the A Notes and the B Notes.

            (b)        The amount of any prepayment in accordance with Section 5.7.3 hereof shall be applied as follows:  (i)  Harman Proceeds shall be allocated and paid first, to the A Lenders in accordance with their respective pro rata share of the aggregate principal balances of the A Loans until they have in the aggregate received payment in full of all principal and interest with respect to their A Loans, and second, to the B Lenders in accordance with their respective pro rata share of the aggregate of the principal balances of the B Loans until they have received payment in full of all principal and interest with respect to their B Loans; and (ii)  Collateral Proceeds shall be allocated and paid first, to the B Lenders in accordance with their respective pro rata share of the aggregate of the principal balances of the B Loans until they have received payment in full of all principal and interest with respect to their B Loans, and second, to the A Lenders in accordance with their respective pro rata share of the aggregate of the principal balances of the A Loans until they have in the aggregate received payments in full of all principal and interest with respect to their A Loans.

            5.9       Recalculation of Loan Payment and Amortization Schedule.  Upon any partial prepayment in accordance with this Section 5, the amount of principal due in accordance with the Payment and Amortization Schedule attached to any Note or Notes against which principalamounts were prepaid, shall be recalculated by Agent on each Payment Date occurring after the date of such partial payment so as to equal the following:

- PP/ OP) x SP

Where:

PP        =          Principal amount of such Loan being prepaid

OP       =          Outstanding principal balance of such Loan immediately prior to the payment of the principal being prepaid (less any principal scheduled to be paid on the date principal is being prepaid)

SP        =          Amount of scheduled principal payment for such Loan had the principal prepayment at issue not been paid

            5.10.    Loan Events of Default. The occurrence of any of the following specified events (whatever the reason for such Loan Event of Default and whether such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall constitute a “Loan Event of Default”:

an Equipment Agreement Event of Default shall have occurred and be continuing; or

either Obligee shall default in the due and punctual payment of any principal of or interest on, any of its respective Loans (including any mandatory prepayment) or any other amount to be paid to Lenders under the Loan Documents; provided, however, that if any such amount is paid after the due date thereof, it shall only be deemed to be paid in full if there shall also be paid, together with such amount, interest on such amount at the Overdue Rate from the date such payment was due until the date of payment; or

either Obligee shall default in the due performance or observance of any of their respective other obligations hereunder, and the same shall continue unremedied for a period of thirty (30) days from the earlier of actual knowledge thereof by such Obligee and receipt by such Obligee of written notice of such default; or

any representation, warranty or statement made by Corporate Obligee, Trust Obligee, Trust Company or Owner Participant in any of the Operative Documents, or otherwise in writing in connection herewith or therewith, or in any statement furnished pursuant hereto or thereto or in connection herewith or therewith, shall be breached or shall prove to be untrue in any material respect on the date as of which made; or

judgments for the payment of money in excess of $100,000 in the aggregate shall be rendered against either Obligee and shall not be satisfied, stayed, bonded with a reputable and financially sound surety company to the full extent thereof, vacated or discharged for more than sixty (60) days; or

(f)         Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall consent to the appointment of or the taking of possession by a receiver, agent or liquidator of itself or of a substantial part of its property, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall admit in writing its inability to pay its debts generally as they become due, or does not pay its debts generally as they become due or shall make a general assignment for the benefit of creditors, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief in a case under any bankruptcy laws or other insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against it, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant Company shall seek relief by voluntary petition, answer or consent, under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time) or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall seek an agreement, composition, extension or adjustment with its creditors under such laws, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall adopt a resolution authorizing action in furtherance of any of the foregoing; or (ii) an order, judgment or decree shall be entered by any court of competent jurisdiction (A) appointing, without the consent of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant, a receiver, trustee or liquidator of such person or of any substantial part of its property, or (B) sequestering any substantial part of the property of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant, or (C) granting any other relief in respect of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant as a debtor under any bankruptcy laws or other insolvency laws (as in effect at such time), and in each case any such order, judgment or decree of appointment or sequestration shall remain in force undismissed, unstayed and unvacated for a period of sixty (60) days after the date of entry thereof; or (iii) a petition against Corporate Obligee, Trust Obligee, Trust Company or Owner Participant in a case under any bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within sixty (60) days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Corporate Obligee, Trust Obligee, Trust Company or Owner Participant , any court of competent jurisdiction assumes jurisdiction, custody or control of such person or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed and unterminated for a period of sixty (60) days; or

            (g)        either Obligee shall default in any of its obligations under any other Operative Document to which it is a party or any Operative Document shall cease to be in full force and effect or be disaffirmed or repudiated in any respect by or on behalf of either Obligee or any party thereto (other than Lenders); or

            (h)        if this Agreement at any time shall not be in full force and effect or shall no longer create a first and prior Lien on any portion of the Collateral, or

            (i)         the trust created pursuant to the Trust Agreement shall have been terminated.

            5.11     Remedies of Lenders.

5.11.1  Rights in Collateral.  If a Loan Event of Default shall have occurred and be continuing, then and in every such case Security Trustee and/or Agent shall, upon written request by the Majority Lenders, exercise any or all of the rights and powers and pursue any and all of the remedies pursuant to this Section 5.11, any and all remedies under the other Security Documents, and any and all remedies available to a secured party under the UCC or any other provision or law and, in the event such Loan Event of Default is a Loan Event of Default referred to in Section 5.10(a) hereof, any and all of the remedies pursuant to the Equipment Agreement, and may take possession of all or any part of the Collateral and may exclude Obligees, Obligor, any lessee and all Persons claiming under any of them wholly or partly therefrom. 

5.11.2  Insolvency.  If a Loan Event of Default referred to in clause (f) of Section 5.10 hereof shall have occurred or an Equipment Agreement Event of Default of the type referred to in clause (e) of Section 20 of the Equipment Agreement thereof shall have occurred, then and in every such case the unpaid principal of each Loan, together with interest accrued but unpaid thereon, Prepayment Premium, if any, and all other amounts due to Lenders shall, unless the Lenders shall otherwise direct, immediately and without further act become due and payable by Obligees to Lenders, without presentment, demand, protest or notice, all of which are hereby waived.  If any other Loan Event of Default shall have occurred and be continuing, then and in every such case, Agent or Security Trustee shall, upon written request by the Majority Lenders, by written notice or notice to each Obligee, declare all Loans to be due and payable, whereupon the unpaid principal of the Loans then outstanding, together with accrued but unpaid interest thereon, Prepayment Premium, if any, and all other amounts due from Obligees to Lenders, shall immediately and without further act become due and payable by Obligees to Lenders without presentment, demand, protest or other notice, all of which are hereby waived.

5.11.3  Delivery of Documents.  Upon the occurrence of a Loan Event of Default, at the request of Security Trustee, Obligees shall promptly execute and deliver to Security Trustee such instruments of title and other documents as Security Trustee may deem necessary or as requested of the Security Trustee by the Majority Lenders or advisable to enable Security Trustee or a representative designated by Security Trustee, at such time or times and place or places as Security Trustee may specify, to obtain possession of all or any part of the Collateral to whose possession Security Trustee shall at the time be entitled hereunder.  If Obligees shall for any reason fail to execute and deliver such instruments and documents after the request by Security Trustee, Security Trustee may (a) obtain a judgment conferring on Security Trustee the right to immediate possession and requiring Obligees to execute and deliver such instruments and documents to Security Trustee, to the entry of which judgment Obligees hereby specifically consent, and (b) pursue all or part of such Collateral wherever it may be found and may enter any of the premises of Obligor or Obligees wherever such Collateral may be or is purported to be and search for such Collateral and take possession of and remove such Collateral.  All expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Agreement.

5.11.4  Possession of Collateral.  Upon taking of possession pursuant hereto, Security Trustee or a representative designated by Security Trustee may, from time to time, at the expense of Obligees, make all such expenditures for maintenance, insurance, repairs, replacements and alterations to any of the Collateral, as it may deem appropriate and commercially reasonable.  In such case, Security Trustee or a representative of Security Trustee shall have the right (but not the obligation) to maintain, use, operate, store, lease, control or manage the Collateral and to carry on the business and to exercise all rights and powers of Obligees relating to the Collateral, as Security Trustee shall deem best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, leasing, control, management or disposition of the Collateral or any part thereof as Security Trustee may determine; and Security Trustee shall be entitled to collect and receive directly all tolls, rents (including Equipment Payment and Supplemental Payments), revenues, issues, income, products and profits of the Collateral and every part thereof, without prejudice, however, to the right of Lenders or Security Trustee under any provision of this Agreement to collect and receive all cash held by, or required to be deposited with, Obligees hereunder.  Such tolls, rents (including Equipment Payment and Supplemental Payments), revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, leasing, control, management or disposition of the Collateral and of conducting the business thereof, and of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments which Security Trustee may be required or may elect to make, if any, for taxes, assessments, insurance or other proper charges upon the Collateral or any part thereof (including the employment of engineers and accountants to examine, inspect and make reports upon the properties and books and records of Obligees or Obligor), and all other payments which Security Trustee may be required or authorized to make under any provision of this Agreement, as well as just and reasonable compensation for the services of Security Trustee, and of all Persons properly engaged and employed by Security Trustee.

5.11.5  Sale of Collateral.  In addition, Security Trustee may sell, assign, transfer and deliver the whole, or from time to time to the extent permitted by law, any part of the Collateral or any interest therein, at any private sale or public auction with or without demand, advertisement or notice (except as herein required or as may be required by law) of the date, time and place of sale and any adjustment thereof for cash or credit or other property for immediate or future delivery and for such price or prices and on such terms as Security Trustee may determine, or as may be required by law.  It is agreed that ten (10) Business Days’ notice to each Obligee of the date, time and place (and terms, in the case of a private sale) of any proposed sale by Security Trustee of the Collateral or any part thereof or interest therein is reasonable.  Each of Security Trustee and any Lender may be a purchaser of the Collateral or any part thereof or any interest therein at any sale thereof, whether pursuant to foreclosure or power of sale or otherwise.  Security Trustee may apply against the purchase price therefor the amount then due under the Notes secured hereby.  Security Trustee shall, upon any such purchase, acquire good title to the property so purchased, to the extent permitted by Applicable Law, free of all rights of redemption.

5.11.6  Discharge.  Upon any sale of the Collateral or any part thereof or interest therein, whether pursuant to foreclosure or power of sale or otherwise, the receipt of the purchase money of the official making the sale by judicial proceeding or by Security Trustee shall be sufficient discharge to the purchaser for the purchase money and neither such official nor such purchaser shall be obliged to see to the application thereof.

5.11.7  Appointment of Receiver.  If a Loan Event of Default shall have occurred and be continuing, Security Trustee shall, as a matter of right, be entitled to appoint a receiver or trustee or representative (who may be Security Trustee or any successor or nominee thereof, or any Lender appointed by Security Trustee) for all or any part of the Collateral, whether such receivership or agency or representation be incidental to a proposed sale of the Collateral or the taking of possession thereof, the exercise of remedies under this Agreement or the Equipment Agreement or otherwise, and Obligees hereby consents to the appointment of such a receiver, trustee or representative.  Any receiver, trustee or representative appointed for all or any part of the Collateral shall be entitled to exercise all rights of Security Trustee under this Agreement and the other Operative Documents to the extent provided in such appointment and shall be entitled to exercise all the powers and pursue all the remedies of Security Trustee hereunder with respect to the Collateral.

5.11.8  Redemption.  Any sale of the Collateral or any part thereof or any interest therein, whether pursuant to foreclosure or power of sale or otherwise hereunder, shall forever be a perpetual bar against Obligees, after the expiration of the period, if any, during which Obligees shall have the benefit of redemption laws which may not be waived pursuant to clause (i) above.  Subject to the provisions of this Agreement, each Obligee covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any appraisement, valuation, stay or extension law wherever enacted, nor at any time hereafter in force, in order to prevent or hinder the enforcement of this Agreement or the execution of any power granted herein to any Lender or Security Trustee, or the absolute sale of the Collateral, or any part thereof, or the possession thereof by any transfer at any sale under this Section 5.11; and each Obligee for itself and all who may claim under it, so far as it or any of them now or thereafter lawfully do so, waives all right to have the Collateral marshaled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Collateral as an entirety.

5.11.9  Rights Cumulative; No Waiver.  Each and every right, power and remedy herein given to Lenders and Security Trustee specifically or otherwise in this Agreement shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Majority Lenders or Security Trustee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No delay or omission Agent, any Lender or Security Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of Obligees or Obligor or to be an acquiescence therein.

5.11.10  Termination of Proceedings. If Agent, any Lender or Security Trustee shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to Agent, any Lender or Security Trustee, then and in every such case Obligees, Agent, Lenders, Security Trustee and Obligor shall, subject to any binding determination in such proceeding, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Agent, Lenders and Security Trustee shall continue as if no such proceedings had been instituted.

Covenants.

Obligee Covenants.

6.1.1.   Obligees Covenants.  Each Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall keep at all times books of record and account related to the transactions contemplated by this Agreement in which full, true and correct entries will be made of all dealings or transactions in relation thereto, and provide or cause to be provided adequate protection against loss or damage to such books of record and account;

                        (b)        it shall not waive an Equipment Agreement Default or Equipment Agreement Event of Default without the prior written consent of the Majority Lenders; and

                        (c)        it shall not amend, modify, consent to any change to the terms or otherwise alter any of the Operative Documents except in accordance with Section 10.2 hereof.

6.1.2    Corporate Obligee Covenants.  Corporate Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall promptly take, and maintain the effectiveness of, all action that may, from time to time, be necessary or appropriate under Applicable Law in connection with the performance by Corporate Obligee of its obligations under the Operative Documents, or the taking of any action hereby or thereby contemplated, or necessary for the legality, validity, binding effect or enforceability of the Operative Documents, or for the making of any payment or the transfer or remittance of any funds by Corporate Obligee under the Operative Documents;

                        (b)        it shall furnish to Lenders or cause to be furnished to Lenders, as the case may, upon actual knowledge thereof, notice of the existence of any Equipment Agreement Default or Equipment Agreement Event of Default.

                        (c)        (i) upon the written request of Security Trustee, it shall designate Security Trustee or such other Person as designated by the Majority Lenders, as the Corporate Obligee’s designee under Section 13 of the Equipment Agreement to visit and inspect the Equipment, to visit, inspect and examine the books and records and accounts of Obligor and to discuss with Obligor its affairs, finances and accounts, and (ii) it shall allow or cause to allow any Person acting on behalf of the Majority Lenders or Security Trustee, to visit, inspect and examine its books of record and accounts of Corporate Obligee and to discuss with Corporate Obligee its affairs, finances and accounts, in each case at such times and as often as Lenders may reasonably request but, in each case, solely as they relate to the transactions contemplated hereby;

            (d)        if and to the extent Security Trustee makes a written request therefor specifying the appropriate filing offices and providing the filing numbers for the original UCC financing statements and such other information as is necessary for filing continuation statements, then the Corporate Obligee shall provide to Security Trustee continuation statements with respect to any UCC financing statements filed in connection with the Security Documents against Corporate Obligee or Trust Obligee or both, to file the same, and promptly upon such filing will provide Security Trustee with written evidence thereof;

            (e)        it shall not except as expressly permitted by the Equipment Agreement, the Receivables Purchase Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and under this Agreement, sell, lease, convey, transfer or encumber or otherwise dispose of all or any part of any Item of Equipment, or cause or permit any Person to do any of the foregoing with respect to all or any part of any Item of Equipment; and

            (f)         it shall comply with all Applicable Laws of any jurisdiction solely as they relate to the transaction contemplated hereby, such compliance to include paying when due all Taxes imposed upon it or upon its property in connection with this transaction by any Government Entity except to the extent contested in good faith and for which adequate reserves have been segregated.

6.1.3    Trust Obligee Covenants.  Trust Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

            (a)        it shall not operate in a manner that would result in an actual, constructive or substantive consolidation with Owner Participant, or any other Persons, and in such connection Trust Obligee shall observe all trust formalities, maintain records separately and independently from those of Owner Participant or other Persons and enter into any transactions with Owner Participant only on an arm’s-length contractual basis;

            (b)        it shall duly pay and discharge (i) all Liens related to the Transferred Property Collateral other than Permitted Liens, (ii) all of its trade bills before the time that any such Lien attaches to the Transferred Property Collateral, and (iii) all Taxes imposed upon or against it or its property or assets, or upon any property leased by it, prior to the date on which penalties attach thereto and (iv) all lawful claims, whether for labor, materials, supplies, services or anything else, which might or could, if unpaid, become a Lien upon the Transferred Property Collateral or such property or assets, unless and only to the extent that any such amounts are not yet due and payable or the validity thereof is being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material danger of the sale, forfeiture or loss of such assets or any interest therein and Trust Obligee maintains appropriate reserves with respect thereto or has made adequate provision for the payment thereof, in accordance with generally accepted accounting principles and approved by Lenders; and

            (c)        it shall comply with all Applicable Laws of any jurisdiction, such compliance to include paying when due all Taxes imposed upon it or upon its property by any Government Entity except to the extent contested in good faith and for which adequate reserves have been segregated.

            6.2.      Further Obligee Covenants.

6.2.1    Further Trust Obligee Covenants.  Trust Obligee covenants for the benefit of each party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of the Agreement as follows:

                        (a)        it shall not (i) enter into any business other than its financing of Equipment, (ii) create, incur, assume or permit to exist any Indebtedness, except as expressly permitted by this Agreement, (iii) enter into, or be a party to, any transaction with any Person, except the transactions set forth in the Operative Documents and as expressly permitted thereby, or (iv) make any investment in, guaranty the obligations of, or make or advance money to any Person, through the direct or indirect lending of money, holding of securities or otherwise except the transactions set forth in the Operative Documents and as expressly permitted thereby; and

                        (b)        it shall not wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease (substantially as a whole), or otherwise dispose of (whether in one or in a series of transactions) its assets except as expressly permitted by this Agreement.

6.2.2    Further Corporate Obligee Covenants.  Corporate Obligee covenants for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall take all actions as are required to keep the representations and warranties made by it in clauses (g), (h) and (i) of Section 2.5 hereof (except, in the case of clause (i) of Section 2.5, if Corporate Obligee’s UCC Location shall change, then Corporate Obligee shall provide notice of such change to each other party hereto within thirty (30) days’ thereafter), true and correct in all material respects (but without regard to the date when such representations and warranties were made or are expressed to be effective) until such time as all of the Secured Obligations have been paid in full;

                        (b)        it will not transfer its interest herein unless the prospective transferee makes the representations and warranties set forth in clause (f) of Section 2.5 hereof as of the date of such transfer, as if it had originally been a party hereto; and

                        (c)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Items of Equipment or any other portion of the Equipment Collateral other than Permitted Liens, (ii) promptly, at its own expense, take such action as may be necessary to duly discharge any Lien on the Equipment Collateral attributable to it other than Permitted Liens, and (iii) make restitution for the Equipment Collateral for any actual diminution of the assets of the Equipment Collateral resulting from any Liens attributable to it on the Equipment Collateral other than Permitted Liens.

            6.3.      Additional Trust Company Covenants.  Trust Company covenants and agrees for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

            (a)        it shall perform all of its obligations set forth in the Trust Agreement and shall not amend, modify, consent to any change to the terms or otherwise alter the Trust Agreement in any manner without the consent of each of the other parties hereto;

            (b)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Transferred Property Collateral or any portion of the Trust Estate other than Permitted Liens; (ii) promptly, at its own expense, take such action as may be necessary duly to discharge any such Lien attributable to it with respect to the Transferred Property Collateral other than Permitted Liens, and (iii) make restitution to the Trust Estate or the Security Trustee, as applicable, for any actual diminution of the assets of the Trust Estate resulting from any Liens attributable to it with respect to the Transferred Property Collateral other than Permitted Liens; and

            (c)        it shall provide written notice of any change in its UCC Location within thirty (30) days thereafter.

            6.4.      Owner Participant Covenants.  Owner Participant covenants and agrees for the benefit of each party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall maintain its existence as a corporation in good standing under the laws of its state of organization;

                        (b)        it shall maintain its right to transact business in each jurisdiction in which the character of the properties owned or leased by it or the business conducted by it makes such qualification necessary and the failure to so qualify would preclude Trust Obligee from enforcing its rights or meeting its obligations under or with respect to any Operative Document;

                        (c)        it shall perform all of its obligations set forth in the Trust Agreement and shall not amend, modify, consent to any change to the terms or otherwise alter the Trust Agreement in any manner without the consent of each of the other parties hereto; and

                        (d)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Transferred Property Collateral other than Permitted Liens, and (ii) promptly, at its own expense, take such action as may be necessary duly to discharge any Lien on the Transferred Property Collateral attributable to it other than Permitted Liens.

            6.5.      Covenants of the Lenders and Security Trustee.  (a) Each of the Lenders and Security Trustee hereby covenants and agrees, for the benefit of Obligees and Obligor, that solong as no Equipment Agreement Event of Default has occurred and is continuing, it shall not take or cause to be taken any action contrary to Obligor’s or any permitted lessee’s right to quiet enjoyment of, and the continuing possession, use and operation of, the Equipment during the Term of the Equipment Agreement.

                        (b)        Each Lender hereby covenants and agrees, for the benefit of Obligees and Obligor, that it will not transfer its interest under this Agreement or the other Operative Documents unless the prospective transferee (i) is a Permitted Assignee, and (ii) as of the date of such transfer represents and warrants either (i) no part of the funds used by it to acquire any Loan shall constitute assets of an “employee benefit plan”, within the meaning of ERISA or any applicable regulation thereunder or assets of a “plan” as defined in Section 4975(e)(1) of the Code or (ii) all of such funds are assets of an insurance company general account as such term is defined in Prohibited Transaction Exemption 95-60 issued by the U.S. Department of Labor (“PTE 95-60”) and as of the date the Notes are acquired there is no employee benefit plan with respect to which the aggregate amount of such general account’s reserves and liabilities for the contracts held by or on behalf of such employee benefit plan and all other employee benefit plans maintained by the same employer (and affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by the same employee organization (in each case determined in accordance with the provisions of PTE 95-60) exceeds 10% of the total reserves and liabilities of such general account (as determined under PTE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National Association of Insurance Commissioners Annual Statement filed with the state of domicile of each Lender.

            6.6.      Obligor Covenants.  Obligor covenants and agrees for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

            (a)        it shall furnish Obligees and Lenders (i) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of Obligor, a copy of the consolidated balance sheet of Obligor and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and retained earnings and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on, without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by an independent certified public accountants of nationally recognized standing, and (ii) as soon as available, but in any event not later than forty-five (45) days after the end of each of the first three quarterly periods of each fiscal year of Obligor, the unaudited consolidated statements of income and retained earnings and of cash flows of Obligor and its consolidated Subsidiaries for such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments); all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, disclosed therein).

            (b)        it shall furnish each Obligee and the Agent (i) concurrently with the delivery of the financial statements referred to in Section 6.6(a)(i) hereof, a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Equipment Agreement Default or Equipment Agreement Event of Default, except as specified in such certificate, (ii) concurrently with the delivery of the financial statements referred to in Sections 6.6(a)(i) and (ii), a certificate of a Responsible Officer stating that, to the best of such officer’s knowledge, Obligor during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Operative Documents to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Equipment Agreement Default or Equipment Agreement Event of Default except as specified in such certificate, (iii) not later than ten (10) Business Days following approval by the Board of Directors of Obligor (and in any event at least once in each fiscal year), a copy of Obligor’s final business plan as approved by the Directors, (iv) within five (5) days after the same are sent, copies of all financial statements and reports which Obligor sends to its stockholders, and within five (5) days after the same are filed, copies of all financial statements and periodic reports which Obligor may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Entity, and (v) promptly, such additional financial and other information as each Obligee or the Agent may from time to time reasonably request (including, but not limited to, annual consolidating financial statements not later than one hundred fifty (150) days after the end of each fiscal year);

            (c)        within the six-month period preceding the fifth anniversary of each Funding Date, Obligor will provide to Trust Obligee, Corporate Obligee, Agent or Security Trustee (as applicable) continuation statements with respect to any UCC financing statements filed in connection with the Equipment Agreement or this Agreement, file the same, and promptly upon any such filing will provide each Obligee, Agent and Security Trustee with written evidence thereof; and

            (d)        it shall obtain and maintain, or cause to be obtained or maintained, in full force and effect, any authorization, approval, license, or consent of any governmental or judicial authority including which may be or become necessary in order for Lenders, Security Trustee, Obligees and Owner Participant to obtain the full benefits of this Agreement and all rights and remedies granted or to be granted herein.

            6.7.      Obligor Negative Covenants.  Obligor covenants and agrees for the benefit of each other party hereto (unless each party shall otherwise waive in writing compliance herewith) during the term of this Agreement that it shall comply with the Multi-Currency NegativeCovenants, and such Multi-Currency Negative Covenants (together with all terms utilized therein) are hereby incorporated by reference as if set forth herein in their entirety and:

                        (a)        Consolidated Total Debt to Consolidated Capitalization.  Obligor shall not permit the ratio of Consolidated Total Debt to Consolidated Capitalization at any time to be greater than 55%.

                        (b)        Interest Coverage Ratio.  Obligor shall not permit the Interest Coverage Ratio for any period of four consecutive fiscal quarters to be less than 3.5 to 1.0; provided that for purposes of this computation, Consolidated EBITDA shall include an addback for the relevant period of (i) $8,300,000 for a special charge taken in the quarter ended December 31, 2001 and (ii) the amount of any Special Non-Cash Charges.

                        (c)        Obligor shall not enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, or make any material change in its present method of conducting business, or permit any Restricted Subsidiary to do any of the foregoing, except (i) any Restricted Subsidiary of Obligor may be merged or consolidated with or into Obligor (provided that Obligor shall be the continuing or surviving corporation) or with or into any one or more wholly-owned Restricted Subsidiaries of Obligor (provided that the wholly-owned Restricted Subsidiary or Restricted Subsidiaries shall be the continuing or surviving corporation), (ii) any Restricted Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to Obligor or any other wholly-owned Restricted Subsidiary of Obligor, and (iii) Obligor and its Restricted Subsidiaries may consummate the transactions permitted by subsection 9.5 of the Multi-Currency Credit Agreement.

            6.8.      Covenants of Lenders, Obligees, Agent and Security Trustee, Trust Company and Owner Participant.  Each Obligee, each Lender, Agent, Security Trustee, Trust Company and Owner Participant that is not a “United States person” as such term is defined in Code Section 7701(a)(30) shall provide to Obligor at such times as may be necessary under Applicable Law as in effect on the Restructuring Date (including Treasury regulations promulgated under Section 1441 of the Code) and at such other times as shall be reasonably requested by Obligor, a fullycompleted Internal Revenue Service Form 4224 or successor form (including an Internal Revenue Service Form W-8 as specified in Treasury Regulations section 1.1441-4(a)) upon which Obligor can rely establishing that all payments to be made by Obligor to each such Person under the Operative Documents can be made by Obligor free and clear of any requirement to withhold any federal income tax therefrom because such payments are effectively connected with the conduct of a trade or business by such Person in the United States; provided, however, that each such Person shall not be required to provide such forms if, solely as a result of a change in Applicable Law, such Person is not legally entitled to deliver such form.  The only consequence of a breach by any Lender, Trust Obligee, Corporate Obligee, Agent, Security Trustee, Trust Company or Owner Participant of this Section 6.8, shall be that Obligor shall be entitled to withhold from any payment made by Obligor to such Person the appropriate amount of federal income tax, notwithstanding the provisions of the Operative Documents to the contrary and Obligor shall have no obligation under Section 8.2 for those amounts withheld from payments to such Person hereunder.

            6.9.      Warranty Disclaimers.  CORPORATE OBLIGEE AND EACH LENDER DEMISE, LEASE AND FINANCE THE ITEMS OF EQUIPMENT HEREUNDER AS‑IS AND WHERE-IS WITH ALL FAULTS AND IN WHATEVER CONDITION THEY MAY BE IN AND EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE DESIGN, CONDITION, QUALITY,CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR QUALIFICATION FOR ANY PARTICULAR TRADEOR ANY OTHER MATTER CONCERNING, THE ITEMS OF EQUIPMENT.  OBLIGORHEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINSTEACH OBLIGEE, EACH LENDER, AGENT OR SECURITY TRUSTEE FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSECAUSED BY THE ITEMS OF EQUIPMENT OR BY OBLIGOR’S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER.

Security.

7.1.      Security Interest.  For valuable consideration, and to secure the due payment and performance of all principal of, Prepayment Premium, if any, and interest on the Loans and all indebtedness and other liabilities and obligations, whether now existing or hereafter arising (including any obligations to indemnify, reimburse or pay costs and/or expenses) of Corporate Obligee and Obligor to Lenders arising out of or in any way connected with the Operative Documents and all instruments, agreements and documents executed, issued and delivered pursuant thereto (collectively, the “Secured Obligations”):

            (a)        Corporate Obligee has acquired the Trust Estate subject to the Lien of Security Trustee thereon granted by Original Obligee to Original Security Trustee under the Original Operative Documents and in the furtherance thereof does hereby assign, convey, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, and grants to Security Trustee, and its successors and assigns, a first Lien on and security interest in the following property and rights of Corporate Obligee, except for Excepted Payments with respect thereto (collectively, the “Equipment Collateral”):

the Items of Equipment;

all right, title and interest of Corporate Obligee in and to any Cross Receipt and all warranties (including, without limitation, warranties of title, merchantability, fitness for a particular purpose, quality and freedom from defects) and rights of recourse against manufacturers, assemblers, sellers and others in connection with the Items of Equipment;

all right, title and interest of Corporate Obligee in and to, but none of the obligations of Corporate Obligee under, the Equipment Agreement, the Security Documents, the Subsidiary Equipment Agreements and all Equipment Payments, and Supplemental Payments payable under the Equipment Agreement including installments of Equipment Payment payments and all other sums payable thereunder;

all accounts, contract rights, general intangibles and all other property rights of any nature whatsoever arising out of or in connection with this Agreement or the Equipment Agreement or the Items of Equipment, including, without limitation, Equipment Payment and Supplemental Payments and any other payments due and to become due under this Agreement or the Equipment Agreement whether as repayments, reimbursements, contractual obligations, indemnities, damages or otherwise;

all claims, rights, powers, or privileges and remedies of Corporate Obligee under the Equipment Agreement;

all rights of Corporate Obligee under the Equipment Agreement to make determinations to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or any property which is the subject of the Equipment Agreement, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action which (in the opinion of Security Trustee) may be necessary or advisable in connection with any of the foregoing; provided, however, Security Trustee agrees for the benefit of Corporate Obligee that so long as no Loan Event of Default has occurred and is continuing, it will not exercise any of the rights assigned to it under clauses (v) and (vi) of this Section 7.1(a), other than the right to receive amounts due under the Equipment Agreement, without the prior written consent of Corporate Obligee;

all moneys now or hereafter paid or required to be paid to Lenders pursuant to any Operative Document; and

all proceeds of the Equipment Collateral including, without limitation, all rentals, income and profits in respect of the Items of Equipment, whether under the Equipment Agreement or otherwise, all credits granted by any manufacturer or vendor with respect to the return of any Item of Equipment and the proceeds of any insurance payable with respect to the Items of Equipment.

                        (b)        Trust Obligee has assumed the Transferred Property subject to the Lien of Security Trustee thereon granted by the Original Obligee to the Original Security Trustee under the Original Operative Documents and, in furtherance thereof, does hereby assign, conveys, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, a first Lien on and security interest in the following property and rights of Trust Obligee, except for Excepted Payments with respect thereto (collectively, the “Transferred Property Collateral”).

            (i)         the Transferred Property;

                                    (ii)        all right, title and interest of Trust Obligee in and to, but none of the obligations of Trust Obligee under, the Receivables Purchase Agreement; and

                                    (iii)       all proceeds of the Transferred Property Collateral.

                        (c)        Owner Participant does hereby assign, convey, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, a first Lien on and security interest in all of its rights, title and interest in, to and under the Trust and the Trust Estate and all proceeds thereof (the “Trust Collateral”)

            7.2       Consent and Agreement of Obligor.  Obligor hereby consents to the assignments and Liens set forth in Section 7.1 hereof.  Obligees and Security Trustee hereby instruct, and Obligor agrees, that until further notified by Security Trustee, Obligor shall pay all amounts payable under the Equipment Agreement other than Excepted Payments to the account of Security Trustee maintained at Bank of Tokyo-Mitsubishi Trust Company, ABA No. 026-009-687, Account No. 97770450, F/F/C A/C# 26025906 reference:  Harman International Payment (6-T-277) or such other account as Security Trustee may designate in a written notice to Obligor.  If there is any disagreementbetween Security Trustee and Obligees as to whether any amount is an Excepted Payment, Obligor shall abide by Security Trustee’s determination with respect to such amount.

7.3.1.   Further Corporate Obligee Covenants.  Corporate Obligee covenants and agrees with Security Trustee as follows:

            (a)        Corporate Obligee will faithfully abide by, perform and discharge each and every obligation, covenant and agreement to be performed by Corporate Obligee under the Operative Documents to which it is a party, and Security Trustee shall not be responsible for any of such obligations, covenants or agreements under any circumstances;

            (b)        Corporate Obligee, at the costs and expense of Obligor and at the reasonable request of Security Trustee and only when required to enforce the rights and remedies of Lenders and Security Trustee, will appear in and defend every action or proceeding arising under, growing out of or in any manner connected with the Equipment Agreement or the obligations, duties or liabilities thereunder of Corporate Obligee and Obligor;

            (c)        if at any time during the continuance of a Loan Default or Loan Event of Default, Corporate Obligee should receive any amounts payable by Obligor under the Equipment Agreement or any other proceeds for or with respect to the Equipment Collateral, it will (i) hold such amounts in trust for Security Trustee and not commingle such amounts with any other amounts belonging to or held by Corporate Obligee, (ii) advise Security Trustee of such receipt and (iii) promptly forward such amounts directly to Security Trustee;

            (d)        upon the occurrence and continuance of any Loan Event of Default, Corporate Obligee will immediately upon receipt of all checks, drafts, cash or other remittances in payment of any of its accounts, contract rights or general intangible constituting part of the Collateral, or in payment for any Collateral sold, transferred, leased or otherwise disposed of, or in payment or on account of its accounts, contracts, contract rights, notes, drafts, acceptances, general intangibles, chooses in action and all other forms of obligation relating to any of the Collateral so sold, transferred or otherwise disposed of, deliver any such items to Security Trustee accompanied by a remittance report in form supplied or approved by Security Trustee, such items to be delivered to Security Trustee in the same form received, endorsed or otherwise assigned by such Corporate Obligee where necessary to permit collection of items and, regardless of the form of such endorsement, Corporate Obligee hereby waives presentment, demand, notice of dishonor, protest and notice of protest; and

            (e)        upon the written request of the Security Trustee, Corporate Obligee will provide to Security Trustee, continuation statements with respect to the UCC financing statements filed in connection with this Agreement against Corporate Obligee, will file the same pursuant to Section 10.1 hereof, and promptly upon such filing will provide Security Trustee with written evidence thereof.

7.3.2    Further Trust Obligee Covenants.  Trust Obligee covenants and agrees with Security Trustee as follows:

                        (a)        it will faithfully abide by, perform and discharge each and every obligation, covenant and agreement to be performed by Trust Obligee under the Operative Documents to which it is a party;

            (b)        if at any time during the continuance of a Loan Default or Loan Event of Default Trust Obligee should receive any amounts payable by Obligor under the Equipment Agreement or the Receivables Purchase Agreement or any other proceeds with respect to the Transferred Property Collateral, it will (i) hold such amounts in trust for Security Trustee and not commingle such amounts with any other amounts belonging to or held by Trust Obligee, (ii) advise Security Trustee of such receipt and (iii) promptly forward such amounts directly to Security Trustee; and

            (c)        upon the written request of the Security Trustee, Trust Obligee will provide to Security Trustee, continuation statements with respect to the UCC financing statements filed in connection with this Agreement against Trust Obligee, will file the same pursuant to Section 10.1 hereof, and promptly upon such filing will provide Security Trustee with written evidence thereof.

            7.4.      Further Assurances.  For each Item of Equipment located in the United States, France, Germany, or England, Corporate Obligee will, upon the written request of Security Trustee and at Obligor’s expense, make, execute, endorse, acknowledge, file and/or deliver to Security Trustee from time to time such confirmatory assignments, conveyances, financing and continuation statements, transfer endorsements, powers of attorney, notes, reports and other assurances or instruments and take such further actions which are appropriate or advisable to perfect, preserve or protect Security Trustee’s security interest granted in the Equipment Collateral hereunder or which Security Trustee deems necessary or advisable in order to obtain the full benefits of the Liens created or intended to be created hereunder in the Equipment Collateral, and will take such other actions reasonably requested by Security Trustee to effectuate the intent of the Operative Documents.  To the extent permitted by Applicable Law, each Obligee and Obligor authorizes Security Trustee to file any such financing and continuation statements without the signature of either Obligee and Obligor will pay all applicable filing fees and related expenses.

            7.5.      Termination.  Upon the full and final discharge and satisfaction of the Loans and the Obligees’ obligations to Lenders and Security Trustee under the Operative Documents, the provisions of this Section 7 and all grants and assignments hereunder shall terminate, and all right, title and interest of Security Trustee in and to (i) the Equipment Collateral and the proceeds thereof shall revert to Corporate Obligee, and (ii) the Transferred Property Collateral and the proceeds thereof shall revert to Trust Obligee, provided in each case that the indemnification provisions hereof shall survive the termination of this Agreement and, provided, further, that if such discharge andsatisfaction shall be made following the occurrence of a Loan Event of Default, the foregoingdischarge shall be made following satisfaction of Obligor’s obligations under Section 21 of the Equipment Agreement.  Security Trustee shall, at Obligor’s expense, execute and deliver any evidence of such release as Corporate Obligee or Trust Obligee may reasonably require and furnish to Security Trustee.

            7.6.      Other Security.  To the extent that the obligations of Obligees under any Operative Document are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then Security Trustee shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of Security Trustee’s rights and remedies hereunder.

            7.7.      Power of Attorney.  Each Obligee irrevocably authorizes Security Trustee and does hereby make, constitute and appoint Security Trustee and any officer of Security Trustee, with full power of substitution, as such Obligee’s true and lawful attorney-in-fact, with power, in its own name or in the name of such Obligee, to endorse any notes, checks, drafts, money orders, orother instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of Security Trustee; to sign and endorse any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; to pay or discharge Taxes, Liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; and generally, to do, at Security Trustee’s option and at Obligor’s expense, at any time, or from time to time, all acts and things which Security Trustee deems necessary to protect, preserve and realize upon the Collateral and Security Trustee’s security interests therein and in order to effect the intent of the Operative Documents all as fully and effectually as such Obligee might or could do; and each Obligee hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.  The powers of attorney made hereunder shall be coupled with an interest and irrevocable for the term of this Agreement and thereafter as long as any of the obligations of Obligees under any Operative Document shall be outstanding.  The powers conferred on Security Trustee hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon Security Trustee to exercise any such powers.  Security Trustee shall be accountable only for amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors or employees shall be responsible to each Obligee for any act or failure to act, except for its own gross negligence or willful misconduct.

            7.8.      Assignment of Rights.  Obligees agree that the assignments made herein are irrevocable and it will not, while said assignments are in effect or thereafter until Obligees have received notice from Security Trustee of the termination thereof, take any action as Obligeesunder the Equipment Agreement or otherwise which is inconsistent with this Agreement or make any other assignment, designation or direction inconsistent herewith and that any assignment, designation or direction inconsistent herewith shall be void.  Obligees and Security Trustee agree that the following are, without limitation, rights, powers, privileges, options, and benefits assigned by Obligees hereunder: the right to make claim for, receive, collect and receipt for (and to apply the same to the payment of the principal of, Prepayment Premium, if any, and interest on the Notes) all rents, income, revenues, issues, profits, insurance proceeds, condemnation awards, payments of Casualty Loss Value and other sums payable or receivable under the Equipment Agreement orthis Agreement or pursuant thereto, and to make all waivers and agreements, to give and receive all notices andother instruments, and to take all action upon the happening of an Equipment Agreement Event of Default, including the commencement, conduct and consummation of proceedings at law or in equity as shall be permitted under any provision of the Equipment Agreement or by law, and todo all other things which Corporate Obligee or any owner of the Equipment is or may become entitled to do under the Equipment Agreement.

            7.9.      Transfer of the Collateral by Lenders.  Security Trustee or Lenders may be a transferee of the Collateral or of any part thereof or of any interest therein at any sale thereof, whether pursuant to foreclosure or power of sale or otherwise hereunder, and may apply upon the transfer price the indebtedness secured hereby owing to such transfer, to the extent of suchtransferee’s distributive share of the transfer price.  Any such transferee shall, upon any such transfer, acquire title to the properties so transferred, free of the Lien of this Agreement.

            7.10.    No Segregation of Monies; No Interest.  Any monies paid to or retained by Security Trustee pursuant to any provision hereof and not then required to be distributed to anyparty as provided in Section 7 hereof need not be segregated in any manner except to the extent required by law, and may be deposited under such general conditions as may be prescribed by law, and Lenders shall not be liable for any interest thereon.

            7.11.    Distribution of Moneys.  Except as may be otherwise provided in this Section 7 and for so long as no Loan Event of Default has occurred and is continuing, all moneys received by Security Trustee shall be applied in accordance with this Section 7.11:

7.11.1  Payments under the Equipment Agreement.  Moneys received by Security Trustee constituting Equipment Payment under the Equipment Agreement (including the payment of interest on any such overdue Equipment Payment) shall be applied:

First, so much of such funds as shall be required to pay in full the aggregate amount of (i) any interest then due on the A Loans and B Loans, pro rata, according to their respective A Loan Term Percentages and B Loan Term Percentages at the Overdue Rate, and (ii) the interest then due to the Lenders on the A Loans and B Loans, pro rata, according to their respective A Loan Term Percentages and B Loan Term Percentages at the Applicable Rate therefor;

Second, so much of such funds as shall be required to pay the Lenders in full the aggregate amount of any principal installment then due on the A Loans and the B Loans as set forth on Schedule 3 hereto according to their respective A Loan Term Percentages and B Loan Term Percentages; and

Third, the balance, if any, of such payment remaining thereafter shall be distributed to Corporate Obligee or its designee.

The parties hereto (other than U.S. Bank National Association in its individual capacity) acknowledge and agree that there was an overpayment made in error under the Original Operative Documents on the Payment Date immediately preceding the Restructuring Date, all as more fully set forth on the Overpayment Memorandum and, in order to correct such overpayment, the Equipment Payment due and payable on the first Payment Date following the Restructuring Date shall be reduced by $55,657.00, and the parties hereto agree that such reduced Equipment Payment shall not constitute an Equipment Agreement Default, Equipment Agreement Event of Default, Loan Default or Loan Event of Default under this Agreement or a default or event of default under the other Operative Documents.

7.11.2  Payments in Respect of an Event of Loss.  Moneys received by Security Trustee constituting Casualty Loss Value (including any insurance proceeds or condemnation awards in respect of the subject Event of Loss which are payable to Security Trustee pursuant to the provisions of the Equipment Agreement) shall be applied first, to the prepayment of the A Loans and B Loans, pro rata, required by Section 5.7.1 hereof, and second, the balance of any such moneys shall be distributed to Corporate Obligee or its designee.  Corporate Obligee shall apply, and there shall become due and payable on the Casualty Loss Value Payment Date for such Item, the Equity Component with respect to such Item of Equipment and all accrued and unpaid amounts set forth in Section 25.1(c) of the Equipment Agreement.

7.11.3  Payments in Respect of Transfers and Sales of Equipment.  Moneys received by Security Trustee constituting payment by Obligor of (a) the Unamortized Debt Balance of any Item of Equipment pursuant to Section 25.2 or 25.4 of the Equipment Agreement shall be applied to the prepayment of the A Loans and B Loans as required by Section 5.7.2 hereof; and (b) the Collateral Proceeds and Harman Proceeds with respect of any Item of Equipment pursuant to Section 26 of the Equipment Agreement shall be applied first, to the prepayment of the A Loans and the B Loans as required under Section 5.7.3 hereof, and second, the balance of any such moneys shall be distributed to Corporate Obligee or its designee.

7.11.4  Payment upon Final Disposition of the Items of Equipment.  Moneys received by Security Trustee constituting proceeds of the sale of any Item of Equipment to a third party pursuant to Section 25.3 of the Equipment Agreement, plus moneys received by Security Trustee constituting any Deficiency with respect to such Item of Equipment shall be applied first, to the prepayment of the Notes required by Section 5.7.3 hereof, and second, the balance of any such moneys shall be distributed to Corporate Obligee or its designee.

            7.12Payments after a Loan Event of Default.  All payments received and all amounts held or realized by Security Trustee (including any amounts realized by Security Trustee from the exercise of any remedies) during the continuance of any Loan Event of Default, and allpayments or amounts then held or thereafter received by Security Trustee hereunder or under the Operative Documents, shall, so long as such Loan Event of Default continues and shall not have been waived in writing by the Lenders, be applied forthwith by Security Trustee in the following order or priority:

First, so much of such payments or amounts held or realized by Security Trustee as shall be required to reimburse Security Trustee for any expenses not reimbursed by Obligees in connection with the collection or distribution of such amounts held or realized by Security Trustee or in connection with the expenses incurred in enforcing its remedies hereunder and preserving the Collateral including, without limitation, those expenses contemplated under Section 10.1 hereof, shall be retained by Security Trustee;

Second, so much of such payments or amounts as shall be required to pay Lenders, Security Trustee and Agent the amounts payable to Lenders, Security Trustee and Agent pursuant to the provisions of any indemnification provisions of this Agreement shall be distributed to Lenders, Security Trustee and Agent;

Third, so much of such payments or amounts remaining as shall be required to pay (i) any accrued but unpaid interest on the A Loans and the B Loans at the Overdue Rate to the date of distribution, pro rata, then (ii) any accrued but unpaid interest on the A Loans and the B Loans at the Applicable Debt Rate to the date of distribution, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders then (iii) the Prepayment Premium payable upon any principal amount paid on the A Loans and the B Loans following acceleration, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders, and then (iv) all of the unpaid principal amount of the A Loans and the B Loans and all other amounts due to the Lenders under the Operative Documents shall be distributed to the Lenders, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders; and

Fourth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Corporate Obligee or its designee, which amounts are to be applied to (i) the outstanding Equity Component, and (ii) all accrued and unpaid amounts set forth in Section 25.1(c) of the Equipment Agreement.

            7.13.    Application of Certain Other Payments.  Any payments received by Lenders for which provision as to the application thereof is made in the Operative Documents but notelsewhere in this Agreement shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of the Operative Documents.

            7.14     Other Payments.  Except as otherwise provided in Sections 7.12 and 7.15 hereof, (a)any payments received by Security Trustee for which no provision as to the application thereof is made in the Operative Documents, or elsewhere in this Section 7, and (b)all payments received and amounts realized by Security Trustee with respect to the Collateral (including, without limitation, all amounts realized upon the sale, release or other disposition of the Collateral upon foreclosure of this Agreement), to the extent received or realized at any time after payment in full of the principal of, Prepayment Premium, if any, and interest on the Loans, as well as any other amounts remaining as part of the Collateral after payment in full of the principal of and interest on the Loans and all other amounts due Lenders hereunder and under any other Loan Document, shall in each case be distributed forthwith by Security Trustee in the following order of priority:

First, in the manner provided in clause “First” of Section 7.12 hereof;

Second, in the manner provided in clause “Second” of Section 7.12 hereof; and

Third, in the manner provided in clause “Fourth” of Section 7.12 hereof.

            7.15.    Retention of Amounts by Security Trustee .  Except as otherwise provided in Section 7.12 hereof, if at the time of receipt by Security Trustee of any payment or amount which would otherwise be distributable to Corporate Obligee, there shall have occurred and be continuing a Loan Default or a Loan Event of Default, Security Trustee shall not distribute any such amount to Corporate Obligee or its designee and shall hold it as security for the Secured Obligations until such time as there shall not be continuing such Loan Default or Loan Event of Default.

8.         Indemnities.

            8.1.      Obligor General Indemnification.  Obligor hereby assumes liability for, and does hereby agree to indemnify, protect, save, defend, and hold harmless each Obligor Indemnified Person on an After-Tax Basis from and against any and all obligations, fees, liabilities, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses, including reasonable legal fees and expenses, of every kind and nature whatsoever, imposed on, incurred by, or asserted against such Obligor Indemnified Person (collectively, “Losses”), which is not directly and primarily caused by the gross negligence or willful misconduct of such ObligorIndemnified Person and which relates in any way to or arises in any way out of (a) the manufacture, construction, ordering, transfer, acceptance or rejection, ownership, transfer of ownership, titling or retitling, registration or reregistration, delivery, leasing, subleasing, possession, use, operation, maintenance, storage, removal, return, repossession, mortgaging, granting of any interest in, transfer of title to, acquisition, sale or other application or disposition, disposition of licensing, documentation, of the Items of Equipment or any Item of Equipment, or any part thereof, including, without limitation, any of such as may arise from (i) loss or damage to any property or death or injury to any Persons, (ii) patent or latent defects in the Items ofEquipment (whether or not discoverable by Obligor or any Obligor Indemnified Person), (iii) any claims based on strict liability in tort or negligence, (iv) any claims related to the release of anysubstance into the environment and (v) any claims based on patent, trademark, trade name or copyright infringement or (b) the Operative Documents or the transactions contemplated hereby or thereby other than Losses primarily caused by such Obligor Indemnified Person’s breachunder the Operative Documents provided such breach is not caused by a breach or default by Obligor under the Operative Documents, or (c) any failure on the part of Obligor to perform or comply with any of the terms of the Equipment Agreement or any other Operative Document to which it is a party or instrument referred to or contemplated hereby or thereby.  With respect to any Obligor Indemnified Person this indemnification shall not include any matters for which such Obligor Indemnified Person is indemnified under Section 8.2 or which are excluded from Obligor’s indemnity obligation thereunder.  Obligor shall give each Obligor Indemnified Person prompt notice of any occurrence, event or condition known to Obligor as a consequence of which any Obligor Indemnified Person may be entitled to indemnification hereunder, except only that Obligor shall not be required pursuant to this Section 8.1 to indemnify any Obligor Indemnified Person for any liability relating to the Items of Equipment arising out of acts or events which occur after return of the Items of Equipment to Corporate Obligee (and expirationof any storage period) pursuant to Section 6 of the Equipment Agreement (other than a return pursuant to Section 21 of the Equipment Agreement) or which occur after a sale to a third party pursuant to Section 25.3 of the Equipment Agreement.  Unless Obligor is contesting any such claim specified in clause (a) hereof in a manner reasonably satisfactory to the affected Obligor Indemnified Person, Obligor shall forthwith upon demand of any such Obligor Indemnified Person reimburse such Obligor Indemnified Person for amounts expended by it in connection with any of the foregoing or pay such amounts directly.  Obligor shall be subrogated to an Obligor Indemnified Person’s rights in any matter with respect to which Obligor has actually reimbursed such Obligor Indemnified Person for amounts expended by it or has actually paid such amounts directly pursuant to this Section 8.1.  In case any claim, action, suit or proceeding is made or brought against any Obligor Indemnified Person in connection with any claim indemnified against hereunder, such Obligor Indemnified Person will, promptly after receipt of notice of such claim or the commencement of such action, suit or proceeding, notify Obligor thereof, enclosing a copy of all papers served upon such Obligor Indemnified Person, but failureto give such notice or to enclose such papers shall not relieve Obligor from any liability hereunder unless such failure materially and adversely affects Obligor’s defense of such claimresulting in an increase in liability of Obligor in respect of such claim or preventing it from reducing liability therefor, in which case Obligor shall not be required to indemnify such Obligor Indemnified Person for the amount by which such liability was increased or not reduced for failure to give such notice.  Obligor may, and upon such Obligor Indemnified Person’s request will, at Obligor’s expense, resist and defend such claim, action, suit or proceeding, or cause the same to be resisted or defended by counsel selected by Obligor and reasonably satisfactory to such Obligor Indemnified Person and in the event of any failure by Obligor to satisfy itsobligations under this Section, Obligor shall pay all reasonable costs and expenses (including, without limitation, attorney’s fees and expenses) incurred by such Obligor Indemnified Person in connection with such action, suit or proceeding.  The provisions of this Section 8.1, and the obligations of Obligor under this Section 8.1, shall apply from the date of the execution of the Equipment Agreement notwithstanding that the Term may not have commenced with respect to any Item of Equipment, and shall survive and continue in full force and effect notwithstanding the expiration or earlier termination of the Equipment Agreement in whole or in part, includingthe expiration of termination of the Term with respect to any Item of Equipment, and are expressly made for the benefit of, and shall be enforceable by, each Obligor Indemnified Person.

            8.2.      Obligor General Tax Indemnity.  Except as provided in Section 6.8 hereof, Obligor agrees to pay, defend and indemnify and hold Obligees, Trust Company, Lenders, Agent, Security Trustee and Owner Participant and their respective Affiliates,successors and assigns (including any consolidated or combined group of which any such Person is a member) (each a “Tax Indemnitee”) harmless on an After-Tax Basis from any and all Federal, state, local and foreign taxes, fees, withholdings, levies, imposts, duties, assessments and charges of any kind and nature whatsoever, together with any penalties, fines or interest thereon (herein called “Taxes”) howsoever imposed, whether levied or imposed upon or asserted against a Tax Indemnitee, Obligor, any Item of Equipment, or any part thereof, by any federal, state or local government or taxing authority in the United States, or by any taxing authority of a foreign country or subdivision thereof, upon or with respect to (a) the Items of Equipment, any Item of Equipment or any part thereof, (b) the manufacture, construction, ordering, transfer, ownership, transfer of ownership, titling or retitling, registration or reregistration, delivery, leasing, subleasing, possession, use, operation, maintenance, storage, removal, return, mortgaging, granting of any interest in, transfers of title to, acquisition, sale or other disposal oflicensing, documentation, repossession, sale or other application or disposition of the Items of Equipment, any Item of Equipment or any part thereof, (c) the revenues, rent, receipts or earnings arising from any Item of Equipment or any part thereof, (d) the Equipment Agreement, the Equipment Payment and/or Supplemental Payments payable by Obligor hereunder or under the Equipment Agreement or any payment made to Lenders by either Obligee, Obligor, Owner Participant or Trust Company pursuant to the Operative Documents, or (e) otherwise in respect of the Operative Documents or any thereof or any transaction or transactions contemplated hereby or thereby; provided, however, that the foregoing indemnity shall not apply with respect to any Tax Indemnitee to (i) Taxes based upon or measured by such Tax Indemnitee’s net income, gross income, gross receipts (except gross income and gross receipts Taxes expressly imposed in lieu of overall sales Taxes), capital, net worth, excess profits or items of tax preference, including minimum and alternative minimum Taxes imposed by any United Sates federal, state or local taxing authority (but such Taxes shall not be excluded from indemnification in the case of state and local taxes only, imposed due to the location or presence of the Items of Equipment, thepresence, activities or place of business or organization of Obligor (or any person claiming or taking possession of the Items of Equipment from or through Obligor) in the taxing jurisdiction imposing such Tax, or any payments being made from such jurisdiction or as contemplated by Section 25.3.2 of the Equipment Agreement) (“Income Taxes”), (ii) Taxes imposed on a Tax Indemnitee, including, without limitation, sales and transfer Taxes, that result from any voluntary or involuntary transfer by such Tax Indemnitee of any interest in the Items of Equipment or in any other Tax Indemnitee or any portion of any of the foregoing or any interest arising out of the Equipment Agreement and Operative Documents unless such transfer shall have occurred in connection with, or as a result of, Obligees’ acquisition of an Item of Equipment following theacquisition by Corporate Obligee of the Original Equipment in accordance with the Assumption and Revocation Agreement and the Original Trust Purchase Agreement or an Equipment Agreement Event of Default or exercise of a transfer option or sale to a third party pursuant to Section 25.3.2 of the Equipment Agreement, (iii) Taxes imposed on a Tax Indemnitee by any jurisdiction as a result of a situs of organization of such Tax Indemnitee or such Tax Indemnitee’s engaging in activities in such jurisdiction unrelated to the transactions contemplated by the Operative Documents and not as a result of the presence of the Items of Equipment, Obligor, any Tax Indemnitee other than suchTax Indemnitee in, or any paymentsbeing made from, or the registration, filing or enforcement of any document or chargecontemplated or necessitated by the Operative Documents, in such jurisdiction, (iv) Taxes imposed on a Tax Indemnitee that result from any willful misconduct or gross negligence of such Tax Indemnitee, (v) except where there exists an Equipment Agreement Event of Default, Taxes that are attributable to any period beginning or circumstances occurring after the expiration or earlier termination of the Equipment Agreement other than with respect to a sale to a third partypursuant to Section 25.3.2 of the Equipment Agreement, and other than the payment of any amount after such date that has accrued on or prior to such date, and any interest thereon, (vi) Taxes that are based on or measured by fees or compensation for services rendered by Obligees but not including interest, (vii) Taxes imposed by a taxing authority of a foreign country or subdivision thereof not by reason of the location or presence of the Items of Equipment, Obligor, in such jurisdiction or payments being made from such jurisdiction or the registration, filing or enforcement of any document or charge contemplated or necessitated by the Operative Documents in such jurisdiction, (viii) Taxes, including, without limitation, any excise Taxes or other impositions or penalties, payable as a result of such Tax Indemnitee’s participation in the transactions contemplated by the Operative Documents being deemed to result in a “prohibitedtransaction” by any party to the Equipment Agreement within the meaning of Section 406 of ERISA or Section 4975 of the Code due to such Tax Indemnitee’s violation of its representation set forth in section 2, (ix) Taxes imposed on a transferee Tax Indemnitee in excess of the amount of such Taxes that would have been imposed on the transferor had there not been a transfer by a Tax Indemnitee after the Closing Date of an interest in the Items of Equipment or in any other Tax Indemnitee or any portion of the foregoing or any interest arising under any Operative Document (except to the extent such excess Taxes are imposed as a result of a change in Applicable Law after the date of such transfer) unless such transfer shall have occurred in connection with, or as a result of, an Equipment Agreement Event of Default or exercise of a transfer option or a sale to a third party pursuant to Section 25.3.2 of the Equipment Agreement, provided that this exclusion shall not be read to prevent any payment pursuant to this Section 8.2 being made on an After-Tax Basis, and (x) Taxes imposed on a Tax Indemnitee resulting from (a) the existence of any Liens created by such Tax Indemnitee (other than Permitted Liens), or (b) any inaccuracy of any representation, or breach of any warranty or covenant by such Tax Indemnitee, unless such violation or breach is a result of a breach by Obligor of any of its obligations under any Operative Document. Obligor will promptly notify Obligees and each TaxIndemnitee of all reports or returns required to be made by it with respect to any tax or other imposition with respect to which Obligor is required to indemnify hereunder, and will promptly provide each Tax Indemnitee with all information necessary for the making and timely filing of such reports or returns by it.  If a Tax Indemnitee requests that any such reports or returns be prepared and filed by Obligor, Obligor will prepare and file the same if permitted by Applicable Law to file the same, and if not so permitted, Obligor shall prepare such reports or returns for signature and shall forward the same, together with immediately available funds for payment of any Tax due, at least ten (10) days in advance of the date such payment is to be made.  Uponwritten request, Obligor shall furnish each Tax Indemnitee with copies of all paid receipts or other appropriate evidence of payment for all Taxes paid by Obligor pursuant to this Section 8.2.  Each Tax Indemnitee shall furnish Obligor with copies of any written requests for information received by it from any taxing authority relating to any Tax with respect to which Obligor is required to indemnify hereunder, and if a written claim is made against a Tax Indemnitee for any such Tax with respect to which Obligor is liable for a payment or indemnity hereunder, Obligees or such Tax Indemnitee shall give Obligor notice in writing of such claim. Each such Tax Indemnitee will use its best efforts to inform Obligor of any potential claims ofwhich it hasnotice.  Obligor may, at its sole cost and expense, either in its own name (other than with respectto Income Taxes) or in the name of the Tax Indemnitee, contest the validity, applicability or amount of such Tax, by (i) resisting payment thereof if practicable, unless payment is required to avoid risk of the sale or forfeiture of, or the creation of a Lien on, the Items of Equipment to which such contest relates, (ii) not paying the same except under protest, if protest is necessary, or (iii) if the payment is made, using reasonable efforts to obtain a refund thereof in appropriateadministrative and judicial proceedings; provided, however, that such contest shall be permitted only if no Equipment Agreement Event of Default has occurred and is continuing hereunder, and only if and to the extent that such contest is being diligently prosecuted by Obligor by appropriate legal or administrative proceedings, and the action to be taken in connection with such contest (a) will not result in the sale, forfeiture or loss of, or the creation of a Lien on, the Items of Equipment to which such contest relates or Obligees’ title thereto or any Tax Indemnitee interest therein, (b) is only with respect to any issue or Tax that is the subject of the indemnity provided in this Section 8.2, (c) Obligor shall have provided such Tax Indemnitee with an opinion of tax counsel reasonably satisfactory to such Tax Indemnitee, that such a contest has a reasonable basis, and (d) Obligor shall have acknowledged in writing its obligationto indemnify such Tax Indemnitee in the event the contest is unsuccessful (but such acknowledgment shall be of no force and effect if the resolution of such contest is on a basis that clearly demonstrates that Obligor is not liable for such indemnity); provided that a Tax Indemnitee may assert control of the conduct of a contest which the Obligor has a right to control hereunder if the Tax Indemnitee provides written notice to Obligor that it wishes to conduct such contest and that it fully and irrevocably releases Obligor from its indemnification obligations for the Tax (or Taxes) that is (or are) the subject of such contest and all otherwise indemnifiable amounts related thereto; provided further that Obligor can eliminate its obligations to cover the costs and expenses of any contest by irrevocably paying the amount of such Taxes.  If a Tax Indemnitee has received a refund of any amount paid by Obligor pursuant to this Section 8.2, such Tax Indemnitee shall pay to Obligor the amount of such refund, together with the amount of any interest actually received by such Tax Indemnitee on account of such refund net of any actual loss incurred by such Tax Indemnitee resulting from the circumstances relating to such payments.  Each Tax Indemnitee shall have sole control over the positions taken with respect to its tax returns, filings and proceedings except with respect to Tax filings and proceedings that are otherwise provided for in this Section 8.2.  All of the indemnities contained in this Section 8.2are expressly made for the benefit of, and shall be enforceable by each Tax Indemnitee.  Each Tax Indemnitee shall determine the allocation of any tax credit, tax savings, refund or other benefit and any related detriment resulting from any Tax indemnified hereunder, or from any indemnity payment hereunder, in its sole discretion and shall not be obligated to disclose its tax returns and related materials to any Person, other than any court or governmental agency if required in any contest, undertaken pursuant to this Section 8.2 hereof, of the imposition of any Tax indemnified hereunder, and the positions of each Tax Indemnitee in its tax returns, filings and proceedings shall be within its sole control except with respect to Tax filings andproceedings that are otherwise provided for in this Section 8.2.  Notwithstanding anything in the foregoing to the contrary, Obligor hereby agrees that all tax reports and returns of Owner Participant will be treated in a responsible manner and their confidentiality maintained.  If Obligor pays any Tax to or on behalf of any Tax Indemnitee for which the Obligor has no indemnity obligation pursuant to this Section 8.2 (or otherwise pursuant to the Operative Documents), the Tax Indemnitee upon whom, or with respect to which, such Tax was imposed, and for which the Obligor has no indemnity obligation, shall, within ten (10) days of writtenrequest therefor by Obligor, pay to Obligor the amount of Tax so paid, with interest at the Applicable Debt Rate from the date of payment of such Tax.

            8.3.      [Intentionally Deleted.]

            8.4.      Survival.  All obligations provided for in this Section 8 shall survive the sale of any Item of Equipment, any termination of the Equipment Agreement, the termination of this Agreement, and the payment in full of the Notes.  Further, all obligations provided for in Section 8 of the Original Participation Agreement shall survive the amendment and restatement of the Original Operative Documents, as such amendment and restatement is evidenced by this Agreement and the other Operative Documents.

9.         Agent for Lenders.

            9.1.      Authorization and Action.  Lenders hereby appoint and authorize Agent and Security Trustee to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent or Security Trustee by the terms hereof and thereof, respectively, together with such powers as are reasonably incidental thereto.  As to any matters not expressly provided for by a Loan Document (including enforcement or collection of the Notes), neither Agent nor Security Trustee shall be required toexercise 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 and such instructions shall be binding upon Lenders; provided, however, that neither Agent nor Security Trustee shall be required to take any action which exposes it to personal liability or which is contrary to any Loan Document or Applicable Law.  Each Agent and Security Trustee agrees to give to Lenders prompt notice of each notice given to it by Obligees pursuant to the terms of this Agreement.  Agent may, with the prior consent of the Majority Lenders, agree to any waiver or amendment of the Operative Documents or to give any consent or exercise any remedies thereunder on behalf of Lenders; provided, however, neither Agent nor Security Trustee will, without the prior consent of all Lenders, agree to any waiver or amendment that would (i) postpone the time or times for payment of any amount payable under the Equipment Agreement or the principal of or interest on any Loan, (ii) reduce any amount payable under the Equipment Agreement or the principal amount of any Loan or reduce the rate of interest on any Loan, or (iii) prior to the payment in full of the Secured Obligations, release any of the Collateral from the Lien created by the Loan Documents, other than in accordance with the terms thereof.  Each of Agent and Security Trustee shall pursue its remedies under the Loan Documents during the continuance of a Loan Event of Default in accordance with the instructions of the Majority Lenders.

            9.2.      Agent’s Reliance, etc.  Neither Agent nor Security Trustee nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted by it or them underor in connection with any Loan Document, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each of Agent and Security Trustee (i) may consult with legal counsel (including counsel for Obligor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted in good faith by it in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to Lenders and shall not be responsible to Lenders for any statements, warranties or representations made in or in connection with any Loan Document, (iii) 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 any Loan Document on the part of Obligor or to inspect the property (including the books andrecords) of Obligor, (iv) shall not be responsible to Lenders for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any other instrument or document furnished pursuant thereto, and (v) shall incur no liability under or inrespect of any Loan Document by acting upon any notice, consent, certificate or other instrumentor writing (which may be by fax, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

            9.3.      Agent and Affiliates.  With respect to any Loans made by it and any Note issued to it as a Lender under the Operative Documents, Agent and Security Trustee shall have the same rights and powers under each Loan Document as any other Lender and may exercise the same as though it were not an agent hereunder; Agent and Security Trustee and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, Obligees or Obligor, any of its subsidiaries and any Person who may do business with or own securities of Obligees or Obligor or any such subsidiary, all as if Agent were not an agent hereunder and without any duty to account therefor to Lenders.

            9.4.      Lenders Credit Decision.  Lenders acknowledge that they have, independently and without reliance upon Agent or Security Trustee and based on the financial statements of Obligees and Obligor and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Lenders also acknowledge that they will, independently and without reliance upon Agent or Security Trustee 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 the Loan Documents.

            9.5.      Indemnification.  Each Lender agrees to indemnify Agent and Security Trustee (to the extent not reimbursed by Obligees or Obligor), (and if there are multiple Lenders, each Lender agrees to do so ratably according to the respective principal amounts of the Notes then held by it), 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 Agent or Security Trustee in any way relating or arising out of any Loan Document or any action taken or omitted by Agent or Security Trustee under any Loan Document; provided that no Lender shall beliable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,expenses or disbursements resulting from the gross negligence or willful misconduct of the Agent or Security Trustee seeking such indemnity.  Without limitation of the foregoing, each Lender agrees to reimburse Agent promptly upon demand for out-of-pocket expenses (including counsel fees) incurred by Agent or Security Trustee 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 orresponsibilities under, any Loan Document, to the extent that Agent is not reimbursed for such expenses by Obligees or Obligor.

