10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2003 or

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to

Commission File Number 0-19598

infoUSA INC.

(exact name of registrant specified in its charter)

DELAWARE	47-0751545
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA	68127
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (402) 593-4500

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

Yes  x    No  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Act). Yes x No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

52,242,941 shares of Common Stock at November 6, 2003

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 5. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
Exhibit Index
EX-10.1 Credit Agreement
EX-10.2 Pledge Agreement
EX-10.3 Security Agreement
EX-10.4 Subsidiaries Guaranty Agreement
EX-31.1 Certification of Chief Executive Officer
EX-31.2 Certification of Chief Financial Officer
EX-32.1 Certification of Chief Executive Officer
EX-32.2 Certification of Chief Financial Officer

infoUSA INC.

INDEX

PART I – FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS
	Item 1.	Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002
		Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2003 and 2002
		Consolidated Statements of Cash Flows Nine Months ended September 30, 2003 and 2002
		Notes to Consolidated Financial Statements
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk
	Item 4.	Controls and Procedures
PART II – OTHER INFORMATION
	Item 6.	Exhibits and Reports on Form 8-K
	Signature
	Index to Exhibits

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infoUSA INC.

FORM 10-Q

FOR THE QUARTER ENDED

September 30, 2003

PART I

FINANCIAL INFORMATION

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ITEM 1. FINANCIAL STATEMENTS

infoUSA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

			September 30, 2003			December 31, 2002
			(UNAUDITED)
ASSETS
Current assets:
	Cash and cash equivalents		$	3,141		$	6,285
	Marketable securities			1,007			887
	Trade accounts receivable, net of allowances of $2,829 and $3,673, respectively			34,152			39,352
	Officer note receivable			510			510
	List brokerage trade accounts receivable			12,621			16,635
	Income taxes receivable			1,439			—
	Prepaid expenses			6,832			4,515
	Deferred marketing costs			3,599			1,746
		Total current assets		63,301			69,930
Property and equipment, net				43,480			45,756
Intangible assets, net				263,982			273,246
Other assets				4,990			4,454
			$	375,753		$	393,386
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of long-term debt		$	16,910		$	26,312
	Accounts payable			13,704			13,303
	List brokerage trade accounts payable			8,721			12,745
	Accrued payroll expenses			11,990			11,410
	Accrued expenses			1,884			1,827
	Income taxes payable			—			3,287
	Deferred income taxes			7,476			515
	Deferred revenues			15,399			13,821
		Total current liabilities		76,084			83,220
Long-term debt, net of current portion				136,477			164,116
Deferred income taxes				18,836			21,722
Other liabilities				4,554			6,000
Stockholders’ equity:
	Common stock, $.0025 par value. Authorized 295,000,000 shares; 52,799,107 shares issued and 52,218,561 outstanding at September 30, 2003 and 51,869,816 shares issued and 51,111,014 outstanding at December 31, 2002			132			130
	Paid-in capital			98,237			92,205
	Retained earnings			47,449			32,237
	Treasury stock, at cost, 580,546 shares held at September 30, 2003 and 758,802 held at December 31, 2002			(3,494	)		(4,538	)
	Notes receivable from officers			(337	)		(834	)
	Accumulated other comprehensive loss			(2,185	)		(872	)
		Total stockholders’ equity		139,802			118,328
			$	375,753		$	393,386

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

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infoUSA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

			THREE MONTHS ENDED						NINE MONTHS ENDED
			September 30,						September 30,
			2003			2002			2003			2002
			(UNAUDITED)						(UNAUDITED)
Net sales			$	77,379		$	77,171		$	232,290		$	227,936
Costs and expenses:
	Database and production costs			21,416			20,618			64,556			63,191
	Selling, general and administrative (excluding non-cash stock option compensation expense of $76 and $8 for the three months and $145 and $35 for the nine months ended September 30, 2003 and 2002, respectively)			36,827			34,711			103,825			98,558
	Depreciation and amortization			7,006			6,805			21,214			21,058
	Non-cash stock option compensation			76			8			145			35
	Restructuring charges			645			804			1,630			1,616
	Litigation settlement charge			1,667			110			1,667			417
	Acquisition costs			—			2			54			175
Total operating costs and expenses				67,637			63,058			193,091			185,050
Operating income				9,742			14,113			39,199			42,886
Other income (expense):
		Investment income		394			35			1,222			133
		Other charges		(2,240	)		(115	)		(6,385	)		(5,355	)
		Interest expense		(2,243	)		(3,404	)		(9,500	)		(12,562	)
Income before income taxes				5,653			10,629			24,536			25,102
Income taxes				2,021			4,225			9,324			9,606
Net income			$	3,632		$	6,404		$	15,212		$	15,496
Basic earnings per share:			$	0.07		$	0.12		$	0.30		$	0.30
Diluted earnings per share:			$	0.07		$	0.12		$	0.30		$	0.30

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

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infoUSA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

				NINE MONTHS ENDED
				September 30,
				2003			2002
				(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income				$	15,212		$	15,496
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization				21,214			21,058
	Amortization of deferred financing costs				539			620
	Deferred income taxes				4,304			(2,164	)
	Non-cash stock option compensation expense				145			35
	Non-cash 401(k) contribution in common stock				1,028			649
	Gain on sale of assets				(860	)		—
	Non-cash impairment of assets				—			2,978
	Non-cash other charges				2,482			1,264
	Changes in assets and liabilities, net of effect of acquisitions:
		Trade accounts receivable			6,727			3,020
		List brokerage trade accounts receivable			4,014			(825	)
		Prepaid expenses and other assets			(5,185	)		2,649
		Deferred marketing costs			(1,853	)		(429	)
		Accounts payable			(533	)		3,117
		List brokerage trade accounts payable			(4,179	)		541
		Income taxes receivable and payable, net			(4,726	)		(1,480	)
		Accrued expenses and other liabilities			(785	)		(10,900	)
			Net cash provided by operating activities		37,544			35,629
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of other investments					1,628			—
Purchase of other investments					(626	)		(32	)
Purchases of property and equipment					(4,657	)		(2,453	)
Acquisitions of businesses, net of cash acquired					(5,494	)		(6,453	)
Software and database development costs					(743	)		(1,820	)
			Net cash used in investing activities		(9,892	)		(10,758	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt					(137,041	)		(27,233	)
Proceeds of long-term debt					100,000			—
Deferred financing costs paid					(141	)		(1,030	)
Proceeds for repayment of officer loan					496			—
Proceeds from exercise of stock options					5,890			569
			Net cash used in financing activities		(30,796	)		(27,694	)
Net decrease in cash and cash equivalents					(3,144	)		(2,823	)
Cash and cash equivalents, beginning					6,285			4,382
Cash and cash equivalents, ending				$	3,141		$	1,559
Supplemental cash flow information:
Interest paid				$	8,390		$	9,884
Income taxes paid				$	9,904		$	13,630

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

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infoUSA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

     The accompanying unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial information included therein. The consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

     The Company suggests that this financial data be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2002 included in the Company’s 2002 Annual Report on Form 10-K, filed with the Securities and Exchange Commission. Results for the interim period presented are not necessarily indicative of results to be expected for the entire year.

     Reclassifications. In April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.” SFAS No. 145, among other things, rescinds SFAS No. 4 which required all gains and losses from the extinguishments of debt to be classified as an extraordinary item and amends SFAS No. 13 to require that certain lease modification that have economic effect similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. Upon adoption of the new accounting standard in 2003, the Company was required to reclassify the extraordinary item of $1.8 million related to the extinguishment of debt as reported in the 2002 consolidated statement of operations. The reclassification increased other charges expense by $2.9 million and decreased income tax expense by $1.1 million.

2. EARNINGS PER SHARE INFORMATION

     The following table shows the amounts used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	(In Thousands)				(In Thousands)
	2003		2002		2003		2002
Weighted average number of shares used in basic EPS		51,676		50,991		51,351		50,935
Net additional common stock equivalent shares outstanding after assumed exercise of stock options		681		—		102		83
Weighted average number of shares outstanding used in diluted EPS		52,357		50,991		51,453		51,018

3. SEGMENT INFORMATION

     The Company currently manages existing operations utilizing financial information accumulated and reported for two business segments.

     The small business segment principally engages in the selling of sales lead generation, business directories and consumer DVD products to small and medium sized companies, small office and home office businesses and individual consumers. This segment includes the sale of content via the Internet.

     The large business segment principally engages in the selling of data processing services, licensed databases, database marketing solutions, e-mail marketing solutions and list brokerage and list management services to large companies. This segment includes the licensing of databases for Internet directory assistance services.

     The small business and large business segments reflect actual net sales, direct order production, and identifiable direct sales and

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marketing costs related to their operations. The remaining indirect costs are presented as a reconciling item in corporate activities.

     Corporate activities principally represent the information systems technology, database compilation, database verification, and administrative functions of the Company. Investment income, interest expense, income taxes, amortization of intangibles, and depreciation expense are only recorded in corporate activities. The Company does not allocate these costs to the two business segments. The Company records unusual or non-recurring items including acquisition costs, non-cash stock compensation expense, asset impairments and other extraordinary items in corporate activities to allow for the analysis of the sales business segments excluding such unusual or non-recurring charges.

     The Company accounts for property and equipment on a consolidated basis. The Company’s business segments share the Company’s property and equipment. Depreciation expense is recorded in corporate activities.

     The Company has no intercompany sales or intercompany expense transactions. Accordingly, there are no adjustments necessary to eliminate amounts between the Company’s segments.

     The following table summarizes segment information:

	For The Three Months Ended September 30, 2003
	Small		Large		Corporate			Consolidated
	Business		Business		Activities			Total
	(In thousands)
Net sales	$	37,902	$	39,477	$	—		$	77,379
Non-cash stock compensation		—		—		(76	)		(76	)
Restructuring charges		—		—		(645	)		(645	)
Litigation settlement charges		—		—		(1,667	)		(1,667	)
Operating income (loss)		10,423		20,009		(20,690	)		9,742
Investment income		—		—		394			394
Other charges		—		—		(2,240	)		(2,240	)
Interest expense		—		—		(2,243	)		(2,243	)
Income (loss) before income taxes		10,423		20,009		(24,779	)		5,653

	For The Three Months Ended September 30, 2002
	Small		Large		Corporate			Consolidated
	Business		Business		Activities			Total
	(In thousands)
Net sales	$	41,084	$	36,087	$	—		$	77,171
Non-cash stock compensation		—		—		(8	)		(8	)
Restructuring charges		—		—		(804	)		(804	)
Litigation settlement charges		—		—		(110	)		(110	)
Acquisition costs		—		—		(2	)		(2	)
Operating income (loss)		15,585		18,571		(20,043	)		14,113
Investment income		—		—		35			35
Other charges		—		—		(115	)		(115	)
Interest expense		—		—		(3,404	)		(3,404	)
Income (loss) before income taxes		15,585		18,571		(23,527	)		10,629

	For The Nine Months Ended September 30, 2003
	Small		Large		Corporate			Consolidated
	Business		Business		Activities			Total
	(In thousands)
Net sales	$	117,556	$	114,734	$	—		$	232,290
Non-cash stock compensation		—		—		(145	)		(145	)
Restructuring charges		—		—		(1,630	)		(1,630	)
Litigation settlement charges		—		—		(1,667	)		(1,667	)
Acquisition costs		—		—		(54	)		(54	)
Operating income (loss)		41,006		57,365		(59,172	)		39,199
Investment income		—		—		1,222			1,222
Other charges		—		—		(6,385	)		(6,385	)
Interest expense		—		—		(9,500	)		(9,500	)
Income (loss) before income taxes		41,006		57,365		(73,835	)		24,536

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	For The Nine Months Ended September 30, 2002
	Small		Large		Corporate			Consolidated
	Business		Business		Activities			Total
	(In thousands)
Net sales	$	117,405	$	110,531	$	—		$	227,936
Non-cash stock compensation		—		—		(35	)		(35	)
Restructuring charges		—		—		(1,616	)		(1,616	)
Litigation settlement charges		—		—		(417	)		(417	)
Acquisition costs		—		—		(175	)		(175	)
Operating income (loss)		46,066		58,615		(61,795	)		42,886
Investment income		—		—		133			133
Other charges		—		—		(5,355	)		(5,355	)
Interest expense		—		—		(12,562	)		(12,562	)
Income (loss) before income taxes		46,066		58,615		(79,579	)		25,102

4. COMPREHENSIVE INCOME (LOSS)

     Comprehensive income (loss), including the components of other comprehensive income (loss), is as follows:

			For The Three						For The Nine
			Months Ended						Months Ended
			September 30,			September 30,			September 30,			September 30,
			2003			2002			2003			2002
			(In thousands)						(In thousands)
Net income			$	3,632		$	6,404		$	15,212		$	15,496
Other comprehensive income:
	Unrealized gain from investments:
	Unrealized gains (losses)			(57	)		(10	)		136			(66	)
		Related tax expense		22			4			(52	)		25
		Net		(35	)		(6	)		84			(41	)
Interest rate swap agreement:
		Gains		—			—			—			850
		Related tax expense		—			—			—			(323	)
		Net		—			—			—			527
Pension plan:
		Unrealized gains (losses)		(1,397	)		—			(1,397	)		—
Total other comprehensive income				(1,432	)		(6	)		(1,313	)		486
Comprehensive income			$	2,200		$	6,398		$	13,899		$	15,982

     The components of accumulated other comprehensive income (loss) is as follows:

				Foreign						Accumulated
	Unrealized			Currency			Unrealized			Other
	Gains/(Losses)			Translation			Gains / (Losses)			Comprehensive
	Pension plan			Adjustments			On Securities			Income (Loss)
	(in thousands)
Balance at September 30, 2003	$	(1,397	)	$	(672	)	$	(116	)	$	(2,185	)
Balance at December 31, 2002	$	—		$	(672	)	$	(200	)	$	(872	)

5. ACQUISITIONS

     Effective September 14, 2003, the Company purchased the assets of LTWC Corporation (“Markado”), a provider of email marketing services. Total consideration for the acquisition was cash of $1.0 million. The purchase price for the acquisition has been preliminarily allocated to current assets of $0.3 million, property and equipment of $0.1 million and goodwill of $0.6 million. The acquisition has been accounted for under the purchase method of accounting, and accordingly, the operating results of Markado have been included in the Company’s financial statements since the date of acquisition.

     Effective March 1, 2003, the Company acquired all issued and outstanding common stock of Yesmail, Inc., a provider of email acquisition and retention services. The acquisition has been accounted for under the purchase method of accounting, and accordingly,

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the operating results of Yesmail, Inc. have been included in the Company’s financial statements since the date of acquisition. Total consideration for the acquisition was cash of $5.0 million. The purchase price for the acquisition had been preliminarily allocated to current assets of $3.1 million, property and equipment of $1.4 million, current liabilities of $3.7 million and goodwill of $4.2 million. The transaction is subject to purchase price adjustment represented by an adjustment for finalized working capital and a two-year escrow for other contingent items specified within the merger agreement. During the second quarter of 2003, the Company recorded an adjustment for finalized working capital resulting in a reclassification of $1.0 million from goodwill to current assets and $0.2 million from goodwill to current liabilities. Intangibles recorded as part of the purchase as of September 30, 2003 total $3.4 million.

     Assuming Markado and Yesmail, Inc. had been acquired on January 1, 2002, included in the accompanying consolidated statements of operations, unaudited pro forma consolidated net sales, net income and net income per share would have been as follows:

	For the three months ended				For the nine months ended
	September 30,		September 30,		September 30,		September 30,
	2003		2002		2003		2002
	(In thousands, except per share amounts)
	(unaudited)
Net sales	$	77,856	$	81,351	$	236,132	$	241,815
Net income	$	3,685	$	3,729	$	13,303	$	3,022
Basic earnings per share	$	0.07	$	0.07	$	0.26	$	0.06
Diluted earnings per share	$	0.07	$	0.07	$	0.26	$	0.06

     The pro forma information provided above does not purport to be indicative of the results of operations that would actually have resulted if the acquisitions were made as of those dates or of results that may occur in the future. Pro forma net income includes adjustments for amortization of intangible assets and income taxes.

6. NON-CASH STOCK COMPENSATION EXPENSE

     At September 30, 2003, the Company has a nonqualified stock option plan. The Company applies the intrinsic value based method of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock option plan. No stock-based employee compensation cost is reflected in net income, as all options granted under the plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The Company’s pro forma net income and earnings per share would have been as indicated below had the fair value of all option grants been charged to salaries, wages, and benefits in accordance with SFAS No. 123, Accounting for Stock-Based Compensation:

		Three months ended				Nine Months ended
		September 30,				September 30,
		2003		2002		2003		2002
Net income, as reported		$	3,632	$	6,404	$	15,212	$	15,496
Less: Total stock-based employee compensation expense determined under fair value based method, net of taxes			527		635		1,747		2,037
Net income, pro forma		$	3,105	$	5,769	$	13,465	$	13,459
Earnings per share:
	Basic – as reported	$	.07	$	.12	$	.30	$	.30
	Basic – pro forma	$	.06	$	.11	$	.26	$	.26
	Diluted – as reported	$	.07	$	.12	$	.30	$	.30
	Diluted – pro forma	$	.06	$	.11	$	.26	$	.26

     The above pro forma results are not likely to be representative of the effects on reported net income for future years since options vest over several years and additional awards generally are made each year.

     The fair value of the weighted average of option grants is estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2003 and 2002: expected volatility of 78.89% (2003) and 80.73% (2002), risk free interest rate of 4.67% (2003) and 4.84% (2002) based on the U.S. Treasury strip yield at the date of grant and expected lives of 5 years.

     Compensation cost for stock options and warrants granted to non-employees and vendors is measured based upon the fair value of the stock option or warrant granted. When the performance commitment of the non-employee or vendor is not complete as of the

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grant date, the Company estimates the total compensation cost using a fair value method at the end of each period. Generally, the final measurement of compensation cost occurs when the non-employee or vendors related performance commitment is complete. Changes, either increases or decreases, in the estimated fair value of the options between the date of the grant and the final vesting of the options result in a change in the measure of compensation cost for the stock options or warrants. Compensation cost is recognized as expense over the periods in which the benefit is received.

     During the second quarter of 2002, the Company granted non-qualified stock options to a non-employee consultant of the Company in connection with a consulting agreement executed by the Company. The options vest evenly over four years and have a five-year life. The fair value of the option was estimated, as of the grant date, using the Black-Scholes option pricing model with the following assumptions: no dividend yield for any year, expected volatility of 78.89%, risk free interest rate of 4.67% and an expected life of 5 years. As such, the Company has recorded a non-cash charge of $145 thousand, related to stock options granted to the consultant during the nine months ended September 30, 2003. The charges were recorded as an addition to paid-in-capital. The consulting agreement commits the Company to make cash payments of $675 thousand, $775 thousand and $200 thousand in 2003, 2004 and 2005 to the consultant for services rendered. Expense recorded for the three months and nine months ended September 30, 2003 for this consulting agreement was $175 thousand and $550 thousand, respectively and $292 thousand for the three months and nine months ended September 30, 2002.

7. RESTRUCTURING CHARGES

     During the three and nine months ended September 30, 2003, the Company recorded restructuring charges due to workforce reductions of $645 thousand and $1.6 million, respectively. The charges included involuntary employee separation costs for 64 employees in administration, order production and data processing support staff. As of September 30, 2003, an accrual of $410 thousand was included in the accompanying consolidated balance sheet for severance costs remaining to be paid.

     During the three and nine months ended September 30, 2002, the Company recorded restructuring charges due to workforce reductions of $804 thousand and $1.6 million, respectively as a part of the Company’s overall strategy to reduce costs and continue commitment to its core businesses. The workforce reduction charges included involuntary employee separation costs for 73 employees in administration, sales support and marketing functions.

8. ACQUISITION COSTS

     The Company recorded costs of $54 thousand and $175 thousand during the nine months ended September 30, 2003 and 2002, respectively, for general and administrative expenses incurred in connection with the integration of acquired companies. These costs are not direct costs of acquisition and therefore cannot be capitalized as part of the purchase price.

9. OTHER CHARGES

     On May 14, 2002, a principal of one of the acquisitions made by the Company in 1996 was awarded $1.7 million by an arbitrator for settlement of a dispute regarding exercise of stock options issued by the Company. Although the Company has appealed the arbitrator’s decision, the Company’s management, under advise from outside counsel, determined during the third quarter of 2003 that the Company was not likely to be successful in the appeal. Consequently, the Company recorded a litigation charge of $1.7 million during the three months ended September 30, 2003, for the arbitrators’ award.

     During the nine months ended September 30, 2003, the Company purchased $67 million of its 91/2% Senior Subordinated Notes of which $11.5 million of the notes were held by the Company’s Chief Executive Officer. All purchases of 91/2% Senior Subordinated Notes occurred at the same price and under the same terms. As part of these purchases, the Company recorded charges of $1.6 million for related net non-amortized debt issue costs and $3.1 million for amounts paid in excess of carrying value of the debt.

     On May 27, 2003 the Company amended and restated the Senior Secured Credit Facility administered by Bank of America, N.A. in order to take advantage of lower interest rates and make significant redemptions of the 91/2% Senior Subordinated Notes. The total credit available was increased from $115 million to $145 million. The existing term loans A and B were combined into a single term loan of $100 million maturing April 30, 2007. In addition, the revolving credit facility of $18 million was increased to $45 million and is due May 27, 2006, reducing to $40 million on April 1, 2004 and reducing to $35 million on April 1, 2005. The Company has expensed $0.8 million in non-amortized costs associated with the issue of the previous

11

facility and $0.8 million in bank fees associated with the new facility, which are classified as other charges in the statement of operations.

     During the nine months ended September 30, 2002, the Company wrote-off deferred financing costs of $2.9 million in connection with the refinancing of its Senior Secured Credit Facility. Additionally, the refinancing resulted in a loss of $1.2 million for the reclassification of an interest rate swap agreement from Other Comprehensive Income (Loss) included in the Company’s consolidated balance sheet. The Company also recorded a loss of $1.1 million for an other-than-temporary decline in the value of a non-marketable equity investment.

10. RELATED PARTY TRANSACTIONS

     During 2003, the Company purchased the rights to a skybox at a local university for $617 thousand from Annapurna Corporation, which is 100% owned by Mr. Gupta, the Company’s Chief Executive Officer. The cost covers the remaining 21 years of the lease and has been recorded in other assets on the accompanying consolidated balance sheet. Expense recognized for the three and nine months ended September 30, 2003 was $7 thousand and $10 thousand, respectively.

     During 2003, the Company purchased $11.5 million of its 91/2% Senior Subordinated Notes from Mr. Gupta at the same terms and prices offered to unrelated parties.

     Mr. Gupta was eligible for a cash bonus in 2002 based on Company performance. The criteria for Mr. Gupta’s bonus specifies that he would receive 10% of the Company’s adjusted EBITDA in excess of $80 million. In January 2002, the Company paid an advance of $1.5 million to Mr. Gupta (based on the Company’s 2001 performance) to be off set against any 2002 bonus payable to Mr. Gupta pursuant to his bonus program. The advance was to be applied to part or his entire 2002 bonus or paid back by Mr. Gupta by January 2004. In May 2002, Mr. Gupta paid back $0.6 million of the original advance, leaving an advance balance of $0.9 million. Mr. Gupta’s 2002 bonus has been determined to be $0.4 million. The remaining balance of $0.5 million is classified as “Officer Note Receivable” in the accompanying Balance Sheet.

11. GOODWILL AND OTHER INTANGIBLE ASSETS

     Intangible assets consist of the following:

	September 30,		December 31,
	2003		2002
	(In thousands)
Goodwill	$	273,560	$	262,417
Non-compete agreements		13,534		13,534
Core technology		4,800		4,800
Customer base		8,372		8,372
Trade names		15,802		15,802
Purchased data processing software		73,478		73,478
Acquired database costs		19,000		19,000
Perpetual software license agreement		8,000		8,000
Software development costs, net		2,379		5,565
Deferred financing costs		8,207		8,845
		427,132		419,813
Less accumulated amortization		163,150		146,567
	$	263,982	$	273,246

12. CONTINGENCIES

     The Company and its subsidiaries are involved in legal proceedings, claims and litigation arising in the ordinary course of business. Management believes that any resulting liability should not materially affect the Company’s financial position, results of operations, or cash flows.

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ITEM 2.

infoUSA INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

     The Company is a leading provider of business and consumer information, data processing and database marketing services. The Company’s key assets include proprietary databases of 14 million businesses and 220 million consumers in the United States and Canada. We believe our proprietary content is the most comprehensive and accurate data available. We leverage these key assets by selling through multiple distribution channels to over 4 million customers that include small and medium-size businesses, Fortune 1000 companies, consumers, and Internet users.

     The Company has supplemented its internal growth through strategic acquisitions and has completed over 20 acquisitions since mid 1996. The Company has increased its presence in the consumer marketing information industry, greatly increased its ability to provide data processing solutions, increased its presence in list management and list brokerage services and broadened its offerings for e-mail and business marketing information. During 2002 and 2003, the Company completed the integration of Polk City Directories and enhanced its presence in e-mail marketing, e-mail customer retention and e-mail customer acquisition services with the purchase of DoubleClick’s email deployment business, ClickAction, Yesmail and Markado. The Company also continued to consolidate the printed and online directory industry with its acquisition of Hill-Donnelly and City Publishing directory companies.

     Since 1996, the Company has systematically integrated the operations of the acquired companies into existing operations of the Company. In most cases, the results of operations for these acquired activities are no longer separately accounted for from existing activities. The Company cannot report the results of the operations of acquired companies upon completion of the integration as the results are “commingled” with existing results. Additionally, upon integration of the acquired operations, the Company frequently combines acquired products or features with existing products, and experiences significant cross selling of products between business units, including sales of acquired products by existing business units and sales by acquired business units of existing products. Due to recent and potential future acquisitions, future results of operations will not be comparable to historical data.

     This discussion and analysis contains forward-looking statements, including without limitation statements in the discussion of comparative results of operations, accounting standards and liquidity and capital resources, within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, which are subject to the “safe harbor” created by those sections. The Company’s actual future results could differ materially from those projected in the forward-looking statements. Some factors which could cause future actual results to differ materially from the company’s recent results or those projected in the forward-looking statements are described in “Factors that May Affect Operating Results” below. The Company assumes no obligation to update the forward-looking statement or such factors.

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RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, selected financial information and other data. The amounts and related percentages may not be fully comparable due to acquisitions.

					THREE MONTHS			THREE MONTHS			NINE MONTHS			NINE MONTHS
					ENDED			ENDED			ENDED			ENDED
					September 30, 2003			September 30, 2002			September 30, 2003			September 30, 2002
	CONSOLIDATED STATEMENT OF OPERATIONS DATA:
	Net sales					100	%		100	%		100	%		100	%
	Costs and expenses:
		Database and production costs				28			27			28			28
		Selling, general and administrative				47			45			44			43
		Depreciation and amortization				9			9			9			9
		Non-cash stock compensation expense				—			—			—			—
		Restructuring charges				1			1			1			1
		Litigation settlement charge				2			—			1			—
		Acquisition costs				—			—			—			—
			Total costs and expenses			87			82			83			81
		Operating income				13			18			17			19
		Other expense, net				(5	)		(5	)		(6	)		(8	)
		Income before income taxes				7			13			11			11
		Income taxes				2			5			4			5
		Net income				5	%		8	%		7	%		6	%
		OTHER DATA:
SALES BY SEGMENT:								(in thousands)
				Small business	$	37,902		$	41,084		$	117,556		$	117,405
				Large business		39,477			36,087			114,734			110,531
				Total	$	77,379		$	77,171		$	232,290		$	227,936
SALES BY SEGMENT AS A PERCENTAGE OF NET SALES:
				Small business		49	%		53	%		51	%		52	%
				Large business		51			47			49			48
				Total		100	%		100	%		100	%		100	%
	Amortization expense of intangible assets (1)				$	3,310		$	3,325		$	9,960		$	9,986
	Earnings before, interest, taxes, depreciation and amortization, (EBITDA), as adjusted (2)				$	16,824		$	20,926		$	60,558		$	63,979
	EBITDA, as adjusted, as a percentage of net sales					22	%		27	%		26	%		28	%
Cash Flow Data:											(in thousands)
				Net cash from operating activities							$	37,544		$	35,629
				Net cash used in investing activities							$	(9,892	)	$	(10,758	)
				Net cash used in financing activities							$	(30,796	)	$	(27,694	)

(1) This represents amortization expense recorded by the Company on amortizable intangible assets recorded as part of the acquisition of other companies, and excludes amortization related to deferred financing costs, software development costs and other intangible assets not recorded as part of an acquisition of another company.

(2) “EBITDA”, as adjusted, is defined as net income adjusted to exclude depreciation and amortization, non-cash impairment of assets, non-operating other charges, income taxes, interest expense, investment income and non-cash stock compensation expenses. EBITDA is presented because it is a widely accepted measure of performance that eliminates the effects of a variety of methods used for deprecation and amortization that have changed over time. However, EBITDA, does not purport to represent cash provided by operating activities as reflected in the Company’s consolidated statements of cash flows, is not a measure of financial performance under generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Also, the measure of EBITDA, may not be comparable to similar measures reported by other companies.

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     The following provides a reconciliation of net income to EBITDA, as adjusted:

		Three months ended						Nine months ended
		September 30,						September 30,
		2003			2002			2003			2002
Net income		$	3,632		$	6,404		$	15,212		$	15,496
	Other charges		2,240			115			6,385			5,355
	Investment income		(394	)		(35	)		(1,222	)		(133	)
	Interest expense		2,243			3,404			9,500			12,562
	Income taxes		2,021			4,225			9,324			9,606
	Depreciation and amortization		7,006			6,805			21,214			21,058
	Non-cash stock compensation		76			8			145			35
EBITDA, as adjusted		$	16,824		$	20,926		$	60,558		$	63,979

Net sales

     Net sales of the Company for the quarter ended September 30, 2003 were $77.4 million compared to $77.2 million for the same period of 2002, an increase of less than 1%. Net sales of the Company for the nine months ended September 30, 2003 were $232.3 million compared to $227.9 million for the same period of 2002, an increase of 2%.

     Net sales of the small business segment for the quarter ended September 30, 2003 were $37.9 million, compared to $41.1 million for the same period of 2002, a decrease of $3.2 million or 8%. The decrease was principally due to a decline in net sales for Polk City Directories, a subsidiary of the Company. Net sales of the small business segment for the nine months ended September 30, 2003 were $117.6 million, compared to $117.4 million for the same period of 2002, an increase of less than 1%. The small business segment principally engages in the selling of sales lead generation and consumer DVD products to small to medium sized companies, small office and home office businesses and individual consumers. This segment also includes the sale of content via the Internet.

     Net sales of the large business segment for the quarter ended September 30, 2003 were $39.5 million compared to $36.1 million for the same period of 2002, an increase of 9%. Net sales of the large business segment for the nine months ended September 30, 2003 were $114.7 million compared to $110.5 million for the same period of 2002, an increase of 4%. The increase was principally due to the acquisition of ClickAction in December 2002 and Yesmail in March 2003. The large business segment principally engages in the selling of data processing services, licensed databases, database marketing solutions, e-mail marketing solutions and list brokerage and list management services to large companies. This segment includes the licensing of databases for Internet directory assistance services.

Database and production costs

     Database and production costs for the quarter ended September 30, 2003 were $21.4 million, or 28% of net sales, compared to $20.6 million, or 27% of net sales for the same period of 2002. Database and production costs for the nine months ended September 30, 2003 were $64.6 million, or 28% of net sales, compared to $63.2 million, or 28% of net sales for the same period of 2002.

Selling, general and administrative expenses

     Selling, general and administrative expenses for the quarter ended September 30, 2003 were $36.8 million, or 47% of net sales, compared to $34.7 million, or 45% of net sales for the same period of 2002. Selling, general and administrative expenses for the nine months ended September 30, 2003 were $103.8 million, or 44% of net sales, compared to $98.6 million, or 43% of net sales for the same period of 2002. The increase in selling, general and administrative expenses principally relates to the Company’s planned increase in direct marketing costs and the addition of sales staff, beginning during the quarter ended September 30, 2003. Additionally, the increase is partially due to the acquisition of various companies during 2002 and 2003, including Hill-Donnelly, City Publishing, and the e-mail list business of DoubleClick, ClickAction and Yesmail. These acquired companies historically had higher operating sales and marketing cost structures than the Company’s existing businesses. The increase in selling, general and administrative expenses was partially offset by a decrease in bad debt expense totaling $0.6 million during the nine months ended September 30, 2003. The decrease in bad debt expense corresponds with the decrease in the Company’s total trade accounts receivable outstanding and days sales outstanding (“DSO”) ratio.

Depreciation and amortization expenses

     Depreciation and amortization expenses for the quarter ended September 30, 2003 were $7.0 million, or 9% of net sales, compared to $6.8 million, or 9% of net sales for the same period of 2002. Depreciation and amortization expenses for the nine months ended September 30, 2003 were $21.2 million, or 9% of net sales, compared to $21.1 million, or 9% of net sales for the same period of 2002.

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The Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets” as of January 1, 2002. SFAS No. 142 requires the Company to complete an annual impairment test on goodwill and other intangible assets with an indefinite life rather than record amortization expense on those assets. We currently do not expect to record an impairment charge, however, there can be no assurance that at the time a review is completed a material impairment charge will not be recorded.

Restructuring costs

     During the quarter ended September 30, 2003, the Company recorded restructuring charges due to workforce reductions of $0.6 million as part of the Company’s continuing strategy to reduce costs and further consolidate data processing operations. The workforce reduction charges included involuntary employee separation costs for 64 employees. During the nine months ended September 30, 2003, the Company recorded restructuring charges due to workforce reductions of $1.6 million for the involuntary employee separation costs for 179 employees.

     During the three and nine months ended September 30, 2002, the Company recorded restructuring charges due to workforce reductions of $0.8 million and $1.6 million, respectively, as a part of the Company’s continuing strategy to reduce costs and focus on core operations. The workforce reduction charges included involuntary employee separation costs for 73 employees for the nine months ended September 30, 2002.

Acquisition costs

     The Company recorded costs of $54 thousand and $175 thousand during the nine months ended September 30, 2003 and 2002, respectively, for general and administrative expenses incurred in connection with the integration of acquired companies. These costs are not direct costs of acquisition and therefore cannot be capitalized as part of the purchase price.

Operating income

     Including the factors previously described, the Company had operating income of $9.7 million, or 13% of net sales for the quarter ended September 30, 2003, compared to operating income of $14.1 million, or 18% of net sales for the same period in 2002. The Company had operating income of $39.2 million, or 17% of net sales for the nine months ended September 30, 2003, compared to operating income of $42.9 million, or 19% of net sales for the same period in 2002. The decrease in operating income as a percentage of net sales is a result of the following items: 1) the Company’s planned increase in direct marketing costs and the addition of sales staff, beginning during the quarter ended September 30, 2003; 2) a decline in net sales for Polk City Directories during the quarter ended September 30, 2003; 3) a litigation settlement charge of $1.7 million recorded during the quarter ended September 30, 2003; and 4) increased operating expenses represented as percentage of net sales associated with companies acquired during 2002 and 2003 including City Publishing, Hill-Donnelly, ClickAction and Yesmail.

     Operating income for the small business segment for the quarter ended September 30, 2003 was $10.4 million, or 27% of net sales, as compared to $15.6 million, or 38% of net sales for the same period in 2002. Operating income for the small business segment for the nine months ended September 30, 2003 was $41.0 million, or 35% of net sales, as compared to $46.1 million, or 39% of net sales for the same period in 2002. The decrease in operating income as a percentage of net sales principally relates to the Company’s planned increase in direct marketing costs and the addition of sales staff, beginning during the quarter ended September 30, 2003. Additionally, the decrease is partially due to a decline in net sales for Polk City Directories and increased operating expenses represented as a percentage of net sales associated with companies acquired during 2002 and 2003 including City Publishing and Hill-Donnelly.

     Operating income for the large business segment for the quarter ended September 30, 2003 was $20.0 million, or 51% of net sales, as compared to $18.6 million, or 51% of net sales for the same period in 2002. Operating income for the large business segment for the nine months ended September 30, 2003 was $57.4 million, or 50% of net sales, as compared to $58.6 million, or 53% of net sales for the same period in 2002. The decrease in operating income as a percentage of net sales is principally due to increased operating expenses represented as a percentage of net sales associated with companies acquired during 2002 and 2003 including ClickAction and Yesmail.

Other income (expense), net

     Other income (expense) net, was $(4.1) million, or (5)% of net sales, and $(3.5) million, or (5)% of net sales, for the quarters ended September 30, 2003 and 2002, respectively. Other income (expense) net, was $(14.7) million, or (6)% of net sales, and $(17.8) million, or (8)% of net sales, for the nine months ended September 30, 2003 and 2002, respectively. Other income (expense) is comprised of interest expense, investment income and other income or expense items, which do not represent components of operating income (expense) of the Company.

     Interest expense was $2.2 million and $3.4 million for the quarters ended September 30, 2003 and 2002, respectively. Interest

16

expense was $9.5 million and $12.6 million for the nine months ended September 30, 2003 and 2002, respectively. Interest expense has decreased due to the continued reduction in the amount of total debt outstanding and favorable interest rates. Investment income was $394 thousand and $35 thousand for the quarters ended September 30, 2003 and 2002. Investment income was $1.2 million and $133 thousand for the nine months ended September 30, 2003 and 2002.

     During 1999 in conjunction with the acquisition of Donnelley, the Company negotiated a credit arrangement (“Senior Debt Credit Facility”). According to the terms of the Senior Debt Credit Facility, the Company entered into an interest rate swap agreement with Union Bank of California, to fix the rate on $60.5 million of the debt at an interest rate of 6.385% for the term of 3 years. On March 6, 2002, the Company refinanced the Senior Debt Credit facility with Bank of America, N.A. As a result of the refinancing, the Company recorded a charge of $1.2 million (classified with other non-operating charges) for amounts reported in Other Comprehensive Income related to the fair value of the interest rate swap agreement. Also during the quarter ended September 30, 2002, the Company wrote-off deferred financing costs of $2.9 million in connection with the refinancing of its Senior Debt Credit Facility as described above. On May 27, 2003 the Bank of America Senior Secured Credit Facility was amended and restated to increase the credit available from $115 million to $145 million to facilitate the partial redemption of the Company’s 91/2% Senior Subordinated Notes. As a result of the refinancing, the Company expensed $0.8 million in non-amortized deferred financing costs associated with the issue of the previous facility and $0.7 million in bank fees associated with the new facility. During the nine months ended September 30, 2003, the Company purchased $67 million of its 91/2% Senior Subordinated Notes. As part of these purchases, the Company recorded charges of $1.6 million for related net non-amortized debt issue costs and $3.1 million for amounts paid in excess of carrying value of the debt.

Income taxes

     A provision for income taxes of $2.0 million and $4.2 million was recorded for the quarters ended September 30, 2003 and 2002, respectively. A provision for income taxes of $9.3 million and $9.6 million was recorded for the nine months ended September 30, 2003 and 2002, respectively.

EBITDA

     The Company’s EBITDA, as adjusted was $16.8 million, or 22% of net sales and $20.9 million, or 27% of net sales for the quarters ended September 30, 2003 and 2002, respectively. EBITDA as adjusted was $60.6 million, or 26% of net sales and $64.0 million, or 28% of net sales for the nine months ended September 30, 2003 and 2002, respectively. “EBITDA”, as adjusted, is defined as net income adjusted to exclude depreciation and amortization, non-cash impairment of assets, non-operating other charges, income taxes, interest expense, investment income and non-cash stock compensation expenses.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated Statements of Cash Flows Information:

     As of September 30, 2003, the Company’s principal sources of liquidity included cash and cash equivalents of $3.1 million, and $25.5 million available under the revolving credit facility described above. As of September 30, 2003, the Company had a working capital deficit of $12.8 million.

     Net cash provided by operating activities during the nine months ended September 30, 2003, totaled $37.5 million compared to $35.6 million during the same period of 2002.

     During the nine months ended September 30, 2003, the Company spent $4.7 million for additions of property and equipment, $0.7 million related to software and database development costs, $5.5 million for the acquisition of businesses and a net amount of $37.0 million on the repayment of long-term debt.

     The amended Senior Secured Credit Facility provides for a term loan of $100 million due April 30, 2007 ($92.5 million outstanding at September 30, 2003) and $45.0 million ($19.5 million outstanding at September 30, 2003) under a revolving credit facility due May 2006, reduces to $40 million on April 1, 2004 and reducing to $35 million on April 1, 2005.

     The Senior Secured Credit Facility provides for grid-based interest pricing based upon the Company’s consolidated leverage ratio and ranges from base rate + 1.00% to 2.00% for base rate loans and from LIBOR + 2.00% to 3.00% for LIBOR loans for use of the revolving credit facility for loans of up to $45.0 million. The term loan interest rate is base rate +3.00% or LIBOR + 4.00%.

17

     Substantially all of the assets of the Company are pledged as security under the terms of the credit facility. As of December 31, 2002, term loan “A” had a balance of $34.3 million, with an interest rate of 4.30% and term loan “B” had a balance of $40.8 million, with an interest rate of 4.80% under the previous credit agreement. At September 30, 2003, the term loan had a balance of $92.5 million with an interest rate of 5.1% and $25.5 million was available under the revolving credit facility. Additionally, the Company is required to pay a commitment fee of between 0.35% and 0.50%, dependent on the consolidated leverage ratio, on the average unused amount of the revolving credit facility.

     The Company is subject to certain financial covenants in its various credit facilities, including total funded debt leverage ratio, senior debt leverage ratio, fixed charge coverage ratio, net worth and minimum consolidated EBITDA. The Company was in compliance with all restrictive covenants of the Company’s various credit facilities at September 30, 2003.

     The Company believes that its existing sources of liquidity and cash generated from operations will satisfy the Company’s projected working capital, debt repayments and other cash requirements for at least the next 12 months. Acquisitions of other technologies, products or companies, or internal product development efforts may require the Company to obtain additional equity or debt financing, which may not be available or may be dilutive.

CONSOLIDATED BALANCE SHEET INFORMATION:

Trade accounts receivable decreased from $40.6 million at September 30, 2002 to $34.2 million at September 30, 2003, with related days sales outstanding (“DSO”) decreasing to 40 days for the quarter ended September 30, 2003 from 47 days for the same period in 2002. The allowance for bad debts has been reduced from 9% of trade accounts receivable to 8% of trade accounts receivable during the quarter ended September 30, 2003 primarily due to the reduction in DSO and better credit and collection techniques.

RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2001, the FASB released SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses financial accounting and reporting for obligations associated with retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires recognition of asset retirement obligations as a liability rather than a contra-asset. SFAS No. 143 is effective for the Company’s fiscal year ending December 31, 2003. SFAS No. 143 did not impact the Company’s consolidated financial statements.

     In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.” SFAS No. 145, among other things, rescinds SFAS No. 4 which required all gains and losses from the extinguishments of debt to be classified as an extraordinary item and amends SFAS No. 13 to require that certain lease modification that have economic effect similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. Upon adoption of the new accounting standard in 2003, the Company reclassified the extraordinary item of $1.8 million related to the extinguishment of debt as reported in the 2002 consolidated statement of operations. The reclassification increased other non-operating expense by $2.9 million and decreased income tax expense by $1.1 million.

     In June 2002, the FASB released SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which addresses accounting and reporting for costs associated with exit or disposal activities, and nullifies EITF 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to exit an Activity.” SFAS No. 146 addresses involuntary one-time employee termination benefits, cost to terminate a contract that is not a capital lease, and other associated exit costs. Existing accounting guidelines require companies to recognize a liability when management commits itself or announces plans to exit or dispose of an activity. SFAS No. 146 will prohibit companies from recognizing an exit or disposal liability that cannot be measured at fair value. The Company has applied the provisions of SFAS No. 146 for liability recognition for disposal activities that have been initiated after December 31, 2002.

     In May 2003, the Emerging Issues Task Force of the FASB issued EITF 00-21, Revenue Arrangements with Multiple Deliverables. EITF 00-21 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. EITF 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. EITF 00-21 has not had a material impact on the Company’s consolidated financial statements.

18

     In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” an interpretation of SFAS No. 5, 57 and 107 and rescission of FASB Interpretation No. 34. This interpretation requires additional disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also specifies the requirements for liability recognition (at fair value) for obligations undertaken in issuing the guarantee. The disclosure requirements are effective for interim and annual financial statements ending after December 15, 2002, (December 31, 2002 financial statements for calendar year companies). The initial recognition and measurement provisions are effective for all guarantees within the scope of Interpretation 45 issued or modified after December 31, 2002. Interpretation No. 45 does not have a material impact on the Company’s consolidated financial statements.

     In April 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This statement amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. As of September 30, 2003, management believes that SFAS No. 149 does not have a significant effect on the financial position, results of operations, and cash flows of the Company.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement requires that an issuer classify a financial instrument that is within its scope as a liability. The provisions of this statement are effective for financial instruments entered into of modified after May 31, 2003. As of September 30, 2003, management believes that SFAS No. 150 has no significant effect on the financial position, results of operations, and cash flows of the Company.

     In January 2003, the FASB issued FASB interpretation No. 46, Consolidation of Variable Interest Entities. FIN no. 46 address consolidation by business enterprises of certain variable interest entities. The provisions of FIN No. 46 are effective immediately for variable interest entities created after January 31, 2003 and for variable interest entities in which an enterprise obtains an interest after that date. The provisions are effective in the first fiscal year of interim period beginning after December 15, 2003, for variable interest entities in which an enterprise hold a variable interest that it acquired before February 1, 2003. The Company does not believe FIN No. 46 will have a material impact on the financial position, results of operations, and cash flows of the Company.

FACTORS THAT MAY AFFECT OPERATING RESULTS

Our Internet strategy is subject to review and revision.

     Our Internet strategy is to leverage our proprietary content into multiple vertical market applications and provide marketing solutions for electronic commerce applications. The strategy we introduced in fiscal 2000 — of being an incubator of Internet database companies — has been revised to a strategy of developing more efficient and profitable applications of our content through the Internet. We cannot guarantee that our customers will choose to have our products and services delivered to them over the Internet. If we are successful in developing Internet applications, we may face strong competition from current and potential competitors, including other Internet companies and other providers of business and consumer databases. We will review our Internet strategy from time to time and may continue to revise it.

     Our markets are highly competitive and many of our competitors have greater resources than we do.

     The business and consumer marketing information industry in which we operate is highly competitive. Intense competition could harm us by causing, among other things, price reductions, reduced gross margins, and loss of market share. Our competition includes:

• In consumer sales lead generation products, Acxiom, Experian (a subsidiary of Great Universal Stores, P.L.C. (“GUS”)), and Equifax, both directly and through reseller networks.

• In data processing services, Acxiom, Experian, Direct Marketing Technologies (a subsidiary of GUS), and Harte-Hanks Communications, Inc.

• In business sales lead generation products, Experian and Dun’s Marketing Services (“DMS”), a division of Dun & Bradstreet. DMS, which relies upon information compiled from Dun & Bradstreet’s credit database, tends to focus on marketing to large companies.

• In business directory publishing, from Regional Bell Operating Companies and many smaller, regional directory publishers. 19 Table of Contents

• In consumer products, certain smaller producers of CD-Rom products.

• Technologies which companies may install and implement in-house as part of their internal IS functions, instead of purchasing or outsourcing such functions.

In addition, we may face competition from new entrants to the business and consumer marketing information industry as a result of the rapid expansion of the Internet, which creates a substantial new channel for distributing business information to the market. Many of our competitors have longer operating histories, better name recognition and greater financial resources than we do, which may enable them to implement their business strategies more readily than we can.

We are highly leveraged. If we are unable to service our debt as it becomes due, our business would be harmed.

     As of September 30, 2003, we had total indebtedness of approximately $153.4 million, including $30.0 million of Notes under an indenture (the “Indenture”) and $112 million under a $145 million Senior Secured Credit Agreement. Substantially all of our assets are pledged as security under the terms of the Senior Secured Credit Agreement. The indebtedness under the Senior Secured Credit Agreement was refinanced March 6, 2002 (amended and restated May 27, 2003) and originally incurred in connection with our acquisition of Donnelley Marketing in 1999. Our ability to pay principal and interest on the Notes issued under the Indenture and the indebtedness under the Senior Secured Credit Agreement and to satisfy our other debt obligations will depend upon our future operating performance. Our performance will be affected by prevailing economic conditions and financial, business and other factors. Certain of these factors are beyond our control. The future availability of revolving credit under the Senior Secured Credit Agreement will depend on, among other things, our ability to meet certain specified financial ratios and maintenance tests. We expect that our operating cash flow should be sufficient to meet our operating expenses, to make necessary capital expenditures and to service our debt requirements as they become due. If we are unable to service our indebtedness, however, we will be forced to take actions such as reducing or delaying acquisitions and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness (including the Notes issued under the Indenture and the Senior Secured Credit Agreement) or seeking additional equity capital. We may not be able to implement any such measures or obtain additional financing.

The terms of our current indebtedness restrict our ability to take certain actions that fit our business strategy.

     Our existing credit facilities contain certain covenants which restrict our ability to:

• Incur additional indebtedness;

• Pay dividends and make certain other similar payments;

• Guarantee indebtedness of others;

• Enter into certain transactions with affiliates;

• Consummate certain asset sales, certain mergers and consolidations, sales or other dispositions of all or substantially all of our assets

• Acquire other companies; and

• Obtain dividends or certain other payments from our subsidiaries.

     These restrictions may impair our ability to take certain actions that fit our business strategy. A breach of any of these covenants could result in an event of default under the terms of our existing credit facilities. Upon the occurrence of an event of default, the lenders could elect to declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If the payment of any such indebtedness is accelerated, our assets may not be sufficient to repay in full the indebtedness under our credit facilities and our other indebtedness. Moreover, if we were unable to repay amounts owed to the lenders under our credit facilities, the lenders could foreclose on our assets that secure the indebtedness.

Under the terms of our current indebtedness, the occurrence of a change of control of infoUSA could have serious adverse financial consequences to us.

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     If a change of control of infoUSA were to occur, we would in certain circumstances be required to make an offer to purchase all outstanding Notes under the Indenture at a purchase price equal to 101% of the principal amount of the Notes, together with accrued and unpaid interest. There can be no guarantee that, if this were to happen, we would have sufficient funds to purchase the Notes. In addition, a change of control and any repurchase of the Notes upon a change of control may constitute an event of default under our other current or future credit facilities. In that event, our obligations under such credit facilities could be declared due and payable by the lenders, and the lenders may also have the right to be paid for all outstanding obligations under such credit facilities before we repurchase any of the Notes.

Fluctuations in our operating results may result in decreases in the market price of our common stock.

     Our operating results may fluctuate on a quarterly and annual basis. Our expense levels are relatively fixed and are based, in part, on our expectations as to future revenues. As a result, unexpected changes in revenue levels may have a disproportionate effect on operating performance in any given period. In some period or periods our operating results may be below the expectations of public market analysts and investors. Our failure to meet analyst or investor expectations could result in a decrease in the market price of our common stock.

If we do not adapt our products and services to respond to changes in technology, they could become obsolete.

     We provide marketing information and services to our customers in a variety of formats, including printed formats, electronic formats such as CD-Rom and DVD, and over the Internet. Advances in information technology may result in changing customer preferences for products and product delivery formats. If we do not successfully adapt our products and services to take advantage of changes in technology and customer preferences, our business, financial condition and results of operations would be adversely affected.

     We have adopted an Internet strategy because we believe that the Internet represents an important and rapidly evolving market for marketing information products and services. Our business, financial condition and results of operations would be adversely affected if we:

• Fail to develop products and services that are well suited to the Internet market;

• Experience difficulties that delay or prevent the successful development, introduction and marketing of these products and services; or

• Fail to achieve sufficient traffic to our Internet sites to generate significant revenues, or to successfully implement electronic commerce operations.

Changes in laws and regulations relating to data privacy could adversely affect our business.

     We engage in direct marketing, as do many of our customers. Certain data and services provided by us are subject to regulation by federal, state and local authorities in the United States as well as those in Canada and the United Kingdom. In addition, growing concerns about individual privacy and the collection, distribution and use of information about individuals have led to self-regulation of such practices by the direct marketing industry through guidelines suggested by the Direct Marketing Association and to increased federal and state regulation. There is increasing awareness and concern among the general public regarding marketing and privacy concerns, particularly as it relates to the Internet. This concern is likely to result in new laws and regulations. Compliance with existing federal, state and local laws and regulations and industry self-regulation has not to date seriously affected our business, financial condition or results of operations. Nonetheless, federal, state and local laws and regulations designed to protect the public from the misuse of personal information in the marketplace and adverse publicity or potential litigation concerning the commercial use of such information may increasingly affect our operations. This could result in substantial regulatory compliance or litigation expense or a loss of revenue.

Our business would be harmed if we do not successfully integrate future acquisitions.

     Our business strategy includes continued growth through acquisitions of complementary products, technologies or businesses. We have made over 20 acquisitions since mid-1996 and completed the integration of these acquisitions into our existing business. We continue to evaluate strategic opportunities available to us and intend to pursue opportunities that we believe fit our business strategy.

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     Acquisitions of companies, products or technologies may result in the diversion of management’s time and attention from day-to-day operations of our business and may entail numerous other risks, including difficulties in assimilating and integrating acquired operations, databases, products, corporate cultures and personnel, potential loss of key employees of acquired businesses, difficulties in applying our internal controls to acquired businesses, and particular problems, liabilities or contingencies related to the businesses being acquired. To the extent our efforts to integrate future acquisitions fail, our business, financial condition and results of operations would be adversely affected.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to material future earnings or cash flow exposures from changes in interest rates as more than 50% of the Company’s debt is not at fixed rates. At September 30, 2003, the fair value of the Company’s long-term debt is based on quoted market prices at the reporting date or is estimated by discounting the future cash flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities. At September 30, 2003, the Company had long-term debt with a carrying value of $153.4 million and estimated fair value of the same. The Company has no significant operations subject to risks of foreign currency fluctuations.

ITEM 4.
CONTROLS AND PROCEDURES

As of September 30, 2003, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Exchange Act Rule 15d-15(e) and Rule 13a-15(e). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective in enabling the Company to record, process, summarize and report information required to be included in the Company’s periodic SEC filings within the required time period. There have been no changes in internal controls over financial reporting that has materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.

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infoUSA INC.
FORM 10-Q

FOR THE QUARTER ENDED

SEPTEMBER 30, 2003

PART II

OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

     On May 14, 2002, a principal of one of the acquisitions made by the Company in 1996 was awarded $1.7 million by an arbitrator for settlement of a dispute regarding exercise of stock options issued by the Company. Although the Company has appealed the arbitrator’s decision, the Company’s management, under advise from outside counsel, determined during the third quarter of 2003 that the Company was not likely to be successful in the appeal. Consequently, the Company recorded a litigation charge of $1.7 million during the three months ended September 30, 2003, for the arbitrators’ award.

ITEM 5.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security holders during the three months ended September 30, 2003.

ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.1*	—	Credit Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
10.2*	—	Pledge Agreement by and among infoUSA, Inc., Various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
10.3*	—	Security Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003
10.4*	—	Subsidiaries Guaranty Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
31.1*	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2*	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1*	—	Certification of Chief Executive Officer pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2*	—	Certification of Chief Financial Officer pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

                                 * Filed herewith

     (b) Reports on Form 8-K

     The Company filed a Form 8-K under Items 7 and 12 (filed under Item 9 as permitted by SEC guidance) on July 18, 2003 for a press release announcing second quarter results; Form 8-K under Items 5, 7 and 9 (filed under Item 9 as permitted by SEC guidance) on August 20, 2003 press releases announcing lower interest rates on the revolving line of credit, Tim Hoffman’s appointment to Chief Accounting Officer and Stormy Dean’s departure as Chief Financial Officer; Form 8-K under Items 5, 7 and 9 (filed under Item 9 as permitted by SEC guidance) on September 12, 2003 press releases announcing the Appointment of Raj Das as Chief Financial Officer and revision of guidance for 2003; and a Form 8-K under Items 7 and 12 (filed under Item 9 as permitted by SEC guidance) on October 15, 2003 for a press release announcing third quarter results.

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     SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	infoUSA INC.
Date: November 13, 2003	/s/ Tim Hoffman
	Tim Hoffman, Chief Accounting Officer (principal accounting officer)

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Exhibit Index

Exhibit			Description
	10.1	-	Credit Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
	10.2	-	Pledge Agreement by and among infoUSA, Inc., Various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
	10.3	-	Security Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003
	10.4	-	Subsidiaries Guaranty Agreement by and among infoUSA, Inc., various Lenders (as defined therein) and Bank of America, N.A. dated as of May 27, 2003.
	31.1	-	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
	31.2	-	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
	32.1	-	Certification of Chief Executive Officer pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
	32.2	-	Certification of Chief Financial Officer pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

EX-10.1 3 d10393exv10w1.txt EX-10.1 CREDIT AGREEMENT EXHIBIT 10.1 ================================================================================ CREDIT AGREEMENT among INFOUSA INC., VARIOUS LENDERS, and BANK OF AMERICA, N.A., as ADMINISTRATIVE AGENT U.S. BANK, N.A. as SYNDICATION AGENT ------------------------------ Dated as of March 6, 2002 as Amended and Restated as of May 27, 2003 BANK OF AMERICA SECURITIES LLC, as LEAD ARRANGER AND SOLE BOOK MANAGER ================================================================================ TABLE OF CONTENTS

PAGE Section 1 DEFINITIONS AND ACCOUNTING TERMS....................................................................... 1 1.01. Defined Terms.................................................................................. 1 Section 2 AMOUNT AND TERMS OF CREDIT............................................................................ 27 2.01. The Commitments............................................................................... 27 2.02. Minimum Amount of Each Borrowing.............................................................. 30 2.03. Notice of Borrowing........................................................................... 30 2.04. Disbursement of Funds......................................................................... 31 2.05. Notes......................................................................................... 32 2.06. Conversions................................................................................... 33 2.07. Pro Rata Borrowings........................................................................... 34 2.08. Interest...................................................................................... 34 2.09. Interest Periods.............................................................................. 35 2.10. Increased Costs, Illegality, etc.............................................................. 36 2.11. Compensation.................................................................................. 38 2.12. Change of Lending Office...................................................................... 38 2.13. Replacement of Lenders........................................................................ 39 2.14. Limitation on Additional Amounts.............................................................. 40 Section 3 LETTERS OF CREDIT..................................................................................... 40 3.01. Letters of Credit............................................................................. 40 3.02. Maximum Letter of Credit Outstandings; Final Maturities....................................... 41 3.03. Letter of Credit Requests; Minimum Stated Amount.............................................. 41 3.04. Letter of Credit Participations............................................................... 42 3.05. Agreement to Repay Letter of Credit Drawings.................................................. 44 3.06. Increased Costs............................................................................... 45 Section 4 COMMITMENT FEE; FEES; REDUCTIONS OF COMMITMENT........................................................ 46 4.01. Fees.......................................................................................... 46 4.02. Voluntary Termination of Unutilized Revolving Loan Commitments................................ 47 4.03. Mandatory Reduction of Commitments............................................................ 47 Section 5 PREPAYMENTS; PAYMENTS; TAXES.......................................................................... 48 5.01. Voluntary Prepayments......................................................................... 48

-i- TABLE OF CONTENTS (continued)

PAGE 5.02. Mandatory Repayments and Commitment Reductions................................................ 49 5.03. Method and Place of Payment................................................................... 53 5.04. Net Payments.................................................................................. 53 Section 6 CONDITIONS PRECEDENT TO CREDIT EVENTS ON THE RESTATEMENT EFFECTIVE DATE........................... 55 6.01. Execution of Agreement; Disclosure Letter; Notes.............................................. 55 6.02. Officer's Certificate......................................................................... 55 6.03. Opinions of Counsel........................................................................... 55 6.04. Corporate Documents; Proceedings; etc......................................................... 56 6.05. Plans; Shareholders' Agreements; Employment Agreements; Existing Indebtedness Agreements...... 56 6.07. Adverse Change, etc........................................................................... 57 6.08. Litigation.................................................................................... 58 6.09. Pledge Agreement.............................................................................. 58 6.10. Security Agreement............................................................................ 58 6.11. Mortgages..................................................................................... 58 6.12. Evidence of Perfection, etc................................................................... 59 6.13. Subsidiaries Guaranty......................................................................... 60 6.14. Insurance Policies............................................................................ 60 6.16. Financial Statements; Projections............................................................. 60 6.17. Solvency Certificate; Insurance Certificates.................................................. 60 6.18. Senior Subordinated Note Compliance........................................................... 60 6.19. Fees, etc..................................................................................... 61 6.20. Consummation of the Refinancing............................................................... 61 Section 7 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS......................................................... 61 7.01. No Default; Representations and Warranties.................................................... 61 7.02. Notice of Borrowing; Letter of Credit Request................................................. 62 Section 8 REPRESENTATIONS, WARRANTIES AND AGREEMENTS........................................................ 62 8.01. Organizational Status......................................................................... 62 8.02. Power and Authority........................................................................... 63

-ii- TABLE OF CONTENTS (continued)

PAGE 8.03. No Violation.................................................................................. 63 8.04. Approvals..................................................................................... 63 8.05. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc.......... 63 8.06. Litigation.................................................................................... 65 8.07. True and Complete Disclosure.................................................................. 65 8.08. Use of Proceeds; Margin Regulations........................................................... 65 8.09. Tax Returns and Payments...................................................................... 65 8.10. Compliance with ERISA......................................................................... 66 8.11. The Security Documents........................................................................ 67 8.12. Representations and Warranties in the Credit Documents........................................ 68 8.13. Properties.................................................................................... 68 8.14. Capitalization................................................................................ 68 8.15. Subsidiaries.................................................................................. 68 8.16. Compliance with Statutes, etc................................................................. 69 8.17. Investment Company Act........................................................................ 69 8.18. Public Utility Holding Company Act............................................................ 69 8.19. Environmental Matters......................................................................... 69 8.20. Labor Relations............................................................................... 70 8.21. Patents, Licenses, Franchises and Formulas.................................................... 70 8.22. Indebtedness.................................................................................. 70 8.23. Refinancing................................................................................... 70 8.24. Insurance..................................................................................... 71 8.25. Senior Subordinated Notes..................................................................... 71 Section 9 AFFIRMATIVE COVENANTS............................................................................. 71 9.01. Information Covenants......................................................................... 71 9.02. Books, Records and Inspections; Annual Meetings............................................... 74 9.03. Maintenance of Property; Insurance............................................................ 74 9.04. Existence; Franchises......................................................................... 75 9.05. Compliance with Statutes, etc................................................................. 75

-iii- TABLE OF CONTENTS (continued)

PAGE 9.06. Compliance with Environmental Laws............................................................ 76 9.07. ERISA......................................................................................... 76 9.08. End of Fiscal Years; Fiscal Quarters.......................................................... 78 9.09. Performance of Obligations.................................................................... 78 9.10. Payment of Taxes.............................................................................. 78 9.11. Additional Security; Further Assurances....................................................... 78 9.12. Use of Proceeds............................................................................... 79 9.13. Foreign Subsidiaries Security................................................................. 79 9.14. Margin Stock.................................................................................. 80 9.15. Permitted Acquisitions........................................................................ 80 Section 10 NEGATIVE COVENANTS................................................................................ 83 10.01. Liens......................................................................................... 83 10.02. Consolidation, Merger, Purchase or Sale of Assets, etc........................................ 86 10.03. Dividends..................................................................................... 87 10.04. Indebtedness.................................................................................. 88 10.05. Advances, Investments and Loans............................................................... 90 10.06. Transactions with Affiliates.................................................................. 92 10.07. Consolidated Fixed Charge Coverage Ratio...................................................... 93 10.08. Maximum Total Leverage Ratio.................................................................. 93 10.09. Maximum Senior Leverage Ratio................................................................. 93 10.10. Minimum Consolidated EBITDA................................................................... 94 10.11. Consolidated Net Worth........................................................................ 94 10.12. Limitation on Voluntary Payments and Modifications of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc....................... 94 10.13. Limitation on Certain Restrictions on Subsidiaries............................................ 95 10.14. Limitation on Issuance of Capital Stock....................................................... 96 10.15. Business...................................................................................... 96 10.16. Limitation on Creation of Subsidiaries........................................................ 96 Section 11 EVENTS OF DEFAULT................................................................................. 97 11.01. Payments...................................................................................... 97

-iv- TABLE OF CONTENTS (continued)

PAGE 11.02. Representations, etc.......................................................................... 97 11.03. Covenants..................................................................................... 97 11.04. Default Under Other Agreements................................................................ 98 11.05. Bankruptcy, etc............................................................................... 98 11.06. ERISA......................................................................................... 98 11.07. Security Documents............................................................................ 99 11.08. Subsidiaries Guaranty......................................................................... 99 11.09. Judgments..................................................................................... 99 11.10. Change of Control............................................................................. 100 Section 12 THE ADMINISTRATIVE AGENT.......................................................................... 100 12.01. Appointment................................................................................... 100 12.02. Nature of Duties.............................................................................. 101 12.03. Lack of Reliance on the Administrative Agent.................................................. 101 12.04. Certain Rights of the Administrative Agent.................................................... 101 12.05. Reliance...................................................................................... 102 12.06. Indemnification............................................................................... 102 12.07. The Administrative Agent in its Individual Capacity........................................... 102 12.08. Holders....................................................................................... 102 12.09. Resignation by the Administrative Agent....................................................... 103 12.10. Issuing Lender................................................................................ 103 Section 13 MISCELLANEOUS..................................................................................... 103 13.01. Payment of Expenses, etc...................................................................... 103 13.02. Right of Setoff............................................................................... 105 13.03. Notices....................................................................................... 105 13.04. Benefit of Agreement; Assignments; Participations............................................. 105 13.05. No Waiver; Remedies Cumulative................................................................ 108 13.06. Payments Pro Rata............................................................................. 108 13.07. Calculations; Computations; Accounting Terms.................................................. 109 13.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL........................ 109

-v- TABLE OF CONTENTS (continued)

PAGE 13.09. Counterparts................................................................................. 110 13.11. Headings Descriptive......................................................................... 111 13.12. Amendment or Waiver; etc..................................................................... 111 13.13. Survival..................................................................................... 113 13.14. Domicile of Loans............................................................................ 113 13.15. Register..................................................................................... 113 13.16. Confidentiality.............................................................................. 113 13.17. Certain Agreements with respect to the Senior Subordinated Notes............................. 114

-vi- SCHEDULE I Commitments SCHEDULE II Lender Addresses SCHEDULE III Disclosure Letter EXHIBIT A Notice of Borrowing EXHIBIT B-1 Term Note EXHIBIT B-2 Revolving Note EXHIBIT B-3 Swingline Note EXHIBIT C Letter of Credit Request EXHIBIT D Section 5.04(b)(ii) Certificate EXHIBIT E-1 Opinion of Robins Kaplan Miller & Ciresi LLP EXHIBIT E-2 Opinion of Illinois Counsel EXHIBIT E-3 Opinion of Iowa and Nebraska Counsel EXHIBIT E-4 Opinion of Wisconsin Counsel EXHIBIT F Officers' Certificate EXHIBIT G Pledge Agreement EXHIBIT H Security Agreement EXHIBIT I Subsidiaries Guaranty EXHIBIT J Solvency Certificate EXHIBIT K Assignment and Assumption Agreement EXHIBIT L Intercompany Note EXHIBIT M Subordination Provisions EXHIBIT N Mortgage EXHIBIT O Compliance Certificate -vii- CREDIT AGREEMENT, dated as of March 6, 2002 as amended and restated as of May 27, 2003 among INFOUSA INC., a Delaware corporation (the "Borrower"), the Lenders party hereto from time to time, and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") (all capitalized terms used herein and defined in Section 1 are used herein as therein defined). W I T N E S S E T H : WHEREAS, the Borrower, the Lenders, and the Administrative Agent are parties to a Credit Agreement dated as of March 6, 2002, (as heretofore amended or modified, the "Existing Credit Agreement") pursuant to which the Lenders agreed to extend credit to the Borrower; WHEREAS, the parties to this Agreement have agreed to amend the Existing Credit Agreement so as to, among other things, (i) revise the terms of the Loans, (ii) provide for certain entities to become or cease to be Lenders hereunder, (iii) revise certain covenants of the Borrower, and (iv) make certain other changes to the Existing Credit Agreement; WHEREAS. the parties hereto desire to amend and restate in its entirety the Existing Credit Agreement; NOW, THEREFORE, IT IS AGREED, that effective as of the Restatement Effective Date, the Existing Credit Agreement is amended and restated in its entirety as follows: SECTION 1 DEFINITIONS AND ACCOUNTING TERMS. 1.01. Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Acquired EBITDA" of any Acquired Entity or Business acquired pursuant to a Permitted Acquisition shall mean the consolidated "EBITDA" of such Acquired Entity or Business calculated on a basis consistent with the calculation of Consolidated EBITDA under this Agreement and reasonably approved by the Administrative Agent. "Acquired Entity or Business" shall have the meaning provided in the definition of "Permitted Acquisition." "Additional Security Documents" shall have the meaning provided in Section 9.11. "Administrative Agent" shall mean Bank of America, in its capacity as Administrative Agent for the Lenders hereunder, and shall include any successor to the Administrative Agent appointed pursuant to Section 12.09. "Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided that neither the Administrative Agent nor any Lender (nor any affiliate thereof) shall be considered an Affiliate of the Borrower or any Subsidiary thereof. "Agreement" shall mean this Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended, renewed, refinanced or replaced from time to time. "Applicable Margin" shall mean with respect to Term Loans, , Revolving Loans, Swingline Loans and Commitment Fees, from and after any Start Date to and including the corresponding End Date, the respective percentage per annum set forth below under the respective Type of Term Loans, Revolving Loans, Swingline Loans or Commitment Fees and opposite the respective Level (i.e., Level 1, Level 2, Level 3, Level 4, or Level 5, as the case may be) indicated to have been achieved on the applicable Test Date for such Start Date (as shown on the respective officer's certificate delivered pursuant to Section 9.01(f) or the first proviso below):

APPLICABLE MARGIN FOR APPLICABLE MARGINS FOR EURODOLLAR LOANS BASE RATE LOANS ---------------------- ----------------------- CONSOLIDATED REVOLVING TOTAL LOANS, AND LEVERAGE REVOLVING TERM SWINGLINE TERM COMMITMENT LEVEL RATIO LOANS LOANS LOANS LOANS FEES - ------------------------------------------------------------------------------------------------- 1 TLR > or = 3.00:1 3.000% 4.000% 2.000% 3.000% 0.500% 2 TLR > or = 2.50:1 2.750% 4.000% 1.750% 3.000% 0.500% but < 3.00:1 3 TLR > or = 2.00:1 2.500% 4.000% 1.500% 3.000% 0.450% but < 2.50:1 4 TLR > or = 1.50:1 2.250% 4.000% 1.250% 3.000% 0.400% but < 2.00:1 5 TLR <1.50:1 2.000% 4.000% 1.000% 3.000% 0.350%

-2- provided, however, that if the Borrower fails to deliver the financial statements required to be delivered pursuant to Section 9.01(b) or (c) (accompanied by the officer's certificate required to be delivered pursuant to Section 9.01(f) showing the applicable Consolidated Total Leverage Ratio on the relevant Test Date) on or prior to the respective date required by such Sections, then Level 1 pricing shall apply until such time, if any, as the financial statements required as set forth above and the accompanying officer's certificate have been delivered showing the pricing for the respective Margin Reduction Period is at a level which is less than Level 1 (it being understood that, in the case of any late delivery of the financial statements and officer's certificate as so required, the Applicable Margin, if any, shall apply only from and after the date of the delivery of the complying financial statements and officer's certificate); provided further, that subject to Section 2.08(c), Level 1 pricing shall apply at any time when any Default or Event of Default is in existence. Notwithstanding anything to the contrary contained in the immediately preceding sentence, Level 2 pricing shall apply for the period from the Initial Borrowing Date to but not including the date which is the first Start Date after the Borrower's fiscal quarter ending on March 31, 2003. The Applicable Margin in respect of Commitment Fees is sometimes called the Commitment Fee Rate. "Asset Sale" shall mean any sale, transfer or other disposition by the Borrower or any of its Subsidiaries to any Person (including by way of redemption by such Person) other than to the Borrower or a Wholly-Owned Subsidiary of the Borrower of any asset (including, without limitation, any capital stock or other securities of, or equity interests in, another Person) other than sales of assets pursuant to Sections 10.02(ii), (iii), (viii) and (ix). "Assignment and Assumption Agreement" shall mean an Assignment and Assumption Agreement substantially in the form of Exhibit K, or in any other form approved by the Administrative Agent (appropriately completed). "Bank of America" shall mean Bank of America, N.A., in its individual capacity, and any successor corporation thereto by merger, consolidation or otherwise. "Bankruptcy Code" shall have the meaning provided in Section 11.05. "Base Rate" shall mean for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." Such rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the -3- opening of business on the day specified in the public announcement of such change. "Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each other Loan designated or deemed designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Borrower" shall have the meaning provided in the first paragraph of this Agreement. "Borrowing" shall mean the borrowing of one Type of Loan of a single Tranche from all the Lenders having Commitments (or from the Swingline Lender in the case of Swingline Loans) on a given date (or resulting from a conversion or conversions on such date) having in the case of Eurodollar Loans the same Interest Period, provided that Base Rate Loans incurred pursuant to Section 2.10(b) shall be considered part of the related Borrowing of Eurodollar Loans. "Business Day" shall mean (i) for all purposes other than as covered by clause (ii) below, any day except Saturday, Sunday and any day which shall be in New York, New York or Chicago, Illinois or Charlotte, North Carolina a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (i) above and which is also a day for trading by and between banks in the interbank Eurodollar market. "Capital Expenditures" shall mean, with respect to any Person, all capital expenditures by such Person, as the same are (or would in accordance with GAAP be) set forth in the consolidated statement of cash flows of the Borrower and its Subsidiaries, exclusive of (A) expenditures made in connection with the acquisition of assets in any Permitted Acquisition, and (B) expenditures made in connection with the replacement or restoration of assets to the extent financed (i) from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored, or (ii) with proceeds from the sale or other disposition of an asset which is replaced within 180 days from such sale or other disposition with another asset performing the same or a similar function. "Capitalized Lease Obligations" shall mean, with respect to any Person, all rental obligations of such Person which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles. "Cash Equivalents" shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or -4- instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) marketable direct obligations issued by the District of Columbia or any state of the United States or any political subdivision of the District of Columbia or any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Ratings Services or Moody's Investors Service, Inc., (iii) Dollar denominated time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least "A" or the equivalent thereof from Standard & Poor's Ratings Services or "A2" or the equivalent thereof from Moody's Investors Service, Inc. with maturities of not more than one year from the date of acquisition by such Person, (iv) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iii) above, (v) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by Moody's Investors Service, Inc. and in each case maturing not more than one year after the date of acquisition by such Person, (vi) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (v) above, and (vii) in the case of any Foreign Subsidiary, (A) direct obligations of the sovereign nation (or any agency thereof) in which such Foreign Subsidiary is organized or is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof) having maturities of not more than one year from the date of acquisition or (B) obligations of the type and maturity described in clauses (iii), (iv) or (v) above of foreign obligors, which obligations or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. Section 9601 et seq. "Change of Control" shall mean (i) any Person or "group" (within the meaning of Sections 13(d) and 14(d) under the Securities Exchange Act, as in effect on the Original Effective Date), other than a Permitted Holder, shall (A) have acquired beneficial ownership of 30% or more on a fully diluted basis of the voting and/or economic interest in the Borrower's capital stock or (B) obtained the power (whether or not exercised) to elect a majority of the Borrower's directors or (ii) the Board of Directors of the Borrower shall cease to consist of a majority of Continuing Directors or (iii) any "change of control" under, and as defined in, the Senior Subordinated Note Indenture shall occur. -5- "Change of Law" shall have the meaning provided in Section 11.06. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor. "Collateral" shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged Properties and all cash and Cash Equivalents delivered as collateral pursuant to Section 5.02 or 11. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the Secured Creditors pursuant to the Security Documents. "Collective Bargaining Agreements" shall have the meaning provided in Section 6.05. "Commitment" shall mean any of the commitments of any Lender, (i.e., whether the Term Loan Commitment, or the Revolving Loan Commitment). "Commitment Fee" shall have the meaning provided in Section 4.01(a). "Commitment Fee Rate" shall have the meaning provided in the definition of Applicable Margin. "Consolidated Capital Expenditures" shall mean, for any period, all Capital Expenditures of the Borrower and its Subsidiaries on a consolidated basis for such period. "Consolidated EBITDA" shall mean, for any period, an amount equal to the sum of (a) the net income of the Borrower and its Subsidiary Guarantors ("Consolidated Net Income") on a consolidated basis from continuing operations (such net income to be exclusive of (i) non-cash charges comprising (A) impairment of assets, (B) cumulative effects of changes in accounting principles (all of which are to be in accordance with GAAP), (C) any non-cash stock compensation; and (ii) extraordinary gains), (b) Consolidated Interest Expense for such period, (c) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated Net Income for such period, and (d) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income for such period. Consolidated EBITDA shall not be calculated on a pro forma basis. -6- "Consolidated Fixed Charge Coverage Ratio" (or "Fixed Charge Coverage Ratio") shall mean, at any date, the ratio of (a) Consolidated EBITDA for the Test Period then most recently ended less Consolidated Capital Expenditures for such Test Period to (b) Consolidated Fixed Charges for such Period. "Consolidated Fixed Charges" shall mean, for any period, the sum of the following (without duplication): (i) Consolidated Interest Expense paid or required to be paid in cash for such period; (ii) income and franchise taxes paid or required to be paid in cash by the Borrower and its Subsidiaries on a consolidated basis during such period; (iii) all scheduled payments of principal made or required to be made with respect to all Indebtedness (including the principal portion of Capitalized Leases Obligations) of the Borrower and its Subsidiaries on a consolidated basis during such period; and (iv) all Restricted Payments made or required to be made by the Borrower and its Subsidiaries on a consolidated basis during such period (exclusive of Restricted Payments in respect of Subordinated Debt permitted under Sections 10.12(a)-(b)). "Consolidated Indebtedness" shall mean, at any time, the principal amount of all Indebtedness of the Borrower and its Subsidiaries at such time; provided that for purposes of this definition, the amount of Indebtedness in respect of Interest Rate Protection Agreements and Other Hedging Agreements shall be at any time the unrealized net loss position, if any, of the Borrower and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than one month prior to such time. "Consolidated Interest Expense" shall mean, for any period, the total consolidated interest expense of the Borrower and its Subsidiaries for such period (calculated without regard to any limitations on the payment thereof) plus, without duplication, that portion of Capitalized Lease Obligations of the Borrower and its Subsidiaries representing the interest factor for such period; provided that the amortization of deferred financing, legal and accounting costs with respect to this Agreement shall be excluded from Consolidated Interest Expense to the extent same would otherwise have been included therein. "Consolidated Net Income" shall have the meaning given to it in the definition of "Consolidated EBITDA." "Consolidated Net Worth" shall mean, at any time, for the Borrower and its Subsidiaries, on a consolidated basis, shareholders' equity at such time. "Consolidated Senior Leverage Ratio" (and sometimes also referred to as the "Senior Leverage Ratio" or "SLR") shall mean, at any time, the ratio of Consolidated Indebtedness (excluding Subordinated Debt) at such time to Consolidated EBITDA for the Test Period then most recently ended. -7- "Consolidated Total Leverage Ratio" (and sometimes also referred to as the "Total Leverage Ratio" or "TLR") shall mean, at any time, the ratio of Consolidated Indebtedness at such time to Consolidated EBITDA for the Test Period then most recently ended, provided, however, that during the period of ninety days after the Restatement Effective Date if the Borrower elects pursuant to Section 10.08 to irrevocably reduce the Consolidated Total Leverage Ratio to 2.50:1.00, then the Consolidated Total Leverage Ratio shall be deemed to mean, at any time, the ratio of (i) Consolidated Indebtedness at such time less the funds available in the Special Collateral Account (but not more than $35,000,000 in the Special Collateral Account) to (ii) Consolidated EBITDA for the Test Period then most recently ended. "Contingent Obligation" shall mean, as to any Person, any obligation of such Person as a result of such Person being a general partner of the other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such 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 (x) for the purchase or payment of any such primary obligation or (y) 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 holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "Continuing Directors" shall mean the directors of the Borrower on the Initial Borrowing Date and each other director if such director's nomination for election to the Board of Directors of the Borrower is recommended by a majority of the then Continuing Directors. "Control Agreement" shall mean a "Control Agreement" as defined in the Security Agreement. -8- "Credit Documents" shall mean this Agreement, the Disclosure Letter and, after the execution and delivery thereof pursuant to the terms of this Agreement, each Note, the Subsidiaries Guaranty and each Security Document. "Credit Event" shall mean the making of any Loan or the issuance of any Letter of Credit. "Credit Party" shall mean the Borrower and each Subsidiary Guarantor. "Debt Rating" shall have the meaning provided in Section 13.18. "Default" shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Defaulting Lender" shall mean any Lender with respect to which a Lender Default is in effect. "Disclosure Letter" shall mean the Disclosure Letter of even date herewith delivered by the Borrower to the Administrative Agent and the Lenders, a copy of which is attached as Schedule III. "Dividend" shall mean, with respect to any Person, that such Person has declared or paid a dividend or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common stock of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or any partnership or membership interests outstanding on or after the Original Effective Date (or any options or warrants issued by such Person with respect to its capital stock or other equity interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock or any partnership or membership interests of such Person outstanding on or after the Original Effective Date (or any options or warrants issued by such Person with respect to its capital stock or other equity interests). Without limiting the foregoing, "Dividends" with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes. "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States. "Domestic Subsidiary" shall mean each Subsidiary of the Borrower that is incorporated under the laws of the United States or any State thereof. -9- "Drawing" shall have the meaning provided in Section 3.05(b). "Eligible Transferee" shall mean and include a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other "accredited investor" (as defined in Regulation D of the Securities Act), but in any event excluding the Borrower and its Subsidiaries. "Employee Benefit Plans" shall have the meaning provided in Section 6.05. "Employment Agreements" shall have the meaning provided in Section 6.05. "End Date" shall mean, for any Margin Reduction Period, the last day of such Margin Reduction Period. "Environmental Claims" shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, "Claims"), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials. "Environmental Law" shall mean any Federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time. -10- "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor. "ERISA Affiliate" shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a "single employer" (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of the Borrower being or having been a general partner of such person. "Eurodollar Loan" shall mean each Loan (other than any Swingline Loan) designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Eurodollar Rate" shall mean for any Interest Period with respect to any Eurodollar Loan, a rate per annum determined by Administrative Agent pursuant to the following formula: Eurodollar Rate = Eurodollar Rate ------------------------------------------ 1.00 - Eurodollar Reserve Percentage Where, "Eurodollar Rate" shall mean, for such Interest Period: (a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate screen that displays an average British Bankers Association Interest Settlement Rate for deposits in U.S. Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (b) in the event the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (c) in the event the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest (rounded to the next 1/100th of 1%) at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the -11- Eurodollar Loan being made, continued or converted by Administrative Agent (or its Affiliate) in its capacity as a lender and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period. "Eurodollar Reserve Percentage" shall mean, for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded to the next 1/100th of 1%) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each outstanding Eurodollar Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. The determination of the Eurodollar Reserve Percentage and the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. "Event of Default" shall have the meaning provided in Section 11. "Excess Cash Flow" shall mean, for any period, (a) Consolidated EBITDA less (b) the sum of (i) Consolidated Interest Expense paid or required to be paid in cash for such period, (ii) all scheduled payments of principal made or required to be made with respect to all Indebtedness (including the principal portion of Capitalized Lease Obligation) for such period, (iii) all Capital Expenditures for such period, (iv) all income and franchise taxes paid or required to be paid in cash by the Borrower and its Subsidiaries on a consolidated basis during such period, and (v) all prepayments of the Term Loans made pursuant to Section 5.01. "Excess Cash Payment Date" shall mean April 15 of each fiscal year of the Borrower (beginning with April 15, 2004). "Excess Cash Payment Period" shall mean, with respect to the repayment required on each Excess Cash Payment Date, the immediately preceding fiscal year of the Borrower. "Existing Credit Agreement" shall have the meaning provided in the Recitals. "Existing Indebtedness" shall have the meaning provided in Section 8.22. "Existing Indebtedness Agreements" shall have the meaning provided in Section 6.05. -12- "Existing Letters of Credit" shall mean the Letters of Credit, if any, issued under the Existing Credit Agreement to the extent the same remain outstanding and undrawn as of the opening of business on the Restatement Effective Date. "Existing Obligations" shall have the meaning provided in Section 6.20. "Federal Funds Rate" shall mean, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Bank of America on such day on such transactions as determined by the Administrative Agent. "Fees" shall mean all amounts payable pursuant to or referred to in Section 4.01. "Foreign Pension Plan" shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code. "Foreign Subsidiary" shall mean each Subsidiary of the Borrower which is not a Domestic Subsidiary. "Fronting Fee" shall have the meaning provided in Section 4.01(c). "GAAP" shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board of such other principles as may be approved by a significant segment of the accounting professions, that are applicable to the circumstances as of the date of determination, consistently applied. "Hazardous Materials" shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is friable, urea formaldehyde foam insulation, transformers or other equipment that contains -13- dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous substances," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants," or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, the Release of which is prohibited, limited or regulated by any governmental authority. "Inactive Subsidiary" shall mean each of Direct Magi Inc. and DBA FL Inc., each a New Jersey corporation and a Wholly-Owned Domestic Subsidiary of the Borrower. "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all letters of credit, bankers' acceptances and similar obligations issued for the account of such Person and all unpaid drawings in respect of such letters of credit, bankers' acceptances and similar obligations, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee, (v) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of such Person, and (vii) all obligations under any Interest Rate Protection Agreement, any Other Hedging Agreement or under any similar type of agreement. Notwithstanding the foregoing, Indebtedness shall not include trade payables and accrued expenses incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person. "Initial Borrowing Date" shall mean the Restatement Effective Date. "Intercompany Loan" shall mean each intercompany loan or advance between or among the Borrower and its Subsidiaries or between or among Subsidiaries of the Borrower. "Intercompany Note" shall mean a promissory note, in the form of Exhibit L or in such other form as is reasonably acceptable to the Administrative Agent, evidencing Intercompany Loans. -14- "Interest Determination Date" shall mean, with respect to any Eurodollar Loan, the second Business Day prior to the commencement of any Interest Period relating to such Eurodollar Loan. "Interest Period" shall have the meaning provided in Section 2.09. "Interest Rate Protection Agreement" shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement. "Investments" shall have the meaning provided in Section 10.05. "Issuing Lender" shall mean Bank of America. "L/C Supportable Obligations" shall mean (i) obligations of the Borrower or any of its Subsidiaries with respect to workers compensation, surety bonds and other similar statutory obligations and (ii) such other obligations of the Borrower or any of its Subsidiaries as are reasonably acceptable to the Issuing Lender and otherwise permitted to exist pursuant to the terms of this Agreement (other than obligations in respect of the Senior Subordinated Notes). "Leaseholds" of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures. "Lender" shall mean each financial institution listed on Schedule I, as well as any Person that becomes a "Lender" hereunder pursuant to Sections 2.13 or 13.04(b). "Lender Default" shall mean (i) the refusal (which has not been retracted) or the failure of a Lender to make available its portion of any Borrowing (including any Mandatory Borrowing) or to fund its portion of any unreimbursed payment under Section 3.04(c) or (ii) a Lender having notified in writing the Borrower and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 2.01(b), 2.01(c), 2.01(e) or 3. "Letter of Credit" shall have the meaning provided in Section 3.01(a). "Letter of Credit Fee" shall have the meaning provided in Section 4.01(b). "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit. "Letter of Credit Request" shall have the meaning provided in Section 3.03(a). -15- "Lien" shall mean any mortgage, security interest, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing). "Loan" shall mean each Term Loan, each Revolving Loan and each Swingline Loan. "Management Agreements" shall have the meaning provided in Section 6.05. "Mandatory Borrowing" shall have the meaning provided in Section 2.01(e). "Margin Reduction Period" shall mean each period which shall commence on the date occurring after the Initial Borrowing Date upon which respective officer's certificate is delivered pursuant to Section 9.01(f) and which shall end on the date of actual delivery of the next officer's certificates pursuant to section 9.01(f) or the latest date on which such next officer's certificate is required to be so delivered. "Margin Stock" shall have the meaning provided in Regulation U. "Material Adverse Effect" shall mean (i) a material adverse effect on the business, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a whole, or (ii) a material adverse effect on the rights or remedies of the Lenders or the Administrative Agent hereunder or under any other Credit Document or on the ability of any Credit Party to perform its obligations to the Lenders or the Administrative Agent hereunder or under any other Credit Document. "Maturity Date" shall mean the Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may be. "Maximum Swingline Amount" shall mean $5,000,000. "Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000, (ii) for Revolving Loans, $500,000 and (iii) for Swingline Loans, $100,000. "Moody's" shall have the meaning provided in Section 13.18. -16- "Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or similar security instrument. "Mortgaged Property" shall mean any Real Property owned or leased by the Borrower or any Subsidiary Guarantor which is encumbered (or required to be encumbered) by a Mortgage. "Net Acquisition Consideration" shall mean the Total Consideration for a Permitted Acquisition (i) less cash and Cash Equivalents that are acquired in such Permitted Acquisition, and (ii) plus the present value of any earn-out, non-compete or deferred compensation or purchase price adjustments, and (iii) less or plus any working capital adjustments, as applicable, and as provided in Section 9.15. "Net Debt Proceeds" shall mean, with respect to any incurrence of Indebtedness for borrowed money, the cash proceeds (net of underwriting discounts and commissions and other reasonable costs associated therewith) received by the respective Person from the respective incurrence of such Indebtedness for borrowed money. "Net Equity Proceeds" shall mean, with respect to each issuance or sale of any equity by any Person or any capital contribution to such Person, the cash proceeds (net of underwriting discounts and commissions and other reasonable costs associated therewith) received by such Person from the respective sale or issuance of its equity or from the respective capital contribution. The term "Net Equity Proceeds" also shall include the amount of Net Debt Proceeds received by the Borrower from the issuance or incurrence of Indebtedness for borrowed money under Section 10.04(xii) which is convertible into shares of the Borrower's capital stock, although such Net Equity Proceeds shall not be considered to be received by the Borrower until such conversion occurs. "Net Insurance Proceeds" shall mean, with respect to any Recovery Event, the cash proceeds (net of reasonable costs and taxes incurred in connection with such Recovery Event) received by the respective Person in connection with such Recovery Event. "Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such sale of assets, net of the reasonable costs of such sale (including fees and commissions, payments of unassumed liabilities relating to the assets sold and required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were sold), and the incremental taxes paid or payable as a result of such Asset Sale. -17- "Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall mean and include each Lender or RL Lender, as the case may be, other than a Defaulting Lender. "Non-Renewing Lender" shall mean each Lender under the Existing Credit Agreement which on or before the Restatement Effective Date does not execute and deliver to the Administrative Agent an executed counterpart as provided in Section 6 of this Agreement. "Note" shall mean each Term Note, each Revolving Note and the Swingline Note. "Notice of Borrowing" shall have the meaning provided in Section 2.03(a). "Notice of Conversion" shall have the meaning provided in Section 2.06. "Notice Office" shall mean the office of the Administrative Agent located at 231 South LaSalle Street, Chicago, Illinois 60697, Attention: David Johanson or such other office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. "Obligations" shall mean all amounts owing to the Administrative Agent, the Collateral Agent, the Issuing Lender, the Swingline Lender or any Lender pursuant to the terms of this Agreement or any other Credit Document. "Operating Leases" shall mean all leases for real or personal property that are not Capitalized Lease Obligations. "Original Effective Date" shall have the meaning given to "Effective Date" in the Existing Credit Agreement. "Other Hedging Agreement" shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency values. "Participant" shall have the meaning provided in Section 3.04(a). "Payment Office" shall mean the office of the Administrative Agent located at 231 South LaSalle Street, Chicago, Illinois 60697, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. -18- "Permitted Acquisition" shall mean the acquisition by the Borrower or a Wholly-Owned Subsidiary thereof of assets constituting a business, division or product line of any Person not already a Subsidiary of the Borrower or of 100% of the capital stock of any such Person (including by way of merger), which Person shall, as a result of such stock acquisition, become a Wholly-Owned Subsidiary of the Borrower (or shall be merged with and into a Wholly-Owned Subsidiary of the Borrower) (such assets or Person are referred to as an "Acquired Entity or Business"), provided that (in each case): (A) the consideration paid by the Borrower or such Wholly-Owned Subsidiary consists solely of cash (including proceeds of Loans), the issuance or incurrence of Indebtedness otherwise permitted by Section 10.04, the issuance of common stock of the Borrower or Qualified Preferred Stock of the Borrower to the extent no Default or Event of Default exists pursuant to Section 11.10 or would result therefrom and the assumption/ acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 10.04; (B) in the case of the acquisition of 100% of the capital stock of any Person (including way of merger), such Person shall own no capital stock of any other Person (other de minimis amounts) unless either (x) such Person owns 100% of the capital stock of such other Person or (y) (1) such Person and/or its Wholly-Owned Subsidiaries own at least 80% of the consolidated assets of such Person and its Subsidiaries and (2) any non-Wholly Owned Subsidiary of such Person was non-Wholly Owned prior to the date of such Permitted Acquisition of such Person; (C) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 10.15; and (D) all applicable requirements of Sections 9.15, 10.02 and 10.16 applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to the contrary contained in the immediately preceding sentence, an acquisition which does not otherwise meet the requirements set forth above in the definition of "Permitted Acquisition" shall constitute a Permitted Acquisition if, and to the extent, the Required Lenders agree in writing that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement. "Permitted Encumbrance" shall mean, with respect to any Mortgaged Property, such exceptions to title as are set forth in the respective mortgage title -19- insurance policy delivered with respect thereto, all of which exceptions must be acceptable to the Administrative Agent in its reasonable discretion. "Permitted Holders" shall mean Vinod Gupta and his spouse, their lineal descendants and adopted children and spouses of their lineal descendants and adopted children, any foundation controlled by any of the foregoing persons, any trusts for the benefit of any of the foregoing persons and any Affiliates of the foregoing persons. "Permitted Liens" shall have the meaning provided in Section 10.01. "Person" shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" shall mean any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. "Pledge Agreement" shall have the meaning provided in Section 6.09. "Pledge Agreement Collateral" shall mean all "Collateral" as defined in the Pledge Agreement. "Projections" shall mean the projections prepared by the Borrower as set forth in the Confidential Offering Memorandum relating to the financing hereunder, dated April 2003, which Confidential Offering Memorandum was furnished by Bank of America Securities LLC (with the assistance and approval of the Borrower) to the Lenders prior to the Restatement Effective Date. "Qualified Preferred Stock" shall mean any preferred stock of the Borrower so long as the terms of any such preferred stock (v) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision, except upon the occurrence of a change of control (the definition of which shall be no more restrictive than that set forth in the Senior Subordinated Note Indenture) so long as the terms thereof do not require any such redemption or other action unless (and until) all Obligations have been paid in full and the Total Commitment and all Letters of Credit have been terminated or the requisite consents under this Agreement have been obtained to permit such redemption or other action, (w) do not require the cash payment of dividends to the extent that the payment thereof would not be permitted at such time pursuant to this -20- Agreement, (x) do not contain any operating or financial maintenance covenants, (y) do not grant the holders thereof any voting rights (prior to the conversion into common stock of the Borrower, if applicable) except for (I) voting rights required to be granted to such holders under applicable law and (II) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of the Borrower, or liquidations involving the Borrower, and (z) are otherwise reasonably satisfactory to the Administrative Agent. "Quarterly Payment Date" shall mean the last Business Day of each December, March, June and September occurring after the Initial Borrowing Date, commencing on June 30, 2003. "RCRA" shall mean the Resource Conservation and Recovery Act, as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq. "Real Property" of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds. "Recovery Event" shall mean the receipt by the Borrower or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable (i) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of the Borrower or any of its Subsidiaries and (ii) under any policy of insurance required to be maintained under Section 9.03. "Refinancing" shall have the meaning provided in Section 6.20. "Register" shall have the meaning provided in Section 13.15. "Regulation D", "Regulation T", "Regulation U" or "Regulation X", as the case may be, shall mean Regulation D, T, U or X, as the case may be, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Release" shall mean the disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or migrating, into or upon any land or water or air, or otherwise entering into the environment. "Replaced Lender" shall have the meaning provided in Section 2.13. "Replacement Lender" shall have the meaning provided in Section 2.13. "Reportable Event" shall mean an event described in Section 4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA other than those -21- events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043. "Required Lenders" shall mean Non-Defaulting Lenders the sum of whose outstanding Term Loans and Revolving Loan Commitments (or after the termination thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding Swingline Loans and (y) Letter of Credit Outstandings) represent more than 50% of the sum of (i) the aggregate principal amount of all outstanding Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Loan Commitment less the Revolving Loan Commitments of all Defaulting Lenders (or after the termination thereof, the sum of the then aggregate principal amount of all outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages of all Non-Defaulting Lenders of the total (x) the aggregate principal amount of outstanding Swingline Loans and (y) Letter of Credit Outstandings at such time). "Restatement Effective Date" shall have the meaning provided in Section 6. "Restricted Payments" shall mean in respect of a period, (i) any and all Dividends authorized, declared or paid with respect to the Borrower or any of its Subsidiaries pursuant to clauses (iii), (iv), (v), and (vi) of Section 10.03, (ii) the payment, prepayment, retirement, redemption, defeasance, or acquisition by the Borrower and/or any Subsidiary of any Subordinated Debt (excluding the (A) payment in full of the 6% Subordinated Notes in the original principal amount of $6,000,000, due September 29, 2003, and issued in connection with the acquisition of TGMVC (f/k/a Infousa.com, Inc.), which have been repaid in full prior to the date of this Credit Agreement, and (B) any repayments of the Senior Subordinated Notes made prior to Restatement Effective Date), and (iii) any and all payments ("earnout payments") required to be made by the Borrower or any Subsidiary which are based on the earnings or revenues relating to any Permitted Acquisitions. "Revolving Loan" shall have the meaning provided in Section 2.01(c). "Revolving Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name in Schedule I directly below the column entitled "Revolving Loan Commitment," as same may be (x) reduced from time to time pursuant to Sections 4.02, 4.03 and/or 11, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.13 or 13.04(b). "Revolving Loan Maturity Date" shall mean April 30, 2006. "Revolving Note" shall have the meaning provided in Section 2.05(a). -22- "RL Lender" shall mean each Lender with a Revolving Loan Commitment or with outstanding Revolving Loans. "RL Percentage" of any RL Lender at any time shall mean a fraction (expressed as a percentage) the numerator of which is the Revolving Loan Commitment of such RL Lender at such time and the denominator of which is the Total Revolving Loan Commitment at such time, provided that if the RL Percentage of any RL Lender is to be determined after the Total Revolving Loan Commitment has been terminated, then the RL Percentages of such RL Lender shall be determined immediately prior (and without giving effect) to such termination. "S&P" shall have the meaning provided in Section 13.18. "Scheduled Repayment" shall mean a Term Loan Scheduled Repayment. "SEC" shall have the meaning provided in Section 9.01(h). "Section 5.04(b)(ii) Certificate" shall have the meaning provided in Section 5.04(b)(ii). "Secured Creditors" shall have the meaning assigned that term in the respective Security Documents. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Securities Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Security Agreement" shall have the meaning provided in Section 6.10. "Security Agreement Collateral" shall mean all "Collateral" as defined in the Security Agreement. "Security Document" shall mean and include each of the Security Agreement, the Pledge Agreement, each Mortgage and, after the execution and delivery thereof, each Additional Security Document. "Senior Leverage Ratio" - see definition of "Consolidated Senior Leverage Ratio". "Senior Subordinated Note Documents" shall mean the Senior Subordinated Note Indenture, the Senior Subordinated Notes and each other document or agreement relating to the issuance of the Senior Subordinated Notes. -23- "Senior Subordinated Note Indenture" shall mean the Indenture, dated as of June 18, 1998, by and between the Borrower and State Street Bank and Trust Company of California, N.A., as trustee. "Senior Subordinated Notes" shall mean the Borrower's 9-1/2% Senior Subordinated Notes due 2008. "Shareholders' Agreements" shall have the meaning provided in Section 6.05. "Special Collateral Account" shall mean a Deposit Account (as defined in the Security Agreement) or Securities Account (as defined in the Security Agreement) of the Borrower that meets all of the following criteria (i) the account shall be maintained by the Borrower with the Collateral Agent, (ii) such account shall have been funded with proceeds of the Term Loans hereunder in an amount that is sufficient for compliance with the Consolidated Total Leverage Ratio, (iii) the Collateral Agent shall have a first perfected security interest in such account, including all investments therof and all earnings thereon, and (iv) the account is subject to a Control Agreement (as defined in the Security Agreement) in form and substance satisfactory to the Collateral Agent duly executed by the Borrower. "Start Date" shall mean, with respect to any Margin Reduction Period, the first day of such Margin Reduction Period. "Stated Amount" of each Letter of Credit shall mean, at any time, the maximum amount available to be drawn thereunder (in each case determined without regard to whether any conditions to drawing could then be met). "Subordinated Debt" shall mean (i) Indebtedness under the Senior Subordinated Notes, and (ii) all other unsecured Indebtedness of the Borrower which has repayment terms and subordination provisions in form and substance acceptable to the Required Lenders. "Subsidiaries Guaranty" shall have the meaning provided in Section 6.13. "Subsidiary" shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time. -24- "Subsidiary Guarantor" shall mean each Domestic Subsidiary of the Borrower (other than an Inactive Subsidiary) and, to the extent required by Section 9.13, each Foreign Subsidiary of the Borrower. "Swingline Expiry Date" shall mean that date which is five Business Days prior to the Revolving Loan Maturity Date. "Swingline Lender" shall mean Bank of America. "Swingline Loan" shall have the meaning provided in Section 2.01(d). "Swingline Note" shall have the meaning provided in Section 2.05(a). "Syndication Date" shall mean that date upon which the Administrative Agent determines (and notifies the Borrower) that the primary syndication (and resultant addition of Persons as Lenders pursuant to Section 13.04(b)) has been completed. "Taxes" shall have the meaning provided in Section 5.04(a). "Term Loan" shall have the meaning provided in Section 2.01. "Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name on Schedule I directly below the column entitled Term Loan Commitment," as the same may be (x) terminated pursuant to Sections 4.03 and/or 11 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Sections 2.13 and/or 13.04(b) "Term Loan Maturity Date" shall mean April 30, 2007. "Term Loan Percentage" shall mean, at any time, a fraction (expressed as a percentage) the numerator of which is equal to the aggregate principal amount of all Term Loans outstanding at such time and the denominator of which is equal to the aggregate principal amount of all Term Loans outstanding at such time. "Term Loan Scheduled Repayment" shall have the meaning provided in Section 5.02(b). "Term Note" shall have the meaning provided in Section 2.05(a). "Test Date" shall mean, with respect to any Start Date, the last day of the most recent fiscal quarter of the Borrower ended immediately prior to such Start Date. "Test Period" shall mean each period of four consecutive fiscal quarters of the Borrower then last ended (in each case taken as one accounting period). -25- "Total Acquisition Amount" shall have the meaning provided in Section 9.15(a)(iv). "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Lenders. "Total Consideration" shall mean the aggregate consideration for any proposed Permitted Acquisition, including, without limitation, (I) the aggregate principal amount of any Indebtedness assumed, incurred or issued in connection therewith, (II) the fair market value (as determined in good faith by the Board of Directors of the Borrower) of any common stock or Qualified Preferred Stock of the Borrower issued as part of the purchase price therefor (provided that no Default or Event of Default under Section 11.10 would result therefrom), and (III) the present value of any aggregate amount paid and to be paid pursuant to any earn-out, non-compete or deferred compensation or purchase price adjustments. "Total Leverage Ratio" - see definition of "Consolidated Total Leverage Ratio". "Total Revolving Loan Commitment" shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Lenders. "Total Unutilized Revolving Loan Commitment" shall mean, at any time, an amount equal to the remainder of (x) the Total Revolving Loan Commitment then in effect less (y) the sum of the aggregate principal amount of all Revolving Loans and Swingline Loans then outstanding plus the then aggregate amount of all Letter of Credit Outstandings. "Tranche" shall mean the respective facility and commitments utilized in making Loans hereunder, with there being three separate Tranches, i.e., Term Loans, Revolving Loans and Swingline Loans. "Type" shall mean the type of Loan determined with regard to the interest option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan. "UCC" shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction. "Unfunded Current Liability" of any Plan shall mean the amount, if any, by which the actuarial present value of the accumulated plan benefits under the Plan determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the market value of all plan assets -26- allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contribution). "United States" and "U.S." shall each mean the United States of America. "Unpaid Drawing" shall have the meaning provided for in Section 3.05(a). "Unutilized Revolving Loan Commitment" shall mean, with respect to any Lender at any time, such Lender's Revolving Loan Commitment at such time less the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Lender at such time and (ii) such Lender's RL Percentage of the Letter of Credit Outstandings at such time. "Wholly-Owned Domestic Subsidiary" shall mean each Domestic Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "Wholly-Owned Foreign Subsidiary" shall mean each Foreign Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation 100% of whose capital stock (other than director's qualifying shares) is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time. SECTION 2 AMOUNT AND TERMS OF CREDIT 2.01. The Commitments. (a) [Intentionally omitted.] (b) Term Loans. Subject to and upon the terms and conditions set forth herein, each Lender with a Term Loan Commitment severally agrees to make a term loan or term loans (each a Term Loan" and, collectively, the Term Loans") to the Borrower, which Term Loans: (i) only may be incurred on the Initial Borrowing Date, (ii) shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that, (A) except as otherwise specifically provided in Section 2.10(b), all Term Loans comprising the same Borrowing shall at all times be of the same Type and (B) unless the Administrative Agent has determined that the Syndication Date has -27- occurred (at which time this clause (B) shall no longer be applicable), (x) on or prior to June 5, 2003 all Term Loans shall be incurred and maintained as Base Rate Loans and (y) thereafter, no more than three Borrowings of Term Loans to be maintained as Eurodollar Loans may be incurred prior to the 28th day after the Initial Borrowing Date, and (iii) shall be made by each such Lender in that aggregate principal amount which does not exceed the Term Loan Commitment of such Lender on the Initial Borrowing Date (before giving effect to the termination thereof or such date pursuant to Section 4.03(c)). Once repaid, Term Loans incurred hereunder may not be reborrowed. (c) Revolving Loans. Subject to and upon the terms and conditions set forth herein, each Lender with a Revolving Loan Commitment severally agrees to make, at any time and from time to time on or after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, a revolving loan or revolving loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving Loans: (i) shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that, (A) except as otherwise specifically provided in Section 2.10(b), all Revolving Loans comprising the same Borrowing shall at all times be of the same Type and (B) unless the Administrative Agent has determined that the Syndication Date has occurred (at which time this clause (B) shall no longer be applicable), (x) on or prior to June 5, 2003, all Revolving Loans shall be incurred and maintained as Base Rate Loans and (y) thereafter, no more than three Borrowings of Revolving Loans to be maintained as Eurodollar Loans may be incurred prior to the 28th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans (A) may only have the same Interest Period as is then permitted for a Borrowing of Term Loans that are maintained as Eurodollar Loans and (B) shall begin and end on the same day as a Borrowing of Term Loans that are maintained as Eurodollar Loans), (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed for any such Lender at any time outstanding that aggregate principal amount which, when added to the product of (x) such Lender's RL Percentage and (y) the sum of (I) the aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time and (II) the aggregate principal amount of all Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) then outstanding, equals the Revolving Loan Commitment of such Lender at such time, and -28- (iv) shall not exceed for all such Lenders at any time outstanding that aggregate principal amount which, when added to the sum of (I) the aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time and (II) the aggregate principal amount of all Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) then outstanding, equals the Total Revolving Loan Commitment at such time. (d) Swingline Loans. Subject to and upon the terms and conditions set forth herein, the Swingline Lender agrees to make, at any time and from time to time on or after the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans (each a "Swingline Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline Loans: (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed in aggregate principal amount at any time outstanding, when combined with the aggregate principal amount of all Revolving Loans then outstanding and the aggregate amount of all Letter of Credit Outstandings at such time, an amount equal to the Total Revolving Loan Commitment at such time, and (iv) shall not exceed in aggregate principal amount at any time outstanding the Maximum Swingline Amount. Notwithstanding anything to the contrary contained in this Section 2.01(d), (i) the Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender Default exists unless the Swingline Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Swingline Lender's risk with respect to the Defaulting Lender's or Lenders' participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of the outstanding Swingline Loans and (ii) the Swingline Lender shall not make any Swingline Loan after it has received written notice from the Borrower or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice (A) of rescission of all such notices from the party or parties originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default by the Required Lenders. (e) Refunding of Swingline Loans. On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the RL Lenders that the Swingline Lender's outstanding Swingline Loans shall be funded with one or more Borrowings of Revolving Loans (provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under Section 11.05 or upon the exercise of any of the remedies -29- provided in the last paragraph of Section 11), in which case one or more Borrowings of Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all RL Lenders pro rata based on each such RL Lender's RL Percentage (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 11) and the proceeds thereof shall be applied directly by the Swingline Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each RL Lender hereby irrevocably agrees to make Revolving Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 7 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing, and (v) the amount of the Total Revolving Loan Commitment at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower), then each RL Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause the RL Lenders to share in such Swingline Loans ratably based upon their respective RL Percentages (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 11), provided that (x) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing RL Lender shall be required to pay the Swingline Lender interest on the principal amount of participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the overnight Federal Funds Rate for the first three days and at the rate otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter. 2.02. Minimum Amount of Each Borrowing. The aggregate principal amount of each Borrowing of Loans under a respective Tranche shall not be less than the Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may occur on the same date, but at no time shall there be outstanding more than ten Borrowings of Eurodollar Loans in the aggregate. -30- 2.03. Notice of Borrowing. (a) Whenever the Borrower desires to incur (x) Eurodollar Loans hereunder, the Borrower shall give the Administrative Agent at the Notice Office at least three Business Days prior notice of each Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans hereunder (excluding Swingline Loans and Revolving Loans made pursuant to a Mandatory Borrowing), the Borrower shall give the Administrative Agent at the Notice Office at least one Business Day's prior notice of each Base Rate Loan to be incurred hereunder, provided that (in each case) any such notice shall be deemed to have been given on a certain day only if given before 10:00 A.M. (Chicago time) on such day. Each such notice (each a "Notice of Borrowing"), except as otherwise expressly provided in Section 2.10, shall be irrevocable and shall be given by the Borrower in writing, or by telephone promptly confirmed in writing, in the form of Exhibit A, appropriately completed to specify the aggregate principal amount of the Loans to be incurred pursuant to such Borrowing, the date of such Borrowing (which shall be a Business Day), whether the Loans being incurred pursuant to such Borrowing shall constitute Term Loans or Revolving Loans and whether the Loans being incurred pursuant to such Borrowing are to be initially maintained as Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be applicable thereto. The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the respective Notice of Borrowing, notice of such proposed Borrowing, of such Lender's proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing. (b) (i) Whenever the Borrower desires to incur Swingline Loans hereunder, the Borrower shall give the Swingline Lender no later than 12:00 Noon (Chicago time) on the date that a Swingline Loan is to be incurred, written notice or telephonic notice promptly confirmed in writing of each Swingline Loan to be incurred hereunder. Each such notice shall be irrevocable and specify in each case (A) the date of Borrowing (which shall be a Business Day) and (B) the aggregate principal amount of the Swingline Loans to be incurred pursuant to such Borrowing. (ii) Mandatory Borrowings shall be made upon the notice specified in Section 2.01(e), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as set forth in Section 2.01(e). (c) Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice of any Borrowing or prepayment of Loans, the Administrative Agent or the Swingline Lender, as the case may be, may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, believed by the Administrative Agent or the Swingline Lender, as the case may be, in good faith to be from the Chairman of the Board, the President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer of the Borrower, or from any other authorized officer of the Borrower designated in writing by the Borrower to the Administrative Agent as being authorized to give such notices, prior to receipt of written confirmation. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent's or Swingline Lender's record of the terms of such telephonic notice of such Borrowing or prepayment of Loans, as the case may be, absent manifest error. -31- 2.04. Disbursement of Funds. No later than 11:00 A.M. (Chicago time) on the date specified in each Notice of Borrowing (or (x) in the case of Swingline Loans, no later than 2:00 P.M. (Chicago time) on the date specified pursuant to Section 2.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than 12:00 Noon (Chicago time) on the date specified in Section 2.01(e)), each Lender with a Commitment of the respective Tranche will make available its pro rata portion (determined in accordance with Section 2.07) of each such Borrowing requested to be made on such date (or in the case of Swingline Loans, the Swingline Lender will make available the full amount thereof). All such amounts will be made available in Dollars and in immediately available funds at the Payment Office, and the Administrative Agent will, except in the case of Revolving Loans made pursuant to a Mandatory Borrowing, make available to the Borrower at the Payment Office the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender's portion of any Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent also shall be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter and (ii) if recovered from the Borrower, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.08. Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to make Loans hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder. 2.05. Notes. (a) The Borrower's obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 13.15 and shall, if requested by such Lender, also be evidenced (i) if Term Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each a " Term Note" and, collectively, the Term Notes"), (ii) if Revolving Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-2, with blanks appropriately completed in conformity herewith (each a "Revolving Note" and, collectively, the "Revolving Notes"), and (iii) if Swingline Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-3, with blanks appropriately completed in conformity herewith (the "Swingline Note"). -32- (b) The Term Note issued to each Lender that has a Term Loan Commitment or outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated principal amount equal to the Term Loans made by such Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated principal amount equal to the outstanding principal amount of Term Loans of such Lender at such time) and be payable in the outstanding principal amount of Term Loans evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (c) [Intentionally omitted.] (d) The Revolving Note issued to each Lender that has a Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount equal to the Revolving Loan Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount equal to the outstanding Revolving Loans of such Lender at such time) and be payable in the outstanding principal amount of the Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (e) The Swingline Note issued to the Swingline Lender shall (i) be executed by the Borrower, (ii) be payable to the Swingline Lender or its registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal amount equal to the Maximum Swingline Amount and be payable in the outstanding principal amount of the Swingline Loans evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 5.01, and mandatory repayment as provided in Section 5.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (f) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will prior to any transfer of any of its Notes endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in such notation shall not affect the Borrower's obligations in respect of such Loans. 2.06. Conversions. The Borrower shall have the option to convert on any Business Day occurring on or after the earlier of (x) June 5, 2003 and (y) the Syndication Date, all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Loans -33- (other than Swingline Loans which may not be converted pursuant to this Section 2.06) made pursuant to one or more Borrowings (so long as of the same Tranche) of one or more Types of Loans into a Borrowing (of the same Tranche) of another Type of Loan, provided that, (i) except as otherwise provided in Section 2.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable to the Loans being converted and no such partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of such Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) unless the Required Lenders otherwise agree, Base Rate Loans may only be converted into Eurodollar Loans if no Default or Event of Default is in existence on the date of the conversion, (iii) unless the Administrative Agent has determined that the Syndication Date has occurred (at which time this clause (iii) shall no longer be applicable), prior to the 28th day after the Initial Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans may only be made if any such conversion is effective on the first day of the first, second or third Interest Period referred to in clause (B) of the proviso in each of Sections 2.01(b)(ii) and 2.01(c)(i) and so long as such conversion does not result in a greater number of Borrowings of Eurodollar Loans prior to the 28th day after the Initial Borrowing Date as are permitted under such Sections, and (iv) no conversion pursuant to this Section 2.06 shall result in a greater number of Borrowings of Eurodollar Loans than is permitted under Section 2.02. Each such conversion shall be effected by the Borrower by giving the Administrative Agent at the Notice Office prior to 10:00 A.M. (Chicago time) at least three Business Days prior notice (each a "Notice of Conversion") specifying the Loans to be so converted, the Borrowing or Borrowings pursuant to which such Loans were made and, if to be converted into Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed conversion affecting any of its Loans. Upon any such conversion the proceeds thereof will be deemed to be applied directly on the day of such conversion to prepay the outstanding principal amount of the Loans being converted. 2.07. Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans under this Agreement shall be incurred from the Lenders pro rata on the basis of their Term Loan Commitments, or Revolving Loan Commitments, as the case may be. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder. 2.08. Interest. (a) The Borrower agrees to pay interest in respect of the unpaid principal amount of each Base Rate Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a -34- Eurodollar Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum which shall be equal to the sum of the Applicable Margin plus the Base Rate each as in effect from time to time. (b) The Borrower agrees to pay interest in respect of the unpaid principal amount of each Eurodollar Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.06, 2.09 or 2.10, as applicable, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of the Applicable Margin plus the Eurodollar Rate for such Interest Period. (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan shall, in each case, bear interest at a rate per annum equal to the greater of (x) the rate which is 2% in excess of the rate then borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans of the respective Tranche from time to time, and all other overdue amounts payable hereunder or under any other Credit Document shall bear interest at a rate per annum equal to the rate which is 2% in excess of the rate applicable to Revolving Loans maintained as Base Rate Loans from time to time. Interest which accrues under this Section 2.08(c) shall be payable on demand. (d) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, and (iii) in respect of each Loan, on any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand; provided, however, that in the case of Base Rate Loans, interest shall not be payable pursuant to preceding clause (iii) at the time of any repayment or prepayment thereof (but shall otherwise be payable as provided in preceding clause (i)) unless the respective repayment or prepayment is made either in conjunction with a permanent reduction of the Total Revolving Loan Commitment or with a repayment or prepayment in full of all outstanding Loans of the respective Tranche. (e) Upon each Interest Determination Date, the Administrative Agent shall determine the Eurodollar Rate for each Interest Period applicable to the respective Eurodollar Loans and shall promptly notify the Borrower and the Lenders thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto. 2.09. Interest Periods. At the time the Borrower gives any Notice of Borrowing or Notice of Conversion in respect of the making of, or conversion into, any Eurodollar Loan (in the case of the initial Interest Period applicable thereto) or prior to 10:00 A.M. (Chicago time) on the third Business Day prior to the expiration of an Interest Period applicable to such Eurodollar Loan (in the case of any subsequent Interest Period), the Borrower shall have the right to elect, by giving the Administrative Agent notice thereof, the interest period (each an "Interest Period") applicable to such Eurodollar Loan, which Interest Period shall, at the option of the Borrower (but otherwise subject to clause (B) of the proviso to Sections 2.01(b)(ii) and 2.01(c)(i) and to clause (iii) of the proviso to Section 2.06), be a one, two, three or six month period and, if prior -35- to the earlier of the Syndication Date and June 5, 2003, a 7-day period, provided that (in each case): (i) all Eurodollar Loans comprising a Borrowing shall at all times have the same Interest Period; (ii) the initial Interest Period for any Eurodollar Loan shall commence on the date of Borrowing of such Eurodollar Loan (including the date of any conversion thereto from a Base Rate Loan) and each Interest Period occurring thereafter in respect of such Eurodollar Loan shall commence on the day on which the next preceding Interest Period applicable thereto expires; (iii) if any Interest Period for a Eurodollar Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iv) if any Interest Period for a Eurodollar Loan would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, however, that if any Interest Period for a Eurodollar Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (v) unless the Required Lenders otherwise agree, no Interest Period may be selected at any time when a Default or an Event of Default is then in existence; (vi) no Interest Period in respect of any Borrowing of any Tranche of Loans shall be selected which extends beyond the respective Maturity Date for such Tranche of Loans; and (vii) no Interest Period in respect of any Borrowing of Term Loans shall be selected which extends beyond any date upon which a mandatory repayment of Term Loans will be required to be made under Section 5.02(b), as the case may be, if the aggregate principal amount of Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of Term Loans then outstanding less the aggregate amount of such required repayment. If upon the expiration of any Interest Period applicable to a Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to such Eurodollar Loans as provided above, the Borrower shall be deemed to have elected to convert such Eurodollar Loans into Base Rate Loans effective as of the expiration date of such current Interest Period. 2.10. Increased Costs, Illegality, etc. -36- (a) In the event that any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clause (i) below, may be made only by the Administrative Agent): (i) on any Interest Determination Date that, by reason of any changes arising after the date of this Agreement affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or (ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loan because of (x) any change since the Original Effective Date in any applicable law or governmental rule, regulation, order, guideline or request (whether or not having the force of law) or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on the Loans or the Notes or any other amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or profits of such Lender pursuant to the laws of the jurisdiction in which it is organized or in which its principal office or applicable lending office is located or any subdivision thereof or therein) or (B) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate and/or (y) other circumstances arising since the Original Effective Date affecting such Lender, the interbank Eurodollar market or the position of such Lender in such market; or (iii) at any time, that the making or continuance of any Eurodollar Loan has been made (x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by any Lender in good faith with any governmental request (whether or not having force of law) or (z) impracticable as a result of a contingency occurring after the Original Effective Date which materially and adversely affects the interbank Eurodollar market; then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) above) shall promptly give notice (by telephone promptly confirmed in writing) to the Borrower and, except in the case of clause (i) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower with respect to Eurodollar Loans which have not yet been incurred (including by way of conversion) shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower shall, subject to Section 2.14, pay to such Lender, upon such Lender's written request therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as shall be required to -37- compensate such Lender for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding on all the parties hereto) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law. (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section 2.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected by the circumstances described in Section 2.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being made initially or pursuant to a conversion, cancel such Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date that the Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at least three Business Days written notice to the Administrative Agent, require the affected Lender to convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.10(b). (c) If any Lender determines that after the Original Effective Date the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by the NAIC or any governmental authority, central bank or comparable agency, will have the effect of increasing the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender based on the existence of such Lender's Commitments hereunder or its obligations hereunder, then the Borrower shall, subject to Section 2.14, pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable, provided that such Lender's determination of compensation owing under this Section 2.10(c) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis for calculation of such additional amounts. 2.11. Compensation. The Borrower shall compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Eurodollar Loans but excluding loss of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of, or conversion from or into, Eurodollar Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to -38- Section 2.10(a)); (ii) if any repayment (including any repayment made pursuant to Section 5.01, Section 5.02 or as a result of an acceleration of the Loans pursuant to Section 11) or conversion of any of its Eurodollar Loans occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any other default by the Borrower to repay its Eurodollar Loans when required by the terms of this Agreement or any Note held by such Lender or (y) any election made pursuant to Section 2.10(b). 2.12. Change of Lending Office. Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Letters of Credit affected by such event, provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of such Section. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 2.10, 2.06 and 5.04. 2.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender or otherwise defaults in its obligations to make Loans, or (y) upon the occurrence of an event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to any Lender which results in such Lender charging to the Borrower increased costs in excess of those being generally charged by the other Lenders, the Borrower shall have the right, if no Default or Event of Default then exists, to replace such Lender (the "Replaced Lender") with one or more other Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the "Replacement Lender") and each of whom shall be required to be reasonably acceptable to the Administrative Agent, provided that: (i) at the time of any replacement pursuant to this Section 2.13, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of, and in each case participations in Letters of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of (I) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (II) an amount equal to all Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest with respect thereto at such time, and (III) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 4.01, (y) the Issuing Lender an amount equal to such Replaced Lender's RL Percentage of any Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent such amount was not theretofore funded by such Replaced Lender to the Issuing Lender and (z) the Swingline Lender an amount equal to such Replaced Lender's RL Percentage of any Mandatory Borrowing to the -39- extent such amount was not theretofore funded by such Replaced Lender to the Swingline Lender, and (ii) all obligations of the Borrower due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement. Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01), which shall survive as to such Replaced Lender. 2.14. Limitation on Additional Amounts. Notwithstanding anything to the contrary contained in Section 2.10 or 3.06, unless a Lender gives notice to the Borrower that the Borrower is obligated to pay any amount under Section 2.10 or 3.06 within 180 days after the later of (x) the date such Lender incurs the respective increased costs or reduction in the rate of return or (y) the date such Lender has actual knowledge of its incurrence of the respective increased costs or reduction in the rate of return, such Lender shall only be entitled to be compensated for such amount by the Borrower pursuant to Section 2.10 or 3.06 to the extent the respective increased costs or reduction in the rate of return are incurred or suffered on or after the date which occurs 180 days prior to such Lender giving notice to the Borrower that it is obligated to pay the respective amounts pursuant to Section 2.10 or 3.06. This Section 2.14 shall have no applicability to any Section of this Agreement other than Sections 2.10 and 3.06. SECTION 3 LETTERS OF CREDIT 3.01. Letters of Credit. (a) Subject to and upon the terms and conditions set forth herein, the Borrower may request that the Issuing Lender issue, at any time and from time to time on and after the Initial Borrowing Date and prior to the 30th day prior to the Revolving Loan Maturity Date, for the account of the Borrower and for the benefit of (x) any holder (or any trustee, agent or other similar representative for any such holders) of L/C Supportable Obligations of the Borrower or any of its Subsidiaries, an irrevocable standby letter of credit, in a form customarily used by the Issuing Lender or in such other form as has been approved by the Issuing Lender, and (y) sellers of goods to the Borrower or any of its Subsidiaries, an irrevocable trade letter of credit, in a form customarily used by the Issuing Lender or in such other form as has been approved by the Issuing Lender (each such letter of credit, a "Letter of Credit" and, collectively, the "Letters of Credit"). All Letters of Credit shall be denominated in Dollars and shall be issued on a sight basis only. -40- (b) Subject to and upon the terms and conditions set forth herein, the Issuing Lender agrees that it will, at any time and from time to time on and after the Initial Borrowing Date and prior to the 30th day prior to the Revolving Loan Maturity Date, following its receipt of the respective Letter of Credit Request, issue for the account of the Borrower, one or more Letters of Credit as are permitted to remain outstanding hereunder without giving rise to a Default or an Event of Default, provided that the Issuing Lender shall be under no obligation to issue any Letter of Credit of the types described above if at the time of such issuance: (i) any order, judgment or decree of any governmental authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect with respect to the Issuing Lender on the date hereof, or any unreimbursed loss, cost or expense which was not applicable or in effect with respect to the Issuing Lender as of the date hereof and which the Issuing Lender reasonably and in good faith deems material to it; or (ii) the Issuing Lender shall have received from the Borrower or the Required Lenders prior to the issuance of such Letter of Credit, notice of the type described in the second sentence of Section 3.03(b). 3.02. Maximum Letter of Credit Outstandings; Final Maturities. Notwithstanding anything to the contrary contained in this Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and prior to the issuance of, the respective Letter of Credit) at such time would exceed either (x) $10,000,000 or (y) when added to the sum of (I) the aggregate principal amount of all Revolving Loans then outstanding and (II) the aggregate principal amount of all Swingline Loans then outstanding, an amount equal to the Total Revolving Loan Commitment at such time and (ii) each Letter of Credit shall by its terms terminate on or before the earlier of (x) (A) in the case of standby Letters of Credit, the date which occurs 12 months after the date of the issuance thereof (although any such standby Letter of Credit may be extendible for successive periods of up to 12 months, but, in each case, not beyond the third Business Day prior to the Revolving Loan Maturity Date, on terms acceptable to the Issuing Lender) and (B) in the case of trade Letters of Credit, the date which occurs 180 days after the date of issuance thereof, and (y) 30 days prior to the Revolving Loan Maturity Date. 3.03. Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the Borrower desires that a Letter of Credit be issued for its account, the Borrower shall give the Administrative Agent and the Issuing Lender at least five Business Days (or such shorter period as is acceptable to the Issuing Lender) written notice thereof (including -41- by way of facsimile). Each notice shall be in the form of Exhibit C, appropriately completed (each a "Letter of Credit Request"). Further, in conjunction with each Letter of Credit Request, Borrower shall submit an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Issuing Lender. (b) The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, Section 3.02. Unless the Issuing Lender has received notice from the Borrower or the Required Lenders before it issues a Letter of Credit that one or more of the conditions specified in Section 6 or 7 are not then satisfied, or that the issuance of such Letter of Credit would violate Section 3.02, then the Issuing Lender shall, subject to the terms and conditions of this Agreement, issue the requested Letter of Credit for the account of the Borrower in accordance with the Issuing Lender's usual and customary practices. Upon the issuance of or modification or amendment to any standby Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent and each Participant of such issuance, modification or amendment as the case may be. Notwithstanding anything to the contrary contained in this Agreement, in the event that a Lender Default exists, the Issuing Lender shall not be required to issue any Letter of Credit unless the Issuing Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Issuing Lender's risk with respect to the participation in Letters of Credit by the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings. (c) The initial Stated Amount of each Letter of Credit shall not be less than $50,000 or such lesser amount as is acceptable to the Issuing Lender. 3.04. Letter of Credit Participations. (a) Immediately upon the issuance by the Issuing Lender of any Letter of Credit, the Issuing Lender shall be deemed to have sold and transferred to each RL Lender, other than the Issuing Lender (each such Lender, in its capacity under this Section 3.04, a "Participant"), and each such Participant shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Participant's RL Percentage, in such Letter of Credit, each drawing or payment made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments or RL Percentages of the Lenders pursuant to Section 2.13 or 13.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings with respect thereto, there shall be an automatic adjustment to the participations pursuant to this Section 3.04 to reflect the new RL Percentages of the assignor and assignee Lender, as the case may be. (b) In determining whether to pay under any Letter of Credit, the Issuing Lender shall not have an obligation relative to the other Lenders other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Issuing Lender under or in connection with any Letter -42- of Credit shall not create for the Issuing Lender any resulting liability to the Borrower, any other Credit Party, any Lender or any other Person unless such action is taken or omitted to be taken with gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). (c) In the event that the Issuing Lender makes any payment under any Letter of Credit and the Borrower shall not have reimbursed such amount in full to the Issuing Lender pursuant to Section 3.05(a), the Issuing Lender shall promptly notify the Administrative Agent, which shall promptly notify each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Issuing Lender the amount of such Participant's RL Percentage of such unreimbursed payment in Dollars and in same day funds. If the Administrative Agent so notifies, prior to 12:00 A.M. New York time on any Business Day, any Participant required to fund a payment under a Letter of Credit, such Participant shall make available to the Issuing Lender in Dollars such Participant's RL Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such Participant shall not have so made its RL Percentage of the amount of such payment available to the Issuing Lender, such Participant agrees to pay to the Issuing Lender, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Issuing Lender at the overnight Federal Funds Rate for the first three days and at the interest rate applicable to Revolving Loans maintained as Base Rate Loans for each day thereafter. The failure of any Participant to make available to the Issuing Lender its RL Percentage of any payment under any Letter of Credit shall not relieve any other Participant of its obligation hereunder to make available to the Issuing Lender its RL Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Issuing Lender such other Participant's RL Percentage of any such payment. (d) Whenever the Issuing Lender receives a payment of a reimbursement obligation as to which it has received any payments from the Participants pursuant to clause (c) above, the Issuing Lender shall pay to each such Participant which has paid its RL Percentage thereof, in Dollars and in same day funds, an amount equal to such Participant's share (based upon the proportionate aggregate amount originally funded by such Participant to the aggregate amount funded by all Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective participations. (e) Upon the request of any Participant, the Issuing Lender shall furnish to such Participant copies of any Letter of Credit issued by it and such other documentation as may reasonably be requested by such Participant. (f) The obligations of the Participants to make payments to the Issuing Lender with respect to Letters of Credit issued by it shall be irrevocable and not subject to any qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents; -43- (ii) the existence of any claim, setoff, defense or other right which the Borrower or any of its Subsidiaries may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any Participant, or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower or any Subsidiary of the Borrower and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or (v) the occurrence of any Default or Event of Default. (g) All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Restatement Effective Date shall be subject to and governed by the terms and conditions hereof, it being understood that on the Restatement Effective Date, each RL Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Lender's RL Percentage, in each Existing Letter of Credit, each drawing or payment made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto shall be deemed to have purchased a participation in the Existing Letters of Credit. 3.05. Agreement to Repay Letter of Credit Drawings. (a) The Borrower agrees to reimburse the Issuing Lender, by making payment to the Administrative Agent in immediately available funds at the Payment Office, for any payment or disbursement made by the Issuing Lender under any Letter of Credit (each such amount, so paid until reimbursed, an "Unpaid Drawing"), not later than one Business Day following receipt by the Borrower of notice of such payment or disbursement (provided that no such notice shall be required to be given if a Default or an Event of Default under Section 11.05 shall have occurred and be continuing, in which case the Unpaid Drawing shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by the Borrower)), with interest on the amount so paid or disbursed by the Issuing Lender, to the extent not reimbursed prior to 11:00 A.M. (Chicago time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date the Issuing Lender was reimbursed by the Borrower therefor at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans; provided, however, to the extent such amounts are not reimbursed prior to 11:00 A.M. (New York time) on the third Business Day following the receipt by the Borrower of notice of such payment or disbursement or following the occurrence of a Default or an Event of Default under Section 11.05, interest shall thereafter accrue on the amounts so paid or disbursed by the -44- Issuing Lender (and until reimbursed by the Borrower) at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans plus 2%, with interest to be payable on demand. The Issuing Lender shall give the Borrower prompt notice of each Drawing under any Letter of Credit; provided that the failure to give any such notice shall in no way affect, impair or diminish the Borrower's obligations hereunder. (b) The obligations of the Borrower under this Section 3.05 to reimburse the Issuing Lender with respect to drawings under Letters of Credit (each a "Drawing") (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any Subsidiary of the Borrower may have or have had against the beneficiary or any Lender (including in its capacity as the Issuing Lender or as a Participant), including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any nonapplication or misapplication by the beneficiary of the proceeds of such Drawing; provided, however, that the Borrower shall not be obligated to reimburse the Issuing Lender for any wrongful payment made by the Issuing Lender under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision). 3.06. Increased Costs. If at any time after the Original Effective Date, the introduction of or any change in any applicable law, rule, regulation, order, guideline or request or in the interpretation or administration thereof by the NAIC or any governmental authority charged with the interpretation or administration thereof, or compliance by the Issuing Lender or any Participant with any request or directive by the NAIC or by any such authority (whether or not having the force of law), shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against letters of credit issued by the Issuing Lender or participated in by any Participant, or (ii) impose on the Issuing Lender or any Participant any other conditions relating, directly or indirectly, to this Agreement or any Letter of Credit; and the result of any of the foregoing is to increase the cost to the Issuing Lender or any Participant of issuing, maintaining or participating in any Letter of Credit, or reduce the amount of any sum received or receivable by the Issuing Lender or any Participant hereunder or reduce the rate of return on its capital with respect to Letters of Credit (except for changes in the rate of tax on, or determined by reference to, the net income or profits of the Issuing Lender or such Participant pursuant to the laws of the jurisdiction in which it is organized or in which its principal office or applicable lending office is located or any subdivision thereof or therein), then, upon the delivery of the certificate referred to below to the Borrower by the Issuing Lender or any Participant (a copy of which certificate shall be sent by the Issuing Lender or such Participant to the Administrative Agent), the Borrower shall, subject to Section 2.14, pay to the Issuing Lender or such Participant such additional amount or amounts as will compensate such Lender for such increased cost or reduction in the amount receivable or reduction on the rate of -45- return on its capital. The Issuing Lender or any Participant, upon determining that any additional amounts will be payable pursuant to this Section 3.06, will give prompt written notice thereof to the Borrower, which notice shall include a certificate submitted to the Borrower by the Issuing Lender or such Participant (a copy of which certificate shall be sent by the Issuing Lender or such Participant to the Administrative Agent), setting forth in reasonable detail the basis for the calculation of such additional amount or amounts necessary to compensate the Issuing Lender or such Participant. The certificate required to be delivered pursuant to this Section 3.06 shall, absent manifest error, be final and conclusive and binding on the Borrower. SECTION 4 COMMITMENT FEE; FEES; REDUCTIONS OF COMMITMENT. 4.01. Fees. (a) The Borrower agrees to pay to the Administrative Agent for distribution to each Non-Defaulting RL Lender a commitment fee (the "Commitment Fee") for the period from and including the Restatement Effective Date to but excluding the Revolving Loan Maturity Date (or such earlier date on which the Total Revolving Loan Commitment has been terminated) computed at a rate per annum for each day equal to the Applicable Margin (i.e., the Commitment Fee Rate as specified in the definition of Applicable Margin) on the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting Lender. Accrued Commitment Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Revolving Loan Commitment is terminated. (b) The Borrower agrees to pay to the Administrative Agent for distribution to each RL Lender (based on each such RL Lender's respective RL Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit Fee") for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to the Applicable Margin then in effect with respect to Revolving Loans maintained as Eurodollar Loans on the daily Stated Amount of each such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the first day on or after the termination of the Total Revolving Loan Commitment upon which no Letters of Credit remain outstanding. (c) The Borrower agrees to pay to the Issuing Lender, for its own account, a fronting fee in respect of each Letter of Credit (the "Fronting Fee") for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to 1/8 of 1% on the available Stated Amount of such Letter of Credit. Fronting Fees shall be due and payable quarterly in arrears on the next Business Day following each Quarterly Payment Date and upon the first day on or after the termination of the Total Revolving Loan Commitment upon which no Letters of Credit remain outstanding. (d) The Borrower agrees to pay to the Issuing Lender, for its own account, upon each payment under, issuance of, or amendment to, any Letter of Credit, such amount as shall at the time of such event be the administrative charge and the reasonable expenses which the Issuing -46- Lender is generally imposing in connection with such occurrence with respect to letters of credit. In addition the Borrower shall pay directly to the Issuing Lender, for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, relating to letters of credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable. (e) The Borrower agrees to pay to the Administrative Agent, for its own account, such other fees as have been agreed to in writing by the Borrower and the Administrative Agent. (f) Any fees due and payable under the Existing Credit Agreement shall not be affected by any amendment that is contained in this Agreement. 4.02. Voluntary Termination of Unutilized Revolving Loan Commitments. (a) Upon at least one Business Day's prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time, without premium or penalty, to terminate the Total Unutilized Revolving Loan Commitment in whole, or reduce it in part, pursuant to this Section 4.02(a), in an integral multiple of $500,000 in the case of partial reductions to the Total Unutilized Revolving Loan Commitment, provided that each such reduction shall apply proportionately to permanently reduce the Revolving Loan Commitment of each RL Lender. (b) [Intentionally omitted.] 4.03. Mandatory Reduction of Commitments. (a) [Intentionally omitted.] (b) In addition to any other mandatory commitment reductions pursuant to this Section 4.03, the Total Term Loan Commitment (and the Term Loan Commitment of each Lender) shall terminate in its entirety on the Initial Borrowing Date (after giving effect to the incurrence of the Term Loans on such date). (c) In addition to any other mandatory commitment reductions pursuant to this Section 4.03, the Total Revolving Loan Commitment shall be reduced on April 1, 2004 by a total of $5,000,000 and shall be reduced on April 1, 2005 by a total of $5,000,000. (d) In addition to any other mandatory commitment reductions pursuant to this Section 4.03, the Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Lender) shall terminate in its entirety on the earlier of (i) the Revolving Loan Maturity Date and (ii) unless the Required Lenders otherwise agree, the date on which a Change of Control occurs. (e) In addition to any other mandatory commitment reductions pursuant to this Section 4.03, on each date after the Initial Borrowing Date upon which a mandatory repayment of Term Loans pursuant to any of Sections 5.02(c) through (g), inclusive, is required (and exceeds in amount the aggregate principal amount of Term Loans then outstanding) or would be -47- required if Term Loans were then outstanding, the Total Revolving Loan Commitment shall be permanently reduced by the amount, if any, by which the amount required to be applied pursuant to said Sections (determined as if an unlimited amount of Term Loans were actually outstanding) exceeds the aggregate principal amount of Term Loans then outstanding. (f) Each reduction and/or termination to the Total Term Loan Commitment, and the Total Revolving Loan Commitment shall be applied to proportionately reduce and/or terminate the Term Loan Commitment, the and the Revolving Loan Commitment, as the case may be, of each Lender with such a Commitment. SECTION 5 PREPAYMENTS; PAYMENTS; TAXES. 5.01. Voluntary Prepayments. (a) The Borrower shall have the right to prepay the Loans, without premium or penalty, in whole or in part at any time and from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent prior to 11:00 A.M. (Chicago time) at the Notice Office (x) at least one Business Day's prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay Base Rate Loans (or same day notice in the case of a prepayment of Swingline Loans) and (y) at least three Business Days prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay Eurodollar Loans, which notice (in each case) shall specify whether Term Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of such prepayment and the Types of Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which made, and which notice the Administrative Agent shall, except in the case of Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each partial prepayment of Term Loans pursuant to this Section 5.01(a) shall be in an aggregate principal amount of at least $500,000, (y) each partial prepayment of Revolving Loans pursuant to this Section 5.01(a) shall be in an aggregate principal amount of at least $250,000 and (z) each partial prepayment of Swingline Loans pursuant to this Section 5.01(a) shall be in an aggregate principal amount of at least $50,000, provided that if any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar Loans and any election of an Interest Period with respect thereto given by the Borrower shall have no force or effect; (iii) each prepayment pursuant to this Section 5.01(a) in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans, -48- provided that at the Borrower's election in connection with any prepayment of Revolving Loans pursuant to this Section 5.01(a), such prepayment shall not, so long as no Default or Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender; and (iv) each prepayment of any Tranche of Term Loans pursuant to this Section 5.01(a) shall be applied to reduce the then remaining Scheduled Repayments of such Tranche of Term Loans in the inverse order of maturity. (b) [Intentionally omitted.] 5.02. Mandatory Repayments and Commitment Reductions. (a) Obligations in Excess of Commitments. On any day on which the sum of (I) the aggregate outstanding principal amount of all Revolving Loans (after giving effect to all other repayments thereof on such date), (II) the aggregate outstanding principal amount of all Swingline Loans (after giving effect to all other repayments thereof on such date) and (III) the aggregate amount of all Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment at such time, the Borrower shall prepay on such day the principal of Swingline Loans and, after all Swingline Loans have been repaid in full or if no Swingline Loans are outstanding, Revolving Loans in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans and Revolving Loans, the aggregate amount of the Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment of such time, the Borrower shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to the Letter of Credit Outstandings at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the Borrower to the Issuing Lender and the Lenders hereunder in a cash collateral account to be established by the Administrative Agent. (b) Term Loans. In addition to any other mandatory repayments pursuant to this Section 5.02, on (each date set forth below,) the Borrower shall be required to repay that principal amount of Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Sections 5.01(a) and 5.02(h), a "Term Loan Scheduled Repayment"): -49-