            9.6.      Successor Agent.  Agent or Security Trustee may resign at any time by giving at least fifteen (15) days written notice thereof to each Lender and to Obligees, and Agent or Security Trustee 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 or Security Trustee.  If no successor Agent or Security Trustee shall have been so appointed by the Majority Lenders, and shall have accepted such appointment, within 30 days after any such resignation of removal, the retiring Agent or Security Trustee may, on behalf of Lenders, appoint a successor Agent or Security Trustee, which shall be a commercial bank organized under the laws of the UnitedStates of America or of any State thereof and having a combined capital and surplus of at least $100,000,000.  Upon the acceptance of any appointment as Agent or Security Trustee hereunder by a successor Agent or Security Trustee, such successorAgent or Security Trustee shall thereupon succeed to and become vested with all the rights,powers, privileges and duties of the retiring Agent or Security Trustee, and the obligations under each Loan Document.

            9.7.      Holder List; Ownership of Notes.  Agent shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the holders of the Notes, which list shall be available to Obligees or their representative for inspection.  Ownership of the Notes shall be proved by the note register kept by Agent.  Prior to due presentment for registration of transfer of any Note, Agent and Obligees may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, and Prepayment Premium, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and neither Agent nor Obligees shall be affected by any notice to the contrary.

9A.      Corporate Obligee Purchase Option.

9A.1    In the event that on any Termination Date, Obligor has not exercised its option to transfer the Equipment pursuant to Sections 25.2 or 25.4 of the Equipment Agreement and has not renewed the Equipment Agreement, Corporate Obligee shall have the right, and is hereby granted the option (the “Corporate Obligee Option”) to purchase, or at the option of Corporate Obligee, to designate a third party to purchase, and each Lender hereby agrees to sell to Corporate Obligee or its designee all of its right, title and interest in the Loans and the Notes, any time after such Termination Date at a purchase price equal to the aggregate of all amounts then owing to Lenders under the Operative Documents (the “Purchase Option Price”) and to assign all of Lenders’ rights, remedies and security interests with respect to the Loans and Notes under the Operative Documents to Corporate Obligee or its designee.  In order to exercise the Corporate Obligee Option, Corporate Obligee shall deliver to Lenders and Security Trustee irrevocable written notice of such election (the “Option Notice”) and shall pay the Purchase Option Price in immediately available funds on or before the second Business Day after delivery of the Option Notice in accordance herewith.

9A.2    Each Lender agrees that, notwithstanding any provision in any Operative Document to the contrary, it shall not grant participations in, assign, sell or otherwise transfer all or any part of its interest in the Loans or any Note unless such transferee, assignee or participant expressly acknowledges and agrees that its interest in the Loans and the Notes shall be subject to the Corporate Obligee Option and Lenders and Security Trustee agree that they will not take any action with respect to the Equipment during the period after Lenders and Security Trustee receive the Option Notice and prior to the third Business Day thereafter without the written consent of Corporate Obligee.

10.       Miscellaneous.

            10.1     Expenses and Recording.  Obligor shall reimburse each Obligee, Trust Company, Owner Participant, each Lender, Agent and Security Trustee for all reasonable costs and expenses in connection with the preparation, execution and delivery of the Operative Documents and the consummation of the transactionscontemplated thereby, and without limiting the generality of Obligor’s undertaking to do so, Obligor shall pay the reasonable fees and expenses (initial and ongoing) of Trust Company forserving as Obligees and shall reimburse Trust Company, Lenders, Owner Participant, Agent and Security Trustee for all of their respective costs and expenses (including, withoutlimitation, reasonable counsel fees and disbursements) in connection with the preparation, execution and delivery of and the consummation of the transactions contemplated thereby; provided, however, Obligor shall have no obligation to reimburse the above Persons for costs and expenses in the negotiation, preparation and execution of Operative Documents negotiated, prepared and executed after the Restructuring Date unless otherwise required under this Agreement or such Operative Documents relate to or arise out of an Equipment Agreement Event of Default.  Obligor shall also pay the reasonable fees and disbursements of special counsel to Corporate Obligee, special counsel to Trust Obligee and special counsel to Agent, Security Trustee and Lenders in connection with any amendments, waivers or consents requested by Obligor under the Equipment Agreement.  Upon the occurrence and during the continuance of any Equipment Agreement Default or Equipment Agreement Event of Default, Obligor will also pay or reimburse each Lender, Agent, Security Trustee and each Obligee for reasonable costs and expenses of counsel and of financial advisors as shall have been selected by such Obligee or suchLender, Agent or Security Trustee to assist such Obligee and such Lender in connection with such Equipment Agreement Defaults or Equipment Agreement Events of Default.  Obligor, at its own expense, will further cause the Equipment Agreement, the Loan Documents and/or appropriate financing statements or continuation statements to be filed and recorded and, from time to time when required, refiled and re-recorded, in accordance with Applicable Law in any jurisdiction in which Obligor or any Item of Equipment is located recognizing Corporate Obligee’s, any Lender’s or Security Trustee’s interest in the Equipment Agreement and in the Items of Equipment as a security interest and in any other jurisdiction where filing shall be reasonably requested by Corporate Obligee, such Lender or Security Trustee for the purpose of proper protection, to the satisfaction of counselfor Corporate Obligee, such Lender or Security Trustee, of its interests and rights under the Equipment Agreement, or the Loan Documents for the purpose of carrying out the intention of the Equipment Agreement and the Loan Documents. Obligor in addition will from time to time do and perform any other act and will execute, acknowledge, deliver, file, register,record (and will refile, reregister,deposit and redeposit or rerecord whenever required) any and all further instruments reasonably requested by Corporate Obligee, any Lender or Security Trustee for the purpose of proper protection, to its satisfaction, of Corporate Obligee’s, Lenders’ or Security Trustee’s interests in the Items of Equipment, or for the purpose of carrying out the intention of the Equipment Agreement or theLoan Documents; and Obligor will promptly furnish toCorporate Obligee, any Lender or Security Trustee which shall have requested the same evidence of all such filing, registering, depositing or recording.

            10.2     Modification.  Except as otherwise expressly provided and subject to the rights assigned by Obligor, Corporate Obligee and Trust Obligee to Security Trustee hereunder, none of this Agreement, the Notes, the Equipment Agreement, the Receivables Purchase Agreement, the Trust Agreement nor the Security Documents nor any terms hereof or thereof may be amended, supplemented, waived or modified without the written agreement and consent of the parties thereto, Obligor, each Lender, Corporate Obligee and Trustee Obligee, provided that where the consent of any Lender is required, such consent (except as provided below) may be given by Agent acting on behalf of Majority Lenders, and any such consent shall be binding on all Lenders, provided further, that no such amendment, modification, waiver or supplement shall, (i) without the consent of a Lender (A) extend the final scheduled maturity of such Lender’s A Loan or B Loan, as the case may be, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof (except to the extent repaid in cash), (B) release all or substantially all of Security Trustee’s interest in the Collateral (except as expressly provided herein), (C) reduce the percentage specified in the definition of Majority Lenders or (D) amend this clause (i); (ii) without the consent of Agent, amend, modify or waive any provision relating to the rights or obligations of Agent, or (iii) without the consent of Security Trustee amend, modify or waive any provision relating to the rights or obligations of Security Trustee.

            10.3     Governing Law, Jurisdiction and Venue; Waiver of Jury.  This Agreement and the rights and obligations of the parties hereunder and under the Notes shall be construed in accordance with, and be governed by, the law of the State of New York.  The parties hereto hereby agree that all actions or proceedings initiated by any party hereto arising directly or indirectly out of this Agreement or the other Loan Documents may be litigated in the Supreme Court of the State of New York located in New York City or the District Court or the United States District Court for the Southern District of New York.  Each party hereto hereby expressly submits and consents in advance to such jurisdiction and venue in any action or proceeding commenced by any party hereto in any of such courts, agrees that jurisdiction and venue is proper in such courts, and hereby waives personal service of the summons and complaint, orother process or papers issued therein, and agrees that such service of the summons and complaint may be made by registered mail, return receipt requested, addressed to the party hereto being served at the address for such party set forth in Section 10.4 hereof.  Each party hereto waives any claim that New York City or the Southern District of New York is an inconvenientforum or an improper forum based on lack of venue.  The choice of forum set forth herein shall not be deemed to preclude the enforcement by any Lender or Security Trustee of any judgment in any other appropriate jurisdiction.  Each of Obligor, Corporate Obligee, Trust Company, Trust Company and Owner Participant hereby waives trial by jury in any judicial proceeding brought by it, Lenders or Security Trustee involving directly or indirectly, any matter in any way arising out of, related to, or connected with this Agreement or the other Operative Documents.

            10.4.    Notices.  All notifications, notices, demands, requests and other communications herein provided for or made pursuant hereto shall be in writing and shall be sent via (i) reputable overnight delivery service, and the giving of such communication shall be complete on the immediately succeeding Business Day after the same is deposited with such delivery service, (ii) by legible telefax with original to promptly follow by certified mail, with return receipt requested, and the giving of such communication shall be completed on the Business Day onwhich such fax is received.  Written communications may be in any form of writing howsoever transmitted.  The initial address of the parties hereto are as follows:

Lenders:                                                           As set forth on Schedule 4 attached hereto.

Agent and Security Trustee:                              Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the Americas, 10^th Floor
New York, New York  10020-1104
Attn:  Corporate Trust Department
Telefax:            212.782.5900/5901

Trust Obligee and Trust Company:                    Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Attention: Peter Murphy
Telephone: (617) 603-6568
Telefax: (617) 603-6667         

Corporate Obligee:                                           111 Huntington Avenue
Suite 400
Boston, Massachusetts 02199-8001
Attention:  Senior Vice President- Administration

Telephone: (617) 573-9000
Telefax:  (617) 345-1444

Obligor:                                                            1101 Pennsylvania Avenue, NW
Suite 1010
Washington, D.C. 20004

Attention:          Treasurer or Assistant Treasurer
Telephone:        (202) 393-1101
Telefax:            (202) 393-3064

            10.5     Interests in the Equipment.  The parties hereto intend that (a) for financial accounting purposes with respect to Obligor, Corporate Obligee will be treated as the owner and the lessor of each Item of Equipment and Obligor will be treated as the lessee of each Item of Equipment and (b) for all other purposes, including federal and all state and local income tax purposes, state sales, use and other transaction tax purposes, and federal and state bankruptcy and insolvency laws, and state commercial law, (i) the Operative Documents will be treated as a financing arrangement, (ii) Corporate Obligee and each Lender will be deemed a lender making secured loans to Obligor in an amount equal to the sum of the aggregate of the EquityComponents for each Item of Equipment and the outstanding principal amount of the Loans and (iii) Obligor will be treated as the owner of each Item of Equipment and will be entitled to all tax benefits ordinarily available to an owner of equipment like the Equipment for such tax purposes.  Obligees shall take no action inconsistent with the intention of the parties setforth in clause (b)(iii) of this Section 10.5; provided however, if the Equipment Agreement is finally andconclusively determined by any taxing authority having jurisdiction with respect thereto not to constitute a finance lease, Obligees, Owner Participant, Lenders, Security Trustee and Obligor may take all actions necessary or desirable as a result of such determination and otherwise permitted by the terms of the Operative Documents.  Notwithstanding the intentions of the parties expressed herein, Obligor acknowledges and agrees that neither Obligees, Owner Participant, Lenders, Security Trustee nor Agent has made any representations or warranties to Obligor concerning the tax, accounting or legal characteristics of the Operative Documents and that Obligor has obtained and relied upon such tax, accounting and legal advice concerning the Operative Documents as it deems appropriate. 

            10.6     Descriptive Headings, etc.  The descriptive headings used in this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any provision hereof.

            10.7     Benefit of Agreement; Assignment.

                        (a)        This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns and in particular any holder from time to time of any Note.  Subject to clause (b) of this Section 10.7 and the following proviso, no party hereto may assign any or all of its rights or obligations hereunder without the consent of the other parties hereto; provided however, that Trust Obligee may transfer or assign any or all of its rights or obligations hereunder to a successor obligee appointed in accordance with the Trust Agreement, and each Lender and Owner Participant may at any time grant participations in or sell, assign, negotiate or otherwise transfer to any Permitted Assignee, any of its rights or obligations hereunder or under any other Operative Document provided that each such Permitted Assignee shall expressly acknowledge and consent to the Corporate Obligee Option.  Obligees shall from time to time at the request of any Lender, execute and deliver to each Lender such documents as such Lender may deem reasonably necessary or desirable to give full force and effect to any such sale, assignment or transfer.  If any Lender sells, assigns, negotiates or otherwise transfers all or a part of its rights and obligations hereunder, or all or a part of any Loan, or all or a part of any Note outstanding at the time, to any Permitted Assignee, any reference to “Lender” or “Lenders” and any reference to “Owner Participant” in any Operative Document shall thereafter refer to such Lender or Owner Participant and to such other Permitted Assignee to the extent of their respective interests.  Any such sale, assignment or transfer shall be evidenced by an Assignment and Acceptance Agreement substantially in the form of Schedule 5 attached hereto executed by the transferring Lender and the Permitted Transferee and delivered to Agent and Security Trustee.

Corporate Obligee shall have the right at any time at its sole expense, to sell, assign or transfer in whole or in part such right, title and interest to a transferee satisfying the conditions set forth below (a “Permitted Transferee”) and provided that such sale, assignment or transfer satisfies the following conditions:

(i)         Such sale, assignment or transfer will not be in violation of the registration requirements of the Securities Act of 1933, as amended;

                        (ii)        The Permitted Transferee shall have the requisite power and authority to enter into and carry out the transactions of Corporate Obligee contemplated hereby and by the other Operative Documents to which Corporate Obligee is a party;

                        (iii)       The Permitted Transferee shall be either (A) a bank or other financial institution with capital and surplus of at least $100,000,000 or a leasing company organized under the laws of the United States with a tangible net worth of $100,000,000 as determined in accordance with GAAP, or (B) a corporation (other than a corporation in the business of selling goods of the same type as the Equipment) organized and operating under the laws of any state of the United States with a tangible net worth of at least $100,000,000 as determined in accordance with GAAP, or (C) a subsidiary of any Person described in clauses (A) or (B) above, provided such Person is not in the business of selling goods of the same type as the Equipment and such Person’s obligations are guarantied by a Person of the type described in clause (A) or (B) in form and substance reasonably acceptable to the Majority Lenders, or (D) a corporation which is a member of the same consolidated group for Federal income tax purposes as Corporate Obligee, or another corporation owned and controlled by, or under common control with, Corporate Obligee, other than a Person in the business of selling goods of the same type as the Equipment, provided, that if the Permitted Transferee is a Person described in clause (D) above and not described in clause (A), (B) or (C) above, Corporate Obligee shall continue to be liable with respect to the obligations of the Permitted Transferee hereunder and under the other Operative Documents; and

                        (iv)       If Corporate Obligee proposes to transfer its interest hereunder at any time pursuant to this Section 10.7(b), Corporate Obligee shall give not less than ten (10) days’ notice to Obligor specifying the name and address of the proposed Permitted Transferee and specifying the facts necessary to determine compliance with this Section 10.7(b).

            From and after any transfer of Corporate Obligee’s interest effected in accordance with this Section 10.7(b), such Permitted Transferee shall be deemed a “Corporate Obligee” for all purposes of this Agreement and the other Operative Documents and the transferring Corporate Obligee shall have no further liability under the transferred interest hereunder or thereunder, expect to the extent of any interest herein retained or claims relating to or arising out of the period prior to such transfer.  Successive transfers may be made pursuant to this Section 10.7(b).

            10.8.    Execution and Effectiveness.  This Agreement may be executed in multiple counterparts, each of which shall be regarded as an original and all of which shall constitute a single instrument and shall become effective on the Restructuring Date when each of the parties hereto shall have signed and delivered a copy hereof (whether the same or different copies).

            10.9.    Registration.  The Notes are or, when issued, will be registered obligations.  Corporate Obligee, Trust Obligee and each Lender hereby directs and authorizes Agent to establish and maintain at the office of Agent registration books in which Agent will register, and register any assignment effected in compliance with Section 10.7 of, each holder’s interest in each Note or any portion thereof and which identifies each registered holder of each Note or any portion thereof.  No transfer by any holder of a Note or any portion thereof shall be effective unless and until such transfer is madeupon the registration books maintained by Agent.  Prior toregistration of transfer, Obligees may treat the person in whose name the Note is registered as theabsolute owner thereof for all purposes, and neither Corporate Obligee nor Trust Obligee shall be affected by any notice to the contrary.

            10.10.  Confidentiality.  Each of Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent and Security Trustee agrees that all financial statements and other proprietary information furnished by Obligor will be treated by it in a responsible manner, and their confidentiality maintained; such material will not be disseminated except to the parties hereto or their respective officers, directors, employees, agents, auditors, attorneys and professional consultants who, for proper reasons consistent with the purposes for which this information is furnished, need access to such information, and to such other parties to whom Corporate Obligee, Trust Obligee, Trust Company, Owner Participant, each Lender, Agent or Security Trustee may have a duty or legal obligation of disclosure, including, without limitation, any Governmental Entity having jurisdiction over Corporate Obligee, Trust Obligee, Trust Company, such Lender, Agent or Security Trustee.  This confidentiality provision will survive the expiration or early termination of this Agreement.  Each of Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee may designate any person in writing who is an officer, employee or agent thereof (each, a “Designee”), to visit and inspect the properties (including, without limitation, the Items of Equipment) of Obligor, and to the extent reasonable under the circumstances, examine its books of record and accounts (including, without limitation, Obligor’s records pertaining to the Items of Equipment but excluding tax returns and related tax information), and discuss its affairs, finances and accounts with its officers, and, with notice to Obligor so that it may have an officer present if it so reasonablyrequests, the accountants of Obligor, all at such reasonable times, during normal business hours, as Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee, as the case may be, may reasonably request and, upon such request, Obligor shall make such properties and such books of record and accounts available to Corporate Obligee, Trust Obligee, Owner Participant,each Lender, Agent or Security Trustee, as the case may be, for inspection; provided, however, that, with respect to the properties of Obligor, other than the Items of Equipment and the records of Obligor other than those pertaining to the Items of Equipment, Obligor’s obligations hereunder shall arise only following the occurrence and during the continuance of an Equipment Agreement Default or Equipment Agreement Event of Default, except that prior to the occurrence of an Equipment Agreement Default or Equipment Agreement Event of Default,Obligor shall, upon receipt of reasonable notice, permit Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee or any Designee todiscuss the affairs, finances and accounts of Obligor with a financial officer of Obligor.  No breach of the foregoing covenants by Obligees, shall affect or impair the obligation of Obligor to pay Obligees or Lenders any amounts due under this Agreement or the Equipment Agreement.  Notwithstanding anything contained herein to the contrary, except as reasonably necessary to comply with Applicable Laws, the parties hereto may disclose to any and all Persons, without limitation of any kind, any information with respect to the United States federal income “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such Persons relating to such tax treatment and tax structure.  To the extent not inconsistent with the immediately preceding sentence, this authorization does not extend to disclosure of any other information, including without limitation (a) the identities of Persons in this transaction, (b) the existence or status of any negotiations, or(c) any other term or detail, or portion of any documents or other materials, not related to the tax treatment or tax structure of the potential transaction.

            10.11.  Survival.  Each of the representations, warranties, terms, covenants, agreements and conditions contained in this Agreement shall specifically survive the execution and delivery of this Agreement and the other Loan Documents and the making of the Loans and shall, unless otherwise expressly provided, continue in full force and effect until the Loans, together with interest thereon, and all other sums payable hereunder or thereunder have been indefeasibly paid in full.

            10.12.  Severability.  The provisions of this Agreement are severable, and if any section or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, insuch jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

            10.13.  No Broker.  Each party hereto hereby represents and warrants to the other parties that no broker other than BTM Financial Services, Inc., BTM Capital Corporation or their respective Affiliates brought about the transactions contemplated hereby and each party hereby agrees to indemnify (the “Indemnifying Party”) and hold each other party harmless from, any and all other liabilities and costs (including without limitation, costs of counsel) to any Person claiming brokerage commissions or finder’s fees as a result of any agreement with the Indemnifying Party.

            10.14.  Performance by Lenders.  If either Obligee fails to perform any of their respective obligations under the Operative Documents in a timely fashion, each Lender shall be entitled, but not obliged, to perform such obligation at the expense of such Obligee and without waiving any rights they may have with respect to such breach.

            10.15.  Payment from Collateral; Limited Recourse.  Without impairing any of the other rights, powers, privileges, liens or security interests of Lenders or Security Trustee pursuant to the Loan Documents, except for the Trust Company’s, Corporate Obligee’s or Owner Participant’s gross negligence, willful misconduct, misrepresentations or fraud and as expressly provided in this Agreement or any other Operative Documents and, subject to the proviso below, Lenders agree that as between it and the Trust Company, Corporate Obligee and Owner Participant, no recourse shall be had with respect to this Agreement or such other Operative Documents against the Trust Company, Corporate Obligee or Owner Participant, or any officer,director, employee, agent or Affiliate thereof for amounts owed by Obligees under the Loan Documents; and none of the Trust Company, Corporate Obligee or Owner Participant, nor any officer, director, employee, agent or Affiliate thereof shall have any personal liability for any amountsowed by Obligees under any of the Operative Documents; provided, however, that nothing contained in this Section 10.15 or elsewhere shall be construed to (i) prevent recourse to and the enforcement against the Collateral of all liabilities, obligations and undertakings contained in any of the Operative Documents, (ii) limit, restrict, or impair the right of Lenders to accelerate the maturity of any Loan upon the occurrence of a Loan Event of Default, (iii) prevent recourse to and the enforcement against Corporate Obligee of any amounts owed under the Loan Documents to the extent corresponding amounts were received by Corporate Obligee from Obligor or realized by Corporate Obligee from the Collateral and, in either case, not remitted to Security Trustee (iv) prevent the bringing of an actionor obtaining a judgment against Obligees or against the Trust Company or Owner Participant for any breach ofany of its representations, warranties or covenants under any of the Operative Documents, or (v) prevent the bringing of anaction or obtaining of a judgment to foreclose the lien of the Equipment Agreement or the Security Documents or otherwise realize upon the Collateral or the sums due or to become due under this Agreement or the other Operative Documents to which any such Person is a party but, in the case of the Corporate Obligee, any liability arising under this Agreement or the other Operative Documents shall be limited solely to Corporate Obligee’s interest in the Collateral unless such liability arises from Corporate Obligee’s gross negligence, willful misconduct or fraud or a breach of Corporate Obligee’s representations and warranties contained in Sections 2.5(a), 2.5(b), 2.5(c), 2.5(e), 2.5(f), 2.5(g) (only with respect to the representation in 2.5(g) that the Equipment Collateral is free and clear of all Liens arising by, through or under Corporate Obligee other than Permitted Liens) or 2.5(i) hereunder or a breach of Corporate Obligee’s agreements or covenants contained in Sections 6.1.1(b), 6.1.1(c), 6.1.2(c)(i), 6.1.2(d), 6.1.2(e) (only with respect to the covenants in Section 6.1.2(e) that Corporate Obligee shall not except as expressly permitted by the Equipment Agreement, the Receivables Purchase Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and under this Agreement, sell, lease, convey, transfer or encumber or otherwise dispose of all or any part of any Item of Equipment), 6.2.2(a) (solely as it relates to the representation in Section 2.5(i)), 6.2.2(c), 6.8, 7.4, 10.2, 10.7 or 10.13 hereunder or a breach of Corporate Obligee’s agreements contained in Section 25.2 or 25.3.2 of the Equipment Agreement (solely as such agreements relate to a breach of Corporate Obligee’s obligation to convey its right, title and interest in and to the Equipment) or Section 26.1 of the Equipment Agreement (solely to the extent Corporate Obligee receives the excess therein in cash from the Security Trustee).

            10.16.  No Proceedings.  Each party hereto agrees that it shall not institute against, or join any other Person in instituting against Trust Obligee any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any federal or state bankruptcy or similar law for one year and a day after the latest maturing A Notes issued by Trust Obligee is paid.

            10.17.  Concerning Trust Company.  Trust Company is entering into this Agreement solely in its capacity as Trustee under the Trust Agreement and not in its individual capacity (except as expressly stated herein) and in no case shall Trust Company (or any entity acting as successor Trustee under the Trust Agreement) be personally liable for or onaccount ofany of the statements, representations, warranties, covenants or obligations stated to be those ofTrust Obligee hereunder; provided, however, that Trust Company (or any such successor Trustee) shall be personally liable hereunder for Trust Company Liabilities.

            10.18.  Waiver for Amendment and Restatement and Further Assurances.  The parties hereto hereby waive any procedural requirements under the Original Operative Documents to the extent required or necessary for the consummation of the transactions contemplated under this Agreement and the other Operative Documents, and waive the requirement under clause (iv) of Section 12.10 under the definition of Permitted Transferee under the Original Trust Agreement.

*  *  *  *

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

HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED,
  as Obligor

By:  /s/ Frank Meredith                        
  Name:  Frank Meredith
  Title:  Executive Vice President and
                  Chief Financial Officer

BTM CAPITAL CORPORATION,
  as Corporate Obligee and Owner Participant

By:  /s/ John F. McCarthy                                
  Name:  John F. McCarthy
        Title:  Vice President

U.S. BANK NATIONAL ASSOCIATION,
  not in its individual capacity,
  but solely as trustee,
  as Trust Obligee

By:  /s/ Peter M. Murphy                                 
  Name:  Peter M. Murphy
  Title:  Trust Officer

U.S. BANK NATIONAL ASSOCIATION,
  in its individual capacity, as Trust Company

By:  /s/ Peter M. Murphy                                 
  Name:  Peter M. Murphy
  Title:  Trust Officer

THE BANK OF NOVA SCOTIA

By:  /s/ Todd S. Meller                                    

  Name:  Todd S. Meller

  Title:  Managing Director

HSBC BANK USA

By:  /s/ Diane M. Zieske                                  

  Name:  Diane M. Zieske

    Title:  First Vice President

BANK OF TOKYO-MITSUBISHI, NEW YORK BRANCH

By:  /s/ Spencer Hughes                                   

  Name:  Spencer Hughes

  Title:  Authorized Signatory

DANSKE BANK, A/S, Cayman Island Branch

By:  /s/ Angelo J. Balestrieri                             

  Name:  Angelo J. Balestrieri

  Title:  Vice President

By:  /s/ John A. O’Neill                        

  Name:  John A. O’Neill

  Title:  Assistant General Manager

BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
  as Agent and Security Trustee

By:  /s/ Charles Ryan                                       

  Name:  Charles Ryan

  Title:  Vice President

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT AND AMENDED AND RESTATED PARTICIPATION AGREEMENT

(1999)

The definitions stated herein shall equally apply to both the singular and plural forms of the terms defined.  Any agreement defined or referred to below means such agreement as amended, supplemented or modified from time to time, and includes all exhibits, supplements and appendices thereto.  Any Person defined or referred to below include its successors, permitted transferees  and assigns.  The word “including,” when used below or in any Operative Document, is deemed to be followed by “without limitation,” whether or not such words appear.

“A Lenders” means any holder of an A Note and its successors and assigns.

“A Loan Term Percentage” means, as to each A Lender at any time, the percentage of the aggregate principal amount of the A Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such A Lender’s A Loan at such time.

“A Loan” means, as to each A Lender, the outstanding principal amount of such A Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “A Loans” opposite such A Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an A Note.  The aggregate principal amount of the A Loans on the Restructuring Date is $21,213,540.72.

“A Note” means any A Note issued by Corporate Obligee or Trust Obligee to any A Lender in the form of Exhibit D‑1 to the Participation Agreement.

“A Notes” means the collective reference to each A Note.

“Acceptance Date” for each Item of Equipment means the date on which Obligor financed such Item under the Original Operative Documents, as evidenced by Obligor’s execution and delivery of an Equipment Agreement Supplement for such Item dated such date.

“Acquisition Cost” of each Item of Equipment means an amount equal to the sum of (i) the total cost paid by Original Obligee to Obligor for such Item in accordance with the Original Operative Documents, plus (ii) all sales and excise taxes paid by Original Obligee and/or Obligor as agent for Original Obligee on or with respect to the acquisition of such Item, plus (iii) all costs and expenses approved and paid by Obligor as agent for Original Obligee in connection with the delivery and installation of such Item.

“Acquisition Period” means the period specified as such on each consecutively numbered Related Exhibit A attached to and made a part of the Equipment Agreement.

“Affected Person” means each of the Lenders, any permitted assignee of any Lender or the Agent.

“Affiliate” means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“After-Tax Basis” means in respect of an amount (the “base amount”) with respect to a Person, the base amount supplemented by a future payment, if necessary, to such Person such that, after reduction for all Taxes (other than Taxes based upon a Person’s net income or gross receipts and which are imposed or levied by any Federal, national, state, provincial or local taxing authority in the United States or a foreign country unless such Person would not otherwise have been subject to taxation in such jurisdiction but for such Person’s involvement in this transaction), if any, imposed on such Person in respect of the sum of the base amount and such future payment shall be equal to the base amount.

“Agent” means Bank of Tokyo-Mitsubishi Trust Company.

“Aggregate A Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Aggregate B Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Alternate Rate” means a variable rate equal to the greater of (i) the sum of the Federal Funds Rate from time to time in effect and  ½ of one percent (0.5%) and (ii) the rate of interest from time to time announced by Agent at its New York branch from time to time as its “prime commercial lending rate” (which rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer, and Agent may make commercial loans or other loans at rates of interest at, above or below such reference rate).

“Applicable Debt Rate” (a) for the purpose of calculating Equipment Payment means the rate calculated in accordance with Section 7.6 of the Equipment Agreement, (b) for the purpose of calculating interest due on any A Loan means the LIBOR Rate then in effect as determined by Agent pursuant to Schedule 2 to the Participation Agreement and (c) for the purpose of calculating interest due on any B Loan means the LIBOR Rate then in effect as determined by the Agent pursuant to Schedule 2 to the Participation Agreement.

“Applicable Law” means, with respect to any Person or Item of Equipment, all provisions of statutes, rules, regulations, orders and requests (whether or not having the force of law) of any Governmental Entity applicable to such Person or Item of Equipment, and all orders and decrees of all courts and arbitrators in proceedings or actions in which such Person is a party.

“Assignee” has the meaning set forth in Section 14.2 of the Equipment Agreement.

“Assignment and Acceptance Agreement” means the form of assignment and acceptance agreement attached as Schedule 5 to the Participation Agreement.

“Assumption and Revocation Agreement” means that certain Assignment, Assumption and Revocation Agreement dated as of June 30, 2003 by and between Original Owner Trustee, Original Obligee and Corporate Obligee, a copy of which is attached as Exhibit B to the Trust Agreement.

“B Lenders” means any holder of a B Note and its successors and assigns.

“B Loan Term Percentage” means, as to each B Lender at any time, the percentage of the aggregate principal amount of the B Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such B Lender’s B Loan at such time.

“B Loan” means, as to each B Lender, the outstanding principal amount of such B Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “B Loans” opposite such B Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an B Note.  The aggregate principal amount of the B Loans on the Restructuring Date is $3,114,771.77.

“B Note” means any B Note issued by Corporate Obligee to any B Lender in the form of Exhibit D-2 to the Participation Agreement.

“B Notes” means a collective reference to each B Note.

“Basic Term” for each Item of Equipment means the period consisting of twelve (12) months commencing on the “Basic Term Commencement Date” set forth on the Related Exhibit A for such Item and terminating on the Payment Date that occurs in the last month of such twelve (12) month period.

“Basic Term Commencement Date” for each Item of Equipment means the date specified as such on the Related Exhibit A.

“Breakage Costs” means any amount or amounts as shall compensate a Lender or Owner Participant for any loss or reasonable cost incurred after using good faith and reasonable efforts to minimize such loss (but excluding loss of margin of profit) or cost by a Lender or Owner Participant directly resulting from repayment by an Obligee of Related Notes (as defined in Appendix A of the Original Participation Agreement) or Equity Components relating to Item(s) of Equipment that Obligor exercises its rights to acquire pursuant to Section 25.4 of the Equipment Agreement, in accordance with the terms of the Operative Documents.  The amount of the loss or cost shall be determined by the Person seeking such, and notice thereof shall be provided to Obligor in the form of a certificate of such Person stating that the calculations set forth therein are in accordance with the terms of the Operative Documents and setting forth in reasonable detail the basis for such calculations, such certificate being conclusive and binding for all purposes absent manifest error.

“Business Day” means any day other than a day on which banking institutions in the State of Connecticut or the State of New York are authorized by law to close.

“Casualty Loss Value” of each Item of Equipment as of any Casualty Loss Value Payment Date means an amount determined by multiplying the Acquisition Cost of such Item of Equipment by the percentage set forth opposite such Casualty Loss Value Payment Date on the Schedule of Casualty Loss Values attached to the Equipment Agreement Supplement for such Item.

“Casualty Loss Value Payment Date” for each Item of Equipment for which an Event of Loss occurs shall mean the Payment Date for such Item next following the date of such Event of Loss and for each Item of Equipment with respect to which Obligor is exercising its option under Section 25.4 of the Equipment Agreement shall mean the Payment Date on which such option is to be exercised in accordance with such Section 25.4.

“Certificate of Costs” means any certificate by Obligor executed by a Responsible Officer certifying Obligor’s original purchase price and date of purchase of the Item of Equipment specified in such certificate sold by Obligor to Original Obligee under the Original Participation Agreement in the form of Exhibit B to the Original Participation Agreement.

“Closing Date” means the first Funding Date.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time, or any comparable successor law.

“Collateral” means the collective reference to the Equipment Collateral and the Transferred Property Collateral.

“Collateral Proceeds” means the amount or amounts constituting all or a portion of the Net Proceeds of Sale received by Corporate Obligee or the Lenders from the sale of any Item or Items of Equipment in accordance with Section 25.3 of the Equipment Agreement to the extent such amounts constitute payments of principal or interest due on the A Loans and the B Loans under Section 5 of the Participation Agreement.

“Commerzbank” means Commerzbank Aktiengesellschaft, New York Branch, the New York branch of a German banking corporation.

“Consolidated Capitalization” means any date, the sum of (a) shareholders’ equity of Obligor and (without duplication) its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (b) Consolidated Total Debt.

“Consolidated EBITDA” means for any period, Consolidated Net Income for such period, plus the amount of taxes, interest, depreciation and amortization deducted from earnings in determining such Consolidated Net Income.

“Consolidated Interest Expense” means for any period, the amount of interest expense deducted from earnings of Obligor and its consolidated Subsidiaries in determining Consolidated Net Income for such period in accordance with GAAP.

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

“Consolidated Total Debt” means at any date, without duplication, the aggregate of all Indebtedness (including the current portion thereof) of Obligor and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Corporate Obligee” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Corporate Obligee Option” has the meaning set forth in Section 9A.1 of the Participation Agreement.

“Cross Receipt” means any cross receipt in the form of Exhibit A to the Original Participation Agreement that was executed and delivered by Obligor to Original Obligee prior to the Restructuring Date in accordance with the Original Operative Documents.

“Debt Amortization Payment” for any Item of Equipment as of any Payment Date means the amount determined by multiplying the Debt Component of such Item by the percentage set forth opposite such Payment Date on the Schedule of Debt Component Amortization attached to the Related Equipment Agreement Supplement.

“Debt Component” for each Item of Equipment means the dollar amount of the Acquisition Cost financed by Original Lender on the Acquisition Date in accordance with the Original Operative Documents therefor calculated as 97.00% of the Acquisition Cost for such Item.

“Deficiency” has the meaning set forth in Section 26.1 of the Equipment Agreement.

“Dollar” means freely transferable, lawful money of the United States.

“EBITDA Ratio” means on any date, the ratio of Consolidated EBITDA to Consolidated Interest Expense for the four consecutive fiscal quarters of Obligor most recently ended prior to such date.

“Englis  h Debenture” means each of Debentures among (i) Original Obligee and Original Security Trustee (ii) Corporate Obligee and Security Trustee, (iii) Obligor and Original Security Trustee and (iv) Harman International Industries, Limited and Original Security Trustee.

“Equipment” means the equipment of the type(s) described on the Schedule of Equipment attached to each consecutively numbered Equipment Agreement Supplement made a part of the Equipment Agreement together with any and all related appliances, parts, accessories, appurtenances, accessions, additions, improvements, replacements and other equipment or components of any nature from time to time incorporated or installed therein.

“Equipment Agreement” means the Amended and Restated Equipment Leasing Agreement dated as of June 30, 2003 between Obligor, as lessee, and Corporate Obligee, as lessor, and each Equipment Agreement Supplement as amended, supplemented and modified from time to time in accordance with the terms of the Operative Documents.

“Equipment Agreement Default” means an Equipment Agreement Event of Default or an event which with notice or lapse of time or both would become an Equipment Agreement Event of Default.

“Equipment Agreement Event of Default” has the meaning set forth in Section 20 of the Equipment Agreement. 

“Equipment Agreement Supplement” means an Equipment Agreement Supplement substantially in the form attached to the Original Equipment Agreement as Exhibit B, which, prior to the Restructuring Date, was executed by Original Obligee and Obligor with respect to each Item of Equipment as provided in Section 4 of the Original Equipment Agreement and was consented thereto by Original Lender, as the same may be amended or modified from time to time.

“Equipment Collateral” has the meaning set forth in Section 7.1(a) of the Participation Agreement.

“Equipment Payment” means the amount payable during the Interim Term pursuant to Section 7.1 of the Equipment Agreement, during the Basic Term pursuant to Section 7.2 of the Equipment Agreement, during each Renewal Term pursuant to Section 25.1 of the Equipment Agreement and during any holdover period pursuant to Section 6.3 of the Equipment Agreement, any Deficiency and any end of term rent adjustment payable in accordance with Section 26.2 of the Equipment Agreement.

“Equipment Payment Period” for each Item of Equipment means (a) for the Interim Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Interim Term as set forth in Section 7.1 of the Equipment Agreement, (b) for the Basic Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Basic Term thereof as set forth in Section 7.2 of the Equipment Agreement, and (c) for each Renewal Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during such Renewal Term as set forth in Section 25.1 of the Equipment Agreement.

“Equity Component” means, for each Item of Equipment, the difference between the Acquisition Cost and the Debt Component therefor.

“Equity Rate” means, for any Equipment Payment Period, the LIBOR in effect as of the first LIBOR Banking Day of each such Equipment Payment Period plus two hundred fifty (250) basis points.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Residual Value” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Estimated Residual Value Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Event of Loss” with respect to any Item of Equipment means (a) the loss of such Item of Equipment or any substantial part thereof, or (b) the loss of the use of such Item of Equipment due to theft or disappearance for a period in excess of forty-five (45) days during the Term, or existing at the expiration or earlier termination of the Term, or (c) the destruction, damage beyond repair, or rendition of such Item of Equipment or any substantial part thereof permanently unfit for normal use for any reason whatsoever, or (d) the condemnation, confiscation, seizure, or requisition of use or title to such Item of Equipment or any substantial part thereof by any Governmental Entity under the power of eminent domain or otherwise beyond the earlier of sixty (60) days and the end of the Basic Term or Renewal Term, as applicable.

“Excepted Payments” means (a) indemnity payments paid or payable in favor of Trust Company, Owner Participant, or any Assignee, or their successors or assigns, directors, officers, employees, affiliates and agents under the Operative Documents, (b) proceeds of public liability insurance (or government indemnities in lieu thereof) payable to Trust Company, Owner Participant, or any Assignee either pursuant to the Equipment Agreement or the Participation Agreement (which shall include proceeds of any self-insurance by Obligor) or maintained by Obligor, Trust Company, Obligees, Owner Participant, or any Assignee and not required to be maintained under the Equipment Agreement, (c) costs or expenses paid or payable by Obligor to, or for the benefit of, Trust Company, Owner Participant, or any Assignee, (d) all rights of, and payments to, Owner Participant under and pursuant to the Trust Agreement, (e) where any amount payable to Trust Company, Owner Participant, or any Assignee is expressed to be payable on an After-Tax Basis, the increment to the underlying payment obligation arising by virtue of the operation of the definition of “After-Tax Basis,” (f) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (e) above and otherwise required to be paid thereon, (g) all rights to receive the amounts referred to in clauses (a) through (f) above, and (h) the proceeds of enforcement of any right to receive the proceeds of any amount referred to in clauses (a) through (f) above.

“Federal Funds Rate” means for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 a.m. (New York time) for such day on such transactions received by Agent from three federal funds brokers of recognized standing selected by Agent.

“French Commercial Pledge Agreement” means each Commercial Pledge Agreement among Obligor, Corporate Obligee and Audax Industries S.N.C.

“Funding Date” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“Funding Notice” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

“German Chattel Mortgage Agreement” means each of the Agreements on Chattel Mortgage among (i) Becker GMBH and Obligor, (ii) Harman Audio Electronic Systems GMBH and Obligor, (iii) Obligor and Corporate Obligee and (iv) Corporate Obligee and Security Trustee.

“Guaranty Obligation” means as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, derivative instrument or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guaranty Obligation shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business or (y) obligations of the Obligor or any of its Subsidiaries under arrangements entered into in the ordinary course of business whereby Obligor or such Subsidiary sells inventory to other Persons under agreements obligating Obligor or such Subsidiary to repurchase such inventory, at a price not exceeding the original sale price, upon the occurrence of certain specified events.

“Governmental Entity” means any Federal, state, municipal or other governmental department, commission, board, bureau, agency, central bank or instrumentality or any court, in each case whether of the United States or any foreign country.

“Harman Proceeds” means the amount or amounts paid by Obligor to Corporate Obligee pursuant to Section 26.1 or 26.2 of the Equipment Agreement and received by the Lenders to the extent such amounts constitute payments of principal or interest due the A Loans and the B Loans under Section 5 of the Participation Agreement.

“Illegality Event” has the meaning set forth in Section 5.5.9 of the Participation Agreement.

“Indebtedness” means of any Person at any date, all indebtedness or obligations of such Person (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), as reflected on the balance sheet of such Person prepared in accordance with GAAP.

“Interest Coverage Ratio” means for any period of four consecutive fiscal quarters, Consolidated EBITDA divided by Consolidated Interest Expense for such period.

“Interim Term” for each Item of Equipment means the period commencing on the Acceptance Date for such Item (unless the Acceptance Date is the Basic Term Commencement Date, in which case there shall be no Interim Term for such Item) and ending on the date immediately prior to the Basic Term Commencement Date. 

“Item of Equipment” or “Item” means any of the items of Equipment separately identified on any of the Schedules of Equipment attached to the Equipment Agreement Supplements currently made a part of the Equipment Agreement.

“Lenders” means the collective reference to the A Lenders and the B Lenders, and their permitted successors and assigns.

“LC Issuer” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“LC Reimbursement Security Agreement” means the Reimbursement Security Agreement between Original Obligee and LC Issuer dated as of June 30, 1999.

“LIBOR” means, in relation to any Equipment Payment Period, the rate per annum for deposits in Dollars for that Equipment Payment Period which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period; provided that if such rate does not appear on the Telerate Screen Page 3750, LIBOR shall mean the rate for deposits of an amount comparable to the aggregate of the Unamortized Debt Balances then financed or refinanced by such Lender by loans on the London interbank Dollar market for that Equipment Payment Period determined by such Lender to be the LIBOR rate offered by Agent to leading banks in the London Eurodollar interbank market at 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period for that relevant Equipment Payment Period adjusted for any reserve requirements in effect on the first day of such Equipment Payment Period.

“LIBOR Banking Day” means any day other than a day on which banking institutions in the State of New York or the City of London are authorized by law to close.

“LIBOR Margin” means, at any time, the liquidity margin then applicable set forth in Schedule 2 to the Participation Agreement, expressed as an annual percentage rate calculated to the seventh decimal place.

“LIBOR Rate” means the sum of LIBOR plus the LIBOR Margin.

“Lien” means liens, mortgages, encumbrances, pledges, charges and security interests of any kind.

“Liquidity Agreement” means the Amended and Restated Liquidity Asset Purchase Agreement dated as of August 27, 2000, among Original Issuer, as issuer, Commerzbank, as liquidity agent for the purchasers thereunder, and the purchasers party thereto, as amended prior to the date hereof.

“Loans” means a collective reference to the A Loans and the B Loans.

“Loan Commitment Fee”  means the Loan Commitment Fee (as defined in Appendix A to the Original Participation Agreement).

“Loan Default” means an event, which with the giving of notice or lapse of time or both, would become a Loan Event of Default.

“Loan Documents” means the Participation Agreement, Notes and Security Documents.

“Loan Event of Default” has the meaning set forth in section 5.10 of the Participation Agreement.

“Majority Lenders” means Lenders in the aggregate holding Notes representing more than 50% of the aggregate outstanding principal balances of the Loans with each Lender being able to vote all or any portion of its outstanding principal balance.

“Material Obligation” means any capitalized lease, derivative instrument or Guaranty Obligation.

“Maturity Date” for each Loan means the earlier of (a) the last day of the third Renewal Period for the Items of Equipment financed by such Loans and (b) such earlier date on which such Loan becomes due and payable under the Participation Agreement.

“Maximum Obligor Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligor Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Maximum Obligee Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligee Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Multi-Currency Credit Agreement” means the Amended and Restated Multi-Currency, Multi-Option Credit Agreement dated as of August 14, 2002 among Obligor, as “Borrower,” JPMorgan Chase Bank, a New York banking corporation, as “Administrative Agent” and the several lenders party thereto, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, and if such is no longer in effect, any other credit agreement or loan agreement which provides Obligor and all or some of its subsidiaries with their primary source of working capital borrowings and if there is no such credit agreement or loan in effect then such last agreement or loan as in effect immediately prior to its termination or expiration.

“Multi-Currency Negative Covenants” means each and every financial and negative covenant contained in the Multi-Currency Credit Agreement (other than covenants (a) for the maintenance of a ratio of Consolidated Total Debt to Consolidated Capitalization, (b) for the maintenance of an Interest Coverage Ratio or (c) restricting mergers, consolidations, amalgamations, liquidation, winding up or dissolutions) as such covenants are in effect from time to time, which, as of the date hereof, are contained in Section 9 of the Multi-Currency Credit Agreement.

“Net Proceeds of Sale” means with respect to each Item of Equipment sold by Corporate Obligee to a third party pursuant to Section 25.3 of the Equipment Agreement, the net amount of the proceeds of sale of such Item, after deducting from the gross proceeds of such sale (a) all sales taxes and other taxes (excluding income taxes on or measured by Corporate Obligee’s income) as may be applicable to the sale or transfer of such Item, (b) all fees, costs and expenses of such sale incurred by Obligee and (b) any other amounts for which, if not paid, Corporate Obligee would be liable or which, if not paid, would constitute a Lien on such Item.

“Non-Renewal Item of Equipment” means each Item of Equipment with respect to which the Equipment Agreement is not renewed at the end of the Basic Term or any Renewal Term pursuant to timely notice to Corporate Obligee in accordance with the provisions of Section 25.1 of the Equipment Agreement.

“Notes” means the collective reference to the A Notes and the B Notes.

“Obligees” means, collectively, Trust Obligee and Corporate Obligee, and each of their permitted successors and assigns.

“Obligee Indemnified Person” means each of Trust Company, Owner Participant, Lenders, Agent, Security Trustee and any Assignee, their successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Obligee Property” means all of the estate, right, title and interest of Trust Obligee and Corporate Obligee in and to the Equipment, the Participation Agreement, the Equipment Agreement and the other Operative Documents, and all documents related hereto and to the Equipment, and all proceeds thereof, including, without limitation, all Equipment Payments, insurance proceeds and Supplemental Payments, but excluding any Excepted Payments.

“Obligor” means Harman International Industries, Incorporated, a Delaware corporation, and its permitted successors and assigns.

“Obligor Indemnified Person” means each Obligee Indemnified Person and each Obligee, its successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Operative Documents” means the Participation Agreement, the Receivables Purchase Agreement, the Notes, the Equipment Agreement, all Equipment Agreement Supplements, the Trust Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and the Security Documents and in each case, all exhibits, schedules and supplements thereto, and all notices, consents, certificates and other documents from time to time issued or entered into pursuant to or in connection therewith; in each case as amended and modified from time to time.

“Optional Alteration” has the meaning given set forth in Section 12 of the Equipment Agreement.

“Original Agent” means Commerzbank, acting in the capacity as “Agent” under the Original Participation Agreement.

“Original Equipment” means the Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Equipment Agreement” means the Equipment Leasing Agreement dated as of September 30, 1999 between the Original Obligee, as “Obligee”, and Obligor, as “Obligor”, as amended prior to the Restructuring Date.

“Original Issuer” means Four Winds Funding Corporation, a Delaware corporation, as “Issuer” under the Liquidity Agreement.

“Original Items of Equipment” means the Items of Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Lender” means Four Winds Funding Corporation, a Delaware corporation, as “Lender” under the Original Operative Documents.

“Original Loans” means each Loan (as defined in Appendix A to the Original Participation Agreement) made by Original Lender to Original Obligee under the Original Operative Documents.

“Original Notes” means the collective reference to the Notes (as defined in Appendix A to the Original Participation Agreement) issued by Original Obligee to Original Lender to evidence the Original Loans made to it by Original Lender under the Original Operative Documents.

“Original Obligee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), not in its individual capacity but solely as trustee under the Original Trust Agreement.

“Original Operative Documents” means the Operative Documents (as defined in Appendix A to the Original Participation Agreement).

“Original Owner Participant” means Bank of Tokyo-Mitsubishi Trust Company, a New York trust company.

“Original Owner Trustee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), acting in the capacity as “Owner Trustee” under the Original Trust Agreement.

“Original Participation Agreement” means the Participation Agreement dated as of September 30, 1999 between Obligor, Original Obligee, Original Lender, Original Agent, Original Security Trustee and LC Issuer.

“Original Security Trustee” means Commerzbank, acting in the capacity as “Security Trustee” under the Original Participation Agreement.

“Original Trust Agreement” means that certain Trust Agreement by and between Original Owner Trustee and Original Owner Participant, dated as of September 30, 1999, which agreement has been terminated pursuant to the Assumption and Revocation Agreement.

“Original Trust Estate” means the Trust Estate (as defined in Appendix A to the Original Participation Agreement).

“Original Trust Purchase Agreement” means the Purchase, Assignment and Assumption Agreement dated as of June 30, 2003, between Original Owner Participant, as “Seller”, and Corporate Obligee, as “Purchaser”, a copy of which is attached as Exhibit A to the Participation Agreement.

“Outstanding Debt Amount” with respect to each Item of Equipment means the Debt Component therefor less the aggregate of all Debt Amortization Payments, all payments on account of Casualty Loss Value and all Deficiency payments and all payments made by Obligor to Corporate Obligee in accordance with Section 26.2 of the Equipment Agreement paid by Obligor to Corporate Obligee with respect to such Item.

“Overdue Rate” means the Applicable Debt Rate at the time in effect plus two (2) percent (200 basis points).

“Overpayment Memorandum” means that certain memorandum dated June 30, 2003 from Greg Henry of Harman International Industries, Incorporated to the A Lenders.

“Owner Participant” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Participation Agreement” means the Amended and Restated Participation Agreement dated as of June 30, 2003 among Obligor, Corporate Obligee, Trust Obligee, each Lender, Owner Participant, Agent and Security Trustee, as amended and modified from time to time in accordance with the terms thereof.

“Payment and Amortization Schedule” for each Loan means the payment and amortization scheduled attached to the Note relating to and evidencing such Loan.

“Payment Date” the 20^th of each June, September, December and March , provided however, if any such date is not a LIBOR Banking Day, then the Payment Date shall be the next LIBOR Banking Day.

“Permitted Assignee” means any “accredited investor” under Rule 501(a) of the Securities Act of 1933, as amended, which is either a bank, insurance company, mutual fund, trust company, employee benefit plan (as defined in ERISA), or savings and loan company, in each case having total assets of at least $200,000,000 or Corporate Obligee upon exercise of the Corporate Obligee Option.

“Permitted Lien” means (a) any Liens created or granted by (i) Corporate Obligee to Security Trustee with respect to the Equipment Collateral under or in connection with the Participation Agreement, or (ii) by Trust Obligee to Security Trustee with respect to the Transferred Property Collateral under or in connection with the Participation Agreement, (b) any Liens created or granted by Original Obligee with respect to the Collateral (as defined in the Original Operative Documents) under or in connection with the Original Participation Agreement, which Liens have been assumed by Corporate Obligee, Trust Obligee, or both, (c) any interest of Obligor with respect to the Collateral under the Participation Agreement or the Equipment Agreement, and (d) any Lien of a mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings.

“Permitted Transferee” has the meaning specified in Section 10.7(b) of the Participation Agreement.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, trustee(s) of a trust, unincorporated organization, or government or Governmental Entity, agency or political subdivision thereof.

“Pre Effective-Date Financing Statement” means any UCC financing statement filed prior to July 1, 2001 in accordance with the Original Operative Documents to perfect a security interest granted by a Subsidiary of Obligor to Obligor or by Obligor to Original Obligee or by Original Obligee to Original Security Trustee under the Original Equipment Agreement or the Original Participation Agreement, which UCC financing statements were not filed in such Subsidiary’s, Obligor’s or Original Obligee’s UCC Location.

“Prepayment Premium” means with respect to any repayment of a Loan in whole or in part on any day other than a Payment Date the amount (if any) by which (a) the amount of interest payable on the next Payment Date on the amount of the Loan which is repaid, but for it having been so repaid, exceeds (b) the aggregate of the amount of interest accrued to the date such amount is repaid and an amount equal to AR x D x R, where AR equals the amount which is repaid, D equals the number of days from the date of repayment to the next Payment Date and R equals the rate per annum at which the Lender concerned is offering or would offer in the London Interbank Market (based on commercially reasonable criteria) for Dollar deposits of leading banks in an amount substantially equal in the amount repaid for a period from such date to the next Payment Date.

“Program Administration Letter” means the Program Administration Letter (as defined in Appendix A to the Original Participation Agreement).

“Receivables Purchase Agreement” means the Financing Agreement Rights Purchase Agreement dated as of June 30, 2003 between Corporate Obligee, as seller, and Trust Obligee, as purchaser, a copy of which is attached as Exhibit C to the Participation Agreement.

“Redelivery Location” means, with respect to any Item of Equipment that is to be returned by Obligor to Corporate Obligee, a location or locations designated by Corporate Obligee.

“Related Exhibit A” means, with respect to an Item of Equipment, the particular numbered Exhibit A currently attached to the Original Equipment Agreement and made a part thereof to which such Item relates as specified in Section 4 of the Equipment Agreement.

“Related Equipment Agreement Supplement” means, with respect to an Item of Equipment, the particular numbered Equipment Agreement Supplement executed and delivered prior to the Restructuring Date in connection with the Original Operative Documents on which that Item is identified.

“Renewal Term” for each Item of Equipment means each twelve (12) month period following the end of the Basic Term for such Item with respect to which Obligor has the option to renew the Equipment Agreement pursuant to Section 25.1 of the Equipment Agreement, terminating on the Payment Date that occurs in the twelfth month of such Renewal Term.

“Required Alteration” has the meaning set forth in Section 12 of the Equipment Agreement.

“Responsible Officer” means the chief executive officer, the president, the chief financial officer, the Chief operating officer or the vice president for financial or legal affairs of Obligor.

“Restricted Subsidiary” means any Subsidiary identified as a “Restricted Subsidiary” in the Multi-Currency Credit Agreement.

“Restructuring Date” means June 30, 2003.

“Risk Allocation Agreement” means the Risk Allocation Agreement dated as of September 30, 1999 by and among Commerzbank Aktiengesellschaft, New York Branch and each other party referred to therein as a “Purchaser” and Commerzbank Aktiengesellschaft, New York Branch, as agent for itself and the other Purchasers thereunder.

“Secured Obligations” has the meaning set forth in Section 7 of the Participation Agreement.

“Security Documents” means the UCC financing statements referenced in Section 2.1(g) of the Participation Agreement, the French Commercial Pledge Agreements, the German Chattel Mortgage Agreements, the English Debentures, and Subsidiary Equipment Agreements.

“Security Trustee” means Bank of Tokyo-Mitsubishi Trust Company. 

“Special Non-Cash Charges” means any non-cash, non recurring restructuring charges in accordance with GAAP and non-cash charges relating to the implementation of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets, issued by the Financial Accounting Standards Board.

“Standard & Poor’s” means Standard & Poor’s Rating Service, a Division of McGraw Hill Companies, Inc. and any successor or assign.

“Subsidiary” means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“Subsidiary Equipment Agreement” has the meaning set forth in Section 14.1 of the Equipment Agreement.

“Supplemental Payments” means all amounts, liabilities and obligations which Obligor assumes or agrees to pay hereunder to Corporate Obligee or others, including payments of Casualty Loss Value, Estimated Residual Value and indemnities, but excluding Equipment Payment.

“Taxes” has the meaning set forth in Section 8.2 of the Participation Agreement.

“Term” for each Item of Equipment means the period from and including the Acceptance Date thereof and ending on the last day of the Basic Term thereof or, if renewed, the last Renewal Term thereof.

“Termination Date” for each Item of Equipment means the last day of the Basic Term therefor, or if the Term of such Item has been renewed pursuant to Section 25.1 of the Equipment Agreement, the last day of the then current Renewal Term of such Item.

“Transfer Option Amount” has the meaning set forth in Section 25.2 of the Equipment Agreement.

“Transferred Property” has the meaning set forth in Section 1 of the Receivables Purchase Agreement.

“Transferred Property Collateral” has the meaning set forth in Section 7.1(b) of the Participation Agreement.

“Trust” means the trust created by the Trust Agreement.

“Trust Agreement” means that certain Trust Agreement by and between Trust Company and Owner Participant, dated as of June 30, 2003, as amended, supplemented or modified from time to time.

“Trust Collateral” has the meaning set forth in Section 7.1(c) of the Participation Agreement.

“Trust Estate” has the meaning specified in Section 2.6 of the Trust Agreement.

“Trust Company” means U.S. Bank National Association, a national banking association, and its successors and assigns, each in its individual capacity.

“Trust Company Liabilities” means any claims or liabilities resulting from or arising out of the following (i) the willful misconduct or gross negligence of Trust Company; (ii) the liabilities that may result from the breach or inaccuracy of any of the Trust Company’s representations, warranties or agreements made in its individual capacity in Sections 5.6 and 5.14 of the Trust Agreement, or in any Operative Documents or any document delivered in connection therewith; (iii) any failure by Trust Company to perform the obligations expressly undertaken in its individual capacity in the Trust Agreement or in any Operative Document or any document delivered in connection therewith; (iv) Taxes based on or measured by any fees, commissions or compensation received by Trust Company for acting as trustee in connection with any of the transactions contemplated by the Operative Documents; or (v) any failure by Trust Company to use ordinary care in the receipt and disbursement of fund.

“Trust Obligee” means U.S. Bank National Association, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement, and its permitted successors and assigns.

“UCC” means the Uniform Commercial Code, as in effect in any applicable jurisdiction.

“UCC Location” means the jurisdiction in which a “debtor” is located (or deemed located) under the UCC.

“Unamortized Debt Balance” for any Item of Equipment, means the amount calculated by multiplying the unpaid principal balance of the Loans made with respect to such Item of Equipment by a fraction, the numerator of which is the Acquisition Cost of such Item of Equipment as set forth on the Related Equipment Agreement Supplement and the denominator of which is the aggregate of all Acquisition Costs for Items of Equipment as set forth on the Related Equipment Agreement Supplement (including such Item of Equipment with respect to which such calculation is being made) and at the time subject to the Equipment Agreement.

When used in any Operative Document the words “this Agreement”, “herein”, “hereunder”, “hereof” or other like words mean and include such Operative Document and each amendment and supplement thereto, and with respect to the Equipment Agreement, each Exhibit A, each Equipment Agreement Supplement.  All references to sections, schedules and exhibits in any Operative Document are to sections, schedules and exhibits in or to such Operative Document unless otherwise specified.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in effect from time to time in the United States.  All words importing any gender shall be deemed to include the other gender.  All references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to.  Unless otherwise specified, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments, modifications and supplements thereto.

EX-10.4

Exhibit 10.4

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT

Dated as of June 30, 2003

between

BTM CAPITAL CORPORATION,
as Corporate Obligee

and

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED,
as Obligor

TO THE EXTENT, IF ANY, THAT THIS DOCUMENT CONSTITUTES
CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE,
NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED
THROUGH THE TRANSFER AND POSSESSION OF ANY
COUNTERPART OTHER THAN COUNTERPART NO. 1.

COUNTERPART NO. 8  OF8 SERIALLY NUMBERED
MANUALLY EXECUTED COUNTERPARTS.

(2001)

TABLE OF CONTENTS

			Page
1.	Definitions.		1
2.	Agreement for Financing of Equipment.		1
3.	Acknowledgment of Financed Equipment.		2
4.	Delivery, Acceptance and Leasing of Equipment.		2
5.	Term.		2
6.	Return of Equipment.		3
	6.1.	Redelivery.	3
	6.2.	Storage.	4
	6.3.	Holdover Equipment Payment.	4
	6.4.	Specific Performance.	4
7.	Payments.		4
	7.1.	Interim Equipment Payment.	4
	7.2.	Basic Equipment Payment.	5
	7.3.	[Intentionally Deleted.]	5
	7.4.	Supplemental Payments.	5
	7.5.	Method of Payment.	5
	7.6.	Applicable Debt Rate.	5
	7.7.	Business Day Convention	5
8.	Net Financing Agreement.		5
9.	Further Assurances.		6
10.	Use of Equipment; Compliance with Laws.		6
11.	Maintenance and Repair of Equipment.		7
12.	Alterations; Modifications; Replacements		8
13.	Identification Marks; Inspection.		8
14.	Assignment and Leasing.		9
	14.1.	By Obligor.	9
	14.2.	By Corporate Obligee.	10
	14.3.	Registration.	10
15.			11
16.	Loss, Damage or Destruction.		11
	16.1.	Risk of Loss, Damage or Destruction.	11
	16.2.	Payment of Casualty Loss Value Upon an Event of Loss.	11
	16.3.	Application of Payments Not Relating to an Event of Loss.	12
17.	Insurance.		12
18.	NO CORPORATE OBLIGEE WARRANTIES.		13
19.	Assignment of Manufacturer Warranties.		13
20.	Events of Default.		14
21.	Remedies Upon Default.		15
22.	Corporate Obligee's Right to Perform for Obligor.		17
23.	Late Charges.		17
24.	Notices.		17
25.	Obligor's Renewal and Transfer Options.		17
	25.1.	Obligor's Renewal Option.	17
	25.2.	Obligor's End of Term Transfer Option.	18
	25.3.	Third Party Sale of Equipment.	19
	25.4.	Obligor's Early Transfer Options.	19
26.	End of Term Equipment Payment Adjustment		20
	26.1.	Third Party Sale of Equipment.	20
	26.2.	Obligor Payment.	21
	26.2.	shall have been terminated prior to the Termination Date.	21
27.	Governing Law, Jurisdiction and Venue; Waiver of Jury.		22
28.	Miscellaneous.		22
	28.1.		22
	28.2.		22
29.	Payments.		23
30.	Concerning Corporate Obligee.		23
	EXHIBIT A-1   To Amended And Restated Equipment Leasing Agreement

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT

AMENDED AND RESTATED EQUIPMENT LEASING AGREEMENT dated as of June 30, 2003 (herein, as amended, supplemented and otherwise modified from time to time, called  “this Equipment Agreement”), between BTM CAPITAL CORPORATION, a Delaware corporation (together with its successors and assigns, “Corporate Obligee”) and HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (together with its successors and assigns, “Obligor”).

WHEREAS, pursuant to that certain Participation Agreement dated as of March 30, 2001 (as amended, the “Original Participation Agreement”) among State Street Bank and Trust Company of Connecticut, National Association, not in its individual capacity but as Trustee (“Original Trustee”), as “Obligee” thereunder (“Original Obligee”), Obligor, Four Winds Funding Corporation, a Delaware corporation, as “Lender”, Commerzbank Aktiengesellschaft, New York and Grand Cayman Branches and Credit Suisse First Boston Corporation, collectively as “Owner Participants” and Commerzbank Aktiengesellschaft, New York Branch, as “Agent”, as “Security Trustee” and as “Equity Agent”, the Original Obligee and Obligor entered into that certain Equipment Financing Agreement dated as of March 30, 2001 (as amended, the “Original Equipment Agreement”); and

WHEREAS, Corporate Obligee has succeeded to the interests of Original Obligee with respect to the Original Participation Agreement and the Original Equipment Agreement and, as part of the transactions contemplated under the Amended and Restated Participation Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Participation Agreement”) among Corporate Obligee, BTM Capital, as “Owner Participant”, U.S. Bank National Association (“Trust Company”), not in its individual capacity but solely as trustee (“Trust Obligee”) under a Trust Agreement dated as of the date hereof (the “Trust Agreement”), Obligor, the financial institutions named therein as Lenders and Bank of Tokyo-Mitsubishi Trust Company, as “Security Trustee” and “Agent”.

In consideration of the mutual covenants and agreements set forth herein and in the Participation Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

            1.         Definitions.  Unless the context otherwise requires, capitalized terms used herein and not otherwise defined herein shall have meanings set forth or referred to in Appendix A to the Participation Agreement which Appendix A includes rules of usage and interpretation applicable hereto.

            2.         Agreement for Financing of Equipment.  Subject to, and upon all of the terms and conditions of this Equipment Agreement, Corporate Obligee hereby agrees to finance for Obligor and Obligor hereby agrees to finance for Corporate Obligee each Item of Equipment for the Term with respect to such Item.  So long as no Equipment Agreement Event of Default has occurred and is continuing hereunder, Corporate Obligee agrees that it shall not interfere with Obligor’s quiet enjoyment and use of any Item of Equipment financed hereunder during the Term thereof.

            3.         Acknowledgment of Financed Equipment.  Corporate Obligee and Obligor acknowledge and agree that all Items of Equipment have been financed for Obligor pursuant to Section 3.1 of the Original Participation Agreement and in accordance with the other Original Operative Documents and no further duty or obligation exists on the part of Corporate Obligee to finance any additional Items of Equipment thereunder.

            4.         Delivery, Acceptance and Leasing of Equipment.  Corporate Obligee and Obligor hereby acknowledge and agree that (a) all Original Items of Equipment have been delivered to and accepted by Obligor in accordance with the terms and provisions of the Original Equipment Agreement; (b) Obligor has inspected each such Original Item so delivered and neither provided Original Obligee with written notice of any defect nor objected to any such Original Item in accordance with Section 4 of the Original Equipment Agreement; and (c) Obligor has executed and delivered to Original Obligee an Equipment Agreement Supplement, dated the Acceptance Date thereof, for each such Original Item of Equipment.  Corporate Obligee and Obligor hereby further acknowledge and agree that (x) each Equipment Agreement Supplement executed by Original Obligee and Obligor for each Original Item of Equipment evidences that such Original Item is leased under, and is subject to, all of the terms, provisions and conditions of this Equipment Agreement, and (y) constitutes Obligor’s unconditional and irrevocable acceptance of such Original Item for all purposes of this Equipment Agreement.  Corporate Obligee and Obligor hereby further acknowledge and agree that (x) all Original Items of Equipment and all Original Items shall for all purposes constitute the Items of Equipment and Items, respectively, hereunder and under the other Operative Documents; (y) each Equipment Agreement Supplement executed and delivered in connection with the Original Equipment Agreement shall in all respects and for all purposes constitute the Equipment Agreement Supplement hereunder and under the other Operative Documents; and (z) all Items of Equipment shall be conclusively deemed to relate to the particular Related Exhibit A attached to the Original Equipment Agreement and made a part thereof that is so identified on the Related Equipment Agreement Supplement of such Original Item, and, each Related Exhibit A attached to the Original Equipment Agreement are herein incorporated by reference as if such Related Exhibit A were attached hereto.

            5.         Term.   The Interim Term (if any) for each Item of Equipment shall commence on the Acceptance Date thereof, and, unless sooner terminated pursuant to the provisions hereof, shall end on the date immediately prior to the Basic Term Commencement Date therefor.  The Basic Term for each Item of Equipment shall commence on the Basic Term Commencement Date thereof and, unless this Equipment Agreement is sooner terminated with respect to such Item (or all Equipment) pursuant to the provisions hereof, shall end on the last day of such Basic Term.  If not sooner terminated pursuant to the provisions hereof, the Term for each Item of Equipment shall end on the last day of the Basic Term thereof, or if this Equipment Agreement is renewed with respect to such Item of Equipment pursuant to Section 25.1 hereof, on the last day of the last Renewal Term thereof.

            6.         Return of Equipment.

                        6.1       Redelivery.  Upon the expiration or earlier termination of the Term with respect to each Item of Equipment (unless Obligor has exercised its transfer option with respect thereto pursuant to Sections 25.2 or 25.4 hereof or a third party sale thereof acceptable to Corporate Obligee is consummated on the Termination Date with respect thereto pursuant to Section 25.3 hereof), Obligor will, at its expense, dismantle, surrender and deliver possession of each Item of Equipment to Corporate Obligee at the Redelivery Location with a certificate executed by a Responsible Officer of Obligor certifying that the Item of Equipment is in the condition required hereunder, a copy of an inventory list for each Item, proof of payment by Obligor to the Person from whom Obligor acquired such Item of Equipment in the form of a canceled check or wire transfer confirmation, all then current plans, specifications and operating, maintenance, and repair manuals and logs relating to each Item that have been prepared or received by Obligor, and with respect to any Item of Equipment which qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy, a statement or certificate that has been signed by an authorized representative of the manufacturer attesting to such condition.  At the time of such return to Corporate Obligee, each Item of Equipment (and each part or component thereof) shall (a) meet the original design specifications and operating standards of such Item, (b) be in as good operating condition, state of repair and appearance as when delivered to Obligor hereunder, ordinary wear and tear excepted, and in the condition required by Section 11 hereof, (c) have no missing or damaged components such that its value, utility or remaining useful life will be reduced, (d) comply (without any reference to materiality) with all laws and rules referred to in Section 11 hereof, (e) have attached or affixed thereto any addition, modification or improvement considered an accession thereto as provided in Section 12 hereof and (f) have had removed therefrom in a workmanlike manner, (i) at Obligor’s option, any addition, modification or improvement which, as provided in Section 12 hereof, is owned by Obligor, and (ii) any insignia or marking permitted pursuant to Section 13 hereof, and (g) be free and clear of all Liens, other than a Lien granted or placed thereon by Corporate Obligee, Lender, or any Assignee pursuant to Section 14.2 hereof.  With respect to any Item of Equipment which has an hour meter or similar device affixed to or relating to such Equipment, Obligor must provide evidence of the total operating hours on such Item at redelivery, as evidenced by such meter or similar device.  The total operating hours for each such Item of Equipment in excess of 3000 hours per year shall be billed to Obligor at a rate set by Corporate Obligee (which rate shall be reasonable in all the circumstances).  All operating licenses and agreements pertinent to operation of each Item of Equipment, whether or not included in the original Agreement (other than non­­-transferable licenses to use software), that are capable of being transferred, shall be fully transferable upon the expiration of the Term to Corporate Obligee or its designee.  Obligor shall transfer any such transferable license or agreement upon return of the Item of Equipment at Obligor’s cost and expense.  Each Item of Equipment that qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy must be properly deinstalled in a manner consistent with such policy and in such a way that the Item remains eligible for or subject to such policy, as appropriate, and Obligor shall provide or shall cause a representative of the manufacturer of such Item a certificate certifying that each Item of Equipment was deinstalled in a manner consistent with such policy and remains eligible for or subject to such policy, as appropriate.  Upon deinstallation each Item of Equipment shall be secured properly for air or overland transport.  Each Item of Equipment originally delivered to Obligor, secured for shock proof and minimum vibration travel or delivered via air ride van shall be redelivered in a similar manner, and each other Item of Equipment shall be delivered in the manner in which it was delivered to Obligor or such other manner as is customary for such Item of Equipment.  Obligor shall pay for any repairs necessary to restore any Item of Equipment to the condition required by this Section 6.1.  The term “ordinary wear and tear” as used herein shall not be construed as permitting any material broken, damaged or missing items or components of any Item of Equipment.  Upon redelivery, Obligor shall provide any additional documentation reasonably requested by Corporate Obligee, at Corporate Obligee’s cost, relating to the redelivery of or Corporate Obligee’s interest in each Item of Equipment.

            6.2       Storage.  For the purpose of delivering possession of any Item of Equipment to Corporate Obligee as above required, Obligor shall at its own cost, expense and risk cause each such Item of Equipment to be insured in accordance with Section 17 hereof and stored at the Redelivery Location identified therefor by Corporate Obligee at the risk of Obligor without charge to Corporate Obligee or any Assignee for insurance, rent or storage until all such Items of Equipment have been sold, leased or otherwise disposed of by Corporate Obligee; provided however, Obligor’s obligations under this Section 6.2 shall terminate with respect to each Item of Equipment on the 90^th day after delivery of such Item to the Redelivery Location in the condition required by Section 6.1 hereof.

            6.3.      Holdover Equipment Payment.  Each Item of Equipment shall be deemed redelivered upon satisfaction of the obligations and conditions set forth in Section 6.1 hereof.  Until each such Item of Equipment has been returned to Corporate Obligee in the condition and as otherwise provided in this Section 6, Obligor shall continue to pay Corporate Obligee, on the same dates on which an Equipment Payment for such Item was payable during the Term thereof 125% of the Equipment Payment for such Item that was payable on the last Payment Date of the Term thereof; provided, that during such holdover period, Obligor shall use its best efforts to secure the return of the Equipment as required under this Section 6.  The provision for payment pursuant to this Section 6 shall not abrogate Corporate Obligee’s right under this Section 6 to have such Equipment returned to it hereunder.

            6.4.      Specific Performance.  The provisions of this Section 6 are of the essence of this Equipment Agreement, and upon application to any court of equity having jurisdiction in the premises, Corporate Obligee shall be entitled to a decree against Obligor requiring specific performance of the covenants of Obligor set forth in this Section 6.

            7.         Payments.

                        7.1.      Interim Equipment Payment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment on each Payment Date during the Interim Term therefor, in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item, (b) an amount calculated by multiplying the Outstanding Debt Amount for such Item on each day by the Applicable Debt Rate determined on a daily basis, and (c) an amount calculated by multiplying the Equity Component for such Item by the Equity Rate determined on a daily basis and in the case of clauses (b) and (c) for the number of days elapsed since the immediately preceding Payment Date, or in the case of the first payment of an Equipment Payment during the Interim Term, the Acceptance Date thereof.

                        7.2.      Basic Equipment Payment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment on each Payment Date during the Basic Term therefor, in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item (b) an amount calculated by multiplying the Outstanding Debt Amount on each day by the Applicable Debt Rate determined on a daily basis, and (c) an amount calculated by multiplying the Equity Component for such Item on each day by the Equity Rate for such date determined on a daily basis; and in the case of clauses (b) and (c) for the number of days elapsed since the immediately preceding Payment Date, or in the case of the first payment of an Equipment Payment during the Basic Term, the Basic Term Commencement Date thereof.

                        7.3.      [Intentionally Deleted.]

                        7.4.      Supplemental Payments.  Obligor also agrees to pay to Corporate Obligee, or to whoever shall be entitled thereto as expressly provided herein, all Supplemental Payments, promptly as the same shall become due and owing, and in the event of any failure on the part of Obligor so to pay any such Supplemental Payment hereunder Corporate Obligee shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Equipment Payments.

                        7.5.      Method of Payment.  All payments of Equipment Payments and Supplemental Payments required to be made by Obligor to Corporate Obligee or an Assignee (or, in the case of Supplemental Payments, any other Person entitled thereto) shall be made in immediately available funds.  In the event of any assignment to an Assignee pursuant to Section 14.2 hereof, all payments which are assigned to such Assignee, whether Equipment Payments, Supplemental Payments or otherwise, shall be paid in such manner as shall be designated by Corporate Obligee or such Assignee.  Subject to the security assignment and the obligations of Obligor with respect thereto in Section 7 of the Participation Agreement, all payments of Equipment Payments required to be made by Obligor to Corporate Obligee hereunder shall be paid at the address or bank account as Corporate Obligee may hereafter designate in writing to Obligor.  Time is of the essence in connection with the payment of Equipment Payments, and Supplemental Payments.

                        7.6.      Applicable Debt Rate.  The Applicable Debt Rate for each Item of Equipment shall be the LIBOR Rate then in effect for the Notes issued by Obligees under the Participation Agreement; provided however, upon the occurrence of any Illegality Event, the Applicable Debt Rate will be the Alternate Rate as of the date interest on such Notes commences to accrue at the Applicable Debt Rate in accordance with Section 8.6 of the Participation Agreement.  At least three (3) Business Days before each Payment Date, Corporate Obligee or its designee shall advise Obligor of the total amount due on such Payment Date.  Except as may otherwise be provided herein, no Equipment Payments or portion thereof may be prepaid.

                        7.7.      Business Day Convention.  Unless otherwise provided herein, any payment or prepayment of amounts due in accordance with the terms hereof which is due on a date which is not a Business Day shall be payable on the next succeeding Business Day.

            8.         Net Financing Agreement.  This Equipment Agreement is a net financing agreement.  Obligor acknowledges and agrees that its obligations hereunder, including, without limitation, its obligations to pay Equipment Payments and all Supplemental Payments payable hereunder, shall be unconditional and irrevocable under any and all circumstances, shall not be subject to cancellation, termination, modification or repudiation by Obligor, and shall be paid and performed by Obligor without notice or demand and without any abatement, reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever, including, without limitation, any abatement, reduction, diminution, setoff, defense, counterclaim, withholding or recoupment due or alleged to be due to, or by reason of, any past, present or future claims which Obligor may have against Corporate Obligee, Owner Participant, Trust Company, any Assignee, any Lender any manufacturer or supplier of any Item of Equipment or any part thereof, or any other Person for any reason whatsoever, or any defect in any Item of Equipment or any part thereof, or the condition, design, operation or fitness for use thereof, any damage to, or any loss or destruction of, any Item of Equipment or any part thereof, or any Liens or rights of others with respect to any Item of Equipment or any part thereof, or any prohibition or interruption of or other restriction against Obligor’s use, operation, possession, maintenance, insurance, improvement or return of the Equipment or any Item thereof, for any reason whatsoever, or any interference with such use, operation or possession by any Person or entity, or any default by Corporate Obligee in the performance of any of its obligations herein contained, or any other indebtedness or liability, howsoever and whenever arising, of Corporate Obligee, Trust Company or of any Assignee, or of Obligor to any other Person, or by reason of insolvency, bankruptcy or similar proceedings by or against Corporate Obligee, Trust Company, any Assignee, Obligor or any other Person, or for any other reason whatsoever, whether similar or dissimilar to any of the foregoing, any present or future law to the contrary notwithstanding; it being the intention of the parties hereto that all Equipment Payments and Supplemental Payments payable by Obligor hereunder shall continue to be payable in all events and in the manner and at the times herein provided, without notice or demand, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Equipment Agreement.

            9.         Further Assurances.   For each Item of Equipment located in the United States, Germany, or England, Obligor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to Corporate Obligee from time to time such confirmatory assignments, conveyances, financing and continuation statements, transfer endorsements, powers of attorney, notes, reports and other assurances or instruments and take such further actions which are appropriate or advisable to perfect, preserve or protect Corporate Obligee’s security interest granted hereunder and each Equipment Agreement Supplement or which Corporate Obligee deems necessary or advisable in order to obtain the full benefits of the Liens created or intended to be created hereunder and thereunder, and will take such other actions reasonably requested by Corporate Obligee to effectuate the intent of the Operative Documents.  To the extent permitted by Applicable Law, Obligor authorizes Corporate Obligee to file any such financing and continuation statements and amendments and supplements thereto without the signature of Obligor and ratifies the filing of any such financing statements, amendments and supplements filed by Corporate Obligee prior to the date hereof, and Obligor will pay all applicable filing fees and related expenses.

            10.       Use of Equipment; Compliance with Laws.  Obligor agrees that each Item of Equipment will be used and operated solely in the conduct of its business or that of its Subsidiaries in the manner for which it was intended, in accordance with the license or certificate, if any, provided by the manufacturer thereof and in compliance with any and all insurance policy terms, conditions and provisions and in all material respects with all Applicable Laws of any Governmental Entity applicable to the use and operation of the Equipment, including, without limitation, environmental, noise and pollution laws (including notifications and reports).  Obligor shall procure and maintain in effect all licenses, registrations, certificates, permits, approvals and consents required by federal, national, state or local laws or by any governmental body, agency or authority in connection with the ownership, delivery, installation, use and operation of each Item of Equipment, including, without limitation, those required by environmental, noise and pollution laws (including notifications and reports) and including, in the case of any Item subject to titling and registration laws, all titles, registrations, registration plates, permits, licenses, and all renewals thereof.  Other than as expressly set forth in the following sentence, no Item of Equipment shall be used or located at a location other than that identified therefor on the Related Equipment Agreement Supplement and in no event shall any Item of Equipment be used or located outside of the Permitted Countries.  Obligor shall keep Items of Equipment with an aggregate value equal to or greater than 75% of the total Acquisition Costs for all Items of Equipment previously financed under this Agreement in the United States, Germany, or the United Kingdom, provided, however, that Items of Equipment, the aggregate of the Acquisition Costs for which does not exceed $1,500,000 may, subject to the prior written consent of Corporate Obligee and the Majority Lenders, be located in Mexico.  Obligor shall use reasonable precautions to prevent loss or damage to each Item of Equipment from fire and other hazards.  Obligor shall not permit any Item of Equipment to be used in any unlawful trade or in any manner that would violate any law that would expose such Item of Equipment to penalty, forfeiture or capture.

            11.       Maintenance and Repair of Equipment.  Obligor agrees, at its own cost and expense, to keep, repair, maintain, service and preserve the Equipment in good repair, operating and serviceable condition and shall keep the Equipment in order and condition equal to or better than other equipment of the same type owned by Obligor, and in compliance in all material respects with all requirements of law applicable to the maintenance and condition of the Equipment, including, without limitation, environmental, noise and pollution laws and regulations (including notifications and reports) of any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Equipment, to the extent that such laws and rules affect the title, operation, maintenance or use of the Equipment, and in the event that such laws or rules require any alteration, replacement or addition of or to any part on any Equipment, Obligor will conform therewith at its own expense.  With respect to any Item of Equipment which qualifies for or is subject to any manufacturer’s maintenance, repair or warranty policy, such maintenance or repair will be only performed in a manner consistent with such policy.  Obligor agrees to prepare and deliver to Corporate Obligee and any Assignee within a reasonable time prior to the required date of filing (or, to the extent permissible, file on behalf of Corporate Obligee and any Assignee) any and all reports (other than income tax returns) to be filed by Corporate Obligee or any Assignee with any Governmental Entity by reason of the ownership by Corporate Obligee or any Assignee of the Items of Equipment or the leasing thereof to Obligor.  Obligor agrees to maintain all records, logs and other materials required by any Governmental Entity having jurisdiction over the Items of Equipment or Obligor, to be maintained in respect of each Item of Equipment.  Obligor hereby waives any right now or hereafter conferred by law to make repairs on the Equipment at the expense of Corporate Obligee.

            12.       Alterations; Modifications; Replacements.  In case any Item of Equipment (or any equipment, part or appliance therein) is required to be altered, added to, replaced or modified in order to comply with any laws, regulations, requirements or rules (“Required Alteration”) pursuant to Sections 10 or 11 hereof, Obligor agrees to make such Required Alteration at its own expense and the same shall, without further act, immediately be and become the property of, and title shall vest in, Corporate Obligee free and clear of all Liens other than Liens granted or placed thereon by Corporate Obligee or any Assignee pursuant to Section 14.2 hereof or other Permitted Liens and subject to the terms of this Equipment Agreement.  Obligor may make any optional alteration to any Item of Equipment (“Optional Alteration”) provided such Optional Alteration does not impair the value, use or remaining useful life of such Item of Equipment.  In the event such Optional Alteration is readily removable without impairing the value, use or remaining useful life of the Item of Equipment, and is not a part, item of equipment or appliance which replaces any part, item of equipment or appliance originally incorporated or installed in or attached to such Item of Equipment on the Acceptance Date therefor or any part, item of equipment or appliance in replacement of or substitution for any such original part, item of equipment or appliance, any such Optional Alteration shall be and remain the property of Obligor.  To the extent such Optional Alteration is not readily removable without impairing the value, use or remaining useful life of the Item of Equipment to which such Optional Alteration has been made, or is a part, item of equipment or appliance which replaces any part, item of equipment or appliance originally incorporated or installed in or attached to such Item of Equipment on the Acceptance Date therefor or any part, item of equipment or appliance in replacement of or substitution for any such original part, item of equipment or appliance, the same shall, without further act, immediately be and become the property of, and title shall vest in, Corporate Obligee free and clear of all Liens other than Liens granted or placed thereon by Corporate Obligee or any Assignee pursuant to Section 14.2 hereof and subject to the terms of this Equipment Agreement.  Any parts installed or replacements made by Obligor upon any Item of Equipment pursuant to its obligation to maintain and keep the Equipment in good and serviceable operating condition and repair under Section 11 hereof shall be considered accessions to such Item of Equipment and title thereto or security interest therein shall be immediately vested in Corporate Obligee.  Except as required or permitted by the provisions of this Section 12, Obligor shall not modify an Item of Equipment without the prior written authority and approval of Corporate Obligee.  Subject to the prior written consent of Corporate Obligee and the Majority Lenders (which consent shall be at the sole and absolute discretion of each such Person) and on terms acceptable to such Person, Obligor may from time to time replace an Item of Equipment with other equipment.

            13.       Identification Marks; Inspection.  Obligor shall use commercially reasonable efforts to keep and maintain, plainly, distinctly and conspicuously marked on each Item, the words “Financed by BTM Capital Corporation, subject to a security interest in favor of Bank of Tokyo-Mitsubishi Trust Company as Security Trustee” or other appropriate words designated by Corporate Obligee, with appropriate changes thereof and additions thereto as from time to time may be required by law in order to protect Corporate Obligee’s and any Assignee’s interests in such Item and the rights of Corporate Obligee and of any Assignee unless the size or characteristics of such Item would make such obligation unduly burdensome or commercially impracticable.  Obligor shall not allow the name of any Person, to be placed upon any Item of Equipment as a designation that might be interpreted as indicating a claim of ownership thereto or a security interest therein by any Person other than Corporate Obligee or any Assignee.  Upon the request of Corporate Obligee, Obligor shall (i) make the Equipment and Obligor’s books, records and accounts with respect to the Equipment available to Corporate Obligee, Assignee or any of their designees for inspection and, for the purpose of inspecting any Items of Equipment for which Obligor’s end of term transfer option set forth in Section 25.2 has expired, such inspection may include, the use of photographic and video equipment and (ii) make a good faith effort to discuss with Corporate Obligee or its designees from time to time as Corporate Obligee or its designees deem reasonably necessary the Obligor’s affairs, finances and accounts.  If Obligor does not elect to renew this Equipment Agreement and does not elect to acquire rights and interests in the Equipment in accordance with the provisions and deadlines contained herein, Obligor shall, at any time prior to thirty (30) days prior to the Termination Date, permit Corporate Obligee or any designee thereof to inspect each Item of Equipment in full operation.  The location for the inspection or demonstration of any Item of Equipment shall be the location designated for such Item on the Related Equipment Agreement Supplement; provided, however, if at the time of Corporate Obligee’s or Assignee’s request an Equipment Agreement Event of Default has occurred and is continuing, Obligor shall make the Equipment available to Corporate Obligee or Assignee for inspection at a location in the United States or Europe reasonably determined by Corporate Obligee.

            14.       Assignment and Leasing.

                        14.1     By Obligor.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 14.1, OBLIGOR WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF CORPORATE OBLIGEE, LEASE ANY ITEM OF EQUIPMENT, OR ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER.  ANY ATTEMPTED LEASE IN VIOLATION HEREOF AND ANY ASSIGNMENT, TRANSFER OR ENCUMBERING BY OBLIGOR OF ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER IN VIOLATION HEREOF SHALL BE NULL AND VOID.  Obligor may, without Corporate Obligee’s consent, lease any Item of Equipment to Subsidiaries of Obligor in the ordinary course of business.  Any such lease or financing agreement (together will all amendments, modifications and supplements thereto, a “Subsidiary Equipment Agreement”) shall be, and shall expressly state that it is, subject and subordinate in all respects to this Equipment Agreement and the rights of Corporate Obligee (and any Assignee) hereunder including Corporate Obligee’s right to possession of the Equipment upon an Equipment Agreement Event of Default, shall prohibit subleasing, shall not have a term that may exceed the remaining portion of the Term of such Item of Equipment, and shall be secured by a first priority security interest granted by such Subsidiary in favor of Obligor, which security interest shall be a perfected security interest for all Equipment located in the United States.  Obligor and Corporate Obligee hereby acknowledge and agree that Obligor leased certain of the Original Equipment to certain of its Subsidiaries under Subsidiary Equipment Agreements in accordance with the terms of the Original Equipment Agreement and that Obligor shall amend such Subsidiary Equipment Agreements within ten (10) days hereof to the extent necessary as a result of the amendments, assignments and assumptions that occurred on the Restructuring Date.  Obligor shall promptly deliver to Security Trustee the original counterpart of each Subsidiary Equipment Agreement and shall provide prompt notice to Corporate Obligee (including the name and address of the lessee) of any lease or sublease to or financing agreement with a third party having a term coterminous with the then current Term of the Items of Equipment subject to such lease, sublease or financing agreement.  Obligor shall deliver a certified schedule of all such leases, subleases and financing agreements to Corporate Obligee by March 31 and September 30 of each year during the Term that were in effect at any time during the preceding calendar year and otherwise at Corporate Obligee’s reasonable request.  No such leasing by Obligor will reduce any of the obligations of Obligor hereunder or the rights of Corporate Obligee (and any Assignee) hereunder, and all of the obligations of Obligor hereunder shall be and remain primary and shall continue in full force and effect as the obligations of a principal and not of a guarantor or surety.

            14.2.    By Corporate Obligee.  Corporate Obligee may sell, assign, transfer or grant a security interest in all or any part of Corporate Obligee’s rights, obligations, title or interest in, to and under the Equipment or any Item(s) thereof, this Equipment Agreement, any Equipment Agreement Supplement and/or any Equipment Payment and Supplemental Payments payable under this Equipment Agreement or any Equipment Agreement Supplement without Obligor’s consent. Any entity to whom any such sale, assignment, transfer or grant of security interest is made is herein called an “Assignee” and any such sale, assignment, transfer or grant of security interest is herein called an “assignment”.  An Assignee may re‑assign and/or grant a security interest in any of such rights, obligations, title or interest assigned to such Assignee without Obligor’s consent.  Obligor agrees to execute related acknowledgments and other documents that may be reasonably requested by Corporate Obligee or an Assignee.  Each Assignee shall have and may enforce all of the rights and benefits of Corporate Obligee hereunder with respect to the Item(s) of Equipment and related Equipment Agreement Supplement(s) covered by the assignment, including, without limitation, the provisions of Section 8 hereof.  Each such assignment shall be subject to Obligor’s rights hereunder so long as no Equipment Agreement Event of Default has occurred and is continuing.  Obligor shall be under no obligation to any Assignee except upon written notice of such assignment from Corporate Obligee or, in the case of a reassignment, from the Assignee.  Upon written notice to Obligor of an assignment in accordance with this Section 14.2, Obligor agrees to pay the Equipment Payments and Supplemental Payments with respect to the Item(s) of Equipment covered by such assignment to such Assignee in accordance with the instructions specified in such notice without any abatement, defense, setoff, counterclaim or recoupment whatsoever, and to otherwise comply with all notices, directions and demands which may be given by Corporate Obligee or such Assignee with respect to such Item(s), in accordance with the provisions of this Equipment Agreement. Notwithstanding any such assignment, all obligations of Corporate Obligee to Obligor under this Equipment Agreement shall be and remain enforceable by Obligor against Corporate Obligee and any Assignee to whom an assignment has been made.

            14.3.    Registration.  This Equipment Agreement is a registered instrument.  Corporate Obligee will establish and maintain registration books in which it will register, and register any assignment effected in compliance with Section 14 hereof of, each of Corporate Obligee’s and Obligor’s interest in this Equipment Agreement or any portion thereof and which identifies each registered holder of any interest in this Equipment Agreement or any portion thereof.  Except for the interests of the Security Trustee pursuant to the Operative Documents, no transfer by Corporate Obligee or Obligor of any interest in this Equipment Agreement shall be effective unless and until such transfer is made upon the registration books maintained by Corporate Obligee.

            15.       Obligor will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to (a) any Item of Equipment or any part thereof, Corporate Obligee’s title thereto, or any interest therein or proceeds thereof, or (b) this Equipment Agreement or any of Corporate Obligee’s interests hereunder, except (i) Permitted Liens or (ii) any Lien granted or placed thereon by Corporate Obligee, Lender, or any Assignee pursuant to Section 14.2 hereof or any Person with a claim against Corporate Obligee or any Assignee.  Obligor, at its own expense, will promptly pay, satisfy and otherwise take such actions as may be necessary to keep this Equipment Agreement and each Item of Equipment free and clear of, and to duly discharge or eliminate or bond in a manner satisfactory to Corporate Obligee and each Assignee, any such Lien not excepted above if the same shall arise at any time. Obligor will notify Corporate Obligee and each Assignee in writing promptly upon becoming aware of any tax or other Lien (other than any Lien excepted above) that shall attach to the Equipment or any Item of Equipment, and of the full particulars thereof.

            16.       Loss, Damage or Destruction.

                        16.1     Risk of Loss, Damage or Destruction.  Obligor hereby assumes all risk of loss, damage, theft, taking, destruction, confiscation, requisition or commandeering, partial or complete, of or to each Item of Equipment, however caused or occasioned, such risk to be borne by Obligor with respect to each Item of Equipment from the date of this Equipment Agreement, and continuing until such Item of Equipment has been returned to Corporate Obligee in accordance with the provisions of Section 6 hereof, the rights and interests in which have been transferred to Obligor in accordance with the provisions of Section 25.2 or 25.4 hereof, or has been sold in accordance with Section 25.3 hereof.  Obligor agrees that no occurrence specified in the preceding sentence shall impair, in whole or in part, any obligation of Obligor under this Equipment Agreement, including, without limitation, the obligation to pay Equipment Payments.

                        16.2     Payment of Casualty Loss Value Upon an Event of  Loss.  If an Event of Loss occurs with respect to an Item of Equipment during the Term thereof, Obligor shall give Corporate Obligee prompt written notice thereof and shall pay to Corporate Obligee on the corresponding Casualty Loss Value Payment Date the sum of (a) all unpaid Equipment Payments payable for such Item of Equipment for the entire Equipment Payment Period in which the Event of Loss has occurred, plus (b) the Casualty Loss Value of such Item of Equipment determined as of the Casualty Loss Value Payment Date, plus (c) all other Supplemental Payments due for such Item of Equipment as of the date of payment of the amounts specified in the foregoing clauses (a) and (b).  Any payments received at any time by Corporate Obligee or by Obligor from any insurer or other party (except Obligor) as a result of the occurrence of such Event of Loss will be applied in reduction of Obligor’s obligation to pay the foregoing amounts, if not already paid by Obligor, or, if already paid by Obligor, will be applied to reimburse Obligor for its payment of such amount, unless an Equipment Agreement Event of Default shall have occurred and be continuing.  Upon payment in full of such Casualty Loss Value, Equipment Payments and Supplemental Payments, (a) the obligation of Obligor to pay Equipment Payments hereunder with respect to such Item of Equipment shall terminate and the Term of such Item shall terminate, and (b) Corporate Obligee shall renounce all title and rights to such Item of Equipment.

                        16.3     Application of Payments Not Relating to an Event of Loss.  Any payments (including, without limitation, insurance proceeds) received at any time by Corporate Obligee or Obligor from any Governmental Entity or other party with respect to any loss or damage to any Item or Items of Equipment not constituting an Event of Loss, will be applied directly in payment of repairs or for replacement of property in accordance with the provisions of Sections 11 and 12 hereof, if not already paid by Obligor, or if already paid by Obligor and no Equipment Agreement Event of Default shall have occurred and be continuing, shall be applied to reimburse Obligor for such payment, and any balance remaining after compliance with the provisions of said Sections with respect to such loss or damage shall be retained by Obligor.  If any Equipment Agreement Event of Default shall have occurred and is continuing, all payments hereunder shall be paid to Corporate Obligee or its Assignee as security for amounts owed by Obligor hereunder.

            17.       Insurance.  Obligor will cause to be carried and maintained, at its sole expense, with respect to each Item of Equipment at all times during the Term thereof and for the geographic area in which such Item is at any time located and until such Item of Equipment has been returned to Corporate Obligee pursuant to Section 6 hereof, the rights and interests therein have been transferred to Obligor pursuant to Section 25.2 or 25.4 hereof or sold to a third party pursuant to Section 25.3.2 hereof (a) physical damage insurance (including theft and collision insurance) insuring against all risks of physical loss or damage to the Equipment (“Property Insurance”), in an amount not less than the greater of the Casualty Loss Value of such Item of Equipment and the replacement value of the Equipment, and (b) insurance against liability for bodily injury, death and property damage resulting from the use and operation of the Equipment (including sudden and accidental environmental pollution coverage) (“Liability Insurance”) in an amount not less than $25,000,000 per occurrence, but in no event shall the insurance coverage described in clauses (a) and (b) above provide less coverage than the insurance coverage on any other similar equipment owned or leased by Obligor.  The insurance coverage described in the preceding sentence shall have deductibles no greater than those applicable to insurance on similar equipment owned or leased by Obligor.  Such Property Insurance policy or policies will name Obligor and Corporate Obligee as the sole loss payees and Corporate Obligee and each Assignee as additional insureds. Such Liability Insurance policy or policies will name each Obligor Indemnified Person as an additional insured.  All such policies will provide that the insurers waive any claim for premiums and any right of subrogation or setoff against the Obligor Indemnified Persons and that the same may not be invalidated against any Obligor Indemnified Person by reason of any violation of a condition or breach of warranty of the policies or the application therefor by Obligor, that the policies may be canceled or materially altered or reduced in coverage (except as otherwise permitted under the terms of this Equipment Agreement) by the insurer only after thirty (30) days’ prior written notice from Obligor’s insurance broker to Corporate Obligee, Trust Company, Owner Participant and each Assignee, and that the insurer will give written notice to Corporate Obligee, Trust Company, Owner Participant, Agent and each Assignee in the event of nonpayment of premium by Obligor when due. The policies of insurance required under this Section 17 shall be valid and enforceable policies issued by insurers of recognized responsibility and shall provide coverage with respect to incidents occurring anywhere in the United States or Canada or Europe.  In the event that any of such Liability Insurance policies shall now or hereafter provide coverage on a “claims‑made” basis, Obligor shall continue to maintain such policies in effect for a period of not less than three (3) years after the expiration of the Term of the last Item of Equipment financed hereunder.  Upon the execution of this Equipment Agreement and thereafter not less than thirty (30) days prior to the expiration dates of any expiring policies required under this Section 17, Obligor shall furnish Corporate Obligee with certificates of the insurance coverage required by this Section 17.  If requested by any Obligor Indemnified Person in connection with a claim made or any suit, action or proceeding brought against any Obligor Indemnified Person, copies of the policies evidencing such insurance coverage, shall be delivered by Obligor to such Obligor Indemnified Person. Any certificate of insurance issued with respect to a blanket policy covering other equipment not subject to this Equipment Agreement shall specifically describe the Equipment as being included therein and covered thereby to the full extent of the coverages and amounts required hereunder.  If Obligor shall fail to cause the insurance required under this Section 17 to be carried and maintained, Corporate Obligee, Trust Company, Owner Participant, any Lender or any Assignee may, but shall not be required to, provide such insurance and Obligor shall reimburse Corporate Obligee, Trust Company, Owner Participant, any Lender or any such Assignee, as the case may be, upon demand for the cost thereof as a Supplemental Payment hereunder together with interest thereon at the Overdue Rate from the date such cost was incurred.

            18.       NO CORPORATE OBLIGEE WARRANTIES.  CORPORATE OBLIGEE HEREBY FINANCES THE EQUIPMENT FOR OBLIGOR AS‑IS WHERE-IS, WITH ALL FAULTS AND IN WHATEVER CONDITION IT MAY BE IN, AND EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF, OR ANY OTHER MATTER CONCERNING, THE EQUIPMENT.  OBLIGOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST CORPORATE OBLIGEE OR OWNER PARTICIPANT FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY THE EQUIPMENT OR BY OBLIGOR’S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER, INCLUDING COMPLIANCE WITH ENVIRONMENTAL LAWS (WHICH ITEMS OF EQUIPMENT, OBLIGOR ACKNOWLEDGES, WERE SELECTED BY OBLIGOR ON THE BASIS OF ITS OWN JUDGMENT WITHOUT RELIANCE ON ANY STATEMENTS, REPRESENTATIONS, GUARANTIES OR WARRANTIES MADE BY CORPORATE OBLIGEE).

            19.       Assignment of Manufacturer Warranties.  So long and only so long as an Equipment Agreement Event of Default shall not have occurred and be continuing, and so long and only so long as the Equipment shall be subject to this Equipment Agreement and Obligor shall be entitled to possession of the Equipment hereunder, Corporate Obligee authorizes Obligor, at Obligor’s expense, to assert for Corporate Obligee’s account, all rights and powers of Corporate Obligee under any manufacturer’s, vendor’s or dealer’s warranty on the Equipment or any part thereof and Corporate Obligee agrees to use reasonable efforts at Obligor’s expense to assist Obligor in obtaining the benefits of such warranties; provided, however, that Obligor shall indemnify, protect, save, defend and hold harmless Corporate Obligee from and against any and all claims, and all costs, expenses, damages, losses and liabilities incurred or suffered by Corporate Obligee in connection therewith, as a result of, or incident to, any action by Obligor pursuant to the foregoing authorization. 

            20.       Events of Default.  Any of the following events shall constitute an Equipment Agreement Event of Default:

                        (a)        Obligor shall fail to make any payment of an Equipment Payment within five (5) days after the same is due and payable or any Supplemental Payment within fifteen (15) days after the same is due and payable; or

                        (b)        Obligor shall fail to observe or perform any of the covenants, agreements or obligations of Obligor set forth in the Sections 14.1 or 17 hereof or in Section 6.7 of the Participation Agreement; or

                        (c)        Obligor shall fail to perform or observe any other covenant, condition, or agreement to be performed or observed by it under this Equipment Agreement, any Equipment Agreement Supplement, the Participation Agreement, or in any agreement or certificate furnished to Corporate Obligee or any Assignee in connection herewith or therewith, and such failure shall continue unremedied for thirty (30) days after written notice to Obligor specifying such failure and demanding the same to be remedied; or

                        (d)        (i) Obligor shall default under any agreements or instruments relating to any Indebtedness or Material Obligations of Obligor or any other event shall occur and shall continue after the applicable grace period, if any, specified in such agreements or instruments, but only if (x) such default is a payment default that occurs upon the scheduled maturity of such Indebtedness or Material Obligations or (y) the effect of such default or event is to permit the acceleration of the maturity of such Indebtedness or Material Obligations and in either the case of (x) or (y), the aggregate principal amount of all such Indebtedness (other than obligations under the Multi-Currency Credit Agreement) or Material Obligations is equal to or greater than $25,000,000, or (ii) any one or more Subsidiaries of Obligor shall default under any agreements or instruments relating to any Indebtedness or Material Obligations of such Subsidiary or Subsidiaries, or any other event shall occur and shall continue after the applicable grace period, if any, specified in such agreements or instruments, but only if (x) such default is a payment default that occurs upon the scheduled maturity of such Indebtedness or Material Obligations or (y) the effect of such default or event is to accelerate the maturity of such Indebtedness or Material Obligations and in either the case of (x) or (y), the aggregate principal amount of all such Subsidiary Indebtedness or Subsidiary Material Obligations is equal to or greater than $25,000,000; or

                        (e)        Obligor shall become insolvent; or Obligor or any Subsidiary thereof shall make an assignment for the benefit of creditors or consent to the appointment of a trustee or receiver; or a trustee or a receiver shall be appointed for Obligor or any Subsidiary thereof or for a substantial part of the property of Obligor or any Subsidiary thereof without its consent and shall not be dismissed for a period of sixty (60) days; or any petition for the relief, reorganization or arrangement of Obligor or any Subsidiary thereof or any other petition in bankruptcy or for the liquidation, insolvency or dissolution of Obligor or any Subsidiary thereof, shall be filed by or against Obligor or any Subsidiary thereof and, if filed against Obligor or any Subsidiary thereof, shall be consented to or be pending and not dismissed for a period of sixty (60) days, or an order for relief under any bankruptcy or insolvency law shall be entered by any court or Governmental Entity of competent jurisdiction with respect to Obligor or any Subsidiary thereof; or any execution or writ or process shall be issued under any action or proceeding against Obligor or any Subsidiary thereof whereby any of the Equipment may be taken or restrained and such execution or writ or process is not stayed within sixty (60) days; or Obligor’s corporate existence shall cease; or

                        (f)         any representation, warranty, statement or certification made by Obligor under this Equipment Agreement, in any Equipment Agreement Supplement, the Participation Agreement or in any document or certificate furnished to Original Obligee, Corporate Obligee or any Assignee in connection herewith or therewith, or pursuant hereto or thereto, shall prove to be untrue or incorrect when made (or deemed made) except for inaccuracies or misstatements when made (or deemed made) that would not have a material effect on Obligor’s ability to fulfill its obligations under this Equipment Agreement or the Participation Agreement; or

                        (g)        final judgments or orders for the payment of money in the aggregate in excess of $25,000,000 (other than judgments or orders with respect to which Obligor provides Corporate Obligee with a written acknowledgment from Obligor’s insurer that such judgment is covered by an insurance policy issued by such insurer) shall be rendered against Obligor or any Subsidiary and Obligor or such Subsidiary shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof, within sixty (60) days after the date of entry thereof and within said period of sixty (60) days (or such longer period during which execution of such judgment shall have been stayed) appeal therefrom and cause the execution thereof to be stayed during such appeal;

            21.       Remedies Upon Default.  Upon the occurrence of any Equipment Agreement Event of Default and at any time thereafter so long as the same shall be continuing, Corporate Obligee may (except in the case of an Equipment Agreement Event of Default of the type described in Section 20(e) hereof, in which case Corporate Obligee shall be deemed automatically without further act to have elected the remedy set forth in clause (d) below) exercise one or more of the following remedies as Corporate Obligee in its sole discretion shall elect:

                        (a)        Corporate Obligee may terminate or cancel this Equipment Agreement, without prejudice to any other remedies of Corporate Obligee hereunder, with respect to all or any Item of Equipment, and whether or not this Equipment Agreement has been so terminated, may enter the premises of Obligor, subject to Obligor’s normal safety and security concerns, including standard confidentiality requirements, or any other party to take immediate possession of the Equipment and remove all or any Item of Equipment by summary proceedings or otherwise, or may cause Obligor, at Obligor’s expense, to store, maintain, surrender and deliver possession of the Equipment or such Item in the same manner as provided in Section 6 hereof;

                        (b)        Corporate Obligee may hold, keep idle or lease to others the Equipment or any Item of Equipment, as Corporate Obligee in its sole discretion may determine, free and clear of any rights of Obligor and without any duty to account to Obligor with respect to such action or inaction or for any proceeds with respect thereto, except that Obligor’s obligation to pay Equipment Payments for any Equipment Payment Periods commencing after Obligor shall have been deprived of possession pursuant to this Section 21 shall be reduced by the net proceeds, if any, received by Corporate Obligee from leasing the Equipment or such Item to any Person other than Obligor for the same Equipment Payment Periods or any portion thereof;

                        (c)        Corporate Obligee may sell the Equipment or any Item of Equipment at public or private sale as Corporate Obligee may determine, free and clear of any rights of Obligor, and Obligor shall pay to Corporate Obligee, as liquidated damages for loss of a bargain and not as a penalty (in lieu of the Equipment Payments due for the Equipment or Item(s) so sold for any Equipment Payment Period commencing after the date on which such sale occurs), the sum of (i) all unpaid Equipment Payments payable for each Item of Equipment for all Equipment Payment Periods through the date on which such sale occurs, plus (ii) an amount equal to the excess, if any, of (x) the Casualty Loss Value of the Item(s) of Equipment so sold, computed as of the Payment Date coincident with or next preceding the date of such sale, over (y) the net proceeds of such sale, plus interest at the rate specified in Section 23 hereof on the amount of such excess from the Payment Date as of which such Casualty Loss Value is computed until the date of actual payment, plus (iii) all unpaid Supplemental Payments due with respect to each Item of Equipment so sold;

                        (d)        whether or not Corporate Obligee shall have exercised, or shall thereafter at any time exercise, any of its rights under subsection (a) or (b) above with respect to any Item(s) of Equipment, Corporate Obligee, by written notice to Obligor specifying a payment date, may demand that Obligor pay to Corporate Obligee, and Obligor shall pay to Corporate Obligee, on the payment date specified in such notice, as liquidated damages for loss of a bargain and not as a penalty (in lieu of the Equipment Payment due for any Item(s) of Equipment for any Equipment Payment Period commencing after the payment date specified in such notice and in lieu of the exercise by Corporate Obligee of its remedies under subsection (b) above in the case of a re‑lease of such Item(s) or under subsection (c) above with respect to a sale of such Item(s)), the sum of (i) all unpaid Equipment Payments payable for such Item(s) for all Equipment Payment Periods through the payment date specified in such notice, plus (ii) all unpaid Supplemental Payments due with respect to such Item(s) as of the payment date specified in such notice, plus (iii) an amount equal to any Prepayment Premium owed or paid by Corporate Obligee to Lender as a result of Equipment Agreement Event of Default, plus (iv) an amount, with respect to each such Item, equal to the Casualty Loss Value of such Item(s) computed as of the Payment Date coincident with or next preceding the payment date specified in such notice; provided, however, that with respect to any such Item(s) returned to or repossessed by Corporate Obligee, the amount recoverable by Corporate Obligee pursuant to the foregoing shall be reduced (but not below zero) by an amount equal to the fair market sales value of such Item(s) as of the date on which Corporate Obligee has obtained possession of such Item(s); and

                        (e)        Corporate Obligee may exercise any other right or remedy which may be available to it under Applicable Law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof or to rescind this Equipment Agreement.

In addition, Obligor shall be liable for all costs and expenses, including reasonable attorney’s fees, incurred by Corporate Obligee or any Assignee by reason of the occurrence of any Equipment Agreement Event of Default or the exercise of Corporate Obligee’s remedies with respect thereto, including all reasonable costs and expenses incurred in connection with the return of the Equipment in accordance with Section 6 hereof or in placing the Equipment in the condition required by said Section. For the purpose of subsection (d) above, the “fair market sales value” of any Item of Equipment shall mean such value as has been determined by an independent qualified appraiser selected jointly by Corporate Obligee and Obligor and in the absence of agreement on an independent qualified appraiser, each of Corporate Obligee and Obligor shall select an appraiser who together shall select the independent qualified appraiser.  Except as otherwise expressly provided above, no remedy referred to in this Section 21 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Corporate Obligee at law or in equity; and the exercise or beginning of exercise by Corporate Obligee of any one or more of such remedies shall not constitute the exclusive election of such remedies and shall not preclude the simultaneous or later exercise by Corporate Obligee of any or all of such other remedies.  No express or implied waiver by Corporate Obligee of any Equipment Agreement Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Equipment Agreement Event of Default.  To the extent permitted by Applicable Law, Obligor hereby waives any rights now or hereafter conferred by statute or otherwise which may require Corporate Obligee to sell, lease or otherwise use the Equipment in mitigation of Corporate Obligee’s damages as set forth in this Section 21 or which may otherwise limit or modify any of Corporate Obligee’s rights and remedies in this Section 21.

            22.       Corporate Obligee’s Right to Perform for Obligor.  If Obligor fails to make any Supplemental Payment required to be made by it hereunder or fails to perform or comply with any of its agreements contained herein, Corporate Obligee may itself, after notice to Obligor, make such payment or perform or comply with such agreement, and the amount of such payment and the amount of the reasonable expenses of Corporate Obligee incurred in connection with such payment or the performance of or compliance with such agreement, as the case may be, together with interest thereon at the rate specified in Section 23 hereof, shall, if not paid by Obligor to Corporate Obligee on demand, be deemed a Supplemental Payment hereunder;  provided, however, that no such payment, performance or compliance by Corporate Obligee shall be deemed to cure any Equipment Agreement Event of Default hereunder.

            23.       Late Charges.  Obligor shall pay to Corporate Obligee, upon demand, to the extent permitted by Applicable Law, interest on any installment of an Equipment Payment not paid when due, and on any Supplemental Payment or other amount payable under this Equipment Agreement which is not paid when due, for any period for which any of the same is overdue (without regard to any grace period) at a rate equal to the lesser of (a) the Overdue Rate and (b) the maximum rate of interest permitted by law.

            24.       Notices.  All notices provided for or required under the terms and provisions hereof shall be given in accordance with Section 10.4 of the Participation Agreement.

            25.       Obligor’s Renewal and Transfer Options.

                        25.1.    Obligor’s Renewal Option.  If no Equipment Agreement Event of Default shall have occurred and be continuing and this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, to renew this Equipment Agreement with respect to all but not less than all Items of Equipment then subject to this Equipment Agreement, up to the number of Renewal Terms specified on the Related Exhibit A.  The first Renewal Term with respect to each such Item of Equipment will commence at the expiration of the Basic Term of such Item, and each succeeding Renewal Term will commence at the expiration of the next preceding Renewal Term.  All of the provisions of this Equipment Agreement, including the Applicable Debt Rate and Equity Rate, shall be applicable during each Renewal Term for each such Item of Equipment.  Obligor hereby agrees to pay Corporate Obligee an Equipment Payment for each Item of Equipment during each Renewal Term for which Obligor exercises its renewal option therefor in an amount equal to the sum of (a) the Debt Amortization Payment due on such Payment Date for such Item (b) an amount calculated by multiplying the Outstanding Debt Amount for each Item on each day by the Applicable Debt Rate determined on a daily basis, and (c) an amount calculated by multiplying the Equity Component for such Item by the Equity Rate determined on a daily basis; in the case of clauses (b) and (c), such amounts shall be calculated by a fraction, the numerator of which is the number of days elapsed since the immediately preceding Payment Date, and the denominator of which is 360.  If, with respect to any Renewal Term, Obligor intends to not exercise said renewal option, Obligor shall give written notice to Corporate Obligee to such effect at least 180 days prior to the expiration of the Basic Term of the Item(s) of Equipment in the case of the first Renewal Term, and at least 180 days prior to the expiration of the then current Renewal Term in the case of the then next succeeding Renewal Term.  If Obligor fails to give such written notice to Corporate Obligee with respect to any of said Renewal Terms, it shall be conclusively presumed that Obligor has irrevocably elected to exercise said renewal option with respect to all Items of Equipment for said Renewal Term.  In the event Obligor elects not to exercise said renewal option with respect to all Items of Equipment (unless Corporate Obligee has otherwise agreed in writing or Obligor has exercised its transfer option under Section 25.2 hereof or its early transfer option pursuant to Section 25.4 hereof), each Item of Equipment shall be returned to Corporate Obligee in accordance with the provisions of Section 6 hereof (unless delivered to a bidder in accordance with Section 25.3 hereof) and until each such Item has been so returned or delivered Obligor shall continue to pay Corporate Obligee the Equipment Payment for each such Item as specified in Section 6.3 hereof.

            25.2     Obligor’s End of Term Transfer Option.  On any Termination Date, if (a) no Equipment Agreement Event of Default shall have occurred and be continuing, and (b) this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, upon written notice to Corporate Obligee, as hereinafter provided, to acquire all, but not less than all, of Corporate Obligee’s rights and interests in all but not less than all Items of Equipment the Term for which is scheduled to expire (if not otherwise renewed in accordance with Section 25.1 hereof) on such Termination Date for an amount (the “Transfer Option Amount”), with respect to each Item of Equipment, payable in immediately available funds, equal to the sum of (i) the aggregate of the Estimated Residual Values of such Items of Equipment applicable to the Basic Term or Renewal Term thereof then ending, plus (ii) the Equipment Payment due and payable for such Items of Equipment on the Termination Date, plus (iii) any applicable sales, excise or other Taxes imposed as a result of such sale (other than gross or net income taxes attributable to such sale for any Person other than Corporate Obligee), plus (iv) any Supplemental Payments then due and owing to any Person. Corporate Obligee’s sale of each Item of Equipment shall be on an as‑is, where‑is basis, without any representation or warranty by, or recourse to, Corporate Obligee.  If Obligor intends to exercise said transfer option, Obligor shall give written notice to Corporate Obligee to such effect at least thirty (30) days prior to the expiration of the Basic Term, or, if Obligor has renewed this Equipment Agreement pursuant to Section 25.1 hereof, then at least thirty (30) days prior to the expiration of the then current Renewal Term.  If Obligor gives such written notice to Corporate Obligee, such notice shall constitute a binding obligation of Obligor to pay Corporate Obligee the Transfer Option Amount with respect thereto on the Termination Date thereof.  Upon payment in full of all amounts due upon the exercise of the Obligors’ option under this Section 25.2, Corporate Obligee will, at the request and cost of Obligor, transfer to or at the direction of the Obligor, without recourse or warranty (except as to the absence of any Liens attributable to Corporate Obligee), all of Corporate Obligee’s right, title and interest in and to such Item(s), “as-is, where-is” and, at the request and cost of Obligor, furnish to or at the direction of  Obligor, a bill of sale without recourse or warranty (except as to the absence of any Liens attributable to Corporate Obligee) and otherwise in form and substance reasonably satisfactory to the Obligor and Corporate Obligee, evidencing such transfer.

                        25.3     Third Party Sale of Equipment.

                                    25.3.1  Remarketing Obligations.  In the event Obligor does not exercise its option to acquire Corporate Obligee’s rights and interests in all the Equipment pursuant to this Section and does not renew this Equipment Agreement, then Obligor shall have the obligation during the last 180 days of the Basic Term, or the then current Renewal Term, if applicable (the “Remarketing Period”), to solicit bona fide bids for not less than all Items of Equipment from prospective purchasers who are financially capable of purchasing such Items of Equipment for cash on an as‑is, where‑is basis, without recourse or warranty.  Any bid received by Obligor prior to the end of the Remarketing Period shall be immediately communicated to Corporate Obligee and Owner Participant in writing, setting forth the amount of such bid and the name and address of the person or entity submitting such bid. Notwithstanding the foregoing, Corporate Obligee shall have the right, but not the obligation, to seek bids for the Equipment during the Remarketing Period.

                                    25.3.2  Sale of Equipment to Third Party Buyer.  On the Termination Date, provided that all the conditions set forth in Section 25.3.1 and in clauses (a) and (b) below have been met, Corporate Obligee shall sell (or cause to be sold) all Items of Equipment, for cash to the bidder, if any, who shall have submitted the highest bid during the Remarketing Period on an as‑is, where‑is basis and without recourse or warranty, and upon receipt by Corporate Obligee of the sales price, Corporate Obligee shall instruct Obligor to deliver and Obligor shall deliver the Equipment to such bidder; provided, that (a) any such sale to a third party shall be consummated, and the sales price for the Equipment shall have been paid to Corporate Obligee in immediately available funds, on or before the Termination Date; and (b) Corporate Obligee shall not be obligated to sell such Equipment (i) if the Net Proceeds of Sale of all of the Equipment are less than the aggregate Maximum Corporate Obligee Risk Amount applicable to all of the Equipment as of the Termination Date, or (ii) if Corporate Obligee has not received the amounts, if any, payable by Obligor pursuant to Section 26.1.

                                    25.4     Obligor’s Early Transfer Options.  Provided that (a) no Equipment Payment or Supplemental Payment is at the time past due, (b) no Equipment Agreement Event of Default shall have occurred and be continuing and (c) this Equipment Agreement shall not have been earlier terminated, Obligor shall be entitled, at its option, on any Payment Date to acquire all but not less than all of Corporate Obligee’s rights and interests in any Item(s) of Equipment upon written notice to Corporate Obligee, as hereinafter provided, for an amount (the “Payment Date Option Amount”), with respect to each Item of Equipment acquired, payable in immediately available funds, equal to the sum of (i) the Casualty Loss Value of such Item of Equipment applicable for such Payment Date, plus (ii) the Equipment Payment due and payable for such Item of Equipment on such Payment Date, plus (iii) any applicable sales, excise or other Taxes imposed as a result of such sale (other than gross or net income taxes attributable to such sale for any Person other than Corporate Obligee), plus (iv) the amount of Breakage Costs that Corporate Obligee or Trust Obligee shall be liable to pay upon a repayment of the Notes issued with respect to any such Item(s) of Equipment on such Payment Date, plus (v) the amount of Breakage Costs incurred by Corporate Obligee upon a repayment of the Equity Component for such Item on such Payment Date provided that (x) the aggregate Acquisition Costs of all Items of Equipment acquired by Obligor at any time under this Section 25.4 shall not exceed thirty percent (30%) of the total Acquisition Costs for all Equipment at any time financed hereunder, (y) after taking into account any acquisition hereunder, the aggregate Acquisition Costs of all Equipment remaining subject to this Equipment Agreement and located in the United States, Germany and the United Kingdom shall be at least equal to or greater than seventy-five percent (75%) of the aggregate Acquisition Cost of all Equipment at the time subject to this Equipment Agreement and (z) this option may not be exercised more than two (2) times during any twelve (12) month period.  If Obligor intends to exercise said early transfer option, Obligor shall give written notice to Corporate Obligee and Agent to such effect at least thirty (30) and no more than sixty (60) days prior to Payment Date on which such option will be exercised, which notice shall for each Item of Equipment to be acquired identify such Item substantially in the same manner as it is identified on the Equipment Agreement Supplement therefor and identify as of the Payment Date such option is to be exercised in the aggregate and for each such Item the Acquisition Cost, Casualty Loss Value, Unamortized Debt Amount and the Equipment Payment due.  Such notice shall also include replacement Equipment Agreement Supplement Schedule As in form and substance reasonably acceptable to Agent and Owner Participant (“Replacement Schedule As”) identifying all Equipment to remain subject to this Equipment Agreement after any such acquisition.  If Obligor gives such written notice to Corporate Obligee, such notice shall constitute a binding obligation of Obligor to pay Corporate Obligee the Payment Date Option Amount with respect to each Item of Equipment subject to such notice on the applicable Payment Date.  Upon payment in full of all amounts due upon the exercise of Obligors’ option under this Section 25.4, Corporate Obligee will, at the request and cost of Obligor, (i) transfer to or at the direction of Obligor, without recourse or warranty (except as to the absence of Corporate Obligee Liens), all of Corporate Obligee’s right, title and interest in and to such Item(s), “as-is, where-is” and, at the request and cost of Obligor, furnish to or at the direction of Obligor, a bill of sale without recourse or warranty (except as to the absence of Corporate Obligee Liens) evidencing such transfer and (ii) execute and deliver such additional agreements and documents and take such further actions as Obligor may reasonably request to release such Item(s) from the Liens granted under the Operative Documents, in each case in form and substance reasonably satisfactory to Obligor and Corporate Obligee.  The Replacement Schedule As shall be deemed a part of the corresponding Equipment Agreement Supplements in replacement of any existing Schedule As thereto.

            26.       End of Term Equipment Payment Adjustment.

                        26.1     Third Party Sale of Equipment.  This Section 26.1 shall apply only if, with respect to any Non-Renewal Item(s) of Equipment, a sale of such Item(s) to a third party pursuant to Section 25.3 hereof has been consummated on the Termination Date.  If the Net Proceeds of Sale of such Item(s) are less than the aggregate Estimated Residual Value of such Item(s) as of such Termination Date, Obligor shall, on the Termination Date, pay to Corporate Obligee as an end of term Equipment Payment adjustment, in immediately available funds, an amount equal to such deficiency (a “Deficiency”) as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s), plus the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus any Supplemental Payments then due and owing to Corporate Obligee hereunder; provided, however, that if no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, the amount of the Deficiency payable by Obligor with respect to such Item(s) shall not exceed the aggregate Maximum Obligor Risk Amount then applicable to such Item(s).  If the Net Proceeds of Sale of such Item(s) of Equipment exceed the aggregate Estimated Residual Value of such Item(s) and if no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder and Obligor shall have paid Corporate Obligee on or before the Termination Date the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus all Supplemental Payments then due and owing with respect to such Item(s), Corporate Obligee shall pay to Obligor an amount equal to such excess as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s).

                        26.2     Obligor Payment.  If a sale of all Non-Renewal Items of Equipment either to Obligor pursuant to Section 25.2 hereof or to a third party pursuant to Section 25.3 hereof has not been consummated on the Termination Date with respect thereto for any reason, then Obligor shall, on the Termination Date of such Item(s), pay to Corporate Obligee as an end of term Equipment Payment adjustment, in immediately available funds, as an adjustment to the Equipment Payment payable under this Equipment Agreement for such Item(s) that have not been sold pursuant to Sections 25.2, 25.3 or 25.4, an amount equal to the Equipment Payment due and payable for such Item(s) of Equipment on the Termination Date, plus all Supplemental Payments then due and owing with respect to such Item(s) plus (a) the Maximum Obligor Risk Amount of all of such Items, if (i) on the Termination Date no Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, and (ii) all Items of Equipment then subject to this Equipment Agreement have been returned to Corporate Obligee on the Termination Date in the condition and at the locations required by Section 6 hereof and (iii) this Equipment Agreement shall not have been terminated prior to the Termination Date, or (b) the Estimated Residual Value of all of such Items, if (i) on the Termination Date an Equipment Agreement Event of Default or event which, with notice or passage of time or both would constitute an Equipment Agreement Event of Default, shall have occurred and be continuing hereunder, or (ii) all Items of Equipment then subject to this Equipment Agreement have not been returned to Corporate Obligee on the Termination Date in the condition and at the locations required by Section 6 hereof, or (iii) this Equipment Agreement shall have been terminated prior to the Termination Date.  Obligor shall remain liable for the payment of, and upon the consummation by Corporate Obligee of the sale of any Item(s) of Equipment on or after the Termination Date thereof, Obligor shall pay, or reimburse Corporate Obligee for the payment of, all applicable sales, excise or other Taxes imposed as a result of such sale, other than gross or net income taxes attributable to such sale, and such obligation shall survive the termination of this Equipment Agreement.

            27.       Governing Law, Jurisdiction and Venue; Waiver of Jury.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with, and be governed by, the law of the State of New York.  The parties hereto hereby agree that all actions or proceedings initiated by any party hereto arising directly or indirectly out of this Agreement or the other Loan Documents may be litigated in the Supreme Court of the State of New York located in New York City or the District Court or the United States District Court for the Southern District of New York.  Each party hereto hereby expressly submits and consents in advance to such jurisdiction and venue in any action or proceeding commenced by any party hereto in any of such courts, agrees that jurisdiction and venue is proper in such courts, and hereby waives personal service of the summons and complaint, or other process or papers issued therein, and agrees that such service of the summons and complaint may be made by registered mail, return receipt requested, addressed to the party hereto being served at the address for such party set forth in Section 10.4 of the Participation Agreement.  Each party hereto waives any claim that New York City or the Southern District of New York is an inconvenient forum or an improper forum based on lack of venue.  The choice of forum set forth herein shall not be deemed to preclude the enforcement by Lender or Security Trustee of any judgment in any other appropriate jurisdiction.  Each of Obligor and Corporate Obligee hereby waives trial by jury in any judicial proceeding brought by it, Lender or Security Trustee involving directly or indirectly, any matter in any way arising out of, related to, or connected with this Agreement or the other Operative Documents.

            28.       Miscellaneous.

                        28.1     Any provision of this Equipment Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating or diminishing Corporate Obligee’s rights under the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by Applicable Law, Obligor hereby waives any provision of law which renders any provision of this Equipment Agreement prohibited or unenforceable in any respect.  All of the covenants, conditions and obligations contained in this Equipment Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of Corporate Obligee and (subject to the restrictions of Sections 14.1 and 14.3 hereof) Obligor.  This Equipment Agreement and the other Operative Documents, and each related instrument, document, agreement and certificate, collectively constitute the complete and exclusive statement of the terms of the agreement between Corporate Obligee and Obligor with respect to the acquisition and leasing of the Equipment, and cancel and supersede any and all prior oral or written understandings with respect thereto.

                        28.2     Except as otherwise expressly provided and subject to the rights assigned by Obligor, Corporate Obligee and Trust Obligee to Security Trustee under the Participation Agreement, none of this Equipment Agreement, the Notes, the Participation Agreement nor the Security Documents nor any terms hereof or thereof may be amended, supplemented, waived or modified without the written agreement and consent of the parties thereto, Obligor, each Lender, Corporate Obligee and Trustee Obligee, provided that where the consent of any Lender is required, such consent (except as provided below) may be given by Agent acting on behalf of Majority Lenders, and any such consent shall be binding on all Lenders, provided further, that no such amendment, modification, waiver or supplement shall, (i) without the consent of a Lender (A) extend the final scheduled maturity of such Lender’s A Loan or B Loan, as the case may be, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof (except to the extent repaid in cash), (B) release all or substantially all of Security Trustee’s interest in the Collateral (except as expressly provided in the Participation Agreement), (C) reduce the percentage specified in the definition of Majority Lenders or (D) amend this clause (i); (ii) without the consent of Agent, amend, modify or waive any provision relating to the rights or obligations of Agent, or (iii) without the consent of Security Trustee amend, modify or waive any provision relating to the rights or obligations of Security Trustee.

            29.       Payments.  All payments by Obligor under this Agreement shall be made in immediately available funds to such bank and/or account as Corporate Obligee may from time to time notify to Obligor no less than three (3) Business Days prior to the due date of any such payment.

            30.       Concerning Corporate Obligee.  Obligor agrees that as between it and the Corporate Obligee, no recourse shall be had with respect to this Equipment Agreement or the other Operative Documents against the Corporate Obligee, or any officer, director, employee, agent or Affiliate thereof except as expressly set forth in Section 10.15 of the Participation Agreement.

*  *  *  *

            IN WITNESS WHEREOF, the parties hereto have caused this Equipment Agreement to be duly executed by their duly authorized representatives as of the date first above written.

BTM CAPITAL CORPORATION,
as Corporate Obligee

By:  /s/ John F. McCarthy                                
     Name:  John F. McCarthy
     Title:  Vice President

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
as Obligor

By:  /s/ Frank Meredith                        
     Name:  Frank Meredith
     Title:  Executive Vice President and
                Chief Financial Officer

COUNTERPART NO. 8 OF 8 SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.

EXHIBIT A‑1 TO AMENDED AND RESTATED
EQUIPMENT LEASING AGREEMENT

Type(s) of Equipment:   As described on each of the Schedules of  Equipment attached to the Equipment Agreement Supplements made with respect to this Exhibit A-1.

Maximum Acquisition Cost:      $42,014,575.94 (which amount is inclusive of the Acquisition Costs of Equipment on or prior to December 20, 2001 financed under the Operative Documents)

Acquisition Period:        From March 30, 2001 to March 28, 2002, both dates inclusive.

Basic Term Commencement Date:        March 29, 2002

Renewal Terms:            two (2) Renewal Terms: (i) one (1) twelve (12) month period following the end of the Basic Term, and (ii) one (1) twenty-four (24) month period following the end of the first Renewal Term. 

            APPENDIX A

HARmAN INTERNATIONAL INDUSTRIES, INCORPORATED

Amended and restated EQUIPMENT leasing AGREEMENT

and amended and restated Participation Agreement

(2001)

“A Lenders” means any holder of an A Note and its successors and assigns.

“A Loan Term Percentage” means, as to each A Lender at any time, the percentage of the aggregate principal amount of the A Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such A Lender’s A Loan at such time.

“A Loan” means, as to each A Lender, the outstanding principal amount of such A Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “A Loans” opposite such A Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an A Note.  The aggregate principal amount of the A Loans on the Restructuring Date is $21,873,510.95.

“A Note” means any A Note issued by Corporate Obligee or Trust Obligee to any A Lender in the form of Exhibit D‑1 to the Participation Agreement.

“A Notes” means the collective reference to each A Note.

“Acceptance Date” for each Item of Equipment means the date on which Obligor has financed such Item under the Original Operative Documents, as evidenced by Obligor’s execution and delivery of an Equipment Agreement Supplement for such Item dated such date.

“Acquisition Cost” of each Item of Equipment means an amount equal to the sum of (i) the total cost paid by Original Obligee to Obligor for such Item in accordance with the Original Operative Documents, plus (ii) all sales and excise taxes paid by Original Obligee and/or Obligor as agent for Original Obligee on or with respect to the acquisition of such Item, plus (iii) all costs and expenses approved and paid by Obligor as agent for Original Obligee in connection with the delivery and installation of such Item. 

“Acquisition Period” means the period specified as such on each consecutively numbered Related Exhibit A attached to and made a part of the Equipment Agreement.

“Affected Person” means each of the Lenders, any permitted assignee of any Lender or the Agent.

“Affiliate” means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“After-Tax Basis” means in respect of an amount (the “base amount”) with respect to a Person, the base amount supplemented by a future payment, if necessary, to such Person such that, after reduction for all Taxes (other than Taxes based upon a Person’s net income or gross receipts and which are imposed or levied by any Federal, national, state, provincial or local taxing authority in the United States or a foreign country unless such Person would not otherwise have been subject to taxation in such jurisdiction but for such Person’s involvement in this transaction), if any, imposed on such Person in respect of the sum of the base amount and such future payment shall be equal to the base amount.

“Agent” means Bank of Tokyo-Mitsubishi Trust Company.

“Aggregate A Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Aggregate B Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Alternate Rate” means a variable rate equal to the greater of (i) the sum of the Federal Funds Rate from time to time in effect and  ½ of one percent (0.5%) and (ii) the rate of interest from time to time announced by Agent at its New York branch from time to time as its “prime commercial lending rate” (which rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer, and Agent may make commercial loans or other loans at rates of interest at, above or below such reference rate).

“Applicable Debt Rate” (a) for the purpose of calculating Equipment Payment means the rate calculated in accordance with Section 7.6 of the Equipment Agreement, (b) for the purpose of calculating interest due on any A Loan means the LIBOR Rate then in effect as determined by Agent pursuant to Schedule 2 to the Participation Agreement and (c) for the purpose of calculating interest due on any B Loan means the LIBOR Rate then in effect as determined by the Agent pursuant to Schedule 2 to the Participation Agreement.

“Applicable Law” means, with respect to any Person or Item of Equipment, all provisions of statutes, rules, regulations, orders and requests (whether or not having the force of law) of any Governmental Entity applicable to such Person or Item of Equipment, and all orders and decrees of all courts and arbitrators in proceedings or actions in which such Person is a party.

“Assignee” has the meaning set forth in Section 14.2 of the Equipment Agreement.

“Assignment and Acceptance Agreement” means the form of assignment and acceptance agreement attached as Schedule 7 to the Participation Agreement.

“Assumption and Revocation Agreement” means that certain Assignment, Assumption and Revocation Agreement dated as of June 30, 2003 by and between Original Owner Trustee, Original Obligee and Corporate Obligee, a copy of which is attached as Exhibit B to the Trust Agreement.

“B Lenders” means any holder of a B Note and its successors and assigns.

“B Loan Term Percentage” means, as to each B Lender at any time, the percentage of the aggregate principal amount of the B Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such B Lender’s B Loan at such time.

“B Loan” means, as to each B Lender, the outstanding principal amount of such B Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “B Loans” opposite such B Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an B Note.  The aggregate principal amount of the B Loans on the Restructuring Date is $4,577,034.39.

“B Note” means any B Note issued by Corporate Obligee to any B Lender in the form of Exhibit D-2 to the Participation Agreement.

“B Notes” means a collective reference to each B Note.