TERM LOAN SCHEDULED REPAYMENT DATE AMOUNT - --------------------------------------------------------- ------------------ (i) the last Business Day of the calendar quarter ending (i) $ 3,750,000 June 30, 2003, and the last Business Day of each calendar quarter thereafter to and including the calendar quarter ending March 31, 2005 (ii) the last Business Day of the calendar quarter ending June 30, 2005, and the last Business Day of each calendar (ii) $ 5,000,000 quarter thereafter to and including the calendar quarter ending March 31, 2007 (iii) On April 30, 2007 (iii) $ 30,000,00

(c) Equity Issuance. In addition to any other mandatory repayments pursuant to this Section 5.02, on each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any capital contribution or any sale or issuance of its equity (other than cash proceeds received (i) from the issuance by the Borrower of shares of its common stock (including as a result of the exercise of any options with regard thereto), or options to purchase shares of its common stock, to officers, directors and employees of the Borrower or any of its Subsidiaries in an aggregate amount not to exceed $500,000 in any fiscal year of the Borrower or (ii) from equity contributions to any Subsidiary of the Borrower to the extent made by the Borrower or another Subsidiary of the Borrower), an amount equal to 50% of the Net Equity Proceeds of such capital contribution or sale or issuance of equity shall be applied on such date as a mandatory repayment of principal of outstanding Term Loans in accordance with the requirements of Sections 5.02(h) and (i). (d) Debt Issuance. In addition to any other mandatory repayments pursuant to this Section 5.02, on each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any incurrence by the Borrower or any of its Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for borrowed money permitted to be incurred pursuant to Section 10.04 as such Section is in effect on the Restatement Effective Date), an amount equal to 100% of the Net Debt Proceeds of the respective incurrence of Indebtedness shall be applied on such date as a mandatory repayment of principal of outstanding Term Loans in accordance with the requirements of Sections 5.02(h) and (i). (e) Asset Sales. In addition to any other mandatory repayments pursuant to this Section 5.02, on each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied on such date as a mandatory repayment of principal of outstanding Term Loans in accordance with the requirements of Sections 5.02(h) and (i); provided that with respect to no more than $5,000,000 in the aggregate of cash proceeds from -50- Asset Sales in any fiscal year of the Borrower, the Net Sale Proceeds therefrom shall not be required to be so applied on such date so long as no Default or Event of Default then exists and the Borrower has delivered a certificate to the Administrative Agent on or prior to such date stating that such Net Sale Proceeds shall be used to purchase assets used or to be used in the business permitted pursuant to Section 10.15 (including, without limitation (but only to the extent permitted by Section 10.02), the purchase of the assets or 100% of the capital stock of a Person engaged in such businesses) within 180 days following the date of such Asset Sale (which certificate shall set forth the estimates of the proceeds to be so expended), and provided further, that if all or any portion of such Net Sale Proceeds not required to be applied to the repayment of outstanding Term Loans are not so reinvested within such 180-day period (or such earlier date, if any, as the Borrower determines not to reinvest the Net Sale Proceeds from such Asset Sale as set forth above), such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as a mandatory repayment of principal of outstanding Term Loans as provided above in this Section 5.02(e) without regard to the preceding proviso. Notwithstanding the foregoing, Net Sale Proceeds of up to $7,000,000 from the sale of the Borrower's property consisting of approximately 25.7 acres, consisting of two parcels, located in Montebello, New York shall not be required to be applied to a mandatory prepayment of Term Loans pursuant to this Section 5.02(e). (f) Excess Cash Flow. In addition to any other mandatory repayments pursuant to this Section 5.02, on each Excess Cash Payment Date, an amount equal to 50% of the Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as a mandatory repayment of principal of outstanding Term Loans in accordance with the requirements of Sections 5.02(h) and (i); provided, however, that no repayment shall be required pursuant to this Section 5.02(f) if on such Excess Cash Payment Date no Default or Event of Default then exists and the Consolidated Total Leverage Ratio at such time is less then 2.00:1. (g) Insurance Proceeds. In addition to any other mandatory repayments pursuant to this Section 5.02, within 10 days following each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any Recovery Event (other than Recovery Events in which the Net Insurance Proceeds therefrom do not exceed $100,000), an amount equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied on such date as a mandatory repayment of principal of outstanding Term Loans in accordance with the requirements of Sections 5.02(h) and (i); provided that so long as no Default or Event of Default then exists, such Net Insurance Proceeds shall not be required to be so applied on such date to the extent that the Borrower has delivered a certificate to the Administrative Agent on or prior to such date stating that such Net Insurance Proceeds shall be used to replace or restore any properties or assets in respect of which such Net Insurance Proceeds were paid within 180 days following the date of the receipt of such Net Insurance Proceeds (which certificate shall set forth the estimates of the Net Insurance Proceeds to be so expended), and provided further, that (i) if the amount of such Net Insurance Proceeds exceeds $2,500,000, then the entire amount of such Net Insurance Proceeds (and not just the portion of such Net Insurance Proceeds in excess of $2,500,000) shall be deposited with the Administrative Agent pursuant to a cash collateral arrangement reasonably satisfactory to the Administrative Agent whereby such proceeds shall be disbursed to the Borrower from time to time as needed to pay actual costs incurred by it or its applicable Subsidiary in connection with the replacement or restoration of the respective properties or assets (pursuant to such certification requirements as -51- may be reasonably required by the Administrative Agent, including certifications to the effect that (x) no Default or Event of Default then exists and (y) the Borrower or its applicable Subsidiary has actually incurred such costs (which certification shall be accompanied by any paid invoices or invoices required to be paid within 5 Business Days thereafter)), although at any time while an Event of Default has occurred and is continuing, the Required Lenders may direct the Administrative Agent (in which case the Administrative Agent shall, and is hereby authorized by the Borrower to, follow said directions) to apply any or all proceeds then on deposit in such collateral account to the repayment of Obligations hereunder, and (ii) if all or any portion of such Net Insurance Proceeds not required to be applied to the repayment of outstanding Term Loans pursuant to the preceding proviso are not so used within 180 days after the date of the receipt of such Net Insurance Proceeds (or such earlier date, if any, as the Borrower determines not to reinvest the Net Insurance Proceeds relating to such Recovery Event as set forth above), such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as a mandatory repayment of principal of outstanding Term Loans as provided above in this Section 5.02(h) without regard to the preceding proviso. (h) Pro Rata Application of Mandatory Repayment. Each amount required to be applied to the outstanding Term Loans pursuant to Sections 5.02(c), (d), (e), (f) and (g) shall be applied to reduce the then remaining Scheduled Repayments of the Term Loans in the inverse order of maturity. (i) Applications to Types of Loans. With respect to each repayment of Loans required by this Section 5.02, the Borrower may designate the Types of Loans of the respective Tranche which are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings of the respective Tranche pursuant to which made, provided that: (i) repayments of Eurodollar Loans pursuant to this Section 5.02 may only be made on the last day of an Interest Period applicable thereto unless all Eurodollar Loans of the respective Tranche with Interest Periods ending on such date of required repayment and all Base Rate Loans of the respective Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be converted at the end of the then current Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion. (j) [Intentionally omitted.] (k) Revolving Loans. Upon the payment in full of all Term Loans, 50% of all Net Equity Proceeds, 100% of all Net Debt Proceeds and 100% of all cash proceeds from any Asset Sale (except as provided in Section 5.02(e)), which in each case before repayment of the Term, Loans would be required to be applied to the repayment thereof, shall be forthwith applied to the mandatory repayment of the Revolving Loans. Concurrent with such application, the Total Revolving Loan Commitment shall be reduced by a like amount. -52- (l) Maturity Date; Change of Control. Notwithstanding anything to the contrary contained in this Agreement or in any other Credit Document, (i) all then outstanding Loans of any Tranche shall be repaid in full on the respective Maturity Date for such Tranche of Loans and (ii) unless the Required Lenders otherwise agree, all then outstanding Loans shall be repaid in full on the date on which a Change of Control occurs. 5.03. Method and Place of Payment. Except as otherwise specifically provided herein, all payments under this Agreement or under any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 11:00 A.M. (Chicago time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension. 5.04. Net Payments. (a) All payments made by the Borrower hereunder or under any Note will be made without setoff, counterclaim or other defense. Except as provided in Section 5.04(b), all such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in the second succeeding sentence, any tax imposed on or measured by the net income or profits of a Lender pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Lender is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. If any amounts are payable in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each Lender, upon the written request of such Lender, for taxes imposed on or measured by the net income or profits of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located and for any withholding of taxes as such Lender shall determine are payable by, or withheld from, such Lender, in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence. The Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender. -53- (b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to deliver to the Borrower and the Administrative Agent on or prior to the Restatement Effective Date or, in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 2.13 or 13.04(b) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit D (any such certificate, a "Section 5.04(b)(ii) Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note. In addition, each Lender agrees that from time to time after the Restatement Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, such Lender will deliver to the Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), Form W-8BEN (with respect to the portfolio interest exemption) and a Section 5.04(b)(ii) Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note, or such Lender shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 5.04(b). (c) Notwithstanding anything to the contrary contained in Section 5.04(a), but subject to Sections 5.04(b) and 13.04(b), (i) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (ii) the Borrower shall not be obligated pursuant to Section 5.04(a) to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States if (I) such Lender has not provided to the Borrower the Internal Revenue Service Forms required to be provided to the Borrower pursuant to this Section 5.04(b) or (II) in the case of a payment, other than interest, to a Lender described in Section 5.04(b) (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. -54- (d) Subject to Section 5.04 and except as set forth in Section 13.04(b), the Borrower further agrees to pay any additional amounts and to indemnify each Lender in the manner set forth in Section 5.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any Taxes deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective after the Restatement Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such Taxes. SECTION 6 CONDITIONS PRECEDENT TO CREDIT EVENTS ON THE RESTATEMENT EFFECTIVE DATE This Agreement shall become effective as of the date (the "Restatement Effective Date") on which each of the following conditions shall have been satisfied: (i) the Borrower, the Administrative Agent and each of the Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered the same to the Administrative Agent at the Notice Office or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written or telex notice (actually received) at such office that the same has been signed and mailed to it, and (ii) the Administrative Agent shall have determined that it has received evidence, in form and substance reasonably satisfactory to it, that the conditions set forth in Sections 6.01 through 6.19, inclusive, have been satisfied (except for such conditions (i) which in the Administrative Agent's determination are not sufficiently material to justify a delay of the Restatement Effective Date and (ii) as to which the Borrower has given written assurances to the Administrative Agent that such conditions shall be satisfied within thirty days following the Restatement Effective Date, it being expressly understood and Borrower agrees that failure to timely satisfy such conditions constitutes an Event of Default). If the Restatement Effective Date does not occur on or before June 30, 2003, this Agreement shall be null and void. 6.01. Execution of Agreement; Disclosure Letter; Notes. On or prior to the Restatement Effective Date, (i) the Lenders shall have received an executed copy of the Disclosure Letter, dated the Restatement Effective Date, which shall be in form and substance satisfactory to the Administrative Agent and the Required Lenders, and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate Term Note and/or Revolving Note executed by the Borrower and to the extent requested by the Swingline Lender, the Swingline Note executed by the Borrower, in each case, in the amount, maturity and as otherwise provided herein. 6.02. Officer's Certificate. On or prior to the Restatement Effective Date, the Administrative Agent shall have received a certificate, dated the Restatement Effective Date and signed on behalf of the Borrower by the Chairman of the Board, the President, the Chief Financial Officer or any Vice President of the Borrower, certifying on behalf of the Borrower that all of the conditions in Sections 6.06, 6.07, 6.08 and 7.01 have been satisfied on such date (although no such certification shall be required to the extent that any determination to be made under any such Section is to be made by the Administrative Agent or any Lender). -55- 6.03. Opinions of Counsel. On or prior to the Restatement Effective Date, the Administrative Agent shall have received (i) from Robins Kaplan Miller & Ciresi LLP, special counsel to the Borrower, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-1 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, dated the Restatement Effective Date, (ii) from Gardner Carton & Douglas LLC, special Illinois counsel to the Borrower, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-2 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, dated the Restatement Effective Date, (iii) from Koley Jessen, special Iowa and Nebraska counsel to the Borrower, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-3 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, dated the Restatement Effective Date, and (iv) from Godfrey & Kahn, special Wisconsin counsel to the Borrower, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Restatement Effective Date covering the matters set forth in Exhibit E-4 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, dated the Restatement Effective Date. 6.04. Corporate Documents; Proceedings; etc. (a) On or prior to the Restatement Effective Date, the Administrative Agent shall have received a certificate from each Credit Party, dated the Restatement Effective Date, signed by the Chairman of the Board, the President, the Chief Financial Officer or any Vice President of such Credit Party, and attested to by the Secretary or any Assistant Secretary of such Credit Party, in the form of Exhibit F with appropriate insertions, together with copies of the certificate of incorporation and by-laws (or equivalent organizational documents) of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and each of the foregoing shall be in form and substance reasonably acceptable to the Administrative Agent. (b) All corporate, partnership and limited liability company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Administrative Agent and the Required Lenders, and the Administrative Agent shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Administrative Agent reasonably may have requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate or governmental authorities. 6.05. Plans; Shareholders' Agreements; Employment Agreements; Existing Indebtedness Agreements. On or prior to the Restatement Effective Date, there shall have been delivered to the Administrative Agent true and correct copies of the following documents: -56- (i) all Plans (and for each Plan that is required to file an annual report on Internal Revenue Service Form 5500-series, a copy of the most recent such report (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information), and for each Plan that is a "single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial valuation therefor) and any other "employee benefit plans," as defined in Section 3(3) of ERISA, and any other material agreements, plans or arrangements, with or for the benefit of current or former employees of the Borrower or any of its Subsidiaries or ERISA Affiliates (provided that the foregoing shall apply in the case of any multiemployer plan, as defined in Section 4001(a)(3) of ERISA, only to the extent that any document described therein is in the possession of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate or reasonably available thereto from the sponsor or trustee of any such Plan) (collectively, the "Employee Benefit Plans"; (ii) all agreements entered into by the Borrower or any of its Subsidiaries governing the terms and relative rights of its capital stock and any agreements entered into by its shareholders relating to any such entity with respect to its capital stock (collectively, the "Shareholders' Agreements"); (iii) all material employment agreements entered into by the Borrower or any of its Subsidiaries (collectively, the "Employment Agreements"); (iv) all agreements evidencing or relating to any material Indebtedness of the Borrower or any of its Subsidiaries which are to remain outstanding after giving effect to the Refinancing, including but not limited to the Subordinated Debt (collectively, the "Existing Indebtedness Agreements"); all of which Employee Benefit Plans, Shareholders' Agreements, Employment Agreements, and Existing Indebtedness Agreements shall be in full force and effect on the Restatement Effective Date. 6.06. Completion of the Credit Documents and Fee Payment. On or prior to the Restatement Effective Date, (i) the parties to the Credit Documents shall have executed and delivered the Credit Documents, and (ii) the Borrower shall have paid all fees and expenses in connection with the foregoing and the Refinancing. 6.07. Adverse Change, etc. (a) Nothing shall have occurred (and neither the Administrative Agent nor any Lender shall have become aware of any facts or conditions not previously known) which the Administrative Agent or the Required Lenders shall reasonably determine has had, or could reasonably be expected to have, a Material Adverse Effect. (b) On or prior to the Restatement Effective Date, all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Refinancing and -57- the other transactions contemplated by the Credit Documents and otherwise referred to herein or therein shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Refinancing or the other transactions contemplated by the Credit Documents or otherwise referred to herein or therein. Additionally, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the Refinancing or the other transactions contemplated by the Credit Documents or otherwise referred to herein or therein. 6.08. Litigation. On the Restatement Effective Date, there shall be no actions, suits or proceedings pending or threatened (i) with respect to the Refinancing or this Agreement or any other Credit Document or (ii) which the Administrative Agent or the Required Lenders shall reasonably determine could reasonably be expected to have a Material Adverse Effect. 6.09. Pledge Agreement. On or prior to the Restatement Effective Date, each Credit Party shall have duly authorized, executed and delivered the Pledge Agreement in the form of Exhibit G (as amended, modified or supplemented from time to time, the "Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated stock powers in the case of capital stock constituting Pledge Agreement Collateral. 6.10. Security Agreement. On or prior to the Restatement Effective Date, each Credit Party shall have duly authorized, executed and delivered the Security Agreement in the form of Exhibit H (as modified, supplemented or amended from time to time, the "Security Agreement") covering all of such Credit Party's present and future Security Agreement Collateral. 6.11. Mortgages. On or prior to the Restatement Effective Date, the Borrower shall have duly authorized, executed and delivered the Mortgages in appropriate form for recording, with respect to the properties located in Omaha, Nebraska, Carter Lake, Iowa and Marshfield, Wisconsin, together with: (i) funds sufficient to pay any filing or recording tax or fee in connection with any and all UCC-1 financing statements and the Mortgages; (ii) with respect to each Mortgaged Property, an ALTA Loan Policy 1970 (10-17-70) (or other form acceptable to the Collateral Agent and the Lenders) mortgagee policy of title insurance or a binder issued by a title insurance company satisfactory to the Collateral Agent and the Lenders insuring (or undertaking to insure, in the case of a binder) that the Mortgage creates and constitutes a valid first Lien against the Mortgaged Property in favor of the Collateral Agent, subject only to exceptions acceptable to the Collateral Agent and the Lenders, with such endorsements and affirmative insurance as the Collateral Agent or any Lender may reasonably request; -58- (iii) evidence that the Collateral Agent has been named as loss payee under all policies of casualty insurance, and as additional insured under all policies of liability insurance, required by the Mortgage; (iv) flood insurance and earthquake insurance on terms satisfactory to the Collateral Agent and the Lenders; (v) current ALTA surveys and surveyor's certification as to all real property and all land covered by a lease in respect of which there is delivered a Mortgage, or as may be reasonably required by the Collateral Agent, each in form and substance satisfactory to the Collateral Agent and the Lenders; (vi) proof of payment of all title insurance premiums, documentary stamp or intangible taxes, recording fees and mortgage taxes payable in connection with the recording of any Mortgage or the issuance of the title insurance policies (whether due on the Closing Date or in the future) including sums due in connection with any future advances; (vii) such consents, estoppels, subordination agreements and other documents and instruments executed by landlords, tenants and other Persons party to material contracts relating to any Collateral as to which the Collateral Agent shall be granted a Lien for the benefit of the Lenders, as requested by the Collateral Agent or any Lender; and (viii) evidence that all other actions necessary or, in the opinion of the Collateral Agent or the Lenders, desirable to perfect and protect the first priority Lien created by the Mortgages, and to enhance the Collateral Agent's ability to preserve and protect its interests in and access to the Collateral, have been taken; 6.12. Evidence of Perfection, etc. On or prior to the Restatement Effective Date, the Administrative Agent shall have received the following: (i) proper Financing Statements (Form UCC-1 or the equivalent) fully executed for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by the Security Agreement and the Mortgages; (ii) certified copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, listing all effective financing statements that name the Borrower, or any of its Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above, together with copies of such other financing statements that name the Borrower, or any of its Subsidiaries as debtor (none of which shall cover any of the Collateral except to the extent evidencing Permitted Liens or in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed for filing); -59- (iii) evidence of the completion of all other recordings and filings of, or with respect to, the Security Agreement and the Mortgages as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interests intended to be created by the Security Agreement and the Mortgages; (iv) to the extent the Administrative Agent shall request, duly executed Control Agreements with respect to any Collateral in which a security interest therein is perfected by control under the UCC (including, Control Agreements pursuant to Section 3.2(a)(vii) of the Pledge Agreement); and (v) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Security Agreement have been taken. 6.13. Subsidiaries Guaranty. On or prior to the Restatement Effective Date, each Subsidiary Guarantor shall have duly authorized, executed and delivered a Guaranty in the form of Exhibit I (as modified, amended or supplemented from time to time, the "Subsidiaries Guaranty"). 6.14. Insurance Policies. On or prior to the Restatement Effective Date, the Administrative Agent shall have received standard lenders' payable endorsements with respect to the insurance policies or other instruments or documents evidencing insurance coverage on the properties of the Borrower in accordance with Section 9.03; 6.15. [Intentionally omitted.] 6.16. Financial Statements; Projections. On or prior to the Restatement Effective Date, the Administrative Agent shall have received true and correct copies of (i) the financial statements referred to in Section 8.05(a), (ii) the Projections referred to in Sections 8.05(d), and (iii) a draft of the Borrower's consolidated audited financial statements for the fiscal year ended December 31, 2002, all of which financial statements, Projections and draft audited financial statements shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. 6.17. Solvency Certificate; Insurance Certificates. On or prior to the Restatement Effective Date, the Administrative Agent shall have received the following dated the Restatement Effective Date: (i) a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit J; and (ii) certificates of insurance complying with the requirements of Section 9.03 for the business and properties of the Borrower and its Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and naming the Collateral Agent as an additional insured and as loss payee, and stating that such insurance shall not be canceled without at least 30 days prior written notice by the insurer to the Collateral Agent. -60- 6.18. Senior Subordinated Note Compliance. (a) On or prior to the Restatement Effective Date, the Administrative Agent shall have received a certificate from the Borrower's chief financial officer, dated the Restatement Effective Date, demonstrating in reasonable detail (and showing the financial calculations therefor) that the full amount of the Loans being incurred on the Restatement Effective Date may be incurred in accordance with, and will not violate the provisions of, Section 4.12 of the Senior Subordinated Note Indenture. (b) On or prior to the Restatement Effective Date, the Borrower shall have delivered to the trustee under the Senior Subordinated Note Indenture and to the Administrative Agent the officers' certificate, dated the Restatement Effective Date, contemplated by the parenthetical in clause (vi) of the final sentence of the definition of "Senior Debt" contained in the Senior Subordinated Note Indenture. 6.19. Fees, etc. On or prior to the Restatement Effective Date, the Borrower shall have paid to the Administrative Agent and Bank of America Securities LLC as arranger ("Arranger") all costs, fees and expenses (including, without limitation, legal fees and expenses) payable to the Administrative Agent and the Arranger to the extent then due. 6.20. Consummation of the Refinancing. On the Restatement Effective Date, concurrent with the satisfaction of the conditions specified in the first paragraph of Section 6, and Sections 6.01 through 6.19, inclusive, the following (collectively, the "Refinancing") shall occur: (i) the Borrower shall effect Borrowings of Term Loans and Revolving Loans in an amount sufficient to repay in full all Obligations under and as defined in the Existing Credit Agreement (other than in respect of the Existing Letters of Credit) (such Obligations to be repaid being called collectively, the "Existing Obligations"), (ii) the Administrative Agent shall apply the proceeds of the initial Borrowings (and any other immediately available funds that have been made available from the Borrower to the Administrative Agent) to repay in full the Existing Obligations (whereupon (x) the commitments of the Non-Renewing Lenders to extend credit under the Existing Credit Agreement, including the participation of the Non-Renewing Lenders in the Existing Letters of Credit, shall automatically terminate, and (y) pursuant to section 3.04, each RL Lender shall be deemed to have purchased and received from the Issuing Lender, an undivided interest and participation, to the extent of such Lender's RL Percentage, in each Existing Letter of Credit). The Administrative Agent will give the Borrower and each Lender prompt written notice of the occurrence of the Restatement Effective Date. SECTION 7 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The Refinancing and the obligation of each Lender to make Loans (including Loans made on the Initial Borrowing Date), and the obligation of the Issuing Lender to issue Letters of Credit, is subject, at the time of each such Credit Event (except as hereinafter indicated), to the satisfaction of the following conditions: -61- 7.01. No Default; Representations and Warranties. At the time of each such Credit Event and also after giving effect thereto (i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date). 7.02. Notice of Borrowing; Letter of Credit Request. (a) Prior to the making of each Loan (other than a Swingline Loan or a Revolving Loan made pursuant to a Mandatory Borrowing), the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.03(a). Prior to the making of each Swingline Loan, the Swingline Lender shall have received the notice referred to in Section 2.03(b)(i). (b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the Issuing Lender shall have received a Letter of Credit Request meeting the requirements of Section 3.03(a). The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the Borrower to the Administrative Agent and each of the Lenders that all the conditions specified in Section 6 (with respect to Credit Events on the Restatement Effective Date) and in this Section 7 (with respect to Credit Events on or after the Restatement Effective Date) and applicable to such Credit Event exist as of that time. All of the Notes, certificates, legal opinions and other documents and papers referred to in Section 6 and in this Section 7, unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. -62- SECTION 8 REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the Lenders to enter into this Agreement and to make the Loans, and issue (or participate in) the Letters of Credit as provided herein, the Borrower makes the following representations, warranties and agreements, in each case after giving effect to the Refinancing, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans and the issuance of the Letters of Credit, with the occurrence of each Credit Event on or after the Restatement Effective Date being deemed to constitute a representation and warranty that the matters specified in this Section 8 are true and correct in all material respects on and as of the Restatement Effective Date and on the date of each such other Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date). 8.01. Organizational Status. Each of the Borrower and each of its Subsidiaries (other than an Inactive Subsidiary) (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications except for failures to be so qualified which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 8.02. Power and Authority. Each Credit Party has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of each of such Credit Documents. Each Credit Party has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law). 8.03. No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed -63- of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) will violate any provision of the certificate or articles of incorporation or by-laws (or equivalent organizational documents) of the Borrower or any of its Subsidiaries. 8.04. Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for (x) the filing of UCC-1 financing statements and Mortgages to perfect the security interest created under the Security Agreement and the Mortgages, as applicable, and (y) those that have otherwise been obtained or made on or prior to the Restatement Effective Date and which remain in full force and effect on the Restatement Effective Date), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of any Credit Document or (ii) the legality, validity, binding effect or enforceability of any such Credit Document. 8.05. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc. (a) (i) The audited consolidated balance sheets of the Borrower for its fiscal years ended on December 31, 2000, 2001 and 2002, and the related audited consolidated statements of income, cash flows and shareholders' equity of the Borrower for the fiscal years ended on such dates, as the case may be, copies of which have been furnished to the Lenders prior to the Restatement Effective Date, present fairly in all material respects the consolidated financial position of the Borrower at the dates of such balance sheets and the consolidated results of the operations of the Borrower for the periods covered thereby. All of the foregoing financial statements have been prepared in accordance with GAAP consistently applied. (ii) Since December 31, 2002, there has been no change in the business, operations, property, assets, liabilities, condition (financial or otherwise) or prospects of the Borrower or any of its Subsidiaries that has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. (b) On and as of the Restatement Effective Date and after giving effect to the Refinancing and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Borrower and its Subsidiaries in connection therewith (i) the sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole will exceed its debts; (ii) each of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe that it will incur, debts beyond its ability to pay such debts as such debts mature; and (iii) each of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole will have sufficient capital with which to conduct its business. For purposes of this Section 8.05(c), "debt" means any liability on a claim, and "claim" means (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, -64- contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. (c) Except as fully disclosed in the financial statements delivered pursuant to Section 8.05(a), there were as of the Initial Borrowing Date no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, could reasonably be expected to be material to the Borrower and its Subsidiaries taken as a whole. As of the Initial Borrowing Date, the Borrower does not know of any basis for the assertion against it or any of its Subsidiaries of any liability or obligation of any nature whatsoever that is not fully disclosed in the financial statements delivered pursuant to Section 8.05(a) which, either individually or in the aggregate, could reasonably be expected to be material to the Borrower and its Subsidiaries taken as a whole. (d) On and as of the Initial Borrowing Date, the Projections delivered to the Administrative Agent and the Lenders prior to the Initial Borrowing Date have been prepared in good faith and are based on reasonable assumptions, and there are no statements or conclusions in the Projections which are based upon or include information known to the Borrower to be misleading in any material respect or which fail to take into account material information known to the Borrower regarding the matters reported therein. On the Initial Borrowing Date, the Borrower believes that the Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results and that the differences may be material. 8.06. Litigation. There are no actions, suits or proceedings pending or, to the best knowledge of the Borrower, threatened (i) with respect to the Refinancing or any Credit Documents, (ii) with respect to any material Indebtedness of the Borrower or any of its Subsidiaries or (iii) that are, either individually or in the aggregate, reasonably likely to have a Material Adverse Effect. 8.07. True and Complete Disclosure. All factual information (taken as a whole) furnished by or on behalf of the Borrower in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Borrower in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. 8.08. Use of Proceeds; Margin Regulations. -65- (a) All proceeds of the Loans will be used by the Borrower (i) to effect the Refinancing, (ii) to pay fees and expenses related to the Refinancing, for working capital and Capital Expenditures, (iv) to finance Permitted Acquisitions, (v) to finance Restricted Payments, and (vi) for other lawful corporate purposes. (b) No part of any Credit Event (or the proceeds thereof) will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the occurrence of any other Credit Event will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System. 8.09. Tax Returns and Payments. Each of the Borrower and each of its Subsidiaries has filed all federal and state income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all taxes and assessments payable by it which have become due, except for immaterial taxes and assessments and for those contested in good faith and adequately disclosed and fully provided for on the financial statements of the Borrower and its Subsidiaries in accordance with GAAP. Each of the Borrower and each of its Subsidiaries has at all times paid, or has provided adequate reserves (in the good faith judgment of the management of the Borrower) for the payment of, all federal, state, local and foreign income taxes applicable for all prior fiscal years and for the current fiscal year to date. There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the knowledge of the Borrower threatened, by any authority regarding any taxes relating to the Borrower or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a material liability to the Borrower or any of its Subsidiaries. 8.10. Compliance with ERISA. (i) Schedule 2 of the Disclosure Letter sets forth, as of the Initial Borrowing Date, each Plan. Each Plan (and each related trust, insurance contract or fund) is in substantial compliance with its terms and with all applicable laws, including, without limitation, ERISA and the Code; each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred; no Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has any material Unfunded Current Liability; no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has any material accumulated funding deficiency, within the meaning of such sections of the Code or ERISA, or has applied for or received a waiver of an accumulated funding deficiency or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all contributions required to be made with respect to a Plan have been timely made; neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or -66- expects to incur any such material liability under any of the foregoing sections with respect to any Plan; no condition exists which presents a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a material liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending or, to the Borrower's knowledge, expected or threatened; using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Plan ended prior to the date of the most recent Credit Event, would not exceed $500,000; each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has at all times been operated in material compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to arise on account of any Plan; and the Borrower and its Subsidiaries may cease contributions to or terminate any employee benefit plan maintained by any of them without incurring any material liability. (ii) Each Foreign Pension Plan has been maintained in material compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All material contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither the Borrower nor any of its Subsidiaries has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower's recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed in any material respect the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities. 8.11. The Security Documents. (a) The provisions of the Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and the Collateral Agent, for the benefit of the Secured Creditors, has a fully perfected first lien on, and security interest in, all right, title and interest in all of the Security -67- Agreement Collateral described therein, free and clear of all other Liens other than Permitted Liens. The recordation of (x) the Grant of Security Interest in U.S. Patents and (y) the Grant of Security Interest in U.S. Trademarks in the respective form attached to the Security Agreement, in each case in the United States Patent and Trademark Office, together with filings on Form UCC-1 made pursuant to the Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States trademarks and patents covered by the Security Agreement, and the recordation of the Grant of Security Interest in U.S. Copyrights in the form attached to the Security Agreement with the United States Copyright Office, together with filings on Form UCC-1 made pursuant to the Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States copyrights covered by the Security Agreement. (b) The security interests created in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement constitute first priority perfected security interests in the Pledge Agreement Collateral described in the Pledge Agreement, free and clear of all other Liens. No filings or recordings are required in order to perfect (or maintain the perfection or priority of) the security interests created in the Pledge Agreement Collateral under the Pledge Agreement. (c) If and when a Mortgage is created, each such Mortgage creates, as security for the obligations purported to be secured thereby, a valid and enforceable perfected security interest in and mortgage lien on the respective Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors, superior to and prior to the rights of all third persons (except that the security interest and mortgage lien created on such Mortgaged Property may be subject to the Permitted Encumbrances related thereto) and subject to no other Liens (other than Liens permitted under Section 10.01 related thereto). 8.12. Representations and Warranties in the Credit Documents. All representations and warranties set forth in the other Credit Documents were true and correct in all material respects at the time as of which such representations and warranties were made (or deemed made) and shall be true and correct in all material respects as of the Initial Borrowing Date as if such representations and warranties were made on and as of such date, unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date. 8.13. Properties. All Real Property owned or leased by the Borrower or any of its Subsidiaries as of the Initial Borrowing Date, and the nature of the interest therein, is correctly set forth on Schedule 1 of the Disclosure Letter. Each of the Borrower and each of its Subsidiaries has good and marketable title to all material properties owned by it, including all property reflected in Schedule 1 of the Disclosure Letter and in the most recent historical balance sheets of the Borrower referred to in Section 8.05(a) (except as sold or otherwise disposed of since the date of such balance sheet in the ordinary course of business or as permitted by the terms of this Agreement), free and clear of all Liens, other than Permitted Liens. 8.14. Capitalization. On the Initial Borrowing Date, the authorized capital stock of the Borrower shall consist of (i) 295,000,000 shares of common stock, $.0025 par value per share, -68- and (ii) 5,000,000 shares of preferred stock, $.0025 par value per share, of which no shares of such preferred stock shall be issued and outstanding. All outstanding shares of the capital stock of the Borrower have been duly and validly issued and are fully paid and non-assessable. The Borrower does not have outstanding any securities convertible into or exchangeable for its capital stock or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its capital stock, except (i) as set forth in any Shareholders' Agreement as in effect on the Initial Borrowing Date, (ii) for options, warrants and rights to purchase shares of the Borrower's common stock or Qualified Preferred Stock which may be issued from time to time and (iii) for any Indebtedness that may be issued or incurred from time to time under Section 10.04(xii) which may be convertible into shares of the Borrower's common stock. 8.15. Subsidiaries. As of the Initial Borrowing Date, the Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule 3 of the Disclosure Letter. Schedule 3 of the Disclosure Letter correctly sets forth, as of the Initial Borrowing Date, (i) the percentage ownership (direct or indirect) of the Borrower in each class of capital stock or other equity of each of its Subsidiaries and also identifies the direct owner thereof and (ii) the jurisdiction of organization of each such Subsidiary. 8.16. Compliance with Statutes, etc. Each of the Borrower and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including, without limitation, applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.17. Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. 8.18. Public Utility Holding Company Act. Neither the Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. 8.19. Environmental Matters. (a) Each of the Borrower and each of its Subsidiaries is in compliance with all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws. There are no pending or, to the knowledge of the Borrower, threatened Environmental Claims against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries (including any such claim arising out of the ownership, lease or operation by the Borrower or any of its Subsidiaries of any Real Property formerly owned by the Borrower or any of its Subsidiaries but no longer owned, leased or operated by the Borrower or any of its Subsidiaries). There are no facts, circumstances, -69- conditions or occurrences with respect to the business or operations of the Borrower or any of its Subsidiaries, or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries (including, to the knowledge of the Borrower, any Real Property formerly owned, leased or operated by the Borrower or any of its Subsidiaries but no longer owned, leased or operated by the Borrower or any of its Subsidiaries) or, to the knowledge of the Borrower, any property adjoining or adjacent to any such Real Property that could be reasonably expected (i) to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries or (ii) to cause any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries to be subject to any restrictions on the ownership, lease, occupancy or transferability of such Real Property by the Borrower or any of its Subsidiaries under any applicable Environmental Law. (b) Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries where such generation, use, treatment, storage or transportation has violated or could reasonably be expected to violate any Environmental Law or give rise to an Environmental Claim. Hazardous Materials have not at any time been Released on or from any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries where such Release has violated or could reasonably be expected to violate any applicable Environmental Law. (c) Notwithstanding anything to the contrary in this Section 8.19, the representations and warranties made in this Section 8.19 shall not be untrue unless the effect of any or all conditions, violations, claims, restrictions, failures and noncompliances of the types described above could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.20. Labor Relations. Neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries and (iii) no union representation question exists with respect to the employees of the Borrower or any of its Subsidiaries, except (with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect. 8.21. Patents, Licenses, Franchises and Formulas. Each of the Borrower and each of its Subsidiaries owns or has the right to use all the domestic and foreign patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises, proprietary information (including, but not limited to, rights in computer programs, databases and data collections) and formulas, or rights with respect to the foregoing, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to obtain which, as the case may be, -70- could reasonably be expected, either individually or in the aggregate, to result in a Material Adverse Effect. 8.22. Indebtedness. Schedule 4 of the Disclosure Letter sets forth a true and complete list of all Indebtedness (including Contingent Obligations) of the Borrower and its Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding after giving effect to the Refinancing (excluding the Loans, the Letters of Credit and the Senior Subordinated Notes, the "Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Subsidiaries which directly or indirectly guarantees such debt. 8.23. Refinancing. At the time of consummation thereof, the Refinancing shall have been consummated in all material respects in accordance with the terms of the respective Credit Documents and all applicable laws. At the time of consummation thereof, all consents and approvals of, and filings and registrations with, and all other actions in respect of, all governmental agencies, authorities or instrumentalities required in order to consummate the Refinancing have been obtained, given, filed or taken and are or will be in full force and effect (or effective judicial relief with respect thereto has been obtained). All applicable waiting periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent authority which restrains, prevents, or imposes material adverse conditions upon the Refinancing. Additionally, at the time of the consummation thereof, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the Refinancing, or the occurrence of any Credit Event or the performance by any Credit Party of its obligations under the Credit Documents to which it is party. All actions taken by each Credit Party pursuant to or in furtherance of the Refinancing have been taken in all material respects in compliance with the respective Credit Documents and all applicable laws. 8.24. Insurance. Schedule 5 of the Disclosure Letter sets forth a true and complete listing of all insurance maintained by the Borrower and its Subsidiaries as of the Initial Borrowing Date, with the amounts insured (and any deductibles) set forth therein. 8.25. Senior Subordinated Notes. The subordination provisions contained in the Senior Subordinated Notes and in the other Senior Subordinated Note Documents are enforceable against the Borrower and the holders of the Senior Subordinated Notes, and all Obligations are within the definition of "Senior Debt" included in such subordination provisions. -71- SECTION 9 AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment and all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case together with interest thereon), Fees and all other Obligations (other than indemnities described in Section 13.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full: 9.01. Information Covenants. The Borrower will furnish to each Lender: (a) Monthly Reports. Within 30 days after the end of each fiscal month of the Borrower (commencing with its fiscal month ending on March 31, 2003), the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal month as well as the related consolidated statement of retained earnings and statement of cash flows and the consolidated and consolidating statements of income for such fiscal month and for the elapsed portion of the fiscal year ended with the last day of such fiscal month, in each case setting forth comparative figures for the corresponding fiscal month in the prior fiscal year and comparable budgeted figures for such fiscal month, all of which shall be certified by the chief financial officer of the Borrower that they fairly present in all material respects in accordance with GAAP the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes. (b) Quarterly Financial Statements. Within 45 days after the close of the first three quarterly accounting periods in each fiscal year of the Borrower (commencing with its quarterly accounting period ending on March 31, 2003), (i) the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarterly accounting period and the related consolidated statements of income and retained earnings and statement of cash flows for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, in each case setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the chief financial officer of the Borrower that they fairly present in all material respects in accordance with GAAP the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes, and (ii) management's discussion and analysis of the important operational and financial developments during such quarterly accounting period (it being understood that any management's discussion and analysis set forth in the Borrower's Form 10-Q for such quarterly accounting period and delivered to the Lenders shall satisfy the provisions of this clause (ii)). (c) Annual Financial Statements. Within 90 days after the close of each fiscal year of the Borrower, (i) the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statement of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified by KPMG Peat Marwick LLP or such other independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent, -72- together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of the Borrower and its Subsidiaries, which audit was conducted in accordance with GAAP, such accounting firm obtained no knowledge of any Default or an Event of Default relating to financial and accounting matters which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof, and (ii) management's discussion and analysis of the important operational and financial developments during such fiscal year (it being understood that any management's discussion and analysis set forth in the Borrower's Form 10-K for such quarterly accounting period and delivered to the Lenders shall satisfy the provisions of this clause (ii)). (d) Management Letters. Promptly after the Borrower's or any of its Subsidiaries' receipt thereof, a copy of any "management letter" received from its certified public accountants and management's response thereto. (e) Budgets. No later than 30 days following the first day of each fiscal year of the Borrower, a budget in form reasonably satisfactory to the Administrative Agent (including budgeted statements of income, sources and uses of cash and balance sheets) prepared by the Borrower (i) for each of the twelve months of such fiscal year prepared in detail and (ii) for each of the immediately three succeeding fiscal years prepared in summary form, in each case setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based. (f) Officer's Certificates. At the time of the delivery of the financial statements provided for in Sections 9.01(b) and (c), a certificate, substantially in the form of Exhibit O, of the chief financial officer of the Borrower certifying on behalf of the Borrower that, to the best of such officer's knowledge, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof, which certificate shall (i) set forth in reasonable detail the calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the provisions of Sections 5.02(e), 5.02(g), 10.02(v), 10.03(iii), 10.04, 10.05, 10.07, 10.08, 10.09, 10.10, 10.11 and 10.12 at the end of such fiscal quarter or year, as the case may be, (ii) if delivered with the financial statements required by Section 10.01(c), set forth in reasonable detail the amount of (and the calculations required to establish the amount of) Excess Cash Flow for the respective Excess Cash Payment Period, and (iii) commencing with the delivery of the financial statements in respect of the Borrower's fiscal quarter ending on June 30, 2003, the Applicable Margin for Term Loans, Revolving Loans and Swingline Loans for the Margin Reduction Period commencing with the delivery of the respective financial statements. (g) Notice of Default or Litigation. Promptly upon, and in any event within five Business Days after, any principal, senior or executive officer of the Borrower obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or an Event of Default and (ii) any litigation or governmental investigation or proceeding pending (x) against the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect, (y) with respect to any material Indebtedness of the Borrower or any of its Subsidiaries or (z) with respect to any Credit Document. -73- (h) Other Reports and Filings. Promptly after the filing or delivery thereof, copies of all financial information, proxy materials and reports, if any, which the Borrower or any of its Subsidiaries shall publicly file with the Securities and Exchange Commission or any successor thereto (the "SEC") or deliver to holders (or any trustee, agent or other representative therefor) of its material Indebtedness pursuant to the terms of the documentation governing such Indebtedness. (i) Environmental Matters. Promptly after any principal, senior or executive officer of the Borrower obtains knowledge thereof, notice of one or more of the following environmental matters, unless such environmental matters could not, either individually or when aggregated with all other such environmental matters, be reasonably expected to have a Material Adverse Effect: (i) any pending or threatened Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries; (ii) any condition or occurrence on or arising from any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries that (a) results in noncompliance by the Borrower or any of its Subsidiaries with any applicable Environmental Law or (b) could be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property; (iii) any condition or occurrence on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries that could be expected to cause such Real Property to be subject to any restrictions on the ownership, lease, occupancy, use or transferability by the Borrower or any of its Subsidiaries of such Real Property under any Environmental Law; and (iv) the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall deliver to each Lender all notices received by the Borrower or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA which identify the Borrower or any of its Subsidiaries as potentially responsible parties for redemption costs or which otherwise notify the Borrower or any of its Subsidiaries of potential liability under CERCLA. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower's or such Subsidiary's response thereto. -74- (j) Other Information. From time to time, such other information or documents (financial or otherwise) with respect to the Borrower or any of its Subsidiaries as the Administrative Agent or any Lender may reasonably request. (k) Debt Ratings. A notice promptly upon any announcement by Moody's or S&P of any change or possible change in a Debt Rating. 9.02. Books, Records and Inspections; Annual Meetings. (a) The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which entries sufficient to prepare the financial statements required to be delivered pursuant to this Agreement in conformity with GAAP and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Administrative Agent or any Lender to visit and inspect, under guidance of officers of the Borrower or such Subsidiary, any of the properties of the Borrower or such Subsidiary, and to examine the books of account of the Borrower or such Subsidiary and discuss the affairs, finances and accounts of the Borrower or such Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable prior notice and at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or such Lender may reasonably request. (b) At a date to be mutually agreed upon between the Administrative Agent and the Borrower occurring on or prior to the 120th day after the close of each fiscal year of the Borrower, the Borrower will, at the request of the Administrative Agent, hold a meeting or a conference call with all of the Lenders at which meeting or a conference call shall be reviewed the financial results of the Borrower and its Subsidiaries for the previous fiscal year and the budgets presented for the current fiscal year of the Borrower. 9.03. Maintenance of Property; Insurance. (a) The Borrower will, and will cause each of its Subsidiaries to, (i) keep all material property necessary to the business of the Borrower and its Subsidiaries in reasonably good working order and condition, ordinary wear and tear and obsolescence excepted, (ii) maintain with financially sound and reputable insurance companies insurance on all such property in at least such amounts and against at least such risks as is consistent and in accordance with industry practice for companies similarly situated owning similar properties in the same general areas in which the Borrower or any of its Subsidiaries operates, and (iii) furnish to the Administrative Agent, together with each set of financial statements delivered pursuant to Section 9.01(c), full information as to the insurance carried. (b) The Borrower will, and will cause each of the Subsidiary Guarantors to, at all times keep its property insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (and any other insurance maintained by the Borrower and/or such Subsidiary Guarantors) (i) shall be endorsed to the Collateral Agent's satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured), (ii) shall state that such insurance -75- policies shall not be canceled without at least 30 days' prior written notice thereof by the respective insurer to the Collateral Agent, (iii) shall provide that the respective insurers irrevocably waive any and all rights of subrogation with respect to the Collateral Agent and the other Secured Creditors, (iv) shall contain the standard non-contributing mortgage clause endorsement in favor of the Collateral Agent with respect to hazard liability insurance, (v) shall, except in the case of public liability insurance, provide that any losses shall be payable notwithstanding (A) any foreclosure or other proceeding relating to the insured properties or (B) any change in the title to or ownership or possession of the insured properties and (vi) shall be deposited with the Collateral Agent. (c) If the Borrower or any of its Subsidiaries shall fail to insure its property in accordance with this Section 9.03, or if the Borrower or any of its Subsidiaries shall fail to so endorse and deposit all policies or certificates with respect thereto, the Administrative Agent shall have the right (but shall be under no obligation) to procure such insurance and the Borrower agrees to reimburse the Administrative Agent for all reasonable costs and expenses of procuring such insurance. 9.04. Existence; Franchises. The Borrower will, and will cause each of its Subsidiaries (other than Inactive Subsidiaries) to, do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents; provided, however, that nothing in this Section 9.04 shall prevent (i) sales of assets and other transactions by the Borrower or any of its Subsidiaries in accordance with Section 10.02 or (ii) the withdrawal by the Borrower or any of its Subsidiaries of its qualification as a foreign corporation in any jurisdiction where such withdrawal could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.05. Compliance with Statutes, etc. The Borrower will, and will cause each of its Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.06. Compliance with Environmental Laws. (a) The Borrower will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or use of its Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and will keep or cause to be kept all such Real Property free and clear of any Liens imposed pursuant to such Environmental Laws, except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of Hazardous Materials on any Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or -76- from any such Real Property, except for Hazardous Materials generated, used, treated, stored, Released or disposed of at any such Real Properties in compliance in all material respects with all applicable Environmental Laws and as reasonably required in connection with the normal operation, use and maintenance of the business or operations of the Borrower or any of its Subsidiaries. (b) At the reasonable written request of the Administrative Agent or the Required Lenders, which request shall specify in reasonable detail the basis therefor, at any time and from time to time, the Borrower will provide, at the sole expense of the Borrower, an environmental site assessment report concerning any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries, prepared by an environmental consulting firm reasonably approved by the Administrative Agent, indicating the presence or absence of Hazardous Materials and the potential cost of any removal or remedial action in connection with such Hazardous Materials on such Real Property, provided that (i) unless the Lenders or the Administrative Agent has received any notice of the type described in Section 9.01(i) or (ii) the Lenders have exercised any of the remedies pursuant to the last paragraph of Section 11, such request may not be made more than once every two years in respect of any parcel of Real Property. If the Borrower fails to provide same within 90 days after such request was made, the Administrative Agent may order the same, the cost of which shall be borne by the Borrower and the Borrower shall grant and hereby grant to the Administrative Agent and the Lenders and their respective agents access to such Real Property and specifically grant the Administrative Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment at any reasonable time upon reasonable notice to the Borrower, all at the sole expense of the Borrower. 9.07. ERISA. As soon as possible and, in any event, within ten (10) days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, the Borrower will deliver to each of the Lenders a certificate of the chief financial officer of the Borrower setting forth in reasonable detail information as to such occurrence and the action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC or any other governmental agency, a Plan participant or the Plan administrator with respect thereto: that a Reportable Event has occurred (except to the extent that the Borrower has previously delivered to the Lenders a certificate and notices (if any) concerning such event pursuant to the next clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; that an accumulated funding deficiency, within the meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any contribution required to be made with respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan has been or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; that a Plan has an -77- Unfunded Current Liability; that proceedings may be or have been instituted to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or may incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that the Borrower or any Subsidiary of the Borrower may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. The Borrower will deliver to each of the Lenders copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. Upon the request of the Administrative Agent or any Lender, the Borrower will also deliver to the Administrative Agent or such Lender a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service. In addition to any certificates or notices delivered to the Lenders pursuant to the first sentence hereof, copies of annual reports and any records, documents or other information required to be furnished to the PBGC or any other governmental agency, and any material notices received by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered to the Lenders no later than ten (10) days after the date such annual report has been filed with the Internal Revenue Service or such records, documents and/or information has been furnished to the PBGC or any other governmental agency or such notice has been received by the Borrower, the respective Subsidiary or the ERISA Affiliate, as applicable. The Borrower and each of its Subsidiaries shall insure that all Foreign Pension Plans administered by it or into which it makes payments obtains or retains (as applicable) registered status under and as required by applicable law and is administered in a timely manner in all respects in compliance with all applicable laws except where the failure to do any of the foregoing could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.08. End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i) its fiscal year to end on the last day of one of the fiscal quarters set forth in clause (ii) below and (ii) each of its fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year. 9.09. Performance of Obligations. The Borrower will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement and each other material agreement, contract or instrument by which it is bound, except such non-performances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9.10. Payment of Taxes. The Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies -78- imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 10.01(i); provided that neither the Borrower nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is immaterial or is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP. 9.11. Additional Security; Further Assurances. (a) The Borrower will, and will cause each of its Domestic Subsidiaries (other than an Inactive Subsidiary) and, to the extent required by Section 9.13, each of its Foreign Subsidiaries to, grant to the Collateral Agent security interests and Mortgages in such assets and properties of the Borrower and such Subsidiaries as are not covered by the original Security Documents, and as may be reasonably requested from time to time by the Required Lenders (collectively, the "Additional Security Documents"). All such security interests and Mortgages shall be granted pursuant to documentation reasonably satisfactory in form and substance to the Administrative Agent and shall constitute valid and enforceable perfected security interests and Mortgages superior to and prior to the rights of all third Persons and subject to no other Liens except for Permitted Liens. The Additional Security Documents or instruments related thereto shall have been duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable in connection therewith shall have been paid in full. (b) The Borrower will, and will cause each of the Subsidiary Guarantors to, at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, real property surveys, reports, landlord waivers and other assurances or instruments and take such further steps relating to the Collateral covered by any of the Security Documents as the Collateral Agent may reasonably require. Furthermore, the Borrower will cause to be delivered to the Collateral Agent such opinions of counsel, title insurance and other related documents as may be reasonably requested by the Administrative Agent to assure itself that this Section 9.11 has been complied with. (c) If the Administrative Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of the Real Property of the Borrower and its Subsidiaries constituting Collateral, the Borrower will, at its own expense, provide to the Administrative Agent appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent. (d) The Borrower agrees that each action required above by this Section 9.11 shall be completed as soon as possible, but in no event later than 90 days after such action is either requested to be taken by the Administrative Agent or the Required Lenders or required to be -79- taken by the Borrower and/or its Subsidiaries pursuant to the terms of this Section 9.11; provided that, in no event will the Borrower or any of its Subsidiaries be required to take any action, other than using its best efforts, to obtain consents from third parties with respect to its compliance with this Section 9.11. 9.12. Use of Proceeds. The Borrower will use the proceeds of the Loans only as provided in Section 8.08. 9.13. Foreign Subsidiaries Security. If, following a change in the relevant sections of the Code or the regulations, rules, rulings, notices or other official pronouncements issued or promulgated thereunder, the Borrower does not within 30 days after a request from the Administrative Agent or the Required Lenders deliver evidence, in form and substance reasonably satisfactory to the Administrative Agent, with respect to any Foreign Subsidiary of the Borrower which has not already had all of its stock pledged pursuant to the Pledge Agreement that (i) a pledge of 65% or more of the total combined voting power of all classes of capital stock of such Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign Subsidiary of a security agreement in substantially the form of the Security Agreement, and (iii) the entering into by such Foreign Subsidiary of a guaranty in substantially the form of the Subsidiaries Guaranty, in any such case could reasonably be expected to cause (I) any undistributed earnings of such Foreign Subsidiary as determined for Federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's United States parent for Federal income tax purposes or (II) other Federal income tax consequences to the Credit Parties having a Material Adverse Effect, then in the case of a failure to deliver the evidence described in clause (i) above, that portion of such Foreign Subsidiary's outstanding capital stock not theretofore pledged pursuant to the Pledge Agreement shall be promptly pledged to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement in substantially similar form, if needed), and in the case of a failure to deliver the evidence described in clause (ii) above, such Foreign Subsidiary shall promptly execute and deliver the Security Agreement and Pledge Agreement (or another security agreement or pledge agreement in substantially similar form, if needed), granting the Secured Creditors a security interest in all of such Foreign Subsidiary's assets and securing the Obligations of the Borrower under the Credit Documents and under any Interest Rate Protection Agreement or Other Hedging Agreement and, in the event the Subsidiaries Guaranty shall have been executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the case of a failure to deliver the evidence described in clause (iii) above, such Foreign Subsidiary shall promptly execute and deliver the Subsidiaries Guaranty (or another guaranty in substantially similar form, if needed), guaranteeing the Obligations of the Borrower under the Credit Documents and under any Interest Rate Protection Agreement or Other Hedging Agreement, in each case to the extent that the entering into of the Security Agreement, Pledge Agreement or Subsidiaries Guaranty is permitted by the laws of the respective foreign jurisdiction and with all documents delivered -80- pursuant to this Section 9.13 to be in form and substance reasonably satisfactory to the Administrative Agent. 9.14. Margin Stock. In the event that the Borrower or any other Credit Party holds any Margin Stock that is required to be pledged pursuant to the Pledge Agreement, the Borrower will duly execute and deliver to each Lender an appropriately completed Form U-1 or Form G-3 referred to in Regulation U. 9.15. Permitted Acquisitions. (a) Subject to the provisions of this Section 9.15 and the requirements contained in the definition of Permitted Acquisition, the Borrower and its Wholly-Owned Subsidiaries may from time to time effect Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Permitted Acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; (iii) the Net Acquisition Consideration with respect to any one Permitted Acquisition shall not be greater than $20,000,000; (iv) the Net Acquisition Consideration with respect to all Permitted Acquisitions consummated during any given fiscal year of the Borrower shall not exceed the "Total Acquisition Amount," which shall be determined according to the following: (A) from and after January 1, 2003, until increased as provided for in (B) or (C) below, the Total Acquisition Amount shall be $20,000,000; (B) from and after January 1, 2004, the Total Acquisition Amount shall be $20,000,000 plus the product (only to the extent the product is a positive number) of 50% of the sum at the Consolidated EBITDA for the period January 1, 2003 to December 31, 2003 less the Consolidated EBITDA for the period of January 1, 2002 to December 31, 2002, provided that the Total Acquisition Amount shall not be increased to more than a total of $25,000,000 pursuant to this clause (B); and (C) from and after January 1, 2005, the Total Acquisition Amount -81- shall be the Total Acquisition Amount as determined by clause (B) above plus the product (only to the extent the product is a positive number) of 50% of the sum of the Consolidated EBITDA for the period January 1, 2004 to December 31, 2004, less the consolidated EBITDA for the period of January 1, 2003 to December 31, 2003, provided that the Total Acquisition Amount shall not be increased to more than a total of $30,000,000 pursuant to this clause (C). (v) the Acquired EBITDA of each Acquired Entity or Business, calculated prior to a Permitted Acquisition shall not be less than a negative $2,500,000 for the twelve month period prior to the Permitted Acquisition, and in any fiscal year of the Borrower the total Acquired EBITDA for all Acquired Entities and Businesses shall not be less than a negative $5,000,000 on an aggregate basis. (vi) immediately after giving effect to each Permitted Acquisition (and all payments to be made in connection therewith), the Total Unutilized Revolving Loan Commitment, when added to the aggregate amount of unrestricted cash and Cash Equivalents held by the Borrower and its Wholly-Owned Domestic Subsidiaries, shall equal or exceed $7,000,000; (vii) no Acquired Entity or Business acquired pursuant to a Permitted Acquisition shall be organized or domiciled under the law of any jurisdiction other than the United States or Canada, or any states or provinces therein, and no Acquired Entity or Business shall have more than 15% of its assets or annual revenues based in or from outside of the United States or Canada (as determined from the most recently available financial information for such Person or assets); (viii) such Permitted Acquisition is non-hostile (i.e., the prior, effective written consent or approval to such Permitted Acquisition of the board of directors or equivalent governing body of the Acquired Entity or Business shall have been obtained); (ix) at least 10 Business Days prior to any Permitted Acquisition, the Borrower shall have (x) given the Administrative Agent and the Lenders at least 10 Business Days prior written notice of any Permitted Acquisition, and (y) delivered to the Administrative Agent and each Lender an officer's certificate executed by a senior financial officer of the Borrower, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (i) through (viii), inclusive, and containing the calculations (in reasonable detail) (A) evidencing compliance with the preceding clauses (iii), (iv), (v), (vi), (vii), and (viii) and (B) necessary to establish the Acquired EBITDA of the Acquired Entity or Business acquired pursuant to such Permitted Acquisition, which calculations shall be reasonably approved by the Administrative Agent. (b) At the time of each Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of capital stock or other equity interest of any Person, all capital -82- stock or other equity interests thereof created or acquired in connection with such Permitted Acquisition shall be pledged for the benefit of the Secured Creditors pursuant to (and to the extent required by) the Pledge Agreement. (c) The Borrower will cause each Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver, all of the documentation as and to the extent required by, Sections 9.11 and 10.16, to the satisfaction of the Administrative Agent. (d) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by the Borrower that the certifications by the Borrower pursuant to Section 9.15(a) are true and correct and that all conditions thereto have been satisfied and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder, including, without limitation, Sections 8 and 11. (e) In any Permitted Acqusition that involves a working capital adjustment, Net Acquisition Consideration for the purposes of clauses (a)(iii) and (iv) above shall be initially calculated on the basis of a reasonably estimated working capital adjustment. Within 75 days after each such Permitted Acquisition, the Borrower (i) shall establish the actual amount of working capital adjustment and the actual Net Acquisition Consideration, and (ii) shall deliver to the Administrative Agent and each Lender an officer's certificate executed by a senior financial officer of the Borrower, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (a)(iii) and (iv) based on such recalculated Net Acquisition Consideration, and containing the calculations (in reasonable detail) evidencing compliance with the preceding clauses (a)(iii) and (iv). SECTION 10 NEGATIVE COVENANTS. The Borrower hereby covenants and agrees that on and after the Restatement Effective Date and until the Total Commitment and all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case, together with interest thereon), Fees and all other Obligations (other than any indemnities described in Section 13.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full: 10.01. Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to the Borrower or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of this Section 10.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as "Permitted Liens"): -83- (i) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (ii) Liens in respect of property or assets of the Borrower or any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers', warehousemen's, materialmen's and mechanics' liens and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of the Borrower's or such Subsidiary's property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Subsidiary or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien; (iii) Liens in existence on the Initial Borrowing Date which are listed, and the property subject thereto described, in Schedule 6 of the Disclosure Letter, but only to the respective date, if any, set forth in such Schedule 6 for the removal, replacement and termination of any such Liens, plus renewals, replacements and extensions of such Liens to the extent set forth on such Schedule 6, provided that (x) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase from that amount outstanding at the time of any such renewal, replacement or extension and (y) any such renewal, replacement or extension does not encumber any additional assets or properties of the Borrower or any of its Subsidiaries; (iv) Liens created pursuant to the Security Documents; (v) leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (vi) Liens upon assets of the Borrower or any of its Subsidiaries subject to Capitalized Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section 10.04(iv), provided that (x) such Liens only serve to secure the payment of Indebtedness arising under such Capitalized Lease Obligation and (y) the Lien encumbering the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset of the Borrower or any Subsidiary of the Borrower; (vii) Liens placed upon (x) equipment or machinery acquired after the Initial Borrowing Date and used in the ordinary course of business of the Borrower or any of its Subsidiaries at the time of the acquisition thereof by the Borrower or any such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or to secure Indebtedness incurred solely for the purpose of financing the acquisition of any such equipment or machinery or extensions, renewals or replacements of any -84- of the foregoing for the same or a lesser amount or (y) Real Property acquired or constructed after the Initial Borrowing Date and used in the ordinary course of business of the Borrower or any of its Subsidiaries at the time of the acquisition or construction thereof by the Borrower or any of its Subsidiaries or within 180 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price or construction cost thereof or to secure Indebtedness incurred solely for the purpose of financing the acquisition or construction of any such Real Property or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that (i) the Indebtedness secured by all such Liens described in this clause (vii) is permitted by Section 10.04(iv) and (y) in all events, the Lien encumbering the asset so acquired or constructed does not encumber any other asset of the Borrower or such Subsidiary; (viii) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (ix) Liens arising from precautionary UCC financing statement filings regarding Operating Leases; (x) Liens arising out of the existence of judgments or awards in respect of which the Borrower or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings, provided that the aggregate amount of all cash and the fair market value of all other property subject to such Liens does not exceed $5,000,000 at any time outstanding; (xi) statutory and common law landlords' liens under leases to which the Borrower or any of its Subsidiaries is a party; (xii) Liens (other than Liens imposed under ERISA) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance and social security benefits; (xiii) Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and consistent with past practice (exclusive of obligations in respect of the payment for borrowed money), provided that the aggregate amount of all cash and the fair market value of all other property subject to all Liens permitted by this clause (xiii) shall not at any time exceed $1,500,000; (xiv) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of the Borrower in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition, -85- provided that (x) any Indebtedness that is secured by such Liens is permitted to exist under Section 10.04(ix), and (y) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of the Borrower or any of its Subsidiaries; (xv) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (xvi) Liens which constitute rights of set-off of a customary nature or bankers' Liens with respect to amounts on deposit, whether arising by operation of law or by contract, in connection with arrangements entered into with banks in the ordinary course of business; (xvii) Liens on insurance proceeds securing the payment of financed insurance premiums; and (xviii) Permitted Encumbrances. In connection with the granting of Liens of the type described in clauses (vi) and (vii) of this Section 10.01 by the Borrower or any of its Subsidiaries, the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by executing appropriate lien releases or lien subordination agreements in favor of the holder or holders of such Liens, in either case solely with respect to the item or items of equipment or other assets subject to such Liens). 10.02. Consolidation, Merger, Purchase or Sale of Assets, etc. The Borrower will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person (or agree to do any of the foregoing at any future time (unless such agreement relates to an action otherwise permitted by this Section 10.02, or to the extent that the respective action is not otherwise permitted by this Section 10.02 (and the Loans will not be repaid in full, and all Commitments terminated, at the time of the consummation of the respective action), such agreement expressly provides that the consent of the requisite percentage of Lenders hereunder is required to be obtained in connection therewith)), except that: (i) Capital Expenditures by the Borrower and its Subsidiaries shall be permitted to the extent not in violation of Section 10.07; (ii) each of the Borrower and its Subsidiaries may make sales of inventory and license intellectual property in the ordinary course of business; -86- (iii) each of the Borrower and its Subsidiaries may sell obsolete, uneconomic or worn-out equipment or materials in the ordinary course of business; (iv) Permitted Acquisitions may be made to the extent permitted by Section 9.15; (v) each of the Borrower and its Subsidiaries may sell other assets (other than the capital stock of any Subsidiary Guarantor), so long as (v) no Default or Event of Default then exists or would result therefrom, (w) each such sale is in an arm's-length transaction and the Borrower or the respective Subsidiary receives at least fair market value (as determined in good faith by the Borrower or such Subsidiary, as the case may be), (x) the total consideration received by the Borrower or such Subsidiary is at least 75% cash and is paid at the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 5.02(e) and (z) the aggregate amount of the proceeds received from all assets sold pursuant to this clause (v) shall not exceed $5,000,000 in any fiscal year of the Borrower; (vi) Investments may be made to the extent permitted by Section 10.05; (vii) each of the Borrower and its Subsidiaries may lease (as lessee) real or personal property (so long as any such lease does not create a Capitalized Lease Obligation except to the extent permitted by Section 10.04(iv)); (viii) each of the Borrower and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction; (ix) each of the Borrower and its Subsidiaries may grant leases or subleases to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (x) any Subsidiary of the Borrower (i) may be merged or consolidated with or into the Borrower or liquidated so long as the Borrower is the surviving corporation of such merger or consolidation or receives the assets of such Subsidiary upon such liquidation and (ii) may transfer its assets to the Borrower or to any Subsidiary Guarantor; and (xi) any Subsidiary of the Borrower may be merged or consolidated with or into any other Subsidiary of the Borrower or liquidated so long as (i) in the case of any (x) such merger or consolidation involving a Subsidiary Guarantor, a Subsidiary Guarantor is the surviving corporation of such merger or consolidation or (y) such liquidation involving a Subsidiary Guarantor, a Subsidiary Guarantor receives the assets of such Subsidiary upon such liquidation and (ii) in the case of any (x) such merger or consolidation involving a Wholly-Owned Subsidiary of -87- the Borrower, in addition to the requirements of preceding clause (i)(x), a Wholly-Owned Subsidiary is the surviving corporation of such merger or consolidation or (y) such liquidation, in addition to the requirements of preceding clause (i)(y), a Wholly-Owned Subsidiary receives the assets of such Subsidiary upon such liquidation. To the extent the Required Lenders waive the provisions of this Section 10.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 10.02 (other than to the Borrower or a Subsidiary thereof), such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing. 10.03. Dividends. The Borrower will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Borrower or any of its Subsidiaries, except that: (i) any Subsidiary of the Borrower may pay cash Dividends to the Borrower or to any Wholly-Owned Subsidiary of the Borrower; (ii) any non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its shareholders generally so long as the Borrower or its respective Subsidiary which owns the equity interest in the Subsidiary paying such Dividends receives at least its proportionate share thereof (based upon its relative holding of the equity interest in the Subsidiary paying such Dividends and taking into account the relative preferences, if any, of the various classes of equity interests of such Subsidiary); (iii) with prior written consent of the Required Lenders and so long as there shall exist no Default or Event of Default (both before and after giving effect to the payment thereof), the Borrower may repurchase outstanding shares of its common stock (or options to purchase such common stock) following the death, disability or termination of employment of officers, directors or employees of the Borrower or any of its Subsidiaries, provided that the aggregate amount of Dividends paid by the Borrower pursuant to this clause (iii) shall not exceed $500,000 in any fiscal year of the Borrower; (iv) the Borrower may pay regularly scheduled Dividends on its Qualified Preferred Stock pursuant to the terms thereof solely through the issuance of additional shares of such Qualified Preferred Stock rather than in cash; (v) with the prior written consent of the Required Lenders, the Borrower may redeem its outstanding preferred stock purchase rights issued under the Borrower's stockholder's rights plan in an aggregate amount not to exceed $500,000; (vi) the Borrower may pay cash Dividends in relation to its common stock on a pro rata basis, provided that before and after giving effect to the payment -88- thereof, (a) no Default or Event of Default shall exist, and (b) the aggregate amount of all cash Dividends under this Section 10.03(vi) shall not exceed $1,000,000. 10.04. Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness, except: (i) Indebtedness incurred pursuant to this Agreement and the other Credit Documents; (ii) Existing Indebtedness outstanding on the Initial Borrowing Date and listed on Schedule 4 of the Disclosure Letter, without giving effect to any subsequent extension, renewal or refinancing thereof except to the extent set forth on such Schedule 4, provided that the aggregate principal amount of the Indebtedness to be extended, renewed or refinanced does not increase from that amount outstanding at the time of any such extension, renewal or refinancing; (iii) Indebtedness under Interest Rate Protection Agreements in notional amounts not to exceed the outstanding Loans pursuant to this Agreement, such Interest Rate Protection Agreements to be reasonably acceptable to the Administrative Agent and entered into with respect to other Indebtedness permitted under this Section 10.04; (iv) Indebtedness of the Borrower and its Subsidiaries evidenced by Capitalized Lease Obligations (to the extent permitted pursuant to Section 10.07, 10.08 and 10.09) and purchase money Indebtedness described in Section 10.01(vii), provided that in no event shall the sum of the aggregate principal amount of all Capitalized Lease Obligations and purchase money Indebtedness permitted by this clause (iv) exceed $10,000,000 at any time outstanding; (v) intercompany Indebtedness among the Borrower and its Subsidiaries to the extent permitted by Sections 10.05(xi), (xiii), (xiv), (xv) and (xvi); (vi) Indebtedness consisting of guaranties by the Borrower and its Subsidiaries of Indebtedness of the Borrower and its Subsidiaries otherwise permitted to be incurred under this Section 10.04 (other than in respect of the Senior Subordinated Notes), in each case only so long as the giving of such guaranty does not require a Subsidiary of the Borrower to guaranty the Borrower's obligations in respect of the Senior Subordinated Notes; (vii) Indebtedness under Other Hedging Agreements providing protection against fluctuations in currency values in connection with the Borrower's or any of its Subsidiaries' operations so long as management of the Borrower or such Subsidiary, as the case may be, has determined that the entering into of such Other Hedging Agreements are bona fide hedging activities and are not for speculative purposes; -89- (viii) Indebtedness of the Borrower under the Senior Subordinated Notes and the other Senior Subordinated Note Documents in an aggregate principal amount not to exceed $92,000,000 (as reduced by any repayments of principal thereof); (ix) Indebtedness of a Subsidiary acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness), provided that (x) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition, (y) such Indebtedness does not constitute debt for borrowed money (other than debt for borrowed money incurred in connection with industrial revenue or industrial development bond financings), it being understood and agreed that Capitalized Lease Obligations and purchase money Indebtedness of the type described in Section 10.01(vii) shall not constitute debt for borrowed money for purposes of this clause (y), and (z) at the time of such Permitted Acquisition, the aggregate of all Indebtedness permitted under this clause (ix) does not exceed the greater of $5,000,000 or 15% of the total value of the assets of all Subsidiaries (or assets) so acquired since the Restatement Effective Date hereof; (x) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness not otherwise constituting Indebtedness permitted under this Section 10.04 is extinguished within two Business Days of the incurrence thereof; (xi) Indebtedness in respect of bid, performance, advance payment or surety bonds entered into in the ordinary course of business and consistent with past practices in an aggregate amount not to exceed $1,500,000 at any time outstanding; and (xii) so long as no Default or Event of Default then exists or would result therefrom, additional unsecured Indebtedness incurred by the Borrower and its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding. 10.05. Advances, Investments and Loans. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Cash Equivalents (each of the foregoing an "Investment" and, collectively, "Investments"), except that the following shall be permitted: -90- (i) the Borrower and its Subsidiaries may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of the Borrower or such Subsidiary; (ii) the Borrower and its Subsidiaries may acquire and hold cash and Cash Equivalents; (iii) the Borrower and its Subsidiaries may hold the Investments held by them on the Initial Borrowing Date and described on Schedule 7 of the Disclosure Letter, provided that any additional Investments made with respect thereto shall be permitted only if independently justified under the other provisions of this Section 10.05; (iv) the Borrower and its Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (v) the Borrower and its Subsidiaries may make loans and advances in the ordinary course of business to their respective employees so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $500,000; (vi) to the extent permitted by law, the Borrower may acquire and hold obligations of one or more officers or other employees of the Borrower or any of its Subsidiaries in connection with such officers' or employees' acquisition of shares of common stock of the Borrower provided, however, that (a) no cash is paid by the Borrower or any of its Subsidiaries to such officers or employees in connection with the acquisition of any such obligations, and (b) the aggregate of all such obligations shall not exceed $3,000,000 at any one time outstanding. (vii) the Borrower and its Subsidiaries may enter into Interest Rate Protection Agreements to the extent permitted by Section 10.04(iii); (viii) the Borrower and its Subsidiaries may enter into Other Hedging Agreement to the extent permitted by Section 10.04(vii); (ix) Permitted Acquisitions shall be permitted in accordance with Section 9.15; (x) the Borrower and its Subsidiaries may acquire and hold promissory notes and other non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Sections 10.02(iv) and (v); -91- (xi) the Borrower and the Subsidiary Guarantors may make Intercompany Loans between or among one another, so long as each Intercompany Loan shall be evidenced by an Intercompany Note that is pledged to the Collateral Agent pursuant to the Pledge Agreement; (xii) the Borrower may make equity contributions to the capital of the Subsidiary Guarantors and the Subsidiary Guarantors may make equity contributions to the capital of their respective Subsidiaries which are Subsidiary Guarantors, provided that the Borrower may not contribute a material portion of its non-cash assets to the Subsidiary Guarantors; (xiii) the Borrower and the Subsidiary Guarantors may make Intercompany Loans and/or cash equity contributions to Wholly-Owned Foreign Subsidiaries of the Borrower for the purpose of enabling such Wholly-Owned Foreign Subsidiaries to consummate a Permitted Acquisition or to make Capital Expenditures so long as (x) each such Investment that is made as an Intercompany Loan shall be evidenced by an Intercompany Note that is pledged to the Collateral Agent pursuant to the Pledge Agreement, (y) no more than $1,000,000 of such Investments in the aggregate may be made in any fiscal year of the Borrower for Permitted Acquisitions and (z) no more than $1,000,000 of such Investments in the aggregate may be made in any fiscal year of the Borrower for Capital Expenditures; (xiv) the Borrower and its Wholly-Owned Subsidiaries may make additional Intercompany Loans and/or cash equity contributions to their respective Wholly-Owned Foreign Subsidiaries for the purpose of enabling such Subsidiaries to make an Investment permitted by clause (xvi) of this Section 10.05 so long as (x) each such Investment that is made as an Intercompany Loan shall be evidenced by an Intercompany Note that is pledged to the Collateral Agent pursuant to the Pledge Agreement and (y) no more than $1,000,000 of such Investments in the aggregate may be made; (xv) Wholly-Owned Foreign Subsidiaries of the Borrower may make intercompany loans (x) between or among one another and (y) to the Borrower or any Subsidiary Guarantor so long as each such Intercompany Loan made to the Borrower or a Subsidiary Guarantor shall contain (and shall be subject to) the subordination provisions described in Exhibit M; and (xvi) so long as no Default or Event of Default then exists or would result therefrom, the Borrower and its Subsidiaries may make additional Investments so long as the aggregate amount of all such Investments made pursuant to this clause (xvi) does not exceed $2,000,000 in any fiscal year. 10.06. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of the Borrower or any of its Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to -92- the Borrower or such Subsidiary as would reasonably be obtained by the Borrower or such Subsidiary at that time in a comparable arm's-length transaction with a Person other than an Affiliate, except that the following in any event shall be permitted: (i) Dividends may be paid to the extent provided in Section 10.03; (ii) loans may be made and other transactions may be entered into by the Borrower and its Subsidiaries to the extent permitted by Sections 10.02, 10.04 and 10.05; (iii) customary fees may be paid to non-officer directors of the Borrower and its Subsidiaries; (iv) the Borrower and its Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions and other similar compensatory arrangements with officers, employees and directors of the Borrower and its Subsidiaries in the ordinary course of business; (v) transactions exclusively between or among the Borrower and any of its Wholly-Owned Subsidiaries or exclusively between or among such Wholly-Owned Subsidiaries, provided that such transactions are not otherwise prohibited by the Credit Documents; (vi) any agreement as in effect as of the Initial Borrowing Date or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) in any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Lenders in any material respect than the original agreement as in effect on the Initial Borrowing Date; and (vii) transactions with Annapurna Corporation aggregating not more than $500,000 in any fiscal year of the Borrower. 10.07. Consolidated Fixed Charge Coverage Ratio. The Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period to be less than 1.15:1. 10.08. Maximum Total Leverage Ratio. The Borrower will not permit the Consolidated Total Leverage Ratio at any time during a period set forth below to be greater than the ratio set forth opposite such period below:

PERIOD RATIO ------ ----- Initial Borrowing Date through and including December 30, 2003 3.25:1.00 December 31, 2003 through and including June 29, 2004 3.00:1.00 June 30, 2004 through and including March 30, 2005 2.75:1.00 March 31, 2005 and thereafter 2.50:1.00

-93- In addition, at the Borrower's option, by written notice to the Administrative Agent, the Borrower may irrevocably reduce to 2.50:1.00 the required Consolidated Total Leverage Ratio, whereupon the Borrower will not permit the Consolidated Total Leverage Ratio at any time to be greater than 2.50:1.00. 10.09. Maximum Senior Leverage Ratio. The Borrower will not permit the Consolidated Senior Leverage Ratio at any time to be greater than 2.00:1; it being understood, however, to the extent the that the required Consolidated Total Leverage Ratio pursuant to Section 10.08 has become equal to or less than 2.50:1, then the Borrower's obligations in respect of this Section 10.09 shall terminate. 10.10. Minimum Consolidated EBITDA. The Borrower will not permit Consolidated EBITDA for any Test Period to be less than $75,000,000. 10.11. Consolidated Net Worth. The Borrower will not permit the Consolidated Net Worth as of the end of any fiscal quarter of the Borrower to be less than the sum of (a) $105,000,000, (b) an amount equal to 50% of the Consolidated Net Income (with no deduction for any net loss in any such fiscal quarter) earned in each fiscal quarter ending after December 31, 2002, plus (c) an amount equal to 100% of the aggregate increases in shareholders' equity of the Borrower and its Subsidiaries after the Restatement Effective Date by reason of the issuance and sale of capital stock of the Borrower for cash consideration (including upon any conversion of debt securities of the Borrower into such capital stock). 10.12. Limitation on Voluntary Payments and Modifications of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc. (a) The Borrower will not, and will not permit any of its Subsidiaries to: (i) make (or give any notice in respect of) any Restricted Payment with respect to any Subordinated Debt, unless immediately before and after giving effect thereto each of the following conditions is satisfied (except as may be permitted under Section 10.12(b): (A) no Default or Event of Default shall exist, (B) such Restricted Payment when added to all other Restricted Payments theretofore made shall not exceed the sum of $50,000,000; and (ii) make any Restricted Payment with respect to any Subordinated Debt under this Section 10.12(a), unless at least 10 Business Days prior to any Restricted Payment with respect to any Subordinated Debt, the Borrower shall have furnished to the Administrative Agent an officer's certificate executed by a senior financial officer of the Borrower certifying compliance with the conditions in preceding clauses 10.12(a)(i)(A) and (B) and accompanied by reasonable -94- calculations. (b) The Borrower will not, and will not permit any of its Subsidiaries to: (i) make (or give any notice in respect of) any Restricted Payment with respect to any Subordinated Debt, unless immediately before and after giving effect thereto each of the following conditions is satisfied: (A) no Default or Event of Default shall exist, (B) the Consolidated EBITDA as of the day of the last most recent Test Period is greater than 105% of the minimum amount of Consolidated EBITDA required pursuant to Section 10.10 in respect of such Test Period, (C) the Total Unutilized Revolving Loan Commitment, when added to the aggregate of unrestricted cash and Cash Equivalents held by the Borrower and its Wholly-Owned Domestic Subsidiaries, shall equal or exceed $7,000,000, (D) the Consolidated Total Leverage Ratio then required to be satisfied by the Borrower pursuant to Section 10.08 has decreased to 2.50:1.00; (ii) make any Restricted Payment with respect to any Subordinated Debt under this Section 10.12(b), unless at least 10 Business Days prior to any Restricted Payment with respect to any Subordinated Debt, the Borrower shall have furnished to the Administrative Agent an officer's certificate executed by a senior financial officer of the Borrower certifying compliance with the conditions in preceding clauses 10.12(b)(i)(A) through (D) and accompanied by reasonable calculations; and (iii) make any Restricted Payment with respect to any Subordinated Debt pursuant to this Section 10.12(b), unless Borrower and its Subsidiaries have made all Restricted Payments with respect to Subordinated Debt that may be made under the limitation of Section 10.12(a)(i)(B), the Borrower being prohibited from electing to categorize Restricted Payments with respect to Subordinated Debt under either 10.12(a) or (b). (c) The Borrower will not, and will not permit any of its Subsidiaries to amend or modify, or permit the amendment or modification of, any provision of any Senior Subordinated Note Document or other agreement relating to Subordinated Debt. (d) The Borrower will not, and will not permit any of its Subsidiaries to amend, modify or change its certificate or articles of incorporation (including, without limitation, by the filing or modification of any certificate or articles of designation) or by-laws (or the equivalent organizational documents) or any agreement entered into by it with respect to its capital stock (including any Shareholders' Agreement), or enter into any new agreement with respect to its -95- capital stock, unless such amendment, modification, change or other action contemplated by this clause (iii) could not reasonably be expected to be adverse to the interests of the Lenders in any material respect. (e) Neither the Borrower nor any of its Subsidiaries shall designate any Indebtedness, other than the Obligations, as "Designated Senior Debt" for purposes of the Senior Subordinated Notes. 10.13. Limitation on Certain Restrictions on Subsidiaries. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Borrower or any Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of the Borrower or (c) transfer any of its properties or assets to the Borrower or any Subsidiary of the Borrower, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) the Senior Subordinated Note Documents, (iv) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or any Subsidiary of the Borrower, (v) customary provisions restricting assignment of any licensing agreement (in which the Borrower or such Subsidiary is the licensee) or other contract entered into by the Borrower or any Subsidiary of the Borrower in the ordinary course of business, (vi) any instrument governing Indebtedness described in Section 10.04(ix), which restriction is not applicable to any Person, or the property or assets of any Person, other than the Person or the properties or assets acquired pursuant to any such Permitted Acquisition, (vii) agreements existing on the Initial Borrowing Date to the extent and in the manner such agreements are in effect on the Initial Borrowing Date, (viii) any agreement for the sale or disposition of capital stock or assets of any Subsidiary, provided that such encumbrances and restrictions are only applicable to such Subsidiary or assets, as applicable, and any such sale or disposition is made in compliance with Section 10.02, and (ix) restrictions on the transfer of any asset subject to a Lien permitted by Section 10.01(v), (vi) or (vii). 10.14. Limitation on Issuance of Capital Stock. (a) The Borrower will not, and will not permit any of its Subsidiaries to, issue (i) any preferred stock other than Qualified Preferred Stock of the Borrower or (ii) any redeemable common stock other than common stock that is redeemable at the sole option of the Borrower or such Subsidiary, as the case may be. (b) The Borrower will not permit any of its Subsidiaries to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except (i) for transfers and replacements of then outstanding shares of capital stock, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the capital stock of such Subsidiary, (iii) to qualify directors to the extent required by applicable law, (iv) for issuances to the Borrower or a Wholly-Owned Subsidiary thereof or (v) for issuances by newly created or acquired Subsidiaries in accordance with the terms of this Agreement. -96- 10.15. Business. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any business other than the business engaged in by the Borrower and its Subsidiaries as of the Initial Borrowing Date and reasonable extensions thereof and other businesses that are complementary or reasonably related thereto. Notwithstanding anything to the contrary contained in this Agreement, the Borrower will not permit any Inactive Subsidiary to engage in any business activities, to have any material liabilities or to own assets with an aggregate value in excess of $250,000. 10.16. Limitation on Creation of Subsidiaries. The Borrower will not, and will not permit any of its Subsidiaries to, establish, create or acquire after the Initial Borrowing Date any Subsidiary, provided that the Borrower and its Wholly-Owned Subsidiaries shall be permitted to establish, create or, to the extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries and, to the extent permitted by Section 10.05(xvi) and the definition of "Permitted Acquisition", non-Wholly-Owned Subsidiaries, so long as (i) the equity interests of each such new Subsidiary (to the extent owned by a Credit Party) is pledged pursuant to, and to the extent required by, the Pledge Agreement, (ii) each such new Domestic Subsidiary (and, to the extent required by Section 9.13, each such new Foreign Subsidiary) executes a counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and (iii) each such new Domestic Subsidiary (and, to the extent required by Section 9.13, each such new Foreign Subsidiary), to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 9.11. In addition, each such new Domestic Subsidiary (and, to the extent required by Section 9.13, each such new Foreign Subsidiary) shall execute and deliver, or cause to be executed and delivered, all other relevant documentation of the type described in Section 6 as such new Subsidiary would have had to deliver if such new Subsidiary were a Credit Party on the Initial Borrowing Date. 10.17. Operating Leases. The Borrower will not permit the aggregate obligations of the Borrower and its Subsidiaries with respect to Operating Leases to exceed $7,500,000 in any fiscal year. SECTION 11 EVENTS OF DEFAULT. Upon the occurrence of any of the following specified events (each an "Event of Default"): 11.01. Payments. The Borrower shall (i) default in the payment when due of any principal of any Loan or any Note or (ii) default, and such default shall continue unremedied for three or more Business Days, in the payment when due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other amounts owing hereunder or thereunder; or -97- 11.02. Representations, etc. Any representation, warranty or statement made or deemed made by any Credit Party herein or in any other Credit Document or in any certificate delivered to the Administrative Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or 11.03. Covenants. The Borrower or any of its Subsidiaries shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Section 9.01(g)(i), 9.08, 9.12, 9.14, 9.15 or Section 10 or (ii) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or any other Credit Document (other than those set forth in Sections 11.01 and 11.02) and such default shall continue unremedied for a period of 30 days after written notice thereof to the defaulting party by the Administrative Agent or the Required Lenders; or 11.04. Default Under Other Agreements. (i) The Borrower or any of its Subsidiaries shall (x) default in any payment of any Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (y) default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity, or (ii) any Indebtedness (other than the Obligations) of the Borrower or any of its Subsidiaries shall be declared to be (or shall become) due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof, provided that it shall not be a Default or an Event of Default under this Section 11.04 unless the aggregate principal amount of all Indebtedness as described in either of the preceding clauses (i) or (ii) is at least $5,000,000; or 11.05. Bankruptcy, etc. The Borrower or any of its Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the Borrower or any of its Subsidiaries, and the petition is not controverted within 10 days, or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any of its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any of its Subsidiaries, or there is commenced against the Borrower or any of its Subsidiaries any such proceeding which remains undismissed for a period of 60 days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any of its Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Borrower or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is -98- taken by the Borrower or any of its Subsidiaries for the purpose of effecting any of the foregoing; or 11.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, ..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days, any Plan which is subject to Title IV of ERISA shall have had or is likely to have a trustee appointed to administer such Plan, any Plan which is subject to Title IV of ERISA is, shall have been or is likely to be terminated or to be the subject of termination proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a contribution required to be made with respect to a Plan or a Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate has incurred or is likely to incur any liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or any Subsidiary of the Borrower has incurred or is likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning of Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable law, rule or regulation is adopted, changed or interpreted, or the interpretation or administration thereof is changed, in each case after the date hereof, by any governmental authority or agency or by any court (a "Change of Law"), or, as a result of a Change in Law, an event occurs following a Change in Law, with respect to or otherwise affecting any Plan; (b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability; and (c) such lien, security interest or liability, individually and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or could reasonably be expected to have, a Material Adverse Effect; or 11.07. Security Documents. At any time after the execution and delivery thereof, any of the Security Documents shall cease to be in full force and effect, or shall cease to give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Lien on, all of the Collateral (other than an immaterial portion thereof), in favor of the Collateral Agent, superior to and prior to the rights of all third Persons (except as permitted by Section 10.01), and subject to no other Liens (except as permitted by Section 10.01); or 11.08. Subsidiaries Guaranty. At any time after the execution and delivery thereof, the Subsidiaries Guaranty or any provision thereof shall cease to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under the -99- Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Subsidiaries Guaranty; or 11.09. Judgments. One or more judgments or decrees shall be entered against the Borrower or any Subsidiary of the Borrower involving in the aggregate for the Borrower and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds $5,000,000; or 11.10. Change of Control. A Change of Control shall occur; then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 11.05 shall occur with respect to the Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Fee shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and the Notes and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; (iii) terminate any Letter of Credit which may be terminated in accordance with its terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon receipt of such notice, or upon the occurrence of an Event of Default specified in Section 11.05 with respect to the Borrower, it will pay) to the Collateral Agent at the Payment Office such additional amount of cash or Cash Equivalents, to be held as security by the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of Credit issued for the account of the Borrower and then outstanding; (v) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents; and (vi) apply any cash collateral held by the Administrative Agent pursuant to Section 5.02 to the repayment of the Obligations. -100- SECTION 12 THE ADMINISTRATIVE AGENT. 12.01. Appointment. The Lenders hereby irrevocably designate Bank of America as Administrative Agent (for purposes of this Section 12, the term "Administrative Agent" also shall include Bank of America in its capacity as Collateral Agent pursuant to the Security Documents) to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on their behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of their respective duties hereunder by or through its officers, directors, agents, employees or affiliates. 12.02. Nature of Duties. The Administrative Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein. 12.03. Lack of Reliance on the Administrative Agent. Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Borrower and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Borrower and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrower or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance -101- of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Borrower or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default. 12.04. Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders; and the Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders. 12.05. Reliance. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent. 12.06. Indemnification. To the extent the Administrative Agent (or any affiliate thereof) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the Administrative Agent (and any affiliate thereof) in proportion to their respective "percentage" as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any affiliate thereof) in performing its duties hereunder or under any other Credit Document or in any way relating to or arising out of this Agreement or any other Credit Document; 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 Administrative Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). 12.07. The Administrative Agent in its Individual Capacity. With respect to its obligation to make Loans, or issue or participate in Letters of Credit, under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a "Lender" and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term "Lender," "Required Lenders", "holders of Notes" or any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its respective individual capacities. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to, any Credit Party or any Affiliate of any Credit Party (or any Person -102- engaged in a similar business with any Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. 12.08. Holders. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 12.09. Resignation by the Administrative Agent. (a) The Administrative Agent may resign from the performance of all its respective functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days prior written notice to the Lenders. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrower which acceptance shall not be unreasonably withheld or delayed (provided that the Borrower's approval shall not be required if an Event of Default then exists). (c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed, provided that the Borrower's consent shall not be required if an Event of Default then exists), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 20th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent's resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. 12.10. Issuing Lender. The Issuing Lender shall have the rights and protections hereunder to the same extent as if it were the Administrative Agent. -103- SECTION 13 MISCELLANEOUS. 13.01. Payment of Expenses, etc. The Borrower shall: (i) whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and disbursements of legal counsel of the Administrative Agent and of the Administrative Agent's consultants) in connection with the preparation, execution and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, of the Administrative Agent in connection with its syndication efforts with respect to this Agreement and of the Administrative Agent and, after the occurrence of an Event of Default, each of the Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings (including, in each case without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent and, after the occurrence of an Event of Default, counsel for each of the Lenders); (ii) pay and hold the Administrative Agent and each of the Lenders harmless from and against any and all present and future stamp, excise and other similar documentary taxes with respect to the foregoing matters and save the Administrative Agent and each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to the Administrative Agent or such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and each Lender, and each of their respective officers, directors, employees, representatives, agents, affiliates, trustees and investment advisors from and hold each of them harmless against any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys' and consultants' fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (a) any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of any Letter of Credit or the proceeds of any Loans hereunder or the consummation of the Refinancing or any other transactions contemplated herein or in any other Credit Document or the exercise of any of -104- their rights or remedies provided herein or in the other Credit Documents, or (b) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real Property owned, leased or at any time operated by the Borrower or any of its Subsidiaries, the generation, storage, transportation, handling or disposal of Hazardous Materials by the Borrower or any of its Subsidiaries at any location, whether or not owned, leased or operated by the Borrower or any of its Subsidiaries, the non-compliance of any Real Property with foreign, federal, state and local laws, regulations, and ordinances (including applicable permits thereunder) applicable to any Real Property, or any Environmental Claim asserted against the Borrower, any of its Subsidiaries or any Real Property owned, leased or at any time operated by the Borrower or any of its Subsidiaries, including, in each case, without limitation, the reasonable fees and disbursements of counsel and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified (as determined by a court of competent jurisdiction in a final and non-appealable decision)). To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. 13.02. Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations and liabilities of the Credit Parties to the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender pursuant to Section 13.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. 13.03. Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party, at the address specified opposite its signature below or in the other relevant Credit Documents; if to any Lender, at its address specified on Schedule II; and if to the Administrative Agent, at the Notice Office; or, as to any Credit Party or the Administrative -105- Agent, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Administrative Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent and the Borrower shall not be effective until received by the Administrative Agent or the Borrower, as the case may be. 13.04. Benefit of Agreement; Assignments; Participations. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, the Borrower may not assign or transfer any of its rights, obligations or interest hereunder without the prior written consent of the Lenders and, provided further, that, although any Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a "Lender" for all purposes hereunder (and may not transfer or assign all or any portion of its Commitments hereunder except as provided in Sections 2.13 and 13.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a "Lender" hereunder and, provided further, that no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof (it being understood that any amendment or modification to the financial definitions in this Agreement or to Section 13.07(a) shall not constitute a reduction in the rate of interest or Fees payable hereunder), or increase the amount of the participant's participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment (or the available portion thereof) or Loan shall be permitted without the consent of any participant if the participant's participation is not increased as a result thereof), (ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement, or (iii) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Loans or Letters of Credit hereunder in which such participant is participating or release all or substantially all of the Subsidiary Guarantors. -106- In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation. (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to (i) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or to one or more Lenders or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of such Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to one or more Eligible Transferees (treating any fund that invests in loans and any other fund that invests in loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, provided that, (i) at such time Schedule I shall be deemed modified to reflect the Commitments and/or outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the Borrower for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the Borrower's expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.05 (with appropriate modifications) to the extent needed to reflect the revised Commitments and/or outstanding Loans, as the case may be, (iii) the consent of the Administrative Agent and, so long as no Default or Event of Default then exists, the consent of the Borrower, shall (in each case) be required in connection with any assignment to an Eligible Transferee pursuant to clause (y) above (each of which consents shall not be unreasonably withheld or delayed), (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500 (only one such fee shall be payable in the event of a simultaneous assignment to multiple assignees that are Affiliates or from multiple assignors that are Affiliates), and -107- (v) no such transfer or assignment will be effective until recorded by the Administrative Agent on the Register pursuant to Section 13.15. To the extent of any assignment pursuant to this Section 13.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and outstanding Loans. At the time of each assignment pursuant to this Section 13.04(b) to a Person which is not already a Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall, to the extent legally entitled to do so, provide to the Borrower the appropriate Internal Revenue Service Forms (and, if applicable, a Section 5.04(b)(ii) Certificate) described in Section 5.04(b). To the extent that an assignment of all or any portion of a Lender's Commitments and related outstanding Obligations pursuant to Section 2.13 or this Section 13.04(b) would, at the time of such assignment, result in increased costs under Section 2.10, 3.06 or 5.04 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment). (c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, upon written notice to the Administrative Agent, any Lender which is a fund may pledge all or any portion of its Loans and Notes to its trustee in support of its obligations to its trustee. No pledge pursuant to this clause (c) shall release the transferor Lender from any of its obligations hereunder. 13.05. No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender to any other or further action in any circumstances without notice or demand. 13.06. Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of -108- any Obligations hereunder, it shall distribute such payment to the Lenders (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received. (b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans, Unpaid Drawings, Commitment Fee or Letter of Credit Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. (c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 13.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders. 13.07. Calculations; Computations; Accounting Terms. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with GAAP in the United States consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Lenders); provided that, except as otherwise specifically provided herein, all computations of Excess Cash Flow, and all computations and all definitions used in determining compliance with Sections 10.07 through 10.11, inclusive, shall utilize accounting principles and policies in conformity with those used to prepare the latest audited historical financial statements of the Borrower referred to in Section 8.05(a). (b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. -109- (c) All computations of interest, Commitment Fee and other Fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day; except that in the case of Letter of Credit Fees, the last day shall be included) occurring in the period for which such interest, Commitment Fee or other Fees are payable; provided that interest in respect of Base Rate Loans determined by reference to the prime rate shall be made on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days occurring in the period for which such interest is payable. 13.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF ILLINOIS. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS, OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS. IN EACH CASE WHICH ARE LOCATED IN THE CITY OF CHICAGO, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. (b) THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION. (c) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN -110- CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. (d) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 13.09. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. 13.10. [Intentionally omitted.] 13.11. Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 13.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing signed by the respective Credit Parties party thereto and the Required Lenders, provided that no such amendment, change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with Obligations being directly affected in the case of following clause (i)): (i) extend the final scheduled maturity of any Loan or Note or extend the stated expiration date of any Letter of Credit beyond the Revolving Loan Maturity Date, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with the waiver of applicability of any post-default increase in interest rates), or reduce the principal amount thereof (it being understood that any amendment or modification to the financial definitions in this Agreement or to Section 13.07 shall not constitute a reduction in the rate of interest or Fees for the purposes of this clause (i)), (ii) release all or substantially all of the Collateral (except as expressly provided in the Credit Documents) under all the Security Documents or release all or substantially all of the Subsidiary Guarantors, -111- (iii) amend, modify or waive any provision of this Section 13.12 (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Term Loans and the Revolving Loan Commitments on the Restatement Effective Date), (iv) reduce the percentage specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Term Loans and Revolving Loan Commitments are included on the Restatement Effective Date), (v) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement, (vi) amend Section 2.09 so as to permit Interest Periods that are greater than six months, (vii) amend Section 13.04(b), or (viii) amend, modify or waive any Term Loan Scheduled Repayment to be made pursuant to Section 5.02(b); provided further, that no such amendment, change, waiver, discharge or termination shall: (1) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (2) affect the rights or duties of the Administrative Agent, the Collateral Agent, the Issuing Lender or the Swingline Lender hereunder or under any other Credit Document, without the prior written consent of the Administrative Agent, the Collateral Agent, the Issuing Lender or the Swingline Lender, as the case may be, (3) (i) amend, change, modify or waive Section 5.02(a) or (ii) have the effect (either immediately) or at some later time) of enabling the Borrower to satisfy a condition precedent to the making of a Revolving Loan or Swingline Loan or the issuance of a Letter of Credit, unless such amendment, modification or waiver shall have been consented to by the holders of more than 50% of the aggregate principal amount of the Revolving Loan Commitments, or (4) amend, change, modify or waive the provisions of Section 5.02 (h), or adversely affect the rights of Lenders participating in any Tranche different from those of the Lenders participating in other Tranches, unless, in any such case, such amendment, modification or waiver shall have been consented to by the holders of (in Dollars) more than 50% of the -112- aggregate amount of Loans outstanding under the Tranche or Tranches affected by such modification, or, in the case of a modification affecting the Revolving Loan Commitments, the Lenders holding more than 50% of the aggregate principal amount of Revolving Loan Commitments (it being agreed and understood that modifications which affect all Lenders ratably shall not be considered hereunder as affecting Lenders of any Tranche differently). (b) [Intentionally omitted.] 13.13. Survival. All indemnities set forth herein including, without limitation, in Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Obligations. 13.14. Domicile of Loans. Each Lender may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans pursuant to this Section 13.14 would, at the time of such transfer, result in increased costs under Section 2.10, 2.11, 3.06 or 5.04 from those being charged by the respective Lender prior to such transfer, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective transfer). 13.15. Register. The Borrower hereby designates the Administrative Agent to serve as the Borrower's agent, solely for purposes of this Section 13.15, to maintain a register (the "Register") on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrower's obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 13.15. 13.16. Confidentiality. -113- (a) Subject to the provisions of clause (b) of this Section 13.16, each Lender agrees that it will use its reasonable efforts not to disclose without the prior consent of the Borrower (other than to its employees, auditors, advisors or counsel or to another Lender if such Lender or such Lender's holding or parent company in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender) any information with respect to the Borrower or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document and which is designated by the Borrower to the Lenders in writing as confidential, provided that any Lender may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 13.16(a) by the respective Lender, (ii) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender, provided that such prospective transferee agrees to be bound by the confidentiality provisions contained in this Section 13.16, and (vii) to any direct or indirect contractual counterparty to swap agreements with a Lender or such contractual counterparty's professional advisor provided that such contractual counterparty or professional advisor agrees to be bound by the provisions of this Section 13.16. (b) The Borrower hereby acknowledges and agrees that each Lender may share with any of its affiliates, and such affiliates may share with such Lender any information related to the Borrower or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of the Borrower and its Subsidiaries), provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender. 13.17. Certain Agreements with respect to the Senior Subordinated Notes. (a) The Borrower hereby (A) represents and warrants that (i) $100,000,000 of Term Loans may be incurred under this Agreement on the Initial Borrowing Date in reliance on the proviso to Section 4.12 of the Senior Subordinated Note Indenture, and (ii) $45,000,000 of Revolving Loans, Swingline Loans and Letters of Credit in the aggregate incurred pursuant to the Total Revolving Loan Commitment as in effect on the Initial Borrowing Date may be incurred and outstanding from time to time in reliance on clause (ii) of the definition of "Permitted Indebtedness" contained in the Senior Subordinated Note Indenture and (B) agrees that it will not take any position contrary to the representations and warranties set forth in preceding clause (A). (b) The Borrower hereby represents and warrants that this (i) Agreement constitutes the "Credit Facility" under, and as defined in, the Senior Subordinated Note Indenture, and (ii) the Obligations (as defined herein) constitute (and are hereby designated by the Borrower as) Designated Senior Debt (as defined in the Senior Subordinated Note Indenture). -114- 13.18. Debt Rating. The Borrower shall, within 90 days after the Initial Borrowing Date, obtain a reaffirmation of all debt ratings (each a "Debt Rating") from Moody's Investors Service, Inc., or any successor thereto ("Moody's") or Standard & Poor's Ratings Services, or any successor thereto ("S&P") for all of the Borrower's long term debt, including but not limited to the Indebtedness and the Subordinated Debt, actual and implied. * * * -115- IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. Address: 5711 South 86th Circle INFOUSA INC. Omaha, Nebraska 68127 Attn: Chief Financial Officer Telephone No.: (402) 593-4500 By: _________________________________ Telecopier No.: (402) 331-1505 Title: Chief Financial Officer Signature Page to Credit Agreement BANK OF AMERICA, N.A., as Administrative Agent By: _________________________________ Title: ______________________________ BANK OF AMERICA, N.A., individually By: _________________________________ Title: ______________________________ U.S. BANK, N.A. By: _________________________________ Title: ______________________________ WELLS FARGO BANK, NATIONAL ASSOCIATION By: _________________________________ Title: ______________________________ FIRST NATIONAL BANK OF OMAHA By: _________________________________ Title: ______________________________ CIBC INC. By: _________________________________ Title: ______________________________ Signature Page to Credit Agreement KZH CypressTree-1 LLC By: _________________________________ Title: ______________________________ KZH STERLING LLC By: _________________________________ Title: ______________________________ KZH STERLING LLC By: _________________________________ Title: ______________________________ ORIX Capital Markets, LLC By: _________________________________ Title: ______________________________ Signature Page to Credit Agreement SCHEDULE I COMMITMENTS

REVOLVING TERM LOAN LOAN LENDER COMMITMENT COMMITMENT PRO RATA SHARE ------ ---------- ---------- -------------- Bank of America, N.A. $ 48,750,000.00 $17,500,000.00 45.689655172% U.S. Bank, N.A. $ 8,000,000.00 $10,000,000.00 12.413793103% Wells Fargo Bank, National Association $ 7,500,000.00 $ 7,500,000.00 10.344827586% First National Bank of Omaha $ 5,000,000.00 $10,000,000.00 10.344827586% CIBC Inc. $ 10,000,000.00 6.896551724% KZH CypressTree-1 LLC $ 5,250,000.00 3.620689655% KZH ING-2 LLC $ 5,250,000.00 3.620689655% KZH STERLING LLC $ 3,250,000.00 2.241379310% ORIX Capital Markets, LLC $ 7,000,000.00 4.827586207% TOTAL: $100,000,000.00 $45,000,000.00

SCHEDULE II LENDER ADDRESSES

Lender Address ------ ------- Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attn: David Johanson Tel. No.: (312) 828-7933 Fax No.: (312) 974-9102 U.S. Bank, N.A. 8800 West Center Road Omaha, Nebraska 68124 Attn: Kevin D. Munro Tel. No.: (402) 399-2729 Fax No.: (402) 399-2778 Wells Fargo Bank, National Association Sixth & Marquette MAC: N9305-051 Minneapolis, Minnesota 55479 Attn: Joseph G. Colianni Tel. No.: (612) 667-0094 Fax No.: (612) 667-7266 First National Bank of Omaha 1620 Dodge Street MS 1050 Omaha, Nebraska 68197 Attn: Jeff Sims Tel. No.: (402) 633-3511 Fax No.: (402) 633-3519 CIBC Inc. 425 Lexington Avenue New York, NY 10017 Attn: Vincent Spencer Tel. No.: (212) 885-4579 Fax No.: (212) 856-3991 425 Lexington Avenue, 8th Floor New York, NY 10017 KZH ING-2 LLC c/o JPMorgan Chase Bank 4 MetroTech Center - 10th Floor Brooklyn, New York 11245 Attn: Virginia Conway Tel. No.: (718) 242-4932 Fax No.: (718) 242-6220