“Basic Term” for each Item of Equipment means the period consisting of twelve (12) months commencing on the “Basic Term Commencement Date” set forth on the Related Exhibit A for such Item and terminating on the Payment Date that occurs in the last month of such twelve (12) month period.

“Basic Term Commencement Date” for each Item of Equipment means the date specified as such on the Related Exhibit A.

“Breakage Costs” means any amount or amounts as shall compensate a Lender or Owner Participant for any loss or reasonable cost incurred after using good faith and reasonable efforts to minimize such loss (but excluding loss of margin of profit) or cost by a Lender or Owner Participant directly resulting from repayment by an Obligee of the Related Notes (as defined in Appendix A of the Original Participation Agreement) or Equity Components relating to Item(s) of Equipment that Obligor exercises its rights to acquire pursuant to Section 25.4 of the Equipment Agreement, in accordance with the terms of the Operative Documents.  The amount of the loss or cost shall be determined by the Person seeking such, and notice thereof shall be provided to Obligor in the form of a certificate of such Person stating that the calculations set forth therein are in accordance with the terms of the Operative Documents and setting forth in reasonable detail the basis for such calculations, such certificate being conclusive and binding for all purposes absent manifest error.

“Business Day” means any day other than a day on which banking institutions in the State of Connecticut or the State of New York are authorized by law to close.

“Casualty Loss Value” of each Item of Equipment as of any Casualty Loss Value Payment Date means an amount determined by multiplying the Acquisition Cost of such Item of Equipment by the percentage set forth opposite such Casualty Loss Value Payment Date on the Schedule of Casualty Loss Values attached to the Equipment Agreement Supplement for such Item.

“Casualty Loss Value Payment Date” for each Item of Equipment for which an Event of Loss occurs shall mean the Payment Date for such Item next following the date of such Event of Loss and for each Item of Equipment with respect to which Obligor is exercising its option under Section 25.4 of the Equipment Agreement shall mean the Payment Date on which such option is to be exercised in accordance with such Section 25.4.

“Certificate of Costs” means any certificate by Obligor executed by a Responsible Officer certifying Obligor’s original purchase price and date of purchase of the Item of Equipment specified in such certificate sold by Obligor to Original Obligee under the Original Participation Agreement in the form of Exhibit B to the Original Participation Agreement.

“Closing Date” means the first Funding Date.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time, or any comparable successor law.

“Collateral” means the collective reference to the Equipment Collateral and the Transferred Property Collateral.

“Commerzbank” means Commerzbank Aktiengesellschaft, New York Branch, the New York branch of a German banking corporation.

“Consolidated Capitalization” means any date, the sum of (a) shareholders’ equity of Obligor and (without duplication) its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (b) Consolidated Total Debt.

“Consolidated EBITDA” means for any period, Consolidated Net Income for such period, plus the amount of taxes, interest, depreciation and amortization deducted from earnings in determining such Consolidated Net Income.

“Consolidated Interest Expense” means for any period, the amount of interest expense deducted from earnings of Obligor and its consolidated Subsidiaries in determining Consolidated Net Income for such period in accordance with GAAP.

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

“Consolidated Total Debt” means at any date, without duplication, the aggregate of all Indebtedness (including the current portion thereof) of Obligor and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Corporate Obligee” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Cross Receipt” means any cross receipt in the form of Exhibit A to the Original Participation Agreement that was executed and delivered by Obligor to Original Obligee prior to the Restructuring Date in accordance with the Original Operative Documents.

“Debt Amortization Payment” for any Item of Equipment as of any Payment Date means the amount determined by multiplying the Debt Component of such Item by the percentage set forth opposite such Payment Date on the Schedule of Debt Component Amortization attached to the Related Equipment Agreement Supplement.

“Debt Component” for each Item of Equipment means the dollar amount of the Acquisition Cost financed by Original Lender on the Acquisition Date in accordance with the Original Operative Documents therefor calculated as 97.00% of the Acquisition Cost for such Item.

“Deficiency” has the meaning set forth in Section 26.1 of the Equipment Agreement.

“Dollar” means freely transferable, lawful money of the United States.

“EBITDA Ratio” means on any date, the ratio of Consolidated EBITDA to Consolidated Interest Expense for the four consecutive fiscal quarters of Obligor most recently ended prior to such date.

“English Debenture” means each of Debentures among (i) Original Obligee and Original Security Trustee, (ii) Corporate Obligee and Security Trustee, (iii) Obligor and Original Security Trustee and (iv) Harman International Industries, Limited and Original Security Trustee.

“Equipment” means the equipment of the type(s) described on the Schedule of Equipment attached to each consecutively numbered Equipment Agreement Supplement made a part of the Equipment Agreement together with any and all related appliances, parts, accessories, appurtenances, accessions, additions, improvements, replacements and other equipment or components of any nature from time to time incorporated or installed therein.

“Equipment Agreement” means the Amended and Restated Equipment Leasing Agreement dated as of June 30, 2003 between Obligor, as lessee, and Corporate Obligee, as lessor, and each Equipment Agreement Supplement as amended, supplemented and modified from time to time in accordance with the terms of the Operative Documents.

“Equipment Agreement Default” means an Equipment Agreement Event of Default or an event which with notice or lapse of time or both would become an Equipment Agreement Event of Default.

“Equipment Agreement Event of Default” has the meaning set forth in Section 20 of the Equipment Agreement.

“Equipment Agreement Supplement” means an Equipment Agreement Supplement substantially in the form attached to the Original Equipment Agreement as Exhibit B, which prior to the Restructuring Date, was executed by Original Obligee and Obligor with respect to each Item of Equipment as provided in Section 4 of the Original Equipment Agreement and was consented thereto by Original Lender, as the same has been amended on the Restructuring Date and as the same may be further amended or modified from time to time.

“Equipment Collateral” has the meaning set forth in Section 7.1(a) of the Participation Agreement.

“Equipment Payment” means the amount payable during the Interim Term pursuant to Section 7.1 of the Equipment Agreement, during the Basic Term pursuant to Section 7.2 of the Equipment Agreement, during each Renewal Term pursuant to Section 25.1 of the Equipment Agreement and during any holdover period pursuant to Section 6.3 of the Equipment Agreement, any Deficiency and any end of term rent adjustment payable in accordance with Section 26.2 of the Equipment Agreement.

“Equipment Payment Period” for each Item of Equipment means (a) for the Interim Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Interim Term as set forth in Section 7.1 of the Equipment Agreement, (b) for the Basic Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Basic Term thereof as set forth in Section 7.2 of the Equipment Agreement, and (c) for each Renewal Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during such Renewal Term as set forth in Section 25.1 of the Equipment Agreement.

“Equity Component” means, for each Item of Equipment, the difference between the Acquisition Cost and the Debt Component therefor.

“Equity Rate” means, for any Equipment Payment, the LIBOR in effect as of the first LIBOR Banking Day of each such Equipment Payment Period plus two hundred fifty (250) basis points.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Residual Value” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Estimated Residual Value Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Event of Loss” with respect to any Item of Equipment means (a) the loss of such Item of Equipment or any substantial part thereof, or (b) the loss of the use of such Item of Equipment due to theft or disappearance for a period in excess of forty-five (45) days during the Term, or existing at the expiration or earlier termination of the Term, or (c) the destruction, damage beyond repair, or rendition of such Item of Equipment or any substantial part thereof permanently unfit for normal use for any reason whatsoever, or (d) the condemnation, confiscation, seizure, or requisition of use or title to such Item of Equipment or any substantial part thereof by any Governmental Entity under the power of eminent domain or otherwise beyond the earlier of sixty (60) days and the end of the Basic Term or Renewal Term, as applicable.

“Excepted Payments” means (a) indemnity payments paid or payable in favor of Trust Company, Owner Participant or any Assignee, or their successors or assigns, directors, officers, employees, affiliates and agents under the Operative Documents, (b) proceeds of public liability insurance (or government indemnities in lieu thereof) payable to Trust Company, Owner Participant or any Assignee either pursuant to the Equipment Agreement or the Participation Agreement (which shall include proceeds of any self-insurance by Obligor) or maintained by Obligor, Trust Company, Obligees, Owner Participant or any Assignee and not required to be maintained under the Equipment Agreement, (c) costs or expenses paid or payable by Obligor to, or for the benefit of, Trust Company, Owner Participant or any Assignee, (d) all rights of, and payments to, Owner Participant under and pursuant to the Trust Agreement, (e) where any amount payable to Trust Company, Owner Participant or any Assignee is expressed to be payable on an After-Tax Basis, the increment to the underlying payment obligation arising by virtue of the operation of the definition of “After-Tax Basis,” (f) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (e) above and otherwise required to be paid thereon, (g) all rights to receive the amounts referred to in clauses (a) through (f) above, and (h) the proceeds of enforcement of any right to receive the proceeds of any amount referred to in clauses (a) through (f) above.

“Federal Funds Rate” means for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 a.m. (New York time) for such day on such transactions received by Agent from three federal funds brokers of recognized standing selected by Agent.

“Funding Date” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“Funding Notice” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

                        “German Chattel Mortgage Agreement” means each of the Agreements on Chattel Mortgage among (i) Harman Becker Automotive Systems (Becker Division) GmbH and Obligor, (ii) Harman Becker Automotive Systems (Straubing Division) GmbH and Obligor, (iii) Obligor and Corporate Obligee and (iv) Corporate Obligee and Security Trustee.

“Guaranty Obligation” means as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, derivative instrument or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guaranty Obligation shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business or (y) obligations of the Obligor or any of its Subsidiaries under arrangements entered into in the ordinary course of business whereby Obligor or such Subsidiary sells inventory to other Persons under agreements obligating Obligor or such Subsidiary to repurchase such inventory, at a price not exceeding the original sale price, upon the occurrence of certain specified events.

“Governmental Entity” means any Federal, state, municipal or other governmental department, commis­sion, board, bureau, agency, central bank or instrumentality or any court, in each case whether of the United States or any foreign country.

“Illegality Event” has the meaning set forth in Section 8.6 of the Participation Agreement.

“Indebtedness” means of any Person at any date, all indebtedness or obligations of such Person (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), as reflected on the balance sheet of such Person prepared in accordance with GAAP.

“Interest Coverage Ratio” means for any period of four consecutive fiscal quarters, Consolidated EBITDA divided by Consolidated Interest Expense for such period. 

“Interim Term” for each Item of Equipment means the period commencing on the Acceptance Date for such Item (unless the Acceptance Date is the Basic Term Commencement Date, in which case there shall be no Interim Term for such Item) and ending on the date immediately prior to the Basic Term Commencement Date. 

“Item of Equipment” or “Item” means any of the items of Equipment separately identified on any of the Schedules of Equipment attached to the Equipment Agreement Supplements currently made a part of the Equipment Agreement.

“Lenders” means the collective reference to the A Lenders and the B Lenders, and their permitted successors and assigns.

“LIBOR” means, in relation to any Equipment Payment Period, the rate per annum for deposits in Dollars for that Equipment Payment Period which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period; provided that if such rate does not appear on the Telerate Screen Page 3750, LIBOR shall mean the rate for deposits of an amount comparable to the aggregate of the Unamortized Debt Balances then financed or refinanced by such Lender by loans on the London interbank Dollar market for that Equipment Payment Period determined by such Lender to be the LIBOR rate offered by Agent to leading banks in the London Eurodollar interbank market at 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period for that relevant Equipment Payment Period adjusted for any reserve requirements in effect on the first day of such Equipment Payment Period.

“LIBOR Banking Day” means any day other than a day on which banking institutions in the State of New York or the City of London are authorized by law to close.

“LIBOR Margin” means, at any time, the liquidity margin then applicable set forth in Schedule 2 to the Participation Agreement, expressed as an annual percentage rate calculated on an actual/360 day basis.

“LIBOR Rate” means the sum of LIBOR plus the LIBOR Margin.

“Lien” means liens, mortgages, encumbrances, pledges, charges and security interests of any kind.

“Liquidity Agreement” means Liquidity Asset Purchase Agreement dated as of March 30, 2001, among Lender, as issuer, Commerzbank, as liquidity agent for the purchasers thereunder, and the purchasers. 

“Loans” means a collective reference to the A Loans and the B Loans.

“Loan Commitment Fee” means the Loan Commitment Fee (as defined in Appendix A to the Original Participation Agreement).

“Loan Default” means an event, which with the giving of notice or lapse of time or both, would become a Loan Event of Default.

“Loan Documents” means the Participation Agreement, Notes and Security Documents.

“Loan Event of Default” has the meaning set forth in section 5.10 of the Participation Agreement.

“Majority Lenders” means Lenders in the aggregate holding Notes representing more than 50% of the aggregate outstanding principal balances of the Loans with each Lender being able to vote all or any portion of its outstanding principal balance.

“Material Obligation” means any capitalized lease, derivative instrument or Guaranty Obligation.

“Maturity Date” for each Loan means the earlier of (a) the last day of the third Renewal Term for the Items of Equipment financed by such Loan, and (b) such earlier date on which such Loan becomes due and payable under the Participation Agreement.

“Maximum Obligor Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligor Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Maximum Obligee Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligee Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Multi-Currency Credit Agreement” means the Amended and Restated Multi-Currency, Multi-Option Credit Agreement dated as of August 14, 2002 among Obligor, JP Morgan Chase Bank, a New York banking corporation and the several lenders party thereto as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, and if such is no longer in effect, any other credit agreement or loan agreement which provides Obligor and all or some of its subsidiaries with their primary source of working capital borrowings and if there is no such credit agreement or loan in effect then such last agreement or loan as in effect immediately prior to its termination or expiration.

“Multi-Currency Negative Covenants” means each and every financial and negative covenant contained in the Multi-Currency Credit Agreement (other than covenants (a) for the maintenance of a ratio of Consolidated Total Debt to Consolidated Capitalization, (b) for the maintenance of an Interest Coverage Ratio or (c) restricting mergers, consolidations, amalgamations, liquidation, winding up or dissolutions) as such covenants are in effect from time to time, which, as of the date hereof, are contained in Section 9 of the Multi-Currency Credit Agreement. 

“Net Proceeds of Sale” means with respect to each Item of Equipment sold by Corporate Obligee to a third party pursuant to Section 25.3 of the Equipment Agreement, the net amount of the proceeds of sale of such Item, after deducting from the gross proceeds of such sale (a) all sales taxes and other taxes (excluding income taxes on or measured by Corporate Obligee’s income) as may be applicable to the sale or transfer of such Item, (b) all fees, costs and expenses of such sale incurred by Obligee and (b) any other amounts for which, if not paid, Corporate Obligee would be liable or which, if not paid, would constitute a Lien on such Item.

“Non-Renewal Item of Equipment” means each Item of Equipment with respect to which the Equipment Agreement is not renewed at the end of the Basic Term or any Renewal Term pursuant to timely notice to Corporate Obligee in accordance with the provisions of Section 25.1 of the Equipment Agreement.

“Notes” means the collective reference to the A Notes and the B Notes.

“Obligees” means, collectively, Trust Obligee and Corporate Obligee, and each of their permitted successors and assigns.

“Obligee Indemnified Person” means each of Trust Company, Owner Participant, Lenders, Agent, Security Trustee and any Assignee, their successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Obligee Property” means all of the estate, right, title and interest of Trust Obligee and Corporate Obligee in and to the Equipment, the Participation Agreement, the Equipment Agreement and the other Operative Documents, and all documents related hereto and to the Equipment, and all proceeds thereof, including, without limitation, all Equipment Payments, insurance proceeds and Supplemental Payments, but excluding any Excepted Payments.

“Obligor” means Harman International Industries, Incorporated, a Delaware corporation, and its permitted successors and assigns.

“Obligor Indemnified Person” means each Obligee Indemnified Person and each Obligee, its successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Operative Documents” means the Participation Agreement, the Receivables Purchase Agreement, the Notes, the Equipment Agreement, all Equipment Agreement Supplements, the Trust Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and the Security Documents and in each case, all exhibits, schedules and supplements thereto, and all notices, consents, certificates and other documents from time to time issued or entered into pursuant to or in connection therewith; in each case as amended and modified from time to time.

“Optional Alteration” has the meaning given set forth in Section 12 of the Equipment Agreement.

“Original Agent” means Commerzbank, acting in the capacity as “Agent” under the Original Participation Agreement.

“Original Equipment” means the Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Equipment Agreement” means the Equipment Financing Agreement dated as of March 30, 2001 between the Original Obligee, as “Obligee”, and Obligor, as “Obligor”, as amended prior to the Restructuring Date.

“Original Equity Agent” means Commerzbank, as “Equity Agent” for Original Owner Participant under the Original Operative Documents.

“Original Issuer” means Four Winds Funding Corporation, a Delaware corporation, as “Issuer” under the Liquidity Agreement.

“Original Items of Equipment” means the Items of Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Lender” means Four Winds Funding Corporation, a Delaware corporation, as “Lender” under the Original Operative Documents.

“Original Loans” means each Loan (as defined in Appendix A to the Original Participation Agreement) made by Original Lender to Original Obligee under the Original Operative Documents.

“Original Notes” means the collective reference to the Notes (as defined in Appendix A of the Original Participation Agreement) issued by Original Obligee to Original Lender to evidence the Original Loans made to it by Original Lender under the Original Operative Documents.

“Original Obligee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), not in its individual capacity but solely as trustee under the Original Trust Agreement.

“Original Operative Documents” means the Operative Documents (as defined in Appendix A to the Original Participation Agreement).

“Original Owner Participants” means, collectively, Commerzbank Aktiengesellschaft, New York Branch and Grand Cayman Branches and Credit Suisse First Boston Corporation.

“Original Owner Trustee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), acting in the capacity as “Owner Trustee” under the Original Trust Agreement.

“Original Participation Agreement” means the Participation Agreement dated as of March 30, 2001 between Obligor, Original Obligee, Original Lender, Original Agent, Original Security Trustee, Original Owner Participants and Original Equity Agent.

“Original Security Trustee” means Commerzbank, acting in the capacity as “Security Trustee” under the Original Participation Agreement.

“Original Trust Agreement” means that certain Trust Agreement by and between Original Owner Trustee and Original Owner Participants, dated as of March 26, 2001, which agreement has been terminated pursuant to the Assumption and Revocation Agreement.

“Original Trust Estate” means the Trust Estate (as defined in Appendix A to the Original Participation Agreement).

“Original Trust Purchase Agreement” means the Purchase, Assignment and Assumption Agreement dated as of June 30, 2003, between Original Owner Participants, as “Seller”, and Corporate Obligee, as “Purchaser”, a copy of which is attached as Exhibit A to the Participation Agreement.

“Outstanding Debt Amount” with respect to each Item of Equipment means the Debt Component therefor less the aggregate of all Debt Amortization Payments, all payments on account of Casualty Loss Value and all Deficiency payments and all payments made by Obligor to Corporate Obligee in accordance with Section 26.2 of the Equipment Agreement paid by Obligor to Corporate Obligee with respect to such Item.

“Overdue Rate” means the Applicable Debt Rate at the time in effect plus two (2) percent (200 basis points).

“Owner Participant” means BTM Capital Corporation, a Delaware corporation, and its successors and permitted assigns.

“Participation Agreement” means the Amended and Restated Participation Agreement dated as of June 30, 2003 among Obligor, Corporate Obligee, Trust Obligee, each Lender, Owner Participant, Agent and Security Trustee, as amended and modified from time to time in accordance with the terms thereof.

“Payment and Amortization Schedule” for each Loan means the payment and amortization scheduled attached to the Note relating to and evidencing such Loan.

“Payment Date” the 20^th of each September, December, March and June, provided however, if any such date is not a LIBOR Banking Day, then the Payment Date shall be the next LIBOR Banking Day.

“Permitted Country” means the United States, Germany, Austria, the United Kingdom, Denmark, France, Hungary, Switzerland, the Netherlands, and Sweden.

“Permitted Assignee” means any “accredited investor” under Rule 501(a) of the Securities Act of 1933, as amended, which is either a bank, insurance company, mutual fund, trust company, employee benefit plan (as defined in ERISA), or savings and loan company, in each case having total assets of at least $200,000,000 or Corporate Obligee upon exercise of the Corporate Obligee Option.

“Permitted Lien” means (a) any Liens created or granted by (i) Corporate Obligee to Security Trustee with respect to the Equipment Collateral under or in connection with the Participation Agreement, or (ii) by Trust Obligee to Security Trustee with respect to the Transferred Property Collateral under or in connection with the Participation Agreement, (b) any Liens created or granted by Original Obligee with respect to the Collateral (as defined in the Original Operative Documents) under or in connection with the Original Participation Agreement, which Liens have been assumed by Corporate Obligee, Trust Obligee, or both, (c) any interest of Obligor with respect to the Collateral under the Participation Agreement or the Equipment Agreement, and (d) any Lien of a mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings.

“Permitted Transferee” has the meaning specified in Section 10.7(b) of the Participation Agreement.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, trustee(s) of a trust, unincorporated organization, or government or Governmental Entity, agency or political subdivision thereof.

“Pre Effective-Date Financing Statement” means any UCC financing statement filed prior to July 1, 2001 in accordance with the Original Operative Documents to perfect a security interest granted by a Subsidiary of Obligor to Obligor or by Obligor to Original Obligee or by Original Obligee to Original Security Trustee under the Original Equipment Agreement or the Original Participation Agreement, which UCC financing statements were not filed in such Subsidiary’s, Obligor’s or Original Obligee’s UCC Location.

“Prepayment Premium” means with respect to any repayment of a Loan in whole or in part on any day other than a Payment Date the amount (if any) by which (a) the amount of interest payable on the next Payment Date on the amount of the Loan which is repaid, but for it having been so repaid, exceeds (b) the aggregate of the amount of interest accrued to the date such amount is repaid and an amount equal to AR x D x R, where AR equals the amount which is repaid, D equals the number of days from the date of repayment to the next Payment Date and R equals the rate per annum at which the Lender concerned is offering or would offer in the London Interbank Market (based on commercially reasonable criteria) for Dollar deposits of leading banks in an amount substantially equal in the amount repaid for a period from such date to the next Payment Date.

“Program Administration Letter” means the Program Administration Letter (as defined in Appendix A to the Original Participation Agreement).

“Receivables Purchase Agreement” means the Financing Agreement Rights Purchase Agreement dated as of July 18, 2003 between Corporate Obligee, as seller, and Trust Obligee, as purchaser, a copy of which is attached as Exhibit C to the Participation Agreement.

“Redelivery Location” means, with respect to any Item of Equipment that is to be returned by Obligor to Corporate Obligee, a location or locations designated by Corporate Obligee.

“Related Exhibit A” means, with respect to an Item of Equipment, the particular numbered Exhibit A currently attached to the Original Equipment Agreement and made a part thereof to which such Item relates as specified in Section 4 of the Equipment Agreement.

“Related Equipment Agreement Supplement” means, with respect to an Item of Equipment, the particular numbered Equipment Agreement Supplement executed and delivered prior to the Restructuring Date in connection with the Original Documents on which that Item is identified.

“Renewal Term” for each Item of Equipment means each of (i) one (1) twelve (12) month period following the end of the Basic Term, and (b) one (1) twenty-four (24) month period following the end of the first Renewal Term with respect to which Obligor has the option to renew the Equipment Agreement pursuant to Section 25.1 of the Equipment Agreement, terminating on the Payment Date that occurs in the twelfth month, or the twenty-fourth month, as the case may be of such Renewal Term.

“Required Alteration” has the meaning set forth in Section 12 of the Equipment Agreement.

“Responsible Officer” means the chief executive officer, the president, the chief financial officer, the Chief operating officer or the vice president for financial or legal affairs of Obligor.

“Restricted Subsidiary” means any Subsidiary identified as a “Restricted Subsidiary in the Multi-Currency Credit Agreement.

“Restructuring Date” means June 30, 2003.

“Secured Obligations” has the meaning set forth in Section 7 of the Participation Agreement.

“Security Documents” means the UCC financing statements referenced in Section 2.1(g) of the Participation Agreement, the German Chattel Mortgage Agreements, the English Debentures, and Subsidiary Equipment Agreements.

“Security Trustee” means Bank of Tokyo - Mitsubishi Trust Company.

“Special Non-Cash Charges” means any non-cash, non recurring restructuring charges in accordance with GAAP and non-cash charges relating to the implementation of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets, issued by the Financial Accounting Standards Board.

“Standard & Poor’s” means Standard & Poor’s Rating Service, a Division of McGraw Hill Companies, Inc. and any successor or assign.

“Subsidiary” means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. 

“Subsidiary Equipment Agreement” has the meaning set forth in Section 14.1 of the Equipment Agreement.

“Supplemental Payments” means all amounts, liabilities and obligations which Obligor assumes or agrees to pay hereunder to Corporate Obligee or others, including payments of Casualty Loss Value, Estimated Residual Value and indemnities, but excluding Equipment Payment.

“Taxes” has the meaning set forth in Section 8.2 of the Participation Agreement.

“Term” for each Item of Equipment means the period from and including the Acceptance Date thereof and ending on the last day of the Basic Term thereof or, if renewed, the last Renewal Term thereof.

“Termination Date” for each Item of Equipment means the last day of the Basic Term therefor, or if the Term of such Item has been renewed pursuant to Section 25.1 of the Equipment Agreement, the last day of the then current Renewal Term of such Item.

“Transfer Option Amount” has the meaning set forth in Section 25.2 of the Equipment Agreement.

“Transferred Property” has the meaning set forth in Section 1 of the Receivables Purchase Agreement.

“Transferred Property Collateral” has the meaning set forth in Section 7.1(b) of the Participation Agreement.

“Trust” means the trust created by the Trust Agreement.

“Trust Agreement” means that certain Trust Agreement by and between Trust Company and Owner Participant, dated as of June 30, 2003, as amended, supplemented or modified from time to time.

“Trust Collateral” has the meaning set forth in Section 7.1(c) of the Participation Agreement.

“Trust Company” means U.S. Bank, National Association, a national banking association, and its successors and assigns, each in its individual capacity.

“Trust Company Liabilities” means any claims or liabilities resulting from or arising out of the following (i) the willful misconduct or gross negligence of Trust Company; (ii) the liabilities that may result from the breach or inaccuracy of any of the Trust Company’s representations, warranties or agreements made in its individual capacity in Sections 5.6 and 5.14 of the Trust Agreement, or in any Operative Documents or any document delivered in connection therewith; (iii) any failure by Trust Company to perform the obligations expressly undertaken in its individual capacity in the Trust Agreement or in any Operative Document or any document delivered in connection therewith; (iv) Taxes based on or measured by any fees, commissions or compensation received by Trust Company for acting as trustee in connection with any of the transactions contemplated by the Operative Documents; or (v) any failure by Trust Company to use ordinary care in the receipt and disbursement of fund.

“Trust Estate” has the meaning specified in Section 2.6 of the Trust Agreement.

“Trust Obligee” means U.S. Bank National Association, a national banking association, not in its individual capacity, but solely as Trustee under the Trust Agreement, and its permitted successors and assigns.

“UCC” means the Uniform Commercial Code, as in effect in any applicable jurisdiction.

“UCC Location” means the jurisdiction in which a “debtor” is located (or deemed located) under the UCC.

“Unamortized Debt Balance” for any Item of Equipment means the amount calculated by multiplying the unpaid principal balance of the Loans made with respect to such Item of Equipment by a fraction, the numerator of which is the Acquisition Cost of such Item of Equipment as set forth on the Related Equipment Agreement Supplement and the denominator of which is the aggregate of all Acquisition Costs for Items of Equipment as set forth on the Related Equipment Agreement Supplement (including such Item of Equipment with respect to which such calculation is being made) and at the time subject to the Equipment Agreement.

The definitions stated herein shall equally apply to both the singular and plural forms of the terms defined.  Unless otherwise provided, any agreement defined or referred to herein means such agreement as amended, supplemented or modified from time to time, and includes all exhibits, supplements and appendices thereto.  Any Person defined or referred to below include its successors, permitted transferees and assigns.  The word “including,” when used herein or in any Operative Document, is deemed to be followed by “without limitation,” whether or not such words appear.

When used in any Operative Document the words “this Agreement”, “herein”, “hereunder”, “hereof” or other like words mean and include such Operative Document and each amendment and supplement thereto, and with respect to the Equipment Agreement, each Exhibit A and each Equipment Agreement Supplement.  All references to sections, schedules and exhibits in any Operative Document are to sections, schedules and exhibits in or to such Operative Document unless otherwise specified.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  All words importing any gender shall be deemed to include the other gender.  All references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to.  Unless otherwise specified, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments, modifications and supplements thereto.

EX-10.5

Exhibit 10.5

AMENDED AND RESTATED PARTICIPATION AGREEMENT

among

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
as Obligor

U.S. BANK NATIONAL ASSOCIATION
in its individual capacity and as trustee,
  as Trust Obligee

BTM CAPITAL CORPORATION,
as Corporate Obligee and Owner Participant

THE FINANCIAL INSTITUTIONS NAMED HEREIN AS LENDERS,
as Lenders

BANK OF TOKYO-MITSUBISHI TRUST COMPANY
as Agent and Security Trustee

Dated as of June 30, 2003

(2001)

TABLE OF CONTENTS

						Page
1.	Definition and Usage.					2
2.	Representations and Warranties.					2
	2.1.	Obligor Representations and Warranties.				2
	2.2.	Trust Obligee Representations and Warranties.				6
	2.3.	Further Trust Obligee Representations and Warranties.				8
	2.4.	Trust Company Representations and Warranties				8
	2.5.	Corporate Obligee Representations and Warranties.				9
	2.6.	[Reserved.]				11
3.	[Reserved.]					11
4.	Restructuring of Original Loans.					11
	4.1.	Equity Components.				11
	4.2.	Amended and Restated Transaction.				11
	4.3.	Rights in Original Equipment.				12
	4.4.	Original Conditions.				12
	4.5.	Sale of Transferred Property to Trust Obligee.				12
5.	Amount and Terms of Loan.					13
	5.1.	Acknowledgment of Original Loans.				13
	5.2.	A Loans and B Loans.				13
	5.3.	Notes.				14
		5.3.1		Original Notes.		14
		5.3.2		A Notes.		14
	5.4.	[Reserved.]				15
	5.5.	Payments.				15
	5.6.	Prepayments Limited.				16
	5.7.	Mandatory Prepayments.				16
	5.8.	Application of Prepayments.				17
	5.9.	Recalculation of Loan Payments and Amortization Schedule.				17
	5.10.	Loan Events of Default.				17
	5.11.	Remedies of Lenders.				19
		5.11.1.			Rights in Collateral.	19
		5.11.2.			Insolvency.	19
		5.11.3.			Delivery of Documents.	20
		5.11.4.			Possession of Collateral.	20
		5.11.5.			Sale of Collateral.	21
		5.11.6.			Discharge.	21
		5.11.7.			Appointment of Receiver.	21
		5.11.8.			Redemption.	21
		5.11.9.			Rights Cumulative; No Waiver.	22
		5.11.10.			Termination of Proceedings.	22
6.	Covenants.					22
	6.1.	Obligee Covenants.				22
		6.1.2.			Corporate Obligee Covenants.	22
		6.1.3.			Trust Obligee Covenants.	23
	6.2.	Further Obligee Covenants.				24
		6.2.1.			Further Trust Obligee Covenants.	24
		6.2.2.			Further Corporate Obligee Covenants.	24
	6.3.	Additional Trust Company Covenants.				25
	6.4.	Owner Participant Covenants.				25
	6.5.	Lenders and Security Trustee Covenant.				26
	6.6.	Obligor Covenants.				26
	6.7.	Obligor Negative Covenants.				28
	6.8.	Covenants of Lenders, Obligees, Agent and Security Trustee, Trust Company and Owner Participant.				28
	6.9.	Warranty Disclaimers.				29
7.	Security.					29
	7.1.	Security Interest.				29
	7.2.	Consent and Agreement of Obligor.				31
	7.3.	Further Corporate Obligee Covenants				31
		7.3.2			Further Trust Obligee Covenants.	32
	7.4.	Further Assurances.				32
	7.5.	Termination.				33
	7.6.	Other Security.				33
	7.7.	Power of Attorney.				33
	7.8.	Assignment of Rights.				34
	7.9.	Transfer of the Collateral by Lenders.				34
	7.10.	No Segregation of Monies; No Interest.				34
	7.11.	Distribution of Moneys.				34
		7.11.1.			Payments under the Equipment Agreement.	34
		7.11.2.			Payments in Respect of an Event of Loss.	35
		7.11.3.			Payments in Respect of Transfers and Sales of Equipment.	35
		7.11.4.			Payment upon Final Disposition of the Items of Equipment.	35
	7.12.	Payments after a Loan Event of Default.				35
	7.13.	Application of Certain Other Payments.				36
	7.14.	Other Payments.				36
	7.15.	Retention of Amounts by Security Trustee.				37
	7.16.	[Reserved.]				37
8.	Indemnities and Yield Protection.					37
	8.1.	Obligor General Indemnification.				37
	8.2.	Obligor General Tax Indemnity.				38
	8.3.	[Intentionally Deleted.]				41
	8.4.	[Reserved.]				41
	8.5.	Increased Costs.				42
	8.6.	Illegality.				43
	8.7.	Survival.				43
9.	Agency.					43
	9.1.	Authorization and Action.				43
	9.2.	Limitation on Liability; Agent’s Reliance, etc.				44
	9.3.	Rights.				44
	9.4.	Credit Decision.				45
	9.5.	Indemnification.				46
	9.6.	Successor Agent.				46
	9.7.	Holder List; Ownership of Notes.				46
10.	Miscellaneous.					47
	10.1.	Expenses and Recording.				47
	10.2.	Modification.				47
	10.3.	Governing Law, Jurisdiction and Venue; Waiver of Jury.				48
	10.4.	Notices.				48
	10.5.	Interest in the Equipment.				49
	10.6.	Descriptive Headings, etc.				50
	10.7.	Benefit of Agreement; Assignment.				50
	10.8.	Execution and Effectiveness.				52
	10.9.	Registration.				52
	10.10.	Confidentiality.				52
	10.11.	Survival.				53
	10.12.	Severability.				53
	10.13.	No Broker.				53
	10.14.	Performance by Lenders.				53
	10.15.	Payment from Collateral; Limited Recourse.				54
	10.16.	No Proceedings.				54
	10.17.	Concerning Trust Company.				55
	10.18.	Waiver for Amendment and Restatement and Further Assurances.				55
	Schedule 1		[Reserved]
	Schedule 2		LIBOR Margins
	Schedule 3		Amortization Schedule for the A Loans and the B Loans
	Schedule 4		Initial Addresses of Lenders
	Schedule 5		Pledge Agreement
	Schedule 6		Form of Opinion
	Schedule 7		Form of Assignment and Acceptance Agreement
	Exhibit A		Copy of Original Trust Purchase Agreement
	Exhibit B		Copy of Assumption and Revocation Agreement
	Exhibit C		Receivables Purchase Agreement
	Exhibit D-1		Form of A Note
	Exhibit D-2		Form of B Note

This AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of June 30, 2003 (together with all amendments and supplements hereto, this “Agreement”) is among HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (together with its successors and permitted assigns, “Obligor”), U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee (together with its successors and permitted assigns, “Trust Obligee”) and in its individual capacity, but only where so specified, (together with its successors and permitted assigns, “Trust Company”), BTM CAPITAL CORPORATION, a Delaware corporation (as assignee of U.S. Bank National Association, successor-in-interest to State Street Bank and Trust Company of Connecticut, National Association, as “Owner Trustee”) (together with its successors and permitted assigns, “Corporate Obligee” and, together with Trust Obligee, collectively, “Obligees”), THE BANK HAPOALIM, CREDIT SUISSE FIRST BOSTON CORPORATION AND THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH (each as assignee of Four Winds Funding Corporation) (together with their respective successors and assigns, each as a “Lender” and collectively, the “Lenders”), BANK OF TOKYO-MITSUBISHI TRUST COMPANY, the New York trust company (as assignee of Commerzbank Aktiengesellschaft, New York Branch), as agent for Lenders (together with its successors and permitted assigns “Agent”) and as security trustee (together with its successors and permitted assigns, “Security Trustee”), and BTM CAPITAL CORPORATION, a Delaware corporation, (together with its successors and permitted assigns, “Owner Participant”).

W I T N E S S E T H:

WHEREAS, the Original Owner Trustee under the Original Trust Agreement financed certain manufacturing equipment pursuant to the Original Participation Agreement and the Original Equipment Agreement;

WHEREAS, on the date hereof, pursuant to the Original Trust Purchase Agreement, Corporate Obligee shall acquire the beneficial interests of the Original Owner Participants under the Original Trust Agreement with respect to which Original Owner Trustee acted as trustee under the existing financing evidenced by the Original Participation Agreement and the Original Equipment Agreement;

WHEREAS, pursuant to the Assumption and Revocation Agreement, Original Owner Trustee assigned to Corporate Obligee and Corporate Obligee assumed from Original Owner Trustee all of Original Owner Trustee’s right, title, interest and obligations in, to and under the Original Trust Agreement and the Original Trust Estate, including, without limitation, all of Original Owner Trustee’s right, title, interest and obligations under the Original Notes evidencing the Original Loans, and thereupon Corporate Obligee terminated the Original Trust Agreement and revoked the trust created thereunder;

WHEREAS, the Lenders, Trust Obligee and Corporate Obligee have each agreed to restructure the Original Loans into (a) A Loans to Corporate Obligee, subject to the conditions in this Agreement, and (b) B Loans to Corporate Obligee, subject to the conditions in this Agreement;

WHEREAS, Corporate Obligee acquired its right, title and interest in, to and under the Original Trust Agreement and the Original Trust Estate subject to the Liens of the Security Trustee, which Liens are for the benefit of all Lenders to secure the A Notes and the B Notes in accordance with the terms hereof;

WHEREAS, pursuant to the Receivables Purchase Agreement, Trust Obligee purchased from Corporate Obligee, and Corporate Obligee sold to Trust Obligee, the Transferred Property subject to the Liens of the A Notes with the purchase price therefor being the assumption by Trust Obligee from Corporate Obligee of the A Loans;

WHEREAS, the Lenders (or their predecessor in interest) acquired their respective undivided ownership interests in and to the Original Notes and the Original Loans pursuant to the Liquidity Agreement and the other Original Operative Documents; and

WHEREAS, the parties hereto desire that this Agreement amend and restate the Original Participation Agreement in its entirety to consummate the transactions described in the foregoing recitals and for certain other purposes.

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree to amend and restate the Original Participation Agreement in its entirety as follows:

            1.         Definition and Usage.

Unless the context otherwise requires, capitalized terms used herein and not otherwise defined herein shall have the meanings set forth or referred to in Appendix A to this Agreement, which Appendix includes rules of usage and interpretation applicable hereto.

            2.         Representations and Warranties.

            2.1       Obligor Representations and Warranties.  Obligor hereby represents and warrants as of the Restructuring Date for the benefit of each other party hereto that:

            (a)        Obligor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation set forth above, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party and is qualified to do business in and is in good standing in each state or other jurisdiction in which the nature of its business makes such qualification necessary, except where failure to so qualify would not have a material adverse effect on Obligor;

            (b)        the financing of the Equipment, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Obligor with the terms hereof and thereof and the payments and performance by Obligor of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate corporate action taken by Obligor, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Obligor’s certificate of incorporation, its by‑laws or any provisions relating to the capital stock of Obligor, and (iii) do not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Obligor is a party, or by or under which Obligor or any of Obligor’s property is bound except where such violation or breach would not be expected to have a material adverse effect on Obligor and would not affect Obligees’ respective interests in the Obligee Property, Security Trustee’s interest in the Collateral or any party’s remedies under the Operative Documents, or conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument except where such conflict, breach or default would not be expected to have a material adverse effect on Obligor and would not affect Obligees’ respective interests in the Obligee Property, Security Trustee’s interest in the Collateral or any party’s remedies under the Operative Documents, or result in the creation or imposition of any Lien, other than Permitted Liens, upon any of Obligor’s property or assets and (iv) do not require, on the part of Obligor or any shareholder or Subsidiary thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Governmental Entity except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

            (c)        each Operative Document to which it is a party and each Security Document to which a Subsidiary of Obligor is a party has been executed by the duly authorized officer or officers of Obligor or such Subsidiary, respectively, and delivered to the other parties thereto and (assuming due authorization, execution and delivery of the Operative Documents by the other parties thereto) constitutes, or when executed by the duly authorized officer or officers of Obligor or such Subsidiary and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Obligor or such Subsidiary, enforceable against Obligor or such Subsidiary in accordance with their respective terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

            (d)        Immediately prior to giving effect to each Cross-Receipt under the Original Operative Documents therefor, Obligor had good and marketable title to each Item of Equipment specified in such Cross Receipt, and Obligor has not granted any Lien on any Item of Equipment or the proceeds thereof, the Equipment Agreement or the insurance required under the Equipment Agreement other than Liens granted by it under the Operative Documents, and no Lien, other than Permitted Liens, has attached to any Item of Equipment, the proceeds thereof or the Equipment Agreement or the insurances required under the Equipment Agreement, or in any manner has affected adversely Corporate Obligee’s, Trust Obligee’s or Security Trustee’s right, title and interest therein;

            (e)        each Item of Equipment is personal property and not a fixture attached to realty under Applicable Law, and each Item of Equipment that has a serial number or other identification number set forth therefor on the Related Equipment Agreement Supplement has such serial number or other identification number permanently affixed thereto;

            (f)         (i) when the Subsidiary Equipment Agreements were executed, the security interests in the Equipment granted to Obligor by the Subsidiaries pursuant to the Subsidiary Equipment Agreements, (ii) the security interests in the Equipment and in the Subsidiary Equipment Agreements granted to Corporate Obligee by Obligor pursuant to the Equipment Agreement and (iii) the security interests in the Equipment Collateral granted to Security Trustee pursuant to this Agreement, in each case constitute a first priority Lien with respect to such Equipment Collateral under Applicable Law, and Obligor, Corporate Obligee and Security Trustee shall be entitled to all of the rights, benefits and priorities provided to a holder of a first priority Lien under Applicable Law;

            (g)        at all times during the Term, each Item of Equipment will be in a Permitted Country and Items of Equipment with aggregate Acquisition Costs equal to or greater than 75% of the total Acquisition Costs of all Items of Equipment will be in the United States, Germany or the United Kingdom;

            (h)        for each Item of Equipment located in the United States for which a serial number or other identification number is identified on the Related Equipment Agreement Supplement, upon the filing of:

(i)         appropriately completed UCC financing statements with the Equipment described in the manner described on the Related Equipment Agreement Supplement (1) naming the relevant Subsidiary of Obligor that is a party to a Subsidiary Equipment Agreement as debtor and the Obligor as secured party, with the Secretary of State of the State of such Subsidiary’s UCC Location, (2) naming Obligor as debtor and Corporate Obligee as secured party, with the Secretary of State of the State of Obligor’s UCC Location, and (3) naming Corporate Obligee as debtor and the Security Trustee as secured party, with the Secretary of State of the State of Corporate Obligee’s UCC Location;

(ii)        appropriately completed UCC “in-lieu” financing statements continuing the effectiveness of the Pre Effective Date Financing Statements (x) naming a Subsidiary of Obligor that is a party to a Subsidiary Equipment Agreement as debtor and Obligor as secured party, filed with the Secretary of State of the relevant Subsidiary of Obligor’s UCC Location, (y) naming Obligor as debtor and Original Obligee as secured party, filed with the Secretary of State of the State of Obligor’s UCC Location and (z) naming Original Obligee as debtor and Original Security Trustee as secured party, filed with the Secretary of State of the State of Original Obligee’s UCC Location;

(iii)       appropriately completed UCC-3 financing statements assigning the Liens evidenced by the UCC financing statements referenced in (ii) above (x) naming Original Obligee as secured party from Original Obligee to and for the benefit of Corporate Obligee and (v) naming Original Security Trustee as secured party to and for the benefit of Security Trustee in each case filed with the Secretary of State of the State of the relevant UCC Location;

(iv)       an appropriately completed UCC-3 financing statements amending the UCC financing statements referenced in (ii) above naming Original Obligee as debtor to reflect Corporate Obligee as the debtor for the benefit of Security Trustee and filed with the Secretary of State of the State of Corporate Obligee’s UCC Location,the security interest in each such Item of Equipment granted to Obligor by such Subsidiary pursuant to the related Subsidiary Equipment Agreement, the security interests in such Item of Equipment and in the related Subsidiary Equipment Agreement granted by Obligor to Corporate Obligee pursuant to the Equipment Agreement, and the security interests in such Item of Equipment and in the Equipment Agreement granted by Corporate Obligee to Security Trustee pursuant to this Agreement, shall in each case constitute a first priority perfected Lien under the UCC (as applicable) with respect to such Equipment, Subsidiary Equipment Agreement and Equipment Agreement under Applicable Law and Obligor, Corporate Obligee and Security Trustee shall be entitled to all of the rights and benefits and priorities provided to a holder of a perfected first priority Lien under Applicable Law, and on Restructuring Date, all recordations and filings shall have been accomplished with respect to this Agreement in each UCC jurisdiction as may be required by Applicable Law to establish and perfect Obligor’s Liens granted by such Subsidiary of Obligor, Corporate Obligee’s Liens granted by Obligor and Security Trustee’s Liens granted by Corporate Obligee in and to such Item of Equipment, such Subsidiary Equipment Agreement and the Equipment Agreement, and any giving of notice or any other action to such end required by Applicable Law has been given or taken;

                        (i)         for each Item of Equipment located in the United States for which a serial number or other identification number is identified on the Related Equipment Agreement Supplement, (i) the security interests in the Equipment Collateral granted by Corporate Obligee to Security Trustee pursuant to this Agreement constitutes a first priority Lien with respect to the Equipment Collateral under Applicable Law, (ii) upon the filing of appropriately completed UCC financing statement with the Equipment described in the manner described on the Related Equipment Agreement Supplement for the benefit of Security Trustee and filed with the Secretary of State of the State of Corporate Obligee’s UCC Location, the security interests in Corporate Obligee’s interest in each such Item of Equipment granted to Security Trustee pursuant to this Agreement constitutes a first priority perfected Lien with respect to such interest in such Items of Equipment under Applicable Law and Security Trustee shall be entitled to all of the rights and benefits and priorities provided to a holder of a perfected first priority Lien under Applicable Law, and (iii) all recordations and filings shall be accomplished with respect to this Agreement in each jurisdiction in the United States as may be required by law to establish and perfect Security Trustee’s rights in and to such Items of Equipment located in the United States and in the Equipment Agreement and any giving of notice or any other action such end required by Applicable Law has been given or taken;

                        (j)         Obligor’s UCC Location is in the State of Delaware;

                        (k)        no Equipment Agreement Default or Equipment Agreement Event of Default has occurred and is continuing and no Event of Loss or event which with the passage of time, would become or Event of Loss has occurred;

                        (l)         there is no litigation or other proceeding now pending or, to the Obligor’s knowledge, threatened, against or affecting Obligor or any Subsidiary thereof, in any court or before any regulatory commission, board or other administrative governmental agency which will adversely affect or impair the right, title or interest of Corporate Obligee to any Item of Equipment, the Equipment Agreement or any other Operative Document, or the security interest of Security Trustee in any Item of Equipment or the Equipment Agreement, this Agreement or any Operative Document, or which, if decided adversely to Obligor or such Subsidiary, will materially adversely affect the business operations or financial condition of Obligor;

                        (m)       without limiting the generality of the foregoing, the retention of possession by Obligor of the Items of Equipment financed hereunder following the transfer of an interest therein to Corporate Obligee shall not be deemed fraudulent or void as against any present or future creditor of Obligor under Applicable Law, nor would any subsequent bona fide purchaser from Obligor of such Items of Equipment, in the event of any attempted subsequent transfer thereof by Obligor, acquire any title to or rights therein superior to Corporate Obligee’s right, title or interest therein;

                        (n)        Obligor has delivered to each Obligee, Owner Participant, each Lender and Agent its most recent annual report on Form 10-K and quarterly report on Form 10-Q and they are complete and correct in all material respects, accurately present the financial condition of Obligor on the dates for which, and the results of its operations for the periods for which, the same have been furnished and have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods covered thereby; and there has been no material adverse change in the condition of Obligor and its Subsidiaries taken as a whole, financial or otherwise, since the date of such Form 10-Q;

                        (o)        Obligor has not entered into the transactions contemplated herein, directly or indirectly, in connection with any arrangement in any way involving any employee benefit plan or plans or related trust to which it is a party in interest or disqualified person, all within the meaning of ERISA, and the Code, and, assuming the accuracy of the representations made in Sections 2.5(f) and (g) and 2.6(a) and (b) herein, the execution and delivery of, and the consummation of the transactions contemplated by, the Operative Documents, will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code;

                        (p)        Obligor is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended;

                        (q)        Obligor delivered to Original Obligee a true, correct and complete Certificate of Costs evidencing payment for the Items of Equipment specified in such Certificate of Costs financed by Original Obligee;

                        (r)        payment in full has been made by or on behalf of Obligor to the vendor of each Item of Equipment; and

                        (s)        each Item of Equipment is leased to a Subsidiary of Obligor, and the identification of such Subsidiary, the location of its chief executive office and the location of such Item of Equipment are each identified on the Subsidiary Equipment Agreement.

                        2.2       Trust Obligee Representations and Warranties.  Trust Obligee hereby represents and warrants as of the Restructuring Date for the benefit of each party hereto that:

                        (a)        Trust Obligee is a trust duly established and validly existing under the laws of the State of Connecticut, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party;

                        (b)        the financing of the Transferred Property, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Trust Obligee with the terms hereof and thereof and the payments and performance by Trust Obligee of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate trust action taken by Trust Obligee, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Trust Obligee’s Trust Agreement, (iii) will not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Trust Obligee is a party, or by or under which Trust Obligee or any of Trust Obligee’s property is bound, or be in conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument, or result in the creation or imposition of any Lien, other than Permitted Liens, upon any of Trust Obligee’s property or assets, and (iv) will not require, on the part of the Trust Company or any Affiliate thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any United States federal or Connecticut local governmental or public commission, board, authority or agency except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

                        (c)        each Operative Document to which it is a party has been executed by the duly authorized officer or officers of the Trust Company on behalf of the Trust Obligee and delivered to the other parties thereto and constitutes, or when executed by the duly authorized officer or officers of the Trust Company on behalf of the Trust Obligee and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Trust Obligee, enforceable against it in accordance with their terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

                        (d)        there are no outstanding judgments against Trust Obligee and no pending or threatened action (known to Trust Obligee) or proceeding affecting Trust Obligee before any court, governmental agency or arbitrator, in any jurisdiction;

                        (e)        there is no tax, levy, impost, deduction, charge or withholding which may be imposed on or asserted against the Transferred Property Collateral or any part thereof or any interest therein, or against Lenders, Agent or Security Trustee under the laws of the State of Connecticut either (i) on or by virtue of the execution or delivery of Operative Documents or any other document contemplated thereby, or (ii) on any payment to be made by Trust Obligee pursuant to the Loan Documents or any other document contemplated thereby to which Trust Obligee is a party; and

                        (f)         Trust Obligee has no indebtedness or other liabilities, whether contingent or otherwise, other than its obligations under and as contemplated by the Operative Documents.

                        2.3.      Further Trust Obligee Representations and Warranties.  Trust Obligee hereby represents and warrants as of the Restructuring Date for the benefit of Lenders, Agent and Security Trustee that:

                        (a)        it has all rights and interests in the Transferred Property Collateral, free and clear of all Liens other than Permitted Liens;

                        (b)        (i)         the security interests in the Transferred Property Collateral granted by it to Security Trustee pursuant to this Agreement constitute a Lien with respect to such Transferred Property Collateral under Applicable Law, and (ii) all recordations and filings shall have been accomplished with respect to this Agreement in each jurisdiction in the United States as may be required by law to establish and perfect Security Trustee’s rights in and to the Transferred Property Collateral and any giving of notice or any other action to such end required by Applicable Law has been given or taken;

                        (c)        its UCC Location is in the State of Ohio; and

                        (d)        it makes each of the representations and warranties made by it in each other Operative Document to which it is a party to, and for the benefit of, Lenders, Agent and Security Trustee as if the same were set forth in full herein.

                        2.4       Trust Company Representations and Warranties.  Trust Company hereby represents and warrants as of the Restructuring Date for the benefit of each of the parties hereto that:

                        (a)        it is a national banking association, duly organized, validly existing and in good standing under the laws of the United States of America, and has full power, authority and legal right under such laws to execute, deliver and perform its obligations under this Agreement and the Trust Agreement;

                        (b)        each of the Trust Agreement and (to the extent of the covenants, agreements, representations and warranties of Trust Company in its individual capacity contained herein) this Agreement has been duly executed and delivered by Trust Company, and (assuming due authorization, execution and delivery of the Trust Agreement by Owner Participant) the Trust Agreement and (to the extent of the covenants, agreements, representations and warranties of Trust Company in its individual capacity contained herein) this Agreement constitute a legal, valid and binding obligation of Trust Company, enforceable against Trust Company in accordance with its terms;

                        (c)        neither the execution or delivery by Trust Company of the Trust Agreement or this Agreement nor the performance by Trust Company of its obligations hereunder or thereunder (i) conflicts or will conflict with or violate in any respect any applicable United States federal law governing the banking or trust powers of Trust Company or any Connecticut law applicable to or binding upon Trust Company or any of its Affiliates, or any of their respective properties, (ii) conflicts or will conflict with or violate Trust Company’s articles of association or by-laws, (iii) conflicts or will conflict with, or contravene, violate or result in a breach of, any indenture, mortgage, loan agreement, lease or any other material agreement or material instrument to which Trust Company or any of its Affiliates is a party or by which any of their respective properties is bound, (iv) results or will result in the creation or imposition of any Lien (other than Permitted Liens) on the Transferred Property Collateral, or (v) requires or will require, on the part of Trust Company or any Affiliate of Trust Company, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Government Entity governing the banking or trust powers of Trust Company, except for filings, if any, made pursuant to any notice reporting requirement applicable to it; provided, that no representation is made as to any laws, rules or regulations applicable to the particular nature of the Transferred Property Collateral;

                        (d)        it is not in breach of any covenants or agreements made by it in the Trust Agreement or by it in its individual capacity in this Agreement;

                        (e)        its UCC Location is in the State of Ohio; and

                        (f)         there are no actions, suits or proceedings pending or, to the best knowledge of Trust Company, threatened before any court or by or before any other Government Entity, or any arbitrator, which (i) either individually or in the aggregate, would have a material adverse effect on the Trust Company or the Trust Estate or on the right, power or authority of Trust Company to perform its obligations under the Operative Documents to which it is, or is to become a party or on Trust Obligee’s ability to perform its obligations under any Operative Document to which it is, or is to become, a party or (ii) call into question the validity or the enforceability of any Operative Document.

                        2.5       Corporate Obligee Representations and Warranties.  Corporate Obligee represents and warrants as of the Restructuring Date for the benefit of each other party hereto that:

                        (a)        Corporate Obligee is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, has full power, authority and legal right under such laws to execute, deliver and perform its obligations under the Operative Documents to which it is a party and is qualified to do business in, is in good standing in all material respects in, each state or other jurisdiction in which the nature of its business makes such qualification necessary, except where failure to so qualify would not have a material adverse effect on Corporate Obligee;

                        (b)        the financing of the Equipment as contemplated hereby, the execution and delivery of the Operative Documents and the other related instruments, documents and agreements to which it is a party, and the compliance by Corporate Obligee with the terms hereof and thereof and the payments and performance by Corporate Obligee of any of its obligations hereunder and thereunder (i) have been duly and legally authorized by appropriate corporate action taken by Corporate Obligee, (ii) are not in contravention of, and will not result in a violation or breach of, any of the terms of Corporate Obligee’s certificate of incorporation (or equivalent document), its by-laws or any provisions relating to the capital stock of Corporate Obligee, and (iii) will not violate or constitute a breach of any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Corporate Obligee is a party, or by or under which Corporate Obligee or any of Corporate Obligee’s property is bound, or be in conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or instrument, or result in the creation or imposition of any Lien upon any of Corporate Obligee’s property or assets other than the Lien of the Security Trustee hereunder and any Permitted Liens, and (iv) will not require, on the part of Corporate Obligee or any Affiliate thereof, the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any United States federal or Delaware local governmental or public commission, board, authority or agency except for filings, if any, made pursuant to any notice reporting requirement applicable to it;

                        (c)        each Operative Document to which it is a party has been executed by the duly authorized officer or officers of Corporate Obligee and delivered to the other parties thereto and constitutes, or when executed by the duly authorized officer or officers of Corporate Obligee and delivered to the other parties thereto, such Operative Documents will constitute, the legal, valid and binding obligations of Corporate Obligee, enforceable in accordance with their terms except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights from time to time in effect and by general principles of equity including those applicable to the enforceability of the remedy of specific performance;

                        (d)        Corporate Obligee is not in breach of any covenants or agreements made by it in this Agreement or in the Equipment Agreement or in its capacity as Owner Participant in the Trust Agreement;

                        (e)        there are no actions, suits or proceedings pending or, to the best knowledge of Corporate Obligee, threatened before any court or by or before any other Government Entity, or any arbitrator, which (i) either individually or in the aggregate, would have a material adverse effect on the Equipment Collateral or on the right, power and authority of Corporate Obligee’s ability to perform its obligations under any Operative Document to which it is, or is to become, a party or (ii) call into question the validity thereof or the enforceability thereof in accordance with the terms thereof;

                        (f)         no part of the funds used or to be used by it to make its investment in the Trust Estate contemplated hereby does or will constitute assets of an employee benefit plan, within the meaning of ERISA or any applicable regulation thereunder, or any assets or any plan, as defined in Section 4975(e)(1) of the Code; and

                        (g)        Corporate Obligee has all rights and interests that Original Obligee had in each Item of Equipment (including the parts and components thereof) and the Equipment Collateral, free and clear of all Liens arising by, through or under Corporate Obligee other than the Permitted Liens;

                        (h)        Security Trustee’s interests in the Equipment Agreement has been registered in accordance with Section 14.3 of the Equipment Agreement; and

                        (i)         Corporate Obligee’s UCC Location is in the State of Delaware.

                        2.6.      [Reserved.]

                        3.         [Reserved.]

                        4.         Restructuring of Original Loans.

                        4.1       Equity Components.  Pursuant to the Original Participation Agreement, the Original Owner Participants advanced Equity Components of each Item of Equipment and each party hereto hereby acknowledges and agrees that all such Equity Components so advanced have been fully and satisfactorily applied pursuant to and in accordance with the Original Operative Documents

                        4.2       Amended and Restated Transaction.  Each party hereto hereby:

                        (a)        acknowledges and agrees that (i) for the benefit of Original Obligee and Original Lender, Obligor transferred all of its right, title and interest in and to the Original Equipment to Original Obligee, pursuant to the Original Operative Documents; (ii) subject to the terms and conditions set forth in the Original Trust Purchase Agreement, a copy of which is attached hereto as Exhibit A, Original Owner Participants transferred all of its right, title and interest in and to the Original Trust Agreement and the Original Trust Estate to Corporate Obligee; and (iii) pursuant to the Assumption and Revocation Agreement, a copy of which is attached hereto as Exhibit B, Original Owner Trustee assigned (subject to the Liens of the Original Security Trustee) to Corporate Obligee, and Corporate Obligee assumed, all of Original Owner Trustee’s right, title, interest and obligations in, to and under the Original Trust Agreement and the Original Trust Estate, including, without limitation, all of Original Owner Trustee’s right, title, interest and obligationsunder the Original Operative Documents and under the Original Loans evidenced by the Original Notes, and thereupon Corporate Obligee terminated the Original Trust Agreement and revoked the trust created thereunder;

                        (b)        acknowledges and agrees that (i) the Lenders, Trust Obligee and Corporate Obligee have each agreed to restructure the Original Loans into (x) A Loans to Corporate Obligee, subject to the conditions in this Agreement, and (y) B Loans to Corporate Obligee, subject to the conditions in this Agreement; (ii) Corporate Obligee has acquired its rights in the Original Trust Estate subject to the Liens of the Original Security Trustee, which Liens were assigned to the Security Trustee for the benefit of all Lenders, and has granted Security Trustee Liens on the Collateral to secure the A Notes and the B Notes in accordance with the terms of this Agreement; and (iii) pursuant to the Receivables Purchase Agreement, a copy of which is attached hereto as Exhibit C, Trust Obligee purchased from Corporate Obligee, and Corporate Obligee sold to Trust Obligee, the Transferred Property subject to the Lien of the Security Trustee hereunder with the purchase price therefor being the assumption by Trust Obligee from Corporate Obligee of the A Loans;

                        (c)        acknowledges and agrees that on the Restructuring Date, contemporaneously with Trust Obligee’s purchase of the Transferred Property and assumption of the A Loans evidenced by the A Notes from Corporate Obligee pursuant to the Receivables Purchase Agreement, (i) Corporate Obligee shall endorse the A Notes over to Trust Obligee and immediately thereafter such A Notes shall be cancelled by the A Lenders, and (ii) Trust Obligee shall issue replacement A Notes evidencing the A Loans in favor of the A Lenders;

                        (d)        consents to the execution and delivery of the Equipment Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement, the Trust Agreement, the Receivables Purchase Agreement and the other Operative Documents and the performance of the transactions contemplated thereby in respect of the Original Equipment and the Original Trust Estate in all respects and for all purposes; and

                        (e)        consents to the termination of the Program Administration  Letter and the Original Trust Agreement in all respects and for all purposes.

                        4.3.      Rights in Original Equipment.  Each party hereto hereby acknowledges and agrees that, as a result of the consummation of the transactions contemplated under this Agreement and the other Operative Documents, Corporate Obligee has and shall have obtained all right, title and interest in and to the Original Trust Estate and the Original Equipment, subject to the Lien of this Agreement and the Equipment Agreement and subject to the terms and conditions set forth herein, including, without limitation, Section 10.15 hereof, and the Original Equipment shall for all purposes constitute the “Equipment” hereunder and under the other Operative Documents.

                        4.4.      Original Conditions.  Each party (other than U.S. Bank National Association in its individual capacity) hereto hereby acknowledges and agrees that, prior to the Restructuring Date, all of the conditions and obligations set forth in Sections 4.1 through 4.5 of the Original Participation Agreement were either fully satisfied or waived by such party entitled to waive such condition and, as of the Restructuring Date, all transfers of the Original Equipment contemplated to occur under the Original Operative Documents have occurred and all reimbursements to Obligor therefor have been made.

                        4.5.      Sale of Transferred Property to Trust Obligee.

                        (a)        Each party (other than U.S. Bank National Association in its individual capacity) hereto hereby acknowledges and agrees that, notwithstanding anything to the contrary contained herein or in the other Operative Documents, Corporate Obligee shall not sell to Trust Obligee, and Trust Obligee shall not purchase from Corporate Obligee, the Transferred Property as contemplated in Section 4.2(b)(iii) hereof unless and until the following conditions are satisfied:

                                    (i)         Corporate Obligee provides written notice to Trust Obligee and Agent stating that Corporate Obligee desires to sell the Transferred Property to Trust Obligee, which written notice shall specify a date not less than fifteen (15) days and not more than thirty (30) days after the Restructuring Date upon which date such sale shall occur;

                                    (ii)        Corporate Obligee and Trust Obligee shall have executed and delivered the Receivable Purchase Agreement substantially in the form indicated on Exhibit C attached hereto;

                                    (iii)       Trust Obligee shall have executed and delivered the Pledge Agreement substantially in the form indicated on Schedule 5 attached hereto; and

                                    (iv)       Corporate Obligee shall have delivered to the Agent an opinion of counsel substantively in the form indicated on Schedule 6 attached hereto.

                        (b)        Corporate Obligee and Trust Obligee covenant and agree with the Lenders that they shall consummate the transactions contemplated in Section 4.2(b)(iii) hereof on or before July 30, 2003.

            (c)        Except for Trust Obligee’s covenant to consummate the transactions contemplated in Section 4.2(b)(iii) as set forth in Section 4.5(b) hereof, each party hereto hereby acknowledges and agrees that, until Trust Obligee purchases from Corporate Obligee the Transferred Property and assumes from Corporate Obligee the A Loans, neither Trust Obligee nor Trust Company shall have any obligations or liability hereunder or under the other Operative Documents.

                        5.         Amount and Terms of Loan.

                        5.1.      Acknowledgment of Original Loans.  Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby acknowledges and agrees that on and as of the Restructuring Date, the entire aggregate outstanding principal amount of all Original Loans is equal to the amount specified under the column entitled “Outstanding Aggregate Principal Balance of Original Loans” on Schedule 3 hereto.

                        5.2.      A Loans and B Loans.

(a)        Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby acknowledges and agrees that, contemporaneously with the execution and delivery of the Original Trust Purchase Agreement, the Receivables Purchase Agreement, the Equipment Agreement and this Agreement, the entire aggregate outstanding principal amount of the Original Loans shall be (and shall be deemed to be) continued and divided into (i) A Loans in an aggregate principal amount equal to the amount specified under the column “Aggregate Principal Amount of A Loans” on Schedule 3 hereto (the “Aggregate A Loan Principal Balance”) and (ii) B Loans in an aggregate principal amount equal to the amount specified under the column “Aggregate Principal Amount of B Loans” on Schedule 3 hereto (the “Aggregate B Loan Principal Balance”).

(b)        Each Lender and each other party hereto (other than U.S. Bank National Association in its individual capacity) hereby further acknowledges and agrees that pursuant to the consummation of transactions contemplated by the Original Trust Purchase Agreement, the Receivables Purchase Agreement, the Equipment Agreement and this Agreement, (x) each A Lender shall have on the Restructuring Date (and after assumption thereby by Trust Obligee) an aggregate undivided ownership interest in the A Loans to Trust Obligee in the original principal amount set forth opposite such A Lender’s name under the column entitled “Principal Amount of A Loan” on Schedule 3 hereto, which amount shall be evidenced by an A Note issued by Trust Obligee to such A Lender pursuant to Section 5.3.2 hereof and (y) each B Lender shall have on the Restructuring Date an undivided ownership interest in the B Loans to Corporate Obligee in the original principal amount set forth opposite such B Lender’s name under the column entitled “Principal Amount of B Loan” on Schedule 3 hereto, which amount shall be evidenced by a B Note issued by Corporate Obligee to such B Lender pursuant to Section 5.3.3 hereof.

(c)        Trust Obligee hereby acknowledges and agrees that pursuant to the Receivables Purchase Agreement, this Agreement and the other Operative Documents to which it is a party, it is and shall be validly and justly indebted to the A Lenders for the payment of the A Loans in an amount equal to the Aggregate A Loan Principal Balance.  Corporate Obligee hereby acknowledges and agrees that pursuant to the Original Trust Purchase Agreement, theAssumption and Revocation Agreement, this Agreement and the other Operative Documents towhich it is a party, it is and shall be validly and justly indebted to the B Lenders for the payment of the B Loans in an amount equal to the Aggregate B Loan Principal Balance.

                        5.3.      Notes.

5.3.1.   Original Notes.  Each Lender (i) consents to the cancellation of each Original Note in all respects and for all purposes; and (ii) directs (x) Corporate Obligee to issue contemporaneously with such cancellation and with the consummation of the transactions contemplated in Section 5.2 the A Notes to the A Lenders; and (y) Corporate Obligee to issue contemporaneously with such cancellation and with the consummation of the transactions contemplated in Section 5.2 the B Notes to the B Lenders.  Each other party hereto hereby consents to the cancellation of the Original Notes and to the issuance of the A Notes and the B Notes hereunder in replacement thereof in all respects and for all purposes.

5.3.2.   A Notes.

(a)        The A Loans made by each A Lender to Original Obligee and assumed by Corporate Obligee shall be evidenced by A Notes, duly executed by Corporate Obligee and payable to the order of such A Lender in an original principal amount equal to such A Lender’s A Loan specified in Schedule 3 hereto.  The A Notes shall be dated as of the date hereof and delivered to the A Lenders in accordance with this Agreement.  Each A Note shall be substantially in the form of Exhibit D-1 with blanks and Payment and Amortization Schedules appropriately completed in conformity herewith and shall have the aggregate Debt Amortization Payments with respect to such A Note noted thereon as of the Restructuring Date.