Copies To: Weil, Gotschal & Manges LLP 767 Fifth Avenue, 34th Floor New York, New York 10153 Attn: Shan D. McSweeney Tel. No.: (212) 310-6857 Fax No.: (212) 310-8007 KZH CypressTree-1 LLC c/o JPMorgan Chase Bank 4 MetroTech Center - 10th Floor Brooklyn, New York 11245 Attn: Virginia Conway Tel. No.: (718) 242-4932 Fax No.: (718) 242-6220 Copies To: Weil, Gotschal & Manges LLP 767 Fifth Avenue, 34th Floor New York, New York 10153 Attn: Shan D. McSweeney Tel. No.: (212) 310-6857 Fax No.: (212) 310-8007 KZH STERLING LLC c/o JPMorgan Chase Bank 4 MetroTech Center - 10th Floor Brooklyn, New York 11245 Attn: Virginia Conway Tel. No.: (718) 242-4932 Fax No.: (718) 242-6220 Copies To: Weil, Gotschal & Manges LLP 767 Fifth Avenue, 34th Floor New York, New York 10153 Attn: Shan D. McSweeney Tel. No.: (212) 310-6857 Fax No.: (212) 310-8007 ORIX Capital Markets, LLC 1717 Main Street Suite 900 Dallas, Texas 75201 Attn: Sheppard H.C. Davis, Jr. Tel. No.: (214) 237-2348 Fax No.: (214) 237-2016 EX-10.2 4 d10393exv10w2.txt EX-10.2 PLEDGE AGREEMENT EXHIBIT 10.2 PLEDGE AGREEMENT PLEDGE AGREEMENT (as amended, modified or supplemented from time to time, this "Agreement"), dated as of March 6, 2002, as amended and restated as of May 27, 2003, made by each of the undersigned pledgors (each a "Pledgor" and, together with any other entity that becomes a pledgor hereunder pursuant to Section 25 hereof, the "Pledgors") to BANK OF AMERICA, N.A., as Collateral Agent together with any successor Collateral Agent (the "Pledgee"), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H: WHEREAS, infoUSA Inc. (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), and Bank of America, N.A., as Administrative Agent (together with any successor Administrative Agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of March 6, 2002, as amended and restated as of May 27, 2003 (as amended, modified or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, the Administrative Agent, the Issuing Lender and the Pledgee are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors," and together with the Lender Creditors, the "Secured Creditors"); WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as described therein; WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Pledgor shall have executed and delivered to the Pledgee this Agreement; and WHEREAS, each Pledgor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows: 1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure: (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and indebtedness (including, without limitation, indemnities, Fees and interest thereon) of such Pledgor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the case of each Pledgor which is a Subsidiary Guarantor, all such obligations and indebtedness of such Pledgor under the Subsidiaries Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging Agreements, being herein collectively called the "Credit Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and liabilities owing by such Pledgor to the Other Creditors under, or with respect to (including, in the case of each Pledgor which is a Subsidiary Guarantor, by reason of the Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained therein (all such obligations and liabilities described in this clause (ii) being herein collectively called the "Other Obligations"); (iii) any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of such Pledgor referred to in clauses (i) and (ii) above, after an Event of Default (which term to mean and include any Event of Default under, and as defined in, the Credit Agreement or any payment default by the Borrower under any Interest Rate Protection Agreement or Other Hedging Agreement and shall, in any event, include, without limitation, any payment default on any of the Obligations (as hereinafter defined)) shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys' fees and court costs; and (v) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement; -2- all such obligations, liabilities, sums and expenses set forth in clauses (i) through (v) of this Section 1 being herein collectively called the "Obligations," it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. 2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. (b) The following capitalized terms used herein shall have the definitions specified below: "Administrative Agent" has the meaning set forth in the Recitals hereto. "Adverse Claim" has the meaning given such term in Section 8-102(a)(1) of the UCC. "Agreement" has the meaning set forth in the first paragraph hereof. "Certificated Security" has the meaning given such term in Section 8-102(a)(4) of the UCC. "Class" has the meaning set forth in Section 22 hereof. "Clearing Corporation" has the meaning given such term in Section 8-102(a)(5) of the UCC. "Collateral" has the meaning set forth in Section 3.1 hereof. "Collateral Accounts" means any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited. "Credit Agreement" has the meaning set forth in the Recitals hereto. "Credit Document Obligations" has the meaning set forth in Section 1 hereof. "Domestic Corporation" has the meaning set forth in the definition of "Stock." "Event of Default" has the meaning set forth in Section 1 hereof. "Financial Asset" has the meaning given such term in Section 8-102(a)(9) of the UCC. "Foreign Corporation" has the meaning set forth in the definition of "Stock." -3- "Indemnitees" has the meaning set forth in Section 11 hereof. "Instrument" has the meaning given such term in Section 9-102(a)(47) of the UCC. "Investment Property" has the meaning given such term in Section 9-102(a)(49) of the UCC. "Lender Creditors" has the meaning set forth in the Recitals hereto. "Lenders" has the meaning set forth in the Recitals hereto. "Limited Liability Company Assets" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest. "Limited Liability Company Interests" means the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company. "Non-Voting Stock" means all capital stock which is not Voting Stock. "Notes" means all promissory notes from time to time issued to, or held by, each Pledgor (including each Intercompany Note). "Obligations" has the meaning set forth in Section 1 hereof. "Other Creditors" has the meaning set forth in the Recitals hereto. "Other Obligations" has the meaning set forth in Section 1 hereof. "Partnership Assets" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest. "Partnership Interest" means the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership. "Pledged Notes" has the meaning set forth in Section 3.5 hereof. "Pledgee" has the meaning set forth in the first paragraph hereof. "Pledgor" has the meaning set forth in the first paragraph hereof. "Proceeds" has the meaning given such term in Section 9-102(a)(64) of the UCC. "Required Lenders" has the meaning given such term in the Credit Agreement. -4- "Requisite Creditors" has the meaning set forth in Section 22 hereof. "Secured Creditors" has the meaning set forth in the Recitals hereto. "Secured Debt Agreements" has the meaning set forth in Section 5 hereof. "Securities Account" has the meaning given such term in Section 8-501(a) of the UCC. "Securities Act" means the Securities Act of 1933, as amended, as in effect from time to time. "Security" and "Securities" has the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes. "Security Entitlement" has the meaning given such term in Section 8-102(a)(17) of the UCC. "Stock" means (x) with respect to corporations incorporated under the laws of the United States or any State or territory thereof (each a "Domestic Corporation"), all of the issued and outstanding shares of capital stock of any corporation at any time owned by any Pledgor of any Domestic Corporation and (y) with respect to corporations not Domestic Corporations (each a "Foreign Corporation"), all of the issued and outstanding shares of capital stock at any time owned by any Pledgor of any Foreign Corporation. "Termination Date" has the meaning set forth in Section 20 hereof. "UCC" means the Uniform Commercial Code as in effect in the State of Illinois from time to time; provided that all references herein to specific sections or subsections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of Illinois on the date hereof. "Uncertificated Security" has the meaning given such term in Section 8-102(a)(18) of the UCC. "Voting Stock" means all classes of capital stock of any Foreign Corporation entitled to vote. 3. PLEDGE OF SECURITIES, ETC. 3.1 Pledge. To secure the Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the "Collateral"): -5- (a) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, moneys, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; (b) all Securities owned by such Pledgor from time to time and all options or warrants owned by such Pledgor from time to time to purchase Securities; (c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests; (B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests; (D) all present and future claims, if any, of such Pledgor against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, 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, amendment, waiver or approval, together with full -6- power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (d) all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests; (B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests; (D) all present and future claims, if any, of such Pledgor against any such partnership for moneys loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Partnership Interests and any such partnership, 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, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing and (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing -7- such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (e) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; (f) all Financial Assets and Investment Property owned by such Pledgor from time to time; and (g) all Proceeds of any and all of the foregoing. Notwithstanding anything to the contrary contained in this Section 3.1, (x) except as otherwise provided in Section 9.13 of the Credit Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be required at any time to pledge hereunder more than 65% of the Voting Stock of any Foreign Corporation, and (y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation. 3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) for the benefit of the Pledgee and the Secured Creditors: (i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall deliver such Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank; (ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security (or, in the case of an issuer that is not a Subsidiary of such Pledgor, will use its best efforts to cause such issuer) to duly authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the Secured Creditors substantially in the form of Annex G hereto (appropriately completed to the reasonable satisfaction of the Pledgee and with such modifications, if any, as shall be reasonably satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction; -8- (iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take all actions required (i) to comply with the applicable rules of such Clearing Corporation and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-106(a) and (b), 9-312(a), 9-314(c) and 8-106 (d) of the UCC). The Pledgor further agrees to take such actions as the Pledgee deems reasonably necessary or desirable to effect the foregoing; (iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than (x) a Partnership Interest or Limited Liability Interest credited on the books of a Clearing Corporation or (y) a Limited Liability Company Interest of an Inactive Subsidiary to the extent that same remains an "Inactive Subsidiary"), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate, the procedure set forth in Section 3.2(a)(ii) hereof; (v) with respect to any Note, delivery of such Note to the Pledgee, indorsed to the Pledgee or indorsed in blank; (vi) with respect to cash, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control and dominion (and no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee) and (ii) deposit of such cash in such cash account; (vii) with respect to Collateral Accounts, the respective Pledgor shall cause each securities intermediary or deposit account bank to duly execute and deliver to the Pledgee an agreement for the benefit of the Pledgee and the Secured Creditors, substantially in the form of Annex H or I, as applicable (appropriately completed to the reasonable satisfaction of the Pledgee and with such modifications, if any, as shall be reasonably satisfactory to the Pledgee). (b) In addition to the actions required to be taken pursuant to proceeding Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Securities and Collateral : (i) with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain "control" thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of Illinois), the respective Pledgor shall take all actions as may be reasonably requested from time to time by the Pledgee so that "control" of such Collateral is obtained and at all times held by the Pledgee; and -9- (ii) each Pledgor shall from time to time cause appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, on form covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC). 3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by a principal executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are reasonably necessary to cause such annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder any shares of stock at any time and from time to time after the date hereof acquired by such Pledgor of any Foreign Corporation, provided that (x) except as provided in Section 9.13 of the Credit Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be required at any time to pledge hereunder more than 65% of the Voting Stock of any Foreign Corporation and (y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation. 3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral. 3.5 Definition of Pledged Notes. All Notes at any time pledged or required to be pledged hereunder are hereinafter called the "Pledged Notes". 3.6 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto; (ii) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex B hereto; (iii) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Notes held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability -10- Company Interest constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex E hereto; (ix) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes A through E hereto; and (x) on the date hereof, such Pledgor owns no other Securities, Limited Liability Company Interests or Partnership Interests. 4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the extent necessary to enable the Pledgee to perfect its security interest in any of the Collateral or to exercise any of its remedies hereunder, the Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee. 5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided, that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or be inconsistent with any of the terms of this Agreement, the Credit Agreement, any other Credit Document or any Interest Rate Protection Agreement or Other Hedging Agreement (collectively, the "Secured Debt Agreements"), or which would have the effect of impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable. 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Pledgee shall be entitled to receive directly, and to retain as part of the Collateral: (i) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral; (ii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and -11- (iii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization. Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee's right to receive proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 and Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement). 7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable: (i) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor; (ii) to transfer all or any part of the Collateral into the Pledgee's name or the name of its nominee or nominees; (iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon); (iv) to vote all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so); (v) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, -12- provided that at least 10 days' written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and (vi) to set-off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations. The Pledgee shall not exercise any rights under Section 3 of any Securities Account Control Agreement, executed and delivered pursuant to Section 3.2(a)(vii) of this Agreement, or under Section 2 of any Deposit Account Control Agreement, executed and delivered pursuant to Section 3.2(a)(vii) of this Agreement, unless an Event of Default shall exist. 8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Pledgee, in each case acting upon the instructions of the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least the majority of the outstanding Other Obligations) and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement. 9. APPLICATION OF PROCEEDS. All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided -13- in the Security Agreement. It is understood and agreed that the Pledgors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral hereunder and the aggregate amount of the Obligations. 10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof. 11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold harmless the Pledgee in such capacity and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an "Indemnitee," and collectively the "Indemnitees") from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all reasonable costs and expenses, including reasonable attorneys' fees, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any claims, demands, losses, judgments and liabilities or expenses to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee). In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any matter or thing in connection with this Agreement other than to account for monies actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person. (b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before -14- or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. (c) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. 13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor's own expense, file and refile under the Uniform Commercial Code or other applicable law such financing statements, continuation statements and other documents in such offices as the Pledgee may deem reasonably necessary and wherever required by law in order to perfect and preserve the Pledgee's security interest in the Collateral and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem necessary to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder. (b) Each Pledgor hereby appoints the Pledgee such Pledgor's attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, to act from time to time solely after the occurrence and during the continuance of an Event of Default in the Pledgee's reasonable discretion to take any action and to execute any instrument which the Pledgee may deem reasonably necessary or advisable to accomplish the purposes of this Agreement. 14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement. -15- 15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein (except as may be permitted in accordance with the terms of the Credit Agreement). 16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants that: (i) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral consisting of one or more Securities and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement); (ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); (iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement, (b) the validity or enforceability of this Agreement, (c) the perfection or enforceability of the Pledgee's security interest in the Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein; (v) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or of the certificate of incorporation, operating agreement, limited liability company agreement, partnership agreement or by-laws of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan agreement, credit agreement or other material contract, agreement or instrument or undertaking to which such Pledgor or any of its -16- Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or imposition of (or the obligation to create or impose) any lien or encumbrance on any of the assets of such Pledgor or any of its Subsidiaries except as contemplated by this Agreement; (vi) all of the Collateral (consisting of Securities, Limited Liability Company Interests or Partnership Interests) has been duly and validly issued and acquired, is fully paid and non-assessable and is subject to no options to purchase or similar rights; (vii) each of the Pledged Notes constituting an Intercompany Note constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); and (viii) the pledge and collateral assignment to, and possession by, the Pledgee of the Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and (ix) "control" (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities (including Notes which are Securities) with respect to which such "control" may be obtained pursuant to Section 8-106 of the UCC. (b) Each Pledgor covenants and agrees that it will defend the Pledgee's right, title and security interest in and to the Securities and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors. 17. CHIEF EXECUTIVE OFFICE; JURISDICTION OF ORGANIZATION RECORDS. The full legal name and jurisdiction of organization of Pledgor is as set forth in Annex F hereto. The chief executive office of each Pledgor is located at the address specified in Annex F hereto. Each Pledgor will not move its chief executive office except to such new location as such Pledgor may establish in accordance with the last sentence of this Section 17. The originals of all documents in the possession of such Pledgor evidencing all Collateral, -17- including but not limited to all Limited Liability Company Interests and Partnership Interests, and the only original books of account and records of such Pledgor relating thereto are, and will continue to be, kept at such chief executive office as specified in Annex F hereto, or at such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17. All Limited Liability Company Interests and Partnership Interests are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, such chief executive office as specified in Annex F hereto, or such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17. No Pledgor shall change its chief executive office, name, form of organization from that of a corporation or jurisdiction of organization until (i) it shall have given to the Pledgee not less than 30 days' prior written notice of its intention so to do, clearly describing the proposed changes and providing such other information in connection therewith as the Pledgee may reasonably request and (ii) with respect to such changes, it shall have taken all action, satisfactory to the Pledgee, to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. Promptly after establishing a new location for such offices in accordance with the immediately preceding sentence, the respective Pledgor shall deliver to the Pledgee a supplement to Annex F hereto so as to cause such Annex F hereto to be complete and accurate. 18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (i) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Agreement or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement; (iii) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (iv) any limitation on any party's liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing. 19. REGISTRATION, ETC. (a) If there shall have occurred and be continuing an Event of Default then, and in every such case, upon receipt by any Pledgor from the Pledgee of a written request or requests that such Pledgor cause any registration, qualification or compliance under any Federal or state securities law or laws to be effected with respect to all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests, such Pledgor as soon as practicable and at its expense will cause such registration to be effected (and be kept effective) and will cause such qualification and compliance to be declared effected (and be kept effective) -18- as may be so requested and as would permit or facilitate the sale and distribution of such Collateral, including, without limitation, registration under the Securities Act, as then in effect (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with any other government requirements, provided, that the Pledgee shall furnish to such Pledgor such information regarding the Pledgee as such Pledgor may reasonably request in writing and as shall be required in connection with any such registration, qualification or compliance. Such Pledgor will cause the Pledgee to be kept advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, will furnish to the Pledgee such number of prospectuses, offering circulars or other documents incident thereto as the Pledgee from time to time may reasonably request, and will indemnify the Pledgee, each other Secured Creditor and all others participating in the distribution of such Collateral against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same may have been caused by an untrue statement or omission based upon information furnished in writing to such Pledgor by the Pledgee or such other Secured Creditor expressly for use therein. (b) If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral, as the case may be, or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, in good faith deems reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid. 20. TERMINATION; RELEASE. (a) After the Termination Date, this Agreement and the security interest created hereby shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination), and the Pledgee, at the request and expense of any Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly -19- assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any monies at the time held by the Pledgee or any of its sub-agents hereunder. As used in this Agreement, "Termination Date" shall mean the date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements have been terminated, no Note under the Credit Agreement is outstanding (and all Loans have been repaid in full), all Letters of Credit have been terminated and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold in connection with a sale permitted by Section 10.02 of the Credit Agreement (other than a sale to any Pledgor or any Subsidiary thereof) or is otherwise released at the direction of the Required Lenders (or all Lenders if required by Section 13.12 of the Credit Agreement) and the proceeds of such sale or sales or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, the Pledgee, at the request and expense of any Pledgor, will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral (and releases therefor) as is then being (or has been) so sold or released and has not theretofore been released pursuant to this Agreement. (c) At any time that a Pledgor desires that the Pledgee assign, transfer and deliver Collateral (and releases therefor) as provided in Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to such Section 20(a) or (b). (d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 20. 21. NOTICES, ETC. All such notices and communications hereunder shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier and when mailed shall be effective three Business Days following deposit in the mail with proper postage, except that notices and communications to the Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows: (a) if to any Pledgor, at: c/o infoUSA Inc. 5711 South 86th Circle Omaha, Nebraska 68127 Attention: Chief Financial Officer Telephone No.: (402) 593-4500 Telecopier No.: (402) 331-1505 -20- (b) if to the Pledgee, at: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: David Johanson Telephone No.: (312) 828-7933 Telecopier No.: (312) 974-9102 (c) if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor at such address as such Other Creditor shall have specified in writing to the Pledgors and the Pledgee; or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. 22. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Pledgor directly affected thereby and the Pledgee (with the written consent of either (x) the Required Lenders (or all of the Lenders to the extent required by Section 13.12 of the Credit Agreement) at all times prior to the time on which all Credit Document Obligations have been paid in full or (y) the holders of at least 50% of the aggregate principal amount of the outstanding Other Obligations at all times after the time on which all Credit Document Obligations have been paid in full); provided, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, i.e., whether (i) the Lender Creditors as holders of the Credit Document Obligations or (ii) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement, the term "Requisite Creditors" of any Class shall mean each of (i) with respect to the Credit Document Obligations, the Required Lenders and (ii) with respect to the Other Obligations, the holders of at least 50% of the aggregate principal amount of the outstanding Other Obligations. 23. MISCELLANEOUS. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns, provided that no Pledgor may assign any of its rights or obligations under this Agreement without the prior consent of the Collateral Agent. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. EACH PLEDGOR IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS -21- CONTEMPLATED HEREBY. The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. 24. RECOURSE. This Agreement is made with full recourse to the Pledgors and pursuant to and upon all the representations, warranties, covenants and agreements on the part of the Pledgors contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 25. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Agreement after the date hereof pursuant to the Credit Agreement shall become a Pledgor hereunder by executing a counterpart hereof and delivering the same to the Pledgee. * * * * -22- IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written. INFOUSA INC., as a Pledgor By _________________________________________ Title: Chief Financial Officer AMERICAN CHURCH LISTS, INC., BJ HUNTER INFORMATION, INC., CD-ROM TECHNOLOGIES, INC., CITY DIRECTORIES, INC., CLICKACTION INC., DONNELLEY MARKETING, INC., HILL-DONNELLY CORPORATION IDEXEC, INC., INFOUSA MARKETING, INC., LIST BAZAAR.COM, INC., STRATEGIC INFORMATION MANAGEMENT, INC., TGMVC CORPORATION WALTER KARL, INC., YESMAIL, INC., each as a Pledgor By _________________________________________ Title: Chief Financial Officer of each Signature Page to Pledge Agreement Accepted and Agreed to: BANK OF AMERICA, N.A., as Pledgee, Collateral Agent By _________________________________ Title: Vice President Signature Page to Pledge Agreement ANNEX A to PLEDGE AGREEMENT LIST OF SUBSIDIARIES See Schedule 3 and 7 of the Disclosure Letter to the Credit Agreement. ANNEX B to PLEDGE AGREEMENT LIST OF STOCK See Schedule 3 and 7 of the Disclosure Letter to the Credit Agreement, provided that with respect to the common stock of BJ Hunter Information, Inc., only 65% of such common stock is required to be pledged. ANNEX C to PLEDGE AGREEMENT LIST OF NOTES Various members of senior management of the Borrower owe the Borrower pursuant to promissory notes an aggregate of $840,645 (as of April 30, 2003) in connection with the exercise of stock options to acquire common stock of the Borrower. ANNEX D to PLEDGE AGREEMENT LIST OF LIMITED LIABILITY COMPANY INTERESTS None. ANNEX E to PLEDGE AGREEMENT LIST OF PARTNERSHIP INTERESTS None. ANNEX F to PLEDGE AGREEMENT LIST OF JURISDICTIONS OF ORGANIZATION See Annex A to the Security Agreement. LIST OF CHIEF EXECUTIVE OFFICES See Annex B to the Security Agreement. ANNEX G to PLEDGE AGREEMENT Form of Agreement Regarding Uncertificated Securities, Limited Liability Company Interests and Partnership Interests AGREEMENT (as amended, modified or supplemented from time to time, this "Agreement"), dated as of _______ __, ____, among the undersigned pledgor (the "Pledgor"), Bank of America, N.A., not in its individual capacity but solely as Collateral Agent (the "Pledgee"), and __________, as the issuer of the Uncertificated Securities, Limited Liability Company Interests and/or Partnership Interests (each as defined below) (the "Issuer"). W I T N E S S E T H : WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have entered into a Pledge Agreement, dated as of March 6, 2002, as amended and restated as of May 27, 2003 (as amended, amended and restated, modified or supplemented from time to time, the "Pledge Agreement"), under which, among other things, in order to secure the payment of the Obligations (as defined in the Pledge Agreement), the Pledgor will pledge to the Pledgee for the benefit of the Secured Creditors (as defined in the Pledge Agreement), and grant a security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest of the Pledgor in and to any and all (1) "uncertificated securities" (as defined in Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of Illinois) ("Uncertificated Securities"), (2) Partnership Interests (as defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the Pledge Agreement), in each case issued from time to time by the Issuer, whether now existing or hereafter from time to time acquired by the Pledgor (with all of such Uncertificated Securities, Partnership Interests and Limited Liability Company Interests being herein collectively called the "Issuer Pledged Interests"); and WHEREAS, the Pledgor desires the Issuer to enter into this Agreement in order to perfect the security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement; NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. The Pledgor hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without the further consent by the registered owner (including the Pledgor), and not to comply with any G-1 instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its successors and assigns) or a court of competent jurisdiction. 2. The Issuer hereby certifies that (i) no notice of any security interest, lien or other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in the books and records of the Issuer. 3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgor of, and the granting by the Pledgor of a security interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured Creditors, does not violate the charter, by-laws, partnership agreement, membership agreement or any other agreement governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and nonassessable. 4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to the Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: David Johanson Telephone No.: (312) 828-7933 Telecopier No.: (312) 974-9102 5. Until the Pledgee shall have delivered written notice to the Issuer that all of the Obligations have been paid in full and this Agreement is terminated, the Issuer will, upon receiving notice from the Pledgee stating that an "Event of Default" has occurred and is continuing, send any and all redemptions, distributions, interest or other payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgor only by wire transfers to the following address: ________________________ ________________________ ________________________ ABA No.: __________________________ Account in the Name of: ___________ Account No.: ______________________ 6. Except as expressly provided otherwise in Sections 4 and 5, all notices, shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier and when mailed shall be effective three Business Days following deposit in the mail with proper G-2 postage, except that notices and communications to the Pledgee, the Pledgor or the Issuer shall not be effective until received by the Pledgee, the Pledgor or the Issuer, as the case may be. All notices and other communications shall be in writing and addressed as follows: (a) if to the Pledgor, at: c/o infoUSA Inc. 5711 South 86th Circle Omaha, Nebraska 68127 Attention: Chief Financial Officer Tel: (402) 593-4500 Fax: (402) 331-1505 (b) if to the Pledgee, at: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: David Johanson Telephone No.: (312) 828-7933 Telecopier No.: (312) 974-9102 (c) if to the Issuer, at: _______________________________ _______________________________ _______________________________ or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. As used in this Section 6, "Business Day" means any day other than a Saturday, Sunday, or other day in which banks in Illinois are authorized to remain closed. 7. This Agreement shall be binding upon the successors and assigns of the Pledgor and the Issuer and shall inure to the benefit of and be enforceable by the Pledgee and its successors and assigns. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in the manner whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor. G-3 8. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its principles of conflict of laws. * * * IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written. [________________________________], as Pledgor By ______________________________________ Name: Title: BANK OF AMERICA, N.A., not in its individual capacity but solely as Collateral Agent and Pledgee By ______________________________________ Name: Title: [________________________________], the Issuer By ______________________________________ Name: Title: G-4 ANNEX H to PLEDGE AGREEMENT SECURITIES ACCOUNT CONTROL AGREEMENT This Securities Account Control Agreement dated as of (this "Agreement") among ___________________(the "Debtor"), Bank of America, N.A., as collateral agent for the Secured Parties (the "Collateral Agent") and _______________________, in its capacity as a "securities intermediary" as defined in Section 8-102 of the UCC (in such capacity, the "Securities Intermediary"). Capitalized terms used but not defined herein shall have the meaning assigned thereto in the Pledge Agreement, dated [as of the date hereof] [as of March 6, 2002, as amended and restated as of May 27, 2003], among the Debtor and the Collateral Agent (as amended, modified or supplemented from time to time, the "Pledge Agreement"). All references herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the State of Illinois. SECTION 1. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities Intermediary hereby confirms and agrees that: (a) The Securities Intermediary has established account number [IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such account and any successor account, the "Securities Account") and the Securities Intermediary shall not change the name or account number of the Securities Account without the prior written consent of the Collateral Agent; (b) All securities or other property underlying any financial assets credited to the Securities Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to the Securities Account be registered in the name of the Debtor, payable to the order of the Debtor or specially indorsed to the Debtor except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank; (c) All property delivered to the Securities Intermediary pursuant to the Pledge Agreement will be promptly credited to the Securities Account; and (d) The Securities Account is a "securities account" within the meaning of Section 8-501 of the UCC. SECTION 2. "FINANCIAL ASSETS" ELECTION. The Securities Intermediary hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument, general intangible or cash) credited to the Securities Account shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC. H-1 SECTION 3. CONTROL OF THE SECURITIES ACCOUNT. If at any time the Securities Intermediary shall receive any order from the Collateral Agent directing transfer or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Debtor or any other person. The Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Collateral Agent, the Securities Intermediary shall follow the orders issued by the Collateral Agent. SECTION 4. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the Securities Intermediary has or subsequently obtains by agreement, by operation of law or otherwise a security interest in the Securities Account or any security entitlement credited thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to the security interest of the Collateral Agent. The financial assets and other items deposited to the Securities Account will not be subject to deduction, set-off, banker's lien, or any other right in favor of any person other than the Collateral Agent (except that the Securities Intermediary may set off (i) all amounts due to the Securities Intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Securities Account and (ii) the face amount of any checks which have been credited to such Securities Account but are subsequently returned unpaid because of uncollected or insufficient funds). SECTION 5. CHOICE OF LAW. This Agreement and the Securities Account shall each be governed by the laws of the State of Illinois. Regardless of any provision in any other agreement, for purposes of the UCC, Illinois shall be deemed to be the Securities Intermediary's jurisdiction (within the meaning of Section 8-110 of the UCC) and the Securities Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of Illinois. SECTION 6. CONFLICT WITH OTHER AGREEMENTS. (a) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail; (b) No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto; (c) The Securities Intermediary hereby confirms and agrees that: (i) There are no other agreements entered into between the Securities Intermediary and the Debtor with respect to the Securities Account; (ii) It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with any other person relating to the Securities Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of such other person; and H-2 (iii) It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with the Debtor or the Collateral Agent purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in Section 3 hereof. SECTION 7. ADVERSE CLAIMS. Except for the claims and interest of the Collateral Agent and of the Debtor in the Securities Account, the Securities Intermediary does not know of any claim to, or interest in, the Securities Account or in any "financial asset" (as defined in Section 8-102(a) of the UCC) credited thereto. If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Debtor thereof. SECTION 8. MAINTENANCE OF SECURITIES ACCOUNT. In addition to, and not in lieu of, the obligation of the Securities Intermediary to honor entitlement orders as agreed in Section 3 hereof, the Securities Intermediary agrees to maintain the Securities Account as follows: (a) Notice of Sole Control. If at any time the Collateral Agent delivers to the Securities Intermediary a Notice of Sole Control in substantially the form set forth in Exhibit A hereto, the Securities Intermediary agrees that after receipt of such notice, it will take all instruction with respect to the Securities Account solely from the Collateral Agent. (b) Voting Rights. Until such time as the Securities Intermediary receives a Notice of Sole Control pursuant to subsection (a) of this Section 8, the Debtor shall direct the Securities Intermediary with respect to the voting of any financial assets credited to the Securities Account. (c) Permitted Investments. Until such time as the Securities Intermediary receives a Notice of Sole Control signed by the Collateral Agent, the Debtor shall direct the Securities Intermediary with respect to the selection of investments to be made for the Securities Account; provided, however, that the Securities Intermediary shall not honor any instruction to purchase any investments other than investments of a type describe on Exhibit B hereto. (d) Statements and Confirmations. The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Securities Account and/or any financial assets credited thereto simultaneously to each of the Debtor and the Collateral Agent at the address for each set forth in Section 12 of this Agreement. (e) Tax Reporting. All items of income, gain, expense and loss recognized in the Securities Account shall be reported to the Internal Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Debtor. H-3 SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES INTERMEDIARY. The Securities Intermediary hereby makes the following representations, warranties and covenants: (a) The Securities Account has been established as set forth in Section I above and such Securities Account will be maintained in the manner set forth herein until termination of this Agreement; and (b) This Agreement is the valid and legally binding obligations of the Securities Intermediary. SECTION 10. INDEMNIFICATION OF SECURITIES INTERMEDIARY. The Debtor and the Collateral Agent hereby agree that (a) the Securities Intermediary is released from any and all liabilities to the Debtor and the Collateral Agent arising from the terms of this Agreement and the compliance of the Securities Intermediary with the terms hereof, except to the extent that such liabilities arise from the Securities Intermediary's negligence and (b) the Debtor, its successors and assigns shall at all times indemnify and save harmless the Securities Intermediary from and against any and all claims, actions and suits of others arising out of the terms of this Agreement or the compliance of the Securities Intermediary with the terms hereof, except to the extent that such arises from the Securities Intermediary's negligence, and from and against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising by reason of the same, until the termination of this Agreement. SECTION 11. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors or heirs and personal representatives who obtain such rights solely by operation of law. The Collateral Agent may assign its rights hereunder only with the express written consent of the Securities Intermediary and by sending written notice of such assignment to the Debtor. SECTION 12. NOTICES. Any notice, request or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below. Debtor: [INSERT ADDRESS) Attention: Telecopier: Collateral Agent: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: David Johanson H-4 Telecopier: (312) 974-9102 Financial Institution: [INSERT ADDRESS] Attention: Telecopier: Any party may change its address for notices in the manner set forth above. SECTION 13. TERMINATION. The obligations of the Securities Intermediary to the Collateral Agent pursuant to this Agreement shall continue in effect until the security interest of the Collateral Agent in the Securities Account has been terminated pursuant to the terms of the Pledge Agreement and the Collateral Agent has notified the Securities Intermediary of such termination in writing. The Collateral Agent agrees to provide Notice of Termination in substantially the form of Exhibit C hereto to the Securities Intermediary upon the request of the Debtor on or after the termination of the Collateral Agent's security interest in the Securities Account pursuant to the terms of the Pledge Agreement. The termination of this Agreement shall not terminate the Securities Account or alter the obligations of the Securities Intermediary to the Debtor pursuant to any other agreement with respect to the Securities Account. SECTION 14. COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts. IN WITNESS WHEREOF, the parties hereto have caused this Securities Account Control Agreement to be executed as of the date first above written by their respective officers thereunto duly authorized. H-5 EXHIBIT A TO SECURITIES ACCOUNT CONTROL AGREEMENT [Letterhead of Collateral Agent] [Date] [Name and Address of Financial Institution] Attention: Re: Notice of Sole Control Ladies and Gentlemen: As referenced in the Securities Account Control Agreement dated as of __________ __, 2003, among ____________________, you and the undersigned (a copy of which is attached), we hereby give you notice of our sole control over securities account number [ACCOUNT NUMBER] (the "Securities Account") and all financial assets credited thereto. You are hereby instructed not to accept any direction, instructions or entitlement orders with respect to the Securities Account or the financial assets credited thereto from any person other than the undersigned, unless otherwise ordered by a court of competent jurisdiction. You are instructed to deliver a copy of this notice by facsimile transmission to [NAME OF DEBTOR]. Very truly yours, Bank of America, N.A., as Collateral Agent By: ______________________________________ Name: ____________________________________ Title: ___________________________________ cc: [NAME OF THE DEBTOR] H-6 EXHIBIT B TO SECURITIES ACCOUNT CONTROL AGREEMENT Permitted Investments H-7 EXHIBIT C TO SECURITIES ACCOUNT CONTROL AGREEMENT [Letterhead of the Collateral Agent] [Date] [Name and Address of Financial Institution] Attention: Re: Termination of Securities Account Control Agreement You are hereby notified that the Securities Account Control Agreement dated as of ____________ among you, ___________________ (the "Debtor") and the undersigned (a copy of which is attached) is terminated and you have no further obligations to the undersigned pursuant to such Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to [ACCOUNT NUMBER(S)] from the Debtor. This notice terminates any obligations you may have to the undersigned with respect to such account, however nothing contained in this notice shall alter any obligations which you may otherwise owe to the Debtor pursuant to any other agreement. You are instructed to deliver a copy of this notice by facsimile transmission to the Debtor. Very truly yours, Bank of America, N.A., as Collateral Agent By: ______________________________________ Name: ____________________________________ Title: ___________________________________ H-8 ANNEX I to PLEDGE AGREEMENT DEPOSIT ACCOUNT CONTROL AGREEMENT This Deposit Account Control Agreement dated as of ___________ (this "Agreement") among _________________ (the "Debtor"), Bank of America, N.A., as collateral agent for the Secured Parties (the "Collateral Agent") and _______ , in its capacity as a "bank" as defined in Section 9-102 of The UCC (in such capacities, the "Financial Institution"). Capitalized terms used but not defined herein shall have the meaning assigned thereto in the Pledge Agreement, dated [as of the date hereof] [______ __, 2003, among the Debtor and the Collateral Agent (as amended, modified or supplemented from time to time, the "Pledge Agreement"). All references herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the State of Illinois. SECTION 1. ESTABLISHMENT OF DEPOSIT ACCOUNT. The Financial Institution hereby confirms and agrees that: (a) The Financial Institution has established account number [IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such account and any successor account, the "Deposit Account") and the Financial Institution shall not change the name or account number of the Deposit Account without the prior written consent of the Collateral Agent; and (b) The Deposit Account is a "deposit account" within the meaning of Section 9-102(a)(29) of the UCC. SECTION 2. CONTROL OF THE DEPOSIT ACCOUNT. If at any time the Financial Institution shall receive any instructions originated by the Collateral Agent directing the disposition of funds in the Deposit Account, the Financial Institution shall comply with such instructions without further consent by the Debtor or any other person. [The Financial Institution hereby acknowledges that for purposes of Section 9-309 of the Illinois Uniform Commercial Code it has received notice of the security interest of the Collateral Agent in the Deposit Account and hereby acknowledges and consents to such lien.] SECTION 3. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the Financial Institution has or subsequently obtains by agreement, by operation of law or otherwise a security interest in the Deposit Account or any funds credited thereto, the Financial Institution hereby agrees that such security interest shall be subordinate to the security interest of the Collateral Agent. Money and other items credited to the Deposit Account will not be subject to deduction, set-off, banker's lien, or any other right in favor of any person other than the Collateral Agent (except that the Financial Institution may set off (i) all amounts due to the Financial Institution in respect of customary fees and expenses for the routine maintenance and operation of the Deposit Account and (ii) the face amount of any checks which have been credited to such Deposit Account but are subsequently returned unpaid because of uncollected or insufficient funds). I-1 SECTION 4. CHOICE OF LAW. This Agreement and the Deposit Account shall each be governed by the laws of the State of Illinois. Regardless of any provision in any other agreement, for purposes of the UCC, Illinois shall be deemed to be the Financial Institution's jurisdiction (within the meaning of Section 9-304 of the UCC and the Deposit Account shall be governed by the laws of the State of Illinois. SECTION 5. CONFLICT WITH OTHER AGREEMENTS. (a) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail; (b) No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto; and (c) The Financial Institution hereby confirms and agrees that: (i) There are no other agreements entered into between the Financial Institution and the Debtor with respect to the Deposit Account; and (ii) It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with any other person relating the Deposit Account and/or any funds credited thereto pursuant to which it has agreed to comply with instructions originated by such persons as contemplated by Section 9-104 of the UCC. SECTION 6. ADVERSE CLAIMS. The Financial Institution does not know of any liens, claims or encumbrances relating to the Deposit Account. If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Deposit Account, the Financial Institution will promptly notify the Collateral Agent and the Debtor thereof. SECTION 7. MAINTENANCE OF DEPOSIT ACCOUNT. In addition to, and not in lieu of, the obligation of the Financial Institution to honor instructions as set forth in Section 2 hereof, the Financial Institution agrees to maintain the Deposit Account as follows: (a) STATEMENTS AND CONFIRMATIONS. The Financial Institution will promptly send copies of all statements, confirmations and other correspondence concerning the Deposit Account simultaneously to each of the Debtor and the Collateral Agent at the address for each set forth in Section 11 of this Agreement; and (b) TAX REPORTING. All interest, if any, relating to the Deposit Account, shall be reported to the Internal Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Debtor. I-2 SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FINANCIAL INSTITUTION. The Financial Institution hereby makes the following representations, warranties and covenants: (a) The Deposit Account has been established as set forth in Section 1 and such Deposit Account will be maintained in the manner set forth herein until termination of this Agreement; and (b) This Agreement is the valid and legally binding obligations of the Financial Institution. SECTION 9. INDEMNIFICATION OF FINANCIAL INSTITUTION. The Debtor and the Collateral Agent hereby agree that (a) the Financial Institution is released from any and all liabilities to the Debtor and the Collateral Agent arising from the terms of this Agreement and the compliance of the Financial Institution with the terms hereof, except to the extent that such liabilities arise from the Financial Institution's negligence and (b) the Debtor, its successors and assigns shall at all times indemnify and save harmless the Financial Institution from and against any and all claims, actions and suits of others arising out of the terms of this Agreement or the compliance of the Financial Institution with the terms hereof, except to the extent that such arises from the Financial Institution's negligence, and from and against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising by reason of the same, until the termination of this Agreement. SECTION 10. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors or heirs and personal representatives who obtain such rights solely by operation of law. The Collateral Agent may assign its rights hereunder only with the express written consent of the Financial Institution and by sending written notice of such assignment to the Debtor. SECTION 11. NOTICES. Any notice, request or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below. Debtor: INSERT ADDRESS] Attention: Telecopier: Collateral Agent: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 I-3 Attention: David Johanson Telecopier: (312) 974-9102 Financial Institution: [INSERT ADDRESS] Attention: Telecopier: Any party may change its address for notices in the manner set forth above. SECTION 12. TERMINATION. The obligations of the Financial Institution to the Collateral Agent pursuant to this Agreement shall continue in effect until the security interest of the Collateral Agent in the Deposit Account has been terminated pursuant to the terms of the Pledge Agreement and the Collateral Agent has notified the Financial Institution of such termination in writing. The Collateral Agent agrees to provide Notice of Termination in substantially the form of Exhibit A hereto to the Financial Institution upon the request of the Debtor on or after the termination of the Collateral Agent's security interest in the Deposit Account pursuant to the terms of the Pledge Agreement. The termination of this Agreement shall not terminate the Deposit Account or alter the obligations of the Financial Institution to the Debtor pursuant to any other agreement with respect to the Deposit Account. SECTION 13. COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts. IN WITNESS WHEREOF, the parties hereto have caused this Deposit Account Control Agreement to be executed as of the date first above written by their respective officers thereunto duty authorized. I-4 EXHIBIT A TO DEPOSIT ACCOUNT CONTROL AGREEMENT [Letterhead of the Collateral Agent] [Date] [Name and Address of Financial Institution] Attention: Re: Termination of Deposit Account Control Agreement You are hereby notified that the Deposit Account Control Agreement dated as of ____________, 2003 among ____________________ (the "Debtor"), you and the undersigned (a copy of which is attached) is terminated and you have no further obligations to the undersigned pursuant to such Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to account number(s) from the Debtor. This notice terminates any obligations you may have to the undersigned with respect to such account, however nothing contained in this notice shall alter any obligations which you may otherwise owe to the Debtor pursuant to any other agreement. You are instructed to deliver a copy of this notice by facsimile transmission to the Debtor. Very truly yours, Bank of America, N.A., as Collateral Agent By: ______________________________________ Name: ____________________________________ Title: ___________________________________ I-5 EX-10.3 5 d10393exv10w3.txt EX-10.3 SECURITY AGREEMENT EXHIBIT 10.3 SECURITY AGREEMENT among INFOUSA INC., CERTAIN OF ITS SUBSIDIARIES and BANK OF AMERICA, N.A., as COLLATERAL AGENT ---------------------------- Dated as of March 6, 2002 as Amended and Restated as of May 27, 2003 ------------------------------ ARTICLE I SECURITY INTERESTS..................................................................................... 2 1.1. Grant of Security Interests................................................................... 2 1.2. Power of Attorney............................................................................. 3 ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS...................................................... 3 2.1. Necessary Filings............................................................................. 3 2.2. No Liens...................................................................................... 3 2.3. Other Financing Statements.................................................................... 3 2.4. Chief Executive Office, Record Locations...................................................... 4 2.5. Jurisdiction of Organization.................................................................. 4 2.6. Location of Inventory and Equipment........................................................... 4 2.7. Recourse...................................................................................... 5 2.8. Names, Trade Names; Change of Name............................................................ 5 2.9. Investment Related Property................................................................... 5 ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER................. 5 3.1. Additional Representations and Warranties..................................................... 5 3.2. Maintenance of Records........................................................................ 6 3.3. Direction to Account Debtors; Contracting Parties; etc........................................ 6 3.4. Modification of Terms; etc.................................................................... 7 3.5. Collection.................................................................................... 7 3.6. Instruments................................................................................... 7 3.7. Assignors Remain Liable Under Receivables..................................................... 7 3.8. Assignors Remain Liable Under Contracts....................................................... 8 3.9. Changes of Name, Jurisdiction of Organization, etc........................................... 8 3.10. Purchase Money Security Interests............................................................. 8 3.11. Protection of the Collateral Agent's Security................................................. 8 3.12. Further Actions............................................................................... 8 ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS............................................................... 9 4.1. Additional Representations and Warranties..................................................... 9 4.2. Licenses and Assignments...................................................................... 9 4.3. Infringements................................................................................. 9 4.4. Preservation of Marks......................................................................... 9 4.5. Maintenance of Registration................................................................... 9 4.6. Future Registered Marks....................................................................... 10 4.7. Remedies...................................................................................... 10 ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS.................................... 10 5.1. Additional Representations and Warranties..................................................... 10 5.2. Licenses and Assignments...................................................................... 11 5.3. Infringements................................................................................. 11 5.4. Maintenance of Patents or Copyright........................................................... 11 5.5. Prosecution of Patent Applications............................................................ 11 5.6. Future Patents and Copyrights................................................................. 12 5.7. Remedies...................................................................................... 12 ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL................................................................... 12 6.1. Protection of Collateral Agent's Security..................................................... 12 6.2. Warehouse Receipts Non-negotiable............................................................. 12 6.3. Further Actions............................................................................... 13 6.4. Financing Statements.......................................................................... 13 6.5. Authorization to File......................................................................... 13 ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT........................................................... 13 7.1. Remedies; Obtaining the Collateral Upon Default............................................... 13 7.2. Remedies; Disposition of the Collateral....................................................... 15 7.3. Waiver of Claims.............................................................................. 16 7.4. Application of Proceeds....................................................................... 16 -ii- 7.5. Remedies Cumulative........................................................................... 18 7.6. Discontinuance of Proceedings................................................................. 19 ARTICLE VIII INDEMNITY.............................................................................................. 19 8.1. Indemnity..................................................................................... 19 8.2. Indemnity Obligations Secured by Collateral; Survival......................................... 20 ARTICLE IX DEFINITIONS............................................................................................ 21 ARTICLE X MISCELLANEOUS.......................................................................................... 27 10.1. Notices....................................................................................... 27 10.2. Waiver; Amendment............................................................................. 28 10.3. Obligations Absolute.......................................................................... 28 10.4. Successors and Assigns........................................................................ 28 10.5. Headings Descriptive.......................................................................... 28 10.6. Governing Law................................................................................. 29 10.7. Assignor's Duties............................................................................. 29 10.8. Termination; Release.......................................................................... 29 10.9. Counterparts.................................................................................. 29 10.10. Severability................................................................................... 30 10.11. The Collateral Agent........................................................................... 30 10.12. Benefit of Agreement........................................................................... 30 10.13. Additional Assignors........................................................................... 30 ANNEX A Schedule of Names and Jurisdictions of Organization ANNEX B Schedule of Chief Executive Offices/Record Locations ANNEX C Schedule of Inventory and Equipment Location ANNEX D Schedule of Trade and Fictitious Names ANNEX E Schedule of Marks ANNEX F Schedule of Patent ANNEX G Schedule of Copyrights ANNEX H Investment Related Property ANNEX I Form of Grant of Security Interest in United States Trademarks and Patents ANNEX J Form of Grant of Security Interest in United States Copyrights -iii- SECURITY AGREEMENT, dated as of March 6, 2002, and amended and restated as of May 27, 2003, made by each of the undersigned assignors (each an "Assignor" and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.13 hereof, the "Assignors") in favor of Bank of America, N.A., as Collateral Agent together with any successor collateral agent (the "Collateral Agent"), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as so defined. W I T N E S S E T H : WHEREAS, infoUSA Inc. (the "Borrower"), the lenders party from time to time party thereto (the "Lenders"), and Bank of America, N.A., as Administrative Agent (together with any successor administrative agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of March 6, 2002, as amended and restated as of May 27, 2003, providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (as amended, modified or supplemented from time to time, the "Credit Agreement") (the Lenders, the Administrative Agent, the Issuing Lender and the Collateral Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors", and together with the Lender Creditors, are herein called the "Secured Creditors"); WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as described therein; WHEREAS, it is a condition precedent to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Assignor shall have executed and delivered to the Collateral Agent this Agreement; and WHEREAS, each Assignor will obtain benefits from the incurrence of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement and the entering into by the Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and, accordingly, each Assignor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows: ARTICLE I SECURITY INTERESTS 1.1. Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Obligations, each Assignor does hereby pledge, hypothecate and grant to the Collateral Agent for the benefit of the Secured Creditors, a continuing security interest in, all of the right, title and interest of such Assignor in, to and under all of the following, whether now existing or hereafter from time to time acquired (all of the following being collectively called, the "Collateral"): all Accounts, all Chattel Paper, all Documents, all General Intangibles, all Goods, all Instruments, all Insurance, all Intellectual Property, all Investment Related Property, all Letter of Credit Rights, all Money, all Supporting Obligations (to the extent not otherwise included above), and all Proceeds, products, accessories, rents and profits of or in respect of the foregoing, it being understood, that without limitation of the foregoing, the Collateral shall include (i) all Receivables, (ii) all Contracts, together with all Contract Rights arising thereunder, (iii) all Equipment, (iv) all Marks, together with the registrations and right to all renewals thereof, and the goodwill of the business of such Assignor symbolized by the Marks, (v) all Patents and Copyrights and all reissues, renewals or extensions thereof, (vi) all computer programs of such Assignor and all intellectual property rights therein and all other Proprietary Information of such Assignor, including, but not limited to, Trade Secrets Rights, and (vii) all Deposit Accounts (including any and all Cash Collateral Accounts) and all monies, securities, instruments and other investments deposited or required to be deposited in such Deposit Accounts. (b) Notwithstanding anything herein to the contrary, in no event shall the Collateral include and no Assignor shall be deemed to have granted a security interest in, any of Assignor's right, title or interest in (i) any Intellectual Property (collectively, the "Non-Assignable Intellectual Property") to the extent that the grant of such security interest would constitute or result in the abandonment or invalidation thereof or the unenforceability of any right, title or interest of any Assignor therein; (ii) any license, contract or agreement to the extent that the grant of such security interest is prohibited by or would constitute a default under or a termination of, such license, contract or agreement (each, a "Non-assignable Contract"), and the terms restricting such grant are enforceable under applicable law (including UCC section 9-406), it being understood that each Assignor hereby agrees to use all reasonable efforts to obtain all requisite consent to enable Assignor to grant a security interest in such asset and, in any event, immediately upon the ineffectiveness, lapse or termination of any such restriction, the Collateral shall include, and Assignor shall be deemed to have granted a security interest in, all such rights and interests as if such restriction had never been in effect; or (iii) any of the outstanding capital stock of a Foreign Subsidiary in excess of 65% of the voting power of all classes of capital stock of such entitled to vote. -2- (c) The security interest of the Collateral Agent under this Agreement extends to all Collateral of the kind which is the subject of this Agreement which any Assignor may acquire at any time during the term of this Agreement. 1.2. Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest. ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows: 2.1. Necessary Filings. Upon (i) the filing by the Collateral Agent of appropriate financing statements in the applicable filing offices in the jurisdictions set forth in Annex A, and (ii) the filing of the appropriate Grants of Security Interest in the form of Annex I or J attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office, as applicable, all filings, registrations and recordings necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral will have been accomplished and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral will create a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and will be entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or in the United States Patent and Trademark Office or in the United States Copyright Office. 2.2. No Liens. Such Assignor owns the Collateral purported to be owned by it and otherwise has the rights it purports to have in each item of Collateral and, as to all Collateral whether now existing or hereafter acquired, will continue to own or have such rights in each item of the Collateral, in each case free and clear of any and all Liens, rights or claims of all other Persons (other than Permitted Liens). Such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent. 2.3. Other Financing Statements. As of the date hereof, there is no financing -3- statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens. 2.4. Chief Executive Office, Record Locations. The chief executive office of such Assignor is located at the address indicated on Annex B hereto for such Assignor. Such Assignor will not move its chief executive office except to such new location as such Assignor may establish in accordance with the last sentence of this Section 2.4. The originals of all documents evidencing all Receivables and Contract Rights of such Assignor and the only original books of account and records of such Assignor relating thereto are, and will continue to be, kept at such chief executive office, at one or more of the other locations set forth on Annex B hereto or at such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4. All Receivables and Contract Rights of such Assignor are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, the office locations described above or such new location established in accordance with the last sentence of this Section 2.4. No Assignor shall establish new locations for such offices until (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention to do so, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request, and (ii) with respect to such new location, it shall have taken all action reasonably satisfactory to the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2.5. Jurisdiction of Organization. The full legal name and jurisdiction of organization of such Assignor is as set forth on Annex A. If the chief executive office or sole place of business of any Assignor is located outside of the United States, then Annex A shall also include the address of the major executive office in the United States, if any, of Assignor. 2.6. Location of Inventory and Equipment. All Inventory and Equipment held on the date hereof by each Assignor is located at one of the locations shown on Annex C hereto for such Assignor. Each Assignor agrees that all Inventory and Equipment now held or subsequently acquired by it shall be kept at (or shall be in transport to) any one of the locations shown on Annex C hereto, or such new location as such Assignor may establish in accordance with the last sentence of this Section 2.6. Any Assignor may establish a new location for Inventory and Equipment only if (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new location, it shall have taken all action reasonably satisfactory to the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. -4- 2.7. Recourse. This Agreement is made with full recourse to each Assignor (including, without limitation, with full recourse to all assets of such Assignor) and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 2.8. Names, Trade Names; Change of Name. No Assignor has or operates in any jurisdiction under, or in the preceding one year has had or has operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. No Assignor shall change its legal name or assume or operate in any jurisdiction under any trade, fictitious or other name except those names listed on Annex D hereto for such Assignor and new names established in accordance with the last sentence of this Section 2.8. No Assignor shall assume or operate in any jurisdiction under any new trade, fictitious or other name until (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention so to do, clearly describing such new name and the jurisdictions in which such new name shall be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2.9. Investment Related Property. Annex H sets forth a complete list of all Investment Related Property, including all Deposit Accounts, Securities Accounts and Commodities Accounts. Assignor has taken all actions necessary or desirable to: (a) establish the Collateral Agent's "control" (within the meaning of Section 9-106 of the Illinois UCC) over any portion of the Investment Related Property constituting Certificated Securities, Uncertificated Securities, Securities Accounts, Securities Entitlements or Commodities Accounts; (b) establish the Collateral Agent's "control" (within the meaning of Section 9-104 of the Illinois UCC) over all Deposit Accounts (including any and all Cash Collateral Accounts); and (c) to deliver all Instruments to the Collateral Agent. Assignor will not create or permit to exist any Securities Account or Deposit Account unless such Assignor shall have executed and delivered to the Collateral Agent a Control Agreement in respect of such Securities Account or Deposit Account, as the case may be. Such Assignor will not create or permit to exist any Commodities Account unless the Required Lenders shall otherwise consent. 2.10. Non-Assignable Collateral. Neither the Non-Assignable Intellectual Property nor the Non-Assignable Contracts are individually or collectively material to the Borrower and its Subsidiaries taken as a whole. ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER 3.1. Additional Representations and Warranties. As of the time when each of its Receivables arises, each Assignor shall be deemed to have represented and warranted that such -5- Receivable, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale or lease and delivery of the inventory, materials, equipment or merchandise listed therein, or both, and (ii) will, to the knowledge of such Assignor, be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction. 3.2. Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense accurate records of its Receivables and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor's premises to the Collateral Agent for inspection, at such Assignor's own cost and expense, at any and all reasonable times upon prior notice to such Assignor. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Receivables and Contract Rights (including, without limitation, all documents evidencing the Receivables and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Receivables and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Receivables and Contracts with an appropriate reference to the fact that such Receivables and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein. 3.3. Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on account of the Receivables and Contracts to be made directly to one or more Cash Collateral Accounts (as the Collateral Agent shall so direct), (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Receivables and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Receivables and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Accounts which application shall be effected in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses (including reasonable attorneys' fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided, that the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3. -6- 3.4. Modification of Terms; etc. Except in accordance with such Assignor's ordinary course of business and consistent with reasonable business judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any Receivable or under any Contract, or modify any term thereof or make any adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Receivable or Contract, or interest therein, without the prior written consent of the Collateral Agent. No Assignor will do anything to impair the rights of the Collateral Agent in the Receivables or Contracts. 3.5. Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Receivables or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Receivable or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable or under such Contract, except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Receivables and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys' fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. 3.6. Instruments. If any Assignor owns or acquires any Instrument with a value of $50,000 or more constituting Collateral (other than checks and other payment instruments received and collected in the ordinary course of business), such Assignor will within 10 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent as further security hereunder. 3.7. Assignors Remain Liable Under Receivables. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Receivables to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Receivables. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Receivable pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Receivable (or any agreement giving rise -7- thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. 3.8. Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. 3.9. Changes of Name, Jurisdiction of Organization, etc. No Assignor shall change its name, form of organization (from that of a corporation) or jurisdiction of organization, unless it shall have (a) given the Collateral Agent not less than 30 days' prior written notice thereof, (b) provided the Collateral Agent with such other information in connection therewith as the Collateral Agent may reasonably request, and (c) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better priority of the Collateral Agent's security interest in the Collateral intended to be granted and agreed to hereby. 3.10. Purchase Money Security Interests. If the Collateral Agent or any Secured Creditor gives value as defined in Section 9-103 of the UCC to enable Assignor to acquire rights in or the use of any Collateral, it shall use such value for such purposes and Assignor further agrees that repayment of any Obligation shall apply on a "first-in, first-out" basis so that the portion of the value used to acquire rights in any Collateral shall be paid in the chronological order Assignor acquired rights therein. 3.11. Protection of the Collateral Agent's Security. Each Assignor will do nothing to impair the rights of the Secured Creditors in the Collateral. Each Assignor assumes all liability and responsibility in connection with the Collateral owned by it and the liability of each Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to it. 3.12. Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to its Receivables, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require. -8- ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS 4.1. Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks listed in Annex E hereto for such Assignor and that said listed Marks include all United States registered marks and applications for United States registered marks in the United States Patent and Trademark Office that such Assignor owns or uses in connection with its business as of the date hereof (or intends to use in the case of an Intent to Use application for trademark registration). Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks that it uses. Each Assignor further warrants that it has no knowledge of any material third party claim received by it that any aspect of such Assignor's present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications listed in Annex E hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any material third-party claim that any of said registrations is invalid or unenforceable, or is not aware that there is any reason that any of said registrations is invalid or unenforceable, or is not aware that there is any reason that any of said applications will not pass to registration. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all right, title and interest in each Mark, and record the same. 4.2. Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark absent prior written approval of the Collateral Agent. 4.3. Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who may be infringing or diluting or otherwise violating any of such Assignor's rights in and to any significant Mark, or with respect to any party claiming that such Assignor's use of any Mark violates in any material respect any property right of that party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any significant Mark. 4.4. Preservation of Marks. Each Assignor agrees to use or license (along with the associated goodwill) the use of its Marks in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are necessary to preserve such Marks as trademarks or service marks under the laws of the United States including, without limitation, maintaining the quality of all associated products or services and assuring the use of proper statutory notice of such Marks in association with each associated product or service. 4.5. Maintenance of Registration. Each Assignor shall, at its own expense, dili- -9- gently process all documents required to maintain trademark registrations and/or to prosecute pending applications for registration, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its significant registered Marks or applications for registration, and shall pay all fees and disbursements in connection therewith and shall not abandon any such application for registration of a Mark, filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent (other than with respect to registrations and applications deemed by such Assignor to be no longer desirable in the conduct of its business). Each Assignor shall, at its own expense, vigorously defend the validity and enforceability of any Mark or registration of a Mark in any proceeding or litigation. 4.6. Future Registered Marks. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office, within 30 days of receipt of such certificate, such Assignor shall deliver to the Collateral Agent a copy of such certificate, and a grant of a security interest in such Mark, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex I hereto or in such other form as may be reasonably satisfactory to the Collateral Agent. 4.7. Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare and assign the entire right, title and interest of such Assignor in and to each of the Marks, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency; (ii) take and use or sell the Marks and the goodwill of such Assignor's business symbolized by the Marks and the right to carry on the business and use the assets of such Assignor in connection with which the Marks have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks and registrations and any pending trademark application in the United States Patent and Trademark Office to the Collateral Agent. ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS 5.1. Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in or has the right to use (i) all Trade Secret Rights, (ii) the Patents listed in Annex F hereto for such Assignor and that said Patents -10- constitute all the United States or non-United States patents and applications for United States or non-United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex G hereto for such Assignor and that said Copyrights constitute all the United States copyrights registered with the United States Copyright Office and applications to register United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor's present or contemplated business operations infringes or will infringe any patent or copyright of any other Person or such Assignor has misappropriated any trade secret or proprietary information. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent, including the right to past damages and to record the same. 5.2. Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright acquired after the date hereof absent prior written approval of the Collateral Agent. 5.3. Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor's rights in any significant Patent or significant Copyright or to any claim that the practice of any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right violates any property right of a third party. Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to diligently prosecute any Person infringing any significant Patent or significant Copyright or any Person misappropriating any significant Trade Secret Right in accordance with reasonable business practices. 5.4. Maintenance of Patents or Copyright. At its own expense, each Assignor shall make timely payment of all post-issuance fees and take all actions necessary to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent, except to the extent that such Assignor has determined in its reasonable business judgment that the maintenance of such Patent or Copyright is no longer necessary in the conduct of its business. Assignor shall assure that proper statutory notice is used in conjunction with all products or services covered by any Patent or Copyright. Each Assignor shall, at its own expense, vigorously defend the validity and enforceability of any Patent in any proceeding or litigation. 5.5. Prosecution of Patent Applications. At its own expense, each Assignor shall diligently prosecute all significant applications for (i) United States Patents listed in Annex F hereto, (ii) Copyrights listed on Annex G hereto, and (iii) all after-acquired or filed patent or copyright applications in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies absent written consent of the Collateral Agent, except to the extent that such Assignor has determined in its reasonable business judgment that such application is no longer necessary in the conduct of its business. -11- 5.6. Future Patents and Copyrights. Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or certificate or registration of, or application therefor, said Patents, as the case may be, with a grant of a security interest in such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex I or J hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent. 5.7. Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may by written notice to the relevant Assignor, take any or all of the following actions: (i) declare and assign the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent, including the right to sue for past damages, for the benefit of the Secured Creditors, in which event such right, title, and interest and right to sue for past damages shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors. ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL 6.1. Protection of Collateral Agent's Security. Each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times keep its Inventory and Equipment insured in favor of the Collateral Agent, at such Assignor's own expense to the extent and in the manner provided in the Credit Agreement. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Credit Agreement, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor. 6.2. Warehouse Receipts Non-negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other -12- relevant law). 6.3. Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral. 6.4. Financing Statements. Each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, first priority perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby all in accordance with the UCC as enacted in any and all relevant jurisdictions or any other relevant law. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law. 6.5. Authorization to File. Each Assignor hereby authorizes the Collateral Agent to file a record or records (as defined in Article 9 of the UCC), including, without limitation, financing statements, in all jurisdictions and with all filing offices as the Collateral Agent may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to the Collateral Agent herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as "all assets" or "all personal property," and such financing statements may be filed prior to the date of this Agreement. ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT 7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect, in all relevant jurisdictions and may: -13- (i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor's premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor; (ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Receivables and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral; (iii) withdraw all monies, securities and instruments in the Cash Collateral Account(s) for application to the Obligations in accordance with Section 7.4 hereof; (iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct the relevant Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation; (v) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, by directing the relevant Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense: (x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent; (y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and (z) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition; and (vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Patents, Copyrights or Proprietary Information included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine; it being understood that each Assignor's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor -14- of said obligation. By accepting the benefits of this Agreement, the Secured Creditors agree that this Agreement may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and the Credit Agreement. 7.2. Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceedings permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time at which such disposition is to be made and the intended sale price or other consideration therefor, and shall be subject, for the 10 days after the giving of such notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Collateral Agent's option, be subject to reserve), after publication of notice of such auction (where required by applicable law) not less than 10 days prior thereto. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section without accountability to the relevant Assignor. If, under mandatory requirements of applicable law, the Collateral Agent shall be required to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be reasonably practicable in view of such mandatory requirements of applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such sale or sales of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such -15- Assignor's expense. 7.3. Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law: (i) all damages occasioned by such taking of possession except any damages which are the direct result of the Collateral Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision); (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent's rights hereunder; and (iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws. Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor. 7.4. Application of Proceeds. (a) All moneys collected by the Collateral Agent (or, to the extent the Pledge Agreement, any Mortgage or any Additional Security Document require proceeds of collateral under such other Security Document to be applied in accordance with the provisions of this Agreement, the Pledge or Collateral Agent under such other Security Document) upon any sale or other disposition of the Collateral, together with all other moneys received by the Collateral Agent hereunder, shall be applied as follows. (i) first, to the payment of all amounts owing the Collateral Agent of the type described in clauses (iii) and (iv) of the definition of "Obligations"; (ii) second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Primary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured -16- Creditor receiving an amount equal to such outstanding Primary Obligations or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of the amount remaining to be distributed; (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and (iv) fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus. (b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean, when calculating a Secured Creditor's portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor's Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the Credit Document Obligations, all principal of, premium, fees and interest on, all Loans, all Unpaid Drawings theretofore made (together with all interest accrued thereon), the aggregate Stated Amount of all Letters of Credit issued or deemed issued under the Credit Agreement and all Fees and (ii) in the case of the Other Obligations, all amounts due under such Interest Rate Protection Agreements or Other Hedging Agreements (other than indemnities, fees (including, without limitation, attorneys' fees) and similar obligations and liabilities) and (z) "Secondary Obligations" shall mean all Obligations other than Primary Obligations. (c) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to their Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution. (d) Each of the Secured Creditors, by their acceptance of the benefits hereof, agrees and acknowledges that if the Lender Creditors are to receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which -17- shall only occur after all outstanding Loans and Unpaid Drawings with respect to such Letters of Credit have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit, and after the application of all such cash security to the repayment of all Obligations owing to the Lender Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 7.4(a) hereof. (e) All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent under the Credit Agreement for the account of the Lender Creditors, and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a "Representative") for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors. (f) For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent under the Credit Agreement and (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary Obligations and Secondary Obligations owed to the Lender Creditors or the Other Creditors, as the case may be. Unless it has actual knowledge (including by way of written notice from a Lender Creditor or an Other Creditor) to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has actual knowledge (including by way of written notice from an Other Creditor) to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection Agreements or Other Hedging Agreements are in existence. (g) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations. 7.5. Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given under this Agreement, the other Secured Debt Agreements 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 or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any obligations shall impair any such right, power -18- or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence therein. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys' fees, and the amounts thereof shall be included in such judgment. 7.6. Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted. ARTICLE VIII INDEMNITY 8.1. Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, permitted assigns, employees and agents (hereinafter in this Section 8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees") harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys' fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called "expenses") of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (a) determined by a court of competent jurisdiction in a final and non-appealable decision). Each Assignor agrees that upon written notice by any Indemnitee of -19- the assertion of such a liability, obligation, damage, injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the relevant Assignor of any such assertion of which such Indemnitee has knowledge. (b) Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent's Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent's interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. (c) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement. (d) If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 8.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made under the Credit Agreement, the termination of all Interest Rate Protection Agreements, Other Hedging Agreements and Letters of Credit and the payment of all other Obligations and notwithstanding the discharge thereof. -20- ARTICLE IX DEFINITIONS The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined. "Account" shall mean an "account" as defined in the Illinois UCC. "Administrative Agent" shall have the meaning provided in the recitals of this Agreement. "Agreement" shall mean this Security Agreement as the same may be modified, supplemented or amended from time to time in accordance with its terms. "Assignor" shall have the meaning provided in the first paragraph of this Agreement. "Borrower" shall have the meaning provided in the recitals of this Agreement. "Cash Collateral Account" shall mean a Deposit Account which is (i) maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors, and (ii) is the subject of a Control Agreement. "Certificated Security" shall mean a "certificated security" as defined in the Illinois UCC. "Chattel Paper" shall mean "chattel paper" as defined in the Illinois UCC. "Class" shall have the meaning provided in Section 10.2 of this Agreement. "Collateral" shall have the meaning provided in Section 1.1(a) of this Agreement. "Collateral Agent" shall have the meaning provided in the first paragraph of this Agreement. "Commodities Accounts" shall mean a "commodity account" as defined in the Illinois UCC. The term "Commodities Accounts" shall include, without limitation, all of the accounts listed on Annex H under the heading "Commodities Accounts" as such annex may be amended or supplemented from time to time. "Contract Rights" shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts. -21- "Contracts" shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, and any partnership agreements, joint venture agreements and limited liability company agreements), but excluding any contract to the extent that (but only as long as) the terms thereof prohibit the assignment of, or granting a security interest in, such contract (it being understood and agreed, however, (i) that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded contract shall be subject to the security interests created by this Agreement and (ii) such excluded contract shall otherwise be subject to the security interests created by this Agreement upon receiving any necessary approvals or waivers permitting the assignment thereof). "Control Agreement" shall mean, in the case of a Securities Account, an agreement substantially in the form of Annex H to the Pledge Agreement, and in the case of a Deposit Account, an agreement substantially in the form of Annex I to the Pledge Agreement. "Copyrights" shall mean any United States or foreign copyright now or hereafter owned by any Assignor, including any registrations of any Copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor. "Credit Agreement" shall have the meaning provided in the recitals of this Agreement. "Credit Document Obligations" shall have the meaning provided in the definition of "Obligations" in this Article IX. "Default" shall mean any event which, with notice or lapse of time, or both, would constitute an Event of Default. "Deposit Account" shall mean a "deposit account" as defined in the Illinois UCC. The term "Deposit Accounts" shall include, without limitation, all of the accounts listed on Annex H under the heading "Deposit Accounts" as such schedule may be amended or supplemented from time to time. "Document" shall mean a "document" as defined in the Illinois UCC. "Equipment" shall mean any "equipment," as such term is defined in the Illinois UCC, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto. "Event of Default" shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Other Obligations after the expiration of any applicable grace period. -22- "General Intangible" shall mean a "general intangible" as defined in the Illinois UCC. The term "General Intangibles" shall include, without limitation, all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations, all Contracts, all Intellectual Property, all Payment Intangibles, all partnership interests, and all limited liability company and membership interests (in each case, regardless of whether characterized as general intangibles under the UCC). "Goods" shall mean "goods" as defined in the Illinois UCC. "Illinois UCC" shall mean the UCC as in effect in Illinois on the date hereof. "Indemnitee" shall have the meaning provided in Section 8.1 of this Agreement. "Instrument" shall mean an "instrument" as defined in the Illinois UCC. "Insurance" shall mean (i) all insurance policies covering all Collateral (regardless of whether the Collateral Agent is the loss payee) and (ii) all key-man life insurance policies. "Intellectual Property" shall mean all Patents, Copyrights and Marks of the Assignors or any of them. "Inventory" shall mean "inventory" as defined in the Illinois UCC. "Investment Property" shall mean "investment property" as defined in the Illinois UCC. "Investment Related Property" shall mean Investment Property, and without limitation, shall include all Deposit Accounts (including the Collateral Account(s)), all Securities Accounts, and all Commodities Accounts (in each case regardless of whether classified as Investment Property under the UCC). "Lender Creditors" shall have the meaning provided in the recitals of this Agreement. "Lenders" shall have the meaning provided in the recitals of this Agreement. "Letter of Credit Right" shall mean a "Letter of Credit Right" as defined in the Illinois UCC. "Liens" shall mean any security interest, mortgage, pledge, lien, claim, charge, encumbrance, title retention agreement, lessor's interest in a financing lease or analogous instrument, in, of, or on any Assignor's property. "Marks" shall mean all right, title and interest in and to any trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now held or hereafter acquired by an Assignor, which are registered in the United States Patent and -23- Trademark Office or the equivalent thereof in any state of the United States or any foreign equivalent office; as well as any unregistered marks used by any Assignor and any trade dress including logos, designs, company names, business names, fictitious business names and other business identifiers used by any Assignor, excluding, however, from the term "Marks" any United States Intent-to-Use trademark application prior to the filing and acceptance of a Statement of Use or an Amendment to allege use in connection therewith to the extent that a valid security interest may not be taken in such an Intent-to-Use trademark application under applicable law. "Money" shall mean Money as defined in the Illinois UCC. "Non-Assignable Contract" - see Section 1(b) of this Agreement.. "Non-Assignable Intellectual Property" - see Section 1(b) of this Agreement. "Obligations" shall mean (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and indebtedness (including, without limitation, indemnities, Fees and interest thereon) of each Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, in the case of each Assignor which is a Subsidiary Guarantor, all such obligations and indebtedness of such Assignor under the Subsidiaries Guaranty) and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging Agreements, being herein collectively called the "Credit Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and liabilities owing by such Assignor to the Other Creditors under, or with respect to (including, in the case of each Assignor which is a Subsidiary Guarantor, by reason of the Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained therein (all such obligations and liabilities described in this clause (ii) being herein collectively called the "Other Obligations"); (iii) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys' fees and court costs; and (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. -24- "Other Creditors" shall have the meaning provided in the recitals of this Agreement. "Other Obligations" shall have the meaning provided in the definition of "Obligations" in this Article IX. "Patents" shall mean all right, title and interest in and to any United States or non-United States patent to which any Assignor now or hereafter has title and any divisions continuations, reissues or reexaminations thereof, as well as any application for a patent now or hereafter made or acquired by any Assignor. "Payment Intangible" shall mean a "payment intangible" as defined in the Illinois UCC. "Permits" shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency. "Primary Obligations" shall have the meaning provided in Section 7.4(b) of this Agreement. "Pro Rata Share" shall have the meaning provided in Section 7.4(b) of this Agreement. "Proceeds" shall mean "proceeds" as defined in the Illinois UCC. Proceeds shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. "Proprietary Information" shall mean all information and know-how worldwide, including, without limitation, data collections; technical data; manufacturing data; research and development data; data relating to compositions, processes and formulations, manufacturing and production know-how and experience; management know-how; training programs; manufacturing, engineering and other drawings; specifications; performance criteria; operating instructions; maintenance manuals; technology; technical information; software; engineering and computer data and databases; design and engineering specifications; catalogs; financial, business and marketing plans; inventions and invention disclosures. "Receivables" shall mean all Accounts, all Chattel Paper, and all Payment Intangibles, now or hereafter owned by any Assignor and, in any event, shall include all Supporting Obligations, including without limitation all of such Assignor's rights to payment for goods sold or leased or services performed by such Assignor, whether now in existence or arising from time to time hereafter, including, without limitation, rights evidenced by an account, note, -25- contract, security agreement, chattel paper, or other evidence of indebtedness or security, together with (a) all security pledged, assigned, hypothecated or granted to or held by such Assignor to secure the foregoing, (b) all of any Assignor's right, title and interest in and to any goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and indemnifications on, or of, any of the foregoing, (d) all powers of attorney for the execution of any evidence of indebtedness or security or other writing in connection therewith, (e) all books, records, ledger cards, and invoices relating thereto, (f) all evidences of the filing of financing statements and other statements and the registration of other instruments in connection therewith and amendments thereto, notices to other creditors or secured parties, and certificates from filing or other registration officers, (g) all credit information, reports and memoranda relating thereto and (h) all other writings related in any way to the foregoing. "Representative" shall have the meaning provided in Section 7.4(e) of this Agreement. "Required Secured Creditors" shall mean (i) the Required Lenders (or, to the extent required by Section 13.12 of the Credit Agreement, each of the Lenders) under the Credit Agreement so long as any Credit Document Obligations remain outstanding and (ii) in any situation not covered by the preceding clause (i), the holders of a majority of the outstanding principal amount of the Other Obligations. "Requisite Creditors" shall have the meaning provided in Section 10.2 of this Agreement. "Secondary Obligations" shall have the meaning provided in Section 7.4(b) of this Agreement. "Secured Creditors" shall have the meaning provided in the recitals of this Agreement. "Secured Debt Agreements" shall mean and include this Agreement, the other Credit Documents and the Interest Rate Protection Agreements and Other Hedging Agreements. "Securities Account" shall mean a "securities account" as defined in the Illinois UCC. The term "Securities Accounts" shall include, without limitation, all of the accounts listed on Annex H under the heading "Securities Accounts" (as such schedule may be amended or supplemented from time to time). "Securities Entitlement" shall mean a "securities entitlement" as defined in the Illinois UCC. "Supporting Obligation" shall mean a "supporting obligation" as defined in the Illinois UCC. "Termination Date" shall have the meaning provided in Section 10.8 of this Agreement. -26- "Trade Secrets" means any secretly held existing engineering and other data, information, production procedures and other know-how relating to the design, manufacture, assembly, installation, use, operation, marketing, sale and servicing of any products or business of an Assignor worldwide whether written or not written. "Trade Secret Rights" shall mean the rights of an Assignor in any Trade Secret it holds. "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. "Uncertificated Security" shall mean an "uncertificated security" as defined in the Illinois UCC. ARTICLE X MISCELLANEOUS 10.1. Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier and when mailed shall be effective three Business Days following deposit in the mail with proper postage, except that notices and communications to the Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows: (a) if to any Assignor, at: c/o infoUSA Inc. 5711 South 86th Circle Omaha, Nebraska 68127 Attention: Chief Financial Officer Telephone No.: (402) 593-4500 Telecopier No.: (402) 331-1505 (b) if to the Collateral Agent, at: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: David Johanson Tel. No.: (312) 828-7933 Fax. No.: (312) 974-9102; -27- (c) if to any Lender Creditor, at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to each Assignor and the Collateral Agent; or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. 10.2. Waiver; Amendment. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly effected thereby and the Collateral Agent (with the written consent of the Required Secured Creditors); provided, however, that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations or (y) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement, the term "Requisite Creditors" of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders and (y) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the respective Interest Rate Protection Agreements or Other Hedging Agreements. 10.3. Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing. 10.4. Successors and Assigns. This Agreement shall be binding upon each Assignor and its successors and assigns (although no Assignor may assign its rights and obligations hereunder) and shall inure to the benefit of the Collateral Agent and the Secured Creditors and their respective successors and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf. 10.5. Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. -28- 10.6. Governing Law. 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 ILLINOIS. 10.7. Assignor's Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral. 10.8. Termination; Release. (a) After the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 8.1 hereof shall survive such termination) and the Collateral Agent, at the request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, "Termination Date" shall mean the date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements have been terminated, no Note is outstanding (and all Loans have been repaid in full), all Letters of Credit have been terminated and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold in connection with a sale permitted by Section 10.02 of the Credit Agreement (other than a sale to any Assignor or a Subsidiary thereof) or otherwise released at the direction of the Required Secured Creditors and the proceeds of such sale or sales or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, such Collateral will be sold free and clear of the Liens created by this Agreement and the Collateral Agent, at the request and expense of the relevant Assignor, will duly and promptly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement. (c) At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to the Collateral Agent a certificate signed by a senior officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to Section 10.8(a) or (b). 10.9. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so -29- executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Assignor and the Collateral Agent. 10.10. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.11. The Collateral Agent. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Section 12 of the Credit Agreement. The Collateral Agent shall act hereunder and thereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement. 10.12. Benefit of Agreement. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns. 10.13. Additional Assignors. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Agreement after the date hereof pursuant to the Credit Agreement shall become an Assignor hereunder by executing a counterpart hereof and delivering the same to the Collateral Agent (it being understood that in connection therewith, such Subsidiary shall supplement Annexes A through H with information pertaining to such Subsidiary). * * * -30- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. INFOUSA INC., as an Assignor By ______________________________________ Title: Chief Financial Officer AMERICAN CHURCH LISTS, INC., BJ HUNTER INFORMATION, INC., CD-ROM TECHNOLOGIES, INC., CITY DIRECTORIES, INC., CLICKACTION INC., DONNELLEY MARKETING, INC., HILL-DONNELLY CORPORATION IDEXEC, INC., INFOUSA MARKETING, INC., LIST BAZAAR.COM, INC., STRATEGIC INFORMATION MANAGEMENT, INC., TGMVC CORPORATION WALTER KARL, INC., YESMAIL, INC. each as an Assignor By ______________________________________ Title: Chief Financial Officer of each Signature Page to Security Agreement Accepted and Agreed to: BANK OF AMERICA, N.A., as Collateral Agent By ________________________ Title: Vice President Signature Page to Security Agreement EX-10.4 6 d10393exv10w4.txt EX-10.4 SUBSIDIARIES GUARANTY AGREEMENT EXHIBIT 10.4 SUBSIDIARIES GUARANTY SUBSIDIARIES GUARANTY, dated as of March 6, 2002, as amended and restated as of May 27, 2003 (as amended, modified or supplemented from time to time, this "Guaranty"), made by each of the undersigned guarantors (each a "Guarantor," and together with any other entity that becomes a guarantor hereunder pursuant to Section 26 hereof, the "Guarantors"). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H: WHEREAS, infoUSA Inc. (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), and Bank of America, N.A., as Administrative Agent (together with any successor administrative agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of March 6, 2002, as amended and restated as of May 27, 2003 (as amended, modified, or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, the Collateral Agent, the Issuing Lender and the Administrative Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors," and together with the Lender Creditors, the "Secured Creditors"); WHEREAS, each Guarantor is a direct or indirect Subsidiary of the Borrower; WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Guarantor shall have executed and delivered this Guaranty; and WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement and the entering into by the Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Secured Creditors and hereby covenants and agrees with each Secured Creditor as follows: 1. Each Guarantor, jointly and severally, irrevocably, absolutely and unconditionally guarantees: (i) to the Lender Creditors the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrower under the Credit Agreement, and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit issued under the Credit Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower to the Lender Creditors under the Credit Agreement and any other Credit Document to which the Borrower is a party (including, without limitation, indemnities, Fees and interest thereon), whether now existing or hereafter incurred under, arising out of or in connection with the Credit Agreement and any such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents (all such principal, premium, interest, liabilities, indebtedness and obligations being herein collectively called the "Credit Document Obligations"); and (ii) to each Other Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower under any Interest Rate Protection Agreement and Other Hedging Agreement, whether now in existence or hereafter arising, and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in the Interest Rate Protection Agreements and Other Hedging Agreements (all such obligations, liabilities and indebtedness being herein collectively called the "Other Obligations," and together with the Credit Document Obligations, the "Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against any other Guarantor, the Borrower, against any security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations. 2. Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by the Borrower upon the occurrence in respect of the Borrower of any of the events specified in Section 11.05 of the Credit Agreement, and unconditionally and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors, or order, on demand, in legal tender of the United States. This Guaranty shall constitute a guaranty of payment, and not of collection. -2- 3. The liability of each Guarantor hereunder is primary, absolute and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation: (a) any direction as to application of payment by the Borrower or by any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, (e) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (f) any action or inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor. 4. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor or the Borrower and whether or not any other Guarantor, any other guarantor or the Borrower be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to each Guarantor. 5. Each Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor or the Borrower) 6. Any Secured Creditor may at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part: (a) change the manner, place or terms of payment of, and/or change, increase or extend the time of payment of, renew or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made -3- shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (c) exercise or refrain from exercising any rights against the Borrower, any other Credit Party, any Subsidiary thereof or otherwise act or refrain from acting; (d) release or substitute any one or more endorsers, Guarantors, other guarantors, the Borrower or other obligors; (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower to creditors of the Borrower other than the Secured Creditors; (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Secured Creditors regardless of what liabilities of the Borrower remain unpaid; (g) consent to or waive any breach of, or any act, omission or default under, any of the Interest Rate Protection Agreements or Other Hedging Agreements, the Credit Documents or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Interest Rate Protection Agreements or Other Hedging Agreements, the Credit Documents or any of such other instruments or agreements; (h) act or fail to act in any manner referred to in this Guaranty which may deprive such Guarantor of its right to subrogation against the Borrower to recover full indemnity for any payments made pursuant to this Guaranty; and/or (i) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty. 7. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created -4- in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Secured Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire into the capacity or powers of the Borrower or the officers, directors, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 8. Any indebtedness of the Borrower now or hereafter held by any Guarantor is hereby subordinated to the indebtedness of the Borrower to the Secured Creditors, and such indebtedness of the Borrower to any Guarantor, if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of an Event of Default, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to the Secured Creditors on account of the indebtedness of the Borrower to the Secured Creditors, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash. 9. (a) Each Guarantor waives any right (except as shall be required by applicable law and cannot be waived) to require the Secured Creditors to: (i) proceed against the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Secured Creditors' power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the Guaranteed Obligations. The Secured Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, or exercise any other right or remedy the Secured Creditors may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the -5- extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Secured Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other party or any security. (b) Each Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that the Secured Creditors shall have no duty to advise any Guarantor of information known to them regarding such circumstances or risks. 10. The Secured Creditors agree that this Guaranty may be enforced only by the action of the Administrative Agent or the Collateral Agent, in each case acting upon the instructions of the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least the majority of the outstanding Other Obligations) and that no other Secured Creditors shall have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the security to be granted by the Security Documents, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the Collateral Agent or, after all the Credit Document Obligations have been paid in full, by the holders of at least a majority of the outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon the terms of this Guaranty and the Security Documents. The Secured Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner, member or stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a Guarantor hereunder). 11. In order to induce the Lenders to make Loans to, and issue Letters of Credit for the account of, the Borrower pursuant to the Credit Agreement, and in order to induce the Other Creditors to execute, deliver and perform the Interest Rate Protection Agreements and Other Hedging Agreements, each Guarantor represents, warrants and covenants that: (a) Such Guarantor (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company, power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualification except for -6- failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Such Guarantor has the corporate, partnership or limited liability company, power and authority, as the case may be, to execute, deliver and perform the terms and provisions of this Guaranty and each other Credit Document to which it is a party and has taken all necessary corporate, partnership or limited liability company, action, as the case may be, to authorize the execution, delivery and performance by it of this Guaranty and each such other Credit Document. Such Guarantor has duly executed and delivered this Guaranty and each other Credit Document to which it is a party, and this Guaranty and each such other Credit Document constitutes the legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, except to the extent that the enforceability hereof or thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law). (c) Neither the execution, delivery or performance by such Guarantor of this Guaranty or any other Credit Document to which it is a party, nor compliance by it with the terms and provisions hereof and thereof, will (i) contravene any provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality, (ii) conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement, or any other material agreement, contract or instrument to which such Guarantor or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) violate any provision of the certificate of incorporation or by-laws (or equivalent organizational documents) of such Guarantor or any of its Subsidiaries. (d) No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made) or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required for, (i) the execution, delivery and performance of this Guaranty by such Guarantor or any other Credit Document to which such Guarantor is a party or (ii) the legality, validity, binding effect or enforceability of this Guaranty or any other Credit Document to which such Guarantor -7- is a party. (e) There are no actions, suits or proceedings pending or, to such Guarantor's knowledge, threatened (i) with respect to this Guaranty or any other Credit Document to which such Guarantor is a party or (ii) with respect to such Guarantor or any of its Subsidiaries that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 12. Each Guarantor covenants and agrees that on and after the Effective Date and until the termination of the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements and until such time as no Note or Letter of Credit remains outstanding and all Guaranteed Obligations have been paid in full, such Guarantor will comply, and will cause each of its Subsidiaries to comply, with all of the applicable provisions, covenants and agreements contained in Sections 9 and 10 of the Credit Agreement, and will take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that it is not in violation of any provision, covenant or agreement contained in Section 9 or 10 of the Credit Agreement, and so that no Default or Event of Default, is caused by the actions of such Guarantor or any of its Subsidiaries. 13. The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of each Secured Creditor in connection with the enforcement of this Guaranty and of the Administrative Agent in connection with any amendment, waiver or consent relating hereto (including in each case, without limitation, the reasonable fees and disbursements of counsel employed by each Secured Creditor). 14. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Secured Creditors and their successors and assigns. 15. Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except with the written consent of each Guarantor directly affected thereby and with the written consent of either (x) the Required Lenders (or to the extent required by Section 13.12 of the Credit Agreement, with the written consent of each Lender) at all times prior to the time on which all Credit Document Obligations have been paid in full or (y) the holders of at least a majority of the outstanding Other Obligations at all times after the time on which all Credit Document Obligations have been paid in full; provided, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such Class of Secured Creditors (it being understood that the addition or release of any Guarantor hereunder shall not constitute a change, waiver, discharge or termination affecting any Guarantor other than the Guarantor so added or released). For the purpose of this Guaranty, the term "Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit Document Obligations or (y) the Other Creditors as the holders of -8- the Other Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with respect to the Credit Document Obligations, the Required Lender (or to the extent required by Section 13.12 of the Credit Agreement, each Lender) and (y) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the Interest Rate Protection or Other Hedging Agreements. 16. Each Guarantor acknowledges that an executed (or conformed) copy of each of the Credit Documents and Interest Rate Protection Agreements or Other Hedging Agreements has been made available to a senior officer of such Guarantor and such officer is familiar with the contents thereof. 17. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include any "Event of Default" as defined in the Credit Agreement or any payment default under any Interest Rate Protection Agreement or Other Hedging Agreement continuing after any applicable grace period), each Secured Creditor is hereby authorized, at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Secured Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or un-matured. 18. All notices, requests, demands or other communications pursuant hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier and when mailed shall be effective three Business Days following deposit in the mail with proper postage, except that notices and communications to the Administrative Agent or any Guarantor shall not be effective until received by the Administrative Agent or such Guarantor, as the case may be. All notices and other communications shall be in writing and addressed to such party at (i) in the case of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of any Guarantor, as provided in the Security Agreement and (iii) in the case of any Other Creditor, at such address as such Other Creditor shall have specified in writing to the Guarantors; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing. 19. If claim is ever made upon any Secured Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having -9- jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Borrower) then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. Any legal action or proceeding with respect to this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the courts of the State of Illinois or of the United States of America for the Northern District of Illinois in each case located in the City of Chicago, and, by execution and delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby further irrevocably waives any claim that any such court lacks personal jurisdiction over such Guarantor, and agrees not to plead or claim in any legal action or proceeding with respect to this Guaranty or any other Credit Document to which such Guarantor is a party brought in any of the aforesaid courts that any such court lacks personal jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Each Guarantor hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Credit Document to which such Guarantor is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any of the Secured Creditors to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against each Guarantor in any other jurisdiction. (b) Each Guarantor hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Credit Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS -10- GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 21. In the event that all of the capital stock of one or more Guarantors is sold or otherwise disposed of or liquidated in compliance with the requirements of Section 10.02 of the Credit Agreement (or such sale or other disposition has been approved in writing by the Required Lenders (or all Lenders if required by Section 13.12 of the Credit Agreement)) and the proceeds of such sale, disposition or liquidation are applied in accordance with the provisions of the Credit Agreement, to the extent applicable, such Guarantor shall upon consummation of such sale or other disposition (except to the extent that such sale or disposition is to the Borrower or another Subsidiary thereof) be released from this Guaranty automatically and without further action and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the capital stock of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of this Section 21). 22. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a payment (a "Relevant Payment") is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed Obligations to, and including the date of the Relevant Payment exceeding such Guarantor's Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such Guarantor shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor's Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor's right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment to the time of each computation; provided, that no Guarantor may take any action to enforce such right until the Guaranteed Obligations have been irrevocably paid in full in cash, it being expressly recognized and agreed by all parties hereto that any Guarantor's right of contribution arising pursuant to this Section 22 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor's obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this Section 22: (i) each Guarantor's "Contribution Percentage" shall mean the percentage obtained by dividing -11- (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean the amount by which the fair salable value of such Guarantor's assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty) on such date. All parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 22, each Guarantor who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of such payment until all of the Guaranteed Obligations have been irrevocably paid in full in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. In this connection, each Guarantor has the right to waive its contribution right against any Guarantor to the extent that after giving effect to such waiver such Guarantor would remain solvent, in the determination of the Required Lenders. 23. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws, and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and other Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance. 24. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Guarantors and the Administrative Agent. 25. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the Borrower under Sections 5.03 and 5.04 of the Credit Agreement. 26. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Guaranty after the date hereof pursuant to the Credit Agreement shall become a Guarantor hereunder by executing a counterpart hereof and delivering the same to the Administrative Agent. -12- 27. Each Guarantor has independently, and without reliance on any information supplied by any Secured Creditor, taken, and will continue to take, whatever steps it deems necessary to evaluate the financial condition and affairs of the Borrower or any Collateral, and the Secured Creditors shall have no duty to advise any Guarantor of information at any time known to them regarding such financial condition or affairs or any Collateral. [Signatures Follow] -13- IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written. AMERICAN CHURCH LISTS, INC., BJ HUNTER INFORMATION, INC., CD-ROM TECHNOLOGIES, INC., CITY DIRECTORIES, INC., CLICKACTION INC., DONNELLEY MARKETING, INC., HILL-DONNELLY CORPORATION IDEXEC, INC., INFOUSA MARKETING, INC., LIST BAZAAR.COM, INC., STRATEGIC INFORMATION MANAGEMENT, INC., TGMVC CORPORATION WALTER KARL, INC., YESMAIL, INC. each as a Guarantor By ______________________________________ Title: Chief Financial Officer of each Signature Page to Subsidiaries Guaranty Accepted and Agreed to: BANK OF AMERICA, N.A., as Collateral Agent By _________________________ Title: Vice President Signature Page to Subsidiaries Guaranty EX-31.1 7 d10393exv31w1.htm EX-31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Exhibit 31.1

CERTIFICATION

I, Vinod Gupta, certify that:

1. I have reviewed this quarterly report on Form 10-Q of infoUSA Inc.;

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 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: November 13, 2003
	/s/ Vinod Gupta
	Vinod Gupta Chief Executive Officer

EX-31.2 8 d10393exv31w2.htm EX-31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER

Exhibit 31.2

CERTIFICATION

I, Raj Das, certify that:

1. I have reviewed this quarterly report on Form 10-Q of infoUSA Inc.;

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 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: November 13, 2003
	/s/ Raj Das
	Raj Das Chief Financial Officer

EX-32.1 9 d10393exv32w1.htm EX-32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the undersigned Chief Executive Officer of infoUSA Inc. (the “Company”), hereby certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2003 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2003 /s/ Vinod Gupta
Vinod Gupta,
Chief Executive Officer

EX-32.2 10 d10393exv32w2.htm EX-32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the undersigned Chief Financial Officer of infoUSA Inc. (the “Company”), hereby certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2003 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2003 /s/ Raj Das
Raj Das,
Chief Financial Officer

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1

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

                                CREDIT AGREEMENT

                                      among

                                  INFOUSA INC.,

                                VARIOUS LENDERS,

                                       and

                             BANK OF AMERICA, N.A.,
                             as ADMINISTRATIVE AGENT

                                 U.S. BANK, N.A.
                              as SYNDICATION AGENT

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

                            Dated as of March 6, 2002
                          as Amended and Restated as of
                                  May 27, 2003

                         BANK OF AMERICA SECURITIES LLC,
                     as LEAD ARRANGER AND SOLE BOOK MANAGER

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


                                TABLE OF CONTENTS



                                                                                                                   PAGE
                                                                                                                
Section 1 DEFINITIONS AND ACCOUNTING TERMS.......................................................................    1

         1.01.    Defined Terms..................................................................................    1

Section 2 AMOUNT AND TERMS OF CREDIT............................................................................    27

         2.01.    The Commitments...............................................................................    27

         2.02.    Minimum Amount of Each Borrowing..............................................................    30

         2.03.    Notice of Borrowing...........................................................................    30

         2.04.    Disbursement of Funds.........................................................................    31

         2.05.    Notes.........................................................................................    32

         2.06.    Conversions...................................................................................    33

         2.07.    Pro Rata Borrowings...........................................................................    34

         2.08.    Interest......................................................................................    34

         2.09.    Interest Periods..............................................................................    35

         2.10.    Increased Costs, Illegality, etc..............................................................    36

         2.11.    Compensation..................................................................................    38

         2.12.    Change of Lending Office......................................................................    38

         2.13.    Replacement of Lenders........................................................................    39

         2.14.    Limitation on Additional Amounts..............................................................    40

Section 3 LETTERS OF CREDIT.....................................................................................    40

         3.01.    Letters of Credit.............................................................................    40

         3.02.    Maximum Letter of Credit Outstandings; Final Maturities.......................................    41

         3.03.    Letter of Credit Requests; Minimum Stated Amount..............................................    41

         3.04.    Letter of Credit Participations...............................................................    42

         3.05.    Agreement to Repay Letter of Credit Drawings..................................................    44

         3.06.    Increased Costs...............................................................................    45

Section 4 COMMITMENT FEE; FEES; REDUCTIONS OF COMMITMENT........................................................    46

         4.01.    Fees..........................................................................................    46

         4.02.    Voluntary Termination of Unutilized Revolving Loan Commitments................................    47

         4.03.    Mandatory Reduction of Commitments............................................................    47

Section 5 PREPAYMENTS; PAYMENTS; TAXES..........................................................................    48

         5.01.    Voluntary Prepayments.........................................................................    48


                                      -i-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                                                   PAGE
                                                                                                                
         5.02.    Mandatory Repayments and Commitment Reductions................................................    49

         5.03.    Method and Place of Payment...................................................................    53

         5.04.    Net Payments..................................................................................    53

Section 6     CONDITIONS PRECEDENT TO CREDIT EVENTS ON THE RESTATEMENT EFFECTIVE DATE...........................    55

         6.01.    Execution of Agreement; Disclosure Letter; Notes..............................................    55

         6.02.    Officer's Certificate.........................................................................    55

         6.03.    Opinions of Counsel...........................................................................    55

         6.04.    Corporate Documents; Proceedings; etc.........................................................    56

         6.05.    Plans; Shareholders' Agreements; Employment Agreements; Existing Indebtedness Agreements......    56

         6.07.    Adverse Change, etc...........................................................................    57

         6.08.    Litigation....................................................................................    58

         6.09.    Pledge Agreement..............................................................................    58

         6.10.    Security Agreement............................................................................    58

         6.11.    Mortgages.....................................................................................    58

         6.12.    Evidence of Perfection, etc...................................................................    59

         6.13.    Subsidiaries Guaranty.........................................................................    60

         6.14.    Insurance Policies............................................................................    60

         6.16.    Financial Statements; Projections.............................................................    60

         6.17.    Solvency Certificate; Insurance Certificates..................................................    60

         6.18.    Senior Subordinated Note Compliance...........................................................    60

         6.19.    Fees, etc.....................................................................................    61

         6.20.    Consummation of the Refinancing...............................................................    61

Section 7     CONDITIONS PRECEDENT TO ALL CREDIT EVENTS.........................................................    61

         7.01.    No Default; Representations and Warranties....................................................    61

         7.02.    Notice of Borrowing; Letter of Credit Request.................................................    62

Section 8     REPRESENTATIONS, WARRANTIES AND AGREEMENTS........................................................    62

         8.01.    Organizational Status.........................................................................    62

         8.02.    Power and Authority...........................................................................    63


                                      -ii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                                                   PAGE
                                                                                                                
         8.03.    No Violation..................................................................................    63

         8.04.    Approvals.....................................................................................    63

         8.05.    Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc..........    63

         8.06.    Litigation....................................................................................    65

         8.07.    True and Complete Disclosure..................................................................    65

         8.08.    Use of Proceeds; Margin Regulations...........................................................    65

         8.09.    Tax Returns and Payments......................................................................    65

         8.10.    Compliance with ERISA.........................................................................    66

         8.11.    The Security Documents........................................................................    67

         8.12.    Representations and Warranties in the Credit Documents........................................    68

         8.13.    Properties....................................................................................    68

         8.14.    Capitalization................................................................................    68

         8.15.    Subsidiaries..................................................................................    68

         8.16.    Compliance with Statutes, etc.................................................................    69

         8.17.    Investment Company Act........................................................................    69

         8.18.    Public Utility Holding Company Act............................................................    69

         8.19.    Environmental Matters.........................................................................    69

         8.20.    Labor Relations...............................................................................    70

         8.21.    Patents, Licenses, Franchises and Formulas....................................................    70

         8.22.    Indebtedness..................................................................................    70

         8.23.    Refinancing...................................................................................    70

         8.24.    Insurance.....................................................................................    71

         8.25.    Senior Subordinated Notes.....................................................................    71

Section 9     AFFIRMATIVE COVENANTS.............................................................................    71

         9.01.    Information Covenants.........................................................................    71

         9.02.    Books, Records and Inspections; Annual Meetings...............................................    74

         9.03.    Maintenance of Property; Insurance............................................................    74

         9.04.    Existence; Franchises.........................................................................    75

         9.05.    Compliance with Statutes, etc.................................................................    75


                                     -iii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                                                   PAGE
                                                                                                                
         9.06.    Compliance with Environmental Laws............................................................    76

         9.07.    ERISA.........................................................................................    76

         9.08.    End of Fiscal Years; Fiscal Quarters..........................................................    78

         9.09.    Performance of Obligations....................................................................    78

         9.10.    Payment of Taxes..............................................................................    78

         9.11.    Additional Security; Further Assurances.......................................................    78

         9.12.    Use of Proceeds...............................................................................    79

         9.13.    Foreign Subsidiaries Security.................................................................    79

         9.14.    Margin Stock..................................................................................    80

         9.15.    Permitted Acquisitions........................................................................    80

Section 10    NEGATIVE COVENANTS................................................................................    83

         10.01.   Liens.........................................................................................    83

         10.02.   Consolidation, Merger, Purchase or Sale of Assets, etc........................................    86

         10.03.   Dividends.....................................................................................    87

         10.04.   Indebtedness..................................................................................    88

         10.05.   Advances, Investments and Loans...............................................................    90

         10.06.   Transactions with Affiliates..................................................................    92

         10.07.   Consolidated Fixed Charge Coverage Ratio......................................................    93

         10.08.   Maximum Total Leverage Ratio..................................................................    93

         10.09.   Maximum Senior Leverage Ratio.................................................................    93

         10.10.   Minimum Consolidated EBITDA...................................................................    94

         10.11.   Consolidated Net Worth........................................................................    94

         10.12.   Limitation on Voluntary Payments and Modifications of Certain Indebtedness; Modifications of
                  Certificate of Incorporation, By-Laws and Certain Other Agreements, etc.......................    94

         10.13.   Limitation on Certain Restrictions on Subsidiaries............................................    95

         10.14.   Limitation on Issuance of Capital Stock.......................................................    96

         10.15.   Business......................................................................................    96

         10.16.   Limitation on Creation of Subsidiaries........................................................    96

Section 11    EVENTS OF DEFAULT.................................................................................    97

         11.01.   Payments......................................................................................    97


                                      -iv-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                                                   PAGE
                                                                                                                
         11.02.   Representations, etc..........................................................................    97

         11.03.   Covenants.....................................................................................    97

         11.04.   Default Under Other Agreements................................................................    98

         11.05.   Bankruptcy, etc...............................................................................    98

         11.06.   ERISA.........................................................................................    98

         11.07.   Security Documents............................................................................    99

         11.08.   Subsidiaries Guaranty.........................................................................    99

         11.09.   Judgments.....................................................................................    99

         11.10.   Change of Control.............................................................................   100

Section 12    THE ADMINISTRATIVE AGENT..........................................................................   100

         12.01.   Appointment...................................................................................   100

         12.02.   Nature of Duties..............................................................................   101

         12.03.   Lack of Reliance on the Administrative Agent..................................................   101

         12.04.   Certain Rights of the Administrative Agent....................................................   101

         12.05.   Reliance......................................................................................   102

         12.06.   Indemnification...............................................................................   102

         12.07.   The Administrative Agent in its Individual Capacity...........................................   102

         12.08.   Holders.......................................................................................   102

         12.09.   Resignation by the Administrative Agent.......................................................   103

         12.10.   Issuing Lender................................................................................   103

Section 13    MISCELLANEOUS.....................................................................................   103

         13.01.   Payment of Expenses, etc......................................................................   103

         13.02.   Right of Setoff...............................................................................   105

         13.03.   Notices.......................................................................................   105

         13.04.   Benefit of Agreement; Assignments; Participations.............................................   105

         13.05.   No Waiver; Remedies Cumulative................................................................   108

         13.06.   Payments Pro Rata.............................................................................   108

         13.07.   Calculations; Computations; Accounting Terms..................................................   109

         13.08.   GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL........................   109


                                      -v-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                                                   PAGE
                                                                                                                
         13.09.   Counterparts.................................................................................     110

         13.11.   Headings Descriptive.........................................................................     111

         13.12.   Amendment or Waiver; etc.....................................................................     111

         13.13.   Survival.....................................................................................     113

         13.14.   Domicile of Loans............................................................................     113

         13.15.   Register.....................................................................................     113

         13.16.   Confidentiality..............................................................................     113

         13.17.   Certain Agreements with respect to the Senior Subordinated Notes.............................     114


                                      -vi-



SCHEDULE I                 Commitments
SCHEDULE II                Lender Addresses
SCHEDULE III               Disclosure Letter

EXHIBIT A                  Notice of Borrowing
EXHIBIT B-1                Term Note
EXHIBIT B-2                Revolving Note
EXHIBIT B-3                Swingline Note
EXHIBIT C                  Letter of Credit Request
EXHIBIT D                  Section 5.04(b)(ii) Certificate
EXHIBIT E-1                Opinion of Robins Kaplan Miller & Ciresi LLP
EXHIBIT E-2                Opinion of Illinois Counsel
EXHIBIT E-3                Opinion of Iowa and Nebraska Counsel
EXHIBIT E-4                Opinion of Wisconsin Counsel
EXHIBIT F                  Officers' Certificate
EXHIBIT G                  Pledge Agreement
EXHIBIT H                  Security Agreement
EXHIBIT I                  Subsidiaries Guaranty
EXHIBIT J                  Solvency Certificate
EXHIBIT K                  Assignment and Assumption Agreement
EXHIBIT L                  Intercompany Note
EXHIBIT M                  Subordination Provisions
EXHIBIT N                  Mortgage
EXHIBIT O                  Compliance Certificate

                                     -vii-



         CREDIT AGREEMENT, dated as of March 6, 2002 as amended and restated as
of May 27, 2003 among INFOUSA INC., a Delaware corporation (the "Borrower"), the
Lenders party hereto from time to time, and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent") (all
capitalized terms used herein and defined in Section 1 are used herein as
therein defined).

                              W I T N E S S E T H :

         WHEREAS, the Borrower, the Lenders, and the Administrative Agent are
parties to a Credit Agreement dated as of March 6, 2002, (as heretofore amended
or modified, the "Existing Credit Agreement") pursuant to which the Lenders
agreed to extend credit to the Borrower;

         WHEREAS, the parties to this Agreement have agreed to amend the
Existing Credit Agreement so as to, among other things, (i) revise the terms of
the Loans, (ii) provide for certain entities to become or cease to be Lenders
hereunder, (iii) revise certain covenants of the Borrower, and (iv) make certain
other changes to the Existing Credit Agreement;

         WHEREAS. the parties hereto desire to amend and restate in its entirety
the Existing Credit Agreement;

         NOW, THEREFORE, IT IS AGREED, that effective as of the Restatement
Effective Date, the Existing Credit Agreement is amended and restated in its
entirety as follows:

                                   SECTION 1

                        DEFINITIONS AND ACCOUNTING TERMS.

         1.01. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

                  "Acquired EBITDA" of any Acquired Entity or Business acquired
         pursuant to a Permitted Acquisition shall mean the consolidated
         "EBITDA" of such Acquired Entity or Business calculated on a basis
         consistent with the calculation of Consolidated EBITDA under this
         Agreement and reasonably approved by the Administrative Agent.

                  "Acquired Entity or Business" shall have the meaning provided
         in the definition of "Permitted Acquisition."

                  "Additional Security Documents" shall have the meaning
         provided in Section 9.11.

                  "Administrative Agent" shall mean Bank of America, in its
         capacity as Administrative Agent for the Lenders hereunder, and shall
         include any successor to the Administrative Agent appointed pursuant to
         Section 12.09.



                  "Affiliate" shall mean, with respect to any Person, any other
         Person directly or indirectly controlling (including, but not limited
         to, all directors and officers of such Person), controlled by, or under
         direct or indirect common control with, such Person. A Person shall be
         deemed to control another Person if such Person possesses, directly or
         indirectly, the power (i) to vote 10% or more of the securities having
         ordinary voting power for the election of directors of such corporation
         or (ii) to direct or cause the direction of the management and policies
         of such other Person, whether through the ownership of voting
         securities, by contract or otherwise; provided that neither the
         Administrative Agent nor any Lender (nor any affiliate thereof) shall
         be considered an Affiliate of the Borrower or any Subsidiary thereof.

                  "Agreement" shall mean this Credit Agreement, as modified,
         supplemented, amended, restated (including any amendment and
         restatement hereof), extended, renewed, refinanced or replaced from
         time to time.

                  "Applicable Margin" shall mean with respect to Term Loans, ,
         Revolving Loans, Swingline Loans and Commitment Fees, from and after
         any Start Date to and including the corresponding End Date, the
         respective percentage per annum set forth below under the respective
         Type of Term Loans, Revolving Loans, Swingline Loans or Commitment Fees
         and opposite the respective Level (i.e., Level 1, Level 2, Level 3,
         Level 4, or Level 5, as the case may be) indicated to have been
         achieved on the applicable Test Date for such Start Date (as shown on
         the respective officer's certificate delivered pursuant to Section
         9.01(f) or the first proviso below):



                                APPLICABLE MARGIN FOR      APPLICABLE MARGINS FOR
                                   EURODOLLAR LOANS            BASE RATE LOANS
                                ----------------------    -----------------------
               CONSOLIDATED                               REVOLVING
                  TOTAL                                   LOANS, AND
                LEVERAGE        REVOLVING       TERM      SWINGLINE         TERM       COMMITMENT
 LEVEL            RATIO           LOANS         LOANS       LOANS           LOANS         FEES
- -------------------------------------------------------------------------------------------------
                                                                     
    1       TLR > or = 3.00:1     3.000%        4.000%      2.000%          3.000%       0.500%

    2       TLR > or = 2.50:1     2.750%        4.000%      1.750%          3.000%       0.500%
            but < 3.00:1

    3       TLR > or = 2.00:1     2.500%        4.000%      1.500%          3.000%       0.450%
            but < 2.50:1

    4       TLR > or = 1.50:1     2.250%        4.000%      1.250%          3.000%       0.400%
            but < 2.00:1

    5       TLR <1.50:1           2.000%        4.000%      1.000%          3.000%       0.350%


                                      -2-


         provided, however, that if the Borrower fails to deliver the financial
         statements required to be delivered pursuant to Section 9.01(b) or (c)
         (accompanied by the officer's certificate required to be delivered
         pursuant to Section 9.01(f) showing the applicable Consolidated Total
         Leverage Ratio on the relevant Test Date) on or prior to the respective
         date required by such Sections, then Level 1 pricing shall apply until
         such time, if any, as the financial statements required as set forth
         above and the accompanying officer's certificate have been delivered
         showing the pricing for the respective Margin Reduction Period is at a
         level which is less than Level 1 (it being understood that, in the case
         of any late delivery of the financial statements and officer's
         certificate as so required, the Applicable Margin, if any, shall apply
         only from and after the date of the delivery of the complying financial
         statements and officer's certificate); provided further, that subject
         to Section 2.08(c), Level 1 pricing shall apply at any time when any
         Default or Event of Default is in existence. Notwithstanding anything
         to the contrary contained in the immediately preceding sentence, Level
         2 pricing shall apply for the period from the Initial Borrowing Date to
         but not including the date which is the first Start Date after the
         Borrower's fiscal quarter ending on March 31, 2003. The Applicable
         Margin in respect of Commitment Fees is sometimes called the Commitment
         Fee Rate.

                  "Asset Sale" shall mean any sale, transfer or other
         disposition by the Borrower or any of its Subsidiaries to any Person
         (including by way of redemption by such Person) other than to the
         Borrower or a Wholly-Owned Subsidiary of the Borrower of any asset
         (including, without limitation, any capital stock or other securities
         of, or equity interests in, another Person) other than sales of assets
         pursuant to Sections 10.02(ii), (iii), (viii) and (ix).

                  "Assignment and Assumption Agreement" shall mean an Assignment
         and Assumption Agreement substantially in the form of Exhibit K, or in
         any other form approved by the Administrative Agent (appropriately
         completed).

                  "Bank of America" shall mean Bank of America, N.A., in its
         individual capacity, and any successor corporation thereto by merger,
         consolidation or otherwise.

                  "Bankruptcy Code" shall have the meaning provided in Section
         11.05.

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

                                      -3-


         opening of business on the day specified in the public announcement of
         such change.

                  "Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
         each other Loan designated or deemed designated as such by the Borrower
         at the time of the incurrence thereof or conversion thereto.

                  "Borrower" shall have the meaning provided in the first
         paragraph of this Agreement.

                  "Borrowing" shall mean the borrowing of one Type of Loan of a
         single Tranche from all the Lenders having Commitments (or from the
         Swingline Lender in the case of Swingline Loans) on a given date (or
         resulting from a conversion or conversions on such date) having in the
         case of Eurodollar Loans the same Interest Period, provided that Base
         Rate Loans incurred pursuant to Section 2.10(b) shall be considered
         part of the related Borrowing of Eurodollar Loans.

                  "Business Day" shall mean (i) for all purposes other than as
         covered by clause (ii) below, any day except Saturday, Sunday and any
         day which shall be in New York, New York or Chicago, Illinois or
         Charlotte, North Carolina a legal holiday or a day on which banking
         institutions are authorized or required by law or other government
         action to close and (ii) with respect to all notices and determinations
         in connection with, and payments of principal and interest on,
         Eurodollar Loans, any day which is a Business Day described in clause
         (i) above and which is also a day for trading by and between banks in
         the interbank Eurodollar market.

                  "Capital Expenditures" shall mean, with respect to any Person,
         all capital expenditures by such Person, as the same are (or would in
         accordance with GAAP be) set forth in the consolidated statement of
         cash flows of the Borrower and its Subsidiaries, exclusive of (A)
         expenditures made in connection with the acquisition of assets in any
         Permitted Acquisition, and (B) expenditures made in connection with the
         replacement or restoration of assets to the extent financed (i) from
         insurance proceeds paid on account of the loss of or damage to the
         assets being replaced or restored, or (ii) with proceeds from the sale
         or other disposition of an asset which is replaced within 180 days from
         such sale or other disposition with another asset performing the same
         or a similar function.

                  "Capitalized Lease Obligations" shall mean, with respect to
         any Person, all rental obligations of such Person which, under GAAP,
         are or will be required to be capitalized on the books of such Person,
         in each case taken at the amount thereof accounted for as indebtedness
         in accordance with such principles.

                  "Cash Equivalents" shall mean, as to any Person, (i)
         securities issued or directly and fully guaranteed or insured by the
         United States or any agency or

                                      -4-


         instrumentality thereof (provided that the full faith and credit of the
         United States is pledged in support thereof) having maturities of not
         more than one year from the date of acquisition, (ii) marketable direct
         obligations issued by the District of Columbia or any state of the
         United States or any political subdivision of the District of Columbia
         or any such state or any public instrumentality thereof maturing within
         one year from the date of acquisition thereof and, at the time of
         acquisition, having one of the two highest ratings obtainable from
         either Standard & Poor's Ratings Services or Moody's Investors Service,
         Inc., (iii) Dollar denominated time deposits and certificates of
         deposit of any commercial bank having, or which is the principal
         banking subsidiary of a bank holding company having, a long-term
         unsecured debt rating of at least "A" or the equivalent thereof from
         Standard & Poor's Ratings Services or "A2" or the equivalent thereof
         from Moody's Investors Service, Inc. with maturities of not more than
         one year from the date of acquisition by such Person, (iv) repurchase
         obligations with a term of not more than 30 days for underlying
         securities of the types described in clause (i) above entered into with
         any bank meeting the qualifications specified in clause (iii) above,
         (v) commercial paper issued by any Person incorporated in the United
         States rated at least A-1 or the equivalent thereof by Standard &
         Poor's Ratings Services or at least P-1 or the equivalent thereof by
         Moody's Investors Service, Inc. and in each case maturing not more than
         one year after the date of acquisition by such Person, (vi) investments
         in money market funds substantially all of whose assets are comprised
         of securities of the types described in clauses (i) through (v) above,
         and (vii) in the case of any Foreign Subsidiary, (A) direct obligations
         of the sovereign nation (or any agency thereof) in which such Foreign
         Subsidiary is organized or is conducting business or in obligations
         fully and unconditionally guaranteed by such sovereign nation (or any
         agency thereof) having maturities of not more than one year from the
         date of acquisition or (B) obligations of the type and maturity
         described in clauses (iii), (iv) or (v) above of foreign obligors,
         which obligations or obligors (or the parents of such obligors) have
         ratings described in such clauses or equivalent ratings from comparable
         foreign rating agencies.

                  "CERCLA" shall mean the Comprehensive Environmental Response,
         Compensation, and Liability Act of 1980, as the same may be amended
         from time to time, 42 U.S.C. Section 9601 et seq.

                  "Change of Control" shall mean (i) any Person or "group"
         (within the meaning of Sections 13(d) and 14(d) under the Securities
         Exchange Act, as in effect on the Original Effective Date), other than
         a Permitted Holder, shall (A) have acquired beneficial ownership of 30%
         or more on a fully diluted basis of the voting and/or economic interest
         in the Borrower's capital stock or (B) obtained the power (whether or
         not exercised) to elect a majority of the Borrower's directors or (ii)
         the Board of Directors of the Borrower shall cease to consist of a
         majority of Continuing Directors or (iii) any "change of control"
         under, and as defined in, the Senior Subordinated Note Indenture shall
         occur.

                                      -5-


                  "Change of Law" shall have the meaning provided in Section
         11.06.

                  "Code" shall mean the Internal Revenue Code of 1986, as
         amended from time to time, and the regulations promulgated and rulings
         issued thereunder. Section references to the Code are to the Code, as
         in effect at the date of this Agreement and any subsequent provisions
         of the Code, amendatory thereof, supplemental thereto or substituted
         therefor.

                  "Collateral" shall mean all property (whether real or
         personal) with respect to which any security interests have been
         granted (or purported to be granted) pursuant to any Security Document,
         including, without limitation, all Pledge Agreement Collateral, all
         Security Agreement Collateral, all Mortgaged Properties and all cash
         and Cash Equivalents delivered as collateral pursuant to Section 5.02
         or 11.

                  "Collateral Agent" shall mean the Administrative Agent acting
         as collateral agent for the Secured Creditors pursuant to the Security
         Documents.

                  "Collective Bargaining Agreements" shall have the meaning
         provided in Section 6.05.

                  "Commitment" shall mean any of the commitments of any Lender,
         (i.e., whether the Term Loan Commitment, or the Revolving Loan
         Commitment).

                  "Commitment Fee" shall have the meaning provided in Section
         4.01(a).

                  "Commitment Fee Rate" shall have the meaning provided in the
         definition of Applicable Margin.

                  "Consolidated Capital Expenditures" shall mean, for any
         period, all Capital Expenditures of the Borrower and its Subsidiaries
         on a consolidated basis for such period.

                  "Consolidated EBITDA" shall mean, for any period, an amount
         equal to the sum of (a) the net income of the Borrower and its
         Subsidiary Guarantors ("Consolidated Net Income") on a consolidated
         basis from continuing operations (such net income to be exclusive of
         (i) non-cash charges comprising (A) impairment of assets, (B)
         cumulative effects of changes in accounting principles (all of which
         are to be in accordance with GAAP), (C) any non-cash stock
         compensation; and (ii) extraordinary gains), (b) Consolidated Interest
         Expense for such period, (c) the amount of taxes, based on or measured
         by income, used or included in the determination of such Consolidated
         Net Income for such period, and (d) the amount of depreciation and
         amortization expense deducted in determining such Consolidated Net
         Income for such period. Consolidated EBITDA shall not be calculated on
         a pro forma basis.

                                      -6-


                  "Consolidated Fixed Charge Coverage Ratio" (or "Fixed Charge
         Coverage Ratio") shall mean, at any date, the ratio of (a) Consolidated
         EBITDA for the Test Period then most recently ended less Consolidated
         Capital Expenditures for such Test Period to (b) Consolidated Fixed
         Charges for such Period.

                  "Consolidated Fixed Charges" shall mean, for any period, the
         sum of the following (without duplication): (i) Consolidated Interest
         Expense paid or required to be paid in cash for such period; (ii)
         income and franchise taxes paid or required to be paid in cash by the
         Borrower and its Subsidiaries on a consolidated basis during such
         period; (iii) all scheduled payments of principal made or required to
         be made with respect to all Indebtedness (including the principal
         portion of Capitalized Leases Obligations) of the Borrower and its
         Subsidiaries on a consolidated basis during such period; and (iv) all
         Restricted Payments made or required to be made by the Borrower and its
         Subsidiaries on a consolidated basis during such period (exclusive of
         Restricted Payments in respect of Subordinated Debt permitted under
         Sections 10.12(a)-(b)).

                  "Consolidated Indebtedness" shall mean, at any time, the
         principal amount of all Indebtedness of the Borrower and its
         Subsidiaries at such time; provided that for purposes of this
         definition, the amount of Indebtedness in respect of Interest Rate
         Protection Agreements and Other Hedging Agreements shall be at any time
         the unrealized net loss position, if any, of the Borrower and/or its
         Subsidiaries thereunder on a marked-to-market basis determined no more
         than one month prior to such time.

                  "Consolidated Interest Expense" shall mean, for any period,
         the total consolidated interest expense of the Borrower and its
         Subsidiaries for such period (calculated without regard to any
         limitations on the payment thereof) plus, without duplication, that
         portion of Capitalized Lease Obligations of the Borrower and its
         Subsidiaries representing the interest factor for such period; provided
         that the amortization of deferred financing, legal and accounting costs
         with respect to this Agreement shall be excluded from Consolidated
         Interest Expense to the extent same would otherwise have been included
         therein.

                  "Consolidated Net Income" shall have the meaning given to it
         in the definition of "Consolidated EBITDA."

                  "Consolidated Net Worth" shall mean, at any time, for the
         Borrower and its Subsidiaries, on a consolidated basis, shareholders'
         equity at such time.

                  "Consolidated Senior Leverage Ratio" (and sometimes also
         referred to as the "Senior Leverage Ratio" or "SLR") shall mean, at any
         time, the ratio of Consolidated Indebtedness (excluding Subordinated
         Debt) at such time to Consolidated EBITDA for the Test Period then most
         recently ended.

                                      -7-


                  "Consolidated Total Leverage Ratio" (and sometimes also
         referred to as the "Total Leverage Ratio" or "TLR") shall mean, at any
         time, the ratio of Consolidated Indebtedness at such time to
         Consolidated EBITDA for the Test Period then most recently ended,
         provided, however, that during the period of ninety days after the
         Restatement Effective Date if the Borrower elects pursuant to Section
         10.08 to irrevocably reduce the Consolidated Total Leverage Ratio to
         2.50:1.00, then the Consolidated Total Leverage Ratio shall be deemed
         to mean, at any time, the ratio of (i) Consolidated Indebtedness at
         such time less the funds available in the Special Collateral Account
         (but not more than $35,000,000 in the Special Collateral Account) to
         (ii) Consolidated EBITDA for the Test Period then most recently ended.

                  "Contingent Obligation" shall mean, as to any Person, any
         obligation of such Person as a result of such Person being a general
         partner of the other Person, unless the underlying obligation is
         expressly made non-recourse as to such general partner, and any
         obligation of such Person guaranteeing or intended to guarantee any
         Indebtedness, leases, dividends or other obligations ("primary
         obligations") of any other Person (the "primary obligor") in any
         manner, whether directly or indirectly, including, without limitation,
         any obligation of such 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
         (x) for the purchase or payment of any such primary obligation or (y)
         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 holder of
         such primary obligation against loss in respect thereof; provided,
         however, that the term Contingent Obligation shall not include
         endorsements of instruments for deposit or collection in the ordinary
         course of business. The amount of any Contingent Obligation shall be
         deemed to be an amount equal to the stated or determinable amount of
         the primary obligation in respect of which such Contingent Obligation
         is made or, if not stated or determinable, the maximum reasonably
         anticipated liability in respect thereof (assuming such Person is
         required to perform thereunder) as determined by such Person in good
         faith.

                  "Continuing Directors" shall mean the directors of the
         Borrower on the Initial Borrowing Date and each other director if such
         director's nomination for election to the Board of Directors of the
         Borrower is recommended by a majority of the then Continuing Directors.

                  "Control Agreement" shall mean a "Control Agreement" as
         defined in the Security Agreement.

                                      -8-


                  "Credit Documents" shall mean this Agreement, the Disclosure
         Letter and, after the execution and delivery thereof pursuant to the
         terms of this Agreement, each Note, the Subsidiaries Guaranty and each
         Security Document.

                  "Credit Event" shall mean the making of any Loan or the
         issuance of any Letter of Credit.

                  "Credit Party" shall mean the Borrower and each Subsidiary
         Guarantor.

                  "Debt Rating" shall have the meaning provided in Section
         13.18.

                  "Default" shall mean any event, act or condition which with
         notice or lapse of time, or both, would constitute an Event of Default.

                  "Defaulting Lender" shall mean any Lender with respect to
         which a Lender Default is in effect.

                  "Disclosure Letter" shall mean the Disclosure Letter of even
         date herewith delivered by the Borrower to the Administrative Agent and
         the Lenders, a copy of which is attached as Schedule III.

                  "Dividend" shall mean, with respect to any Person, that such
         Person has declared or paid a dividend or returned any equity capital
         to its stockholders, partners or members or authorized or made any
         other distribution, payment or delivery of property (other than common
         stock of such Person) or cash to its stockholders, partners or members
         as such, or redeemed, retired, purchased or otherwise acquired,
         directly or indirectly, for a consideration any shares of any class of
         its capital stock or any partnership or membership interests
         outstanding on or after the Original Effective Date (or any options or
         warrants issued by such Person with respect to its capital stock or
         other equity interests), or set aside any funds for any of the
         foregoing purposes, or shall have permitted any of its Subsidiaries to
         purchase or otherwise acquire for a consideration any shares of any
         class of the capital stock or any partnership or membership interests
         of such Person outstanding on or after the Original Effective Date (or
         any options or warrants issued by such Person with respect to its
         capital stock or other equity interests). Without limiting the
         foregoing, "Dividends" with respect to any Person shall also include
         all payments made or required to be made by such Person with respect to
         any stock appreciation rights, plans, equity incentive or achievement
         plans or any similar plans or setting aside of any funds for the
         foregoing purposes.

                  "Dollars" and the sign "$" shall each mean freely transferable
         lawful money of the United States.

                  "Domestic Subsidiary" shall mean each Subsidiary of the
         Borrower that is incorporated under the laws of the United States or
         any State thereof.

                                      -9-


                  "Drawing" shall have the meaning provided in Section 3.05(b).

                  "Eligible Transferee" shall mean and include a commercial
         bank, an insurance company, a finance company, a financial institution,
         any fund that invests in loans or any other "accredited investor" (as
         defined in Regulation D of the Securities Act), but in any event
         excluding the Borrower and its Subsidiaries.

                  "Employee Benefit Plans" shall have the meaning provided in
         Section 6.05.

                  "Employment Agreements" shall have the meaning provided in
         Section 6.05.

                  "End Date" shall mean, for any Margin Reduction Period, the
         last day of such Margin Reduction Period.

                  "Environmental Claims" shall mean any and all administrative,
         regulatory or judicial actions, suits, demands, demand letters,
         directives, claims, liens, notices of noncompliance or violation,
         investigations or proceedings relating in any way to any Environmental
         Law or any permit issued, or any approval given, under any such
         Environmental Law (hereafter, "Claims"), including, without limitation,
         (a) any and all Claims by governmental or regulatory authorities for
         enforcement, cleanup, removal, response, remedial or other actions or
         damages pursuant to any applicable Environmental Law, and (b) any and
         all Claims by any third party seeking damages, contribution,
         indemnification, cost recovery, compensation or injunctive relief in
         connection with alleged injury or threat of injury to health, safety or
         the environment due to the presence of Hazardous Materials.

                  "Environmental Law" shall mean any Federal, state, foreign or
         local statute, law, rule, regulation, ordinance, code, guideline,
         written policy and rule of common law now or hereafter in effect and in
         each case as amended, and any judicial or administrative interpretation
         thereof, including any judicial or administrative order, consent decree
         or judgment, relating to the environment, employee health and safety or
         Hazardous Materials, including, without limitation, CERCLA; RCRA; the
         Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
         the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
         Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water
         Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
         U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
         Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
         Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq.
         and the Occupational Safety and Health Act, 29 U.S.C. Section 651 et
         seq.; and any state and local or foreign counterparts or equivalents,
         in each case as amended from time to time.

                                      -10-


                  "ERISA" shall mean the Employee Retirement Income Security Act
         of 1974, as amended from time to time, and the regulations promulgated
         and rulings issued thereunder. Section references to ERISA are to
         ERISA, as in effect at the date of this Agreement and any subsequent
         provisions of ERISA, amendatory thereof, supplemental thereto or
         substituted therefor.

                  "ERISA Affiliate" shall mean each person (as defined in
         Section 3(9) of ERISA) which together with the Borrower or a Subsidiary
         of the Borrower would be deemed to be a "single employer" (i) within
         the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a
         result of the Borrower or a Subsidiary of the Borrower being or having
         been a general partner of such person.

                  "Eurodollar Loan" shall mean each Loan (other than any
         Swingline Loan) designated as such by the Borrower at the time of the
         incurrence thereof or conversion thereto.

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

                  Eurodollar Rate  =            Eurodollar Rate
                                      ------------------------------------------
                                      1.00 - Eurodollar Reserve Percentage
Where,

"Eurodollar Rate" shall mean, for such Interest Period:

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

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

                  (c) in the event the rates referenced in the preceding
         subsections (a) and (b) are not available, the rate per annum
         determined by Administrative Agent as the rate of interest (rounded to
         the next 1/100th of 1%) at which deposits in Dollars for delivery on
         the first day of such Interest Period in same day funds in the
         approximate amount of the

                                      -11-


         Eurodollar Loan being made, continued or converted by Administrative
         Agent (or its Affiliate) in its capacity as a lender and with a term
         equivalent to such Interest Period would be offered by Bank of
         America's London Branch to major banks in the offshore Dollar market at
         their request at approximately 11:00 a.m. (London time) two Business
         Days prior to the first day of such Interest Period.

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

                  "Event of Default" shall have the meaning provided in Section
         11.

                  "Excess Cash Flow" shall mean, for any period, (a)
         Consolidated EBITDA less (b) the sum of (i) Consolidated Interest
         Expense paid or required to be paid in cash for such period, (ii) all
         scheduled payments of principal made or required to be made with
         respect to all Indebtedness (including the principal portion of
         Capitalized Lease Obligation) for such period, (iii) all Capital
         Expenditures for such period, (iv) all income and franchise taxes paid
         or required to be paid in cash by the Borrower and its Subsidiaries on
         a consolidated basis during such period, and (v) all prepayments of the
         Term Loans made pursuant to Section 5.01.

                  "Excess Cash Payment Date" shall mean April 15 of each fiscal
         year of the Borrower (beginning with April 15, 2004).

                  "Excess Cash Payment Period" shall mean, with respect to the
         repayment required on each Excess Cash Payment Date, the immediately
         preceding fiscal year of the Borrower.

                  "Existing Credit Agreement" shall have the meaning provided in
         the Recitals.

                  "Existing Indebtedness" shall have the meaning provided in
         Section 8.22.

                  "Existing Indebtedness Agreements" shall have the meaning
         provided in Section 6.05.

                                      -12-


                  "Existing Letters of Credit" shall mean the Letters of Credit,
         if any, issued under the Existing Credit Agreement to the extent the
         same remain outstanding and undrawn as of the opening of business on
         the Restatement Effective Date.

                  "Existing Obligations" shall have the meaning provided in
         Section 6.20.

                  "Federal Funds Rate" shall mean, for any day, the rate per
         annum equal to the weighted average of the rates on overnight Federal
         funds transactions with members of the Federal Reserve System arranged
         by Federal funds brokers on such day, as published by the Federal
         Reserve Bank on the Business Day next succeeding such day; provided
         that (a) if such day is not a Business Day, the Federal Funds Rate for
         such day shall be such rate on such transactions on the next preceding
         Business Day as so published on the next succeeding Business Day, and
         (b) if no such rate is so published on such next succeeding Business
         Day, the Federal Funds Rate for such day shall be the average rate
         charged to Bank of America on such day on such transactions as
         determined by the Administrative Agent.

                  "Fees" shall mean all amounts payable pursuant to or referred
         to in Section 4.01.

                  "Foreign Pension Plan" shall mean any plan, fund (including,
         without limitation, any superannuation fund) or other similar program
         established or maintained outside the United States by the Borrower or
         any one or more of its Subsidiaries primarily for the benefit of
         employees of the Borrower or such Subsidiaries residing outside the
         United States, which plan, fund or other similar program provides, or
         results in, retirement income, a deferral of income in contemplation of
         retirement or payments to be made upon termination of employment, and
         which plan is not subject to ERISA or the Code.

                  "Foreign Subsidiary" shall mean each Subsidiary of the
         Borrower which is not a Domestic Subsidiary.

                  "Fronting Fee" shall have the meaning provided in Section
         4.01(c).

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

                  "Hazardous Materials" shall mean (a) any petroleum or
         petroleum products, radioactive materials, asbestos in any form that is
         friable, urea formaldehyde foam insulation, transformers or other
         equipment that contains

                                      -13-


         dielectric fluid containing levels of polychlorinated biphenyls, and
         radon gas; (b) any chemicals, materials or substances defined as or
         included in the definition of "hazardous substances," "hazardous
         waste," "hazardous materials," "extremely hazardous substances,"
         "restricted hazardous waste," "toxic substances," "toxic pollutants,"
         "contaminants," or "pollutants," or words of similar import, under any
         applicable Environmental Law; and (c) any other chemical, material or
         substance, the Release of which is prohibited, limited or regulated by
         any governmental authority.

                  "Inactive Subsidiary" shall mean each of Direct Magi Inc. and
         DBA FL Inc., each a New Jersey corporation and a Wholly-Owned Domestic
         Subsidiary of the Borrower.

                  "Indebtedness" shall mean, as to any Person, without
         duplication, (i) all indebtedness (including principal, interest, fees
         and charges) of such Person for borrowed money or for the deferred
         purchase price of property or services, (ii) the maximum amount
         available to be drawn under all letters of credit, bankers' acceptances
         and similar obligations issued for the account of such Person and all
         unpaid drawings in respect of such letters of credit, bankers'
         acceptances and similar obligations, (iii) all Indebtedness of the
         types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
         definition secured by any Lien on any property owned by such Person,
         whether or not such Indebtedness has been assumed by such Person
         (provided that, if the Person has not assumed or otherwise become
         liable in respect of such Indebtedness, such Indebtedness shall be
         deemed to be in an amount equal to the fair market value of the
         property to which such Lien relates as determined in good faith by such
         Person), (iv) the aggregate amount required to be capitalized under
         leases under which such Person is the lessee, (v) all obligations of
         such Person to pay a specified purchase price for goods or services,
         whether or not delivered or accepted, i.e., take-or-pay and similar
         obligations, (vi) all Contingent Obligations of such Person, and (vii)
         all obligations under any Interest Rate Protection Agreement, any Other
         Hedging Agreement or under any similar type of agreement.
         Notwithstanding the foregoing, Indebtedness shall not include trade
         payables and accrued expenses incurred by any Person in accordance with
         customary practices and in the ordinary course of business of such
         Person.

                  "Initial Borrowing Date" shall mean the Restatement Effective
         Date.

                  "Intercompany Loan" shall mean each intercompany loan or
         advance between or among the Borrower and its Subsidiaries or between
         or among Subsidiaries of the Borrower.

                  "Intercompany Note" shall mean a promissory note, in the form
         of Exhibit L or in such other form as is reasonably acceptable to the
         Administrative Agent, evidencing Intercompany Loans.

                                      -14-


                  "Interest Determination Date" shall mean, with respect to any
         Eurodollar Loan, the second Business Day prior to the commencement of
         any Interest Period relating to such Eurodollar Loan.

                  "Interest Period" shall have the meaning provided in Section
         2.09.

                  "Interest Rate Protection Agreement" shall mean any interest
         rate swap agreement, interest rate cap agreement, interest collar
         agreement, interest rate hedging agreement or other similar agreement
         or arrangement.

                  "Investments" shall have the meaning provided in Section
         10.05.

                  "Issuing Lender" shall mean Bank of America.

                  "L/C Supportable Obligations" shall mean (i) obligations of
         the Borrower or any of its Subsidiaries with respect to workers
         compensation, surety bonds and other similar statutory obligations and
         (ii) such other obligations of the Borrower or any of its Subsidiaries
         as are reasonably acceptable to the Issuing Lender and otherwise
         permitted to exist pursuant to the terms of this Agreement (other than
         obligations in respect of the Senior Subordinated Notes).

                  "Leaseholds" of any Person shall mean all the right, title and
         interest of such Person as lessee or licensee in, to and under leases
         or licenses of land, improvements and/or fixtures.

                  "Lender" shall mean each financial institution listed on
         Schedule I, as well as any Person that becomes a "Lender" hereunder
         pursuant to Sections 2.13 or 13.04(b).

                  "Lender Default" shall mean (i) the refusal (which has not
         been retracted) or the failure of a Lender to make available its
         portion of any Borrowing (including any Mandatory Borrowing) or to fund
         its portion of any unreimbursed payment under Section 3.04(c) or (ii) a
         Lender having notified in writing the Borrower and/or the
         Administrative Agent that such Lender does not intend to comply with
         its obligations under Section 2.01(b), 2.01(c), 2.01(e) or 3.

                  "Letter of Credit" shall have the meaning provided in Section
         3.01(a).

                  "Letter of Credit Fee" shall have the meaning provided in
         Section 4.01(b).

                  "Letter of Credit Outstandings" shall mean, at any time, the
         sum of (i) the Stated Amount of all outstanding Letters of Credit and
         (ii) the aggregate amount of all Unpaid Drawings in respect of all
         Letters of Credit.

                  "Letter of Credit Request" shall have the meaning provided in
         Section 3.03(a).

                                      -15-


                  "Lien" shall mean any mortgage, security interest, pledge,
         hypothecation, assignment, deposit arrangement, encumbrance, lien
         (statutory or other), preference, priority or other security agreement
         of any kind or nature whatsoever (including, without limitation, any
         conditional sale or other title retention agreement, any financing or
         similar statement or notice filed under the UCC or any other similar
         recording or notice statute, and any lease having substantially the
         same effect as any of the foregoing).

                  "Loan" shall mean each Term Loan, each Revolving Loan and each
         Swingline Loan.

                  "Management Agreements" shall have the meaning provided in
         Section 6.05.

                  "Mandatory Borrowing" shall have the meaning provided in
         Section 2.01(e).

                  "Margin Reduction Period" shall mean each period which shall
         commence on the date occurring after the Initial Borrowing Date upon
         which respective officer's certificate is delivered pursuant to Section
         9.01(f) and which shall end on the date of actual delivery of the next
         officer's certificates pursuant to section 9.01(f) or the latest date
         on which such next officer's certificate is required to be so
         delivered.

                  "Margin Stock" shall have the meaning provided in Regulation
         U.

                  "Material Adverse Effect" shall mean (i) a material adverse
         effect on the business, operations, properties, assets, liabilities,
         condition (financial or otherwise) or prospects of the Borrower or of
         the Borrower and its Subsidiaries taken as a whole, or (ii) a material
         adverse effect on the rights or remedies of the Lenders or the
         Administrative Agent hereunder or under any other Credit Document or on
         the ability of any Credit Party to perform its obligations to the
         Lenders or the Administrative Agent hereunder or under any other Credit
         Document.

                  "Maturity Date" shall mean the Term Loan Maturity Date, the
         Revolving Loan Maturity Date or the Swingline Expiry Date, as the case
         may be.

                  "Maximum Swingline Amount" shall mean $5,000,000.

                  "Minimum Borrowing Amount" shall mean (i) for Term Loans,
         $5,000,000, (ii) for Revolving Loans, $500,000 and (iii) for Swingline
         Loans, $100,000.

                  "Moody's" shall have the meaning provided in Section 13.18.

                                      -16-


                  "Mortgage" shall mean a mortgage, leasehold mortgage, deed of
         trust, leasehold deed of trust, deed to secure debt, leasehold deed to
         secure debt or similar security instrument.

                  "Mortgaged Property" shall mean any Real Property owned or
         leased by the Borrower or any Subsidiary Guarantor which is encumbered
         (or required to be encumbered) by a Mortgage.

                  "Net Acquisition Consideration" shall mean the Total
         Consideration for a Permitted Acquisition (i) less cash and Cash
         Equivalents that are acquired in such Permitted Acquisition, and (ii)
         plus the present value of any earn-out, non-compete or deferred
         compensation or purchase price adjustments, and (iii) less or plus any
         working capital adjustments, as applicable, and as provided in Section
         9.15.

                  "Net Debt Proceeds" shall mean, with respect to any incurrence
         of Indebtedness for borrowed money, the cash proceeds (net of
         underwriting discounts and commissions and other reasonable costs
         associated therewith) received by the respective Person from the
         respective incurrence of such Indebtedness for borrowed money.

                  "Net Equity Proceeds" shall mean, with respect to each
         issuance or sale of any equity by any Person or any capital
         contribution to such Person, the cash proceeds (net of underwriting
         discounts and commissions and other reasonable costs associated
         therewith) received by such Person from the respective sale or issuance
         of its equity or from the respective capital contribution. The term
         "Net Equity Proceeds" also shall include the amount of Net Debt
         Proceeds received by the Borrower from the issuance or incurrence of
         Indebtedness for borrowed money under Section 10.04(xii) which is
         convertible into shares of the Borrower's capital stock, although such
         Net Equity Proceeds shall not be considered to be received by the
         Borrower until such conversion occurs.