(b)        Immediately following the consummation of the transaction contemplated in Section 4.2(b) (iii) hereof, each A Lender (i) consents to the assignment of the A Notes from Corporate Obligee in favor of Trust Obligee and the cancellation of such A Notes in all respects and for all purposes, and (ii) directs Trust Obligee to issue, and Trust Obligee hereby agrees to issue, contemporaneously with such cancellation, replacement A Notes to each such A Lender.  The replacement A Notes shall be issued by Trust Obligee to the A Lenders in accordance with the requirements of Section 5.3.2 (a) hereof.

5.3.3.   B Notes.  The B Loans made by each B Lender to Corporate Obligee shall be evidenced by B Notes of Corporate Obligee, duly executed by Corporate Obligee thereof and payable to the order of such B Lender in an original principal amount equal to such B Lender’s B Loan specified in Schedule 3 hereto.  The B Notes shall be dated as of the date hereof and delivered to the Lenders in accordance with this Agreement.  Each B Note shall be substantially in the form of Exhibit D-2, with blanks and Payment and Amortization Schedules appropriately completed in conformity herewith and shall have the aggregate Debt Amortization Payments with respect to such B Note noted thereon as of the Restructuring Date.

            5.4       [Reserved.]

                        5.5       Payments.

5.5.1    Principal.  Unless otherwise adjusted in accordance with Section 5.9 hereof, (a) principal on each A Loan shall be payable to each A Lender on each Payment Date in an amount equal to the amount specified for such date on the Payment and Amortization Schedule attached to such A Lender’s A Note; and (b) principal on each B Loan shall be payable to each B Lender on each Payment Date in an amount equal to the amount specified for such date on the Payment and Amortization Schedule attached to such B Lender’s B Note.

5.5.2    Interest.

(a)        Trust Obligee agrees to pay to the A Lenders interest in respect of the unpaid principal amount of each A Loan assumed by Trust Obligee from Corporate Obligee pursuant to the Receivables Purchase Agreement and this Agreement from the date hereof until the date on which such A Loan (together with accrued and unpaid interest thereon) is repaid in full (whether on the Maturity Date, by acceleration or otherwise) at the Applicable Debt Rate (calculated on the basis of a 360-day year and actual days elapsed).  Accrued (and theretofore unpaid) interest shall be payable in arrears, on each Payment Date, on the date of any prepayment (on the amount prepaid), on the Maturity Date and, after the Maturity Date, on demand.

(b)        Corporate Obligee agrees to pay to the B Lenders interest in respect of the unpaid principal amount of each B Loan assumed by Corporate Obligee from the date hereof until the date on which such B Loan (together with accrued and unpaid interest thereon) is repaid in full (whether on the Maturity Date, by acceleration or otherwise) at the Applicable Debt Rate (calculated on the basis of a 360-day year and actual days elapsed).  Accrued (and theretofore unpaid) interest shall be payable in arrears, on each Payment Date, on the date of any prepayment (on the amount prepaid), on the Maturity Date and, after the Maturity Date, on demand.

5.5.3    [Reserved.]

5.5.4 Satisfaction of Commitment Fee.  The parties hereto (other than U.S. Bank National Association in its individual capacity) agree and acknowledge that, prior to the Restructuring Date, the Loan Commitment Fee pursuant to Section 5.5.4 of the Original Participation Agreement has been paid in full and all such obligations to pay the Loan Commitment Fee pursuant to Section 5.5.4 of the Original Participation Agreement have been fully discharged.

5.5.5    Overdue Rate.  Trust Obligee shall pay to each A Lender and Corporate Obligee shall pay to each B Lender interest on any part of the unpaid principal amount of any Note issued by such Obligee to such Lender, if any, and interest on such Note and any other amount payable by such Obligees hereunder which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise) on demand for the period commencing on the due date thereof until the same is paid in full at the Overdue Rate.

5.5.6    Payment Instructions.  All payments by Trust Obligee or Corporate Obligee to the Lenders hereunder or under the other Operative Documents shall be made without defense, set-off or counterclaim to Security Trustee no later than 12:00 noon (New York time) on the date when due and shall be made in lawful money of the United States of America in immediately available funds to the account of Security Trustee maintained at Bank of Tokyo-Mitsubishi Trust Company, ABA No. 026-009-687, Account No. 97770450, F/F/C A/C# 26025906 reference:  Harman International Payment (6-T-277) or such other account as Security Trustee may designate in a written notice to Obligees.

5.5.7    Withholding Tax.  If any amount of principal or interest payable with respect to any Loan becomes subject to any withholding Tax under Applicable Laws, Obligor shall withhold such Tax and shall pay the Lender that made such Loan such additional amounts so that the net amount actually received by such Lender, after reduction for such withholding Tax, shall be equal on an After-Tax Basis to the full amount of principal and interest otherwise due and payable hereunder.

5.5.8    Business Day Convention.  Unless otherwise provided herein, any payment or prepayment of amounts due in accordance with the terms hereof which is due on a date which is not a Business Day shall be payable on the next succeeding Business Day.

                        5.6.      Prepayments Limited.  No prepayment of any Loan may be made except to the extent and in the manner expressly permitted by this Agreement.

                        5.7.      Mandatory Prepayments.

5.7.1    Event of Loss.  In the event an Item of Equipment shall suffer an Event of Loss, then on the Casualty Loss Value Payment Date for such Item, Corporate Obligee and Trust Obligee shall prepay and apply, and there shall become due and payable on the Casualty Loss Value Payment Date for such Item, a principal amount of the A Loans and B Loans, pro rata, equal to the Unamortized Debt Balance with respect to such Item of Equipment and all accrued and unpaid interest thereon.

5.7.2    Transfer of Rights and Interests in Items of Equipment.  In the event that Obligor exercises its option to acquire Corporate Obligee’s rights and interests in an Item of Equipment pursuant to Sections 25.2 or 25.4 of the Equipment Agreement, Corporate Obligee and Trust Obligee shall prepay and apply, and there shall become due and payable on the Payment Date designated for such acquisition, Breakage Costs, if any, a principal amount of the A Loans and B Loans, pro rata, equal to the Unamortized Debt Balance with respect to such Item of Equipment and all accrued and unpaid interest thereon.

5.7.3    Other Termination of Equipment Agreement.  In the event that Obligor does not exercise any option to renew the Equipment Agreement with respect to any Item of Equipment pursuant to Section 25.1 thereof or does not exercise on the Termination Date for such Item of Equipment the option to transfer such Item of Equipment pursuant to Section 25.2 or 25.4 of the Equipment Agreement, then on the Termination Date for such Item of Equipment Obligees shall apply, and there shall become due and payable, the Unamortized Debt Balance of the A Loan and the B Loans, pro rata, made with respect to such Item of Equipment and all accrued and unpaid interest thereon.

                        5.8.      Application of Prepayments.  The amount of any prepayment shall be applied first, ratably to the payment of accrued but unpaid interest on the A Loans and the B Loans at the Overdue Rate, if any, to the date of such payment then due hereunder, second, ratably to the payment of accrued but unpaid interest on the A Loans and the B Loans at the Applicable Debt Rate, if any, to the date of such prepayment then due hereunder, third, ratably to the payments of any other amounts due the Lenders under the Operative Documents, and fourth ratably to the payment of the outstanding principal amount of the A Notes and B Notes.

                        5.9.      Recalculation of Loan Payment and Amortization Schedule.  Upon any partial prepayment in accordance with this Section 5, the amount of principal due in accordance with the Payment and Amortization Schedule attached to any Note or Notes against which principal amounts were prepaid, shall be recalculated by Agent on each Payment Date occurring after the date of such partial payment so as to equal the following:

(1.0 - PP/ OP) x SP

Where:

PP        =          Principal amount of such Loan being prepaid

OP       =          Outstanding principal balance of such Loan immediately prior to the payment of the principal being prepaid (less any principal scheduled to be paid on the date principal is being prepaid)

SP        =          Amount of scheduled principal payment for such Loan had the principal prepayment at issue not been paid

                        5.10     Loan Events of Default. The occurrence of any of the following specified events (whatever the reason for such Loan Event of Default and whether such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall constitute a “Loan Event of Default”:

                        (a)        an Equipment Agreement Event of Default shall have occurred and be continuing; or

                        (b)        either Obligee shall default in the due and punctual payment of any principal of or interest on, any of its respective Loans (including any mandatory prepayment) or any other amount to be paid to Lenders under the Loan Documents; provided, however, that if any such amount is paid after the due date thereof, it shall only be deemed to be paid in full if there shall also be paid, together with such amount, interest on such amount at the Overdue Rate from the date such payment was due until the date of payment; or

                        (c)        either Obligee shall default in the due performance or observance of any of their respective other obligations hereunder, and the same shall continue unremedied for a period of thirty (30) days from the earlier of actual knowledge thereof by such Obligee and receipt by such Obligee of written notice of such default; or

                        (d)        any representation, warranty or statement made by Corporate Obligee, Trust Obligee, Trust Company or Owner Participant in any of the Operative Documents, or otherwise in writing in connection herewith or therewith, or in any statement furnished pursuant hereto or thereto or in connection herewith or therewith, shall be breached or shall prove to be untrue in any material respect on the date as of which made; or

                        (e)        judgments for the payment of money in excess of $100,000 in the aggregate shall be rendered against either Obligee (other than judgments with respect to which such Obligee provides Agent with a written acknowledgement from such Obligee’s or Obligor’s insurer that such judgment is covered by an insurance policy issued by such insurer) and shall not be satisfied, stayed, bonded with a reputable and financially sound surety company to the full extent thereof, vacated or discharged for more than sixty (60) days; or

                        (f)         (i) Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall consent to the appointment of or the taking of possession by a receiver, agent or liquidator of itself or of a substantial part of its property, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall admit in writing its inability to pay its debts generally as they become due, or does not pay its debts generally as they become due or shall make a general assignment for the benefit of creditors, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief in a case under any bankruptcy laws or other insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against it, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant Company shall seek relief by voluntary petition, answer or consent, under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time) or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall seek an agreement, composition, extension or adjustment with its creditors under such laws, or Corporate Obligee, Trust Obligee, Trust Company or Owner Participant shall adopt a resolution authorizing action in furtherance of any of the foregoing; or (ii) an order, judgment or decree shall be entered by any court of competent jurisdiction (A) appointing, without the consent of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant, a receiver, trustee or liquidator of such person or of any substantial part of its property, or (B) sequestering any substantial part of the property of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant, or (C) granting any other relief in respect of Corporate Obligee, Trust Obligee, Trust Company or Owner Participant as a debtor under any bankruptcy laws or other insolvency laws (as in effect at such time), and in each case any such order, judgment or decree of appointment or sequestration shall remain in force undismissed, unstayed and unvacated for a period of sixty (60) days after the date of entry thereof; or (iii) a petition against Corporate Obligee, Trust Obligee, Trust Company or Owner Participant in a case under any bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within sixty (60) days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Corporate Obligee, Trust Obligee, Trust Company or Owner Participant , any court of competent jurisdiction assumes jurisdiction, custody or control of such person or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed and unterminated for a period of sixty (60) days; or

                        (g)        either Obligee shall default in any of its obligations under any other Operative Document to which it is a party or any Operative Document shall cease to be in full force and effect or be disaffirmed or repudiated in any respect by or on behalf of either Obligee or any party thereto (other than Lenders); or

                        (h)        if this Agreement at any time shall not be in full force and effect or shall no longer create a first and prior Lien on any portion of the Collateral, or

                        (i)         the trust created pursuant to the Trust Agreement shall have been terminated.

                        5.11     Remedies of Lenders.

                                    5.11.1. Rights in Collateral.  If a Loan Event of Default shall have occurred and be continuing, then and in every such case Security Trustee and/or Agent shall, upon written request by the Majority Lenders, exercise any or all of the rights and powers and pursue any and all of the remedies pursuant to this Section 5.11, any and all remedies under the other Security Documents, and any and all remedies available to a secured party under the UCC or any other provision or law and, in the event such Loan Event of Default is a Loan Event of Default referred to in Section 5.10(a) hereof, any and all of the remedies pursuant to the Equipment Agreement, and may take possession of all or any part of the Collateral and may exclude Obligees, Obligor, any lessee and all Persons claiming under any of them wholly or partly therefrom.

                                    5.11.2. Insolvency.  If a Loan Event of Default referred to in clause (f) of Section 5.10 hereof shall have occurred or an Equipment Agreement Event of Default of the type referred to in clause (e) of Section 20 of the Equipment Agreement thereof shall have occurred, then and in every such case the unpaid principal of each Loan, together with interest accrued but unpaid thereon, Prepayment Premium, if any, and all other amounts due to Lenders shall, unless the Lenders shall otherwise direct, immediately and without further act become due and payable by Obligees to Lenders, without presentment, demand, protest or notice, all of which are hereby waived.  If any other Loan Event of Default shall have occurred and be continuing, then and in every such case, Agent or Security Trustee shall, upon written request by the Majority Lenders, by written notice or notice to each Obligee, declare all Loans to be due and payable, whereupon the unpaid principal of the Loans then outstanding, together with accrued but unpaid interest thereon, Prepayment Premium, if any, and all other amounts due from Obligees to Lenders, shall immediately and without further act become due and payable by Obligees to Lenders without presentment, demand, protest or other notice, all of which are hereby waived.

                                    5.11.3  Delivery of Documents.  Upon the occurrence of a Loan Event of Default, at the request of Security Trustee, Obligees shall promptly execute and deliver to Security Trustee such instruments of title and other documents as Security Trustee may deem necessary or as requested of the Security Trustee by the Majority Lenders or advisable to enable Security Trustee or a representative designated by Security Trustee, at such time or times and place or places as Security Trustee may specify, to obtain possession of all or any part of the Collateral to whose possession Security Trustee shall at the time be entitled hereunder.  If Obligees shall for any reason fail to execute and deliver such instruments and documents after the request by Security Trustee, Security Trustee may (a) obtain a judgment conferring on Security Trustee the right to immediate possession and requiring Obligees to execute and deliver such instruments and documents to Security Trustee, to the entry of which judgment Obligees hereby specifically consent, and (b) pursue all or part of such Collateral wherever it may be found and may enter any of the premises of Obligor or Obligees wherever such Collateral may be or is purported to be and search for such Collateral and take possession of and remove such Collateral.  All expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Agreement.

                                    5.11.4. Possession of Collateral.  Upon taking of possession pursuant hereto, Security Trustee or a representative designated by Security Trustee may, from time to time, at the expense of Obligees, make all such expenditures for maintenance, insurance, repairs, replacements and alterations to any of the Collateral, as it may deem appropriate and commercially reasonable.  In such case, Security Trustee or a representative of Security Trustee shall have the right (but not the obligation) to maintain, use, operate, store, lease, control or manage the Collateral and to carry on the business and to exercise all rights and powers of Obligees relating to the Collateral, as Security Trustee shall deem best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, leasing, control, management or disposition of the Collateral or any part thereof as Security Trustee may determine; and Security Trustee shall be entitled to collect and receive directly all tolls, rents (including Equipment Payment and Supplemental Payments), revenues, issues, income, products and profits of the Collateral and every part thereof, without prejudice, however, to the right of Lenders or Security Trustee under any provision of this Agreement to collect and receive all cash held by, or required to be deposited with, Obligees hereunder.  Such tolls, rents (including Equipment Payment and Supplemental Payments), revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, leasing, control, management or disposition of the Collateral and of conducting the business thereof, and of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments which Security Trustee may be required or may elect to make, if any, for taxes, assessments, insurance or other proper charges upon the Collateral or any part thereof (including the employment of engineers and accountants to examine, inspect and make reports upon the properties and books and records of Obligees or Obligor), and all other payments which Security Trustee may be required or authorized to make under any provision of this Agreement, as well as just and reasonable compensation for the services of Security Trustee, and of all Persons properly engaged and employed by Security Trustee.

                                    5.11.5  Sale of Collateral.  In addition, Security Trustee may sell, assign, transfer and deliver the whole, or from time to time to the extent permitted by law, any part of the Collateral or any interest therein, at any private sale or public auction with or without demand, advertisement or notice (except as herein required or as may be required by law) of the date, time and place of sale and any adjustment thereof for cash or credit or other property for immediate or future delivery and for such price or prices and on such terms as Security Trustee may determine, or as may be required by law.  It is agreed that ten (10) Business Days’ notice to each Obligee of the date, time and place (and terms, in the case of a private sale) of any proposed sale by Security Trustee of the Collateral or any part thereof or interest therein is reasonable.  Each of Security Trustee and any Lender may be a purchaser of the Collateral or any part thereof or any interest therein at any sale thereof, whether pursuant to foreclosure or power of sale or otherwise.  Security Trustee may apply against the purchase price therefor the amount then due under the Notes secured hereby.  Security Trustee shall, upon any such purchase, acquire good title to the property so purchased, to the extent permitted by Applicable Law, free of all rights of redemption.

                                    5.11.6  Discharge.  Upon any sale of the Collateral or any part thereof or interest therein, whether pursuant to foreclosure or power of sale or otherwise, the receipt of the purchase money of the official making the sale by judicial proceeding or by Security Trustee shall be sufficient discharge to the purchaser for the purchase money and neither such official nor such purchaser shall be obliged to see to the application thereof.

                                    5.11.7. Appointment of Receiver.  If a Loan Event of Default shall have occurred and be continuing, Security Trustee shall, as a matter of right, be entitled to appoint a receiver or trustee or representative (who may be Security Trustee or any successor or nominee thereof, or any Lender appointed by Security Trustee) for all or any part of the Collateral, whether such receivership or agency or representation be incidental to a proposed sale of the Collateral or the taking of possession thereof, the exercise of remedies under this Agreement or the Equipment Agreement or otherwise, and Obligees hereby consents to the appointment of such a receiver, trustee or representative.  Any receiver, trustee or representative appointed for all or any part of the Collateral shall be entitled to exercise all rights of Security Trustee under this Agreement and the other Operative Documents to the extent provided in such appointment and shall be entitled to exercise all the powers and pursue all the remedies of Security Trustee hereunder with respect to the Collateral.

                                    5.11.8. Redemption.  Any sale of the Collateral or any part thereof or any interest therein, whether pursuant to foreclosure or power of sale or otherwise hereunder, shall forever be a perpetual bar against Obligees, after the expiration of the period, if any, during which Obligees shall have the benefit of redemption laws which may not be waived pursuant to clause (i) above.  Subject to the provisions of this Agreement, each Obligee covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any appraisement, valuation, stay or extension law wherever enacted, nor at any time hereafter in force, in order to prevent or hinder the enforcement of this Agreement or the execution of any power granted herein to any Lender or Security Trustee, or the absolute sale of the Collateral, or any part thereof, or the possession thereof by any transfer at any sale under this Section 5.11; and each Obligee for itself and all who may claim under it, so far as it or any of them now or thereafter lawfully do so, waives all right to have the Collateral marshaled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Collateral as an entirety.

                                    5.11.9. Rights Cumulative; No Waiver.  Each and every right, power and remedy herein given to Lenders and Security Trustee specifically or otherwise in this Agreement shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Majority Lenders or Security Trustee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No delay or omission Agent, any Lender or Security Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of Obligees or Obligor or to be an acquiescence therein.

                                    5.11.10.Termination of Proceedings. If Agent, any Lender or Security Trustee shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to Agent, any Lender or Security Trustee, then and in every such case Obligees, Agent, Lenders, Security Trustee and Obligor shall, subject to any binding determination in such proceeding, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Agent, Lenders and Security Trustee shall continue as if no such proceedings had been instituted.

                        6.         Covenants.

                        6.1.1    Obligee Covenants.  Each Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall keep at all times books of record and account related to the transactions contemplated by this Agreement in which full, true and correct entries will be made of all dealings or transactions in relation thereto, and provide or cause to be provided adequate protection against loss or damage to such books of record and account;

                        (b)        it shall not waive an Equipment Agreement Default or Equipment Agreement Event of Default without the prior written consent of the Majority Lenders; and

                        (c)        it shall not amend, modify, consent to any change to the terms or otherwise alter any of the Operative Documents except in accordance with Section 10.2 hereof.

                        6.1.2.   Corporate Obligee Covenants.  Corporate Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall promptly take, and maintain the effectiveness of, all action that may, from time to time, be necessary or appropriate under Applicable Law in connection with the performance by Corporate Obligee of its obligations under the Operative Documents, or the taking of any action hereby or thereby contemplated, or necessary for the legality, validity, binding effect or enforceability of the Operative Documents, or for the making of any payment or the transfer or remittance of any funds by Corporate Obligee under the Operative Documents;

                        (b)        it shall furnish to Lenders or cause to be furnished to Lenders, as the case may, upon actual knowledge thereof, notice of the existence of any Equipment Agreement Default or Equipment Agreement Event of Default.

                        (c)        (i) upon the written request of Security Trustee, it shall designate Security Trustee or such other Person as designated by the Majority Lenders, as the Corporate Obligee’s designee under Section 13 of the Equipment Agreement to visit and inspect the Equipment, to visit, inspect and examine the books and records and accounts of Obligor and to discuss with Obligor its affairs, finances and accounts, and (ii) it shall allow or cause to allow any Person acting on behalf of the Majority Lenders or Security Trustee, to visit, inspect and examine its books of record and accounts of Corporate Obligee and to discuss with Corporate Obligee its affairs, finances and accounts, in each case at such times and as often as Lenders may reasonably request but, in each case, solely as they relate to the transactions contemplated hereby;

                        (d)        if and to the extent Security Trustee makes a written request therefor specifying the appropriate filing offices and providing the filing numbers for the original UCC financing statements and such other information as is necessary for filing continuation statements, then the Corporate Obligee shall provide to Security Trustee continuation statements with respect to any UCC financing statements filed in connection with the Security Documents against Corporate Obligee or Trust Obligee or both, to file the same, and promptly upon such filing will provide Security Trustee with written evidence thereof;

                        (e)        it shall not except as expressly permitted by the Equipment Agreement, the Receivables Purchase Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and under this Agreement, sell, lease, convey, transfer or encumber or otherwise dispose of all or any part of any Item of Equipment, or cause or permit any Person to do any of the foregoing with respect to all or any part of any Item of Equipment; and

                        (f)         it shall comply with all Applicable Laws of any jurisdiction solely as they relate to the transaction contemplated hereby, such compliance to include paying when due all Taxes imposed upon it or upon its property in connection with this transaction by any Government Entity except to the extent contested in good faith and for which adequate reserves have been segregated.

                        6.1.3    Trust Obligee Covenants.  Trust Obligee covenants and agrees for the benefit of Lenders (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall not operate in a manner that would result in an actual, constructive or substantive consolidation with Owner Participant, or any other Persons, and in such connection Trust Obligee shall observe all trust formalities, maintain records separately and independently from those of Owner Participant or other Persons and enter into any transactions with Owner Participant only on an arm’s-length contractual basis;

                        (b)        it shall duly pay and discharge (i) all Liens related to the Transferred Property Collateral other than Permitted Liens, (ii) all of its trade bills before the time that any such Lien attaches to the Transferred Property Collateral, and (iii) all Taxes imposed upon or against it or its property or assets, or upon any property leased by it, prior to the date on which penalties attach thereto and (iv) all lawful claims, whether for labor, materials, supplies, services or anything else, which might or could, if unpaid, become a Lien upon the Transferred Property Collateral or such property or assets, unless and only to the extent that any such amounts are not yet due and payable or the validity thereof is being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material danger of the sale, forfeiture or loss of such assets or any interest therein and Trust Obligee maintains appropriate reserves with respect thereto or has made adequate provision for the payment thereof, in accordance with generally accepted accounting principles and approved by Lenders; and

                        (c)        it shall comply with all Applicable Laws of any jurisdiction, such compliance to include paying when due all Taxes imposed upon it or upon its property by any Government Entity except to the extent contested in good faith and for which adequate reserves have been segregated.

                        6.2.      Further Obligee Covenants.

                                    6.2.1    Further Trust Obligee Covenants.  Trust Obligee covenants for the benefit of each party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of the Agreement as follows:

                                    (a)        it shall not (i) enter into any business other than its financing of Equipment, (ii) create, incur, assume or permit to exist any Indebtedness, except as expressly permitted by this Agreement, (iii) enter into, or be a party to, any transaction with any Person, except the transactions set forth in the Operative Documents and as expressly permitted thereby, or (iv) make any investment in, guaranty the obligations of, or make or advance money to any Person, through the direct or indirect lending of money, holding of securities or otherwise except the transactions set forth in the Operative Documents and as expressly permitted thereby; and

                                    (b)        it shall not wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease (substantially as a whole), or otherwise dispose of (whether in one or in a series of transactions) its assets except as expressly permitted by this Agreement.

                                    6.2.2.   Further Corporate Obligee Covenants.  Corporate Obligee covenants for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                                    (a)        it shall take all actions as are required to keep the representations and warranties made by it in clauses (g), (h) and (i) of Section 2.5 hereof (except, in the case of clause (i) of Section 2.5, if Corporate Obligee’s UCC Location shall change, then Corporate Obligee shall provide notice of such change to each other party hereto within thirty (30) days’ thereafter), true and correct in all material respects (but without regard to the date when such representations and warranties were made or are expressed to be effective) until such time as all of the Secured Obligations have been paid in full;

                                    (b)        it will not transfer its interest herein unless the prospective transferee makes the representations and warranties set forth in clause (f) of Section 2.5 hereof as of the date of such transfer, as if it had originally been a party hereto; and

                                    (c)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Items of Equipment or any other portion of the Equipment Collateral other than Permitted Liens; (ii) promptly, at its own expense, take such action as may be necessary to duly discharge any Lien on the Equipment Collateral attributable to it other than Permitted Liens; and (iii) make restitution for the Equipment Collateral for any actual diminution of the assets of the Equipment Collateral resulting from any Liens attributable to it on the Equipment Collateral other than Permitted Liens.

                        6.3.      Additional Trust Company Covenants.  Trust Company covenants and agrees for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall perform all of its obligations set forth in the Trust Agreement and shall not amend, modify, consent to any change to the terms or otherwise alter the Trust Agreement in any manner without the consent of each of the other parties hereto;

                        (b)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Transferred Property Collateral or any portion of the Trust Estate other than Permitted Liens, (ii) promptly, at its own expense, take such action as may be necessary duly to discharge any such Lien attributable to it with respect to the Transferred Property Collateral other than Permitted Liens, and (iii) make restitution to the Trust Estate or the Security Trustee, as applicable, for any actual diminution of the assets of the Trust Estate resulting from any Liens attributable to it with respect to the Transferred Property Collateral other than Permitted Liens; and

                        (c)        it shall provide written notice of any change in its UCC Location within thirty (30) days thereafter.

                        6.4.      Owner Participant Covenants.  Owner Participant covenants and agrees for the benefit of each party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall maintain its existence as a corporation in good standing under the laws of its state of organization;

                        (b)        it shall maintain its right to transact business in each jurisdiction in which the character of the properties owned or leased by it or the business conducted by it makes such qualification necessary and the failure to so qualify would preclude Trust Obligee from enforcing its rights or meeting its obligations under or with respect to any Operative Document;

                        (c)        it shall perform all of its obligations set forth in the Trust Agreement and shall not amend, modify, consent to any change to the terms or otherwise alter the Trust Agreement in any manner without the consent of each of the other parties hereto; and

                        (d)        it shall (i) not cause or permit to exist any Lien attributable to it with respect to the Transferred Property Collateral other than Permitted Liens, and (ii) promptly, at its own expense, take such action as may be necessary duly to discharge any Lien on the Transferred Property Collateral attributable to it other than Permitted Liens.

                        6.5.      Lenders and Security Trustee Covenant. 

                        (a).       Each of the Lenders and Security Trustee hereby covenants and agrees, for the benefit of Obligees and Obligor, that so long as no Equipment Agreement Event of Default has occurred and is continuing, it shall not take or cause to be taken any action contrary to Obligor’s or any permitted lessee’s right to quiet enjoyment of, and the continuing possession, use and operation of, the Equipment during the Term of the Equipment Agreement.

                        (b)        Each Lender hereby covenants and agrees, for the benefit of Obligees and Obligor, that it will not transfer its interest under this Agreement or the other Operative Documents unless the prospective transferee (i) is a Permitted Assignee, and (ii) as of the date of such transfer represents and warrants either (i) no part of the funds used by it to acquire any Loan shall constitute assets of an “employee benefit plan”, within the meaning of ERISA or any applicable regulation thereunder or assets of a “plan” as defined in Section 4975(e)(1) of the Code or (ii) all of such funds are assets of an insurance company general account as such term is defined in Prohibited Transaction Exemption 95-60 issued by the U.S. Department of Labor (“PTE 95-60”) and as of the date the Notes are acquired there is no employee benefit plan with respect to which the aggregate amount of such general account’s reserves and liabilities for the contracts held by or on behalf of such employee benefit plan and all other employee benefit plans maintained by the same employer (and affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by the same employee organization (in each case determined in accordance with the provisions of PTE 95-60) exceeds 10% of the total reserves and liabilities of such general account (as determined under PTE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National Association of Insurance Commissioners Annual Statement filed with the state of domicile of each Lender.

                        6.6.      Obligor Covenants.  Obligor covenants and agrees for the benefit of each other party hereto (unless Lenders shall have otherwise waived in writing compliance herewith in accordance with Section 10.2 hereof) during the term of this Agreement as follows:

                        (a)        it shall furnish Obligees and Lenders (i) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of Obligor, a copy of the consolidated balance sheet of Obligor and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and retained earnings and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on, without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by an independent certified public accountants of nationally recognized standing, and (ii) as soon as available, but in any event not later than forty-five (45) days after the end of each of the first three quarterly periods of each fiscal year of Obligor, the unaudited consolidated statements of income and retained earnings and of cash flows of Obligor and its consolidated Subsidiaries for such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments); all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, disclosed therein).

                        (b)        it shall furnish each Obligee and the Agent (i) concurrently with the delivery of the financial statements referred to in Section 6.6(a)(i) hereof, a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Equipment Agreement Default or Equipment Agreement Event of Default, except as specified in such certificate, (ii) concurrently with the delivery of the financial statements referred to in Sections 6.6(a)(i) and (ii), a certificate of a Responsible Officer stating that, to the best of such officer’s knowledge, Obligor during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Operative Documents to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Equipment Agreement Default or Equipment Agreement Event of Default except as specified in such certificate, (iii) not later than ten (10) Business Days following approval by the Board of Directors of Obligor (and in any event at least once in each fiscal year), a copy of Obligor’s final business plan as approved by the Directors, (iv) within five (5) days after the same are sent, copies of all financial statements and reports which Obligor sends to its stockholders, and within five (5) days after the same are filed, copies of all financial statements and periodic reports which Obligor may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Entity, and (v) promptly, such additional financial and other information as each Obligee or the Agent may from time to time reasonably request (including, but not limited to, annual consolidating financial statements not later than 150 days after the end of each fiscal year.);

                        (c)        within the six month period preceding the fifth anniversary of each Funding Date, Obligor will provide to Trust Obligee, Corporate Obligee, Agent or Security Trustee (as applicable) continuation statements with respect to any UCC financing statements filed in connection with the Equipment Agreement or this Agreement, file the same, and promptly upon any such filing will provide each Obligee, Agent and Security Trustee with written evidence thereof; and

                        (d)        it shall obtain and maintain, or cause to be obtained or maintained, in full force and effect, any authorization, approval, license, or consent of any governmental or judicial authority including which may be or become necessary in order for Lenders, Security Trustee, Obligees and Owner Participant to obtain the full benefits of this Agreement and all rights and remedies granted or to be granted herein.

                        6.7.      Obligor Negative Covenants.  Obligor covenants and agrees for the benefit of each other party hereto (unless each party shall otherwise waive in writing compliance herewith) during the term of this Agreement that it shall comply with the Multi-Currency Negative Covenants, and such Multi-Currency Negative Covenants (together with all terms utilized therein) are hereby incorporated by reference as if set forth herein in their entirety and:

                        (a)        Consolidated Total Debt to Consolidated Capitalization.  Obligor shall not permit the ratio of Consolidated Total Debt to Consolidated Capitalization at any time to be greater than 55%;

                        (b)        Interest Coverage Ratio.  Obligor shall not permit the Interest Coverage Ratio for any period of four consecutive fiscal quarters to be less than 3.5 to 1.0; provided that for purposes of this computation, Consolidated EBITDA shall include an addback for the relevant period of (i) $8,300,000 for a special charge taken in the quarter ended December 31, 2001 and (ii) the amount of any Special Non-Cash Charges.

                        (c)        Obligor shall not enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, or make any material change in its present method of conducting business, or permit any Restricted Subsidiary to do any of the foregoing, except (i) any Restricted Subsidiary of Obligor may be merged or consolidated with or into Obligor (provided that Obligor shall be the continuing or surviving corporation) or with or into any one or more wholly-owned Restricted Subsidiaries of Obligor (provided that the wholly-owned Restricted Subsidiary or Restricted Subsidiaries shall be the continuing or surviving corporation), (ii) any Restricted Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to Obligor or any other wholly-owned Restricted Subsidiary of Obligor, and (iii) Obligor and its Restricted Subsidiaries may consummate the transactions permitted by subsection 10.5 of the Multi-Currency Credit Agreement; and

                        (d)        in the event that Obligor amends or replaces the Multi-Currency Credit Agreement with another revolving credit facility, the Obligor shall, at the request of the Agent, amend this Agreement to include herein any financial or negative covenants in such amendment or replacement facility.

                        6.8.      Covenant of Lenders, Obligees, Agent and Security Trustee, Trust Company and Owner Participant.  Each Obligee, each Lender, Agent, Security Trustee, Trust Company and Owner Participant that is not a “United States person” as such term is defined in Code Section 7701(a)(30) shall provide to Obligor at such times as may be necessary under Applicable Law as in effect on the Restructuring Date (including Treasury regulations promulgated under Section 1441 of the Code) and at such other times as shall be reasonably requested by Obligor, a fully completed Internal Revenue Service Form 4224 or successor form (including an Internal Revenue Service Form W-8 as specified in Treasury Regulations section 1.1441-4(a)) upon which Obligor can rely establishing that all payments to be made by Obligor to each such Person under the Operative Documents can be made by Obligor free and clear of any requirement to withhold any federal income tax therefrom because such payments are effectively connected with the conduct of a trade or business by such Person in the United States; provided, however, that each such Person shall not be required to provide such forms if, solely as a result of a change in Applicable Law, such Person is not legally entitled to deliver such form.   The only consequence of a breach by any Lender, Trust Obligee, Corporate Obligee, Agent, Security Trustee, Trust Company or Owner Participant of this Section 6.8, shall be that Obligor shall be entitled to withhold from any payment made by Obligor to such Person the appropriate amount of federal income tax, notwithstanding the provisions of the Operative Documents to the contrary and Obligor shall have no obligation under Section 8.2 for those amounts withheld from payments to such Person hereunder.

                        6.9.      Warranty Disclaimers.  CORPORATE OBLIGEE AND EACH LENDER DEMISE, LEASE AND FINANCE THE ITEMS OF EQUIPMENT HEREUNDER AS‑IS AND WHERE-IS WITH ALL FAULTS AND IN WHATEVER CONDITION THEY MAY BE IN AND EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR QUALIFICATION FOR ANY PARTICULAR TRADE OR ANY OTHER MATTER CONCERNING, THE ITEMS OF EQUIPMENT.  OBLIGOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST EACH OBLIGEE, EACH LENDER, AGENT OR SECURITY TRUSTEE FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY THE ITEMS OF EQUIPMENT OR BY OBLIGOR’S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER.

                        7.         Security.

                        7.1.      Security Interest.  For valuable consideration, and to secure the due payment and performance of all principal of, Prepayment Premium, if any, and interest on the Loans and all indebtedness and other liabilities and obligations, whether now existing or hereafter arising (including any obligations to indemnify, reimburse or pay costs and/or expenses) of Corporate Obligee and Obligor to Lenders arising out of or in any way connected with the Operative Documents and all instruments, agreements and documents executed, issued and delivered pursuant thereto (collectively, the “Secured Obligations”):

                        (a)        Corporate Obligee has acquired the Trust Estate subject to the Lien of Security Trustee thereon granted by Original Obligee to Original Security Trustee under the Original Operative Documents and in the furtherance thereof does hereby assign, convey, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, and grants to Security Trustee, and its successors and assigns, a first Lien on and security interest in the following property and rights of Corporate Obligee, except for Excepted Payments with respect thereto (collectively, the “Equipment Collateral”):

                        (i)         the Items of Equipment;

                        (ii)        all right, title and interest of Corporate Obligee in and to any Cross Receipt and all warranties (including, without limitation, warranties of title, merchantability, fitness for a particular purpose, quality and freedom from defects) and rights of recourse against manufacturers, assemblers, sellers and others in connection with the Items of Equipment;

                        (iii)       all right, title and interest of Corporate Obligee in and to, but none of the obligations of Corporate Obligee under, the Equipment Agreement, the Security Documents and the Subsidiary Equipment Agreements and all Equipment Payments and Supplemental Payments payable under the Equipment Agreement including installments of Equipment Payment payments and all other sums payable thereunder;

                        (iv)       all accounts, contract rights, general intangibles and all other property rights of any nature whatsoever arising out of or in connection with this Agreement or the Equipment Agreement or the Items of Equipment, including, without limitation, Equipment Payment and Supplemental Payments and any other payments due and to become due under this Agreement or the Equipment Agreement whether as repayments, reimbursements, contractual obligations, indemnities, damages or otherwise;

                        (v)        all claims, rights, powers, or privileges and remedies of Corporate Obligee under this Agreement or the Equipment Agreement;

                        (vi)       all rights of Corporate Obligee under this Agreement or the Equipment Agreement to make determinations to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or any property which is the subject of the Equipment Agreement, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action which (in the opinion of Security Trustee) may be necessary or advisable in connection with any of the foregoing; provided, however, Security Trustee agrees for the benefit of Corporate Obligee that so long as no Loan Event of Default has occurred and is continuing, it will not exercise any of the rights assigned to it under clauses (v) and (vi) of this Section 7.1(a), other than the right to receive amounts due under the Equipment Agreement and Section 8 of this Agreement, without the prior written consent of Corporate Obligee;

                        (vii)      all moneys now or hereafter paid or required to be paid to Lenders pursuant to any Operative Document; and

                        (viii)      all proceeds of the Equipment Collateral including, without limitation, all rentals, income and profits in respect of the Items of Equipment, whether under the Equipment Agreement or otherwise, all credits granted by any manufacturer or vendor with respect to the return of any Item of Equipment and the proceeds of any insurance payable with respect to the Items of Equipment.

                        (b)        Trust Obligee has assumed the Transferred Property subject to the Lien thereon granted by the Original Obligee to the Original Security Trustee under the Original Operative Documents and, in furtherance thereof, does hereby assign, conveys, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, a first Lien on and security interest in the following property and rights of Trust Obligee, except for Excepted Payments with respect thereto (collectively, the “Transferred Property Collateral”).

                                    (i)         the Transferred Property;

                                    (ii)        all right, title and interest of Trust Obligee in and to, but none of the obligations of Trust Obligee under, the Receivables Purchase Agreement; and

                                    (iii)all proceeds of the Transferred Property Collateral.

                        (c)        Owner Participant does hereby assign, convey, mortgage, pledge, hypothecate, transfer and set over to Security Trustee, and its successors and assigns, a first Lien on a security interest in all of its rights, title and interest in, to and under the Trust and the Trust Estate and all proceeds thereof (the “Trust Collateral”).

                        7.2.      Consent and Agreement of Obligor.  Obligor hereby consents to the assignments and Liens set forth in Section 7.1 hereof.  Obligees and Security Trustee hereby instruct, and Obligor agrees, that until further notified by Security Trustee, Obligor shall pay all amounts payable under the Equipment Agreement other than Excepted Payments to the account of Security Trustee maintained at Bank of Tokyo-Mitsubishi Trust Company, ABA No. 026-009-687, Account No. 97770450, F/F/C A/C# 26025906 reference:  Harman International Payment (6-T-277) or such other account as Security Trustee may designate in a written notice to Obligor.  If there is any disagreement between Security Trustee and Obligees as to whether any amount is an Excepted Payment, Obligor shall abide by Security Trustee’s determination with respect to such amount.

                        7.3.      Further Corporate Obligee Covenants.  Corporate Obligee covenants and agrees with Security Trustee as follows:

                        (a)        Corporate Obligee will faithfully abide by, perform and discharge each and every obligation, covenant and agreement to be performed by Corporate Obligee under the Operative Documents to which it is a party, and Security Trustee shall not be responsible for any of such obligations, covenants or agreements under any circumstances;

                        (b)        Corporate Obligee, at the cost and expense of Obligor and at the reasonable request of Security Trustee and only when required to enforce the rights and remedies of Lenders and Security Trustee, will appear in and defend every action or proceeding arising under, growing out of or in any manner connected with the Equipment Agreement or the obligations, duties or liabilities thereunder of Corporate Obligee and Obligor;

                        (c)        if at any time during the continuance of a Loan Default or Loan Event of Default Corporate Obligee should receive any amounts payable by Obligor under the Equipment Agreement or any other proceeds for or with respect to the Equipment Collateral, it will (i) hold such amounts in trust for Security Trustee and not commingle such amounts with any other amounts belonging to or held by Corporate Obligee, (ii) advise Security Trustee of such receipt, and (iii) promptly forward such amounts directly to Security Trustee;

                        (d)        upon the occurrence and continuance of any Loan Event of Default, Corporate Obligee will immediately upon receipt of all checks, drafts, cash or other remittances in payment of any of its accounts, contract rights or general intangible constituting part of the Collateral, or in payment for any Collateral sold, transferred, leased or otherwise disposed of, or in payment or on account of its accounts, contracts, contract rights, notes, drafts, acceptances, general intangibles, chooses in action and all other forms of obligation relating to any of the Collateral so sold, transferred or otherwise disposed of, deliver any such items to Security Trustee accompanied by a remittance report in form supplied or approved by Security Trustee, such items to be delivered to Security Trustee in the same form received, endorsed or otherwise assigned by Corporate Obligee where necessary to permit collection of items and, regardless of the form of such endorsement, Corporate Obligee hereby waives presentment, demand, notice of dishonor, protest and notice of protest; and

                        (e)        upon the written request of Security Trustee, Corporate Obligee will provide to Security Trustee, continuation statements with respect to the UCC financing statements filed in connection with this Agreement against the Corporate Obligee, will file the same pursuant to Section 10.1 hereof, and promptly upon such filing will provide Security Trustee with written evidence thereof.

                                    7.3.2    Further Trust Obligee Covenants.  Trust Obligee covenants and agrees with Security Trustee as follows:

                        (a)        it will faithfully abide by, perform and discharge each and every obligation, covenant and agreement to be performed by Trust Obligee under the Operative Documents to which it is a party;

                        (b)        if at any time during the continuance of a Loan Default or Loan Event of Default Trust Obligee should receive any amounts payable by Obligor under the Equipment Agreement or the Receivables Purchase Agreement or any other proceeds with respect to the Transferred Property Collateral, it will (i) hold such amounts in trust for Security Trustee and not commingle such amounts with any other amounts belonging to or held by Trust Obligee, (ii) advise Security Trustee of such receipt and (iii) promptly forward such amounts directly to Security Trustee; and

                        (c)        upon the written request of the Security Trustee, Trust Obligee will provide to Security Trustee, continuation statements with respect to the UCC financing statements filed in connection with this Agreement against Trust Obligee, will file the same pursuant to Section 10.1 hereof, and promptly upon such filing will provide Security Trustee with written evidence thereof.

                        7.4.      Further Assurances.  For each Item of Equipment located in the United States, Germany, or England, Corporate Obligee will, upon the written request of Security Trustee and at Obligor's expense, make, execute, endorse, acknowledge, file and/or deliver to Security Trustee from time to time such confirmatory assignments, conveyances, financing and continuation statements, transfer endorsements, powers of attorney, notes, reports and other assurances or instruments and take such further actions which are appropriate or advisable to perfect, preserve or protect Security Trustee’s security interest granted in the Equipment Collateral hereunder or which Security Trustee deems necessary or advisable in order to obtain the full benefits of the Liens created or intended to be created hereunder in the Equipment Collateral, and will take such other actions reasonably requested by Security Trustee to effectuate the intent of the Operative Documents.  To the extent permitted by Applicable Law, each Obligee and Obligor authorizes Security Trustee to file any such financing and continuation statements without the signature of either Obligee and Obligor will pay all applicable filing fees and related expenses.

                        7.5.      Termination.  Upon the full and final discharge and satisfaction of the Loans and the Obligees’ obligations to Lenders and Security Trustee under the Operative Documents, the provisions of this Section 7 and all grants and assignments hereunder shall terminate, and all right, title and interest of Security Trustee in and to (i) the Equipment Collateral and the proceeds thereof shall revert to Corporate Obligee, and (ii) the Transferred Property Collateral and the proceeds thereof shall revert to Trust Obligee, provided in each case that the indemnification provisions hereof shall survive the termination of this Agreement and, provided, further, that if such discharge and satisfaction shall be made following the occurrence of a Loan Event of Default, the foregoing discharge shall be made following satisfaction of Obligor’s obligations under Section 21 of the Equipment Agreement.  Security Trustee shall, at Obligor’s expense, execute and deliver any evidence of such release as Corporate Obligee or Trust Obligee may reasonably require and furnish to Security Trustee.

                        7.6.      Other Security.  To the extent that the obligations of Obligees under any Operative Document are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then Security Trustee shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of Security Trustee’s rights and remedies hereunder.

                        7.7.      Power of Attorney.  Each Obligee irrevocably authorizes Security Trustee and does hereby make, constitute and appoint Security Trustee and any officer of Security Trustee, with full power of substitution, as such Obligee’s true and lawful attorney-in-fact, with power, in its own name or in the name of such Obligee, to endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of Security Trustee; to sign and endorse any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; to pay or discharge Taxes, Liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; and generally, to do, at Security Trustee’s option and at Obligor’s expense, at any time, or from time to time, all acts and things which Security Trustee deems necessary to protect, preserve and realize upon the Collateral and Security Trustee’s security interests therein and in order to effect the intent of the Operative Documents all as fully and effectually as such Obligee might or could do; and each Obligee hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.  The powers of attorney made hereunder shall be coupled with an interest and irrevocable for the term of this Agreement and thereafter as long as any of the obligations of Obligees under any Operative Document shall be outstanding.  The powers conferred on Security Trustee hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon Security Trustee to exercise any such powers.  Security Trustee shall be accountable only for amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors or employees shall be responsible to each Obligee for any act or failure to act, except for its own gross negligence or willful misconduct.

            7.8.      Assignment of Rights.  Obligees agree that the assignments made herein are irrevocable and it will not, while said assignments are in effect or thereafter until Obligees have received notice from Security Trustee of the termination thereof, take any action as Obligees under the Equipment Agreement or otherwise which is inconsistent with this Agreement or make any other assignment, designation or direction inconsistent herewith and that any assignment, designation or direction inconsistent herewith shall be void.  Obligees and Security Trustee agree that the following are, without limitation, rights, powers, privileges, options, and benefits assigned by Obligees hereunder: the right to make claim for, receive, collect and receipt for (and to apply the same to the payment of the principal of, Prepayment Premium, if any, and interest on the Notes) all rents, income, revenues, issues, profits, insurance proceeds, condemnation awards, payments of Casualty Loss Value and other sums payable or receivable under the Equipment Agreement or this Agreement or pursuant thereto, and to make all waivers and agreements, to give and receive all notices and other instruments, and to take all action upon the happening of an Equipment Agreement Event of Default, including the commencement, conduct and consummation of proceedings at law or in equity as shall be permitted under any provision of the Equipment Agreement or by law, and to do all other things which Corporate Obligee or any owner of the Equipment is or may become entitled to do under the Equipment Agreement.

            7.9.      Transfer of the Collateral by Lenders.  Security Trustee or Lenders may be a transferee of the Collateral or of any part thereof or of any interest therein at any sale thereof, whether pursuant to foreclosure or power of sale or otherwise hereunder, and may apply upon the transfer price the indebtedness secured hereby owing to such transfer, to the extent of such transferee’s distributive share of the transfer price.  Any such transferee shall, upon any such transfer, acquire title to the properties so transferred, free of the Lien of this Agreement.

            7.10.    No Segregation of Monies; No Interest.  Any monies paid to or retained by Security Trustee pursuant to any provision hereof and not then required to be distributed to any party as provided in Section 7 hereof need not be segregated in any manner except to the extent required by law, and may be deposited under such general conditions as may be prescribed by law, and Lenders shall not be liable for any interest thereon.

            7.11.    Distribution of Moneys.   Except as may be otherwise provided in this Section 7 and for so long as no Loan Event of Default has occurred and is continuing, all moneys received by Security Trustee shall be applied in accordance with this Section 7.11:

                        7.11.1  Payments under the Equipment Agreement.  Moneys received by Security Trustee constituting Equipment Payment under the Equipment Agreement (including the payment of interest on any such overdue Equipment Payment) shall be applied:

First, so much of such funds as shall be required to pay in full the aggregate amount of (i) any interest then due on the A Loans and B Loans, pro rata, according to their respective A Loan Term Percentages and B Loan Term Percentages at the Overdue Rate, and (ii) the interest then due to the Lenders on the A Loans and B Loans, pro rata, according to their respective A Loan Term Percentages and B Loan Term Percentages at the Applicable Rate therefor;

Second, so much of such funds as shall be required to pay the Lenders in full the aggregate amount of any principal installment then due on the A Loans and the B Loans as set forth on Schedule 3 hereto according to their respective A Loan Term Percentages and B Loan Term Percentages; and

Third, the balance, if any, of such payment remaining thereafter shall be distributed to Corporate Obligee or its designee.

            7.11.2  Payments in Respect of an Event of Loss.  Moneys received by Security Trustee constituting Casualty Loss Value (including any insurance proceeds or condemnation awards in respect of the subject Event of Loss which are payable to Security Trustee pursuant to the provisions of the Equipment Agreement) shall be applied first, to the prepayment of the A Loans and B Loans, pro rata, required by Section 5.7.1 hereof, and second, the balance of any such moneys shall be distributed to Corporate Obligee or its designee.  Corporate Obligee shall apply, and there shall become due and payable on the Casualty Loss Value Payment Date for such Item, the Equity Component with respect to such Item of Equipment and all accrued and unpaid amounts set forth in Section 25.1(c) of the Equipment Agreement.

            7.11.3  Payments in Respect of Transfers and Sales of Equipment.  Moneys received by Security Trustee constituting payment by Obligor of (a) the Unamortized Debt Balance of any Item of Equipment pursuant to Section 25.2 or 25.4 of the Equipment Agreement shall be applied to the prepayment of the A Loans and B Loans as required by Section 5.7.2 hereof.

            7.11.4  Payment upon Final Disposition of the Items of Equipment.  Moneys received by Security Trustee constituting proceeds of the sale of any Item of Equipment to a third party pursuant to Section 25.3 of the Equipment Agreement, plus moneys received by Security Trustee constituting any Deficiency with respect to such Item of Equipment shall be applied first, to the prepayment of the Notes required by Section 5.7.3 hereof, and second, the balance of any such moneys shall be distributed to Corporate Obligee or its designee.

            7.12.    Payments after a Loan Event of Default.  All payments received and all amounts held or realized by Security Trustee (including any amounts realized by Security Trustee from the exercise of any remedies) during the continuance of any Loan Event of Default, and all payments or amounts then held or thereafter received by Security Trustee hereunder or under the Operative Documents, shall, so long as such Loan Event of Default continues and shall not have been waived in writing by Lenders, be applied forthwith by Security Trustee in the following order or priority:

First, so much of such payments or amounts held or realized by Security Trustee as shall be required to reimburse Security Trustee for any expenses not reimbursed by Obligees in connection with the collection or distribution of such amounts held or realized by Security Trustee or in connection with the expenses incurred in enforcing its remedies hereunder and preserving the Collateral including, without limitation, those expenses contemplated under Section 10.1 hereof, shall be retained by Security Trustee;

Second, so much of such payments or amounts as shall be required to pay Lenders, Security Trustee and Agent the amounts payable to Lenders, Security Trustee and Agent pursuant to the provisions of any indemnification provisions of this Agreement shall be distributed to Lenders, Security Trustee and Agent;

Third, so much of such payments or amounts remaining as shall be required to pay (i) any accrued but unpaid interest on the A Loans and the B Loans at the Overdue Rate to the date of distribution, pro rata, then (ii) any accrued but unpaid interest on the A Loans and the B Loans at the Applicable Debt Rate to the date of distribution, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders then (iii) the Prepayment Premium payable upon any principal amount paid on the A Loans and the B Loans following acceleration, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders, and then (iv) all of the unpaid principal amount of the A Loans and the B Loans and all other amounts due to the Lenders under the Operative Documents shall be distributed to the Lenders, pro rata, according to the respective A Loan Term Percentages and the B Loan Term Percentages of the relevant Lenders; and

Fourth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Corporate Obligee or its designee, which amounts are to be applied to (i) the outstanding Equity Component, and (ii) all accrued and unpaid amounts set forth in Section 25.1(c) of the Equipment Agreement.

                        7.13.    Application of Certain Other Payments.  Any payments received by Lenders for which provision as to the application thereof is made in the Operative Documents but not elsewhere in this Agreement shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of the Operative Documents.

                        7.14.    Other Payments.  Except as otherwise provided in Sections 7.12 and 7.15 hereof, (a) any payments received by Security Trustee for which no provision as to the application thereof is made in the Operative Documents, or elsewhere in this Section 7, and (b) all payments received and amounts realized by Security Trustee with respect to the Collateral (including, without limitation, all amounts realized upon the sale, release or other disposition of the Collateral upon foreclosure of this Agreement), to the extent received or realized at any time after payment in full of the principal of, Prepayment Premium, if any, and interest on the Loans, as well as any other amounts remaining as part of the Collateral after payment in full of the principal of and interest on the Loans and all other amounts due Lenders hereunder and under any other Loan Document, shall in each case be distributed forthwith by Security Trustee in the following order of priority:

First, in the manner provided in clause “First” of Section 7.12 hereof;

Second, in the manner provided in clause “Second” of Section 7.12 hereof; and

Third, in the manner provided in clause “Fourth” of Section 7.12 hereof.

            7.15.    Retention of Amounts by Security Trustee .  Except as otherwise provided in Section 7.12 hereof, if at the time of receipt by Security Trustee of any payment or amount which would otherwise be distributable to Corporate Obligee, there shall have occurred and be continuing a Loan Default or a Loan Event of Default, Security Trustee shall not distribute any such amount to Corporate Obligee or its designee and shall hold it as security for the Secured Obligations until such time as there shall not be continuing such Loan Default or Loan Event of Default.

                        7.16.    [Reserved.]

                        8.         Indemnities and Yield Protection.

                        8.1.      Obligor General Indemnification.  Obligor hereby assumes liability for, and does hereby agree to indemnify, protect, save, defend, and hold harmless each Obligor Indemnified Person on an After‑Tax Basis from and against any and all obligations, fees, liabilities, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses, including reasonable legal fees and expenses, of every kind and nature whatsoever, imposed on, incurred by, or asserted against such Obligor Indemnified Person (collectively, “Losses”), which is not directly and primarily caused by the gross negligence or willful misconduct of such Obligor Indemnified Person and which relates in any way to or arises in any way out of (a) the manufacture, construction, ordering, transfer, acceptance or rejection, ownership, transfer of ownership, titling or retitling, registration or reregistration, delivery, leasing, subleasing, appraisal, possession, use, operation, maintenance, storage, removal, return, repossession, mortgaging, granting of any interest in, transfer of title to, acquisition, sale or other application or disposition, disposition of licensing, documentation, of the Items of Equipment or any Item of Equipment, or any part thereof, including, without limitation, any of such as may arise from (i) loss or damage to any property or death or injury to any Persons, (ii) patent or latent defects in the Items of Equipment (whether or not discoverable by Obligor or any Obligor Indemnified Person), (iii) any claims based on strict liability in tort or negligence, (iv) any claims related to the release of any substance into the environment and (v) any claims based on patent, trademark, trade name or copyright infringement or (b) the Operative Documents or the transactions contemplated hereby or thereby other than Losses primarily caused by such Obligor Indemnified Person’s breach under the Operative Documents provided such breach is not caused by a breach or default by Obligor under the Operative Documents, or (c) any failure on the part of Obligor to perform or comply with any of the terms of the Equipment Agreement or any other Operative Document to which it is a party or instrument referred to or contemplated hereby or thereby.  With respect to any Obligor Indemnified Person this indemnification shall not include any matters for which such Obligor Indemnified Person is indemnified under Section 8.2 or which are excluded from Obligor’s indemnity obligation thereunder.  Obligor shall give each Obligor Indemnified Person prompt notice of any occurrence, event or condition known to Obligor as a consequence of which any Obligor Indemnified Person may be entitled to indemnification hereunder, except only that Obligor shall not be required pursuant to this Section 8.1 to indemnify any Obligor Indemnified Person for any liability relating to the Items of Equipment arising out of acts or events which occur after return of the Items of Equipment to Corporate Obligee (and expiration of any storage period) pursuant to Section 6 of the Equipment Agreement (other than a return pursuant to Section 21 of the Equipment Agreement) or which occur after a sale to a third party pursuant to Section 25.3 of the Equipment Agreement.  Unless Obligor is contesting any such claim specified in clause (a) hereof in a manner reasonably satisfactory to the affected Obligor Indemnified Person, Obligor shall forthwith upon demand of any such Obligor Indemnified Person reimburse such Obligor Indemnified Person for amounts expended by it in connection with any of the foregoing or pay such amounts directly.  Obligor shall be subrogated to an Obligor Indemnified Person’s rights in any matter with respect to which Obligor has actually reimbursed such Obligor Indemnified Person for amounts expended by it or has actually paid such amounts directly pursuant to this Section 8.1.  In case any claim, action, suit or proceeding is made or brought against any Obligor Indemnified Person in connection with any claim indemnified against hereunder, such Obligor Indemnified Person will, promptly after receipt of notice of such claim or the commencement of such action, suit or proceeding, notify Obligor thereof, enclosing a copy of all papers served upon such Obligor Indemnified Person, but failure to give such notice or to enclose such papers shall not relieve Obligor from any liability hereunder unless such failure materially and adversely affects Obligor’s defense of such claim resulting in an increase in liability of Obligor in respect of such claim or preventing it from reducing liability therefor, in which case Obligor shall not be required to indemnify such Obligor Indemnified Person for the amount by which such liability was increased or not reduced for failure to give such notice.  Obligor may, and upon such Obligor Indemnified Person’s request will, at Obligor’s expense, resist and defend such claim, action, suit or proceeding, or cause the same to be resisted or defended by counsel selected by Obligor and reasonably satisfactory to such Obligor Indemnified Person and in the event of any failure by Obligor to satisfy its obligations under this Section, Obligor shall pay all reasonable costs and expenses (including, without limitation, attorney’s fees and expenses) incurred by such Obligor Indemnified Person in connection with such action, suit or proceeding.  The provisions of this Section 8.1, and the obligations of Obligor under this Section 8.1, shall apply from the date of the execution of the Equipment Agreement notwithstanding that the Term may not have commenced with respect to any Item of Equipment, and shall survive and continue in full force and effect notwithstanding the expiration or earlier termination of the Equipment Agreement in whole or in part, including the expiration of termination of the Term with respect to any Item of Equipment, and are expressly made for the benefit of, and shall be enforceable by, each Obligor Indemnified Person.

                        8.2.      Obligor General Tax Indemnity.  Except as provided in Section 6.8 hereof, Obligor agrees to pay, defend and indemnify and hold Obligees, Trust Company, Lenders, Agent, Security Trustee and Owner Participant and their respective Affiliates, successors and assigns (including any consolidated or combined group of which any such Person is a member) (each a “Tax Indemnitee”) harmless on an After-Tax Basis from any and all Federal, state, local and foreign taxes, fees, withholdings, levies, imposts, duties, assessments and charges of any kind and nature whatsoever, together with any penalties, fines or interest thereon (herein called “Taxes”) howsoever imposed, whether levied or imposed upon or asserted against a Tax Indemnitee, Obligor, any Item of Equipment, or any part thereof, by any federal, state or local government or taxing authority in the United States, or by any taxing authority of a foreign country or subdivision thereof, upon or with respect to (a) the Items of Equipment, any Item of Equipment or any part thereof, (b) the manufacture, construction, ordering, transfer, ownership, transfer of ownership, titling or retitling, registration or reregistration, delivery, leasing, subleasing, possession, use, operation, maintenance, storage, removal, return, mortgaging, granting of any interest in, transfers of title to, acquisition, sale or other disposal of licensing, documentation, repossession, sale or other application or disposition of the Items of Equipment, any Item of Equipment or any part thereof, (c) the revenues, rent, receipts or earnings arising from any Item of Equipment or any part thereof, (d) the Equipment Agreement, the Equipment Payment and/or Supplemental Payments payable by Obligor hereunder or under the Equipment Agreement or any payment made to Lenders by either Obligee, Obligor, Owner Participant or Trust Company pursuant to the Operative Documents, or (e) otherwise in respect of the Operative Documents or any thereof or any transaction or transactions contemplated hereby or thereby; provided, however, that the foregoing indemnity shall not apply with respect to any Tax Indemnitee to (i) Taxes based upon or measured by such Tax Indemnitee’s net income, gross income, gross receipts (except gross income and gross receipts Taxes expressly imposed in lieu of overall sales Taxes), capital, net worth, excess profits or items of tax preference, including minimum and alternative minimum Taxes imposed by any United Sates federal, state or local taxing authority (but such Taxes shall not be excluded from indemnification in the case of state and local taxes only, imposed due to the location or presence of the Items of Equipment, the presence, activities or place of business or organization of Obligor (or any person claiming or taking possession of the Items of Equipment from or through Obligor) in the taxing jurisdiction imposing such Tax, or any payments being made from such jurisdiction or as contemplated by Section 25.3.2 of the Equipment Agreement) (“Income Taxes”), (ii) Taxes imposed on a Tax Indemnitee, including, without limitation, sales and transfer Taxes, that result from any voluntary or involuntary transfer by such Tax Indemnitee of any interest in the Items of Equipment or in any other Tax Indemnitee or any portion of any of the foregoing or any interest arising out of the Equipment Agreement and Operative Documents unless such transfer shall have occurred in connection with, or as a result of, Obligees’ acquisition of an Item of Equipment following the acquisition by Corporate Obligee of the Original Equipment in accordance with the Assumption and Revocation Agreement and the Original Trust Purchase Agreement or an Equipment Agreement Event of Default or exercise of a transfer option or sale to a third party pursuant to Section 25.3.2 of the Equipment Agreement, (iii) Taxes imposed on a Tax Indemnitee by any jurisdiction as a result of a situs of organization of such Tax Indemnitee or such Tax Indemnitee’s engaging in activities in such jurisdiction unrelated to the transactions contemplated by the Operative Documents and not as a result of the presence of the Items of Equipment, Obligor, any Tax Indemnitee other than such Tax Indemnitee in, or any payments being made from, or the registration, filing or enforcement of any document or charge contemplated or necessitated by the Operative Documents, in such jurisdiction, (iv) Taxes imposed on a Tax Indemnitee that result from any willful misconduct or gross negligence of such Tax Indemnitee, (v) except where there exists an Equipment Agreement Event of Default, Taxes that are attributable to any period beginning or circumstances occurring after the expiration or earlier termination of the Equipment Agreement other than with respect to a sale to a third partypursuant to Section 25.3.2 of the Equipment Agreement, and other than the payment of any amount after such date that has accrued on or prior to such date, and any interest thereon, (vi) Taxes that are based on or measured by fees or compensation for services rendered by Obligees but not including interest, (vii) Taxes imposed by a taxing authority of a foreign country orsubdivision thereof not by reason of the location or presence of the Items of Equipment, Obligor, in such jurisdiction or payments being made from such jurisdiction or the registration, filing or enforcement of any document or charge contemplated or necessitated by the Operative Documents in such jurisdiction, (viii) Taxes, including, without limitation, any excise Taxes or other impositions or penalties, payable as a result of such Tax Indemnitee’s participation in the transactions contemplated by the Operative Documents being deemed to result in a “prohibitedtransaction” by any party to the Equipment Agreement within the meaning of Section 406 of ERISA or Section 4975 of the Code due to such Tax Indemnitee’s violation of its representation set forth in section 2, (ix) Taxes imposed on a transferee Tax Indemnitee in excess of the amount of such Taxes that would have been imposed on the transferor had there not been a transfer by a Tax Indemnitee after the Closing Date of an interest in the Items of Equipment or in any other Tax Indemnitee or any portion of the foregoing or any interest arising under any Operative Document (except to the extent such excess Taxes are imposed as a result of a change in Applicable Law after the date of such transfer) unless such transfer shall have occurred in connection with, or as a result of, an Equipment Agreement Event of Default or exercise of a transfer option or a sale to a third party pursuant to Section 25.3.2 of the Equipment Agreement, provided that this exclusion shall not be read to prevent any payment pursuant to this Section 8.2 being made on an After-Tax Basis, and (x) Taxes imposed on a Tax Indemnitee resulting from (a) the existence of any Liens created by such Tax Indemnitee (other than Permitted Liens), or (b) any inaccuracy of any representation, or breach of any warranty or covenant by such Tax Indemnitee, unless such violation or breach is a result of a breach by Obligor of any of its obligations under any Operative Document. Obligor will promptly notify Obligees and each TaxIndemnitee of all reports or returns required to be made by it with respect to any tax or other imposition with respect to which Obligor is required to indemnify hereunder, and will promptly provide each Tax Indemnitee with all information necessary for the making and timely filing of such reports or returns by it.  If a Tax Indemnitee requests that any such reports or returns be prepared and filed by Obligor, Obligor will prepare and file the same if permitted by Applicable Law to file the same, and if not so permitted, Obligor shall prepare such reports or returns for signature and shall forward the same, together with immediately available funds for payment of any Tax due, at least ten (10) days in advance of the date such payment is to be made.  Upon written request, Obligor shall furnish each Tax Indemnitee with copies of all paid receipts or other appropriate evidence of payment for all Taxes paid by Obligor pursuant to this Section 8.2.  Each Tax Indemnitee shall furnish Obligor with copies of any written requests for information received by it from any taxing authority relating to any Tax with respect to which Obligor is required to indemnify hereunder, and if a written claim is made against a Tax Indemnitee for any such Tax with respect to which Obligor is liable for a payment or indemnity hereunder, Obligees or such Tax Indemnitee shall give Obligor notice in writing of such claim. Each such Tax Indemnitee will use its best efforts to inform Obligor of any potential claims ofwhich it hasnotice.  Obligor may, at its sole cost and expense, either in its own name (other than with respectto Income Taxes) or in the name of the Tax Indemnitee, contest the validity, applicability or amount of such Tax, by (i) resisting payment thereof if practicable, unless payment is required to avoid risk of the sale or forfeiture of, or the creation of a Lien on, the Items of Equipment to which such contest relates, (ii) not paying the same except under protest, if protest is necessary, or (iii) if the payment is made, using reasonable efforts to obtain a refund thereof in appropriateadministrative and judicial proceedings; provided, however, that such contest shall be permitted only if no Equipment Agreement Event of Default has occurred and is continuing hereunder, andonly if and to the extent that such contest is being diligently prosecuted by Obligor by appropriate legal or administrative proceedings, and the action to be taken in connection with such contest (a) will not result in the sale, forfeiture or loss of, or the creation of a Lien on, the Items of Equipment to which such contest relates or Obligees’ title thereto or any Tax Indemnitee interest therein, (b) is only with respect to any issue or Tax that is the subject of the indemnity provided in this Section 8.2, (c) Obligor shall have provided such Tax Indemnitee with an opinion of tax counsel reasonably satisfactory to such Tax Indemnitee, that such a contest has a reasonable basis, and (d) Obligor shall have acknowledged in writing its obligationto indemnify such Tax Indemnitee in the event the contest is unsuccessful (but such acknowledgment shall be of no force and effect if the resolution of such contest is on a basis that clearly demonstrates that Obligor is not liable for such indemnity); provided that a Tax Indemnitee may assert control of the conduct of a contest which the Obligor has a right to control hereunder if the Tax Indemnitee provides written notice to Obligor that it wishes to conduct such contest and that it fully and irrevocably releases Obligor from its indemnification obligations for the Tax (or Taxes) that is (or are) the subject of such contest and all otherwise indemnifiable amounts related thereto; provided further that Obligor can eliminate its obligations to cover the costs and expenses of any contest by irrevocably paying the amount of such Taxes.  If a Tax Indemnitee has received a refund of any amount paid by Obligor pursuant to this Section 8.2, such Tax Indemnitee shall pay to Obligor the amount of such refund, together with the amount of any interest actually received by such Tax Indemnitee on account of such refund net of any actual loss incurred by such Tax Indemnitee resulting from the circumstances relating to such payments.  Each Tax Indemnitee shall have sole control over the positions taken with respect to its tax returns, filings and proceedings except with respect to Tax filings and proceedings that are otherwise provided for in this Section 8.2.  All of the indemnities contained in this Section 8.2are expressly made for the benefit of, and shall be enforceable by each Tax Indemnitee.  Each Tax Indemnitee shall determine the allocation of any tax credit, tax savings, refund or other benefit and any related detriment resulting from any Tax indemnified hereunder, or from any indemnity payment hereunder, in its sole discretion and shall not be obligated to disclose its tax returns and related materials to any Person, other than any court or governmental agency if required in any contest, undertaken pursuant to this Section 8.2 hereof, of the imposition of any Tax indemnified hereunder, and the positions of each Tax Indemnitee in its tax returns, filings and proceedings shall be within its sole control except with respect to Tax filings and proceedings that are otherwise provided for in this Section 8.2.  Notwithstanding anything in the foregoing to the contrary, Obligor hereby agrees that all tax reports and returns of Owner Participant will be treated in a responsible manner and their confidentiality maintained.  If Obligor pays any Tax to or on behalf of any Tax Indemnitee for which the Obligor has no indemnity obligation pursuant to this Section 8.2 (or otherwise pursuant to the Operative Documents), the Tax Indemnitee upon whom, or with respect to which, such Tax was imposed, and for which the Obligor has no indemnity obligation, shall, within ten (10) days of writtenrequest therefor by Obligor, pay to Obligor the amount of Tax so paid, with interest at the Applicable Debt Rate from the date of payment of such Tax.