                  "Net Insurance Proceeds" shall mean, with respect to any
         Recovery Event, the cash proceeds (net of reasonable costs and taxes
         incurred in connection with such Recovery Event) received by the
         respective Person in connection with such Recovery Event.

                  "Net Sale Proceeds" shall mean, for any Asset Sale, the gross
         cash proceeds (including any cash received by way of deferred payment
         pursuant to a promissory note, receivable or otherwise, but only as and
         when received) received from such sale of assets, net of the reasonable
         costs of such sale (including fees and commissions, payments of
         unassumed liabilities relating to the assets sold and required payments
         of any Indebtedness (other than Indebtedness secured pursuant to the
         Security Documents) which is secured by the respective assets which
         were sold), and the incremental taxes paid or payable as a result of
         such Asset Sale.

                                      -17-


                  "Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall
         mean and include each Lender or RL Lender, as the case may be, other
         than a Defaulting Lender.

                  "Non-Renewing Lender" shall mean each Lender under the
         Existing Credit Agreement which on or before the Restatement Effective
         Date does not execute and deliver to the Administrative Agent an
         executed counterpart as provided in Section 6 of this Agreement.

                  "Note" shall mean each Term Note, each Revolving Note and the
         Swingline Note.

                  "Notice of Borrowing" shall have the meaning provided in
         Section 2.03(a).

                  "Notice of Conversion" shall have the meaning provided in
         Section 2.06.

                  "Notice Office" shall mean the office of the Administrative
         Agent located at 231 South LaSalle Street, Chicago, Illinois 60697,
         Attention: David Johanson or such other office or person as the
         Administrative Agent may hereafter designate in writing as such to the
         other parties hereto.

                  "Obligations" shall mean all amounts owing to the
         Administrative Agent, the Collateral Agent, the Issuing Lender, the
         Swingline Lender or any Lender pursuant to the terms of this Agreement
         or any other Credit Document.

                  "Operating Leases" shall mean all leases for real or personal
         property that are not Capitalized Lease Obligations.

                  "Original Effective Date" shall have the meaning given to
         "Effective Date" in the Existing Credit Agreement.

                  "Other Hedging Agreement" shall mean any foreign exchange
         contracts, currency swap agreements, commodity agreements or other
         similar agreements or arrangements designed to protect against the
         fluctuations in currency values.

                  "Participant" shall have the meaning provided in Section
         3.04(a).

                  "Payment Office" shall mean the office of the Administrative
         Agent located at 231 South LaSalle Street, Chicago, Illinois 60697, or
         such other office as the Administrative Agent may hereafter designate
         in writing as such to the other parties hereto.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
         established pursuant to Section 4002 of ERISA, or any successor
         thereto.

                                      -18-


                  "Permitted Acquisition" shall mean the acquisition by the
         Borrower or a Wholly-Owned Subsidiary thereof of assets constituting a
         business, division or product line of any Person not already a
         Subsidiary of the Borrower or of 100% of the capital stock of any such
         Person (including by way of merger), which Person shall, as a result of
         such stock acquisition, become a Wholly-Owned Subsidiary of the
         Borrower (or shall be merged with and into a Wholly-Owned Subsidiary of
         the Borrower) (such assets or Person are referred to as an "Acquired
         Entity or Business"), provided that (in each case):

                           (A) the consideration paid by the Borrower or such
                  Wholly-Owned Subsidiary consists solely of cash (including
                  proceeds of Loans), the issuance or incurrence of Indebtedness
                  otherwise permitted by Section 10.04, the issuance of common
                  stock of the Borrower or Qualified Preferred Stock of the
                  Borrower to the extent no Default or Event of Default exists
                  pursuant to Section 11.10 or would result therefrom and the
                  assumption/ acquisition of any Indebtedness (calculated at
                  face value) which is permitted to remain outstanding in
                  accordance with the requirements of Section 10.04;

                           (B) in the case of the acquisition of 100% of the
                  capital stock of any Person (including way of merger), such
                  Person shall own no capital stock of any other Person (other
                  de minimis amounts) unless either (x) such Person owns 100% of
                  the capital stock of such other Person or (y) (1) such Person
                  and/or its Wholly-Owned Subsidiaries own at least 80% of the
                  consolidated assets of such Person and its Subsidiaries and
                  (2) any non-Wholly Owned Subsidiary of such Person was
                  non-Wholly Owned prior to the date of such Permitted
                  Acquisition of such Person;

                           (C) the Acquired Entity or Business acquired pursuant
                  to the respective Permitted Acquisition is in a business
                  permitted by Section 10.15; and

                           (D) all applicable requirements of Sections 9.15,
                  10.02 and 10.16 applicable to Permitted Acquisitions are
                  satisfied.

         Notwithstanding anything to the contrary contained in the immediately
         preceding sentence, an acquisition which does not otherwise meet the
         requirements set forth above in the definition of "Permitted
         Acquisition" shall constitute a Permitted Acquisition if, and to the
         extent, the Required Lenders agree in writing that such acquisition
         shall constitute a Permitted Acquisition for purposes of this
         Agreement.

                  "Permitted Encumbrance" shall mean, with respect to any
         Mortgaged Property, such exceptions to title as are set forth in the
         respective mortgage title

                                      -19-


         insurance policy delivered with respect thereto, all of which
         exceptions must be acceptable to the Administrative Agent in its
         reasonable discretion.

                  "Permitted Holders" shall mean Vinod Gupta and his spouse,
         their lineal descendants and adopted children and spouses of their
         lineal descendants and adopted children, any foundation controlled by
         any of the foregoing persons, any trusts for the benefit of any of the
         foregoing persons and any Affiliates of the foregoing persons.

                  "Permitted Liens" shall have the meaning provided in Section
         10.01.

                  "Person" shall mean any individual, partnership, joint
         venture, firm, corporation, association, limited liability company,
         trust or other enterprise or any government or political subdivision or
         any agency, department or instrumentality thereof.

                  "Plan" shall mean any pension plan as defined in Section 3(2)
         of ERISA, which is maintained or contributed to by (or to which there
         is an obligation to contribute of) the Borrower or a Subsidiary of the
         Borrower or an ERISA Affiliate, and each such plan for the five year
         period immediately following the latest date on which the Borrower, a
         Subsidiary of the Borrower or an ERISA Affiliate maintained,
         contributed to or had an obligation to contribute to such plan.

                  "Pledge Agreement" shall have the meaning provided in Section
         6.09.

                  "Pledge Agreement Collateral" shall mean all "Collateral" as
         defined in the Pledge Agreement.

                  "Projections" shall mean the projections prepared by the
         Borrower as set forth in the Confidential Offering Memorandum relating
         to the financing hereunder, dated April 2003, which Confidential
         Offering Memorandum was furnished by Bank of America Securities LLC
         (with the assistance and approval of the Borrower) to the Lenders prior
         to the Restatement Effective Date.

                  "Qualified Preferred Stock" shall mean any preferred stock of
         the Borrower so long as the terms of any such preferred stock (v) do
         not contain any mandatory put, redemption, repayment, sinking fund or
         other similar provision, except upon the occurrence of a change of
         control (the definition of which shall be no more restrictive than that
         set forth in the Senior Subordinated Note Indenture) so long as the
         terms thereof do not require any such redemption or other action unless
         (and until) all Obligations have been paid in full and the Total
         Commitment and all Letters of Credit have been terminated or the
         requisite consents under this Agreement have been obtained to permit
         such redemption or other action, (w) do not require the cash payment of
         dividends to the extent that the payment thereof would not be permitted
         at such time pursuant to this

                                      -20-


         Agreement, (x) do not contain any operating or financial maintenance
         covenants, (y) do not grant the holders thereof any voting rights
         (prior to the conversion into common stock of the Borrower, if
         applicable) except for (I) voting rights required to be granted to such
         holders under applicable law and (II) limited customary voting rights
         on fundamental matters such as mergers, consolidations, sales of all or
         substantially all of the assets of the Borrower, or liquidations
         involving the Borrower, and (z) are otherwise reasonably satisfactory
         to the Administrative Agent.

                  "Quarterly Payment Date" shall mean the last Business Day of
         each December, March, June and September occurring after the Initial
         Borrowing Date, commencing on June 30, 2003.

                  "RCRA" shall mean the Resource Conservation and Recovery Act,
         as the same may be amended from time to time, 42 U.S.C. Section 6901 et
         seq.

                  "Real Property" of any Person shall mean all the right, title
         and interest of such Person in and to land, improvements and fixtures,
         including Leaseholds.

                  "Recovery Event" shall mean the receipt by the Borrower or any
         of its Subsidiaries of any cash insurance proceeds or condemnation
         awards payable (i) by reason of theft, loss, physical destruction,
         damage, taking or any other similar event with respect to any property
         or assets of the Borrower or any of its Subsidiaries and (ii) under any
         policy of insurance required to be maintained under Section 9.03.

                  "Refinancing" shall have the meaning provided in Section 6.20.

                  "Register" shall have the meaning provided in Section 13.15.

                  "Regulation D", "Regulation T", "Regulation U" or "Regulation
         X", as the case may be, shall mean Regulation D, T, U or X, as the case
         may be, of the Board of Governors of the Federal Reserve System as from
         time to time in effect and any successor to all or a portion thereof.

                  "Release" shall mean the disposing, discharging, injecting,
         spilling, pumping, leaking, leaching, dumping, emitting, escaping,
         emptying, pouring or migrating, into or upon any land or water or air,
         or otherwise entering into the environment.

                  "Replaced Lender" shall have the meaning provided in Section
         2.13.

                  "Replacement Lender" shall have the meaning provided in
         Section 2.13.

                  "Reportable Event" shall mean an event described in Section
         4043(c) of ERISA with respect to a Plan that is subject to Title IV of
         ERISA other than those

                                      -21-


         events as to which the 30-day notice period is waived under subsection
         .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.

                  "Required Lenders" shall mean Non-Defaulting Lenders the sum
         of whose outstanding Term Loans and Revolving Loan Commitments (or
         after the termination thereof, outstanding Revolving Loans and RL
         Percentages of (x) outstanding Swingline Loans and (y) Letter of Credit
         Outstandings) represent more than 50% of the sum of (i) the aggregate
         principal amount of all outstanding Term Loans of Non-Defaulting
         Lenders and (ii) the Total Revolving Loan Commitment less the Revolving
         Loan Commitments of all Defaulting Lenders (or after the termination
         thereof, the sum of the then aggregate principal amount of all
         outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate
         RL Percentages of all Non-Defaulting Lenders of the total (x) the
         aggregate principal amount of outstanding Swingline Loans and (y)
         Letter of Credit Outstandings at such time).

                  "Restatement Effective Date" shall have the meaning provided
         in Section 6.

                  "Restricted Payments" shall mean in respect of a period, (i)
         any and all Dividends authorized, declared or paid with respect to the
         Borrower or any of its Subsidiaries pursuant to clauses (iii), (iv),
         (v), and (vi) of Section 10.03, (ii) the payment, prepayment,
         retirement, redemption, defeasance, or acquisition by the Borrower
         and/or any Subsidiary of any Subordinated Debt (excluding the (A)
         payment in full of the 6% Subordinated Notes in the original principal
         amount of $6,000,000, due September 29, 2003, and issued in connection
         with the acquisition of TGMVC (f/k/a Infousa.com, Inc.), which have
         been repaid in full prior to the date of this Credit Agreement, and (B)
         any repayments of the Senior Subordinated Notes made prior to
         Restatement Effective Date), and (iii) any and all payments ("earnout
         payments") required to be made by the Borrower or any Subsidiary which
         are based on the earnings or revenues relating to any Permitted
         Acquisitions.

                  "Revolving Loan" shall have the meaning provided in Section
         2.01(c).

                  "Revolving Loan Commitment" shall mean, for each Lender, the
         amount set forth opposite such Lender's name in Schedule I directly
         below the column entitled "Revolving Loan Commitment," as same may be
         (x) reduced from time to time pursuant to Sections 4.02, 4.03 and/or
         11, or (y) adjusted from time to time as a result of assignments to or
         from such Lender pursuant to Section 2.13 or 13.04(b).

                  "Revolving Loan Maturity Date" shall mean April 30, 2006.

                  "Revolving Note" shall have the meaning provided in Section
         2.05(a).

                                      -22-


                  "RL Lender" shall mean each Lender with a Revolving Loan
         Commitment or with outstanding Revolving Loans.

                  "RL Percentage" of any RL Lender at any time shall mean a
         fraction (expressed as a percentage) the numerator of which is the
         Revolving Loan Commitment of such RL Lender at such time and the
         denominator of which is the Total Revolving Loan Commitment at such
         time, provided that if the RL Percentage of any RL Lender is to be
         determined after the Total Revolving Loan Commitment has been
         terminated, then the RL Percentages of such RL Lender shall be
         determined immediately prior (and without giving effect) to such
         termination.

                  "S&P" shall have the meaning provided in Section 13.18.

                  "Scheduled Repayment" shall mean a Term Loan Scheduled
         Repayment.

                  "SEC" shall have the meaning provided in Section 9.01(h).

                  "Section 5.04(b)(ii) Certificate" shall have the meaning
         provided in Section 5.04(b)(ii).

                  "Secured Creditors" shall have the meaning assigned that term
         in the respective Security Documents.

                  "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations promulgated thereunder.

                  "Securities Exchange Act" shall mean the Securities Exchange
         Act of 1934, as amended, and the rules and regulations promulgated
         thereunder.

                  "Security Agreement" shall have the meaning provided in
         Section 6.10.

                  "Security Agreement Collateral" shall mean all "Collateral" as
         defined in the Security Agreement.

                  "Security Document" shall mean and include each of the
         Security Agreement, the Pledge Agreement, each Mortgage and, after the
         execution and delivery thereof, each Additional Security Document.

                  "Senior Leverage Ratio" - see definition of "Consolidated
         Senior Leverage Ratio".

                  "Senior Subordinated Note Documents" shall mean the Senior
         Subordinated Note Indenture, the Senior Subordinated Notes and each
         other document or agreement relating to the issuance of the Senior
         Subordinated Notes.

                                      -23-


                  "Senior Subordinated Note Indenture" shall mean the Indenture,
         dated as of June 18, 1998, by and between the Borrower and State Street
         Bank and Trust Company of California, N.A., as trustee.

                  "Senior Subordinated Notes" shall mean the Borrower's 9-1/2%
         Senior Subordinated Notes due 2008.

                  "Shareholders' Agreements" shall have the meaning provided in
         Section 6.05.

                  "Special Collateral Account" shall mean a Deposit Account (as
         defined in the Security Agreement) or Securities Account (as defined in
         the Security Agreement) of the Borrower that meets all of the following
         criteria (i) the account shall be maintained by the Borrower with the
         Collateral Agent, (ii) such account shall have been funded with
         proceeds of the Term Loans hereunder in an amount that is sufficient
         for compliance with the Consolidated Total Leverage Ratio, (iii) the
         Collateral Agent shall have a first perfected security interest in such
         account, including all investments therof and all earnings thereon, and
         (iv) the account is subject to a Control Agreement (as defined in the
         Security Agreement) in form and substance satisfactory to the
         Collateral Agent duly executed by the Borrower.

                  "Start Date" shall mean, with respect to any Margin Reduction
         Period, the first day of such Margin Reduction Period.

                  "Stated Amount" of each Letter of Credit shall mean, at any
         time, the maximum amount available to be drawn thereunder (in each case
         determined without regard to whether any conditions to drawing could
         then be met).

                  "Subordinated Debt" shall mean (i) Indebtedness under the
         Senior Subordinated Notes, and (ii) all other unsecured Indebtedness of
         the Borrower which has repayment terms and subordination provisions in
         form and substance acceptable to the Required Lenders.

                  "Subsidiaries Guaranty" shall have the meaning provided in
         Section 6.13.

                  "Subsidiary" shall mean, as to any Person, (i) any corporation
         more than 50% of whose stock of any class or classes having by the
         terms thereof ordinary voting power to elect a majority of the
         directors of such corporation (irrespective of whether or not at the
         time stock of any class or classes of such corporation shall have or
         might have voting power by reason of the happening of any contingency)
         is at the time owned by such Person and/or one or more Subsidiaries of
         such Person and (ii) any partnership, limited liability company,
         association, joint venture or other entity in which such Person and/or
         one or more Subsidiaries of such Person has more than a 50% equity
         interest at the time.

                                      -24-


                  "Subsidiary Guarantor" shall mean each Domestic Subsidiary of
         the Borrower (other than an Inactive Subsidiary) and, to the extent
         required by Section 9.13, each Foreign Subsidiary of the Borrower.

                  "Swingline Expiry Date" shall mean that date which is five
         Business Days prior to the Revolving Loan Maturity Date.

                  "Swingline Lender" shall mean Bank of America.

                  "Swingline Loan" shall have the meaning provided in Section
         2.01(d).

                  "Swingline Note" shall have the meaning provided in Section
         2.05(a).

                  "Syndication Date" shall mean that date upon which the
         Administrative Agent determines (and notifies the Borrower) that the
         primary syndication (and resultant addition of Persons as Lenders
         pursuant to Section 13.04(b)) has been completed.

                  "Taxes" shall have the meaning provided in Section 5.04(a).

                  "Term Loan" shall have the meaning provided in Section 2.01.

                  "Term Loan Commitment" shall mean, for each Lender, the amount
         set forth opposite such Lender's name on Schedule I directly below the
         column entitled Term Loan Commitment," as the same may be (x)
         terminated pursuant to Sections 4.03 and/or 11 or (y) adjusted from
         time to time as a result of assignments to or from such Lender pursuant
         to Sections 2.13 and/or 13.04(b)

                  "Term Loan Maturity Date" shall mean April 30, 2007.

                  "Term Loan Percentage" shall mean, at any time, a fraction
         (expressed as a percentage) the numerator of which is equal to the
         aggregate principal amount of all Term Loans outstanding at such time
         and the denominator of which is equal to the aggregate principal amount
         of all Term Loans outstanding at such time.

                  "Term Loan Scheduled Repayment" shall have the meaning
         provided in Section 5.02(b).

                  "Term Note" shall have the meaning provided in Section
         2.05(a).

                  "Test Date" shall mean, with respect to any Start Date, the
         last day of the most recent fiscal quarter of the Borrower ended
         immediately prior to such Start Date.

                  "Test Period" shall mean each period of four consecutive
         fiscal quarters of the Borrower then last ended (in each case taken as
         one accounting period).

                                      -25-


                  "Total Acquisition Amount" shall have the meaning provided in
         Section 9.15(a)(iv).

                  "Total Commitment" shall mean, at any time, the sum of the
         Commitments of each of the Lenders.

                  "Total Consideration" shall mean the aggregate consideration
         for any proposed Permitted Acquisition, including, without limitation,
         (I) the aggregate principal amount of any Indebtedness assumed,
         incurred or issued in connection therewith, (II) the fair market value
         (as determined in good faith by the Board of Directors of the Borrower)
         of any common stock or Qualified Preferred Stock of the Borrower issued
         as part of the purchase price therefor (provided that no Default or
         Event of Default under Section 11.10 would result therefrom), and (III)
         the present value of any aggregate amount paid and to be paid pursuant
         to any earn-out, non-compete or deferred compensation or purchase price
         adjustments.

                  "Total Leverage Ratio" - see definition of "Consolidated Total
         Leverage Ratio".

                  "Total Revolving Loan Commitment" shall mean, at any time, the
         sum of the Revolving Loan Commitments of each of the Lenders.

                  "Total Unutilized Revolving Loan Commitment" shall mean, at
         any time, an amount equal to the remainder of (x) the Total Revolving
         Loan Commitment then in effect less (y) the sum of the aggregate
         principal amount of all Revolving Loans and Swingline Loans then
         outstanding plus the then aggregate amount of all Letter of Credit
         Outstandings.

                  "Tranche" shall mean the respective facility and commitments
         utilized in making Loans hereunder, with there being three separate
         Tranches, i.e., Term Loans, Revolving Loans and Swingline Loans.

                  "Type" shall mean the type of Loan determined with regard to
         the interest option applicable thereto, i.e., whether a Base Rate Loan
         or a Eurodollar Loan.

                  "UCC" shall mean the Uniform Commercial Code as from time to
         time in effect in the relevant jurisdiction.

                  "Unfunded Current Liability" of any Plan shall mean the
         amount, if any, by which the actuarial present value of the accumulated
         plan benefits under the Plan determined on a plan termination basis in
         accordance with actuarial assumptions at such time consistent with
         those prescribed by the PBGC for purposes of Section 4044 of ERISA,
         exceeds the market value of all plan assets

                                      -26-


         allocable to such liabilities under Title IV of ERISA (excluding any
         accrued but unpaid contribution).

                  "United States" and "U.S." shall each mean the United States
         of America.

                  "Unpaid Drawing" shall have the meaning provided for in
         Section 3.05(a).

                  "Unutilized Revolving Loan Commitment" shall mean, with
         respect to any Lender at any time, such Lender's Revolving Loan
         Commitment at such time less the sum of (i) the aggregate outstanding
         principal amount of all Revolving Loans made by such Lender at such
         time and (ii) such Lender's RL Percentage of the Letter of Credit
         Outstandings at such time.

                  "Wholly-Owned Domestic Subsidiary" shall mean each Domestic
         Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of
         the Borrower.

                  "Wholly-Owned Foreign Subsidiary" shall mean each Foreign
         Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of
         the Borrower.

                  "Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
         any corporation 100% of whose capital stock (other than director's
         qualifying shares) is at the time owned by such Person and/or one or
         more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
         limited liability company, association, joint venture or other entity
         in which such Person and/or one or more Wholly-Owned Subsidiaries of
         such Person has a 100% equity interest at such time.

                                   SECTION 2

                           AMOUNT AND TERMS OF CREDIT

         2.01. The Commitments.

         (a) [Intentionally omitted.]

         (b) Term Loans. Subject to and upon the terms and conditions set forth
herein, each Lender with a Term Loan Commitment severally agrees to make a term
loan or term loans (each a Term Loan" and, collectively, the Term Loans") to the
Borrower, which Term Loans:

                  (i) only may be incurred on the Initial Borrowing Date,

                  (ii) shall, at the option of the Borrower, be incurred and
         maintained as, and/or converted into, Base Rate Loans or Eurodollar
         Loans, provided that, (A) except as otherwise specifically provided in
         Section 2.10(b), all Term Loans comprising the same Borrowing shall at
         all times be of the same Type and (B) unless the Administrative Agent
         has determined that the Syndication Date has

                                      -27-


         occurred (at which time this clause (B) shall no longer be applicable),
         (x) on or prior to June 5, 2003 all Term Loans shall be incurred and
         maintained as Base Rate Loans and (y) thereafter, no more than three
         Borrowings of Term Loans to be maintained as Eurodollar Loans may be
         incurred prior to the 28th day after the Initial Borrowing Date, and

                  (iii) shall be made by each such Lender in that aggregate
         principal amount which does not exceed the Term Loan Commitment of such
         Lender on the Initial Borrowing Date (before giving effect to the
         termination thereof or such date pursuant to Section 4.03(c)). Once
         repaid, Term Loans incurred hereunder may not be reborrowed.

         (c) Revolving Loans. Subject to and upon the terms and conditions set
forth herein, each Lender with a Revolving Loan Commitment severally agrees to
make, at any time and from time to time on or after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, a revolving loan or revolving
loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans:

                  (i) shall, at the option of the Borrower, be incurred and
         maintained as, and/or converted into, Base Rate Loans or Eurodollar
         Loans, provided that, (A) except as otherwise specifically provided in
         Section 2.10(b), all Revolving Loans comprising the same Borrowing
         shall at all times be of the same Type and (B) unless the
         Administrative Agent has determined that the Syndication Date has
         occurred (at which time this clause (B) shall no longer be applicable),
         (x) on or prior to June 5, 2003, all Revolving Loans shall be incurred
         and maintained as Base Rate Loans and (y) thereafter, no more than
         three Borrowings of Revolving Loans to be maintained as Eurodollar
         Loans may be incurred prior to the 28th day after the Initial Borrowing
         Date (each of which Borrowings of Eurodollar Loans (A) may only have
         the same Interest Period as is then permitted for a Borrowing of Term
         Loans that are maintained as Eurodollar Loans and (B) shall begin and
         end on the same day as a Borrowing of Term Loans that are maintained as
         Eurodollar Loans),

                  (ii) may be repaid and reborrowed in accordance with the
         provisions hereof,

                  (iii) shall not exceed for any such Lender at any time
         outstanding that aggregate principal amount which, when added to the
         product of (x) such Lender's RL Percentage and (y) the sum of (I) the
         aggregate amount of all Letter of Credit Outstandings (exclusive of
         Unpaid Drawings which are repaid with the proceeds of, and
         simultaneously with the incurrence of, the respective incurrence of
         Revolving Loans) at such time and (II) the aggregate principal amount
         of all Swingline Loans (exclusive of Swingline Loans which are repaid
         with the proceeds of, and simultaneously with the incurrence of, the
         respective incurrence of Revolving Loans) then outstanding, equals the
         Revolving Loan Commitment of such Lender at such time, and

                                      -28-


                  (iv) shall not exceed for all such Lenders at any time
         outstanding that aggregate principal amount which, when added to the
         sum of (I) the aggregate amount of all Letter of Credit Outstandings
         (exclusive of Unpaid Drawings which are repaid with the proceeds of,
         and simultaneously with the incurrence of, the respective incurrence of
         Revolving Loans) at such time and (II) the aggregate principal amount
         of all Swingline Loans (exclusive of Swingline Loans which are repaid
         with the proceeds of, and simultaneously with the incurrence of, the
         respective incurrence of Revolving Loans) then outstanding, equals the
         Total Revolving Loan Commitment at such time.

         (d) Swingline Loans. Subject to and upon the terms and conditions set
forth herein, the Swingline Lender agrees to make, at any time and from time to
time on or after the Initial Borrowing Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (each a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrower, which Swingline Loans:

                  (i) shall be made and maintained as Base Rate Loans,

                  (ii) may be repaid and reborrowed in accordance with the
         provisions hereof,

                  (iii) shall not exceed in aggregate principal amount at any
         time outstanding, when combined with the aggregate principal amount of
         all Revolving Loans then outstanding and the aggregate amount of all
         Letter of Credit Outstandings at such time, an amount equal to the
         Total Revolving Loan Commitment at such time, and

                  (iv) shall not exceed in aggregate principal amount at any
         time outstanding the Maximum Swingline Amount.

Notwithstanding anything to the contrary contained in this Section 2.01(d), (i)
the Swingline Lender shall not be obligated to make any Swingline Loans at a
time when a Lender Default exists unless the Swingline Lender has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Lender's risk with respect to the Defaulting Lender's or Lenders' participation
in such Swingline Loans, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the outstanding Swingline Loans and (ii)
the Swingline Lender shall not make any Swingline Loan after it has received
written notice from the Borrower or the Required Lenders stating that a Default
or an Event of Default exists and is continuing until such time as the Swingline
Lender shall have received written notice (A) of rescission of all such notices
from the party or parties originally delivering such notice or notices or (B) of
the waiver of such Default or Event of Default by the Required Lenders.

         (e) Refunding of Swingline Loans. On any Business Day, the Swingline
Lender may, in its sole discretion, give notice to the RL Lenders that the
Swingline Lender's outstanding Swingline Loans shall be funded with one or more
Borrowings of Revolving Loans (provided that such notice shall be deemed to have
been automatically given upon the occurrence of a Default or an Event of Default
under Section 11.05 or upon the exercise of any of the remedies

                                      -29-


provided in the last paragraph of Section 11), in which case one or more
Borrowings of Revolving Loans constituting Base Rate Loans (each such Borrowing,
a "Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all RL Lenders pro rata based on each such RL Lender's RL Percentage
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 11) and the proceeds
thereof shall be applied directly by the Swingline Lender to repay the Swingline
Lender for such outstanding Swingline Loans. Each RL Lender hereby irrevocably
agrees to make Revolving Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by the Swingline Lender
notwithstanding

                  (i) the amount of the Mandatory Borrowing may not comply with
         the Minimum Borrowing Amount otherwise required hereunder,

                  (ii) whether any conditions specified in Section 7 are then
         satisfied,

                  (iii) whether a Default or an Event of Default then exists,

                  (iv) the date of such Mandatory Borrowing, and

                  (v) the amount of the Total Revolving Loan Commitment at such
         time.

In the event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each RL Lender hereby agrees that it shall forthwith purchase
(as of the date the Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date and
prior to such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause the RL Lenders to
share in such Swingline Loans ratably based upon their respective RL Percentages
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 11), provided that (x) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing RL Lender shall be required to pay the Swingline
Lender interest on the principal amount of participation purchased for each day
from and including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the overnight Federal Funds Rate for the first three days and at the rate
otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder
for each day thereafter.

         2.02. Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than ten
Borrowings of Eurodollar Loans in the aggregate.

                                      -30-


         2.03. Notice of Borrowing.

         (a) Whenever the Borrower desires to incur (x) Eurodollar Loans
hereunder, the Borrower shall give the Administrative Agent at the Notice Office
at least three Business Days prior notice of each Eurodollar Loan to be incurred
hereunder and (y) Base Rate Loans hereunder (excluding Swingline Loans and
Revolving Loans made pursuant to a Mandatory Borrowing), the Borrower shall give
the Administrative Agent at the Notice Office at least one Business Day's prior
notice of each Base Rate Loan to be incurred hereunder, provided that (in each
case) any such notice shall be deemed to have been given on a certain day only
if given before 10:00 A.M. (Chicago time) on such day. Each such notice (each a
"Notice of Borrowing"), except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall be given by the Borrower in writing, or by
telephone promptly confirmed in writing, in the form of Exhibit A, appropriately
completed to specify the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), whether the Loans being incurred pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans and whether the Loans being incurred
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or,
to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans,
the initial Interest Period to be applicable thereto. The Administrative Agent
shall promptly give each Lender which is required to make Loans of the Tranche
specified in the respective Notice of Borrowing, notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.

         (b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Lender no later than 12:00 Noon
(Chicago time) on the date that a Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed in writing of each Swingline Loan
to be incurred hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be incurred pursuant to
such Borrowing.

         (ii) Mandatory Borrowings shall be made upon the notice specified in
Section 2.01(e), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 2.01(e).

         (c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Lender, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or the
Swingline Lender, as the case may be, in good faith to be from the Chairman of
the Board, the President, the Chief Financial Officer, the Treasurer or any
Assistant Treasurer of the Borrower, or from any other authorized officer of the
Borrower designated in writing by the Borrower to the Administrative Agent as
being authorized to give such notices, prior to receipt of written confirmation.
In each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's or Swingline Lender's record of the terms of such
telephonic notice of such Borrowing or prepayment of Loans, as the case may be,
absent manifest error.

                                      -31-


         2.04. Disbursement of Funds. No later than 11:00 A.M. (Chicago time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, no later than 2:00 P.M. (Chicago time) on the date specified pursuant to
Section 2.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
12:00 Noon (Chicago time) on the date specified in Section 2.01(e)), each Lender
with a Commitment of the respective Tranche will make available its pro rata
portion (determined in accordance with Section 2.07) of each such Borrowing
requested to be made on such date (or in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof). All such amounts
will be made available in Dollars and in immediately available funds at the
Payment Office, and the Administrative Agent will, except in the case of
Revolving Loans made pursuant to a Mandatory Borrowing, make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Lenders. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date of Borrowing
and the Administrative Agent may (but shall not be obligated to), in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover on demand from
such Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 2.08. Nothing in this Section 2.04 shall be deemed to relieve any
Lender from its obligation to make Loans hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any failure by
such Lender to make Loans hereunder.

         2.05. Notes.

         (a) The Borrower's obligation to pay the principal of, and interest on,
the Loans made by each Lender shall be evidenced in the Register maintained by
the Administrative Agent pursuant to Section 13.15 and shall, if requested by
such Lender, also be evidenced (i) if Term Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-1,
with blanks appropriately completed in conformity herewith (each a " Term Note"
and, collectively, the Term Notes"), (ii) if Revolving Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-2, with blanks appropriately completed in conformity herewith (each a
"Revolving Note" and, collectively, the "Revolving Notes"), and (iii) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-3, with blanks appropriately
completed in conformity herewith (the "Swingline Note").

                                      -32-


         (b) The Term Note issued to each Lender that has a Term Loan Commitment
or outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable
to such Lender or its registered assigns and be dated the Initial Borrowing Date
(or, if issued after the Initial Borrowing Date, be dated the date of issuance
thereof), (iii) be in a stated principal amount equal to the Term Loans made by
such Lender on the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be in a stated principal amount equal to the outstanding
principal amount of Term Loans of such Lender at such time) and be payable in
the outstanding principal amount of Term Loans evidenced thereby, (iv) mature on
the Term Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 2.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 5.01, and mandatory repayment as provided in Section
5.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.

         (c) [Intentionally omitted.]

         (d) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be payable to such Lender or its registered assigns and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance thereof), (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Lender (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Lender at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 2.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 5.01, and mandatory repayment as provided in Section
5.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.

         (e) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Lender or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 2.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 5.01, and mandatory repayment as provided in Section 5.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

         (f) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.

         2.06. Conversions. The Borrower shall have the option to convert on any
Business Day occurring on or after the earlier of (x) June 5, 2003 and (y) the
Syndication Date, all or a portion equal to at least the Minimum Borrowing
Amount of the outstanding principal amount of Loans

                                      -33-


(other than Swingline Loans which may not be converted pursuant to this Section
2.06) made pursuant to one or more Borrowings (so long as of the same Tranche)
of one or more Types of Loans into a Borrowing (of the same Tranche) of another
Type of Loan, provided that,

                  (i) except as otherwise provided in Section 2.10(b),
         Eurodollar Loans may be converted into Base Rate Loans only on the last
         day of an Interest Period applicable to the Loans being converted and
         no such partial conversion of Eurodollar Loans shall reduce the
         outstanding principal amount of such Eurodollar Loans made pursuant to
         a single Borrowing to less than the Minimum Borrowing Amount applicable
         thereto,

                  (ii) unless the Required Lenders otherwise agree, Base Rate
         Loans may only be converted into Eurodollar Loans if no Default or
         Event of Default is in existence on the date of the conversion,

                  (iii) unless the Administrative Agent has determined that the
         Syndication Date has occurred (at which time this clause (iii) shall no
         longer be applicable), prior to the 28th day after the Initial
         Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans
         may only be made if any such conversion is effective on the first day
         of the first, second or third Interest Period referred to in clause (B)
         of the proviso in each of Sections 2.01(b)(ii) and 2.01(c)(i) and so
         long as such conversion does not result in a greater number of
         Borrowings of Eurodollar Loans prior to the 28th day after the Initial
         Borrowing Date as are permitted under such Sections, and

                  (iv) no conversion pursuant to this Section 2.06 shall result
         in a greater number of Borrowings of Eurodollar Loans than is permitted
         under Section 2.02.

Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at the Notice Office prior to 10:00 A.M. (Chicago time) at
least three Business Days prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing or Borrowings pursuant to
which such Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Lender prompt notice of any such proposed conversion affecting
any of its Loans. Upon any such conversion the proceeds thereof will be deemed
to be applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.

         2.07. Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be incurred from the Lenders pro rata on the
basis of their Term Loan Commitments, or Revolving Loan Commitments, as the case
may be. It is understood that no Lender shall be responsible for any default by
any other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.

         2.08. Interest.

         (a) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the date of Borrowing thereof until
the earlier of (i) the maturity thereof (whether by acceleration or otherwise)
and (ii) the conversion of such Base Rate Loan to a

                                      -34-


Eurodollar Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per
annum which shall be equal to the sum of the Applicable Margin plus the Base
Rate each as in effect from time to time.

         (b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 2.06, 2.09 or 2.10, as applicable, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the Applicable Margin plus the Eurodollar Rate for such Interest Period.

         (c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall, in each case, bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans of the respective Tranche from time to
time, and all other overdue amounts payable hereunder or under any other Credit
Document shall bear interest at a rate per annum equal to the rate which is 2%
in excess of the rate applicable to Revolving Loans maintained as Base Rate
Loans from time to time. Interest which accrues under this Section 2.08(c) shall
be payable on demand.

         (d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period, and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand; provided,
however, that in the case of Base Rate Loans, interest shall not be payable
pursuant to preceding clause (iii) at the time of any repayment or prepayment
thereof (but shall otherwise be payable as provided in preceding clause (i))
unless the respective repayment or prepayment is made either in conjunction with
a permanent reduction of the Total Revolving Loan Commitment or with a repayment
or prepayment in full of all outstanding Loans of the respective Tranche.

         (e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the Borrower and the
Lenders thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.

         2.09. Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or prior to 10:00 A.M. (Chicago time) on the third Business Day prior
to the expiration of an Interest Period applicable to such Eurodollar Loan (in
the case of any subsequent Interest Period), the Borrower shall have the right
to elect, by giving the Administrative Agent notice thereof, the interest period
(each an "Interest Period") applicable to such Eurodollar Loan, which Interest
Period shall, at the option of the Borrower (but otherwise subject to clause (B)
of the proviso to Sections 2.01(b)(ii) and 2.01(c)(i) and to clause (iii) of the
proviso to Section 2.06), be a one, two, three or six month period and, if prior

                                      -35-


to the earlier of the Syndication Date and June 5, 2003, a 7-day period,
provided that (in each case):

                  (i) all Eurodollar Loans comprising a Borrowing shall at all
         times have the same Interest Period;

                  (ii) the initial Interest Period for any Eurodollar Loan shall
         commence on the date of Borrowing of such Eurodollar Loan (including
         the date of any conversion thereto from a Base Rate Loan) and each
         Interest Period occurring thereafter in respect of such Eurodollar Loan
         shall commence on the day on which the next preceding Interest Period
         applicable thereto expires;

                  (iii) if any Interest Period for a Eurodollar Loan begins on a
         day for which there is no numerically corresponding day in the calendar
         month at the end of such Interest Period, such Interest Period shall
         end on the last Business Day of such calendar month;

                  (iv) if any Interest Period for a Eurodollar Loan would
         otherwise expire on a day which is not a Business Day, such Interest
         Period shall expire on the next succeeding Business Day; provided,
         however, that if any Interest Period for a Eurodollar Loan would
         otherwise expire on a day which is not a Business Day but is a day of
         the month after which no further Business Day occurs in such month,
         such Interest Period shall expire on the next preceding Business Day;

                  (v) unless the Required Lenders otherwise agree, no Interest
         Period may be selected at any time when a Default or an Event of
         Default is then in existence;

                  (vi) no Interest Period in respect of any Borrowing of any
         Tranche of Loans shall be selected which extends beyond the respective
         Maturity Date for such Tranche of Loans; and

                  (vii) no Interest Period in respect of any Borrowing of Term
         Loans shall be selected which extends beyond any date upon which a
         mandatory repayment of Term Loans will be required to be made under
         Section 5.02(b), as the case may be, if the aggregate principal amount
         of Term Loans which have Interest Periods which will expire after such
         date will be in excess of the aggregate principal amount of Term Loans
         then outstanding less the aggregate amount of such required repayment.

         If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.

         2.10. Increased Costs, Illegality, etc.

                                      -36-


         (a) In the event that any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto but, with respect to clause (i) below, may be made only
by the Administrative Agent):

                  (i) on any Interest Determination Date that, by reason of any
         changes arising after the date of this Agreement affecting the
         interbank Eurodollar market, adequate and fair means do not exist for
         ascertaining the applicable interest rate on the basis provided for in
         the definition of Eurodollar Rate; or

                  (ii) at any time, that such Lender shall incur increased costs
         or reductions in the amounts received or receivable hereunder with
         respect to any Eurodollar Loan because of (x) any change since the
         Original Effective Date in any applicable law or governmental rule,
         regulation, order, guideline or request (whether or not having the
         force of law) or in the interpretation or administration thereof and
         including the introduction of any new law or governmental rule,
         regulation, order, guideline or request, such as, for example, but not
         limited to: (A) a change in the basis of taxation of payment to any
         Lender of the principal of or interest on the Loans or the Notes or any
         other amounts payable hereunder (except for changes in the rate of tax
         on, or determined by reference to, the net income or profits of such
         Lender pursuant to the laws of the jurisdiction in which it is
         organized or in which its principal office or applicable lending office
         is located or any subdivision thereof or therein) or (B) a change in
         official reserve requirements, but, in all events, excluding reserves
         required under Regulation D to the extent included in the computation
         of the Eurodollar Rate and/or (y) other circumstances arising since the
         Original Effective Date affecting such Lender, the interbank Eurodollar
         market or the position of such Lender in such market; or

                  (iii) at any time, that the making or continuance of any
         Eurodollar Loan has been made (x) unlawful by any law or governmental
         rule, regulation or order, (y) impossible by compliance by any Lender
         in good faith with any governmental request (whether or not having
         force of law) or (z) impracticable as a result of a contingency
         occurring after the Original Effective Date which materially and
         adversely affects the interbank Eurodollar market;

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall, subject
to Section 2.14, pay to such Lender, upon such Lender's written request
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as shall be required to

                                      -37-


compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing in reasonable detail the basis for the calculation
thereof, submitted to the Borrower by such Lender shall, absent manifest error,
be final and conclusive and binding on all the parties hereto) and (z) in the
case of clause (iii) above, the Borrower shall take one of the actions specified
in Section 2.10(b) as promptly as possible and, in any event, within the time
period required by law.

         (b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 2.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 2.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Lender or the
Administrative Agent pursuant to Section 2.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days
written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Lender is affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 2.10(b).

         (c) If any Lender determines that after the Original Effective Date the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by the NAIC or any governmental authority, central bank
or comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitments
hereunder or its obligations hereunder, then the Borrower shall, subject to
Section 2.14, pay to such Lender, upon its written demand therefor, such
additional amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of capital. In determining such additional amounts,
each Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided that such Lender's
determination of compensation owing under this Section 2.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 2.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts.

         2.11. Compensation. The Borrower shall compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to

                                      -38-


Section 2.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 5.01, Section 5.02 or as a result of an acceleration of the Loans
pursuant to Section 11) or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement or any Note held by such
Lender or (y) any election made pursuant to Section 2.10(b).

         2.12. Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or
(iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 2.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Sections
2.10, 2.06 and 5.04.

         2.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting
Lender or otherwise defaults in its obligations to make Loans, or (y) upon the
occurrence of an event giving rise to the operation of Section 2.10(a)(ii) or
(iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect to any Lender
which results in such Lender charging to the Borrower increased costs in excess
of those being generally charged by the other Lenders, the Borrower shall have
the right, if no Default or Event of Default then exists, to replace such Lender
(the "Replaced Lender") with one or more other Eligible Transferees, none of
whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") and each of whom shall be required to
be reasonably acceptable to the Administrative Agent, provided that:

                  (i) at the time of any replacement pursuant to this Section
         2.13, the Replacement Lender shall enter into one or more Assignment
         and Assumption Agreements pursuant to Section 13.04(b) (and with all
         fees payable pursuant to said Section 13.04(b) to be paid by the
         Replacement Lender) pursuant to which the Replacement Lender shall
         acquire all of the Commitments and outstanding Loans of, and in each
         case participations in Letters of Credit by, the Replaced Lender and,
         in connection therewith, shall pay to (x) the Replaced Lender in
         respect thereof an amount equal to the sum of (I) an amount equal to
         the principal of, and all accrued interest on, all outstanding Loans of
         the Replaced Lender, (II) an amount equal to all Unpaid Drawings that
         have been funded by (and not reimbursed to) such Replaced Lender,
         together with all then unpaid interest with respect thereto at such
         time, and (III) an amount equal to all accrued, but theretofore unpaid,
         Fees owing to the Replaced Lender pursuant to Section 4.01, (y) the
         Issuing Lender an amount equal to such Replaced Lender's RL Percentage
         of any Unpaid Drawing (which at such time remains an Unpaid Drawing) to
         the extent such amount was not theretofore funded by such Replaced
         Lender to the Issuing Lender and (z) the Swingline Lender an amount
         equal to such Replaced Lender's RL Percentage of any Mandatory
         Borrowing to the

                                      -39-


         extent such amount was not theretofore funded by such Replaced Lender
         to the Swingline Lender, and

                  (ii) all obligations of the Borrower due and owing to the
         Replaced Lender at such time (other than those specifically described
         in clause (i) above in respect of which the assignment purchase price
         has been, or is concurrently being, paid) shall be paid in full to such
         Replaced Lender concurrently with such replacement.

Upon the execution of the respective Assignment and Assumption Agreement, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to constitute a
Lender hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 2.10, 2.11, 3.06, 5.04, 12.06
and 13.01), which shall survive as to such Replaced Lender.

         2.14. Limitation on Additional Amounts. Notwithstanding anything to the
contrary contained in Section 2.10 or 3.06, unless a Lender gives notice to the
Borrower that the Borrower is obligated to pay any amount under Section 2.10 or
3.06 within 180 days after the later of (x) the date such Lender incurs the
respective increased costs or reduction in the rate of return or (y) the date
such Lender has actual knowledge of its incurrence of the respective increased
costs or reduction in the rate of return, such Lender shall only be entitled to
be compensated for such amount by the Borrower pursuant to Section 2.10 or 3.06
to the extent the respective increased costs or reduction in the rate of return
are incurred or suffered on or after the date which occurs 180 days prior to
such Lender giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to Section 2.10 or 3.06. This Section 2.14 shall
have no applicability to any Section of this Agreement other than Sections 2.10
and 3.06.

                                   SECTION 3

                                LETTERS OF CREDIT

         3.01. Letters of Credit.

         (a) Subject to and upon the terms and conditions set forth herein, the
Borrower may request that the Issuing Lender issue, at any time and from time to
time on and after the Initial Borrowing Date and prior to the 30th day prior to
the Revolving Loan Maturity Date, for the account of the Borrower and for the
benefit of (x) any holder (or any trustee, agent or other similar representative
for any such holders) of L/C Supportable Obligations of the Borrower or any of
its Subsidiaries, an irrevocable standby letter of credit, in a form customarily
used by the Issuing Lender or in such other form as has been approved by the
Issuing Lender, and (y) sellers of goods to the Borrower or any of its
Subsidiaries, an irrevocable trade letter of credit, in a form customarily used
by the Issuing Lender or in such other form as has been approved by the Issuing
Lender (each such letter of credit, a "Letter of Credit" and, collectively, the
"Letters of Credit"). All Letters of Credit shall be denominated in Dollars and
shall be issued on a sight basis only.

                                      -40-


         (b) Subject to and upon the terms and conditions set forth herein, the
Issuing Lender agrees that it will, at any time and from time to time on and
after the Initial Borrowing Date and prior to the 30th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit as are permitted to remain outstanding hereunder without giving rise to a
Default or an Event of Default, provided that the Issuing Lender shall be under
no obligation to issue any Letter of Credit of the types described above if at
the time of such issuance:

                  (i) any order, judgment or decree of any governmental
         authority or arbitrator shall purport by its terms to enjoin or
         restrain the Issuing Lender from issuing such Letter of Credit or any
         requirement of law applicable to the Issuing Lender or any request or
         directive (whether or not having the force of law) from any
         governmental authority with jurisdiction over the Issuing Lender shall
         prohibit, or request that the Issuing Lender refrain from, the issuance
         of letters of credit generally or such Letter of Credit in particular
         or shall impose upon the Issuing Lender with respect to such Letter of
         Credit any restriction or reserve or capital requirement (for which the
         Issuing Lender is not otherwise compensated hereunder) not in effect
         with respect to the Issuing Lender on the date hereof, or any
         unreimbursed loss, cost or expense which was not applicable or in
         effect with respect to the Issuing Lender as of the date hereof and
         which the Issuing Lender reasonably and in good faith deems material to
         it; or

                  (ii) the Issuing Lender shall have received from the Borrower
         or the Required Lenders prior to the issuance of such Letter of Credit,
         notice of the type described in the second sentence of Section 3.03(b).

         3.02. Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $10,000,000 or (y) when added to the sum of
(I) the aggregate principal amount of all Revolving Loans then outstanding and
(II) the aggregate principal amount of all Swingline Loans then outstanding, an
amount equal to the Total Revolving Loan Commitment at such time and (ii) each
Letter of Credit shall by its terms terminate on or before the earlier of (x)
(A) in the case of standby Letters of Credit, the date which occurs 12 months
after the date of the issuance thereof (although any such standby Letter of
Credit may be extendible for successive periods of up to 12 months, but, in each
case, not beyond the third Business Day prior to the Revolving Loan Maturity
Date, on terms acceptable to the Issuing Lender) and (B) in the case of trade
Letters of Credit, the date which occurs 180 days after the date of issuance
thereof, and (y) 30 days prior to the Revolving Loan Maturity Date.

         3.03. Letter of Credit Requests; Minimum Stated Amount.

         (a) Whenever the Borrower desires that a Letter of Credit be issued for
its account, the Borrower shall give the Administrative Agent and the Issuing
Lender at least five Business Days (or such shorter period as is acceptable to
the Issuing Lender) written notice thereof (including

                                      -41-


by way of facsimile). Each notice shall be in the form of Exhibit C,
appropriately completed (each a "Letter of Credit Request"). Further, in
conjunction with each Letter of Credit Request, Borrower shall submit an
application and agreement for the issuance or amendment of a Letter of Credit in
the form from time to time in use by the Issuing Lender.

         (b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
3.02. Unless the Issuing Lender has received notice from the Borrower or the
Required Lenders before it issues a Letter of Credit that one or more of the
conditions specified in Section 6 or 7 are not then satisfied, or that the
issuance of such Letter of Credit would violate Section 3.02, then the Issuing
Lender shall, subject to the terms and conditions of this Agreement, issue the
requested Letter of Credit for the account of the Borrower in accordance with
the Issuing Lender's usual and customary practices. Upon the issuance of or
modification or amendment to any standby Letter of Credit, the Issuing Lender
shall promptly notify the Administrative Agent and each Participant of such
issuance, modification or amendment as the case may be. Notwithstanding anything
to the contrary contained in this Agreement, in the event that a Lender Default
exists, the Issuing Lender shall not be required to issue any Letter of Credit
unless the Issuing Lender has entered into arrangements satisfactory to it and
the Borrower to eliminate the Issuing Lender's risk with respect to the
participation in Letters of Credit by the Defaulting Lender or Lenders,
including by cash collateralizing such Defaulting Lender's or Lenders' RL
Percentage of the Letter of Credit Outstandings.

         (c) The initial Stated Amount of each Letter of Credit shall not be
less than $50,000 or such lesser amount as is acceptable to the Issuing Lender.

         3.04. Letter of Credit Participations.

         (a) Immediately upon the issuance by the Issuing Lender of any Letter
of Credit, the Issuing Lender shall be deemed to have sold and transferred to
each RL Lender, other than the Issuing Lender (each such Lender, in its capacity
under this Section 3.04, a "Participant"), and each such Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Lender, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's RL Percentage, in such Letter
of Credit, each drawing or payment made thereunder and the obligations of the
Borrower under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments
or RL Percentages of the Lenders pursuant to Section 2.13 or 13.04(b), it is
hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings with respect thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 3.04 to reflect the new RL Percentages
of the assignor and assignee Lender, as the case may be.

         (b) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall not have an obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Lender under or in connection with
any Letter

                                      -42-


of Credit shall not create for the Issuing Lender any resulting liability to the
Borrower, any other Credit Party, any Lender or any other Person unless such
action is taken or omitted to be taken with gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).

         (c) In the event that the Issuing Lender makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Lender pursuant to Section 3.05(a), the Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 12:00 A.M. New York time on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the Issuing Lender in Dollars
such Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its RL Percentage of the amount of such payment available to the Issuing
Lender, such Participant agrees to pay to the Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans maintained as Base Rate Loans for each day thereafter. The
failure of any Participant to make available to the Issuing Lender its RL
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Issuing Lender
its RL Percentage of any payment under any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Issuing Lender such
other Participant's RL Percentage of any such payment.

         (d) Whenever the Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Lender shall pay to each such
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.

         (e) Upon the request of any Participant, the Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.

         (f) The obligations of the Participants to make payments to the Issuing
Lender with respect to Letters of Credit issued by it shall be irrevocable and
not subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:

                  (i) any lack of validity or enforceability of this Agreement
         or any of the other Credit Documents;

                                      -43-


                  (ii) the existence of any claim, setoff, defense or other
         right which the Borrower or any of its Subsidiaries may have at any
         time against a beneficiary named in a Letter of Credit, any transferee
         of any Letter of Credit (or any Person for whom any such transferee may
         be acting), the Administrative Agent, any Participant, or any other
         Person, whether in connection with this Agreement, any Letter of
         Credit, the transactions contemplated herein or any unrelated
         transactions (including any underlying transaction between the Borrower
         or any Subsidiary of the Borrower and the beneficiary named in any such
         Letter of Credit);

                  (iii) any draft, certificate or any other document presented
         under any Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect;

                  (iv) the surrender or impairment of any security for the
         performance or observance of any of the terms of any of the Credit
         Documents; or (v) the occurrence of any Default or Event of Default.

         (g) All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Restatement Effective Date shall be
subject to and governed by the terms and conditions hereof, it being understood
that on the Restatement Effective Date, each RL Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's RL Percentage, in each Existing Letter of Credit,
each drawing or payment made thereunder and the obligations of the Borrower
under this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto shall be deemed to have purchased a participation in the
Existing Letters of Credit.

         3.05. Agreement to Repay Letter of Credit Drawings.

         (a) The Borrower agrees to reimburse the Issuing Lender, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by the Issuing Lender under
any Letter of Credit (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), not later than one Business Day following receipt by the Borrower of
notice of such payment or disbursement (provided that no such notice shall be
required to be given if a Default or an Event of Default under Section 11.05
shall have occurred and be continuing, in which case the Unpaid Drawing shall be
due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by the Borrower)), with interest on the
amount so paid or disbursed by the Issuing Lender, to the extent not reimbursed
prior to 11:00 A.M. (Chicago time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date the
Issuing Lender was reimbursed by the Borrower therefor at a rate per annum equal
to the Base Rate in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans; provided, however, to the extent
such amounts are not reimbursed prior to 11:00 A.M. (New York time) on the third
Business Day following the receipt by the Borrower of notice of such payment or
disbursement or following the occurrence of a Default or an Event of Default
under Section 11.05, interest shall thereafter accrue on the amounts so paid or
disbursed by the

                                      -44-


Issuing Lender (and until reimbursed by the Borrower) at a rate per annum equal
to the Base Rate in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans plus 2%, with interest to be
payable on demand. The Issuing Lender shall give the Borrower prompt notice of
each Drawing under any Letter of Credit; provided that the failure to give any
such notice shall in no way affect, impair or diminish the Borrower's
obligations hereunder.

         (b) The obligations of the Borrower under this Section 3.05 to
reimburse the Issuing Lender with respect to drawings under Letters of Credit
(each a "Drawing") (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower or any Subsidiary
of the Borrower may have or have had against the beneficiary or any Lender
(including in its capacity as the Issuing Lender or as a Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
nonapplication or misapplication by the beneficiary of the proceeds of such
Drawing; provided, however, that the Borrower shall not be obligated to
reimburse the Issuing Lender for any wrongful payment made by the Issuing Lender
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Issuing Lender (as determined
by a court of competent jurisdiction in a final and non-appealable decision).

         3.06. Increased Costs. If at any time after the Original Effective
Date, the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by the NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by the Issuing Lender or any Participant
with any request or directive by the NAIC or by any such authority (whether or
not having the force of law), shall either

                  (i) impose, modify or make applicable any reserve, deposit,
         capital adequacy or similar requirement against letters of credit
         issued by the Issuing Lender or participated in by any Participant, or

                  (ii) impose on the Issuing Lender or any Participant any other
         conditions relating, directly or indirectly, to this Agreement or any
         Letter of Credit;

and the result of any of the foregoing is to increase the cost to the Issuing
Lender or any Participant of issuing, maintaining or participating in any Letter
of Credit, or reduce the amount of any sum received or receivable by the Issuing
Lender or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of the Issuing Lender or
such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to the Borrower by the Issuing Lender or any
Participant (a copy of which certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), the Borrower shall, subject to
Section 2.14, pay to the Issuing Lender or such Participant such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction in the amount receivable or reduction on the rate of

                                      -45-


return on its capital. The Issuing Lender or any Participant, upon determining
that any additional amounts will be payable pursuant to this Section 3.06, will
give prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Lender or such Participant
(a copy of which certificate shall be sent by the Issuing Lender or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate the Issuing Lender or such Participant. The certificate required to
be delivered pursuant to this Section 3.06 shall, absent manifest error, be
final and conclusive and binding on the Borrower.

                                   SECTION 4

                 COMMITMENT FEE; FEES; REDUCTIONS OF COMMITMENT.

         4.01. Fees.

         (a) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting RL Lender a commitment fee (the "Commitment
Fee") for the period from and including the Restatement Effective Date to but
excluding the Revolving Loan Maturity Date (or such earlier date on which the
Total Revolving Loan Commitment has been terminated) computed at a rate per
annum for each day equal to the Applicable Margin (i.e., the Commitment Fee Rate
as specified in the definition of Applicable Margin) on the daily average
Unutilized Revolving Loan Commitment of such Non-Defaulting Lender. Accrued
Commitment Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the date upon which the Total Revolving Loan Commitment is
terminated.

         (b) The Borrower agrees to pay to the Administrative Agent for
distribution to each RL Lender (based on each such RL Lender's respective RL
Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin then in
effect with respect to Revolving Loans maintained as Eurodollar Loans on the
daily Stated Amount of each such Letter of Credit. Accrued Letter of Credit Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
on the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.

         (c) The Borrower agrees to pay to the Issuing Lender, for its own
account, a fronting fee in respect of each Letter of Credit (the "Fronting Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to 1/8 of 1% on the available Stated Amount
of such Letter of Credit. Fronting Fees shall be due and payable quarterly in
arrears on the next Business Day following each Quarterly Payment Date and upon
the first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.

         (d) The Borrower agrees to pay to the Issuing Lender, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit, such amount as shall at the time of such event be the administrative
charge and the reasonable expenses which the Issuing

                                      -46-


Lender is generally imposing in connection with such occurrence with respect to
letters of credit. In addition the Borrower shall pay directly to the Issuing
Lender, for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, relating to letters
of credit as from time to time in effect. Such fees and charges are due and
payable on demand and are nonrefundable.

         (e) The Borrower agrees to pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Administrative Agent.

         (f) Any fees due and payable under the Existing Credit Agreement shall
not be affected by any amendment that is contained in this Agreement.

         4.02. Voluntary Termination of Unutilized Revolving Loan Commitments.

         (a) Upon at least one Business Day's prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, at any time or from time to time, without premium or penalty, to
terminate the Total Unutilized Revolving Loan Commitment in whole, or reduce it
in part, pursuant to this Section 4.02(a), in an integral multiple of $500,000
in the case of partial reductions to the Total Unutilized Revolving Loan
Commitment, provided that each such reduction shall apply proportionately to
permanently reduce the Revolving Loan Commitment of each RL Lender.

         (b) [Intentionally omitted.]

         4.03. Mandatory Reduction of Commitments.

         (a) [Intentionally omitted.]

         (b) In addition to any other mandatory commitment reductions pursuant
to this Section 4.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Lender) shall terminate in its entirety on the Initial
Borrowing Date (after giving effect to the incurrence of the Term Loans on such
date).

         (c) In addition to any other mandatory commitment reductions pursuant
to this Section 4.03, the Total Revolving Loan Commitment shall be reduced on
April 1, 2004 by a total of $5,000,000 and shall be reduced on April 1, 2005 by
a total of $5,000,000.

         (d) In addition to any other mandatory commitment reductions pursuant
to this Section 4.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Lender) shall terminate in its entirety on the earlier
of (i) the Revolving Loan Maturity Date and (ii) unless the Required Lenders
otherwise agree, the date on which a Change of Control occurs.

         (e) In addition to any other mandatory commitment reductions pursuant
to this Section 4.03, on each date after the Initial Borrowing Date upon which a
mandatory repayment of Term Loans pursuant to any of Sections 5.02(c) through
(g), inclusive, is required (and exceeds in amount the aggregate principal
amount of Term Loans then outstanding) or would be

                                      -47-


required if Term Loans were then outstanding, the Total Revolving Loan
Commitment shall be permanently reduced by the amount, if any, by which the
amount required to be applied pursuant to said Sections (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans then outstanding.

         (f) Each reduction and/or termination to the Total Term Loan
Commitment, and the Total Revolving Loan Commitment shall be applied to
proportionately reduce and/or terminate the Term Loan Commitment, the and the
Revolving Loan Commitment, as the case may be, of each Lender with such a
Commitment.

                                   SECTION 5

                          PREPAYMENTS; PAYMENTS; TAXES.

         5.01. Voluntary Prepayments.

         (a) The Borrower shall have the right to prepay the Loans, without
premium or penalty, in whole or in part at any time and from time to time on the
following terms and conditions:

                  (i) the Borrower shall give the Administrative Agent prior to
         11:00 A.M. (Chicago time) at the Notice Office (x) at least one
         Business Day's prior written notice (or telephonic notice promptly
         confirmed in writing) of its intent to prepay Base Rate Loans (or same
         day notice in the case of a prepayment of Swingline Loans) and (y) at
         least three Business Days prior written notice (or telephonic notice
         promptly confirmed in writing) of its intent to prepay Eurodollar
         Loans, which notice (in each case) shall specify whether Term Loans,
         Revolving Loans or Swingline Loans shall be prepaid, the amount of such
         prepayment and the Types of Loans to be prepaid and, in the case of
         Eurodollar Loans, the specific Borrowing or Borrowings pursuant to
         which made, and which notice the Administrative Agent shall, except in
         the case of Swingline Loans, promptly transmit to each of the Lenders;

                  (ii) (x) each partial prepayment of Term Loans pursuant to
         this Section 5.01(a) shall be in an aggregate principal amount of at
         least $500,000, (y) each partial prepayment of Revolving Loans pursuant
         to this Section 5.01(a) shall be in an aggregate principal amount of at
         least $250,000 and (z) each partial prepayment of Swingline Loans
         pursuant to this Section 5.01(a) shall be in an aggregate principal
         amount of at least $50,000, provided that if any partial prepayment of
         Eurodollar Loans made pursuant to any Borrowing shall reduce the
         outstanding principal amount of Eurodollar Loans made pursuant to such
         Borrowing to an amount less than the Minimum Borrowing Amount
         applicable thereto, then such Borrowing may not be continued as a
         Borrowing of Eurodollar Loans and any election of an Interest Period
         with respect thereto given by the Borrower shall have no force or
         effect;

                  (iii) each prepayment pursuant to this Section 5.01(a) in
         respect of any Loans made pursuant to a Borrowing shall be applied pro
         rata among such Loans,

                                      -48-


         provided that at the Borrower's election in connection with any
         prepayment of Revolving Loans pursuant to this Section 5.01(a), such
         prepayment shall not, so long as no Default or Event of Default then
         exists, be applied to any Revolving Loan of a Defaulting Lender; and

                  (iv) each prepayment of any Tranche of Term Loans pursuant to
         this Section 5.01(a) shall be applied to reduce the then remaining
         Scheduled Repayments of such Tranche of Term Loans in the inverse order
         of maturity.

         (b) [Intentionally omitted.]

         5.02. Mandatory Repayments and Commitment Reductions.

         (a) Obligations in Excess of Commitments. On any day on which the sum
of (I) the aggregate outstanding principal amount of all Revolving Loans (after
giving effect to all other repayments thereof on such date), (II) the aggregate
outstanding principal amount of all Swingline Loans (after giving effect to all
other repayments thereof on such date) and (III) the aggregate amount of all
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment at
such time, the Borrower shall prepay on such day the principal of Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment of such time, the Borrower shall pay
to the Administrative Agent at the Payment Office on such day an amount of cash
and/or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Letter of Credit Outstandings at such time), such cash
and/or Cash Equivalents to be held as security for all obligations of the
Borrower to the Issuing Lender and the Lenders hereunder in a cash collateral
account to be established by the Administrative Agent.

         (b) Term Loans. In addition to any other mandatory repayments pursuant
to this Section 5.02, on (each date set forth below,) the Borrower shall be
required to repay that principal amount of Term Loans, to the extent then
outstanding, as is set forth opposite each such date below (each such repayment,
as the same may be reduced as provided in Sections 5.01(a) and 5.02(h), a "Term
Loan Scheduled Repayment"):

                                      -49-




                         TERM LOAN
                 SCHEDULED REPAYMENT DATE                                          AMOUNT
- ---------------------------------------------------------                    ------------------
                                                                          
(i) the last Business Day of the calendar quarter ending                       (i) $  3,750,000
June 30, 2003, and the last Business Day of each calendar
quarter thereafter to and including the calendar quarter
ending March 31, 2005

(ii) the last Business Day of the calendar quarter ending
June 30, 2005, and the last Business Day of each calendar                     (ii) $  5,000,000
quarter  thereafter to and including the calendar quarter
ending March 31, 2007

(iii) On April 30, 2007                                                      (iii) $  30,000,00


         (c) Equity Issuance. In addition to any other mandatory repayments
pursuant to this Section 5.02, on each date on or after the Initial Borrowing
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any capital contribution or any sale or issuance of its equity
(other than cash proceeds received (i) from the issuance by the Borrower of
shares of its common stock (including as a result of the exercise of any options
with regard thereto), or options to purchase shares of its common stock, to
officers, directors and employees of the Borrower or any of its Subsidiaries in
an aggregate amount not to exceed $500,000 in any fiscal year of the Borrower or
(ii) from equity contributions to any Subsidiary of the Borrower to the extent
made by the Borrower or another Subsidiary of the Borrower), an amount equal to
50% of the Net Equity Proceeds of such capital contribution or sale or issuance
of equity shall be applied on such date as a mandatory repayment of principal of
outstanding Term Loans in accordance with the requirements of Sections 5.02(h)
and (i).