                        8.3.      [Intentionally Deleted.]

                        8.4.      [Reserved]

                        8.5.      Increased Costs.  In the event any Affected Person shall have reasonably determined that any Regulatory Change (as hereinafter defined) shall (a) subject such Affected Person to any tax of any kind whatsoever as a result of this Agreement or any Operative Document or its interest therein or as a result of its commitments hereunder or thereunder or its liquidity or other commitment to any Obligee or any Lender as a result of this Agreement or any Operative Document or its interest therein (any such commitment or commitments, individually or collectively, an “Affected Person Commitment”), or change the basis of taxation of payments as a result thereof (except for Taxes for which Obligor indemnifies Lenders under Section 8.2 hereof); or (b) impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances under this Agreement or any Operative Documents, loans or other extensions of credit by, or any other acquisition of funds by, such Affected Person, and the result of any of the foregoing is to increase the cost to such Affected Person, by an amount which such Affected Person reasonably determines in good faith to be material, of maintaining its interest in this Agreement, the Notes or any Operative Document or to reduce any amount receivable in respect thereof, then in any  such case, after submission by such Affected Person to Obligor of a written request therefor specifying the nature and amount of such cost in reasonable detail Obligor shall pay to such Affected Person any additional amounts necessary to compensate such Affected Person for such increased cost or reduced amount receivable, together with interest on each such amount from the day which is five (5) Business Days after the date such request for compensation under this Section 8.5 is received by the Obligor until payment in full thereof (after as well as before judgment) at the Applicable Debt Rate in effect from time to time.  In the event that any Affected Person shall have determined that any Regulatory Change regarding capital adequacy has the effect of reducing the rate of return on such Affected Person's capital or on the capital of any entity controlling such Affected Person as a result of its obligations hereunder or under any liquidity or credit support agreement or under any Operative Document or its maintenance of its Affected Person Commitment or its interest in this Agreement, the Notes or any Operative Document to a level below that which such Affected Person or such entity could have achieved but for such Regulatory Change (taking into consideration such Affected Person's or such entity's policies with respect to capital adequacy) by an amount reasonably determined in good faith by such Affected Person to be material, then, from time to time, after submission by such Affected Person to Obligor of such written request therefor specifying the nature and amount of such cost in reasonable detail, Obligor shall pay to such Affected Person such additional amount or amounts as will compensate such Affected Person for such reduction, together with interest on each such amount from the day which is five (5) Business Days after the date such request for compensation under this Section (b) is received by Obligor until payment in full thereof (after as well as before judgment) at the Applicable Debt Rate in effect from time to time.  It shall be a condition to the right of an Affected Person to receive any compensation under this Section 8.5 that it use its reasonable efforts to reduce or eliminate any claim for such compensation, including but not limited to designating a different investing office for its interest in this Agreement, the Notes or the Operative Documents, if such designation will avoid the need for, or reduce the amount of any increased amounts referred to in this Section 8.5 and will not in the reasonable opinion of such Affected Person, be unlawful or otherwise disadvantageous to such Affected Person or inconsistent with its policies or result in an unreimbursed cost or expense to such Affected Person or in an increase in the aggregate amounts payable under this Section 8.5.  Each Affected Person claiming any increased amounts described in this Section 8.5 will furnish to Obligor and Agent together with its request for compensation a certificate prepared in good faith setting forth the basis and the calculation of the amount (in reasonable detail) of each request by such Affected Person for any such increased amounts referred to in this Section 8.5.  Failure on the part of any Affected Person to demand compensation for any amount pursuant to this Section 8.5 with respect to any period shall not constitute a waiver of such Affected Person’s right to demand compensation with respect to such period.  For purposes of this Section 8.5, “Regulatory Change” shall mean as to each Affected Person, any change occurring after the date of the execution and delivery of this Agreement in any (or the adoption after such date of any new) (a) United States Federal or state law or foreign law applicable to such Affected Person; or (b) regulation, interpretation, directive, guideline or request (whether or not having the force of law) applicable to such Affected Person of any court or other judicial authority, or any entity which is exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to the government of any nation or any state or other political subdivision thereof and which is charged with the interpretation or administration of any law referred to in clause (a) or of any fiscal, monetary or other authority or central bank having jurisdiction over such Affected Person.

                        8.6.      Illegality.  Notwithstanding any other provision of this Agreement or the other Operative Documents to the contrary, if it becomes unlawful or contrary to an official directive of a Governmental Entity, any Applicable Law, or any interpretation, directive or request or change therein, or change in the administration or enforcement thereof after the date hereof for any Lender to honor any obligation to maintain any Loan funded by Dollar borrowings on the London interbank market or if for any reason any Lender is unable to borrow Dollars on the London interbank market (in either case, an “Illegality Event”, and any Loan affected thereby, an “Illegal Loan”) then  (a) Lenders shall promptly notify Agent, Obligees and Obligor thereof, (b)  if such Illegality Event can be avoided without incurring any consequences which are, in the sole judgment of such Lender, adverse to such Lender, then such Lender shall make reasonable, good faith efforts consistent with its internal policy to effect such avoidance, (c) if, notwithstanding such Lender’s efforts in accordance with clause (b) hereof, any Loan remains an Illegal Loan, then, at the time specified for such in the notice given in accordance with clause (a) above, the interest rate on any such Illegal Loan shall be automatically converted to the Alternate Rate and (d) all Loans made after such Illegality Event shall accrue interest at the Alternate Rate.  Obligor shall compensate such Lender, upon such Lender’s written request, for all reasonable losses, expenses and liabilities incurred which such Lender may sustain as a result of the conversion or any payment of any Illegal Loan on a date other than a Payment Date.

                        8.7.      Survival.  All obligations provided for in this Section 8 shall survive the sale of any Item of Equipment, any termination of the Equipment Agreement, the termination of this Agreement, and the payment in full of the Notes.  Further, all obligations provided for in Section 8 of the Original Participation Agreement shall survive the amendment and restatement of the Original Operative Documents, as such amendment and restatement is evidenced by this Agreement and the other Operative Documents.

                        9.         Agency.

                        9.1.      Authorization and Action.  Lenders hereby appoint and authorize Agent and Security Trustee to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent or Security Trustee by the terms hereof and thereof, respectively, together with such powers as are reasonably incidental thereto.  As to any matters not expressly provided for by a Loan Document (including enforcement or collection of the Notes), neither Agent nor Security Trustee shall 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 and such instructions shall be binding upon Lenders; provided, however, that neither Agent nor Security Trustee shall be required to take any action which exposes it to personal liability or which is contrary to any Loan Document or Applicable Law.  Each Agent and Security Trustee agrees to give to Lenders prompt notice of each notice given to it by Obligees pursuant to the terms of this Agreement.  Agent may, with the prior consent of the Majority Lenders, agree to any waiver or amendment of the Operative Documents or to give any consent or exercise any remedies thereunder on behalf of Lenders; provided, however, neither Agent nor Security Trustee will, without the prior consent of all Lenders, agree to any waiver or amendment that would (i) postpone the time or times for payment of any amount payable under the Equipment Agreement or the principal of or interest on any Loan, (ii) reduce any amount payable under the Equipment Agreement or the principal amount of any Loan or reduce the rate of interest on any Loan, or (iii) prior to the payment in full of the Secured Obligations, release any of the Collateral from the Lien created by the Loan Documents, other than in accordance with the terms thereof.  Each of Agent and Security Trustee shall pursue its remedies under the Loan Documents during the continuance of a Loan Event of Default in accordance with the instructions of the Majority Lenders.

                        9.2       Limitation on Liability; Agent’s Reliance, etc.  Neither Agent nor Security Trustee nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted by it or them under or in connection with any Loan Document, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each of Agent and Security Trustee (i) may consult with legal counsel (including counsel for Obligor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted in good faith by it in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to Lenders and shall not be responsible to Lenders for any statements, warranties or representations made in or in connection with any Loan Document, (iii) 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 any Loan Document on the part of Obligor or to inspect the property (including the books and records) of Obligor, (iv) shall not be responsible to Lenders for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any other instrument or document furnished pursuant thereto, and (v) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by fax, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

                        9.3       Rights.  With respect to any Loans made by it and any Note issued to it as a Lender under the Operative Documents, Agent and Security Trustee shall have the same rights and powers under each Loan Document as any other Lender and may exercise the same as though it were not an agent hereunder; Agent and Security Trustee and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, Obligees or Obligor, any of its subsidiaries and any Person who may do business with or own securities of Obligees or Obligor or any such subsidiary, all as if Agent were not an agent hereunder and without any duty to account therefor to Lenders.

                        9.4       Credit Decision.  Lenders acknowledge that they have, independently and without reliance upon Agent or Security Trustee and based on the financial statements of Obligees and Obligor and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Lenders also acknowledge that they will, independently and without reliance upon Agent or Security Trustee 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 the Operative Documents.

                        9.5       Indemnification.  Each Lender agrees to indemnify Agent and Security Trustee (to the extent not reimbursed by Obligees or Obligor), (and if there are multiple Lenders, each Lender agrees to do so ratably according to the respective principal amounts of the Notes then held by it), 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 Agent or Security Trustee in any way relating or arising out of any Loan Document, any Item of Equipment or any appraisal of the Equipment or any action taken or omitted by Agent or Security Trustee under any Loan Document, any Item of Equipment or with respect to any appraisal of the Equipment; 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 gross negligence or willful misconduct of the Agent or Security Trustee seeking such indemnity.  Without limitation of the foregoing, each Lender agrees to reimburse Agent promptly upon demand for out-of-pocket expenses (including counsel fees) incurred by Agent or Security Trustee 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, any Loan Document, to the extent that Agent is not reimbursed for such expenses by Obligees or Obligor.

                        9.6.      Successor Agent.  Agent or Security Trustee may resign at any time by giving at least 15 days written notice thereof to each Lender and to Obligees, and Agent or Security Trustee 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 or Security Trustee.  If no successor Agent or Security Trustee shall have been so appointed by the Majority Lenders, and shall have accepted such appointment, within 30 days after any such resignation of removal, the retiring Agent or Security Trustee may, on behalf of Lenders, appoint a successor Agent or Security Trustee, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $100,000,000.  Upon the acceptance of any appointment as Agent or Security Trustee hereunder by a successor Agent or Security Trustee, such successor Agent or Security Trustee shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent or Security Trustee, and the obligations under each Loan Document.

                        9.7.      Holder List; Ownership of Notes.  Agent shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the holders of the Notes, which list shall be available to Obligees or their representative for inspection.  Ownership of the Notes shall be proved by the note register kept by Agent.  Prior to due presentment for registration of transfer of any Note, Agent and Obligees may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, and Prepayment Premium, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and neither Agent nor Obligees shall be affected by any notice to the contrary.

                        10.       Miscellaneous.

                        10.1     Expenses and Recording.  Obligor shall reimburse each Obligee, Trust Company, Owner Participant, each Lender, Agent and Security Trustee for all reasonable costs and expenses in connection with the preparation, execution and delivery of the Operative Documents and the consummation of the transactions contemplated thereby, and without limiting the generality of Obligor’s undertaking to do so, Obligor shall pay the reasonable fees and expenses (initial and ongoing) of Trust Company for serving as Obligees and shall reimburse Trust Company, Lenders, Owner Participant, Agent and Security Trustee for all of their respective costs and expenses (including, without limitation, reasonable counsel fees and disbursements) in connection with the preparation, execution and delivery of and the consummation of the transactions contemplated thereby and the costs and expenses in connection with the preparation and filing of Obligee’s tax returns; provided, however, Obligor shall have no obligation to reimburse the above Persons for costs and expenses in the negotiation, preparation and execution of Operative Documents negotiated, prepared and executed after the Restructuring Date unless otherwise required under this Agreement or such Operative Documents relate to or arise out of an Equipment Agreement Event of Default.  Obligor shall also pay the reasonable fees and disbursements of special counsel to Corporate Obligee, special counsel to Trust Obligee and special counsel to Agent, Security Trustee and Lenders in connection with any amendments, waivers or consents requested by Obligor under the Equipment Agreement.  Upon the occurrence and during the continuance of any Equipment Agreement Default or Equipment Agreement Event of Default, Obligor will also pay or reimburse each Lender, Agent, Security Trustee and each Obligee for reasonable costs and expenses of counsel and of financial advisors as shall have been selected by such Obligee or such Lender, Agent or Security Trustee to assist such Obligee and such Lender in connection with such Equipment Agreement Defaults or Equipment Agreement Events of Default.  Obligor, at its own expense, will further cause the Equipment Agreement, the Loan Documents and/or appropriate financing statements or continuation statements to be filed and recorded and, from time to time when required, refiled and re-recorded, in accordance with Applicable Law in any jurisdiction in which Obligor or any Item of Equipment is located recognizing Corporate Obligee’s, any Lender’s or Security Trustee’s interest in the Equipment Agreement and in the Items of Equipment as a security interest and in any other jurisdiction where filing shall be reasonably requested by Corporate Obligee, such Lender or Security Trustee for the purpose of proper protection, to the satisfaction of counsel for Corporate Obligee, such Lender or Security Trustee, of its interests and rights under the Equipment Agreement, or the Loan Documents for the purpose of carrying out the intention of the Equipment Agreement and the Loan Documents. Obligor in addition will from time to time do and perform any other act and will execute, acknowledge, deliver, file, register, record (and will refile, reregister, deposit and redeposit or rerecord whenever required) any and all further instruments reasonably requested by Corporate Obligee, any Lender or Security Trustee for the purpose of proper protection, to its satisfaction, of Corporate Obligee’s, Lenders’ or Security Trustee’s interests in the Items of Equipment, or for the purpose of carrying out the intention of the Equipment Agreement or the Loan Documents; and Obligor will promptly furnish to Corporate Obligee, any Lender or Security Trustee which shall have requested the same evidence of all such filing, registering, depositing or recording.

                        10.2     Modification.  Except as otherwise expressly provided and subject to the rights assigned by Obligor, Corporate Obligee and Trust Obligee to Security Trustee hereunder, none of this Agreement, the Notes, the Equipment Agreement, the Receivables Purchase Agreement, the Trust Agreement nor the Security Documents nor any terms hereof or thereof may be amended, supplemented, waived or modified without the written agreement and consent of the parties thereto, Obligor, each Lender, Corporate Obligee and Trustee Obligee, provided that where the consent of any Lender is required, such consent (except as provided below) may be given by Agent acting on behalf of Majority Lenders, and any such consent shall be binding on all Lenders, provided further, that no such amendment, modification, waiver or supplement shall, (i) without the consent of a Lender (A) extend the final scheduled maturity of such Lender’s A Loan or B Loan, as the case may be, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof (except to the extent repaid in cash), (B) release all or substantially all of Security Trustee’s interest in the Collateral (except as expressly provided herein), (C) reduce the percentage specified in the definition of Majority Lenders or (D) amend this clause (i); (ii) without the consent of Agent, amend, modify or waive any provision relating to the rights or obligations of Agent, or (iii) without the consent of Security Trustee amend, modify or waive any provision relating to the rights or obligations of Security Trustee.

                        10.3     Governing Law, Jurisdiction and Venue; Waiver of Jury.   This Agreement and the rights and obligations of the parties hereunder and under the Notes shall be construed in accordance with, and be governed by, the law of the State of New York.  The parties hereto hereby agree that all actions or proceedings initiated by any party hereto arising directly or indirectly out of this Agreement or the other Loan Documents may be litigated in the Supreme Court of the State of New York located in New York City or the District Court or the United States District Court for the Southern District of New York.  Each party hereto hereby expressly submits and consents in advance to such jurisdiction and venue in any action or proceeding commenced by any party hereto in any of such courts, agrees that jurisdiction and venue is proper in such courts, and hereby waives personal service of the summons and complaint, or other process or papers issued therein, and agrees that such service of the summons and complaint may be made by registered mail, return receipt requested, addressed to the party hereto being served at the address for such party set forth in Section 10.4 hereof.  Each party hereto waives any claim that New York City or the Southern District of New York is an inconvenient forum or an improper forum based on lack of venue.   The choice of forum set forth herein shall not be deemed to preclude the enforcement by any Lenders or Security Trustee of any judgment in any other appropriate jurisdiction.  Each of Obligor, Corporate Obligee, Trust Obligee, Trust Company and Owner Participant hereby waives trial by jury in any judicial proceeding brought by it, Lenders or Security Trustee involving directly or indirectly, any matter in any way arising out of, related to, or connected with this Agreement or the other Operative Documents.

                        10.4     Notices.  All notifications, notices, demands, requests and other communications herein provided for or made pursuant hereto shall be in writing and shall be sent via (i) reputable overnight delivery service, and the giving of such communication shall be complete on the immediately succeeding Business Day after the same is deposited with such delivery service, (ii) by legible telefax with original to promptly follow by certified mail, with return receipt requested, and the giving of such communication shall be completed on the Business Day on which such fax is received.  Written communications may be in any form of writing howsoever transmitted.  The initial address of the parties hereto are as follows:

Lenders:                                               As set forth on Schedule 4 attached hereto.

Agent and Security Trustee:                  Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the Americas, 10^th Floor
New York, New York  10020-1104
Attn:  Corporate Trust Department
Telefax:            212.782.5900/5901

Trust Obligee and Trust Company:        Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Attention: Peter Murphy

Telephone: (617) 603-6568
Telefax: (617) 603-6667

Corporate Obligee:                               111 Huntington Avenue
Suite 400
Boston, Massachusetts 02199-8001
Attention:  Senior Vice President- Administration

Telephone: (617) 573-9000
Telefax:  (617) 345-1444

Obligor:                                                1101 Pennsylvania Avenue, NW
Suite 1010
Washington, D.C. 20004

Attention:          Treasurer or Assistant Treasurer
Telephone:        (202) 393-1101
Telefax:            (202) 393-3064

                        10.5     Interests in the Equipment.  The parties hereto intend that (a) for financial accounting purposes with respect to Obligor, Corporate Obligee will be treated as the owner and the lessor of each Item of Equipment and Obligor will be treated as the lessee of each Item of Equipment and (b) for all other purposes, including federal and all state and local income tax purposes, state sales, use and other transaction tax purposes, and federal and state bankruptcy and insolvency laws, and state commercial law, (i) the Operative Documents will be treated as a financing arrangement, (ii) Corporate Obligee and each Lender will be deemed a lender making secured loans to Obligor in an amount equal to the sum of the aggregate of the Equity Components for each Item of Equipment and the outstanding principal amount of the Loans and (iii) Obligor will be treated as the owner of each Item of Equipment and will be entitled to all tax benefits ordinarily available to an owner of equipment like the Equipment for such tax purposes.  Obligees shall take no action inconsistent with the intention of the parties set forth in clause (b)(iii) of this Section 10.5; provided however, if the Equipment Agreement is finally and conclusively determined by any taxing authority having jurisdiction with respect thereto not to constitute a finance lease, Obligees, Owner Participant, Lenders, Security Trustee and Obligor may take all actions necessary or desirable as a result of such determination and otherwise permitted by the terms of the Operative Documents.  Notwithstanding the intentions of the parties expressed herein, Obligor acknowledges and agrees that neither Obligees, Owner Participant, Lenders, Security Trustee nor Agent has made any representations or warranties to Obligor concerning the tax, accounting or legal characteristics of the Operative Documents and that Obligor has obtained and relied upon such tax, accounting and legal advice concerning the Operative Documents as it deems appropriate.

                        10.6     Descriptive Headings, etc.  The descriptive headings used in this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any provision hereof.

                        10.7.    Benefit of Agreement; Assignment.

                        (a)        This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns and in particular any holder from time to time of any Note.  Subject to clause (b) of this Section 10.7 and the following proviso, no party hereto may assign any or all of its rights or obligations hereunder without the consent of the other parties hereto; provided however, that Trust Obligee may transfer or assign any or all of its rights or obligations hereunder to a successor obligee appointed in accordance with the Trust Agreement, and each Lender and Owner Participant may at any time grant participations in or sell, assign, negotiate or otherwise transfer to any Permitted Assignee, any of its rights or obligations hereunder or under any other Operative Document provided that each such Permitted Assignee shall expressly acknowledge and consent to the Corporate Obligee Option.  Obligees shall from time to time at the request of any Lender, execute and deliver to each Lender such documents as such Lender may deem reasonably necessary or desirable to give full force and effect to any such sale, assignment or transfer.  If any Lender sells, assigns, negotiates or otherwise transfers all or a part of its rights and obligations hereunder, or all or a part of any Loan, or all or a part of any Note outstanding at the time, to any Permitted Assignee, any reference to “Lender” or “Lenders” and any reference to “Owner Participant” in any Operative Document shall thereafter refer to such Lender or Owner Participant and to such other Permitted Assignee to the extent of their respective interests.  Any such sale, assignment or transfer shall be evidenced by an Assignment and Acceptance Agreement substantially in the form of Schedule 7 attached hereto executed by the transferring Lender and the Permitted Transferee and delivered to Agent and Security Trustee.

                        (b)        If at any time, any Lender or Owner Participant sells, assigns, negotiates or otherwise transfers all or any of its rights and/or obligations hereunder and at the time of such assignment or transfer:   (i) Obligor is or will become obliged (but for this Section 10.7) to make a payment to such assignee or transferee under Sections 5.5.7 or 8.5 for any amount in excess of the amount for which Obligor would have been obliged to make payment thereunder had such assignment or transfer not have taken place; or (ii) the relevant assignee or transferee knows or ought reasonably to have known that Obligor is or will become obliged (but for this Section 10.7) to make payments under Sections 5.5.7 or 8.5 in excess of the amount Obligor would have been obliged to make payment thereunder had such assignment or transfer not taken place, then Obligor shall not be obligated to pay such amount in excess of the amount that Obligor would have been obligated to pay had such assignment or transfer taken place.

                        (c)        Notwithstanding any other provision in the Operative Documents, any Lender or Owner Participant may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in any Operative Documents in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR 203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under Applicable Law.

                        (d)        Corporate Obligee shall have the right at any time at its sole expense, to sell, assign or transfer in whole or in part such right, title and interest to a transferee satisfying the conditions set forth below (a “Permitted Transferee”) and provided that such sale, assignment or transfer satisfies the following conditions:

                        (i)         Such sale, assignment or transfer will not be in violation of the registration requirements of the Securities Act of 1933, as amended;

                        (ii)        The Permitted Transferee shall have the requisite power and authority to enter into and carry out the transactions of Corporate Obligee contemplated hereby and by the other Operative Documents to which Corporate Obligee is a party;

                        (iii)       The Permitted Transferee shall be either (A) a bank or other financial institution with capital and surplus of at least $100,000,000 or a leasing company organized under the laws of the United States with a tangible net worth of $100,000,000 as determined in accordance with GAAP, or (B) a corporation (other than a corporation in the business of selling goods of the same type as the Equipment) organized and operating under the laws of any state of the United States with a tangible net worth of at least $100,000,000 as determined in accordance with GAAP, or (C) a subsidiary of any Person described in clauses (A) or (B) above, provided such Person is not in the business of selling goods of the same type as the Equipment and such Person’s obligations are guarantied by a Person of the type described in clause (A) or (B) in form and substance reasonably acceptable to the Majority Lenders, or (D) a corporation which is a member of the same consolidated group for Federal income tax purposes as Corporate Obligee, or another corporation owned and controlled by, or under common control with, Corporate Obligee, other than a Person in the business of selling goods of the same type as the Equipment, provided, that if the Permitted Transferee is a Person described in clause (D) above and not described in clause (A), (B) or (C) above, Corporate Obligee shall continue to be liable with respect to the obligations of the Permitted Transferee hereunder and under the other Operative Documents; and

                        (iv)       If Corporate Obligee proposes to transfer its interest hereunder at any time pursuant to this Section 10.7(d), Corporate Obligee shall give not less than ten (10) days’ notice to Obligor specifying the name and address of the proposed Permitted Transferee and specifying the facts necessary to determine compliance with this Section 10.7(d).

From and after any transfer of Corporate Obligee’s interest effected in accordance with this Section 10.7(d), such Permitted Transferee shall be deemed a “Corporate Obligee” for all purposes of this Agreement and the other Operative Documents and the transferring Corporate Obligee shall have no further liability under the transferred interest hereunder or thereunder, expect to the extent of any interest herein retained or claims relating to or arising out of the period prior to such transfer.  Successive transfers may be made pursuant to this Section 10.7(d).

                        10.8.    Execution and Effectiveness.  This Agreement may be executed in multiple counterparts, each of which shall be regarded as an original and all of which shall constitute a single instrument and shall become effective on the Restructuring Date when each of the parties hereto shall have signed and delivered a copy hereof (whether the same or different copies).

                        10.9.    Registration.  The Notes are or, when issued, will be registered obligations.  Corporate Obligee, Trust Obligee and each Lender hereby directs and authorizes Agent to establish and maintain at the office of Agent registration books in which Agent will register, and register any assignment effected in compliance with Section 10.7 of, each holder’s interest in each Note or any portion thereof and which identifies each registered holder of each Note or any portion thereof.  No transfer by any holder of a Note or any portion thereof shall be effective unless and until such transfer is made upon the registration books maintained by Agent.  Prior to registration of transfer, Obligees may treat the person in whose name the Note is registered as the absolute owner thereof for all purposes, and neither Corporate Obligee nor Trust Obligee shall be affected by any notice to the contrary.

                        10.10.  Confidentiality.

                        (a)        Each of Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent and Security Trustee agrees that all financial statements and other proprietary information furnished by Obligor will be treated by it in a responsible manner, and their confidentiality maintained; such material will not be disseminated except to the parties hereto or their respective officers, directors, employees, agents, auditors, attorneys and professional consultants who, for proper reasons consistent with the purposes for which this information is furnished, need access to such information, and to such other parties to whom Corporate Obligee, Trust Obligee, Trust Company, Owner Participant, each Lender, Agent or Security Trustee may have a duty or legal obligation of disclosure, including, without limitation, any Governmental Entity having jurisdiction over Corporate Obligee, Trust Obligee, Trust Company, each Lender, Agent or Security Trustee.  This confidentiality provision will survive the expiration or early termination of this Agreement.  Each of Corporate Obligee, Trust Obligee, Owner Participant, such Lender, Agent or Security Trustee may designate any person in writing who is an officer, employee or agent thereof (each, a “Designee”), to visit and inspect the properties (including, without limitation, the Items of Equipment) of Obligor, and to the extent reasonable under the circumstances, examine its books of record and accounts (including, without limitation, Obligor’s records pertaining to the Items of Equipment but excluding tax returns and related tax information), and discuss its affairs, finances and accounts with its officers, and, with notice to Obligor so that it may have an officer present if it so reasonably requests, the accountants of Obligor, all at such reasonable times, during normal business hours, as Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee, as the case may be, may reasonably request and, upon such request, Obligor shall make such properties and such books of record and accounts available to Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee, as the case may be, for inspection; provided, however, that, with respect to the properties of Obligor, other than the Items of Equipment and the records of Obligor other than those pertaining to the Items of Equipment, Obligor’s obligations hereunder shall arise only following the occurrence and during the continuance of an Equipment Agreement Default or Equipment Agreement Event of Default, except that prior to the occurrence of an Equipment Agreement Default or Equipment Agreement Event of Default, Obligor shall, upon receipt of reasonable notice, permit Corporate Obligee, Trust Obligee, Owner Participant, each Lender, Agent or Security Trustee or any Designee to discuss the affairs, finances and accounts of Obligor with a financial officer of Obligor.  No breach of the foregoing covenants by Obligees, shall affect or impair the obligation of Obligor to pay Obligees or Lenders any amounts due under this Agreement or the Equipment Agreement.  Notwithstanding anything contained herein to the contrary, except as reasonably necessary to comply with Applicable Laws, the parties hereto may disclose to any and all Persons, without limitation of any kind, any information with respect to the United States federal income “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such Persons relating to such tax treatment and tax structure.   To the extent not inconsistent with the immediately preceding sentence, this authorization does not extend to disclosure of any other information, including without limitation (a) the identities of Persons in this transaction, (b) the existence or status of any negotiations, or (c) any other term or detail, or portion of any documents or other materials, not related to the tax treatment or tax structure of the potential transaction.

                        10.11.  Survival.  Each of the representations, warranties, terms, covenants, agreements and conditions contained in this Agreement shall specifically survive the execution and delivery of this Agreement and the other Loan Documents and the making of the Loans and shall, unless otherwise expressly provided, continue in full force and effect until the Loans, together with interest thereon, and all other sums payable hereunder or thereunder have been indefeasibly paid in full.

                        10.12.  Severability.  The provisions of this Agreement are severable, and if any section or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

                        10.13.  No Broker.  Each party hereto hereby represents and warrants to the other parties that no broker other than BTM Financial Services, Inc., BTM Capital Corporation or their respective Affiliates brought about the transactions contemplated hereby and each party hereby agrees to indemnify (the “Indemnifying Party”) and hold each other party harmless from, any and all other liabilities and costs (including without limitation, costs of counsel) to any Person claiming brokerage commissions or finder’s fees as a result of any agreement with the Indemnifying Party.

                        10.14.  Performance by Lenders.  If either Obligee fails to perform any of their respective obligations under the Operative Documents in a timely fashion, each Lender shall be entitled, but not obliged, to perform such obligation at the expense of such Obligee and without waiving any rights they may have with respect to such breach.

                        10.15   Payment from Collateral; Limited Recourse.  Without impairing any of the other rights, powers, privileges, liens or security interests of Lenders or Security Trustee pursuant to the Loan Documents, except for the Trust Company’s, Corporate Obligee’s or Owner Participant’s gross negligence, willful misconduct, misrepresentations or fraud and as expressly provided in this Agreement or any other Operative Documents and, subject to the proviso below, Lenders agree that as between it and the Trust Company, Corporate Obligee and Owner Participant, no recourse shall be had with respect to this Agreement or such other Operative Documents against the Trust Company, Corporate Obligee or Owner Participant, or any officer, director, employee, agent or Affiliate thereof for amounts owed by Obligees under the Loan Documents; and none of the Trust Company, Corporate Obligee or Owner Participant, nor any officer, director, employee, agent or Affiliate thereof shall have any personal liability for any amounts owed by Obligees under any of the Operative Documents; provided, however, that nothing contained in this Section 10.15 or elsewhere shall be construed to (i) prevent recourse to and the enforcement against the Collateral of all liabilities, obligations and undertakings contained in any of the Operative Documents, (ii) limit, restrict, or impair the right of Lenders to accelerate the maturity of any Loan upon the occurrence of a Loan Event of Default, (iii) prevent recourse to and the enforcement against Corporate Obligee of any amounts owed under the Loan Documents to the extent corresponding amounts were received by Corporate Obligee from Obligor or realized by Corporate Obligee from the Collateral and, in either case, not remitted to Security Trustee (iv) prevent the bringing of an action or obtaining a judgment against Obligees or against the Trust Company or Owner Participant for any breach of any of its representations, warranties or covenants under any of the Operative Documents, or (v) prevent the bringing of an action or obtaining of a judgment to foreclose the lien of the Equipment Agreement or the Security Documents or otherwise realize upon the Collateral or the sums due or to become due under this Agreement or the other Operative Documents to which any such Person is a party but, in the case of the Corporate Obligee, any liability arising under this Agreement or the other Operative Documents shall be limited solely to Corporate Obligee’s interest in the Collateral unless such liability arises from Corporate Obligee’s gross negligence, willful misconduct or fraud or a breach of Corporate Obligee’s representations and warranties contained in Sections 2.5(a), 2.5(b), 2.5(c), 2.5(e), 2.5(f), 2.5(g) (only with respect to the representation in 2.5(g) that the Equipment Collateral is free and clear of all Liens arising by, through or under Corporate Obligee other than Permitted Liens) or 2.5(i) hereunder or a breach of Corporate Obligee’s agreements or covenants contained in Sections 6.1.1(b), 6.1.1(c), 6.1.2(c)(i), 6.1.2(d), 6.1.2(e) (only with respect to the covenants in Section 6.1.2(e) that Corporate Obligee shall not except as expressly permitted by the Equipment Agreement, the Receivables Purchase Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and under this Agreement, sell, lease, convey, transfer or encumber or otherwise dispose of all or any part of any Item of Equipment), 6.2.2(a) (solely as it relates to the representation in Section 2.5(i)), 6.2.2(c), 6.8, 7.4, 10.2, 10.7 or 10.13 hereunder or a breach of Corporate Obligee’s agreements contained in Section 25.2 or 25.3.2 of the Equipment Agreement (solely as such agreements relate to a breach of Corporate Obligee’s obligation to convey its right, title and interest in and to the Equipment) or Section 26.1 of the Equipment Agreement (solely to the extent Corporate Obligee receives the excess therein in cash from the Security Trustee).

                        10.16.  No Proceedings.  Each party hereto agrees that it shall not institute against, or join any other Person in instituting against Trust Obligee any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any federal or state bankruptcy or similar law for one year and a day after the latest maturing A Notes issued by Trust Obligee is paid.

                        10.17.  Concerning Trust Company.  Trust Company is entering into this Agreement solely in its capacity as Trustee under the Trust Agreement and not in its individual capacity (except as expressly stated herein) and in no case shall Trust Company (or any entity acting as successor Trustee under the Trust Agreement) be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Trust Obligee hereunder; provided, however, that Trust Company (or any such successor Trustee) shall be personally liable hereunder for Trust Company Liabilities.

                        10.18.  Waiver for Amendment and Restatement and Further Assurances.  The parties hereto hereby (i) waive any procedural requirements under the Original Operative Documents to the extent required or necessary for the consummation of the transactions contemplated under this Agreement and the other Operative Documents, and (ii) waive the requirement under clause (iv) of Section 12.10 under the definition of Permitted Transferee under the Original Trust Agreement.

*  *  *  *

Exhibit D-2

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

HARMAN INTERNATIONAL INDUSTRIES,
  INCORPORATED,
Obligor

By:  /s/ Frank Meredith                        
  Name:  Frank Meredith
  Title:  Executive Vice President and
                  Chief Financial Officer

BTM CAPITAL CORPORATION,
  as Corporate Obligee and Owner Participant

By:  /s/ John F. McCarthy                                
  Name:  John F. McCarthy
        Title:  Vice President

U.S. BANK NATIONAL ASSOCIATION,
  not in its individual capacity, but solely as trustee,
  as Trust Obligee

By:  /s/ Peter M. Murphy                                 
  Name:  Peter M. Murphy
  Title:  Trust Officer

U.S. BANK NATIONAL ASSOCIATION, in its
  individual capacity, as Trust Company

By:  /s/ Peter M. Murphy                                 
  Name:  Peter M. Murphy
  Title:  Trust Officer

BANK OF TOKYO-MITSUBISHI,
  NEW YORK BRANCH

By:  /s/ Spencer Hughes                                   
  Name:  Spencer Hughes
  Title:  Authorized Signatory

CREDIT SUISSE FIRST BOSTON

By:  /s/ Robert Hétu                                         
  Name:  Robert Hétu
  Title:  Director

By:  /s/ David Dodd                                         
  Name:  David Dodd
  Title:  Associate

BANK HAPOALIM B.M.

By:  /s/ Shaun Breidbart                                   
  Name:  Shaun Breidbart
  Title:  Vice President

By:  /s/ Laura Anne Raffa                                 
  Name:  Laura Anne Raffa
  Title:  Senior Vice President & Corporate
Manager

BANK OF TOKYO-MITSUBISHI TRUST
  COMPANY,
  as Agent and Security Trustee

By:  /s/ Charles Ryan                                       
  Name:  Charles Ryan
  Title:  Vice President

APPENDIX A

HARmAN INTERNATIONAL INDUSTRIES, INCORPORATED

Amended and restated EQUIPMENT leasing AGREEMENT

and amended and restated Participation Agreement

(2001)

“A Lenders” means any holder of an A Note and its successors and assigns.

“A Loan Term Percentage” means, as to each A Lender at any time, the percentage of the aggregate principal amount of the A Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such A Lender’s A Loan at such time.

“A Loan” means, as to each A Lender, the outstanding principal amount of such A Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “A Loans” opposite such A Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an A Note.  The aggregate principal amount of the A Loans on the Restructuring Date is $21,873,510.95.

“A Note” means any A Note issued by Corporate Obligee or Trust Obligee to any A Lender in the form of Exhibit D‑1 to the Participation Agreement.

“A Notes” means the collective reference to each A Note.

“Acceptance Date” for each Item of Equipment means the date on which Obligor has financed such Item under the Original Operative Documents, as evidenced by Obligor’s execution and delivery of an Equipment Agreement Supplement for such Item dated such date.

“Acquisition Cost” of each Item of Equipment means an amount equal to the sum of (i) the total cost paid by Original Obligee to Obligor for such Item in accordance with the Original Operative Documents, plus (ii) all sales and excise taxes paid by Original Obligee and/or Obligor as agent for Original Obligee on or with respect to the acquisition of such Item, plus (iii) all costs and expenses approved and paid by Obligor as agent for Original Obligee in connection with the delivery and installation of such Item. 

“Acquisition Period” means the period specified as such on each consecutively numbered Related Exhibit A attached to and made a part of the Equipment Agreement.

“Affected Person” means each of the Lenders, any permitted assignee of any Lender or the Agent.

“Affiliate” means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“After-Tax Basis” means in respect of an amount (the “base amount”) with respect to a Person, the base amount supplemented by a future payment, if necessary, to such Person such that, after reduction for all Taxes (other than Taxes based upon a Person’s net income or gross receipts and which are imposed or levied by any Federal, national, state, provincial or local taxing authority in the United States or a foreign country unless such Person would not otherwise have been subject to taxation in such jurisdiction but for such Person’s involvement in this transaction), if any, imposed on such Person in respect of the sum of the base amount and such future payment shall be equal to the base amount.

“Agent” means Bank of Tokyo-Mitsubishi Trust Company.

“Aggregate A Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Aggregate B Loan Principal Balance” has the meaning set forth in Section 5.2(a) of the Participation Agreement.

“Alternate Rate” means a variable rate equal to the greater of (i) the sum of the Federal Funds Rate from time to time in effect and  ½ of one percent (0.5%) and (ii) the rate of interest from time to time announced by Agent at its New York branch from time to time as its “prime commercial lending rate” (which rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer, and Agent may make commercial loans or other loans at rates of interest at, above or below such reference rate).

“Applicable Debt Rate” (a) for the purpose of calculating Equipment Payment means the rate calculated in accordance with Section 7.6 of the Equipment Agreement, (b) for the purpose of calculating interest due on any A Loan means the LIBOR Rate then in effect as determined by Agent pursuant to Schedule 2 to the Participation Agreement and (c) for the purpose of calculating interest due on any B Loan means the LIBOR Rate then in effect as determined by the Agent pursuant to Schedule 2 to the Participation Agreement.

“Applicable Law” means, with respect to any Person or Item of Equipment, all provisions of statutes, rules, regulations, orders and requests (whether or not having the force of law) of any Governmental Entity applicable to such Person or Item of Equipment, and all orders and decrees of all courts and arbitrators in proceedings or actions in which such Person is a party.

“Assignee” has the meaning set forth in Section 14.2 of the Equipment Agreement.

“Assignment and Acceptance Agreement” means the form of assignment and acceptance agreement attached as Schedule 7 to the Participation Agreement.

“Assumption and Revocation Agreement” means that certain Assignment, Assumption and Revocation Agreement dated as of June 30, 2003 by and between Original Owner Trustee, Original Obligee and Corporate Obligee, a copy of which is attached as Exhibit B to the Trust Agreement.

“B Lenders” means any holder of a B Note and its successors and assigns.

“B Loan Term Percentage” means, as to each B Lender at any time, the percentage of the aggregate principal amount of the B Loans then outstanding at such time constituted by the aggregate outstanding principal amount of such B Lender’s B Loan at such time.

“B Loan” means, as to each B Lender, the outstanding principal amount of such B Lender’s loan under the Participation Agreement in the principal amount as of the Restructuring Date set forth under the heading “B Loans” opposite such B Lender’s name on Schedule 3 to the Participation Agreement, each of which is evidenced by an B Note.  The aggregate principal amount of the B Loans on the Restructuring Date is $4,577,034.39.

“B Note” means any B Note issued by Corporate Obligee to any B Lender in the form of Exhibit D-2 to the Participation Agreement.

“B Notes” means a collective reference to each B Note.

“Basic Term” for each Item of Equipment means the period consisting of twelve (12) months commencing on the “Basic Term Commencement Date” set forth on the Related Exhibit A for such Item and terminating on the Payment Date that occurs in the last month of such twelve (12) month period.

“Basic Term Commencement Date” for each Item of Equipment means the date specified as such on the Related Exhibit A.

“Breakage Costs” means any amount or amounts as shall compensate a Lender or Owner Participant for any loss or reasonable cost incurred after using good faith and reasonable efforts to minimize such loss (but excluding loss of margin of profit) or cost by a Lender or Owner Participant directly resulting from repayment by an Obligee of the Related Notes (as defined in Appendix A of the Original Participation Agreement) or Equity Components relating to Item(s) of Equipment that Obligor exercises its rights to acquire pursuant to Section 25.4 of the Equipment Agreement, in accordance with the terms of the Operative Documents.  The amount of the loss or cost shall be determined by the Person seeking such, and notice thereof shall be provided to Obligor in the form of a certificate of such Person stating that the calculations set forth therein are in accordance with the terms of the Operative Documents and setting forth in reasonable detail the basis for such calculations, such certificate being conclusive and binding for all purposes absent manifest error.

“Business Day” means any day other than a day on which banking institutions in the State of Connecticut or the State of New York are authorized by law to close.

“Casualty Loss Value” of each Item of Equipment as of any Casualty Loss Value Payment Date means an amount determined by multiplying the Acquisition Cost of such Item of Equipment by the percentage set forth opposite such Casualty Loss Value Payment Date on the Schedule of Casualty Loss Values attached to the Equipment Agreement Supplement for such Item.

“Casualty Loss Value Payment Date” for each Item of Equipment for which an Event of Loss occurs shall mean the Payment Date for such Item next following the date of such Event of Loss and for each Item of Equipment with respect to which Obligor is exercising its option under Section 25.4 of the Equipment Agreement shall mean the Payment Date on which such option is to be exercised in accordance with such Section 25.4.

“Certificate of Costs” means any certificate by Obligor executed by a Responsible Officer certifying Obligor’s original purchase price and date of purchase of the Item of Equipment specified in such certificate sold by Obligor to Original Obligee under the Original Participation Agreement in the form of Exhibit B to the Original Participation Agreement.

“Closing Date” means the first Funding Date.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time, or any comparable successor law.

“Collateral” means the collective reference to the Equipment Collateral and the Transferred Property Collateral.

“Commerzbank” means Commerzbank Aktiengesellschaft, New York Branch, the New York branch of a German banking corporation.

“Consolidated Capitalization” means any date, the sum of (a) shareholders’ equity of Obligor and (without duplication) its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (b) Consolidated Total Debt.

“Consolidated EBITDA” means for any period, Consolidated Net Income for such period, plus the amount of taxes, interest, depreciation and amortization deducted from earnings in determining such Consolidated Net Income.

“Consolidated Interest Expense” means for any period, the amount of interest expense deducted from earnings of Obligor and its consolidated Subsidiaries in determining Consolidated Net Income for such period in accordance with GAAP.

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

“Consolidated Total Debt” means at any date, without duplication, the aggregate of all Indebtedness (including the current portion thereof) of Obligor and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Corporate Obligee” means BTM Capital Corporation, a Delaware corporation, and its permitted successors and assigns.

“Cross Receipt” means any cross receipt in the form of Exhibit A to the Original Participation Agreement that was executed and delivered by Obligor to Original Obligee prior to the Restructuring Date in accordance with the Original Operative Documents.

“Debt Amortization Payment” for any Item of Equipment as of any Payment Date means the amount determined by multiplying the Debt Component of such Item by the percentage set forth opposite such Payment Date on the Schedule of Debt Component Amortization attached to the Related Equipment Agreement Supplement.

“Debt Component” for each Item of Equipment means the dollar amount of the Acquisition Cost financed by Original Lender on the Acquisition Date in accordance with the Original Operative Documents therefor calculated as 97.00% of the Acquisition Cost for such Item.

“Deficiency” has the meaning set forth in Section 26.1 of the Equipment Agreement.

“Dollar” means freely transferable, lawful money of the United States.

“EBITDA Ratio” means on any date, the ratio of Consolidated EBITDA to Consolidated Interest Expense for the four consecutive fiscal quarters of Obligor most recently ended prior to such date.

“English Debenture” means each of Debentures among (i) Original Obligee and Original Security Trustee, (ii) Corporate Obligee and Security Trustee, (iii) Obligor and Original Security Trustee and (iv) Harman International Industries, Limited and Original Security Trustee.

“Equipment” means the equipment of the type(s) described on the Schedule of Equipment attached to each consecutively numbered Equipment Agreement Supplement made a part of the Equipment Agreement together with any and all related appliances, parts, accessories, appurtenances, accessions, additions, improvements, replacements and other equipment or components of any nature from time to time incorporated or installed therein.

“Equipment Agreement” means the Amended and Restated Equipment Leasing Agreement dated as of June 30, 2003 between Obligor, as lessee, and Corporate Obligee, as lessor, and each Equipment Agreement Supplement as amended, supplemented and modified from time to time in accordance with the terms of the Operative Documents.

“Equipment Agreement Default” means an Equipment Agreement Event of Default or an event which with notice or lapse of time or both would become an Equipment Agreement Event of Default.

“Equipment Agreement Event of Default” has the meaning set forth in Section 20 of the Equipment Agreement.

“Equipment Agreement Supplement” means an Equipment Agreement Supplement substantially in the form attached to the Original Equipment Agreement as Exhibit B, which prior to the Restructuring Date, was executed by Original Obligee and Obligor with respect to each Item of Equipment as provided in Section 4 of the Original Equipment Agreement and was consented thereto by Original Lender, as the same has been amended on the Restructuring Date and as the same may be further amended or modified from time to time.

“Equipment Collateral” has the meaning set forth in Section 7.1(a) of the Participation Agreement.

“Equipment Payment” means the amount payable during the Interim Term pursuant to Section 7.1 of the Equipment Agreement, during the Basic Term pursuant to Section 7.2 of the Equipment Agreement, during each Renewal Term pursuant to Section 25.1 of the Equipment Agreement and during any holdover period pursuant to Section 6.3 of the Equipment Agreement, any Deficiency and any end of term rent adjustment payable in accordance with Section 26.2 of the Equipment Agreement.

“Equipment Payment Period” for each Item of Equipment means (a) for the Interim Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Interim Term as set forth in Section 7.1 of the Equipment Agreement, (b) for the Basic Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during the Basic Term thereof as set forth in Section 7.2 of the Equipment Agreement, and (c) for each Renewal Term of such Item, each period for which a payment of Equipment Payment is to be made for such Item during such Renewal Term as set forth in Section 25.1 of the Equipment Agreement.

“Equity Component” means, for each Item of Equipment, the difference between the Acquisition Cost and the Debt Component therefor.

“Equity Rate” means, for any Equipment Payment, the LIBOR in effect as of the first LIBOR Banking Day of each such Equipment Payment Period plus two hundred fifty (250) basis points.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Residual Value” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Estimated Residual Value Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Event of Loss” with respect to any Item of Equipment means (a) the loss of such Item of Equipment or any substantial part thereof, or (b) the loss of the use of such Item of Equipment due to theft or disappearance for a period in excess of forty-five (45) days during the Term, or existing at the expiration or earlier termination of the Term, or (c) the destruction, damage beyond repair, or rendition of such Item of Equipment or any substantial part thereof permanently unfit for normal use for any reason whatsoever, or (d) the condemnation, confiscation, seizure, or requisition of use or title to such Item of Equipment or any substantial part thereof by any Governmental Entity under the power of eminent domain or otherwise beyond the earlier of sixty (60) days and the end of the Basic Term or Renewal Term, as applicable.

“Excepted Payments” means (a) indemnity payments paid or payable in favor of Trust Company, Owner Participant or any Assignee, or their successors or assigns, directors, officers, employees, affiliates and agents under the Operative Documents, (b) proceeds of public liability insurance (or government indemnities in lieu thereof) payable to Trust Company, Owner Participant or any Assignee either pursuant to the Equipment Agreement or the Participation Agreement (which shall include proceeds of any self-insurance by Obligor) or maintained by Obligor, Trust Company, Obligees, Owner Participant or any Assignee and not required to be maintained under the Equipment Agreement, (c) costs or expenses paid or payable by Obligor to, or for the benefit of, Trust Company, Owner Participant or any Assignee, (d) all rights of, and payments to, Owner Participant under and pursuant to the Trust Agreement, (e) where any amount payable to Trust Company, Owner Participant or any Assignee is expressed to be payable on an After-Tax Basis, the increment to the underlying payment obligation arising by virtue of the operation of the definition of “After-Tax Basis,” (f) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (e) above and otherwise required to be paid thereon, (g) all rights to receive the amounts referred to in clauses (a) through (f) above, and (h) the proceeds of enforcement of any right to receive the proceeds of any amount referred to in clauses (a) through (f) above.

“Federal Funds Rate” means for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 a.m. (New York time) for such day on such transactions received by Agent from three federal funds brokers of recognized standing selected by Agent.

“Funding Date” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“Funding Notice” has the meaning set forth in Section 4.5 of the Original Participation Agreement.

“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

“German Chattel Mortgage Agreement” means each of the Agreements on Chattel Mortgage among (i) Harman Becker Automotive Systems (Becker Division) GmbH and Obligor, (ii) Harman Becker Automotive Systems (Straubing Division) GmbH and Obligor, (iii) Obligor and Corporate Obligee and (iv) Corporate Obligee and Security Trustee.

“Guaranty Obligation” means as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, derivative instrument or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guaranty Obligation shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business or (y) obligations of the Obligor or any of its Subsidiaries under arrangements entered into in the ordinary course of business whereby Obligor or such Subsidiary sells inventory to other Persons under agreements obligating Obligor or such Subsidiary to repurchase such inventory, at a price not exceeding the original sale price, upon the occurrence of certain specified events.

“Governmental Entity” means any Federal, state, municipal or other governmental department, commis­sion, board, bureau, agency, central bank or instrumentality or any court, in each case whether of the United States or any foreign country.

“Illegality Event” has the meaning set forth in Section 8.6 of the Participation Agreement.

“Indebtedness” means of any Person at any date, all indebtedness or obligations of such Person (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), as reflected on the balance sheet of such Person prepared in accordance with GAAP.

“Interest Coverage Ratio” means for any period of four consecutive fiscal quarters, Consolidated EBITDA divided by Consolidated Interest Expense for such period. 

“Interim Term” for each Item of Equipment means the period commencing on the Acceptance Date for such Item (unless the Acceptance Date is the Basic Term Commencement Date, in which case there shall be no Interim Term for such Item) and ending on the date immediately prior to the Basic Term Commencement Date. 

“Item of Equipment” or “Item” means any of the items of Equipment separately identified on any of the Schedules of Equipment attached to the Equipment Agreement Supplements currently made a part of the Equipment Agreement.

“Lenders” means the collective reference to the A Lenders and the B Lenders, and their permitted successors and assigns.

“LIBOR” means, in relation to any Equipment Payment Period, the rate per annum for deposits in Dollars for that Equipment Payment Period which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period; provided that if such rate does not appear on the Telerate Screen Page 3750, LIBOR shall mean the rate for deposits of an amount comparable to the aggregate of the Unamortized Debt Balances then financed or refinanced by such Lender by loans on the London interbank Dollar market for that Equipment Payment Period determined by such Lender to be the LIBOR rate offered by Agent to leading banks in the London Eurodollar interbank market at 11:00 a.m. London time on the second LIBOR Banking Day before the first day of the relevant Equipment Payment Period for that relevant Equipment Payment Period adjusted for any reserve requirements in effect on the first day of such Equipment Payment Period.

“LIBOR Banking Day” means any day other than a day on which banking institutions in the State of New York or the City of London are authorized by law to close.

“LIBOR Margin” means, at any time, the liquidity margin then applicable set forth in Schedule 2 to the Participation Agreement, expressed as an annual percentage rate calculated on an actual/360 day basis.

“LIBOR Rate” means the sum of LIBOR plus the LIBOR Margin.

“Lien” means liens, mortgages, encumbrances, pledges, charges and security interests of any kind.

“Liquidity Agreement” means Liquidity Asset Purchase Agreement dated as of March 30, 2001, among Lender, as issuer, Commerzbank, as liquidity agent for the purchasers thereunder, and the purchasers. 

“Loans” means a collective reference to the A Loans and the B Loans.

“Loan Commitment Fee” means the Loan Commitment Fee (as defined in Appendix A to the Original Participation Agreement).

“Loan Default” means an event, which with the giving of notice or lapse of time or both, would become a Loan Event of Default.

“Loan Documents” means the Participation Agreement, Notes and Security Documents.

“Loan Event of Default” has the meaning set forth in section 5.10 of the Participation Agreement.

“Majority Lenders” means Lenders in the aggregate holding Notes representing more than 50% of the aggregate outstanding principal balances of the Loans with each Lender being able to vote all or any portion of its outstanding principal balance.

“Material Obligation” means any capitalized lease, derivative instrument or Guaranty Obligation.

“Maturity Date” for each Loan means the earlier of (a) the last day of the third Renewal Term for the Items of Equipment financed by such Loan, and (b) such earlier date on which such Loan becomes due and payable under the Participation Agreement.

“Maximum Obligor Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligor Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Maximum Obligee Risk Amount” for any Item of Equipment on any date of determination shall mean an amount obtained by multiplying (a) the percentage set forth in the Equipment Agreement Supplement for such Item under the caption “Maximum Obligee Risk Percentage” applicable to the Basic Term or Renewal Term in effect on such date, by (b) the Acquisition Cost for such Item.

“Multi-Currency Credit Agreement” means the Amended and Restated Multi-Currency, Multi-Option Credit Agreement dated as of August 14, 2002 among Obligor, JP Morgan Chase Bank, a New York banking corporation and the several lenders party thereto as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, and if such is no longer in effect, any other credit agreement or loan agreement which provides Obligor and all or some of its subsidiaries with their primary source of working capital borrowings and if there is no such credit agreement or loan in effect then such last agreement or loan as in effect immediately prior to its termination or expiration.

“Multi-Currency Negative Covenants” means each and every financial and negative covenant contained in the Multi-Currency Credit Agreement (other than covenants (a) for the maintenance of a ratio of Consolidated Total Debt to Consolidated Capitalization, (b) for the maintenance of an Interest Coverage Ratio or (c) restricting mergers, consolidations, amalgamations, liquidation, winding up or dissolutions) as such covenants are in effect from time to time, which, as of the date hereof, are contained in Section 9 of the Multi-Currency Credit Agreement. 

“Net Proceeds of Sale” means with respect to each Item of Equipment sold by Corporate Obligee to a third party pursuant to Section 25.3 of the Equipment Agreement, the net amount of the proceeds of sale of such Item, after deducting from the gross proceeds of such sale (a) all sales taxes and other taxes (excluding income taxes on or measured by Corporate Obligee’s income) as may be applicable to the sale or transfer of such Item, (b) all fees, costs and expenses of such sale incurred by Obligee and (b) any other amounts for which, if not paid, Corporate Obligee would be liable or which, if not paid, would constitute a Lien on such Item.

“Non-Renewal Item of Equipment” means each Item of Equipment with respect to which the Equipment Agreement is not renewed at the end of the Basic Term or any Renewal Term pursuant to timely notice to Corporate Obligee in accordance with the provisions of Section 25.1 of the Equipment Agreement.

“Notes” means the collective reference to the A Notes and the B Notes.

“Obligees” means, collectively, Trust Obligee and Corporate Obligee, and each of their permitted successors and assigns.

“Obligee Indemnified Person” means each of Trust Company, Owner Participant, Lenders, Agent, Security Trustee and any Assignee, their successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Obligee Property” means all of the estate, right, title and interest of Trust Obligee and Corporate Obligee in and to the Equipment, the Participation Agreement, the Equipment Agreement and the other Operative Documents, and all documents related hereto and to the Equipment, and all proceeds thereof, including, without limitation, all Equipment Payments, insurance proceeds and Supplemental Payments, but excluding any Excepted Payments.

“Obligor” means Harman International Industries, Incorporated, a Delaware corporation, and its permitted successors and assigns.

“Obligor Indemnified Person” means each Obligee Indemnified Person and each Obligee, its successors and assigns and each of their respective officers, directors, employees, beneficiaries, stockholders, agents and servants.

“Operative Documents” means the Participation Agreement, the Receivables Purchase Agreement, the Notes, the Equipment Agreement, all Equipment Agreement Supplements, the Trust Agreement, the Original Trust Purchase Agreement, the Assumption and Revocation Agreement and the Security Documents and in each case, all exhibits, schedules and supplements thereto, and all notices, consents, certificates and other documents from time to time issued or entered into pursuant to or in connection therewith; in each case as amended and modified from time to time.

“Optional Alteration” has the meaning given set forth in Section 12 of the Equipment Agreement.

“Original Agent” means Commerzbank, acting in the capacity as “Agent” under the Original Participation Agreement.

“Original Equipment” means the Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Equipment Agreement” means the Equipment Financing Agreement dated as of March 30, 2001 between the Original Obligee, as “Obligee”, and Obligor, as “Obligor”, as amended prior to the Restructuring Date.

“Original Equity Agent” means Commerzbank, as “Equity Agent” for Original Owner Participant under the Original Operative Documents.

“Original Issuer” means Four Winds Funding Corporation, a Delaware corporation, as “Issuer” under the Liquidity Agreement.

“Original Items of Equipment” means the Items of Equipment (as defined in Appendix A to the Original Participation Agreement).

“Original Lender” means Four Winds Funding Corporation, a Delaware corporation, as “Lender” under the Original Operative Documents.

“Original Loans” means each Loan (as defined in Appendix A to the Original Participation Agreement) made by Original Lender to Original Obligee under the Original Operative Documents.

“Original Notes” means the collective reference to the Notes (as defined in Appendix A of the Original Participation Agreement) issued by Original Obligee to Original Lender to evidence the Original Loans made to it by Original Lender under the Original Operative Documents.

“Original Obligee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), not in its individual capacity but solely as trustee under the Original Trust Agreement.

“Original Operative Documents” means the Operative Documents (as defined in Appendix A to the Original Participation Agreement).

“Original Owner Participants” means, collectively, Commerzbank Aktiengesellschaft, New York Branch and Grand Cayman Branches and Credit Suisse First Boston Corporation.

“Original Owner Trustee” means U.S. Bank National Association (assignee of State Street Bank and Trust Company of Connecticut, National Association), acting in the capacity as “Owner Trustee” under the Original Trust Agreement.

“Original Participation Agreement” means the Participation Agreement dated as of March 30, 2001 between Obligor, Original Obligee, Original Lender, Original Agent, Original Security Trustee, Original Owner Participants and Original Equity Agent.

“Original Security Trustee” means Commerzbank, acting in the capacity as “Security Trustee” under the Original Participation Agreement.

“Original Trust Agreement” means that certain Trust Agreement by and between Original Owner Trustee and Original Owner Participants, dated as of March 26, 2001, which agreement has been terminated pursuant to the Assumption and Revocation Agreement.

“Original Trust Estate” means the Trust Estate (as defined in Appendix A to the Original Participation Agreement).

“Original Trust Purchase Agreement” means the Purchase, Assignment and Assumption Agreement dated as of June 30, 2003, between Original Owner Participants, as “Seller”, and Corporate Obligee, as “Purchaser”, a copy of which is attached as Exhibit A to the Participation Agreement.

“Outstanding Debt Amount” with respect to each Item of Equipment means the Debt Component therefor less the aggregate of all Debt Amortization Payments, all payments on account of Casualty Loss Value and all Deficiency payments and all payments made by Obligor to Corporate Obligee in accordance with Section 26.2 of the Equipment Agreement paid by Obligor to Corporate Obligee with respect to such Item.

“Overdue Rate” means the Applicable Debt Rate at the time in effect plus two (2) percent (200 basis points).

“Owner Participant” means BTM Capital Corporation, a Delaware corporation, and its successors and permitted assigns.

“Participation Agreement” means the Amended and Restated Participation Agreement dated as of June 30, 2003 among Obligor, Corporate Obligee, Trust Obligee, each Lender, Owner Participant, Agent and Security Trustee, as amended and modified from time to time in accordance with the terms thereof.

“Payment and Amortization Schedule” for each Loan means the payment and amortization scheduled attached to the Note relating to and evidencing such Loan.

“Payment Date” the 20^th of each September, December, March and June, provided however, if any such date is not a LIBOR Banking Day, then the Payment Date shall be the next LIBOR Banking Day.

“Permitted Country” means the United States, Germany, Austria, the United Kingdom, Denmark, France, Hungary, Switzerland, the Netherlands, and Sweden.

“Permitted Assignee” means any “accredited investor” under Rule 501(a) of the Securities Act of 1933, as amended, which is either a bank, insurance company, mutual fund, trust company, employee benefit plan (as defined in ERISA), or savings and loan company, in each case having total assets of at least $200,000,000 or Corporate Obligee upon exercise of the Corporate Obligee Option.

“Permitted Lien” means (a) any Liens created or granted by (i) Corporate Obligee to Security Trustee with respect to the Equipment Collateral under or in connection with the Participation Agreement, or (ii) by Trust Obligee to Security Trustee with respect to the Transferred Property Collateral under or in connection with the Participation Agreement, (b) any Liens created or granted by Original Obligee with respect to the Collateral (as defined in the Original Operative Documents) under or in connection with the Original Participation Agreement, which Liens have been assumed by Corporate Obligee, Trust Obligee, or both, (c) any interest of Obligor with respect to the Collateral under the Participation Agreement or the Equipment Agreement, and (d) any Lien of a mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings.

“Permitted Transferee” has the meaning specified in Section 10.7(b) of the Participation Agreement.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, trustee(s) of a trust, unincorporated organization, or government or Governmental Entity, agency or political subdivision thereof.

“Pre Effective-Date Financing Statement” means any UCC financing statement filed prior to July 1, 2001 in accordance with the Original Operative Documents to perfect a security interest granted by a Subsidiary of Obligor to Obligor or by Obligor to Original Obligee or by Original Obligee to Original Security Trustee under the Original Equipment Agreement or the Original Participation Agreement, which UCC financing statements were not filed in such Subsidiary’s, Obligor’s or Original Obligee’s UCC Location.

“Prepayment Premium” means with respect to any repayment of a Loan in whole or in part on any day other than a Payment Date the amount (if any) by which (a) the amount of interest payable on the next Payment Date on the amount of the Loan which is repaid, but for it having been so repaid, exceeds (b) the aggregate of the amount of interest accrued to the date such amount is repaid and an amount equal to AR x D x R, where AR equals the amount which is repaid, D equals the number of days from the date of repayment to the next Payment Date and R equals the rate per annum at which the Lender concerned is offering or would offer in the London Interbank Market (based on commercially reasonable criteria) for Dollar deposits of leading banks in an amount substantially equal in the amount repaid for a period from such date to the next Payment Date.

“Program Administration Letter” means the Program Administration Letter (as defined in Appendix A to the Original Participation Agreement).

“Receivables Purchase Agreement” means the Financing Agreement Rights Purchase Agreement dated as of July 18, 2003 between Corporate Obligee, as seller, and Trust Obligee, as purchaser, a copy of which is attached as Exhibit C to the Participation Agreement.

“Redelivery Location” means, with respect to any Item of Equipment that is to be returned by Obligor to Corporate Obligee, a location or locations designated by Corporate Obligee.

“Related Exhibit A” means, with respect to an Item of Equipment, the particular numbered Exhibit A currently attached to the Original Equipment Agreement and made a part thereof to which such Item relates as specified in Section 4 of the Equipment Agreement.

“Related Equipment Agreement Supplement” means, with respect to an Item of Equipment, the particular numbered Equipment Agreement Supplement executed and delivered prior to the Restructuring Date in connection with the Original Documents on which that Item is identified.

“Renewal Term” for each Item of Equipment means each of (i) one (1) twelve (12) month period following the end of the Basic Term, and (b) one (1) twenty-four (24) month period following the end of the first Renewal Term with respect to which Obligor has the option to renew the Equipment Agreement pursuant to Section 25.1 of the Equipment Agreement, terminating on the Payment Date that occurs in the twelfth month, or the twenty-fourth month, as the case may be of such Renewal Term.

“Required Alteration” has the meaning set forth in Section 12 of the Equipment Agreement.

“Responsible Officer” means the chief executive officer, the president, the chief financial officer, the Chief operating officer or the vice president for financial or legal affairs of Obligor.

“Restricted Subsidiary” means any Subsidiary identified as a “Restricted Subsidiary in the Multi-Currency Credit Agreement.

“Restructuring Date” means June 30, 2003.

“Secured Obligations” has the meaning set forth in Section 7 of the Participation Agreement.

“Security Documents” means the UCC financing statements referenced in Section 2.1(g) of the Participation Agreement, the German Chattel Mortgage Agreements, the English Debentures, and Subsidiary Equipment Agreements.

“Security Trustee” means Bank of Tokyo - Mitsubishi Trust Company.

“Special Non-Cash Charges” means any non-cash, non recurring restructuring charges in accordance with GAAP and non-cash charges relating to the implementation of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets, issued by the Financial Accounting Standards Board.

“Standard & Poor’s” means Standard & Poor’s Rating Service, a Division of McGraw Hill Companies, Inc. and any successor or assign.

“Subsidiary” means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“Subsidiary Equipment Agreement” has the meaning set forth in Section 14.1 of the Equipment Agreement.

“Supplemental Payments” means all amounts, liabilities and obligations which Obligor assumes or agrees to pay hereunder to Corporate Obligee or others, including payments of Casualty Loss Value, Estimated Residual Value and indemnities, but excluding Equipment Payment.

“Taxes” has the meaning set forth in Section 8.2 of the Participation Agreement.

“Term” for each Item of Equipment means the period from and including the Acceptance Date thereof and ending on the last day of the Basic Term thereof or, if renewed, the last Renewal Term thereof.

“Termination Date” for each Item of Equipment means the last day of the Basic Term therefor, or if the Term of such Item has been renewed pursuant to Section 25.1 of the Equipment Agreement, the last day of the then current Renewal Term of such Item.

“Transfer Option Amount” has the meaning set forth in Section 25.2 of the Equipment Agreement.

“Transferred Property” has the meaning set forth in Section 1 of the Receivables Purchase Agreement.

“Transferred Property Collateral” has the meaning set forth in Section 7.1(b) of the Participation Agreement.

“Trust” means the trust created by the Trust Agreement.

“Trust Agreement” means that certain Trust Agreement by and between Trust Company and Owner Participant, dated as of June 30, 2003, as amended, supplemented or modified from time to time.

“Trust Collateral” has the meaning set forth in Section 7.1(c) of the Participation Agreement.

“Trust Company” means U.S. Bank, National Association, a national banking association, and its successors and assigns, each in its individual capacity.

“Trust Company Liabilities” means any claims or liabilities resulting from or arising out of the following (i) the willful misconduct or gross negligence of Trust Company; (ii) the liabilities that may result from the breach or inaccuracy of any of the Trust Company’s representations, warranties or agreements made in its individual capacity in Sections 5.6 and 5.14 of the Trust Agreement, or in any Operative Documents or any document delivered in connection therewith; (iii) any failure by Trust Company to perform the obligations expressly undertaken in its individual capacity in the Trust Agreement or in any Operative Document or any document delivered in connection therewith; (iv) Taxes based on or measured by any fees, commissions or compensation received by Trust Company for acting as trustee in connection with any of the transactions contemplated by the Operative Documents; or (v) any failure by Trust Company to use ordinary care in the receipt and disbursement of fund.

“Trust Estate” has the meaning specified in Section 2.6 of the Trust Agreement.

“Trust Obligee” means U.S. Bank National Association, a national banking association, not in its individual capacity, but solely as Trustee under the Trust Agreement, and its permitted successors and assigns.

“UCC” means the Uniform Commercial Code, as in effect in any applicable jurisdiction.

“UCC Location” means the jurisdiction in which a “debtor” is located (or deemed located) under the UCC.

“Unamortized Debt Balance” for any Item of Equipment means the amount calculated by multiplying the unpaid principal balance of the Loans made with respect to such Item of Equipment by a fraction, the numerator of which is the Acquisition Cost of such Item of Equipment as set forth on the Related Equipment Agreement Supplement and the denominator of which is the aggregate of all Acquisition Costs for Items of Equipment as set forth on the Related Equipment Agreement Supplement (including such Item of Equipment with respect to which such calculation is being made) and at the time subject to the Equipment Agreement.

The definitions stated herein shall equally apply to both the singular and plural forms of the terms defined.  Unless otherwise provided, any agreement defined or referred to herein means such agreement as amended, supplemented or modified from time to time, and includes all exhibits, supplements and appendices thereto.  Any Person defined or referred to below include its successors, permitted transferees and assigns.  The word “including,” when used herein or in any Operative Document, is deemed to be followed by “without limitation,” whether or not such words appear.

When used in any Operative Document the words “this Agreement”, “herein”, “hereunder”, “hereof” or other like words mean and include such Operative Document and each amendment and supplement thereto, and with respect to the Equipment Agreement, each Exhibit A and each Equipment Agreement Supplement.  All references to sections, schedules and exhibits in any Operative Document are to sections, schedules and exhibits in or to such Operative Document unless otherwise specified.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  All words importing any gender shall be deemed to include the other gender.  All references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to.  Unless otherwise specified, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments, modifications and supplements thereto.

EX-10.16

Exhibit 10.16

FIRST AMENDMENT TO THE

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

RETIREMENT SAVINGS PLAN

            WHEREAS, Harman International Industries, Incorporated (the "Employer") maintains the Harman International Industries, Incorporated Retirement Savings Plan, as amended and restated (the "Plan") and may amend the Plan pursuant to Section 9.1 of Plan;

            WHEREAS, the Plan desires to be in compliance with the provisions of the Community Renewal Tax Relief Act of 2000;

            WHEREAS, the Plan desires to continue to be in compliance with Internal Revenue Service ("IRS") regulations and such other IRS guidance legally binding on the Plan;

            WHEREAS, the Plan desires to update the definition of "Participating Employer" to include new affiliates and to exclude merged or disposed affiliates; and

            WHEREAS, the Board of Directors of the Employer has resolved that the Plan shall be amended to reflect these intentions.

            NOW, THEREFORE, the Plan is hereby amended, effective January 1, 2001, to read as follows:

            1.         Section 1.1(i) of the Plan is hereby amended to read as follows:

            (i)         "Compensation" shall mean, subject to the limitations herein, any remuneration for services rendered to a Participating Employer paid or payable to the Participant during a Plan Year which is required to be reported as wages on the Participant's Form W-2.  Compensation shall also include any remuneration which is not currently includible in the Participant's gross income by reason of the application of Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) and, effective January 1, 2001 132(f)(4) of the Code.  However, Compensation shall not include:

                        (i)         Reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits, including severance benefits other than payments to a terminating Employee in lieu of notice;

                        (ii)        Any contributions made by the Employer for or on account of the Employees under this Plan, except for Tax-Deferred Contributions, or under any other employee benefit plan other than any specifically excepted herein;

                        (iii)       Except for purposes of Sections 1.1(w), 4.4 and 4.5, any compensation paid or payable by reason of services performed prior to the date the Employee becomes a Participant;

                        (iv)       Any compensation paid or payable by reason of services performed after the date the Employee ceases to be a Participant; and

                        (v)        Any amounts in excess of the annual dollar limit for such Plan Year.  For any Plan Year, the annual dollar limit is $170,000 (in 2000, as adjusted for the cost of living in accordance with Code Section 401(a)(17)(B)).

            Notwithstanding the above provisions to the contrary, Compensation earned but not paid in a Plan Year may include amounts earned but not paid in a Plan Year because of the timing of pay periods and pay days if such amounts are paid during the first few weeks of the following Plan Year, the amounts are included on a uniform and consistent basis with respect to all similarly situated Employees, and no Compensation is included in more than one Limitation Year.

            The "family aggregation" rules as applicable to the determination of Compensation under applicable regulations are deleted effective June 27, 1997.

            2.         Section 1.1(cc) of the Plan is hereby amended effective June 30, 2001 to read as follows:

            (cc)      "Participating Employer" shall mean the Employer and each Affiliated Employer and any such other business entity which, by resolution of its Board of Directors and with the written approval of the Employer, elects to participate in the Plan.  As of June 30, 2001, the Employer and the following Affiliated Employers were Participating Employers:

Audax of America, Inc.                                     Harman Wisconsin, Inc.

Becker of North America, Inc.                          Infinity Systems, Inc.

Crown Audio, Inc.                                                        JBL Incorporated

Harman/Becker Automotive Systems                            Lexicon, Incorporated

Harman/Becker Automotive Systems - KY                   Madrigal Audio Laboratories, Inc.

Harman Enterprises, Inc.                                               Studer USA, Inc.

Harman Music Group, Incorporated

Harman Pro North America, Inc.         

For all purposes under the Plan each of the following divisions shall be treated as though it was a separate Participating Employer:

            JBL Professional Manufacturing

            Harman Multimedia

            Harman/Becker Northridge

            Harman/Becker Juarez 

            JBL Professional

            IN WITNESS WHEREOF, the Employer has executed this Amendment on the 12th day of September, 2003.

                                                                        HARMAN INTERNATIONAL INDUSTRIES,

                                                                        INCORPORATED

                                                                        By: /s/ Frank Meredith                         

                                                                              Name:  Frank Meredith

                                                                              Title:    Chief Financial Officer

EX-10.17

EXHIBIT 10.17

Second AMENDMENT TO THE
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN

WHEREAS, Harman International Industries, Incorporated (the "Employer") maintains the Harman International Industries, Incorporated Retirement Savings Plan (Amended and Restated Effective as of June 27, 2000), as heretofore amended (the "Plan"), and may amend the Plan pursuant to Section 9.1 of the Plan;

WHEREAS, the Employer desires the Plan to be in compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, as amended (the "Act");

WHEREAS, the Employer desires the Plan to be in compliance with Internal Revenue Service ("IRS") regulations, such other IRS guidance legally binding on the Plan, and Department of Labor regulations;

WHEREAS, the Employer desires to make certain required and optional amendments to the Plan in order to be in compliance with the Act and regulatory guidance, as well as make other optional changes; and

WHEREAS, the Board of Directors of the Employer has resolved that the Plan shall be amended to reflect these intentions.

NOW, THEREFORE, the Plan is hereby amended, effective June 27, 2002, except as otherwise indicated herein, in the manner set forth below:

Effective October 1, 2002, Section 1.1(a) of the Plan is hereby amended to read as follows:

            (a)        "Account" shall mean the records, including subaccounts, maintained by or at the direction of the Committee to determine the interest of each Participant in the assets of the Plan and may refer to any or all of the Participant's Tax-Deferred Contributions Account, Rollover Account, Catch-Up Contributions Account, and Regular Account (consisting of a Safe Harbor Nonelective Contribution SubAccount to which Safe Harbor Nonelective Contributions are credited, a Basic Contributions SubAccount to which Basic Contributions made to the Plan prior to the Effective Date are credited, a Matching Contributions SubAccount to which Matching Contributions are credited, and a Profit Sharing Contribution SubAccount to which Profit Sharing Contributions are credited).

Section 1.1(i)(ii) of the Plan is hereby amended to read as follows:

            (ii)        Any contributions made by the Employer for or on account of the Employees under this Plan, except for Tax-Deferred Contributions and Catch-Up Contributions, or under any other employee benefit plan other than any specifically excepted herein;

Section 1.1(i)(v) of the Plan is hereby amended to read as follows:

            (v)        Any amounts in excess of the annual dollar limit for such Plan Year.  For any Plan Year beginning on or after June 27, 2002, the annual dollar limit is $200,000 (as adjusted for the cost of living in accordance with Code Section 401(a)(17)(B)).

Section 1.1(x) of the Plan is hereby amended to read as follows:

            (x)        "Key Employee" shall mean, effective for any Plan Year beginning on or after June 27, 2002, each Employee or former Employee (including a Beneficiary of a Key Employee or former Key Employee) who, at any time during the current Plan Year:

                        (i)         is an officer of the Employer having an annual compensation greater than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning on or after January 1, 2003);

                        (ii)        is an Employee owning (within the meaning of Code Section 318) five percent (5%) of the Employer; or

                        (iii)       is an Employee receiving more than one hundred fifty thousand dollars ($150,000) of annual compensation from the Employer and owning (within the meaning of Code Section 318) one percent (1%) of the Employer.

            Notwithstanding the foregoing, no more than fifty (50) Employees or, if less, the greater of three (3) or ten percent (10%) (rounded to the next highest integer) of the Employer's Employees shall be treated as officers of the Employer.  Compensation for the purpose of this Section shall have the meaning given such term by Code Section 414(q)(4).  For the purposes of determining the number of officers under (i) above, Employees described in Code Section 414(q)(5) shall be excluded.

The following paragraph is hereby added after the first paragraph of Section 1.1(nn) of the Plan to read as follows:

            Notwithstanding the preceding paragraph of this Section 1.1(nn), effective for Plan Years beginning on or after June 27, 2002, the present values of accrued benefits and the amounts of the account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the one (1) year period ending on the Anniversary Date.  The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i).  In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting "5-year period" for "1-year period."  Furthermore, for purposes of this Section 1.1(nn) and notwithstanding any other provision in this Section 1.1(nn), the accrued benefits and accounts of any individual who has not performed services for the Employer during the one (1) year period ending on the Anniversary Date shall be disregarded.

A new Section 1.1(rr) is hereby added to the Plan to read as follows:

            (rr)       "Catch-Up Contributions" shall mean contributions made to the Plan during the Plan Year by the Employer, at the election of a Participant, in lieu of Compensation, in accordance with Section 4.3(b).

A new Section 1.1(ss) is hereby added to the Plan to read as follows:

            (ss)       "Catch-Up Contributions Account" shall mean a Participant's Account hereunder to which his Catch-Up Contributions are allocated.

Section 3.4(e) of the Plan is hereby amended to read as follows:

            (e)        Severance from Employment.  Effective for distributions occurring on or after June 27, 2002, the Participant incurs a Severance from Employment within the meaning of Code Section 401(k)(2)(b)(i)(I) in connection with a liquidation, merger, consolidation, acquisition or disposition of assets or other similar corporate transaction involving an Affiliated Employer and an unrelated business entity.

            Notwithstanding the foregoing, in the event that an Affiliated Employer and an unrelated business entity agree in a corporate transaction to transfer from the Plan to a plan maintained by the unrelated entity or an affiliate thereof assets and liabilities attributable to the Accounts of one or more Participants, then no such Participant who is employed by the unrelated entity or an affiliate thereof as a result of such transaction shall be deemed to have incurred a Severance from Employment hereunder for purposes of being eligible to receive a distribution of the Participant's Account.

Effective October 1, 2002, the heading of Section 4.3 of the Plan is hereby amended to read as follows:

            4.3       Tax-Deferred Contributions and Catch-Up Contributions.

The first paragraph of Section 4.3 of the Plan is hereby amended to read as follows:

            (a)        Tax-Deferred Contributions.  A Participant may reduce his Compensation and have the Employer contribute on his behalf as a Tax‑Deferred Contribution a minimum of one percent (1%) of his Compensation up to a maximum of an amount which, when added to all contributions in excess of the initial one percent (1%), does not exceed fifty percent (50%) (fifteen percent (15%) before June 27, 2002) of such Participant's Compensation for the Plan Year.  The rate of his Tax‑Deferred Contribution shall be determined by the Participant on a form approved by the Committee and filed with the Committee and shall continue unless changed in the manner hereinafter provided.  All such contributions shall be calculated in integral percentages of a Participant's Compensation.

Effective October 1, 2002, a new Section 4.3(b) is hereby added to Section 4.3 of the Plan to read as follows:

            (b)        Catch-Up Contributions.  Notwithstanding any other provision of this Plan, effective as of October 1, 2002, any Participant who (a) has elected to make Tax-Deferred Contributions under this Plan but is precluded from making any further Tax-Deferred Contributions to the Plan for such Plan Year by reason of the application of any limitation under Section 4.3, 4.4 or 5.5(a), and (b) who has attained age fifty (50) before the close of such Plan Year, shall be eligible to make Catch‑Up Contributions in accordance with, and subject to the limitations of Code Section 414(v), provided that such Catch-Up Contributions shall not be eligible for Matching Contributions as defined in Section 1.1(y) and described in Section 4.1(ii) of the Plan, and further provided that such Catch-Up Contributions shall not be taken into account for purposes of the provisions of the Plan implementing Sections 401(a)(30) and 415(c) of the Code.  Notwithstanding any other Plan provision, the Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the making of such Catch-Up Contributions.  A Participant’s election to make a Catch-Up Contribution pursuant to this Section 4.3(b) or the Committee’s recharacterization of Excess Deferrals as Catch-Up Contributions shall be made in accordance with the procedures established by the Committee.

Section 4.4(d) of the Plan is hereby deleted in its entirety and Sections 4.4(e) and 4.4(f) of the Plan are re-numbered to be 4.4(d) and 4.4(e), respectively.

The first sentence of Section 4.5(c)(i) of the Plan is hereby amended to read as follows:

            Except as may be permitted under Code Section 414(v), Excess Deferrals and income allocable thereto shall be distributed after the date on which the Plan receives the Excess Deferral, but no later than the April 15 following the calendar year during which such Excess Deferral was made.

Section 4.9 of the Plan is hereby amended to read as follows:

            4.9       Rollover Contributions.  The Funding Agent may accept assets from a person who is or is about to become a Participant in this Plan, provided the assets are in the form of cash and qualify as a rollover contribution.  A "rollover contribution" means an amount distributed from an eligible retirement plan as defined in Section 7.5 of this Plan and qualifies as an eligible rollover distribution as defined in Section 7.5.  Any rollover of after-tax contribution, as described in Section 7.5, must occur by way of a direct trustee to trustee rollover from a qualified trust.

The first incomplete sentence of Section 5.5 of the Plan is hereby amended to read as follows:

Notwithstanding any other provisions of the Plan and except as otherwise provided in Section 4.3(b):

Section 5.5(a) of the Plan is hereby amended to read as follows:

            (a)        The amounts credited to a Participant under the Plan shall not exceed the limitations of Code Section 415(c) and the regulations thereunder, the provisions of which are incorporated by reference.

Effective October 1, 2002, a new Section 5.7 is hereby added to the Plan to read as follows:

            5.7       Crediting of Catch-Up Contributions.  Catch-Up Contributions shall be allocated to a Participant's Catch-Up Contributions Account as soon as reasonably possible following the date such amounts would have been paid to the Participant as wages if such amounts did not constitute a Catch-Up Contribution; provided, however, that the Employer must pay over any contributions to the Funding Agent no later than the fifteenth (15^th) business day of the month following the date the funds were received or withheld from payroll, subject to any shorter period required by government regulations.

The heading and the first sentence of Section 6.1 of the Plan are hereby amended to read as follows:

            6.1       Vesting of Participant Accounts.

            (a)        Vesting of Tax-Deferred and Catch-Up Contributions.  The interest of each Participant in his Tax-Deferred Contributions Account and Catch-Up Contributions Account shall be, at all times, one hundred percent (100%) vested and nonforfeitable.

Sections 6.1(a), (b), (c), (d) and (e) of the Plan are hereby renumbered to be 6.1(b), (c), (d), (e) and (f), respectively.

Effective as of June 27, 2000, Section 6.3(c) of the Plan is hereby deleted and Sections 6.3(d)and (e) of the Plan are hereby renumbered to be 6.3(e) and (f), respectively.

Section 6.3(f) (as renumbered hereby) of the Plan is hereby amended to read as follows:

            (f)         Elective Deferrals and Catch-Up Contributions shall not be used to satisfy the minimum contribution or benefit accrual which must be made on behalf of Non-Key Employees to this Section.  Effective as of June 27, 2002, Matching Contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) and Section 6.3(a) of the Plan.  Matching Contributions that are used to satisfy such minimum contribution requirement shall be treated as Matching Contributions for purposes of the ACP test and other requirements of Code Section 401(m).

Effective October 1, 2002, the third sentence of Section 6.6(a) of the Plan is hereby amended to read as follows:

If a Participant who is an Employee has attained age fifty‑nine and one‑half (59‑1/2), such Employee may withdraw his Tax Deferred Contributions, and, effective June 25, 2000, earnings thereon, any amounts in such Employee's Rollover Account, and, effective October 1, 2002, his Catch-Up Contributions and earnings thereon, upon request to the Committee in accordance with such procedures as it may establish.

Effective October 1, 2002, Section 6.6(b) of the Plan is hereby amended to read as follows:

            (b)        In addition, a Participant may request a distribution of his Tax‑Deferred Contributions, Catch-Up Contributions and amounts in his Rollover Account on account of hardship, but only if the distribution is necessary to satisfy the hardship.  Such distribution shall be made subject to spousal consent as described above.  In no event shall such distribution include any of the investment gains earned after December 31, 1988 on such Tax‑Deferred Contributions or Catch-Up Contributions or be made in an amount less than $500.00.

Effective January 1, 2002, Section 6.6(c)(C) of the Plan is hereby amended to read as follows:

                        C.        Effective as of January 1, 2002, the Participant's Elective Contributions are suspended for six (6) months under the Plan and any other plan maintained by the Employer after receipt of the hardship distribution occurring after December 31, 2001.

Section 6.6(c)(D) of the Plan is hereby amended to read as follows:

                        D.        The Participant does not make Elective Contributions under the Plan, or any other plan maintained by the Employer, for the Employee's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code Section 402(g) for such next taxable year less the amount of such Participant's Elective Contributions for the taxable year of the hardship distribution; provided, however, that this paragraph (D) shall not apply on or after January 1, 2002 with respect to hardship distributions received after December 31, 2000.

Effective January 1, 2002, Section 6.9(c) of the Plan is hereby amended to read as follows:

            (c)        The Employer shall appoint an individual or entity to make an initial determination with respect to a disputed claim for benefits (the "Claims Coordinator").  If any initial claim for benefits is wholly or partially denied, the Claims Coordinator shall notify the applicant in writing of such denial and of the claimant's right to a review by the Committee.  The notice shall set forth:

                        (i)         specific reasons for such denial,

                        (ii)        specific references to pertinent Plan provisions on which the denial is based,

                        (iii)       a description of any additional material or information necessary for the claimant to perfect the application and an explanation of why such material or information is necessary, and

                        (iv)       a description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under ERISA Section 502 following an adverse benefit determination on review. 

            The claimant shall be notified of the Plan's adverse benefit determination within ninety (90) days after receipt of the claim by the Claims Coordinator, unless the Committee determines that special circumstances require an extension of time for processing the application.  If the Committee determines that an extension of time for processing is required, written notice of the extension will be furnished to the claimant prior to the termination of the initial 90-day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination. 

Effective January 1, 2002, a new Section 6.9(d) is hereby added to the Plan to read as follows:

            (d)        Notwithstanding any provision of the Plan, in making a determination with respect to any claim for a disability retirement benefit filed on or after January 1, 2002 (a “disability claim”), the Claims Coordinator shall comply with the applicable requirements for processing disability claims that are set forth in the Department of Labor regulations promulgated under Section 503 of ERISA.

Effective January 1, 2002, the last paragraph of Section 6.10(a) of the Plan is hereby amended to read as follows:

            If the Participant so chooses, he, or his authorized representative, may submit written comments, documents, records and other information relating to the application for benefits.  The Participant, or his duly authorized representative is entitled, upon request and free of charge, to reasonable access to, and copies of, all documents, records, and other information relevant to the claim.

            The Committee shall act upon each such application within sixty (60) days after receipt of the claimant's request for review by the Committee, unless an extension of time is needed by the Committee in which case the Committee shall notify the Participant in the manner set forth in Section 6.10(b).

Effective January 1, 2002, Section 6.10(b) of the Plan is hereby amended to read as follows:

            (b)        The Committee shall provide for a full and fair review of each such application that takes into account all comments, documents, records, and other information submitted by the Participant relating to the application and any written materials submitted by the applicant or the Employer in connection therewith.  Such information will be taken into account without regard to whether such information was submitted by the Participant in the initial application for benefit determination.  The Committee may require the Employer or the claimant to submit, within thirty (30) days after a written notice by the Committee therefor, such additional facts, documents or other evidence as is deemed necessary or advisable in the sole discretion of the Committee in making such a benefit determination on review.  On the basis of the review, the Committee shall make an independent determination of the claimant's eligibility for benefits under the Plan.  The decision of the Committee on any application for benefits shall be final and conclusive upon all persons.  A claimant who fails to file a request for review in accordance with the procedures described in this Section shall have no right to review and shall have no right to bring an action with respect to the claim in any court. 

            If the Committee denies an application in whole or in part, the Committee shall give written notice of the decision to the claimant setting forth (i) the specific reasons for such denial, (ii) specific references to pertinent Plan provisions on which the Committee based its denial, (iii) a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records, and other information relevant to the claimant's application for benefits, and (iv) a statement of the claimant's right to bring a civil action under ERISA Section 502(a). 

            Such written notice shall be given within sixty (60) days of the date the appeal was filed; however, if the Committee determines that an extension of time for processing is required, written notice of the extension will be furnished to the Participant prior to the termination of the initial sixty (60) day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review.  In the event that a period of time is extended due to a claimant's failure to submit information necessary to make the determination on review, the period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

Effective January 1, 2002, a new Section 6.10(c) is hereby added to the Plan to read as follows:

            (c)        Notwithstanding any provision of the Plan, in the case of denial of a disability claim, the Committee and its appointees shall comply with the applicable requirements for processing disability claims on review that are set forth in the Department of Labor regulations promulgated under Section 503 of ERISA.

Effective January 1, 2003, the last sentence of Section 7.3(b) of the Plan is hereby deleted.

Effective January 1, 2003, a new Section 7.3(c) is hereby added to the Plan to read as follows:

            (c)        Notwithstanding any provision in the Plan to the contrary, all minimum required distributions under the Plan will be determined and made in accordance with Code Section 401(a)(9), including the incidental death benefit requirements of Code Section 401(a)(9)(G), and, effective for purposes of determining minimum required distributions occurring in any distribution calendar year beginning on or after January 1, 2003, the Treasury regulations issued under Code Section 401(a)(9), including Treas. Reg. Sec. 1.401(a)(9)-1 through 1.401(a)(9)-9, which provisions are hereby incorporated herein by reference; provided, however, that such provisions shall override the other distribution provisions of the Plan only to the extent that under such other Plan provisions, distribution is not made or does not begin to be made by the date required under Code Section 401(a)(9) and Treasury regulations issued thereunder.

            (i)         Required Distributions During Participant's Lifetime.  Generally, the Participant's entire interest will be paid no later than the Required Beginning Date or will be distributed beginning not later than the Required Beginning Date over the life of such Participant or over the lives of such Participant and a designated Beneficiary or over a period not extending beyond the life expectancy of such Participant or the joint life expectancies of such Participant and his designated Beneficiary.

            (ii)        Required Beginning Date.  Except as provided in Section 7.3(b), the Participant's entire vested interest will be distributed or begin to be distributed to the Participant no later than the April 1 following the later of the calendar year in which (A) he attains age 70½ or (B) terminates employment. 

Section 7.4 of the Plan is hereby amended to read as follows:

            7.4       Death Benefit.  The vested portion of a Participant's Account shall be distributed to his Beneficiary in a single sum as soon as practicable after the Participant's death, provided, however, that the value of an Annuity Portion, if any, shall be paid to the spouse of a Participant who was married at the time of his death in the form of a life annuity for the remainder of such spouse's lifetime.  The surviving spouse may elect to defer the date on which the life annuity payments are to commence to what would have been the Participant's Normal Retirement Age.  Alternatively, the Participant's spouse may elect to receive the distribution in a single sum cash payment to be made as soon as practical after receipt by the Committee of the spouse's application for distribution; provided, however, that if the Participant died before commencing distributions, his spouse must receive the lump sum payment of the Participant's vested interest no later than December 31 of the calendar year containing the fifth anniversary of the Participant's death and provided further that the spouse's election of the lump sum is made by September 30 of the earlier of the calendar year in which the Participant would have attained age 70-½ or the calendar year containing the fifth anniversary of the Participant's death.

            Notwithstanding any provision in this Plan, if a Participant dies before distributions begin, in no event will his entire vested interest be distributed to his designated Beneficiary (within the meaning of the Treasury Regulations under Code Section 401(a)(9)) who is not the Participant’s surviving spouse, later than December 31 of the year containing the fifth anniversary of the Participant’s death.  In no event will the Participant’s vested interest begin to be distributed to the Participant’s designated Beneficiary who is the Participant’s surviving spouse later than December 31 of the later of the calendar year in which the Participant would have attained age 70‑½ or the calendar year immediately following the calendar year in which the Participant died.

The fourth paragraph of Section 7.5 of the Plan is hereby amended to read as follows:

            For purposes of this Section, "eligible retirement plan" shall mean: (1) an individual retirement account described in Code Section 408(a); (2) an individual retirement annuity described in Code Section 408(b) (other than an endowment contract); (3) a qualified trust under Code Section 401(a); (4) an annuity plan described in Code Section 403(a); (5) effective as of June 27, 2002, an annuity contract described in Code Section 403(b); and (6) effective as of June 27, 2002, an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan.  The definition of an eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), except that for Plan Years beginning before June 27, 2002, only an eligible retirement plan described in clauses (1) or (2) of the preceding sentence shall apply with respect to a surviving spouse.

The fifth paragraph of Section 7.5 of the Plan is hereby amended to read as follows:

            For purposes of this Section, the term "eligible rollover distribution" shall mean any distribution of all or any portion of the balance to the credit of the distributee from an employees' trust described in Code Section 401(a) which is exempt from tax under Code Section 501(a) except: (i) any distribution that is one of a series of substantially equal periodic payments (paid not less frequently than annually) over the life (or life expectancy) of the distributee or the joint lives (or life expectancies) of the distributee and a designated beneficiary or for a specified period of ten years or more, (ii) any distribution to the extent required under Code Section 401(a)(9), (iii) the portion of any distribution that is not includible in gross income, (iv) any "hardship" distribution and (v) such other amounts specified in Treasury regulations and rulings, notices or announcements issued under Code Section 402(c).  In addition, a distribution shall not fail to be an eligible rollover distribution merely because the portion of such distribution consists of after-tax employee contributions which are not includible in gross income of the distributee.  However, such portion may be transferred only to (a) an individual retirement account or annuity described in Code Section 408(a) or (b) or in a direct trustee-to-trustee rollover to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

*          *          *

Executed to be effective as of the date first hereinabove provided, as approved and authorized by the Board of Directors on the 10th day of June, 2003.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

By:  /s/ Frank Meredith                                    

        Name:  Frank Meredith

        Title:    Chief Financial Officer

EX-10.18

eXHIBIT 10.18

third amendment to the
harman international industries, incorporated
retirement savings plan

WHEREAS, Harman International Industries, Incorporated (the "Employer") maintains the Harman International Industries, Incorporated Retirement Savings Plan, as amended and restated effective as of June 27, 2000 (the "Plan"), and may amend the Plan pursuant to Section 9.1 of the Plan;

WHEREAS, the Plan desires to amend the Plan in certain respects as requested by the Internal Revenue Service ("IRS") in connection with the pending application for a favorable determination letter filed with the IRS on May 15, 2002;

WHEREAS, the Board of Directors of the Employer has resolved that the Plan shall be amended to reflect these intentions.

NOW, THEREFORE, the Plan is hereby amended, effective June 27, 1997, to read as follows:

1.         Section 1.1(n) of the Plan is hereby amended by deleting the second sentence thereof and inserting in lieu thereof the following:

"Employee" shall include leased employees.  For purposes of this Section 1.1(n), a “leased employee” means any person who, pursuant to an agreement between an Affiliated Employer and any other person (“leasing organization”), has performed services for the Affiliated Employer on a substantially full‑time basis for a period of at least one year and such services are performed under the primary direction or control of the Affiliated Employer.  Contributions or benefits provided a leased employee by the leasing organization which are attributable to services performed for an Affiliated Employer will be treated as provided by the Affiliated Employer.

2.         Section 5.5(a) of the Plan is hereby amended to read as follows:

     (a)  The amounts credited to a Participant under the Plan shall not exceed the limitations of Code Section 415(c) and the regulations thereunder, the provisions of which are incorporated by reference.

IN WITNESS WHEREOF, the Employer has executed this Amendment on the 12th day of September, 2003.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

By: /s/ Frank Meredith                                           
      Name:  Frank Meredith
      Title:    Chief Financial Officer

EX-10.27

Harman international

Exhibit 10.27

  Harman International Industries, Inc    8500 Balboa Boulevard            Northridge, CA  91329            (818) 893-8411

July 1, 2003

Dr. Erich A. Geiger
8323 Octillo Court
Naples, FL  34113

Re:   Employment Agreement (“Agreement”)

Dear Dr. Geiger:

      We are pleased to offer you the position of Chief Technology Officer for Harman International Industries, Inc. (the “Company”), on the following terms:

Duties and Responsibilities.

General.  Your role as Chief Technology Officer will be to deliver global technological leadership.  As a member of the Company’s top management team, you will provide effective counsel to the other members of the top management team and direct the Company’s worldwide technology organization to assure the Company’s technical leadership across all business units.

Essential Functions.  Your essential functions will include the following:

Participation as one of the five key corporate leaders of the Company;

Creation and direct leadership of the Harman International Corporate Technology Council (CTC).  A primary goal of the CTC is to provide the vision and be the catalyst to identify emerging critical new technologies and ensuring their appropriate and timely application to specific Company business units;

Development and implementation of a master five-year technology roadmap for each Company business unit;

Identification, development and growth of the technology talent pool for the Company, and authoring and implementing an in-depth technology leadership succession plan for the Company;

Taking on the role as key technology spokesperson for Harman International; and

Developing and implementing a strategic roadmap for the management, protection and commercialization of the Company’s intellectual property.

(c)  Additional Responsibilities.  You will place your full working capacity at the disposal of the Company.  The Company reserves the right to assign additional areas of responsibility to you.  At the request of the Company, within the framework of this Agreement and your areas of responsibility, you will also provide services for other subsidiaries of the Company.  You will have no direct or indirect operating responsibility or authority for any unit of the Company, notwithstanding any title or office to which you may be appointed, except for those units specifically assigned to you for such purpose by the Company, to the responsibility or authority for which you have agreed.

(d)  Compliance with Company Policies.  You will be expected to comply fully with all policies of the Company applicable to you as an executive officer of the Company, including those concerning Conflicts of Interest and Securities Law Compliance.

Reporting Relationships.  You will be accountable to the Vice Chairman and Chief Executive Officer of the Company for all phases of your activities, or to such other person as my be designated by the Company.  Reporting to you, directly or indirectly, will be all Group/Division R&D and/or Technology executives.  You will advise, consult and coordinate your work with executive officers of the Company, and with the Group and Division presidents.

Outside Activities.  You will refrain from engaging in any other profit-making activity or any other activity that might impair your ability to place your full working capacity at the disposal of the Company, and shall refrain from participating in any other enterprise, irrespective of the legal form of such enterprise or the nature of its business.  Inactive participation solely as a matter of private investment management is, however, permitted.  Service as an officer, director or member of a supervisory body of any other Company requires the prior written consent of the Company.

Business Expenses.  The Company will reimburse you for your ordinary and necessary expenses incurred while engaged on Company business, subject to documentation and approval in accordance with the Company’s travel policy.

Salary.  Your salary through August 31, 2003 will be at an annualized rate of  US$812,000 (Eight hundred twelve thousand U.S. Dollars), payable in equal semi-monthly installments of US$33,833.33 (Thirty-three thousand eight hundred thirty-three and 33/100ths U.S. Dollars) on the 15^th and the last days of each month, less deductions as required by law or authorized by you.

Additional Benefits.

Automobile.  For the duration of your service under this Agreement you will be entitled to the use of a Company car during trips to Europe with the latest technology then being tested by Harman Becker Automotive Systems GmbH, which automobile shall be provided to you for testing purposes and may also be used for private purposes.  The Company will bear all costs associated with the maintenance and use of this vehicle, including any repairs.  You will assign to the Company any claim against a third party responsible for such repairs.  Your salary set out in paragraph 2 above includes monthly amounts withheld by the Company for taxes by reason of the tax benefit to you from the use of such automobile.  Since you have your own private car in the U.S., no Company automobile will be provided for your use in the United States.

Bonus.  In addition to your salary you will be eligible for an annual bonus, based on certain performance parameters and in accordance with the Harman International Industries, Inc. Management Incentive Compensation Plan, as decided each year in the sole discretion of the Company.  At full realization of all performance parameters, the bonus is targeted at 45% of your then base salary as provided in paragraph 2 above.  You and the Company acknowledge that this annual gross salary already reflects the parties’ mutual risk in the event the Company releases you from your obligation to work, and you will therefore have no right to claim any bonus or pro-rata bonus should the Company (with or without terminating this Agreement) release you from your obligation to work.  It is understood and agreed that any bonus payment by the Company shall be voluntary one-time remuneration, and will not give rise to any future obligations on the part of the Company.

Deferred Compensation Plan.  Your will also be eligible to participate in the Harman International Industries, Inc. Executive Deferred Compensation Plan, in accordance with its terms.

Vacation.  You will receive forty-two (42) annual vacation days.  The date(s) of vacation as well as the respective vacation period(s) shall be determined by the Vice Chairman and Chief Executive Officer of the Company.

Disability.  In the event of your disability due to illness not caused by negligence, or during a medical treatment prescribed by a doctor, or in the event of any other disability as a result of circumstances beyond your control, you will retain your entitlement to fixed salary as provided in paragraph 1 above for a period of six months following the onset of such disability.  Thereafter, you will be entitled to receive the difference between the amount of any disability benefit paid by any health insurance company and 75% or your net fixed salary as provided in paragraph 2 above as a gross subsidy for a maximum period of six additional months.  In the event you have claims against any third party responsible in whole or in part for such disability, you agree to assign such claims, up to the amount of the continuing salary payments, to the Company, and to make available to the Company all information, documents and other material necessary to permit the assertion of such claims against any such third party.

Capital-Sum Life Insurance.  The capital-sum life insurance policy in effect under your former employment agreement with Harman Becker Automotive Systems GmbH will be maintained in effect on the same basis as at present as provided in the Becker Employment Agreement (as defined below), and the Company will add to amounts withheld from your salary for your taxes an additional amount per month equal to the amount of tax you would otherwise owe by reason of receiving the benefit to you of the maintenance of such insurance.

Pension Benefit.  In addition to the capital-sum life insurance referred to in subparagraph 3(f) above, you shall be entitled to a pension benefit to be calculated as follows:

On February 28, 2004, if you are then employed by the Company, you will become entitled to an annual gross pension payment (“Annual Pension”) corresponding to 5% of your Eligible Salary.  The Annual Pension shall be increased by a further 5% or your Eligible Salary for each year of service under this Agreement completed after February 28, 2004.  However, the total Annual Pension shall under no circumstances exceed 10% of your Eligible Salary.

If you cease to be employed by the Company before attaining age 60, and if the Company has not terminated your employment for cause, the pension entitlements to which you were entitled at the time of termination shall be deemed to have vested.

For purposes of this subsection 3(g), “Eligible Salary” shall mean the average of your annual base salary in accordance with paragraph 2 above, as earned (A) during the term of this Agreement, or (B) during the last five years of service under this Agreement if you have completed five years of service or more under this Agreement.  Eligible Salary shall not include any other kind of payments, benefits, bonus or other compensation made or granted to you.

If you are on February 28, 2005 employed by the Company, and if at the time pension benefits become payable hereunder (a) the sum of what you are entitled to receive under Sections 9(3) and 9(4) of the managing Director Employment Agreement dated March 28, 2000 between you and Harman Becker Automotive Systems GmbH, as amended (the “Becker Employment Agreement) plus the pension benefit you would otherwise receive under subparagraphs (i) – (iii) above is less than (b) thirty percent (30%) of the average of your highest five (5) consecutive years of Eligible Salary from all Harman companies, then you will be entitled to receive an additional pension benefit equal to the amount of that difference. 

If you are on August 31, 2005 employed by the Company you will also become on that date entitled to receive an additional annual post-retirement benefit equal to thirty percent (30%) of the average of your Management Incentive Compensation plan bonus (only – no other bonuses or compensation of any nature will be included) during the last five (5) consecutive years of your service as an employee of the Company, including, for this purpose only, all subsidiaries of the Company.

The pension benefits payable hereunder shall be paid in twelve (12) equal monthly installments, commencing on the later of (a) the first day of the month following the month in which you attain age 60, or (b) the termination of this Agreement.

In the event of your death, your widow shall be entitled to a widow’s pension, the amount and payment terms of which shall correspond to the pension entitlement vested at the time of your death, to be paid during the following period:

(A) In the event of your death before having attained age 60, for a period of ten years; or

(B) In the event of your death during or after the month in which you attain age 60, for the period between your death and the month during which you would have attained age 70.

Death Benefit.  In the event of your death your widow if then living, or if not as an alternative your legitimate offspring in equal parts, will receive an amount equal to your monthly salary per paragraph 2 above for the month in which your death occurred, and for the three months following.  If in the event of accidental death your widow or your heirs are entitled to insurance benefits per subparagraph 3(i) below, they shall be obligated to repay such sums to the Company up to the amount of the salary payments made pursuant to this subparagraph 3(h).

Accident and Disability Insurance.  The Company will maintain an accidental death and disability insurance policy, which may be a group insurance policy, with an insurance company of its choosing and providing the following benefits:

                  accidental death       US$234,000

                  disability                   US$468,000

      Said insurance policy will be maintained by the Company for its own benefit.  Any benefit received as a result of an insurance contingency under such policy shall be paid to you, or in the event of your death to your widow if living, otherwise to your legitimate offspring in equal parts, or to such other beneficiaries as you appropriately designated to the Company in writing.  Any such payment shall be deducted from the Company’s payment obligations under paragraphs 2 and 3(b) above.

Annual Performance Review.  You will receive a formal review of your performance at least annually, which generally will occur on or around the time that executive officer salaries are adjusted.

Confidentiality.

You shall maintain in absolute confidence as to third parties, and refrain from any use except for the Company’s benefit, any and all information, matters and relationships pertaining to the Company and its subsidiaries that has not been generally disclosed publicly, especially any and all matters pertaining to business and other trade secrets, subject to any disclosure that is required by law, and then only after notifying the Company thereof and providing it with an opportunity to contest such disclosure.  These obligations of confidentiality and limited use shall survive the termination of this Agreement.

You will also, at any time upon request of the Company, and without a request to do so upon termination of this Agreement, return all property of the Company and/or its subsidiaries, including without limitation records of business and trade matters regarding the Company and/or its subsidiaries, regardless of whether you or some other person produce such documents, along with your written certification that all relevant documents have been returned and that no copies are in your possession.

Inventions.

All ideas, designs, circuits, schematics, formulas, algorithms, computer programs, trade secrets, works of authorship, mask works, inventions, discoveries, developments, improvements, copyrightable materials, processes, techniques, and related know-how which result from work you perform, alone or with others, on behalf of the Company or any of its subsidiaries, or from access to confidential information or property, whether or not patentable, copyrightable, or qualified for mask work protection (collectively “Inventions”) shall be the property of the Company and, to the extent permitted by law, shall be “works made for hire.”  You assign and agree to assign to the Company or its designee, without further consideration, your entire right, title, and interest in and to all Inventions, including all rights to obtain, register, perfect, and enforce patents, copyrights, mask work rights, and other intellectual property protection for Inventions in the United States and foreign countries; provided, however, that to the extent compensation for such Inventions is governed by German law, the provisions of Article 12 of the Becker Employment Agreement (as defined below) shall apply.

During your employment and thereafter you will, upon the Company’s request, provide the Company (at its expense) with all reasonable assistance in obtaining and enforcing patents, copyrights, mask work rights, and other forms of intellectual property protection in Inventions in any and all countries.  When requested by the Company you will execute all lawful documents and perform all other lawful acts which the Company may reasonably deem necessary to carry out the purposes of this Agreement.

Term.

This Agreement comes into effect on July 1, 2003.

The contractual relationship is established for a fixed term of twenty-six (26) months and may not be terminated by either party without cause prior to the expiration thereof.  The earliest effective date of termination of this Agreement is therefore August 31, 2005.

After August 31, 2005 this Agreement will continue in effect on a month-to-month basis, and may be terminated at any time after August 31, 2005 by you or the Company, in the sole discretion of either, upon at least thirty (30) days’ advance written notice to the other.

You or the Company may modify this Agreement only by mutual written agreement.

Either party may, however, terminate this Agreement for material breach by the other of its terms.

Any notice of termination must be in writing to be effective.

Following any early termination of this Agreement by ether party the Company may immediately release you from your obligation to work for the Company.

Pursuant to subparagraph 1(f) above, you agree to refrain from any other activity until termination of this Agreement is fully effective, regardless of whether the Company has released you from your obligation to work for the Company.

Additional Provisions.

Prior Agreements Superseded.  This Agreement supersedes all other employment and similar agreements, including agreements relating to pensions or other benefits, that you have or heretofore have had with Harman International Industries, Inc. and/or any of its subsidiaries and affiliates, including without limitation the Becker Employment Agreement, the January 2, 2001 Employment Agreement with Harman International Industries, Inc., as amended (the HIII Employment Agreement”), except the following agreements (only) which shall remain in effect:  deferred compensation agreements (“Pensionszusage gegen Gehaltsverzicht”) dated December 16, 1996 (DM3000,000), June 27, 1997 (DM200,000), June 27, 1997 (DM400,000), June 23, 1998 (DM808,000), July 1, 1999 (DM600,000, DM750,000 and DM618,800, a total of DM1,968,800) and August 31, 2000 (DM31,200); the Restricted Stock Agreement effective as of August 15, 2001; and stock option agreements under the Company’s 1992 Incentive Plan and 2002 Stock Option and Incentive Plan.  Termination and payment of salary, pension and other benefits under the Becker Employment Agreement are addressed in a separate letter of even date herewith.

Arbitration.  Any dispute concerning your employment or its termination shall be resolved by final and binding arbitration before a neutral arbitrator.  The arbitrator shall be selected by mutual agreement or in accordance with the procedures of the American Arbitration Association.  Arbitration shall take place in Detroit, Michigan unless you and the Company otherwise agree in writing.

Notice.  Any notice required or permitted under this Agreement shall be made in writing and sent by personal delivery, overnight courier, facsimile or first class mail addressed as follows:  if to Company to Harman International Industries, Inc. 8500 Balboa Blvd., Northridge, CA91329, Attention:  Vice Chairman and chief Executive Officer; if to you, to Dr. Erich A Geiger, 8323 Ocotillo Court, Naples, FL  34113.  Notice personally delivered or sent via overnight courier or facsimile shall be effective upon receipt; notice given by mail shall be effective three business days after deposit in the U.S. mail, postage paid.

Choice of Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, U.S.A. without regard to its rules pertaining to conflict of laws.

Assignment; Complete Agreement.  This Agreement, and any rights, duties, and obligations hereunder, shall not be assignable, in whole or in part, by either party hereto without the express written consent of the other party, and any purported assignment hereof or thereof absent such consent shall be void.  This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof, all prior representations and agreements being merged herein and superseded hereby.

Amendments Must be Written.  No modification, amendment or waiver of any of the terms hereof shall be effective unless made in writing and executed by the party to be charged.

Invalidity.  If any portion of this Agreement is deemed by a court of competent jurisdiction to be invalid or unenforceable then such portion shall be deemed stricken from this Agreement and the remaining terms shall continue in full force and effect.  The parties shall replace any provision so invalidated with a permissible and valid provision which comes closest in economic and legal content to the invalid provision.

Please acknowledge your understanding of and agreement to the foregoing terms by signing one copy of this letter in the space provided below and return that signed copy to me.

Very truly yours,

HARMAN INTERNATIONAL INDUSTRIES, INC.

By:

Bernard A. Girod

Vice Chairman and Chief Executive Officer

I UNDERSTAND AND AGREE TO THE TERMS SET FORTH ABOVE:

__________________________________

Dr. Erich A. Geiger

EX-10.28

Harman international
Exhibit 10.28
Harman International Industries,Inc.   8500 Balboa Boulevard  Northridge, CA 91329 818-893-8411

September 11, 2003

Mr. William S. Palin
The White House
Llandyrnog
Denbighshire LL16 4LT
WALES

Dear Bill:

I am writing to confirm our agreement on the terms of your employment:

Your employment is with Harman International Industries, Incorporated but for payroll, tax and social security purposes you may be attached to one of the UK subsidiaries, your residence being in the UK.

Your title is Vice President.

You will report to the Chief Financial Officer of the Company.

Your base salary will be £230,000 per annum paid monthly in arrears.  It will be subject to annual review the first of such to be carried out in September 2004.

Your employment will be subject to a notice period mutually applied of 12 months, such notice may not be given prior to June 30, 2005.  During your employment and any notice period you agree not to engage in any conduct which is competitive with the Company.

You will be entitled to participate in the Company’s UK health and life insurance plans at the Company’s expense.

The Company will provide you with an automobile for both business and your personal use.  The Company will bear all running costs.  The car provided will be selected by you in line with those driven by other employees of the Company at a similar level to yourself in Europe.

William S. Palin
September 11, 2003
Page 2 of 3

You will participate in the Company’s discretionary bonus plan.

You will be eligible to participate in any General Option Award by the Company.

The Company shall contribute annually to your portable pension scheme an amount no less than 10 percent of your base salary payable in January of each calendar year.

In addition to public holidays, you will be entitled to 30 business days annual vacation.

Your position will involve a considerable amount of travel to various Company locations.

The Company will reimburse you for all travel and related expense and for any out-of-pocket expenses reasonably incurred in the performance of your duties (telephone, equipment, stationery, journals, etc.).

Travel by rail may be first class, and by air up to business class at your option.

You will be the Controller for all Operations for which you will report to the Chief Financial Officer.

In the event your employment is terminated after a Change in Control, the Company shall be obligated to provide you with severance and benefits for a period of 24 months.

This agreement replaces and supersedes all other agreements concerning your employment.

William S. Palin
September 11, 2003
Page 3 of 3

Will you please indicate your understanding of and agreement to the foregoing by signing and returning to me the attached copy of this letter.

Sincerely,

HARMAN INTERNATIONAL INDUSTRIES, INC.

Frank Meredith
Chief Financial Officer

AGREED TO AND ACCEPTED:

By:                                                      
            William S. Palin

EX-13.1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Harman International Industries, Inc. designs, manufactures and markets high-quality, high fidelity audio products and electronic systems for the consumer and professional markets.  The Company is organized into segments based on the end-user markets they serve.  The Consumer Systems Group designs, manufactures and markets loudspeakers, audio electronics and infotainment systems for vehicles, home audio, video and computer applications.  The Professional Group designs, manufactures and markets loudspeakers and electronics used by audio professionals in concert halls, stadiums, airports and other buildings and for recording, broadcast, cinema and music reproduction applications.

The Company’s primary manufacturing facilities in the U.S. are located in California, Indiana, Kentucky and Utah.  The Company’s primary international manufacturing facilities are located in Germany, Austria, the United Kingdom, Mexico, France, Sweden, China and Hungary. The Company’s products are sold worldwide with the largest markets being the U.S. and Germany.

The Company experiences seasonal fluctuations in sales and earnings.  The first fiscal quarter is generally the weakest due to automotive model changeovers and the summer holidays in Europe.  Variations in seasonal demand among end-markets may also cause operating results to vary from quarter to quarter.

Sales

Net sales increased 22 percent in fiscal 2003 to $2.229 billion, compared to $1.826 billion in fiscal 2002 and $1.717 billion in fiscal 2001.  In fiscal 2003, foreign currency translation contributed $185 million to net sales compared to the prior year.  In fiscal 2002, the foreign currency impact was minimal when compared to the prior year.

Presented below is a summary of sales by business segment:

(in thousands)	Fiscal 2003			Fiscal 2002			Fiscal 2001
	$		%	$		%	$		%
Consumer Systems Group	$	1,782,521	80%	$	1,401,446	77%	$	1,267,358	74%
Professional Group		445,998	20%		424,742	23%		449,189	26%
Total	$	2,228,519	100%	$	1,826,188	100%	$	1,716,547	100%

Consumer Systems Group – The Consumer Systems Group reported net sales of $1.783 billion in fiscal 2003 compared to net sales of $1.401 billion in fiscal 2002, representing an increase of $382 million or 27 percent.  Foreign currency translation contributed approximately $166 million to net sales in fiscal 2003 compared to the prior fiscal year. Net sales also increased by $268 million as a result of higher sales of speakers and electronics to automobile manufacturers primarily located in Germany.  These higher sales are primarily the result of greater unit sales of the Company’s new infotainment systems.  Sales of speakers and electronics to retail customers decreased by $11 million compared to the prior year.  Sales of speakers and electronics for computer applications were lower by $41 million as a result of the phase out of a supply agreement with a computer manufacturer located in the United States.

In fiscal 2002, Consumer Systems Group sales of $1.401 billion compared to sales of $1.267 billion in fiscal 2001, representing an increase of $134 million or 11 percent. In fiscal 2002, the foreign currency impact on sales was minimal versus fiscal 2001.  The increase was due to higher sales of speakers and electronics to automotive customers of $138 million offset by a modest decline in sales to retail customers.

Professional Group– Professional Group net sales for fiscal 2003 were $446.0 million compared with $424.7 million in fiscal 2002, an increase of $21.3 million or 5 percent.  The impact of foreign currency translation contributed approximately $19.4 million to fiscal 2003 net sales compared to the previous year.

In fiscal 2002, Professional Group sales were $424.7 million compared with $449.2 million in fiscal 2001, a decrease of $24.5 million.  In fiscal 2002, the foreign currency impact on sales was minimal versus fiscal 2001.  The decrease in sales was due in part to the sale of a business unit in the fourth quarter of fiscal 2001.  This business unit accounted for approximately $11 million of sales in the prior year.

Gross Profit

The consolidated gross profit percentage was 29.2 percent in fiscal 2003, compared to 27.4 percent in fiscal 2002.  The increased gross profit margin was substantially due to higher sales to automotive customers, which results in a shift in the Company’s overall product mix.  Management presently expects that gross profit margins will continue to improve in fiscal 2004 as the trend of higher sales to automotive customers continues.

The consolidated gross profit percentage was 27.4 percent in fiscal 2002 compared to 26.1 percent in fiscal 2001. The fiscal 2001 gross margin was reduced 0.8 percentage points as a result of special charges.  These charges reduced fiscal 2001 gross margin by $8.6 million for inventory write-downs and $5.3 million for other items including impaired asset write-downs.  The remaining increase in gross profit margin was due to product mix as sales to automotive customers increased as a percentage of total company sales.  Productivity enhancements at factories in the United States also contributed. 

Selling, General and Administrative Expenses

Selling, general and administrative expenses as a percentage of sales were 21.7 percent in fiscal years 2003 and 2002.  In fiscal 2003, research and development costs were $143.1 million, or 6 percent of sales, compared to $109.9 million in fiscal 2002, which also represented 6 percent of sales.  The research and development costs were substantially incurred in the Consumer Systems Group to support engineering development for our automotive customers.  Professional Group research and development costs in fiscal 2003 were slightly above the prior year.  Selling, general and administrative expenses also included increased selling costs in the Consumer Systems Group to support higher sales to automotive customers and enhanced marketing efforts to support consumer home audio product sales hampered by a weak economic environment. Professional Group selling costs were also above the prior year.  In addition, selling, general and administrative expenses included $5.0 million for the expensing of stock options in accordance with Statement of Financial Accounting Standards (SFAS) 123, and excluded $7.7 million for the amortization of goodwill in accordance with SFAS 142 in fiscal 2003. 

Management anticipates selling, general and administrative expenses to continue as approximately 22 percent of sales in fiscal 2004. However, new customer awards may require the Company to fund additional non-reimbursable research and development initiatives.  In the event of such an award, the Company’s selling, general and administrative expenses may change.

Selling, general and administrative expenses as a percentage of sales were 21.7 percent in fiscal 2002 compared with 22.0 percent in fiscal 2001.  Special charges accounted for 1.4 percentage points in fiscal 2001.  These charges included $22.4 million to terminate distributors in the U.K. and Germany, to cover severance costs for 250 employees, to write-off impaired assets, and to close factories in the U.K. and Argentina.  This is offset by an increase in these costs as a percentage of sales during fiscal 2002 primarily due to increased research and development costs to support the development of new automotive products in the Consumer Systems Group.  Also included in selling, general and administrative expenses was an $8.3 million legal charge paid during the year.  Selling, general and administrative expenses in the Professional Group were approximately equal to the prior year.  Research and development expenses were $109.9 million, or 6 percent of sales, in fiscal 2002 compared with $88.7 million, or 5.2 percent of sales, in fiscal 2001.

Operating Income

Fiscal 2003 operating income was 7.5 percent of sales compared with 5.7 percent in fiscal 2002.  The increase in profitability is a result of product mix as a greater percentage of total company sales are from the Consumer System Group businesses supplying automotive customers.  Operating income as a percentage of sales also improved on sales of consumer home audio systems primarily due to cost reduction programs.  In the Professional Group, operating profit performance was slightly below the prior year partially due to the closure and consolidation of European facilities and the bankruptcy of a professional retailer.

Fiscal 2002 operating income was 5.7 percent of sales compared with 4.2 percent in fiscal 2001.  Special charges reduced operating income as a percent of sales by 2.1 percentage points in fiscal 2001.  This is offset by an increase in selling, general and administrative expenses as a percentage of sales at the Consumer Systems Group as a result of increased research and development costs to support future automotive programs.

Interest Expense

Interest expense was $22.6 million in fiscal 2003 compared with $22.4 million in fiscal 2002.  Interest expense increased slightly due to higher average borrowings.  The weighted average interest rate of 5.0 was the same as the prior year.  The Company uses interest rate swaps to convert a portion of its fixed rate debt into floating rate debt.  Fiscal 2002 interest expense of $22.4 million compared to $25.0 million in fiscal 2001.  Interest expense decreased in fiscal 2002 due to lower average interest rates and the use of interest rate swaps.

The weighted average interest rate in fiscal years 2003 and 2002 was 5.0 percent compared to 6.3 percent in fiscal 2001.  The weighted average borrowings were $465.1 million, $451.9 million and $397.2 million for fiscal years ended 2003, 2002 and 2001, respectively. The weighted average rates were the same for the fiscal years ended 2003 and 2002 primarily due to the effective use of interest rate swaps to convert fixed rate debt to variable rate debt.  The decrease in rates in fiscal 2002 compared to fiscal 2001 was due to lower interest rates and the use of interest rate swaps.

Miscellaneous Expenses

Miscellaneous expenses were $1.8 million in fiscal 2003 compared to $0.6 million in fiscal 2002 and $1.2 million in fiscal 2001.  Fiscal 2003 miscellaneous expenses were comprised primarily of bank charges.  In fiscal years 2002 and 2001, bank charges of $1.6 million and $1.5 million, respectively, were included in miscellaneous expenses.

Income Before Taxes and Minority Interest

In fiscal 2003, the Company reported income before taxes of $142.5 million.  In fiscal 2002, the Company reported $80.2 million of income before taxes and minority interest.  And, in fiscal 2001, we reported income before taxes and minority interest of $45.1 million, inclusive of $36.3 million of special charges.

Income Taxes

The Company reported fiscal 2003 income tax expense of $37.0 million, an effective tax rate of 26.0 percent, compared with income tax expense of $22.6 million, an effective tax rate of 28.2 percent in fiscal 2002, and $12.7 million, an effective tax rate of 28.2 percent in fiscal 2001.  The effective tax rates for fiscal years 2003, 2002, and 2001 were below the U.S. statutory rate due to utilization of tax credits, realization of tax benefits for United States exports and the utilization of tax loss carryforwards at certain foreign subsidiaries.  Additional rate benefit was realized in fiscal 2003 due to foreign restructuring that generated additional interest deductions.  In fiscal 2004, management expects the Company to have an effective tax rate of 29 percent.

Net Income

Net income for fiscal 2003 was $105.4 million, compared with net income of $57.5 million in fiscal 2002.  In fiscal 2001, net income was $32.4 million, inclusive of $25.8 million of special charges, net of tax effect.

Liquidity and Capital Resources

Harman International primarily finances its working capital requirements through cash generated by operations, cash borrowings and normal trade credit.

Net working capital, excluding short-term debt and cash, was $337.6 million at June 30, 2003, compared with working capital of $331.3 million at June 30, 2002.  The increase primarily resulted from higher accounts receivable and inventory balances as a result of higher sales and was partially offset by higher accrual balances.

The Company’s debt at June 30, 2003, was comprised primarily of $300 million of 7.125 percent senior notes, issued in fiscal 2002 and due February 15, 2007, and $150 million of 7.32 percent senior notes due July 1, 2007.  The Company also had mortgages, capital leases and other long-term borrowings of $13.3 million at June 30, 2003.  Cash and cash equivalents at June 30, 2003 were $147.9 million.  The $31.7 million increase in cash and cash equivalents during fiscal 2003 was primarily due to cash generated by operations offset by capital expenditures.

In August 2002, the Company entered into a multi-currency revolving credit facility with a group of eight banks, which committed $150 million to the Company for cash borrowings and letters of credit through August 14, 2005.  It replaced the prior credit facility that was scheduled to expire in September 2002. There were no borrowings under the revolving credit facility at June 30, 2003.  Outstanding letters of credit under the revolving credit facility at June 30, 2003, were $14.0 million.  Unused availability under the revolving credit facility was $136.0 million at June 30, 2003. The rates for borrowings under the revolving credit facility float with base rates.

At June 30, 2002, the Company’s debt was primarily comprised of the $300 million of 7.125 percent senior notes, issued in fiscal 2002 and due February 15, 2007, and $150 million of 7.32 percent senior notes due July 1, 2007.  In addition, at June 30, 2002, the Company had a $125 million revolving credit facility.  There were no borrowings under the revolving credit facility at June 30, 2002 and outstanding letters of credit were $10.9 million.  The rates for borrowing under the revolving credit facility float with base rates.  The Company also had mortgages, capital leases and other long-term borrowings of $16.6 million at June 30, 2002.

Capital expenditures, net of acquisitions, were $115.3 million in fiscal 2003.  No operating lease financing was utilized in fiscal 2003.  In fiscal years 2002 and 2001, capital expenditures, net of acquisitions and lease financing, were $104.5 million and $88.1 million, respectively.  Expenditures in fiscal years 2003, 2002 and 2001 were for equipment and facilities required to increase capacity and efficiency, primarily in our businesses that supply the automotive industry, and new product tooling.  The Company anticipates capital expenditures to approximate $140 million in fiscal 2004 primarily due to the rollout of additional automotive infotainment programs.  Firm commitments of approximately $27.0 million existed as of June 30, 2003 for fiscal 2004 capital expenditures.

The Company utilized operating lease financing for certain machinery and equipment in fiscal years 2002 and 2001.  The amounts financed were $17.1 million in fiscal 2002 and $34.6 million in fiscal 2001.

Total shareholders’ equity was $655.8 million at June 30, 2003 compared with $526.6 million at June 30, 2002 and $422.9 million at June 30, 2001.  The increase in fiscal 2003 is due to net income of $105.4 million and positive foreign currency translation of $56.2 million primarily due to the strengthening of the Euro versus the U.S. dollar offset by common stock repurchases of $31.2 million.  The increase in fiscal 2002 is primarily due to net income of $57.5 million and positive foreign currency translation of $47.6 million due mainly to the strengthening of the Euro versus the U.S. dollar.

Since the share repurchase program began in 1988, the Board of Directors has authorized the repurchase of a total of 8.0 million shares.  In fiscal 2003, the Company acquired 583,491 shares at a cost of $31.2 million.  From the inception of the share repurchase program through June 30, 2003, the Company has acquired and placed in treasury 6,348,100 shares of its common stock at a total cost of $171.9 million.  We expect future share repurchases to be funded with cash generated by operations.

The Company will continue to have cash requirements to support seasonal working capital needs, capital expenditures, interest and principal payments, dividends and share repurchases.  In June 2003, the Board of Directors approved a debt repurchase program of up to $100 million of outstanding debt securities.  No repurchases had been made at June 30, 2003.  The Company intends to use cash on hand, cash generated by operations and borrowings under its existing revolving credit facility to meet these needs.  The Company believes that cash from these sources will be adequate to meet its cash requirements over the next 12 months.

The Company has dividend restrictions under its revolving credit agreement and the indenture under which the Company’s 7.32 percent senior notes due July 2007 were issued. The most restrictive of these covenants limits the Company to dividend payments and purchases of capital stock of $50 million annually.  Neither the credit agreement nor the indentures for the senior notes limits the Company from transferring assets to or from its restricted subsidiaries in the form of loans, advances or cash dividends.

The Company is subject to various risks, including dependence on key customers, economic conditions affecting disposable consumer income and fluctuations in currency exchange rates.  A disruption in the operations of one of our key customers, such as an automotive strike, could have a material adverse effect on the Company.  In fiscal 2003, sales to DaimlerChrysler and BMW accounted for 25.9 percent and 10.4 percent, respectively, of the Company’s sales.  Accounts receivable due from DaimlerChrysler and BMW accounted for 22.0 percent and 7.8 percent, respectively, of total consolidated accounts receivable at June 30, 2003.

The following table provides a summary of the Company’s contractual financing obligations by due date:

		Fiscal Year
(dollars in thousands)		2004	2005	2006	2007	2008	Thereafter	Total
Short-term borrowings (a)	$	4,345	--	--	--	--	--	4,345
Senior notes (b)		--	--	--	298,287	150,000	--	448,287
Capital leases (c)		756	876	522	398	405	1,616	4,573
Other long-term obligations (b)		208	175	166	139	142	7,896	8,726
Firm commitments for      capital expenditures		26,986	--	--	--	--	--	26,986
Non-cancelable operating leases (c)		54,059	46,494	38,758	29,190	26,497	42,974	237,972
Total contractual cash obligations	$	86,354	47,545	39,446	328,014	177,044	52,486	730,889

(a)        As described in Note 5 to the Consolidated Financial Statements.
(b)        As described in Note 6 to the Consolidated Financial Statements.
(c)        As described in Note 7 to the Consolidated Financial Statements.

Interest Rate Sensitivity

The following table provides information as of June 30, 2003 about the Company’s derivative financial instruments and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt obligations.  For debt obligations, the table presents principal cash flows and related average interest rates by contractual maturity dates.  For interest rate swaps, the table presents notional principal amounts and weighted average interest rates by contractual maturity dates.  Notional amounts are used to calculate the contractual payments to be exchanged under the interest rate swaps.  Weighted average variable rates are generally based on LIBOR as of the reset dates.  Unless otherwise indicated, the information is presented in U.S. dollar equivalents as of June 30, 2003.

Principal Payments and Interest Rates by Contractual Maturity Dates

	Fiscal Year							Fair  Value  (Assets)/  Liabilities
($ millions)	2004	2005	2006	2007	2008	Thereafter	Total
Liabilities:
Fixed Rate debt (US $)	$---	$---	$---	$300.0	$150.0	$7.2	$457.2	$468.4
Average interest rate				7.13 %	7.32 %	1.54 %
Interest Rate Derivatives:
Fixed to Variable     Interest Rate Swaps (US$)	$---	$---	$---	$200.0	$150.0	$---	$350.0	$(37.1)
Average pay rate (a)				2.83 %	3.43 %
Average receive rate				7.13 %	7.32 %
&n bsp;
(a) The average pay rate is based on $175.0 million set at 3-month LIBOR set in arrears plus 1.62% and $175.0 million set at 6-month LIBOR set in arrears plus 1.88%.

Foreign Currency

The Company maintains significant operations in Germany, the United Kingdom, France, Austria, Hungary, Switzerland, Mexico, China and Sweden.  As a result, exposure to foreign currency gains and losses exists.  A portion of foreign currency exposure is hedged by incurring liabilities, including loans, denominated in the local currency where subsidiaries are located.

The subsidiaries of the Company purchase products and raw materials in various currencies.  As a result, the Company may be exposed to cost changes relative to local currencies in the markets to which it sells.  To mitigate such risks, the Company enters into foreign exchange contracts and other hedging activities.  Also, foreign currency positions are partially offsetting and are netted against one another to reduce exposure.

Some products made in the U.S. are sold abroad.  Sales of such products are affected by the value of the U.S. dollar relative to other currencies.  Any long-term strengthening of the U.S. dollar could depress these sales.  Competitive conditions in the Company’s markets may limit its ability to increase product pricing in the face of adverse currency movements.  However, due to the multiple currencies involved in the Company’s business and the netting effect of various simultaneous transactions, the Company’s foreign currency positions are partially offsetting.

As discussed above, the Company is exposed to market risks arising from changes in foreign exchange rates, principally the change in the value of the euro versus the U.S. dollar.

The Company estimates the effect on projected fiscal 2004 net income, based upon a recent estimate of foreign exchange transactional exposure, of a uniform strengthening or uniform weakening of the transaction currency pairs of 10 percent will decrease net income by $17.9 million or will increase net income by $17.9 million.  As of June 30, 2003, the Company had hedged a majority of its estimated foreign currency transactions using forward exchange contracts for fiscal 2004.

The Company estimates the effect on projected fiscal 2004 net income, based upon a recent estimate of foreign exchange translation exposure (translating the operating performance of our foreign subsidiaries into U.S. dollars) of a uniform strengthening or weakening of the U.S. dollar by 10 percent to decrease net income $9.5 million or to increase net income $9.5 million.

Critical Accounting Policies

The Company’s accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements.  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about the future that may affect the amounts reported in the financial statements.  Among the most significant estimates used in the preparation of the Company’s financial statements are estimates associated with the depreciable lives of fixed assets, the evaluation of net assets acquired and allocation of related purchase prices for corporate acquisitions, the evaluation of the recoverability of goodwill, evaluation of the recoverability of pre-production and development contract costs, warranty liability, litigation, product liability, taxation and environmental matters.  In addition, estimates form the basis for the Company’s reserves for sales discounts, sales allowances, accounts receivable, inventory, postretirement and other employee benefits.  Various assumptions go into the determination of these estimates.  The process of determining significant estimates requires consideration of factors such as historical experience, current and expected economic conditions, and actuarial methods.  The Company re-evaluates these significant factors and makes changes and adjustments where facts and circumstances indicate that changes are necessary. Future events cannot be determined with certainty.  Actual results may differ from those estimates and such differences may be material to the financial statements.

Impact of New Accounting Pronouncements

Recent accounting pronouncements are discussed in Note 1 to the Consolidated Financial Statements, Summary of Significant Accounting Policies.

Forward Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and 21E of the Exchange Act of 1934.  You should not place undue reliance on these statements.  Forward-looking statements include information concerning possible or assumed future results of operations, capital expenditures, the outcome of pending legal proceedings and claims, including environmental matters, goals and objectives for future operations, including descriptions of our business strategies and purchase commitments from customers, among other things.  These statements are typically identified by words such as “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” and similar expressions.  We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances.  As you read and consider the information in this report, you should understand that these statements are not guarantees of performance or results.  They involve risks, uncertainties and assumptions.

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements.  These factors include, among other things:

-- changes in consumer confidence and spending;

-- automobile industry sales and production rates and the willingness of automobile purchasers to
pay for the option of a premium branded audio system and/or a multi-functional infotainment system;

-- model-year changeovers in the automotive industry;

-- the ability to satisfy contract performance criteria, including technical specifications and due
dates;

-- competition in the consumer and/or professional markets in which we operate;

-- the outcome of pending or future litigation and administrative claims, including patent and
environmental matters;

-- work stoppages at one or more of our facilities or at a facility of one of our significant customers;

-- the loss of one or more significant customers, including our automotive manufacturer customers;

-- the ability to adapt to technological advances and innovation on a cost-effective and timely basis;

-- currency fluctuations and other risks inherent in international trade and business transactions;

-- our ability to enforce or defend our ownership and use of intellectual property; and

-- general economic conditions.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in  this report will in fact transpire.

Consolidated Balance Sheets
Harman International Industries, Incorporated and Subsidiaries

June 30, 2003 and 2002 ($000s omitted except share amounts)
			2003			2002
ASSETS
Current assets
	Cash and cash equivalents	$	147,911		$	116,253
	Receivables (less allowance for doubtful accounts
	of $13,785 in 2003 and $18,211 in 2002)		363,121			335,019
	Inventories (note 2)		349,626			329,935
	Other current assets		106,966			95,556
	Total current assets		967,624			876,763
	Property, plant and equipment, net (notes 3, 6 and 7)		393,920			325,812
	Goodwill		221,579			199,239
	Other assets		120,535			78,466
	Total assets	$	1,703,658		$	1,480,280
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
	Short-term borrowings (notes 5 and 6)	$	4,345		$	---
	Current portion of long-term debt (note 6)		964			4,255
	Accounts payable		176,846			193,110
	Accrued liabilities		305,255			236,106
	Total current liabilities		487,410			433,471
	Borrowings under revolving credit facility (note 6)		--			--
	Senior long-term debt (note 6)		497,759			470,424
	Other non-current liabilities		62,704			47,523
	Minority interest		---			2,233
Shareholders’ Equity (notes 6 and 11)
	Preferred stock, $.01 par value.  Authorized     5,000,000 shares; none issued and outstanding		---			---
	Common stock, $.01 par value.  Authorized    100,000,000 shares; issued 38,957,733 shares in 2003 and 38,330,490 shares in 2002		390			383
	Additional paid-in capital		324,757			310,166
	Accumulated other comprehensive income (loss):
	Unrealized gain (loss) on hedging derivatives		(10,605	)		(1,499	)
	Minimum pension liability adjustment		(6,462	)		(2,907	)
	Equity adjustment from foreign currency translation		11,548			(44,686	)
	Retained earnings		508,008			405,811
	Less common stock held in treasury    (6,348,100 shares in 2003 and 5,807,300 shares in 2002)		(171,851	)		(140,639	)
	Total shareholders’ equity		655,785			526,629
	Commitments and contingencies (notes 7, 8 and 14)		---			---
	Total liabilities and shareholders’ equity	$	1,703,658		$	1,480,280

See accompanying notes to consolidated financial statements.

Consolidated Statements of Operations
Harman International Industries, Incorporated and Subsidiaries

Years Ended June 30, 2003, 2002 and 2001 ($000s omitted except per share amounts)
		2003	2002	2001
Net sales	$	2,228,519	1,826,188	1,716,547
Cost of sales		1,577,372	1,326,317	1,268,512
Gross profit		651,147	499,871	448,035
Selling, general and administrative expenses		484,253	396,650	376,807
Operating income		166,894	103,221	71,228
Other expenses
Interest expense		22,621	22,406	24,950
Miscellaneous, net		1,802	638	1,179
Income before income taxes and minority interest		142,471	80,177	45,099
Income tax expense		37,043	22,602	12,703
Minority interest		--	62	32
Net income	$	105,428	57,513	32,364
Basic EPS	$	3.26	1.78	1.00
Diluted EPS	$	3.10	1.70	0.96
Weighted average shares outstanding – basic		32,344	32,261	32,296
Weighted average shares outstanding – diluted		34,024	33,903	33,737

See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows
Harman International Industries, Incorporated and Subsidiaries

Years Ended June 30, 2003, 2002 and 2001 ($000s omitted)
			2003		2002		2001
Cash flows from operating activities:
Net income		$	105,428		57,513		32,364
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization of intangible assets		88,545		78,084		67,201
	Deferred income taxes		(10,528	)	(12,379	)	12,480
	Loss on disposition of assets		4,814		6,897		2,226
	Tax benefit attributable to stock options		18,250		4,169		1,008
Change in working capital, net of acquisitions/disposition effects:
Decrease (increase) in:
	Receivables		4,265		7,021		(25,174	)
	Inventories		20,819		12,948		(37,342	)
	Other current assets		19,071		3,951		3,161
Increase (decrease) in:
	Accounts payable		(31,785	)	25,900		(1,699	)
	Accrued liabilities and income taxes payable		36,311		17,332		695
	Other operating activities		(5,128	)	(11,065	)	(977	)
Net cash provided by operating activities		$	250,062		190,371		53,943
Cash flows from investing activities:
Payment for purchase of companies, net of cash acquired		$	(11,211	)	(35,512	)	--
Proceeds from asset dispositions			1,026		5,526		4,135
Capital expenditures and software development costs			(116,448	)	(125,144	)	(105,764	)
Collection of loans			--		--		12,259
Other items, net			618		2,772		105
Net cash used in investing activities		$	(126,015	)	(152,358	)	(89,265	)
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings		$	(229	)	(20,528	)	4,826
Net increase (decrease) in long-term borrowings			(54,079	)	331,586		106,418
Repayment of long-term debt			--		(238,961	)	(9,426	)
Debt issuance costs			(1,580	)	(778	)	(1,179	)
Repurchase of common stock			(31,212	)	(3,667	)	(66,968	)
Dividends paid to shareholders			(3,231	)	(3,227	)	(3,222	)
Exercise of stock options and other benefits, net			(8,677	)	8,488		3,799
Net cash flow provided by (used in) financing activities		$	(99,008	)	72,913		34,248
Effect of exchange rate changes on cash			6,619		2,579		(543	)
Net increase (decrease) in cash and cash equivalents			31,658		113,505		(1,617	)
Cash and cash equivalents at beginning of year			116,253		2,748		4,365
Cash and cash equivalents at end of year		$	147,911		116,253		2,748
Supplemental schedule of non-cash investing activities:
	Fair value of assets acquired	$	30,455		62,487		--
	Cash paid for the capital stock		11,211		35,512		--
	Liabilities assumed	$	19,244		26,975		--

See accompanying notes to consolidated financial statements.

Consolidated Statements of Shareholders' Equity
Harman International Industries, Incorporated and Subsidiaries

Years Ended June 30, 2002, 2002 and 2001 ($000 omitted)
		Common Stock
		Number of shares			$.01 par value	Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Treasury stock		Total   shareholders’ equity
Balance, June 30, 2000		17,031,304		$	188	292,897		(59,131	)	322,383		(70,004	)	486,333
Comprehensive income:
	Net income	--			--	--		--		32,364		--		32,364
	Foreign currency    translation adjustment	--			--	--		(33,157	)	--		--		(33,157	)
	Unrealized gain (loss)    on hedging derivatives	--			--	--		2,785		--		--		2,785
Total comprehensive income		--			--	--		(30,372	)	32,364		--		1,992
Stock split adjustment		17,031,304			188	(188	)	--		--		--		--
Exercise of stock options		199,323			1	3,798		--		--		--		3,799
Tax benefit attributable to stock options		--			--	1,008		--		--		--		1,008
Treasury shares purchased		(2,201,300	)		--	--		--		--		(66,968	)	(66,968	)
Dividends ($.10 per share)		--			--	--		--		(3,222	)	--		(3,222	)
Balance, June 30, 2001		32,060,631		$	377	297,515		(89,503	)	351,525		(136,972	)	422,942
Comprehensive income:
	Net income	--			--	--		--		57,513		--		57,513
	Foreign currency    translation adjustment	--			--	--		47,602		--		--		47,602
	Unrealized gain (loss)    on hedging derivatives	--			--	--		(4,284	)	--		--		(4,284	)
	Minimum pension    liability adjustment	--			--	--		(2,907	)	--		--		(2,907	)
Total comprehensive income		--			--	--		40,411		57,513		--		97,924
Exercise of stock options   and restricted stock granted		580,559			6	8,482		--		--		--		8,488
Tax benefit attributable    to stock options		--			--	4,169		--		--		--		4,169
Treasury shares purchased		(118,000	)		--	--		--		--		(3,667	)	(3,667	)
Dividends ($.10 per share)		--			--	--		--		(3,227	)	--		(3,227	)
Balance, June 30, 2002		32,523,190		$	383	310,166		(49,092	)	405,811		(140,639	)	526,629
Comprehensive income:
	Net income	--			--	--		--		105,428		--		105,428
	Foreign currency    translation adjustment	--			--	--		56,234		--		--		56,234
	Unrealized gain (loss)    on hedging derivatives	--			--	--		(9,106	)	--		--		(9,106	)
	Minimum pension    liability adjustment	--			--	--		(3,555	)	--		--		(3,555	)
Total comprehensive income		--			--	--		43,573		105,428		--		149,001
Exercise of stock options,    net of shares received		669,934			7	(8,684	)	--		--		--		(8,677	)
Tax benefit attributable    to stock options		--			--	18,250		--		--		--		18,250
Stock option compensation		--			--	5,025		--		--		--		5,025
Treasury shares purchased		(540,800	)		--	--		--		--		(27,897	)	(27,897	)
Treasury shares purchased and retired		(42,691	)		--	--		--		--		(3,315	)	(3,315	)
Dividends ($.10 per share)		--			--	--		--		(3,231	)	--		(3,231	)
Balance, June 30, 2003		32,609,633		$	390	324,757		(5,519	)	508,008		(171,851	)	655,785

See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements
Harman International Industries, Incorporated and Subsidiaries

1. Summary of Significant Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and subsidiaries after the elimination of significant intercompany transactions and accounts.

Reclassifications:  Where necessary, prior years' information has been reclassified to conform to the 2003 consolidated financial statement presentation.

Use of Estimates:  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results may differ from those estimates, and the differences may be material to the consolidated financial statements.

Among the most significant estimates used in the preparation of the Company’s financial statements are estimates associated with the depreciable lives of fixed assets, the evaluation of net assets acquired and allocation of related purchase prices for corporate acquisitions, the evaluation of the recoverability of goodwill, evaluation of the recoverability of pre-production and development contract costs, warranty liability, litigation, product liability, taxation and environmental matters.  In addition, estimates form the basis for the Company’s reserves for sales discounts, sales allowances, accounts receivable, inventory, postretirement and other employee benefits.  Various assumptions go into the determination of these estimates.  The process of determining significant estimates requires consideration of factors such as historical experience, current and expected economic conditions, and actuarial methods.  The Company re-evaluates these significant factors and makes changes and adjustments where facts and circumstances indicate that changes are necessary.

Revenue Recognition:  Revenue is recognized from product sales upon shipment of goods when passage of title to goods transfer to the customer.  Substantially all revenue transactions involve the delivery of a physical product.  The Company does not have multiple element arrangements that contain undelivered products or services at shipment.

Sales Discounts:  The Company offers product discounts and sales incentives including prompt payment discounts, volume incentive programs, rebates and dealer order incentives.  The Company reports revenues net of discounts and other sales incentives in accordance with Emerging Issues Task Force (EITF) Issue No. 01-09.

Cost of Sales: Cost of sales includes material, labor and overhead for products manufactured by the Company and cost of goods produced for the Company on a contract basis. Expenses incurred for manufacturing depreciation and engineering, warehousing, shipping and handling, sales commissions, and customer service are also included in cost of sales.

Warranty Liabilities:  The Company warrants its products to be free from defects in materials and workmanship for a period ranging from 90 days to five years from the date of purchase, depending on the product.  The warranty is a limited warranty, and it imposes certain shipping costs on the customer and excludes deficiencies in appearance except for those evident when the product is delivered.  The Company's dealers normally perform warranty service for loudspeakers and electronics in the field, using parts supplied on an exchange basis by the Company.  Warranties in international markets are generally similar to those in the domestic market.  Estimated warranty liabilities are based upon past experience with similar types of products.Please see Note 9, Warranty Liabilities, for addition information regarding the Company’s warranties.

Selling, General and Administrative Expenses: Selling, general and administrative expenses include non-manufacturing salaries and benefits, occupancy costs, professional fees, research and development costs, amortization of intangibles, advertising and marketing costs and other operating expenses.

Advertising Costs: The Company expenses advertising costs as incurred.  When production costs are incurred for future advertising, these costs are recorded as an asset and subsequently expensed when the advertisement is first put into service.

Amortization of intangibles:  Amortization of intangibles primarily includes amortization of intangible assets, amortization of capitalized software costs, and amortization of costs, other than interest costs, associated with debt issuance.  In accordance with SFAS 142, Goodwill and Other Intangible Assets, goodwill was not amortized after July 1, 2002.  Prior to SFAS 142, goodwill was amortized over periods from 3 to 40 years, using the straight-line method, and impairment testing was based on an undiscounted cash flow analysis for future periods.

Research and Development: Research and development costs are expensed as incurred. The Company's expenditures for research and development were $143.1 million, $109.9 million and $88.7 million for the fiscal years ending June 30, 2003, 2002 and 2001,respectively.

Interest Expense:  Interest expense includes interest expense and amortization of original issue discount on notes, net of interest income.

Cash and Cash Equivalents: Cash and cash equivalents includes cash on hand and short-term investments with original maturities of less than three months.

Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally by the first-in, first-out method.  Please see Note 2, Inventories, for additional information.

Property, Plant and Equipment: Property, plant and equipment is stated at cost or, in the case of capitalized leases, at the present value of the future minimum lease payments. Depreciation and amortization of property, plant and equipment is computed primarily using the straight-line method over useful lives estimated from 3 to 50 years. Buildings and improvements are depreciated over 3 to 50 years or over the term of the lease, whichever is shorter. Machinery and equipment are depreciated over 5 to 10 years and furniture and fixtures are depreciated over 3 years.Please see Note 3, Property, Plant and Equipment, for additional information.

Goodwill:  Effective July 1, 2002, the Company adopted SFAS 142.  Under SFAS 142, goodwill and assets deemed to have indefinite lives are no longer amortized, but are subject to an annual impairment test.  Other intangible assets continue to be amortized over their useful lives.  As of July 1, 2002, the Company performed the first of the required impairment tests of goodwill.  Additionally, the Company performed its annual impairment test during fiscal 2003.  No impairment was present upon performing either of the fiscal 2003 tests.  At June 30, 2003, the Company reported a goodwill balance of $221.6 million.  The Company cannot predict the occurrence of certain events that might adversely affect the reported value of goodwill.  Such events may include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on the Company’s customer base, or a material negative change in its relationships with significant customers.Please see Note 4, Goodwill, for addition information regarding the Company’s goodwill.

Unbilled costs:  The Company incurs pre-production and development costs related to products developed for automobile manufacturers pursuant to long-term supply agreements.  The Company records costs incurred pursuant to these agreements as unbilled costs in accordance with EITF Issue No. 99-5, Accounting for Pre-Production Costs Related to Long-Term Supply Agreements, or AICPA Statement of Position (SOP) 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. 

At June 30, 2003, total unbilled costs were $58.2 million, including $38.0 million of pre-production costs and $20.2 million of costs under development contracts.  Unbilled costs reimbursable in the next twelve months total $19.4 million and are recorded in other current assets.  Unbilled costs reimbursable in subsequent years total $38.8 million and are recorded in other assets.

At June 30, 2002, total unbilled costs were $40.6 million, all of which were pre-production costs.  Unbilled costs reimbursable in the next twelve months total $13.5 million and are recorded in other current assets.  Unbilled costs reimbursable in subsequent years total $27.1 million and are recorded in other assets.

Purchased and Deferred Software Costs:  Software costs that are related to conceptual formulation and incurred prior to the establishment of technological feasibility are expensed as incurred. Costs incurred to purchase software to be sold as an integral component of a product are deferred. Software costs incurred subsequent to establishment of technological feasibility and which are considered recoverable by management are deferred in compliance with SFAS 86 and amortized over the product's life, usually three years. At June 30, 2003, deferred costs were $7.9 million, net of accumulated amortization of $26.6 million. At June 30, 2002, deferred costs were $13.2 million, net of accumulated amortization of $18.8 million.  Deferred costs, net, are included in other assets on the balance sheet.  Deferred costs are principally comprised of costs to acquire or develop automotive navigation, telecommunications and networking software.

Income Taxes: The deferred income tax asset or liability is determined by applying currently enacted tax laws and rates to the expected reversal of the cumulative temporary differences between the carrying value of assets and liabilities for financial statement and income tax purposes. Deferred income tax expense is measured by the change in the net deferred income tax asset or liability during the year. The Company has not made provision for U.S. federal or foreign withholding taxes on foreign subsidiary undistributed earnings as of June 30, 2003, because such earnings are intended to be permanently invested. It is not practicable to determine the U.S. Federal income tax liability, if any, which would be payable if such earnings were not reinvested indefinitely.  Additional information regarding the Company’s income taxes appears in Note 10, Income Taxes.

Postretirement benefits:  The Company provides postretirement benefits to certain employees.  Domestic employees are covered by a defined contribution plan.  The Company’s contributions to this plan are based on a percentage of employee contributions and, with approval of the Board of Directors, employee compensation.  These plans are funded on a current basis.

Certain non-domestic employees are covered by non-contributory defined benefit plans.  The defined benefit plans are funded in conformity with the funding requirements of applicable government regulations.  Generally, benefits are based on age, years of service, and the level of compensation during the final years of service.  Postretirement benefits are discussed further in Note 12, Postretirement Benefits.

Foreign Currency Translation:  The financial statements of subsidiaries located outside of the United States generally are measured using the local currency as the functional currency.  Assets, including goodwill, and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date.  The resulting translation adjustments are included in accumulated other comprehensive income.  In fiscal 2003, the foreign currency translation adjustment was a positive $56.2 million compared with a positive foreign currency translation adjustment of $47.6 million in fiscal 2002.  Income and expense items are translated at average monthly exchange rates.  Gains and losses from foreign currency transactions of these subsidiaries are included in net income.

Derivative Financial Instruments:  The Company is exposed to market risks arising from changes in interest rates, commodity prices and foreign currency exchange rates.  The Company uses derivatives in its management of interest rate and foreign currency exposure.  The Company does not utilize derivatives that contain leverage features.  On the date that the Company enters into a derivative, the derivative is designated as a hedge of the identified exposure.  The Company documents all relationships between hedging instruments and hedged items and measures the effectiveness of its hedges at inception and on an ongoing basis.

For each derivative instrument that is designated and qualifies as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values.  For each derivative instrument that is designated and qualifies as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the period during which the hedged transaction affects earnings.  For derivatives that are designated and qualify as hedges of net investments in subsidiaries located outside the United States, the gain or loss is reported in other comprehensive income as a part of the cumulative translation adjustment if the derivative is effective.  For derivative instruments not designed as hedging instruments, the gain or loss is recognized in current earnings during the period of change.  For additional information regarding derivatives, please see Note 15, Derivatives.

Interest Rate Management:  The Company has in place interest rate swaps, which are designated as fair value hedges of the underlying fixed rate obligations.  The fair value of the interest rate swaps is recorded in other assets or other long-term liabilities with a corresponding increase or decrease in the fixed rate obligation.  The changes in the fair value of the interest rate swaps and the underlying fixed rate obligations are recorded as equal and offsetting unrealized gains and losses in interest expense in the Consolidated Statement of Operations.

Foreign Currency Management:  The fair value of foreign currency related derivatives is generally included in the Consolidated Balance Sheet in other current assets and accrued liabilities.  The earnings impact of cash flow hedges relating to forecasted purchases of inventory is generally reported in cost of sales to match the underlying transaction being hedged.  Unrealized gains and losses on these instruments are deferred in other comprehensive income until the underlying transaction is recognized in earnings.  The earnings impact of cash flow hedges relating to the variability in cash flows associated with foreign currency denominated assets and liabilities is reported in cost of sales or other expense depending on the nature of the assets or liabilities being hedged.  The amounts deferred in other comprehensive income associated with these instruments generally relate to foreign currency spot-rate to forward-rate differentials that are recognized in earnings over the term of the hedge.  The discount or premium relating to cash flow hedges associated with foreign currency denominated assets and liabilities is recognized in net interest expense over the life of the hedge.

Stock Based Compensation:  On July 1, 2002, the Company adopted the fair-value method of stock based compensation per SFAS 123, Accounting for Stock-Based Compensation, for all grants made on or after July 1, 2002.  As such, an expense based on service attribution and the fair value of stock options granted in fiscal 2003 has been reflected in net income.  Prior to fiscal 2003, the Company accounted for expense under the stock option plans according to the intrinsic-value-based provisions of APB No. 25, Accounting for Stock Issue to Employees, and related interpretations.  Options granted in prior periods continue to be accounted for under the intrinsic-value-based provisions of APB No. 25.  Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price.  Consequently, no compensation expense was recognized in fiscal years 2002 and 2001 for stock options issue under the stock option plans.  Stock based compensation is discussed further in Note 11, Stock Option and Incentive Plan.

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123, Accounting for Stock based Compensation to all of our outstanding and unvested awards in each period:

Fiscal Years Ended June 30,
($000s omitted except   per share amounts)		2003	2002	2001
Net income, reported	$	105,428	57,513	32,364
Add:   Stock-based employee compensation expense included   in reported net income, net of tax		3,852	189	8,127
Deduct:  Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax		7,252	5,622	13,227
Net income, pro forma	$	102,028	52,080	27,264
Basic EPS, reported	$	3.26	1.78	1.00
Basic EPS, pro forma		3.15	1.61	0.84
Diluted EPS, reported	$	3.10	1.70	0.96
Diluted EPS, pro forma		3.00	1.54	0.81

Recent Accounting Pronouncements:  In May 2003, the Financial Accounting Standards Board (FASB) issued SFAS 150, Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity.  This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The Company does not believe that the adoption of SFAS 150 on July 1, 2003 will have a material impact on its financial statements.

In April 2003, the FASB issued SFAS 149, Amendment of Statement on Derivative Instruments and Hedging Activities.  SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS 133, Accounting for Derivative Instruments and Hedging Activities.  SFAS 149 is effective for all contracts created or modified after June 30,2003.  The Company does not expect the adoption of SFAS 149 to have a significant impact on its financial statements.

In January 2003, the FASB issued FASB Interpretation No. (FIN) 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.  FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.  FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 will be applicable for the first interim or annual period beginning after June 15, 2003. The Company has adopted the provisions of FIN 46 and it did not have a material impact on the Company’s financial position or results of operations.

In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of SFAS 123. This Statement amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation.  In addition, this Statement amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements. The disclosure requirements apply to all companies for fiscal years ending after December 15, 2002 and for interim periods beginning after December 15, 2002.   The Company has adopted the disclosure provisions of SFAS 148.  See Note 11, Stock Option and Incentive Plan, for additional information.

In November 2002, the FASB issued FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Other.  This interpretation clarifies the requirements of a guarantor in accounting for and disclosing certain guarantees issued and outstanding.  This interpretation is effective for fiscal years ending after December 15, 2002. The adoption of FIN 45 did not have a material impact on the Company’s financial statements.  Please see Note 14, Commitments and Contingencies, for additional information.

In November 2002, the EITF reached a consensus on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables.”  EITF 00-21 addresses the accounting for contractual arrangements in which revenue-generating activities are performed.  In some situations, the different revenue-generating activities (deliverables) are sufficiently separable and there exists sufficient evidence for fair values to account separately for the different deliverables (that is, there are separate units of accounting).  In other situations, some or all of the different deliverables are closely interrelated or there is not sufficient evidence of fair value to account separately for the different deliverables.  EITF 00-21 addresses when and, if so, how an arrangement involving multiple deliverables should be divided into separate units of accounting.   EITF 00-21 is effective for interim periods beginning after June 30, 2003.  The Company does not anticipate that the adoption of EITF 00-21 will have a material effect on the Company’s financial statements.

In July 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities.  SFAS 146 addresses the accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.  It also substantially nullifies EITF Issue No. 88-10, Costs Associated with Lease Modification or Termination.  The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged.  The adoption of SFAS 146 did not have a material impact on the Company's financial statements.

In August 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.  SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets.  This Statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.  SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company adopted SFAS 144 on July 1, 2002. The adoption of SFAS 144 did not have a material impact on the Company’s financial position or results of operations in fiscal 2003.

In July 2001, the FASB issued SFAS 141, Business Combinations, and SFAS 142, Goodwill and Other Intangible Assets.  SFAS 141 requires that the purchase method of accounting be used for all business combinations.  SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill.  The Company adopted SFAS 142 during fiscal year 2002 and, accordingly, all acquisitions were recorded under the purchase method.

SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS 142.  As of July 1, 2002, the Company performed the first of the required impairment tests of goodwill.  Additionally, the Company performed its annual impairment test as of June 30, 2003.  No impairment was present upon performing either of the fiscal 2003 tests.  SFAS 142 also requires that intangible assets with definite useful lives be amortized over their estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement Obligations.   SFAS 143 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets.  The Company also records a corresponding asset that is depreciated over the life of the asset.  Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation.  The Company adopted SFAS 143 on July 1, 2002, and the adoption did not have a material impact on the statement of financial position or results of operations.

2. Inventories

Inventories consist of the following:

June 30 ($000s omitted)		2003	2002
Finished goods	$	126,729	133,685
Work in process		54,733	54,132
Raw materials		168,164	142,118
Total	$	349,626	329,935

The Company calculates inventory reserves using a combination of lower of cost or market analysis and analysis of usage data.  Lower of cost or market analysis is typically applied to those items of inventory that represent a high portion of the total value of inventory on-hand.  In some cases, lower of cost or market analysis is applied to a broader population of similar inventory items.  The high-value units typically represent a small percentage of the total inventory items, so identification of obsolescence or valuation reserve requirements for the balance of the inventory on-hand is accomplished using either historic or forecast usage data to identify slow-moving or obsolete items.

3. Property, Plant and Equipment

Property, plant and equipment are composed of the following:

June 30 ($000s omitted)		2003		2002
Land	$	10,566		7,907
Buildings and improvements		182,215		155,199
Machinery and equipment		489,241		386,642
Furniture and fixtures		65,180		51,151
		747,202		600,899
Less accumulated depreciation    and amortization		(353,282	)	(275,087	)
Property, plant and equipment, net	$	393,920		325,812

4. Goodwill

Goodwill was $221.6 million at June 30, 2003, compared with $199.2 million at June 30, 2002.  The increase is due in part to the acquisitions of two independent distributors of the Company’s products during fiscal 2003 for which a total of $7.9 million in goodwill was recorded at June 30, 2003.  The remaining increase was due to foreign currency translation.  In accordance with SFAS 142, there was no amortization of goodwill in fiscal 2003.  Amortization of $7.7 million was recorded during fiscal 2002.

Prior to July 1, 2002, goodwill was amortized over periods from 3 to 40 years, using the straight-line method.  The following is a pro forma presentation of reported net income, adjusted for the exclusion of goodwill amortization net of related income tax effect:

Years Ended June 30 (000s omitted except per share amounts)		2003	2002	2001
Net income, reported	$	105,428	57,513	32,364
Goodwill amortization, net of tax		---	5,494	5,999
Net income, adjusted	$	105,428	63,007	38,363
Basic EPS, as reported	$	3.26	1.78	1.00
Goodwill amortization, net of tax		---	0.17	0.19
Basic EPS, adjusted	$	3.26	1.95	1.19
Diluted EPS, as reported	$	3.10	1.70	0.96
Goodwill amortization, net of tax		---	0.16	0.18
Diluted EPS, adjusted	$	3.10	1.86	1.14

5. Short-Term Borrowings

At June 30, 2003, the Company had outstanding short-term borrowings of $4.3 million at 5.6 percent.  The short-term borrowings were under lines of credit totaling $7.5 million in Japan and China.  The Company had no outstanding short-term borrowings at June 30, 2002.  The Company did have short-term borrowings outstanding during fiscal 2002 that were repaid with a portion of the net proceeds from the issuance of $300 million of unsecured senior notes in February 2002.

6. Long-Term Debt

The Company’s debt at June 30, 2003, was comprised primarily of $300 million of 7.125 percent senior notes, issued in fiscal 2002 and due February 15, 2007, and $150.0 million of 7.32 percent senior notes due July 1, 2007.

At June 30, 2003, the Company had a multi-currency unsecured revolving credit facility with a group of eight banks committing $150 million to the Company for cash borrowings and letters of credit through August 14, 2005. At June 30, 2003, the Company had no borrowings under the revolving credit facility and outstanding letters of credit of $14.1 million. Unused availability under the revolving credit facility was $135.9 million at June 30, 2003.  This agreement contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur additional indebtedness, create restrictions on subsidiary dividends and distributions, limit the Company's ability to encumber certain assets and restrict the Company's ability to issue capital stock of its subsidiaries. The most restrictive provisions limit the Company’s ability to make dividend payments and purchases of capital stock to $50 million annually.  The revolving credit agreement also requires the Company to maintain certain interest coverage and leverage ratios. The Company was in compliance with such covenants at June 30, 2003.

The Company's other long-term debt agreements contain covenants that, among other things, limit the ability for the Company and its subsidiaries to incur liens, limit sale and leaseback transactions, limit domestic subsidiary indebtedness, and limit the Company’s ability to make dividends and purchase capital stock to $50 million annually.  The Company was in compliance with the terms of its other long-term debt agreements at June 30, 2003 and 2002.

The Company’s weighted average borrowings were $465.1 million, $451.9 million and $397.2 million for fiscal years ended June 30, 2003, 2002 and 2001, respectively.  The weighted average interest rate in fiscal 2003 and fiscal 2002 was 5.0 percent.  In fiscal 2001, the weighted average interest rate was 6.3 percent.

Cash paid for interest for both short- and long-term borrowings was $22.7 million, $23.3 million, and $24.9 million during the fiscal years ended June 30, 2003, 2002 and 2001, respectively.

Long-term debt is composed of the following:

June 30 ($000s omitted)		2003		2002
Senior notes, unsecured,      due February 15, 2007, interest      due semiannually at 7.13%	$	298,287		297,815
Senior notes, unsecured,      due July 1, 2007, interest      due semiannually at 7.32%		150,000		150,000
Carrying value of interest rate hedge		37,137		10,282
Obligations under capital leases (note 7)		4,573		4,579
Other unsubordinated loans due in installments      through 2030, some of which vary with the      prime rate, bearing interest at an average      effective rate of 5.19% at June 30, 2003		8,726		12,003
Total		498,723		474,679
Less current installments		(964	)	(4,255	)
Long-term debt	$	497,759		470,424

Long-term debt, including obligations under capital leases, maturing in each of the next five fiscal years is as follows ($000s omitted):

2004	$	964
2005		1,051
2006		688
2007		320,539
2008		165,969
Thereafter		9,512

7. Leases

The following analysis represents property under capital leases:

June 30 ($000s omitted)		2003		2002
Capital lease assets	$	12,351		10,506
Less accumulated amortization		(4,358	)	(3,537	)
Net	$	7,993		6,969

No new capital lease obligations were incurred in fiscal years 2003 and 2002.  At June 30, 2003, the Company is obligated for the following minimum lease commitments under terms of noncancelable lease agreements:

($000s omitted)		Capital Leases			Operating Leases
2004	$	888		$	54,059
2005		904			46,494
2006		532			38,758
2007		405			29,190
2008		412			26,497
Thereafter		1,621			42,974
Total minimum lease payments	$	4,762		$	237,972
less interest		(189	)
Present value of minimum lease payments	$	4,573

Operating lease expense, net of sub-rental income, under operating leases having noncancelable terms of greater than one year for the years ended June 30, 2003, 2002 and 2001 was $65.4 million, $60.7 million, and $53.6 million, respectively.

8. Fair Value of Financial Instruments

The estimated fair value of the Company's financial instruments was determined using market information and valuation methodologies. In the measurement of the fair value of certain financial instruments, quoted market prices were unavailable and other valuation techniques were utilized. These derived fair value estimates are significantly affected by the assumptions used.

The fair values of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these items.

Long-Term Debt. Fair values of long-term debt are based on market prices where available. When quoted market prices are not available, fair values are estimated using discounted cash flow analysis, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements.

The Company used current market pricing models to estimate fair value of financial instruments.  The carrying value and fair value of long-term debt were $498.7 million and $511.6 million, respectively, at June 30, 2003.

9. Warranty Liabilities

Details of the estimated warranty liability are as follows:

Fiscal Years Ended June 30 ($000s omitted)		2003		2002
Beginning balance	$	12,495		12,339
Warranty provisions		30,748		14,923
Warranty payments (cash or in-kind)		(22,121	)	(14,767	)
Ending balance	$	21,122		12,495

10. Income Taxes

The tax provisions and analysis of effective income tax rates are comprised of the following items:

Years Ended June 30 ($000s omitted)		2003		2002		2001
Provision for Federal income taxes      before credits at statutory rate	$	49,865		28,062		15,785
State income taxes		135		344		314
Difference between Federal statutory rate      and foreign effective rate		(2,260	)	526		1,086
Permanent differences		2		226		683
Tax benefit from export sales		(2,660	)	(3,242	)	(1,336	)
Loss on foreign investment		(3,196	)	--		--
Change in valuation allowance		(1,454	)	(541	)	(2,927	)
Change in other tax liabilities		855		(925	)	(1,325	)
Losses without income tax benefit		--		--		2,419
Federal income tax credits		(3,972	)	(2,000	)	(2,000	)
Other		(272	)	152		4
Total	$	37,043		22,602		12,703

Income tax expense (benefit) consists of the following:

Years Ended June 30 ($000s omitted)		2003		2002		2001
Current:
Federal	$	13,727		9,158		(1,247	)
State		395		380		209
Foreign		35,715		24,371		1,261
		49,837		33,909		223
Deferred:
Federal		(12,196	)	(3,454	)	(216	)
State		(260	)	(36	)	146
Foreign		(388	)	(7,817	)	12,550
		(12,794	)	(11,307	)	12,480
Total	$	37,043		22,602		12,703

Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets and liabilities and available tax loss carry-forwards.

The following deferred taxes are recorded:

Assets / (Liabilities) June 30  ($000s omitted)		2003		2002
Federal tax loss	$	12,651		--
Federal tax credits		10,247		7,612
Inventory costing differences		7,170		5,948
Foreign net operating loss		9,064		17,649
Valuations and other allowances		18,037		13,594
Total gross deferred tax asset	$	57,169		44,803
Less valuation allowance		(1,646	)	(11,559	)
Deferred tax asset	$	55,523		33,244
Total gross deferred tax liability     from fixed asset depreciation	$	(14,541	)	(13,335	)
Foreign statutory accounting including     royalty payments		(21,482	)	(10,937	)
Total gross deferred tax liability	$	(36,023	)	(24,272	)
Net deferred tax asset	$	19,500		8,972

In fiscal 2002, $8.5 million of foreign tax losses were due to acquired losses at CAA, a German subsidiary.  There was a 100 percent valuation allowance on this asset.  In fiscal 2003, the losses were utilized and the asset and related valuation allowance were removed.  The benefit of this utilization reduced goodwill.  The Company has a Federal research credit carryforward valued at $9.6 million and $7.0 million for fiscal years 2003 and 2002, respectively, and an alternative minimum tax credit carryforward valued at $0.6 million for both years.  The research credit carryforward will begin to expire in 2019.  The alternative minimum tax credit does not expire.  For fiscal 2003, the deferred tax assets include $7.2 million of federal tax loss carryforward related to stock option expense.  The benefit for these losses was included in additional paid-in capital.

Tax benefits of $18.3 million in fiscal 2003, $4.2 million in fiscal 2002, and $1.0 million in fiscal 2001 associated with the exercise of employee stock options were recognized in stockholders’ equity.

Management believes the results of future operations will generate sufficient taxable income to realize the net deferred tax asset.

Cash paid for Federal, state and foreign income taxes was $11.4 million, $6.2 million, and $13.2 million, during fiscal years ended June 30, 2003, 2002 and 2001, respectively.

Accrued income taxes were $51.9 million and $37.9 million as of June 30, 2003 and 2002, respectively. These balances are included in accrued liabilities.

11. Stock Option and Incentive Plan

The 2002 Stock Option and Incentive Plan (the 2002 Plan) authorizes the granting of stock options, stock appreciation rights in tandem with options, restricted stock and performance units to officers and key employees of the Company and its subsidiaries.  In addition, the 2002 Plan authorizes the automatic annual grant of options to the non-officer directors of the Company and for a further automatic grant to such non-officer directors each year in which the Company achieves a specified level of return on consolidated equity.

The 2002 Plan replaced the Company’s 1992 Plan.  The 1992 Plan expired on November 9, 2002; however, options previously granted pursuant to this Plan remain outstanding and will be exercisable in accordance with the terms of the 1992 Plan.  The 2002 Plan expires on November 8, 2012.  At June 30, 2003, a total of 2,969,000 shares of Common Stock were reserved for issuance under the 2002 Plan.

Stock appreciation rights allow the holders to receive a predetermined percentage of the spread between the option price and the fair market value of the shares on the date of exercise.  A grant of restricted stock involves the immediate transfer of ownership of a specified number of shares of Common Stock with a “substantial risk of forfeiture” for a period of at least three years.  The participant that receives a restricted stock grant is entitled immediately to voting, dividend and other share ownership rights associated with the restricted stock.  A performance unit is the equivalent of $100 and is awarded for the achievement of specified management objectives as a condition to the payment of the award.  The performance period will not be less than three years.

Options to purchase shares of Common Stock have been granted under both the 1992 and 2002 Plans.  In fiscal 2003, the Company granted 712,000 stock options under the 1992 and 2002 Plans.  No stock appreciation right, restricted stock or performance unit grants have been made under the 1992 and 2002 Plans. Options granted are at prices not less than market value on the date of grant and, under the terms of the 1992 and 2002 Plan, may not be re-priced.  Options granted pursuant to the 1992 and 2002 Plans generally vest over five years and expire ten years from the date of grant.

For purposes of awards granted under SFAS No. 123 and the pro-forma disclosures for awards granted under APB No. 25, the fair value of each option granted has been estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted average assumptions used for grants in fiscal 2003, 2002, and 2001, respectively: annual dividends consistent with the Company's current dividend policy, which resulted in payments of $0.10 per share in the last three years; expected volatility of 60%, 60% and 56%; risk free interest rate of 3.0%, 4.0% and 3.9%; and weighted average expected life of 5.4 years in fiscal years 2003, 2002 and 2001.  The weighted average fair value of options granted was $26.49 in fiscal 2003, $20.51 in fiscal 2002, and $14.81 in fiscal 2001.

Stock Option Activity Summary:  Years ended June 30

	Shares			Weighted Average Exercise Price
Balance at June 30, 2000	4,358,274		$	19.38
Granted	855,900		$	28.49
Canceled	(69,850	)	$	20.71
Exercised	(202,725	)	$	19.28
Balance at June 30, 2001	4,941,599		$	20.95
Granted	323,500		$	37.00
Canceled	(704,020	)	$	20.26
Exercised	(635,379	)	$	16.08
Balance at June 30, 2002	3,925,700		$	23.04
Granted	712,000		$	48.88
Canceled	(58,882	)	$	25.09
Exercised	(995,781	)	$	16.11
Balance at June 30, 2003	3,583,037		$	30.06

Options Outstanding at June 30, 2003

	Range of exercise prices	Number of options	Weighted average remaining life in years	Weighted average exercise price
$	9.88 – 16.90	22,472	0.90	$	14.19
$	17.20 – 23.44	1,610,856	4.87	$	21.52
$	24.31 – 36.10	898,709	6.65	$	28.11
$	36.83 – 47.00	351,000	8.10	$	37.68
$	48.23 – 57.88	700,000	9.25	$	48.91
$	9.88 – 57.88	3,583,037	6.46	$	30.06

Options Exercisable at June 30, 2003

	Range of exercise prices	Number of options	Weighted average exercise price
$	9.88 – 16.90	22,472	$	14.19
$	17.20 – 23.44	1,196,136	$	21.14
$	24.31 – 36.10	431,919	$	27.84
$	36.83 – 47.00	71,200	$	37.80
$	48.23 – 57.88	100,000	$	48.26
$	9.88 – 57.88	1,721,827	$	23.42

At June 30, 2002, options with an average exercise price of $19.43 were exercisable on 2,158,270 shares. At June 30, 2001, options with an average exercise price of $17.98 were exercisable on 2,764,669 shares.

In August 1998, the Company granted 600,000 performance-based stock options to a group of executive officers that only vested if Harman's common stock price achieved specified target levels and the average closing stock price remained at or above those levels for at least 30 consecutive calendar days. The Company measured the cost of these performance-based options as the difference between the exercise price and market price and recognized this expense over the period to the estimated vesting dates and in full for options that had vested. The Company recognized $8.6 million in fiscal year 2001 in compensation expense for the performance-based options.  In September 2001, the Company repurchased these options for an amount equal to $18.125 per option, representing the difference between $38.00 and the $19.875 exercise price of the options and the options were canceled.

The Company adopted SFAS 123 in July 2002.  Prior to fiscal 2003, the Company accounted for expense under the stock option plans according to the provisions of APB No. 25 and related interpretations.  Accordingly, no compensation expense was recognized in fiscal year 2002 for stock options issued under the stock option plans.  In the first quarter of fiscal 2003, the Company implemented the expense recognition provisions of SFAS No. 123.  Options granted in fiscal years prior to fiscal 2003 will continue to be accounted for using the intrinsic value method as described in APB 25.  As a result of the change in accounting method, the Company recorded compensation expense for employee stock options granted during fiscal 2003 based on the fair value of the options at the date of grant and vesting requirements.

12. Postretirement Benefits

Under the Retirement Savings Plan, domestic employees may contribute up to 50.0% of their pretax compensation. Each division will make a safe harbor non-elective contribution in an amount equal to 3.0% of a participant’s eligible contribution.  With the approval of the Board of Directors, each division may make a matching contribution of up to 3.0% (50.0% on the first 6.0% of an employee's tax-deferred contribution); and a profit sharing contribution. Profit sharing and matching contributions vest at a rate of 25.0% for each year of service with the employer, beginning with the second year of service. Expenses related to the Retirement Savings Plan for the years ended June 30, 2003, 2002 and 2001 totaled $12.7 million, $8.5 million and $6.7 million respectively.

The Company also has a Supplemental Executive Retirement Plan (SERP) that provides retirement, pre-retirement and termination benefits, as defined, to certain key executives designated by the Board of Directors. Company expenses related to the SERP for the years ended June 30, 2003, 2002 and 2001 were $2.5 million, $2.0 million and $2.1 million, respectively.

Additionally, certain non-domestic subsidiaries maintain defined benefit pension plans.  Plan benefits are generally based on age, years of service, and average compensation during the final years of service.

The following table illustrates the change in benefit obligation, change in plan assets and funded status of the SERP and pension plans:

Years Ended June 30 ($000s omitted)		2003		2002
Change in benefit obligation:
Benefit obligation at beginning of year	$	47,843		42,114
Service cost		1,752		1,386
Interest cost		3,137		2,176
Amendments		3,757		--
Actuarial (gain) / loss		5,027		3,230
Benefits paid		(1,531	)	(1,063	)
Benefit obligation at end of year	$	59,985		47,843
Change in plan assets:
Fair value of plan assets at beginning of year	$	1,530		1,485
Actual return on plan assets		(198	)	--
Asset transfer		71		--
Employer contribution		47		45
Fair value of plan assets at end of year	$	1,450		1,530
Reconciliation of funded status:
Funded status	$	(58,535	)	(46,313	)
Unrecognized transitional amount		88		188
Unrecognized prior service benefit		5,704		2,205
Unrecognized net (gain) or loss		10,421		7,313
Prepaid / (Accrued) pension cost	$	(42,322	)	(36,607	)
Amounts recognized in the    consolidated balance sheets:
Prepaid pension costs	$	5,264		185
Accrued pension costs		(59,840	)	(37,751	)
Intangible asset		5,792		--
Accumulated other comprehensive income		6,462		959
Prepaid / (accrued) pension cost	$	(42,322	)	(36,607	)

The following table illustrates the net pension expense and assumptions used in accounting for the SERP and pension plans:

Fiscal years Ended June 30 ($000s omitted)		2003		2002		2001
The components of net pension expense were    as follows:
Service cost	$	1,752		1,386		1,850
Interest cost		3,137		2,176		2,021
Expected return on plan assets		192		--		--
Amortization of transitional amount		--		(11	)	505
Amortization of (gain) or loss		424		530		--
Net pension expense	$	5,505		4,081		4,376
Assumptions used in accounting for the    pension plans were:
Interest rate		5.50	%	6.00	%	6.00	%
Expected rate of return on plan assets		5.50	%	5.50	%	5.50	%
Rate of increase in compensation levels		2.23	%	2.30	%	2.30	%
Inflation rate		1.50	%	2.30	%	2.30	%
Increase of social security contribution ceiling		2.30	%	2.30	%	2.30	%

13. Business Segment Data

The Company designs, manufactures and markets high-quality audio products and electronic systems for the consumer and professional markets.  The Company is organized into reporting segments by the end-user markets they serve – consumer and professional.  The chief operating decision maker evaluates performance and allocates resources based on net sales, operating income and working capital in each of the segments.

The Consumer Systems Group has operating segments which design, manufacture and market audio and electronic systems for vehicle, home audio, video and computer applications.  These operating segments market products worldwide under brand names including Harman/Kardon, Becker, JBL, Infinity, Revel, Lexicon and Mark Levinson.

Net sales to DaimlerChrysler accounted for approximately 25.9%, 20.6% and 20.5% of consolidated net sales for the years ended June 30, 2003, 2002 and 2001, respectively.  Accounts receivable due from DaimlerChrysler accounted for 22.0% and 18.6% of total consolidated accounts receivable at June 30, 2003 and 2002, respectively.

BMW net sales accounted for approximately 10.4%, 8.3% and 4.6% of consolidated net sales for the years ended June 30, 2003, 2002 and 2001, respectively.  Accounts receivable due from BMW accounted for 7.8% and 6.9% of total consolidated accounts receivable at June 30, 2003 and 2002, respectively.

The Professional Group designs, manufactures and markets loudspeakers and electronics used by audio professionals in concert halls, stadiums, airports and other buildings and recording, broadcast, cinema and music reproduction applications.  Professional products are marketed worldwide under brand names including JBL, AKG, Crown, Studer, Soundcraft, Lexicon, DOD, Digitech and dbx.

The following table reports external sales, operating income (loss), assets, capital expenditures and depreciation and amortization by segment.

Segmentation

Years ended June 30 ($000s omitted)		2003		2002		2001
External sales:
Consumer Systems	$	1,782,521		1,401,446		1,267,358
Professional		445,998		424,742		449,189
Other		--		--		--
Total	$	2,228,519		1,826,188		1,716,547
Operating income (loss):
Consumer Systems	$	190,797		110,445		94,517
Professional		15,398		16,802		1,948
Other		(38,301	)	(24,026	)	(25,237	)
Total	$	166,894		103,221		71,228
Assets:
Consumer Systems	$	1,216,400		1,023,623		803,435
Professional		292,086		295,534		315,265
Other		195,172		161,123		40,685
Total	$	1,703,658		1,480,280		1,159,385
Capital expenditures:
Consumer Systems	$	98,617		88,227		69,908
Professional		15,597		13,636		17,147
Other		1,123		2,664		1,028
Total	$	115,337		104,527		88,083
Depreciation and amortization:
Consumer Systems	$	71,648		61,357		45,795
Professional		14,246		14,552		17,213
Other		2,651		2,175		4,193
Total	$	88,545		78,084		67,201

The results for a manufacturing facility that principally produced professional products in fiscal years 2003 and 2002 has been reclassified from Consumer Systems to Professional in fiscal year 2001 to conform to fiscal 2003 presentation.

Net sales, long-lived assets and net assets by geographic area for the years ended June 30, 2003, 2002 and 2001 were as follows.

Years Ended June 30 ($000s omitted)		2003	2002	2001
Net sales:
U.S.	$	645,542	714,774	715,449
Germany		808,876	459,042	372,320
Other Europe		377,497	289,711	293,101
Other		396,604	362,661	335,677
Total	$	2,228,519	1,826,188	1,716,547
Long-lived assets:
U.S.	$	177,598	176,924	170,139
Germany		349,858	260,515	147,823
Other Europe		169,671	128,445	85,074
Other		38,907	37,633	44,337
Total	$	736,034	603,517	447,373
Net assets:
U.S.	$	280,286	253,551	202,498
Germany		319,556	208,483	166,265
Other Europe		15,567	39,315	49,872
Other		40,376	25,280	4,307
Total	$	655,785	526,629	422,942

14. Commitments and Contingencies

The Company has operating lease arrangements for certain machinery and equipment used in several of our production facilities.  These leases expire over the next three years.  Upon expiration, the leases have purchase options of approximately $22 million and residual value guarantees of approximately $18 million.  No amount has been accrued for the Company’s obligation at the end of the lease terms.

At June 30, 2003, the Company and its subsidiaries were involved in several legal actions. The outcome cannot be predicted with certainty; however, management, based upon advice from legal counsel, believes such actions are either without merit or will not have a material adverse effect on the Company's financial position or results of operations.  In fiscal 2002, the Company recorded and paid $8.3 million as the result of a judgment on appeal in a lawsuit.

Harman’s Board of Directors has authorized the repurchase a total of 8.0 million shares.  Through June 30, 2003, the Company has acquired and placed in treasury 6,348,100 shares of its common stock at a total cost of $171.9 million.  We expect future share repurchases to be funded with cash generated by operations. The Board of Directors also approved a debt repurchase program of up to $100 million of outstanding debt securities.  No repurchases had been made at June 30, 2003. 

15. Derivatives

The Company uses foreign currency forward contracts to hedge a portion of its forecasted transactions.  These forward contracts are designated as foreign currency cash flow hedges and recorded at fair value in the statement of financial position.  The recorded fair value is balanced by an entry to other comprehensive income (loss) in the statement of financial position until the underlying forecasted foreign currency transaction occurs.  When the transaction occurs, the gain or loss from the derivative designated as a hedge of the transaction is reclassified from accumulated other comprehensive income (loss) to the same income statement line item in which the foreign currency gain or loss on the underlying hedged transaction is recorded.  If the underlying forecasted transaction does not occur, the amount recorded in accumulated other comprehensive income (loss) is reclassified to the miscellaneous, net line of the income statement in the then-current period.

Because the amounts and the maturities of the derivatives approximate those of the forecasted exposures, changes in the fair value of the derivatives are highly effective in offsetting changes in the cash flows of the hedged items.  Any ineffective portion of the derivatives is recognized in current earnings.  The ineffective portion of the derivatives, which was immaterial for all periods presented, primarily results from discounts or premiums on forward contracts.

As of June 30, 2003, the Company had contracts maturing through June 2004 to purchase and sell the equivalent of approximately $106.5 million of various currencies to hedge future foreign currency purchases and sales.  The Company recorded approximately $0.7 million in net losses from cash flow hedges of forecasted foreign currency transactions in fiscal 2003.  At June 30, 2003, the amount that will be reclassified from accumulated other comprehensive income (loss) to earnings within the next twelve months is a loss of approximately $3.0 million.

The Company has entered into cross currency swaps to hedge future cash flows due from foreign consolidated subsidiaries under operating lease agreements.  As of June 30, 2003, the Company had such swap contracts in place to purchase and sell the equivalent of approximately $35.6 million in various currencies to hedge quarterly lease commitments through March 2006. The valuation calculation related to the cross currency swaps was a negative $1.7 million for fiscal 2003.  As of June 30, 2003, the amount that will be reclassified from accumulated other comprehensive income (loss) to earnings within the next twelve months that is associated with these hedges is a loss of $2.5 million. 

The Company entered into swap contracts in August 2001 and October 2001 to convert interest on $150 million principal amount of its 7.32 percent senior notes due July 1, 2007, from a fixed rate to a floating rate.  The Company also entered into swap contracts in March 2002 and April 2002 to convert interest on $200 million of the $300 million principal amount of its 7.125 percent senior notes due February 15, 2007, from a fixed rate to a floating rate.

The objective of these interest rate swap contracts is to offset changes in the fair value of the Company’s fixed rate debt caused by interest rate fluctuations.  The interest rate swap contracts are carried at fair value in the Company’s consolidated balance sheet and the related hedged portion of fixed-rate debt is carried at remaining principal due net of the valuation adjustment for the change in fair value of the debt obligation attributable to the hedged risk.  The valuation adjustment at June 30, 2003, was a positive $37.1 million.

Changes in the fair value of the interest rate swaps and the offsetting changes in the carrying value of the hedged fixed-rate debt are recognized in interest expense in the Company’s consolidated statement of operations.

As of June 30, 2003, the Company had contracts maturing through October 2003 to purchase and sell the equivalent of $306.1 million of various currencies to hedge foreign currency denominated loans to foreign subsidiaries.  These loans are of a long-term investment nature.  Adjustments to the carrying value of the foreign currency forward contracts offset the gains and losses on the underlying loans.  At June 30, 2003, market value on these contracts was a negative $8.5 million.

16. Acquisitions

In October 2002, the Company acquired a distributor of consumer home audio products in Japan.  The purchase price, net of cash acquired, was $3.0 million.  At June 30, 2003, goodwill related to this transaction was $3.3 million.  The acquisition of this distributor is not material to the consolidated financial statements of the Company.

The Company acquired a distributor of consumer home audio products in Germany in April 2003.  The purchase price, net of cash acquired, was $8.7 million.  The Company recorded $4.6 million of goodwill at June 30, 2003 related to this acquisition.  The acquisition of this distributor is not material to the consolidated financial statements of the Company.

17. Earnings Per Share Information

Years Ended June 30 (000s omitted except per share amounts)		2003		2002		2001
		Basic	Diluted	Basic	Diluted	Basic	Diluted
Net income	$	105,428	105,428	57,513	57,513	32,364	32,364
Shares of Harman common stock     outstanding		32,344	32,344	32,261	32,261	32,296	32,296
Employee stock options		---	1,680	---	1,642	---	1,441
Total average equivalent shares		32,344	34,024	32,261	33,903	32,296	33,737
Earnings per share	$	3.26	3.10	1.78	1.70	1.00	0.96

Certain options were outstanding and not included in the computation of diluted net earnings per share because the sum of the options’ exercise prices, related tax benefit and compensation cost not yet recognized were greater than the average market price of the common shares, therefore such options would have been anti-dilutive.  Options to purchase 525,497 shares of Harman common stock with exercise prices ranging from $48.23 to $57.88 per share were outstanding and not included in the calculation at June 30, 2003; options to purchase 18,167 shares with exercise prices ranging from $45.00 to $48.26 per share were not included at June 30, 2002; and options to purchase 12,419 shares with exercise prices ranging from $36.10 to $45.00 per share were not included at June 30, 2001 because they would have been anti-dilutive.

18. Quarterly Summary of Operations (unaudited)

The following is a summary of operations by quarter for fiscal 2003 and 2002:

Three months ended:  ($000s omitted except per share amounts)
Fiscal 2003		SEPT 30	DEC 31	MAR 31	JUN 30
Net Sales	$	490,759	559,977	554,454	623,329
Gross Profit	$	140,125	159,422	162,966	188,634
Net Income	$	9,802	27,606	30,614	37,406
EPS – Basic	$	0.30	0.85	.95	1.16
EPS – Diluted	$	0.29	0.81	.90	1.10
Fiscal 2002
Net Sales	$	399,009	467,432	458,310	501,437
Gross Profit	$	103,721	127,438	123,482	145,230
Net Income	$	5,031	11,730	14,648	26,104
EPS – Basic	$	0.16	0.37	0.45	0.80
EPS – Diluted *	$	0.15	0.35	0.43	0.76
*Quarters do not add to full year due to changes in shares outstanding.

Shareholder Information

Market Price		Fiscal 2003			Fiscal 2002			Fiscal 2001
		High	Low		High	Low		High	Low
First quarter ended September 30	$	54.580	38.270	$	41.710	30.890	$	41.375	30.250
Second quarter ended December 31		62.740	46.980		46.270	31.230		48.000	32.300
Third quarter ended March 31		63.650	42.600		53.840	42.600		37.050	24.900
Fourth quarter ended June 30		79.580	48.950		58.160	48.950		39.730	24.800

The Common Stock of the Company is listed on the New York Stock Exchange and is reported on the New York Stock Exchange Composite Tape under the symbol HAR. As of June 30, 2003, the Company's Common Stock was held by approximately 171 record holders.

The table above sets forth the reported high and low sales prices at the market close of the Company's Common Stock, as reported on the New York Stock Exchange, for each quarterly period for fiscal years ended June 30, 2003, 2002, and 2001.

The Company paid dividends during fiscal years 2003, 2002 and 2001 of $.10 per share, with a dividend of $.025 per share paid in each of the four quarters.

EX-21.1

Subsidiaries

Name of Subsidiary	Jurisdiction
AKG Acoustics GmbH	Austria
AKG Acoustics GmbH	Germany
AKG Acoustics Limited	United Kingdom
Amek Systems and Controls Ltd.	United Kingdom
Amek Technology Group Limited	United Kingdom
Audax of America, Inc.	Delaware
Becker Service und Verwaltungs GmbH	Germany
BSS Audio	United Kingdom
Crown Audio, Inc.	Delaware
Digital Audio Research Limited	United Kingdom
Epicure Products, Inc.	Delaware
Fosgate, Inc.	Delaware
Harman Audio	United Kingdom
Harman Audio Outlet, Inc.	Delaware
Harman Becker Automotive Systems (Becker Division) GmbH	Germany
Harman Becker Automotive Systems (Kentucky), Inc.	Delaware
Harman Becker Automotive (Pty) Ltd.	South Africa
Harman Becker Automotive Systems (Straubing Division) GmbH	Germany
Harman Becker Automotive Systems (Wisconsin), Inc.	Delaware
Harman Becker Automotive Systems Holding GmbH	Germany
Harman Becker Automotive Systems, Inc.	Delaware
Harman Becker Automotive Systems Kft.	Hungary
Harman Becker Automotive Systems S.A. de C.V.	Mexico
Harman Becker Automotive Systems - Wavemakers, Inc.	Canada
Harman Belgium NV	Belgium
Harman Consumer Finland OY	Finland
Harman Consumer International A/S	Denmark
Harman Consumer International SNC	France
Harman Consumer Manufacturing A/S	Denmark
Harman Consumer Nederland, B.V.	Netherlands
Harman de Mexico S.A. de C.V.	Mexico
Harman Deutschland GmbH & Co. KG	Germany
Harman Enterprises, Inc.	Delaware
Harman Europe EEIG	United Kingdom
Harman France SNC	France
Harman Germany LLC	Delaware
Harman Holding GmbH & Co. KG	Germany
Harman Industries SNC	France
Harman International Industries Limited	United Kingdom
Harman International Japan Co. Ltd.	Japan
Harman International Singapore Pte. Ltd.	Singapore
Harman Investment Company, Inc.	Delaware
Harman Management GmbH	Germany
Harman Motive	United Kingdom
Harman Music Group, Incorporated	Delaware
Harman Pro North America, Inc.	Delaware
Harman Residential Group, Inc.	Delaware
Harman (Suzhou) Electronics Co. Ltd.	China
Harman UK Limited	United Kingdom
Harman-Kardon, Incorporated	Delaware
Infinity Systems, Inc.	California
Innovative Systems GmbH Navigation-Multimedia	Germany
ISAS Gesellschaft für innovative Anwendungs-Software GmbH	Germany
JBL Incorporated	Delaware
Lexicon, Incorporated	Massachusetts
Madrigal Audio Laboratories, Inc.	Delaware
Precision Devices	United Kingdom
Son-Audax Loudspeakers Limited	United Kingdom
Soundcraft Electronics	United Kingdom
Studer Canada Limited	Canada
Studer Deutschland GmbH	Germany
Studer Digitec, S.A.	France
Studer Japan Ltd.	Japan
Studer Professional Audio AG	Switzerland
Studer UK	United Kingdom
Studer USA, Inc.	Delaware
TEMIC SDS GmbH	Germany
Total Audio Concepts Ltd.	United Kingdom

EX-23.1

Exhibit 23.1

INDEPENDENT AUDITORS’ CONSENT

The Board of Directors
Harman International Industries, Incorporated:

We consent to the incorporation by reference in the Registration Statement Nos. 33-20559, 33-28973, 33-36388, 33-60234, 33-60236, 33-59605, 333-02917, 333-28793, 333-32673, 333-103487 and 333-103488 on Form S-8 and 333-21021 on Form S-3 of Harman International Industries, Incorporated of our reports dated August 15, 2003, relating to the consolidated balance sheets of Harman International Industries, Incorporated and subsidiaries as of June 30, 2003 and 2002, and the related consolidated statements of operations, cash flows and shareholders’ equity and related schedule for each of the years in the three-year period ended June 30, 2003, which reports appear in the June 30, 2003, annual report on Form 10-K of Harman International Industries, Incorporated.  Our reports refer to changes in the method of accounting for stock-based compensation and method of accounting for goodwill in the year ended June 30,2003.

/s/  KPMG

Los Angeles, California

September 25, 2003

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sidney Harman, certify that:

     1.    I have reviewed this Annual Report on Form 10-K of Harman International Industries, Incorporated;

     2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or
            omit to state a material fact necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect to the period covered by this
            report;

     3.    Based on my knowledge, the financial statements, and other financial information included in this report,
            fairly present in all material respects the financial condition, results of operations and cash flows of the
            registrant as of, and for, the periods presented in this report;

     4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure
            controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
            have:

            (a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
                     to be designed under our supervision, to ensure that material information relating to the registrant,
                     including its consolidated subsidiaries, is made known to us by others within those entities,
                     particularly during the period in which this report is being prepared;

            (b)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
                      report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
                      of the period covered by this report based on such evaluation; and

            (c)      Disclosed in this report any change in the registrant’s internal control over financial reporting that
                      occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
                      case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
                      registrant’s internal control over financial reporting; and 

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
             internal control over financial reporting, to the registrant’s auditors and the audit committee of the
             registrant’s board of directors (or persons performing the equivalent functions):

            (a)     All significant deficiencies and material weaknesses in the design or operation of internal control over
                     financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
                     process, summarize and report financial information; and

            (b)     Any fraud, whether or not material, that involves management or other employees who have a
                      significant role in the registrant’s internal control over financial reporting.

Date:  September 26, 2003         /s/  Sidney Harman                                           
                                                Sidney Harman
                                                Chairman of the Board of Directors

EX-31.2

Exhibit 31.2

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bernard A. Girod, certify that:

     1.    I have reviewed this Annual Report on Form 10-K of Harman International Industries, Incorporated;

     2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or
            omit to state a material fact necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect to the period covered by this
            report;

     3.    Based on my knowledge, the financial statements, and other financial information included in this report,
            fairly present in all material respects the financial condition, results of operations and cash flows of the
            registrant as of, and for, the periods presented in this report;

     4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure
            controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
            have:

            (a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
                     to be designed under our supervision, to ensure that material information relating to the registrant,
                     including its consolidated subsidiaries, is made known to us by others within those entities,
                     particularly during the period in which this report is being prepared;

            (b)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
                      report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
                      of the period covered by this report based on such evaluation; and

            (c)      Disclosed in this report any change in the registrant’s internal control over financial reporting that
                      occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
                      case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
                      registrant’s internal control over financial reporting; and 

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
             internal control over financial reporting, to the registrant’s auditors and the audit committee of the
             registrant’s board of directors (or persons performing the equivalent functions):

            (a)     All significant deficiencies and material weaknesses in the design or operation of internal control over
                     financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
                     process, summarize and report financial information; and

            (b)     Any fraud, whether or not material, that involves management or other employees who have a
                      significant role in the registrant’s internal control over financial reporting.

Date:   September 26, 2003        /s/  Bernard A. Girod                                        
                                                Bernard A. Girod
                                                Vice Chairman of the Board of Directors and Chief Executive Officer

EX-31.3

Exhibit 31.3

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank Meredith, certify that:

     1.    I have reviewed this Annual Report on Form 10-K of Harman International Industries, Incorporated;

     2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or
            omit to state a material fact necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect to the period covered by this
            report;

     3.    Based on my knowledge, the financial statements, and other financial information included in this report,
            fairly present in all material respects the financial condition, results of operations and cash flows of the
            registrant as of, and for, the periods presented in this report;

     4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure
            controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
            have:

            (a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
                     to be designed under our supervision, to ensure that material information relating to the registrant,
                     including its consolidated subsidiaries, is made known to us by others within those entities,
                     particularly during the period in which this report is being prepared;

            (b)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
                      report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
                      of the period covered by this report based on such evaluation; and

            (c)      Disclosed in this report any change in the registrant’s internal control over financial reporting that
                      occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
                      case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
                      registrant’s internal control over financial reporting; and 

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
             internal control over financial reporting, to the registrant’s auditors and the audit committee of the
             registrant’s board of directors (or persons performing the equivalent functions):

            (a)     All significant deficiencies and material weaknesses in the design or operation of internal control over
                     financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
                     process, summarize and report financial information; and

            (b)     Any fraud, whether or not material, that involves management or other employees who have a
                      significant role in the registrant’s internal control over financial reporting.

Date:  September 26, 2003         /s/  Frank Meredith                                           
                                                Frank Meredith
                                                Executive Vice President, Chief Financial Officer and Secretary

EX-32.1

CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Harman International Industries, Incorporated (the "Company") on Form 10-K for the fiscal year ended June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:
	1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: September 25, 2003

/s/Sidney Harman

Name:  Sidney Harman

  Title:  Executive Chairman of the Board of Directors

/s/Bernard A. Girod

Name:  Bernard A. Girod

  Title:  Vice Chairman and Chief Executive Officer

/s/Frank Meredith

Name:  Frank Meredith

  Title:  Executive Vice President, Chief Financial Officers and Secretary

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.