         (d) Debt Issuance. In addition to any other mandatory repayments
pursuant to this Section 5.02, on each date on or after the Initial Borrowing
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any incurrence by the Borrower or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 10.04 as such Section is in effect
on the Restatement Effective Date), an amount equal to 100% of the Net Debt
Proceeds of the respective incurrence of Indebtedness shall be applied on such
date as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Sections 5.02(h) and (i).

         (e) Asset Sales. In addition to any other mandatory repayments pursuant
to this Section 5.02, on each date on or after the Initial Borrowing Date upon
which the Borrower or any of its Subsidiaries receives any cash proceeds from
any Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom shall
be applied on such date as a mandatory repayment of principal of outstanding
Term Loans in accordance with the requirements of Sections 5.02(h) and (i);
provided that with respect to no more than $5,000,000 in the aggregate of cash
proceeds from

                                      -50-


Asset Sales in any fiscal year of the Borrower, the Net Sale Proceeds therefrom
shall not be required to be so applied on such date so long as no Default or
Event of Default then exists and the Borrower has delivered a certificate to the
Administrative Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase assets used or to be used in the business
permitted pursuant to Section 10.15 (including, without limitation (but only to
the extent permitted by Section 10.02), the purchase of the assets or 100% of
the capital stock of a Person engaged in such businesses) within 180 days
following the date of such Asset Sale (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such Net Sale Proceeds not required to be applied to the
repayment of outstanding Term Loans are not so reinvested within such 180-day
period (or such earlier date, if any, as the Borrower determines not to reinvest
the Net Sale Proceeds from such Asset Sale as set forth above), such remaining
portion shall be applied on the last day of such period (or such earlier date,
as the case may be) as a mandatory repayment of principal of outstanding Term
Loans as provided above in this Section 5.02(e) without regard to the preceding
proviso. Notwithstanding the foregoing, Net Sale Proceeds of up to $7,000,000
from the sale of the Borrower's property consisting of approximately 25.7 acres,
consisting of two parcels, located in Montebello, New York shall not be required
to be applied to a mandatory prepayment of Term Loans pursuant to this Section
5.02(e).

         (f) Excess Cash Flow. In addition to any other mandatory repayments
pursuant to this Section 5.02, on each Excess Cash Payment Date, an amount equal
to 50% of the Excess Cash Flow for the relevant Excess Cash Payment Period shall
be applied as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Sections 5.02(h) and (i); provided, however,
that no repayment shall be required pursuant to this Section 5.02(f) if on such
Excess Cash Payment Date no Default or Event of Default then exists and the
Consolidated Total Leverage Ratio at such time is less then 2.00:1.

         (g) Insurance Proceeds. In addition to any other mandatory repayments
pursuant to this Section 5.02, within 10 days following each date on or after
the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries
receives any cash proceeds from any Recovery Event (other than Recovery Events
in which the Net Insurance Proceeds therefrom do not exceed $100,000), an amount
equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be
applied on such date as a mandatory repayment of principal of outstanding Term
Loans in accordance with the requirements of Sections 5.02(h) and (i); provided
that so long as no Default or Event of Default then exists, such Net Insurance
Proceeds shall not be required to be so applied on such date to the extent that
the Borrower has delivered a certificate to the Administrative Agent on or prior
to such date stating that such Net Insurance Proceeds shall be used to replace
or restore any properties or assets in respect of which such Net Insurance
Proceeds were paid within 180 days following the date of the receipt of such Net
Insurance Proceeds (which certificate shall set forth the estimates of the Net
Insurance Proceeds to be so expended), and provided further, that (i) if the
amount of such Net Insurance Proceeds exceeds $2,500,000, then the entire amount
of such Net Insurance Proceeds (and not just the portion of such Net Insurance
Proceeds in excess of $2,500,000) shall be deposited with the Administrative
Agent pursuant to a cash collateral arrangement reasonably satisfactory to the
Administrative Agent whereby such proceeds shall be disbursed to the Borrower
from time to time as needed to pay actual costs incurred by it or its applicable
Subsidiary in connection with the replacement or restoration of the respective
properties or assets (pursuant to such certification requirements as

                                      -51-


may be reasonably required by the Administrative Agent, including certifications
to the effect that (x) no Default or Event of Default then exists and (y) the
Borrower or its applicable Subsidiary has actually incurred such costs (which
certification shall be accompanied by any paid invoices or invoices required to
be paid within 5 Business Days thereafter)), although at any time while an Event
of Default has occurred and is continuing, the Required Lenders may direct the
Administrative Agent (in which case the Administrative Agent shall, and is
hereby authorized by the Borrower to, follow said directions) to apply any or
all proceeds then on deposit in such collateral account to the repayment of
Obligations hereunder, and (ii) if all or any portion of such Net Insurance
Proceeds not required to be applied to the repayment of outstanding Term Loans
pursuant to the preceding proviso are not so used within 180 days after the date
of the receipt of such Net Insurance Proceeds (or such earlier date, if any, as
the Borrower determines not to reinvest the Net Insurance Proceeds relating to
such Recovery Event as set forth above), such remaining portion shall be applied
on the last day of such period (or such earlier date, as the case may be) as a
mandatory repayment of principal of outstanding Term Loans as provided above in
this Section 5.02(h) without regard to the preceding proviso.

         (h) Pro Rata Application of Mandatory Repayment. Each amount required
to be applied to the outstanding Term Loans pursuant to Sections 5.02(c), (d),
(e), (f) and (g) shall be applied to reduce the then remaining Scheduled
Repayments of the Term Loans in the inverse order of maturity.

         (i) Applications to Types of Loans. With respect to each repayment of
Loans required by this Section 5.02, the Borrower may designate the Types of
Loans of the respective Tranche which are to be repaid and, in the case of
Eurodollar Loans, the specific Borrowing or Borrowings of the respective Tranche
pursuant to which made, provided that: (i) repayments of Eurodollar Loans
pursuant to this Section 5.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all Base
Rate Loans of the respective Tranche have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto, such Borrowing shall
be converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion.

         (j) [Intentionally omitted.]

         (k) Revolving Loans. Upon the payment in full of all Term Loans, 50% of
all Net Equity Proceeds, 100% of all Net Debt Proceeds and 100% of all cash
proceeds from any Asset Sale (except as provided in Section 5.02(e)), which in
each case before repayment of the Term, Loans would be required to be applied to
the repayment thereof, shall be forthwith applied to the mandatory repayment of
the Revolving Loans. Concurrent with such application, the Total Revolving Loan
Commitment shall be reduced by a like amount.

                                      -52-


         (l) Maturity Date; Change of Control. Notwithstanding anything to the
contrary contained in this Agreement or in any other Credit Document, (i) all
then outstanding Loans of any Tranche shall be repaid in full on the respective
Maturity Date for such Tranche of Loans and (ii) unless the Required Lenders
otherwise agree, all then outstanding Loans shall be repaid in full on the date
on which a Change of Control occurs.

         5.03. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Lender or Lenders
entitled thereto not later than 11:00 A.M. (Chicago time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office. Whenever any payment to be made hereunder or under any Note shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.

         5.04. Net Payments.

         (a) All payments made by the Borrower hereunder or under any Note will
be made without setoff, counterclaim or other defense. Except as provided in
Section 5.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or profits of a Lender pursuant to the laws of the jurisdiction
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender.

                                      -53-


         (b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Restatement Effective Date or, in the case of a Lender that is an assignee
or transferee of an interest under this Agreement pursuant to Section 2.13 or
13.04(b) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or successor forms)
certifying to such Lender's entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) (or any successor forms) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D (any
such certificate, a "Section 5.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (with
respect to the portfolio interest exemption) (or successor form) certifying to
such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that from
time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, such Lender will deliver to the Borrower and
the Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of any income tax treaty), Form W-8BEN (with respect to the portfolio interest
exemption) and a Section 5.04(b)(ii) Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
such Lender shall immediately notify the Borrower and the Administrative Agent
of its inability to deliver any such Form or Certificate, in which case such
Lender shall not be required to deliver any such Form or Certificate pursuant to
this Section 5.04(b).

         (c) Notwithstanding anything to the contrary contained in Section
5.04(a), but subject to Sections 5.04(b) and 13.04(b), (i) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (ii) the Borrower shall not be
obligated pursuant to Section 5.04(a) to gross-up payments to be made to a
Lender in respect of income or similar taxes imposed by the United States if (I)
such Lender has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 5.04(b) or (II)
in the case of a payment, other than interest, to a Lender described in Section
5.04(b) (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes.

                                      -54-


         (d) Subject to Section 5.04 and except as set forth in Section
13.04(b), the Borrower further agrees to pay any additional amounts and to
indemnify each Lender in the manner set forth in Section 5.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes that are effective after the
Restatement Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes.

                                   SECTION 6

                      CONDITIONS PRECEDENT TO CREDIT EVENTS
                        ON THE RESTATEMENT EFFECTIVE DATE

         This Agreement shall become effective as of the date (the "Restatement
Effective Date") on which each of the following conditions shall have been
satisfied: (i) the Borrower, the Administrative Agent and each of the Lenders
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent at
the Notice Office or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it, and (ii) the Administrative Agent shall have determined that it has received
evidence, in form and substance reasonably satisfactory to it, that the
conditions set forth in Sections 6.01 through 6.19, inclusive, have been
satisfied (except for such conditions (i) which in the Administrative Agent's
determination are not sufficiently material to justify a delay of the
Restatement Effective Date and (ii) as to which the Borrower has given written
assurances to the Administrative Agent that such conditions shall be satisfied
within thirty days following the Restatement Effective Date, it being expressly
understood and Borrower agrees that failure to timely satisfy such conditions
constitutes an Event of Default). If the Restatement Effective Date does not
occur on or before June 30, 2003, this Agreement shall be null and void.

         6.01. Execution of Agreement; Disclosure Letter; Notes. On or prior to
the Restatement Effective Date, (i) the Lenders shall have received an executed
copy of the Disclosure Letter, dated the Restatement Effective Date, which shall
be in form and substance satisfactory to the Administrative Agent and the
Required Lenders, and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Lenders that has requested same the
appropriate Term Note and/or Revolving Note executed by the Borrower and to the
extent requested by the Swingline Lender, the Swingline Note executed by the
Borrower, in each case, in the amount, maturity and as otherwise provided
herein.

         6.02. Officer's Certificate. On or prior to the Restatement Effective
Date, the Administrative Agent shall have received a certificate, dated the
Restatement Effective Date and signed on behalf of the Borrower by the Chairman
of the Board, the President, the Chief Financial Officer or any Vice President
of the Borrower, certifying on behalf of the Borrower that all of the conditions
in Sections 6.06, 6.07, 6.08 and 7.01 have been satisfied on such date (although
no such certification shall be required to the extent that any determination to
be made under any such Section is to be made by the Administrative Agent or any
Lender).

                                      -55-


         6.03. Opinions of Counsel. On or prior to the Restatement Effective
Date, the Administrative Agent shall have received (i) from Robins Kaplan Miller
& Ciresi LLP, special counsel to the Borrower, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Restatement Effective Date covering the matters set forth in Exhibit E-1 and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, dated the Restatement Effective
Date, (ii) from Gardner Carton & Douglas LLC, special Illinois counsel to the
Borrower, an opinion addressed to the Administrative Agent, the Collateral Agent
and each of the Lenders and dated the Restatement Effective Date covering the
matters set forth in Exhibit E-2 and such other matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request, dated the Restatement Effective Date, (iii) from Koley Jessen, special
Iowa and Nebraska counsel to the Borrower, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Restatement Effective Date covering the matters set forth in Exhibit E-3 and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, dated the Restatement Effective
Date, and (iv) from Godfrey & Kahn, special Wisconsin counsel to the Borrower,
an opinion addressed to the Administrative Agent, the Collateral Agent and each
of the Lenders and dated the Restatement Effective Date covering the matters set
forth in Exhibit E-4 and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request, dated
the Restatement Effective Date.

         6.04. Corporate Documents; Proceedings; etc.

         (a) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received a certificate from each Credit Party, dated the
Restatement Effective Date, signed by the Chairman of the Board, the President,
the Chief Financial Officer or any Vice President of such Credit Party, and
attested to by the Secretary or any Assistant Secretary of such Credit Party, in
the form of Exhibit F with appropriate insertions, together with copies of the
certificate of incorporation and by-laws (or equivalent organizational
documents) of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and each of the foregoing shall be in form and
substance reasonably acceptable to the Administrative Agent.

         (b) All corporate, partnership and limited liability company and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent and
the Required Lenders, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.

         6.05. Plans; Shareholders' Agreements; Employment Agreements; Existing
Indebtedness Agreements. On or prior to the Restatement Effective Date, there
shall have been delivered to the Administrative Agent true and correct copies of
the following documents:

                                      -56-


                  (i) all Plans (and for each Plan that is required to file an
         annual report on Internal Revenue Service Form 5500-series, a copy of
         the most recent such report (including, to the extent required, the
         related financial and actuarial statements and opinions and other
         supporting statements, certifications, schedules and information), and
         for each Plan that is a "single-employer plan," as defined in Section
         4001(a)(15) of ERISA, the most recently prepared actuarial valuation
         therefor) and any other "employee benefit plans," as defined in Section
         3(3) of ERISA, and any other material agreements, plans or
         arrangements, with or for the benefit of current or former employees of
         the Borrower or any of its Subsidiaries or ERISA Affiliates (provided
         that the foregoing shall apply in the case of any multiemployer plan,
         as defined in Section 4001(a)(3) of ERISA, only to the extent that any
         document described therein is in the possession of the Borrower, any
         Subsidiary of the Borrower or any ERISA Affiliate or reasonably
         available thereto from the sponsor or trustee of any such Plan)
         (collectively, the "Employee Benefit Plans";

                  (ii) all agreements entered into by the Borrower or any of its
         Subsidiaries governing the terms and relative rights of its capital
         stock and any agreements entered into by its shareholders relating to
         any such entity with respect to its capital stock (collectively, the
         "Shareholders' Agreements");

                  (iii) all material employment agreements entered into by the
         Borrower or any of its Subsidiaries (collectively, the "Employment
         Agreements");

                  (iv) all agreements evidencing or relating to any material
         Indebtedness of the Borrower or any of its Subsidiaries which are to
         remain outstanding after giving effect to the Refinancing, including
         but not limited to the Subordinated Debt (collectively, the "Existing
         Indebtedness Agreements");

all of which Employee Benefit Plans, Shareholders' Agreements, Employment
Agreements, and Existing Indebtedness Agreements shall be in full force and
effect on the Restatement Effective Date.

         6.06. Completion of the Credit Documents and Fee Payment. On or prior
to the Restatement Effective Date, (i) the parties to the Credit Documents shall
have executed and delivered the Credit Documents, and (ii) the Borrower shall
have paid all fees and expenses in connection with the foregoing and the
Refinancing.

         6.07. Adverse Change, etc.

         (a) Nothing shall have occurred (and neither the Administrative Agent
nor any Lender shall have become aware of any facts or conditions not previously
known) which the Administrative Agent or the Required Lenders shall reasonably
determine has had, or could reasonably be expected to have, a Material Adverse
Effect.

         (b) On or prior to the Restatement Effective Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Refinancing and

                                      -57-


the other transactions contemplated by the Credit Documents and otherwise
referred to herein or therein shall have been obtained and remain in effect, and
all applicable waiting periods with respect thereto shall have expired without
any action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the Refinancing
or the other transactions contemplated by the Credit Documents or otherwise
referred to herein or therein. Additionally, there shall not exist any judgment,
order, injunction or other restraint issued or filed or a hearing seeking
injunctive relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the Refinancing or the other transactions
contemplated by the Credit Documents or otherwise referred to herein or therein.

         6.08. Litigation. On the Restatement Effective Date, there shall be no
actions, suits or proceedings pending or threatened (i) with respect to the
Refinancing or this Agreement or any other Credit Document or (ii) which the
Administrative Agent or the Required Lenders shall reasonably determine could
reasonably be expected to have a Material Adverse Effect.

         6.09. Pledge Agreement. On or prior to the Restatement Effective Date,
each Credit Party shall have duly authorized, executed and delivered the Pledge
Agreement in the form of Exhibit G (as amended, modified or supplemented from
time to time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any,
referred to therein and then owned by such Credit Party, (x) endorsed in blank
in the case of promissory notes constituting Pledge Agreement Collateral and (y)
together with executed and undated stock powers in the case of capital stock
constituting Pledge Agreement Collateral.

         6.10. Security Agreement. On or prior to the Restatement Effective
Date, each Credit Party shall have duly authorized, executed and delivered the
Security Agreement in the form of Exhibit H (as modified, supplemented or
amended from time to time, the "Security Agreement") covering all of such Credit
Party's present and future Security Agreement Collateral.

         6.11. Mortgages. On or prior to the Restatement Effective Date, the
Borrower shall have duly authorized, executed and delivered the Mortgages in
appropriate form for recording, with respect to the properties located in Omaha,
Nebraska, Carter Lake, Iowa and Marshfield, Wisconsin, together with:

                  (i) funds sufficient to pay any filing or recording tax or fee
         in connection with any and all UCC-1 financing statements and the
         Mortgages;

                  (ii) with respect to each Mortgaged Property, an ALTA Loan
         Policy 1970 (10-17-70) (or other form acceptable to the Collateral
         Agent and the Lenders) mortgagee policy of title insurance or a binder
         issued by a title insurance company satisfactory to the Collateral
         Agent and the Lenders insuring (or undertaking to insure, in the case
         of a binder) that the Mortgage creates and constitutes a valid first
         Lien against the Mortgaged Property in favor of the Collateral Agent,
         subject only to exceptions acceptable to the Collateral Agent and the
         Lenders, with such endorsements and affirmative insurance as the
         Collateral Agent or any Lender may reasonably request;

                                      -58-


                  (iii) evidence that the Collateral Agent has been named as
         loss payee under all policies of casualty insurance, and as additional
         insured under all policies of liability insurance, required by the
         Mortgage;

                  (iv) flood insurance and earthquake insurance on terms
         satisfactory to the Collateral Agent and the Lenders;

                  (v) current ALTA surveys and surveyor's certification as to
         all real property and all land covered by a lease in respect of which
         there is delivered a Mortgage, or as may be reasonably required by the
         Collateral Agent, each in form and substance satisfactory to the
         Collateral Agent and the Lenders;

                  (vi) proof of payment of all title insurance premiums,
         documentary stamp or intangible taxes, recording fees and mortgage
         taxes payable in connection with the recording of any Mortgage or the
         issuance of the title insurance policies (whether due on the Closing
         Date or in the future) including sums due in connection with any future
         advances;

                  (vii) such consents, estoppels, subordination agreements and
         other documents and instruments executed by landlords, tenants and
         other Persons party to material contracts relating to any Collateral as
         to which the Collateral Agent shall be granted a Lien for the benefit
         of the Lenders, as requested by the Collateral Agent or any Lender; and

                  (viii) evidence that all other actions necessary or, in the
         opinion of the Collateral Agent or the Lenders, desirable to perfect
         and protect the first priority Lien created by the Mortgages, and to
         enhance the Collateral Agent's ability to preserve and protect its
         interests in and access to the Collateral, have been taken;

         6.12. Evidence of Perfection, etc. On or prior to the Restatement
Effective Date, the Administrative Agent shall have received the following:

                  (i) proper Financing Statements (Form UCC-1 or the equivalent)
         fully executed for filing under the UCC or other appropriate filing
         offices of each jurisdiction as may be necessary or, in the reasonable
         opinion of the Collateral Agent, desirable to perfect the security
         interests purported to be created by the Security Agreement and the
         Mortgages;

                  (ii) certified copies of Requests for Information or Copies
         (Form UCC-11), or equivalent reports, listing all effective financing
         statements that name the Borrower, or any of its Subsidiaries as debtor
         and that are filed in the jurisdictions referred to in clause (i)
         above, together with copies of such other financing statements that
         name the Borrower, or any of its Subsidiaries as debtor (none of which
         shall cover any of the Collateral except to the extent evidencing
         Permitted Liens or in respect of which the Collateral Agent shall have
         received termination statements (Form UCC-3) or such other termination
         statements as shall be required by local law fully executed for
         filing);

                                      -59-


                  (iii) evidence of the completion of all other recordings and
         filings of, or with respect to, the Security Agreement and the
         Mortgages as may be necessary or, in the reasonable opinion of the
         Collateral Agent, desirable to perfect the security interests intended
         to be created by the Security Agreement and the Mortgages;

                  (iv) to the extent the Administrative Agent shall request,
         duly executed Control Agreements with respect to any Collateral in
         which a security interest therein is perfected by control under the UCC
         (including, Control Agreements pursuant to Section 3.2(a)(vii) of the
         Pledge Agreement); and

                  (v) evidence that all other actions necessary or, in the
         reasonable opinion of the Collateral Agent, desirable to perfect and
         protect the security interests purported to be created by the Security
         Agreement have been taken.

         6.13. Subsidiaries Guaranty. On or prior to the Restatement Effective
Date, each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Guaranty in the form of Exhibit I (as modified, amended or
supplemented from time to time, the "Subsidiaries Guaranty").

         6.14. Insurance Policies. On or prior to the Restatement Effective
Date, the Administrative Agent shall have received standard lenders' payable
endorsements with respect to the insurance policies or other instruments or
documents evidencing insurance coverage on the properties of the Borrower in
accordance with Section 9.03;

         6.15. [Intentionally omitted.]

         6.16. Financial Statements; Projections. On or prior to the Restatement
Effective Date, the Administrative Agent shall have received true and correct
copies of (i) the financial statements referred to in Section 8.05(a), (ii) the
Projections referred to in Sections 8.05(d), and (iii) a draft of the Borrower's
consolidated audited financial statements for the fiscal year ended December 31,
2002, all of which financial statements, Projections and draft audited financial
statements shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.

         6.17. Solvency Certificate; Insurance Certificates. On or prior to the
Restatement Effective Date, the Administrative Agent shall have received the
following dated the Restatement Effective Date:

                  (i) a solvency certificate from the chief financial officer of
         the Borrower in the form of Exhibit J; and

                  (ii) certificates of insurance complying with the requirements
         of Section 9.03 for the business and properties of the Borrower and its
         Subsidiaries, in form and substance reasonably satisfactory to the
         Administrative Agent and naming the Collateral Agent as an additional
         insured and as loss payee, and stating that such insurance shall not be
         canceled without at least 30 days prior written notice by the insurer
         to the Collateral Agent.

                                      -60-


         6.18. Senior Subordinated Note Compliance.

         (a) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received a certificate from the Borrower's chief financial
officer, dated the Restatement Effective Date, demonstrating in reasonable
detail (and showing the financial calculations therefor) that the full amount of
the Loans being incurred on the Restatement Effective Date may be incurred in
accordance with, and will not violate the provisions of, Section 4.12 of the
Senior Subordinated Note Indenture.

         (b) On or prior to the Restatement Effective Date, the Borrower shall
have delivered to the trustee under the Senior Subordinated Note Indenture and
to the Administrative Agent the officers' certificate, dated the Restatement
Effective Date, contemplated by the parenthetical in clause (vi) of the final
sentence of the definition of "Senior Debt" contained in the Senior Subordinated
Note Indenture.

         6.19. Fees, etc. On or prior to the Restatement Effective Date, the
Borrower shall have paid to the Administrative Agent and Bank of America
Securities LLC as arranger ("Arranger") all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to the Administrative Agent
and the Arranger to the extent then due.

         6.20. Consummation of the Refinancing. On the Restatement Effective
Date, concurrent with the satisfaction of the conditions specified in the first
paragraph of Section 6, and Sections 6.01 through 6.19, inclusive, the following
(collectively, the "Refinancing") shall occur: (i) the Borrower shall effect
Borrowings of Term Loans and Revolving Loans in an amount sufficient to repay in
full all Obligations under and as defined in the Existing Credit Agreement
(other than in respect of the Existing Letters of Credit) (such Obligations to
be repaid being called collectively, the "Existing Obligations"), (ii) the
Administrative Agent shall apply the proceeds of the initial Borrowings (and any
other immediately available funds that have been made available from the
Borrower to the Administrative Agent) to repay in full the Existing Obligations
(whereupon (x) the commitments of the Non-Renewing Lenders to extend credit
under the Existing Credit Agreement, including the participation of the
Non-Renewing Lenders in the Existing Letters of Credit, shall automatically
terminate, and (y) pursuant to section 3.04, each RL Lender shall be deemed to
have purchased and received from the Issuing Lender, an undivided interest and
participation, to the extent of such Lender's RL Percentage, in each Existing
Letter of Credit). The Administrative Agent will give the Borrower and each
Lender prompt written notice of the occurrence of the Restatement Effective
Date.

                                   SECTION 7

                   CONDITIONS PRECEDENT TO ALL CREDIT EVENTS.

         The Refinancing and the obligation of each Lender to make Loans
(including Loans made on the Initial Borrowing Date), and the obligation of the
Issuing Lender to issue Letters of Credit, is subject, at the time of each such
Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:

                                      -61-


         7.01. No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).

         7.02. Notice of Borrowing; Letter of Credit Request.

         (a) Prior to the making of each Loan (other than a Swingline Loan or a
Revolving Loan made pursuant to a Mandatory Borrowing), the Administrative Agent
shall have received a Notice of Borrowing meeting the requirements of Section
2.03(a). Prior to the making of each Swingline Loan, the Swingline Lender shall
have received the notice referred to in Section 2.03(b)(i).

         (b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 3.03(a).

         The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all the conditions specified in Section 6 (with respect to
Credit Events on the Restatement Effective Date) and in this Section 7 (with
respect to Credit Events on or after the Restatement Effective Date) and
applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 6 and in this Section 7, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts or copies for each
of the Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.

                                      -62-


                                   SECTION 8

                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

         In order to induce the Lenders to enter into this Agreement and to make
the Loans, and issue (or participate in) the Letters of Credit as provided
herein, the Borrower makes the following representations, warranties and
agreements, in each case after giving effect to the Refinancing, all of which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans and the issuance of the Letters of Credit, with the
occurrence of each Credit Event on or after the Restatement Effective Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 8 are true and correct in all material respects on and as of the
Restatement Effective Date and on the date of each such other Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).

         8.01. Organizational Status. Each of the Borrower and each of its
Subsidiaries (other than an Inactive Subsidiary) (i) is a duly organized and
validly existing corporation, partnership or limited liability company, as the
case may be, in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate, partnership or limited liability company
power and authority, as the case may be, to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

         8.02. Power and Authority. Each Credit Party has the corporate,
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party, and each of such Credit Documents constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).

         8.03. No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed

                                      -63-


of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, in each case to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it may be subject or (iii) will violate any provision of the
certificate or articles of incorporation or by-laws (or equivalent
organizational documents) of the Borrower or any of its Subsidiaries.

         8.04. Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (x) the
filing of UCC-1 financing statements and Mortgages to perfect the security
interest created under the Security Agreement and the Mortgages, as applicable,
and (y) those that have otherwise been obtained or made on or prior to the
Restatement Effective Date and which remain in full force and effect on the
Restatement Effective Date), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with, (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
such Credit Document.

         8.05. Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.

         (a) (i) The audited consolidated balance sheets of the Borrower for its
fiscal years ended on December 31, 2000, 2001 and 2002, and the related audited
consolidated statements of income, cash flows and shareholders' equity of the
Borrower for the fiscal years ended on such dates, as the case may be, copies of
which have been furnished to the Lenders prior to the Restatement Effective
Date, present fairly in all material respects the consolidated financial
position of the Borrower at the dates of such balance sheets and the
consolidated results of the operations of the Borrower for the periods covered
thereby. All of the foregoing financial statements have been prepared in
accordance with GAAP consistently applied.

         (ii) Since December 31, 2002, there has been no change in the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower or any of its Subsidiaries that has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

         (b) On and as of the Restatement Effective Date and after giving effect
to the Refinancing and to all Indebtedness (including the Loans) being incurred
or assumed and Liens created by the Borrower and its Subsidiaries in connection
therewith (i) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a
whole will exceed its debts; (ii) each of the Borrower on a stand-alone basis
and the Borrower and its Subsidiaries taken as a whole has not incurred and does
not intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (iii) each of the Borrower
on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole
will have sufficient capital with which to conduct its business. For purposes of
this Section 8.05(c), "debt" means any liability on a claim, and "claim" means
(a) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,

                                      -64-


contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

         (c) Except as fully disclosed in the financial statements delivered
pursuant to Section 8.05(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole. As of the Initial Borrowing Date, the Borrower
does not know of any basis for the assertion against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully disclosed in the financial statements delivered pursuant to Section
8.05(a) which, either individually or in the aggregate, could reasonably be
expected to be material to the Borrower and its Subsidiaries taken as a whole.

         (d) On and as of the Initial Borrowing Date, the Projections delivered
to the Administrative Agent and the Lenders prior to the Initial Borrowing Date
have been prepared in good faith and are based on reasonable assumptions, and
there are no statements or conclusions in the Projections which are based upon
or include information known to the Borrower to be misleading in any material
respect or which fail to take into account material information known to the
Borrower regarding the matters reported therein. On the Initial Borrowing Date,
the Borrower believes that the Projections are reasonable and attainable, it
being recognized by the Lenders, however, that projections as to future events
are not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
that the differences may be material.

         8.06. Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened (i) with respect to the
Refinancing or any Credit Documents, (ii) with respect to any material
Indebtedness of the Borrower or any of its Subsidiaries or (iii) that are,
either individually or in the aggregate, reasonably likely to have a Material
Adverse Effect.

         8.07. True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.

         8.08. Use of Proceeds; Margin Regulations.

                                      -65-


         (a) All proceeds of the Loans will be used by the Borrower (i) to
effect the Refinancing, (ii) to pay fees and expenses related to the
Refinancing, for working capital and Capital Expenditures, (iv) to finance
Permitted Acquisitions, (v) to finance Restricted Payments, and (vi) for other
lawful corporate purposes.

         (b) No part of any Credit Event (or the proceeds thereof) will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

         8.09. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all taxes and assessments payable by it which have become due, except for
immaterial taxes and assessments and for those contested in good faith and
adequately disclosed and fully provided for on the financial statements of the
Borrower and its Subsidiaries in accordance with GAAP. Each of the Borrower and
each of its Subsidiaries has at all times paid, or has provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state, local and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to date. There is no
action, suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of the Borrower threatened, by any authority regarding any taxes
relating to the Borrower or any of its Subsidiaries that either individually or
in the aggregate could reasonably be expected to result in a material liability
to the Borrower or any of its Subsidiaries.

         8.10. Compliance with ERISA.

                  (i) Schedule 2 of the Disclosure Letter sets forth, as of the
         Initial Borrowing Date, each Plan. Each Plan (and each related trust,
         insurance contract or fund) is in substantial compliance with its terms
         and with all applicable laws, including, without limitation, ERISA and
         the Code; each Plan (and each related trust, if any) which is intended
         to be qualified under Section 401(a) of the Code has received a
         determination letter from the Internal Revenue Service to the effect
         that it meets the requirements of Sections 401(a) and 501(a) of the
         Code; no Reportable Event has occurred; no Plan which is a
         multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is
         insolvent or in reorganization; no Plan has any material Unfunded
         Current Liability; no Plan which is subject to Section 412 of the Code
         or Section 302 of ERISA has any material accumulated funding
         deficiency, within the meaning of such sections of the Code or ERISA,
         or has applied for or received a waiver of an accumulated funding
         deficiency or an extension of any amortization period, within the
         meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all
         contributions required to be made with respect to a Plan have been
         timely made; neither the Borrower nor any Subsidiary of the Borrower
         nor any ERISA Affiliate has incurred any material liability (including
         any indirect, contingent or secondary liability) to or on account of a
         Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
         4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975
         of the Code or

                                      -66-


         expects to incur any such material liability under any of the foregoing
         sections with respect to any Plan; no condition exists which presents a
         material risk to the Borrower or any Subsidiary of the Borrower or any
         ERISA Affiliate of incurring a material liability to or on account of a
         Plan pursuant to the foregoing provisions of ERISA and the Code; no
         proceedings have been instituted to terminate or appoint a trustee to
         administer any Plan which is subject to Title IV of ERISA; no action,
         suit, proceeding, hearing, audit or investigation with respect to the
         administration, operation or the investment of assets of any Plan
         (other than routine claims for benefits) is pending or, to the
         Borrower's knowledge, expected or threatened; using actuarial
         assumptions and computation methods consistent with Part 1 of subtitle
         E of Title IV of ERISA, the aggregate liabilities of the Borrower and
         its Subsidiaries and its ERISA Affiliates to all Plans which are
         multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the
         event of a complete withdrawal therefrom, as of the close of the most
         recent fiscal year of each such Plan ended prior to the date of the
         most recent Credit Event, would not exceed $500,000; each group health
         plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
         the Code) which covers or has covered employees or former employees of
         the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has
         at all times been operated in material compliance with the provisions
         of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
         Code; no lien imposed under the Code or ERISA on the assets of the
         Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
         exists or is likely to arise on account of any Plan; and the Borrower
         and its Subsidiaries may cease contributions to or terminate any
         employee benefit plan maintained by any of them without incurring any
         material liability.

                  (ii) Each Foreign Pension Plan has been maintained in material
         compliance with its terms and with the requirements of any and all
         applicable laws, statutes, rules, regulations and orders and has been
         maintained, where required, in good standing with applicable regulatory
         authorities. All material contributions required to be made with
         respect to a Foreign Pension Plan have been timely made. Neither the
         Borrower nor any of its Subsidiaries has incurred any material
         obligation in connection with the termination of or withdrawal from any
         Foreign Pension Plan. The present value of the accrued benefit
         liabilities (whether or not vested) under each Foreign Pension Plan,
         determined as of the end of the Borrower's recently ended fiscal year
         on the basis of actuarial assumptions, each of which is reasonable, did
         not exceed in any material respect the current value of the assets of
         such Foreign Pension Plan allocable to such benefit liabilities.

         8.11. The Security Documents.

         (a) The provisions of the Security Agreement are effective to create in
favor of the Collateral Agent for the benefit of the Secured Creditors a legal,
valid and enforceable security interest in all right, title and interest of the
Credit Parties in the Security Agreement Collateral described therein, and the
Collateral Agent, for the benefit of the Secured Creditors, has a fully
perfected first lien on, and security interest in, all right, title and interest
in all of the Security

                                      -67-


Agreement Collateral described therein, free and clear of all other Liens other
than Permitted Liens. The recordation of (x) the Grant of Security Interest in
U.S. Patents and (y) the Grant of Security Interest in U.S. Trademarks in the
respective form attached to the Security Agreement, in each case in the United
States Patent and Trademark Office, together with filings on Form UCC-1 made
pursuant to the Security Agreement, will create, as may be perfected by such
filings and recordation, a perfected security interest in the United States
trademarks and patents covered by the Security Agreement, and the recordation of
the Grant of Security Interest in U.S. Copyrights in the form attached to the
Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, as
may be perfected by such filings and recordation, a perfected security interest
in the United States copyrights covered by the Security Agreement.

         (b) The security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledge Agreement
Collateral described in the Pledge Agreement, free and clear of all other Liens.
No filings or recordings are required in order to perfect (or maintain the
perfection or priority of) the security interests created in the Pledge
Agreement Collateral under the Pledge Agreement.

         (c) If and when a Mortgage is created, each such Mortgage creates, as
security for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and mortgage lien on the respective
Mortgaged Property in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons (except that
the security interest and mortgage lien created on such Mortgaged Property may
be subject to the Permitted Encumbrances related thereto) and subject to no
other Liens (other than Liens permitted under Section 10.01 related thereto).

         8.12. Representations and Warranties in the Credit Documents. All
representations and warranties set forth in the other Credit Documents were true
and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true and
correct in all material respects as of the Initial Borrowing Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date.

         8.13. Properties. All Real Property owned or leased by the Borrower or
any of its Subsidiaries as of the Initial Borrowing Date, and the nature of the
interest therein, is correctly set forth on Schedule 1 of the Disclosure Letter.
Each of the Borrower and each of its Subsidiaries has good and marketable title
to all material properties owned by it, including all property reflected in
Schedule 1 of the Disclosure Letter and in the most recent historical balance
sheets of the Borrower referred to in Section 8.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by the terms of this Agreement), free and
clear of all Liens, other than Permitted Liens.

         8.14. Capitalization. On the Initial Borrowing Date, the authorized
capital stock of the Borrower shall consist of (i) 295,000,000 shares of common
stock, $.0025 par value per share,

                                      -68-


and (ii) 5,000,000 shares of preferred stock, $.0025 par value per share, of
which no shares of such preferred stock shall be issued and outstanding. All
outstanding shares of the capital stock of the Borrower have been duly and
validly issued and are fully paid and non-assessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, except (i) as set forth in any Shareholders' Agreement as in
effect on the Initial Borrowing Date, (ii) for options, warrants and rights to
purchase shares of the Borrower's common stock or Qualified Preferred Stock
which may be issued from time to time and (iii) for any Indebtedness that may be
issued or incurred from time to time under Section 10.04(xii) which may be
convertible into shares of the Borrower's common stock.

         8.15. Subsidiaries. As of the Initial Borrowing Date, the Borrower has
no Subsidiaries other than those Subsidiaries listed on Schedule 3 of the
Disclosure Letter. Schedule 3 of the Disclosure Letter correctly sets forth, as
of the Initial Borrowing Date, (i) the percentage ownership (direct or indirect)
of the Borrower in each class of capital stock or other equity of each of its
Subsidiaries and also identifies the direct owner thereof and (ii) the
jurisdiction of organization of each such Subsidiary.

         8.16. Compliance with Statutes, etc. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

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

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

         8.19. Environmental Matters.

         (a) Each of the Borrower and each of its Subsidiaries is in compliance
with all applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no pending or, to the knowledge
of the Borrower, threatened Environmental Claims against the Borrower or any of
its Subsidiaries or any Real Property owned, leased or operated by the Borrower
or any of its Subsidiaries (including any such claim arising out of the
ownership, lease or operation by the Borrower or any of its Subsidiaries of any
Real Property formerly owned by the Borrower or any of its Subsidiaries but no
longer owned, leased or operated by the Borrower or any of its Subsidiaries).
There are no facts, circumstances,

                                      -69-


conditions or occurrences with respect to the business or operations of the
Borrower or any of its Subsidiaries, or any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries (including, to the knowledge
of the Borrower, any Real Property formerly owned, leased or operated by the
Borrower or any of its Subsidiaries but no longer owned, leased or operated by
the Borrower or any of its Subsidiaries) or, to the knowledge of the Borrower,
any property adjoining or adjacent to any such Real Property that could be
reasonably expected (i) to form the basis of an Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries or (ii) to cause any Real
Property owned, leased or operated by the Borrower or any of its Subsidiaries to
be subject to any restrictions on the ownership, lease, occupancy or
transferability of such Real Property by the Borrower or any of its Subsidiaries
under any applicable Environmental Law.

         (b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries where such generation,
use, treatment, storage or transportation has violated or could reasonably be
expected to violate any Environmental Law or give rise to an Environmental
Claim. Hazardous Materials have not at any time been Released on or from any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries where such Release has violated or could reasonably be expected to
violate any applicable Environmental Law.

         (c) Notwithstanding anything to the contrary in this Section 8.19, the
representations and warranties made in this Section 8.19 shall not be untrue
unless the effect of any or all conditions, violations, claims, restrictions,
failures and noncompliances of the types described above could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         8.20. Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to,
either individually or in the aggregate, have a Material Adverse Effect. There
is (i) no unfair labor practice complaint pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the knowledge of
the Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of the Borrower or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.

         8.21. Patents, Licenses, Franchises and Formulas. Each of the Borrower
and each of its Subsidiaries owns or has the right to use all the domestic and
foreign patents, trademarks, permits, service marks, trade names, copyrights,
licenses, franchises, proprietary information (including, but not limited to,
rights in computer programs, databases and data collections) and formulas, or
rights with respect to the foregoing, and has obtained assignments of all leases
and other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be,

                                      -70-


could reasonably be expected, either individually or in the aggregate, to result
in a Material Adverse Effect.

         8.22. Indebtedness. Schedule 4 of the Disclosure Letter sets forth a
true and complete list of all Indebtedness (including Contingent Obligations) of
the Borrower and its Subsidiaries as of the Initial Borrowing Date and which is
to remain outstanding after giving effect to the Refinancing (excluding the
Loans, the Letters of Credit and the Senior Subordinated Notes, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guarantees such debt.

         8.23. Refinancing. At the time of consummation thereof, the Refinancing
shall have been consummated in all material respects in accordance with the
terms of the respective Credit Documents and all applicable laws. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Refinancing have been obtained, given, filed or taken and are or will be in full
force and effect (or effective judicial relief with respect thereto has been
obtained). All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Refinancing. Additionally, at the
time of the consummation thereof, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Refinancing, or the occurrence of any Credit Event or the performance by any
Credit Party of its obligations under the Credit Documents to which it is party.
All actions taken by each Credit Party pursuant to or in furtherance of the
Refinancing have been taken in all material respects in compliance with the
respective Credit Documents and all applicable laws.

         8.24. Insurance. Schedule 5 of the Disclosure Letter sets forth a true
and complete listing of all insurance maintained by the Borrower and its
Subsidiaries as of the Initial Borrowing Date, with the amounts insured (and any
deductibles) set forth therein.

         8.25. Senior Subordinated Notes. The subordination provisions contained
in the Senior Subordinated Notes and in the other Senior Subordinated Note
Documents are enforceable against the Borrower and the holders of the Senior
Subordinated Notes, and all Obligations are within the definition of "Senior
Debt" included in such subordination provisions.

                                      -71-


                                   SECTION 9

                             AFFIRMATIVE COVENANTS.

         The Borrower hereby covenants and agrees that on and after the
Restatement Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case
together with interest thereon), Fees and all other Obligations (other than
indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:

         9.01. Information Covenants. The Borrower will furnish to each Lender:

         (a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Borrower (commencing with its fiscal month ending on March 31, 2003), the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal month as well as the related consolidated statement of retained
earnings and statement of cash flows and the consolidated and consolidating
statements of income for such fiscal month and for the elapsed portion of the
fiscal year ended with the last day of such fiscal month, in each case setting
forth comparative figures for the corresponding fiscal month in the prior fiscal
year and comparable budgeted figures for such fiscal month, all of which shall
be certified by the chief financial officer of the Borrower that they fairly
present in all material respects in accordance with GAAP the financial condition
of the Borrower and its Subsidiaries as of the dates indicated and the results
of their operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.

         (b) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the Borrower
(commencing with its quarterly accounting period ending on March 31, 2003), (i)
the consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated statements
of income and retained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, in each case setting forth
comparative figures for the related periods in the prior fiscal year, all of
which shall be certified by the chief financial officer of the Borrower that
they fairly present in all material respects in accordance with GAAP the
financial condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations for the periods indicated, subject
to normal year-end audit adjustments and the absence of footnotes, and (ii)
management's discussion and analysis of the important operational and financial
developments during such quarterly accounting period (it being understood that
any management's discussion and analysis set forth in the Borrower's Form 10-Q
for such quarterly accounting period and delivered to the Lenders shall satisfy
the provisions of this clause (ii)).

         (c) Annual Financial Statements. Within 90 days after the close of each
fiscal year of the Borrower, (i) the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified by KPMG Peat Marwick LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Administrative Agent,

                                      -72-


together with a report of such accounting firm stating that in the course of its
regular audit of the financial statements of the Borrower and its Subsidiaries,
which audit was conducted in accordance with GAAP, such accounting firm obtained
no knowledge of any Default or an Event of Default relating to financial and
accounting matters which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof, and (ii) management's
discussion and analysis of the important operational and financial developments
during such fiscal year (it being understood that any management's discussion
and analysis set forth in the Borrower's Form 10-K for such quarterly accounting
period and delivered to the Lenders shall satisfy the provisions of this clause
(ii)).

         (d) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.

         (e) Budgets. No later than 30 days following the first day of each
fiscal year of the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income, sources and uses
of cash and balance sheets) prepared by the Borrower (i) for each of the twelve
months of such fiscal year prepared in detail and (ii) for each of the
immediately three succeeding fiscal years prepared in summary form, in each case
setting forth, with appropriate discussion, the principal assumptions upon which
such budgets are based.

         (f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 9.01(b) and (c), a certificate,
substantially in the form of Exhibit O, of the chief financial officer of the
Borrower certifying on behalf of the Borrower that, to the best of such
officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(i) set forth in reasonable detail the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the provisions
of Sections 5.02(e), 5.02(g), 10.02(v), 10.03(iii), 10.04, 10.05, 10.07, 10.08,
10.09, 10.10, 10.11 and 10.12 at the end of such fiscal quarter or year, as the
case may be, (ii) if delivered with the financial statements required by Section
10.01(c), set forth in reasonable detail the amount of (and the calculations
required to establish the amount of) Excess Cash Flow for the respective Excess
Cash Payment Period, and (iii) commencing with the delivery of the financial
statements in respect of the Borrower's fiscal quarter ending on June 30, 2003,
the Applicable Margin for Term Loans, Revolving Loans and Swingline Loans for
the Margin Reduction Period commencing with the delivery of the respective
financial statements.

         (g) Notice of Default or Litigation. Promptly upon, and in any event
within five Business Days after, any principal, senior or executive officer of
the Borrower obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default and (ii) any litigation
or governmental investigation or proceeding pending (x) against the Borrower or
any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, (y) with respect to any material Indebtedness of the Borrower or
any of its Subsidiaries or (z) with respect to any Credit Document.

                                      -73-



         (h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders (or any trustee, agent or other representative therefor) of
its material Indebtedness pursuant to the terms of the documentation governing
such Indebtedness.

         (i) Environmental Matters. Promptly after any principal, senior or
executive officer of the Borrower obtains knowledge thereof, notice of one or
more of the following environmental matters, unless such environmental matters
could not, either individually or when aggregated with all other such
environmental matters, be reasonably expected to have a Material Adverse Effect:

                  (i) any pending or threatened Environmental Claim against the
         Borrower or any of its Subsidiaries or any Real Property owned, leased
         or operated by the Borrower or any of its Subsidiaries;

                  (ii) any condition or occurrence on or arising from any Real
         Property owned, leased or operated by the Borrower or any of its
         Subsidiaries that (a) results in noncompliance by the Borrower or any
         of its Subsidiaries with any applicable Environmental Law or (b) could
         be expected to form the basis of an Environmental Claim against the
         Borrower or any of its Subsidiaries or any such Real Property;

                  (iii) any condition or occurrence on any Real Property owned,
         leased or operated by the Borrower or any of its Subsidiaries that
         could be expected to cause such Real Property to be subject to any
         restrictions on the ownership, lease, occupancy, use or transferability
         by the Borrower or any of its Subsidiaries of such Real Property under
         any Environmental Law; and

                  (iv) the taking of any removal or remedial action in response
         to the actual or alleged presence of any Hazardous Material on any Real
         Property owned, leased or operated by the Borrower or any of its
         Subsidiaries as required by any Environmental Law or any governmental
         or other administrative agency; provided that in any event the Borrower
         shall deliver to each Lender all notices received by the Borrower or
         any of its Subsidiaries from any government or governmental agency
         under, or pursuant to, CERCLA which identify the Borrower or any of its
         Subsidiaries as potentially responsible parties for redemption costs or
         which otherwise notify the Borrower or any of its Subsidiaries of
         potential liability under CERCLA.

         All such notices shall describe in reasonable detail the nature of the
         claim, investigation, condition, occurrence or removal or remedial
         action and the Borrower's or such Subsidiary's response thereto.

                                      -74-



         (j) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender may reasonably request.

         (k) Debt Ratings. A notice promptly upon any announcement by Moody's or
S&P of any change or possible change in a Debt Rating.

         9.02. Books, Records and Inspections; Annual Meetings.

         (a) The Borrower will, and will cause each of its Subsidiaries to, keep
proper books of record and accounts in which entries sufficient to prepare the
financial statements required to be delivered pursuant to this Agreement in
conformity with GAAP and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. The Borrower will,
and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Lender to visit and inspect,
under guidance of officers of the Borrower or such Subsidiary, any of the
properties of the Borrower or such Subsidiary, and to examine the books of
account of the Borrower or such Subsidiary and discuss the affairs, finances and
accounts of the Borrower or such Subsidiary with, and be advised as to the same
by, its and their officers and independent accountants, all upon reasonable
prior notice and at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or such Lender may reasonably request.

         (b) At a date to be mutually agreed upon between the Administrative
Agent and the Borrower occurring on or prior to the 120th day after the close of
each fiscal year of the Borrower, the Borrower will, at the request of the
Administrative Agent, hold a meeting or a conference call with all of the
Lenders at which meeting or a conference call shall be reviewed the financial
results of the Borrower and its Subsidiaries for the previous fiscal year and
the budgets presented for the current fiscal year of the Borrower.

         9.03. Maintenance of Property; Insurance.

         (a) The Borrower will, and will cause each of its Subsidiaries to, (i)
keep all material property necessary to the business of the Borrower and its
Subsidiaries in reasonably good working order and condition, ordinary wear and
tear and obsolescence excepted, (ii) maintain with financially sound and
reputable insurance companies insurance on all such property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice for companies similarly situated owning similar properties in
the same general areas in which the Borrower or any of its Subsidiaries
operates, and (iii) furnish to the Administrative Agent, together with each set
of financial statements delivered pursuant to Section 9.01(c), full information
as to the insurance carried.

         (b) The Borrower will, and will cause each of the Subsidiary Guarantors
to, at all times keep its property insured in favor of the Collateral Agent, and
all policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower and/or such
Subsidiary Guarantors) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured), (ii) shall state that such insurance

                                      -75-



policies shall not be canceled without at least 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent, (iii) shall provide
that the respective insurers irrevocably waive any and all rights of subrogation
with respect to the Collateral Agent and the other Secured Creditors, (iv) shall
contain the standard non-contributing mortgage clause endorsement in favor of
the Collateral Agent with respect to hazard liability insurance, (v) shall,
except in the case of public liability insurance, provide that any losses shall
be payable notwithstanding (A) any foreclosure or other proceeding relating to
the insured properties or (B) any change in the title to or ownership or
possession of the insured properties and (vi) shall be deposited with the
Collateral Agent.

         (c) If the Borrower or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 9.03, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Administrative Agent shall have the right (but shall
be under no obligation) to procure such insurance and the Borrower agrees to
reimburse the Administrative Agent for all reasonable costs and expenses of
procuring such insurance.

         9.04. Existence; Franchises. The Borrower will, and will cause each of
its Subsidiaries (other than Inactive Subsidiaries) to, do or cause to be done,
all things necessary to preserve and keep in full force and effect its existence
and its material rights, franchises, licenses and patents; provided, however,
that nothing in this Section 9.04 shall prevent (i) sales of assets and other
transactions by the Borrower or any of its Subsidiaries in accordance with
Section 10.02 or (ii) the withdrawal by the Borrower or any of its Subsidiaries
of its qualification as a foreign corporation in any jurisdiction where such
withdrawal could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

         9.05. Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

         9.06. Compliance with Environmental Laws.

         (a) The Borrower will comply, and will cause each of its Subsidiaries
to comply, with all Environmental Laws and permits applicable to, or required
by, the ownership, lease or use of its Real Property now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries, will promptly pay
or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws, except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, or transport or permit the transportation
of Hazardous Materials to or

                                      -76-



from any such Real Property, except for Hazardous Materials generated, used,
treated, stored, Released or disposed of at any such Real Properties in
compliance in all material respects with all applicable Environmental Laws and
as reasonably required in connection with the normal operation, use and
maintenance of the business or operations of the Borrower or any of its
Subsidiaries.

         (b) At the reasonable written request of the Administrative Agent or
the Required Lenders, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at the
sole expense of the Borrower, an environmental site assessment report concerning
any Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous Materials on such Real Property, provided that (i) unless
the Lenders or the Administrative Agent has received any notice of the type
described in Section 9.01(i) or (ii) the Lenders have exercised any of the
remedies pursuant to the last paragraph of Section 11, such request may not be
made more than once every two years in respect of any parcel of Real Property.
If the Borrower fails to provide same within 90 days after such request was
made, the Administrative Agent may order the same, the cost of which shall be
borne by the Borrower and the Borrower shall grant and hereby grant to the
Administrative Agent and the Lenders and their respective agents access to such
Real Property and specifically grant the Administrative Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment at any reasonable time upon reasonable notice to
the Borrower, all at the sole expense of the Borrower.

         9.07. ERISA. As soon as possible and, in any event, within ten (10)
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrower will deliver to each of the Lenders a certificate of the chief
financial officer of the Borrower setting forth in reasonable detail information
as to such occurrence and the action, if any, that the Borrower, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the Borrower,
the Subsidiary, the ERISA Affiliate, the PBGC or any other governmental agency,
a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Lenders a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such Plan within
the following 30 days; that an accumulated funding deficiency, within the
meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an

                                      -77-



Unfunded Current Liability; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title IV
of ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA
to collect a delinquent contribution to a Plan; that the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate will or may incur any material
liability (including any indirect, contingent, or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or
502(l) of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that the Borrower or any Subsidiary of the Borrower may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan or
any Foreign Pension Plan. The Borrower will deliver to each of the Lenders
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. Upon the
request of the Administrative Agent or any Lender, the Borrower will also
deliver to the Administrative Agent or such Lender a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan (including,
to the extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information) required to be filed with the Internal Revenue Service. In addition
to any certificates or notices delivered to the Lenders pursuant to the first
sentence hereof, copies of annual reports and any records, documents or other
information required to be furnished to the PBGC or any other governmental
agency, and any material notices received by the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan
shall be delivered to the Lenders no later than ten (10) days after the date
such annual report has been filed with the Internal Revenue Service or such
records, documents and/or information has been furnished to the PBGC or any
other governmental agency or such notice has been received by the Borrower, the
respective Subsidiary or the ERISA Affiliate, as applicable. The Borrower and
each of its Subsidiaries shall insure that all Foreign Pension Plans
administered by it or into which it makes payments obtains or retains (as
applicable) registered status under and as required by applicable law and is
administered in a timely manner in all respects in compliance with all
applicable laws except where the failure to do any of the foregoing could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

         9.08. End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i)
its fiscal year to end on the last day of one of the fiscal quarters set forth
in clause (ii) below and (ii) each of its fiscal quarters to end on March 31,
June 30, September 30 and December 31 of each year.

         9.09. Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement, loan agreement or credit agreement
and each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

         9.10. Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies

                                      -78-



imposed upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and all lawful
claims for sums that have become due and payable which, if unpaid, might become
a Lien not otherwise permitted under Section 10.01(i); provided that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is immaterial or is being contested in
good faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.

         9.11. Additional Security; Further Assurances.

         (a) The Borrower will, and will cause each of its Domestic Subsidiaries
(other than an Inactive Subsidiary) and, to the extent required by Section 9.13,
each of its Foreign Subsidiaries to, grant to the Collateral Agent security
interests and Mortgages in such assets and properties of the Borrower and such
Subsidiaries as are not covered by the original Security Documents, and as may
be reasonably requested from time to time by the Required Lenders (collectively,
the "Additional Security Documents"). All such security interests and Mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and shall constitute valid and enforceable
perfected security interests and Mortgages superior to and prior to the rights
of all third Persons and subject to no other Liens except for Permitted Liens.
The Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.

         (b) The Borrower will, and will cause each of the Subsidiary Guarantors
to, at the expense of the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports, landlord waivers and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require. Furthermore,
the Borrower will cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Administrative Agent to assure itself that this Section 9.11
has been complied with.

         (c) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of the Real Property of the Borrower and its Subsidiaries
constituting Collateral, the Borrower will, at its own expense, provide to the
Administrative Agent appraisals which satisfy the applicable requirements of the
Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be
in form and substance reasonably satisfactory to the Administrative Agent.

         (d) The Borrower agrees that each action required above by this Section
9.11 shall be completed as soon as possible, but in no event later than 90 days
after such action is either requested to be taken by the Administrative Agent or
the Required Lenders or required to be

                                      -79-



taken by the Borrower and/or its Subsidiaries pursuant to the terms of this
Section 9.11; provided that, in no event will the Borrower or any of its
Subsidiaries be required to take any action, other than using its best efforts,
to obtain consents from third parties with respect to its compliance with this
Section 9.11.

         9.12. Use of Proceeds. The Borrower will use the proceeds of the Loans
only as provided in Section 8.08.

         9.13. Foreign Subsidiaries Security. If, following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, the Borrower
does not within 30 days after a request from the Administrative Agent or the
Required Lenders deliver evidence, in form and substance reasonably satisfactory
to the Administrative Agent, with respect to any Foreign Subsidiary of the
Borrower which has not already had all of its stock pledged pursuant to the
Pledge Agreement that

                  (i) a pledge of 65% or more of the total combined voting power
         of all classes of capital stock of such Foreign Subsidiary entitled to
         vote,

                  (ii) the entering into by such Foreign Subsidiary of a
         security agreement in substantially the form of the Security Agreement,
         and

                  (iii) the entering into by such Foreign Subsidiary of a
         guaranty in substantially the form of the Subsidiaries Guaranty,

in any such case could reasonably be expected to cause (I) any undistributed
earnings of such Foreign Subsidiary as determined for Federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's United
States parent for Federal income tax purposes or (II) other Federal income tax
consequences to the Credit Parties having a Material Adverse Effect, then in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock not theretofore
pledged pursuant to the Pledge Agreement shall be promptly pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary shall promptly execute and deliver
the Security Agreement and Pledge Agreement (or another security agreement or
pledge agreement in substantially similar form, if needed), granting the Secured
Creditors a security interest in all of such Foreign Subsidiary's assets and
securing the Obligations of the Borrower under the Credit Documents and under
any Interest Rate Protection Agreement or Other Hedging Agreement and, in the
event the Subsidiaries Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iii) above, such
Foreign Subsidiary shall promptly execute and deliver the Subsidiaries Guaranty
(or another guaranty in substantially similar form, if needed), guaranteeing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement, in each case to the extent
that the entering into of the Security Agreement, Pledge Agreement or
Subsidiaries Guaranty is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered

                                      -80-



pursuant to this Section 9.13 to be in form and substance reasonably
satisfactory to the Administrative Agent.

         9.14. Margin Stock. In the event that the Borrower or any other Credit
Party holds any Margin Stock that is required to be pledged pursuant to the
Pledge Agreement, the Borrower will duly execute and deliver to each Lender an
appropriately completed Form U-1 or Form G-3 referred to in Regulation U.

         9.15. Permitted Acquisitions.

         (a) Subject to the provisions of this Section 9.15 and the requirements
contained in the definition of Permitted Acquisition, the Borrower and its
Wholly-Owned Subsidiaries may from time to time effect Permitted Acquisitions,
so long as (in each case except to the extent the Required Lenders otherwise
specifically agree in writing in the case of a specific Permitted Acquisition):

                  (i) no Default or Event of Default shall have occurred and be
         continuing at the time of the consummation of the proposed Permitted
         Acquisition or immediately after giving effect thereto;

                  (ii) all representations and warranties contained herein and
         in the other Credit Documents shall be true and correct in all material
         respects with the same effect as though such representations and
         warranties had been made on and as of the date of such Permitted
         Acquisition (both before and after giving effect thereto), unless
         stated to relate to a specific earlier date, in which case such
         representations and warranties shall be true and correct in all
         material respects as of such earlier date;

                  (iii) the Net Acquisition Consideration with respect to any
         one Permitted Acquisition shall not be greater than $20,000,000;

                  (iv) the Net Acquisition Consideration with respect to all
         Permitted Acquisitions consummated during any given fiscal year of the
         Borrower shall not exceed the "Total Acquisition Amount," which shall
         be determined according to the following:

                           (A) from and after January 1, 2003, until increased
                  as provided for in (B) or (C) below, the Total Acquisition
                  Amount shall be $20,000,000;

                           (B) from and after January 1, 2004, the Total
                  Acquisition Amount shall be $20,000,000 plus the product (only
                  to the extent the product is a positive number) of 50% of the
                  sum at the Consolidated EBITDA for the period January 1, 2003
                  to December 31, 2003 less the Consolidated EBITDA for the
                  period of January 1, 2002 to December 31, 2002, provided that
                  the Total Acquisition Amount shall not be increased to more
                  than a total of $25,000,000 pursuant to this clause (B); and

                           (C) from and after January 1, 2005, the Total
                  Acquisition Amount

                                      -81-



                  shall be the Total Acquisition Amount as determined by clause
                  (B) above plus the product (only to the extent the product is
                  a positive number) of 50% of the sum of the Consolidated
                  EBITDA for the period January 1, 2004 to December 31, 2004,
                  less the consolidated EBITDA for the period of January 1, 2003
                  to December 31, 2003, provided that the Total Acquisition
                  Amount shall not be increased to more than a total of
                  $30,000,000 pursuant to this clause (C).

                  (v) the Acquired EBITDA of each Acquired Entity or Business,
         calculated prior to a Permitted Acquisition shall not be less than a
         negative $2,500,000 for the twelve month period prior to the Permitted
         Acquisition, and in any fiscal year of the Borrower the total Acquired
         EBITDA for all Acquired Entities and Businesses shall not be less than
         a negative $5,000,000 on an aggregate basis.

                  (vi) immediately after giving effect to each Permitted
         Acquisition (and all payments to be made in connection therewith), the
         Total Unutilized Revolving Loan Commitment, when added to the aggregate
         amount of unrestricted cash and Cash Equivalents held by the Borrower
         and its Wholly-Owned Domestic Subsidiaries, shall equal or exceed
         $7,000,000;

                  (vii) no Acquired Entity or Business acquired pursuant to a
         Permitted Acquisition shall be organized or domiciled under the law of
         any jurisdiction other than the United States or Canada, or any states
         or provinces therein, and no Acquired Entity or Business shall have
         more than 15% of its assets or annual revenues based in or from outside
         of the United States or Canada (as determined from the most recently
         available financial information for such Person or assets);

                  (viii) such Permitted Acquisition is non-hostile (i.e., the
         prior, effective written consent or approval to such Permitted
         Acquisition of the board of directors or equivalent governing body of
         the Acquired Entity or Business shall have been obtained);

                  (ix) at least 10 Business Days prior to any Permitted
         Acquisition, the Borrower shall have (x) given the Administrative Agent
         and the Lenders at least 10 Business Days prior written notice of any
         Permitted Acquisition, and (y) delivered to the Administrative Agent
         and each Lender an officer's certificate executed by a senior financial
         officer of the Borrower, certifying to the best of such officer's
         knowledge, compliance with the requirements of preceding clauses (i)
         through (viii), inclusive, and containing the calculations (in
         reasonable detail) (A) evidencing compliance with the preceding clauses
         (iii), (iv), (v), (vi), (vii), and (viii) and (B) necessary to
         establish the Acquired EBITDA of the Acquired Entity or Business
         acquired pursuant to such Permitted Acquisition, which calculations
         shall be reasonably approved by the Administrative Agent.

         (b) At the time of each Permitted Acquisition involving the creation or
acquisition of a Subsidiary, or the acquisition of capital stock or other equity
interest of any Person, all capital

                                      -82-



stock or other equity interests thereof created or acquired in connection with
such Permitted Acquisition shall be pledged for the benefit of the Secured
Creditors pursuant to (and to the extent required by) the Pledge Agreement.

         (c) The Borrower will cause each Subsidiary which is formed to effect,
or is acquired pursuant to, a Permitted Acquisition to comply with, and to
execute and deliver, all of the documentation as and to the extent required by,
Sections 9.11 and 10.16, to the satisfaction of the Administrative Agent.

         (d) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by the Borrower that the certifications by the
Borrower pursuant to Section 9.15(a) are true and correct and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 8 and 11.

         (e) In any Permitted Acqusition that involves a working capital
adjustment, Net Acquisition Consideration for the purposes of clauses (a)(iii)
and (iv) above shall be initially calculated on the basis of a reasonably
estimated working capital adjustment. Within 75 days after each such Permitted
Acquisition, the Borrower (i) shall establish the actual amount of working
capital adjustment and the actual Net Acquisition Consideration, and (ii) shall
deliver to the Administrative Agent and each Lender an officer's certificate
executed by a senior financial officer of the Borrower, certifying to the best
of such officer's knowledge, compliance with the requirements of preceding
clauses (a)(iii) and (iv) based on such recalculated Net Acquisition
Consideration, and containing the calculations (in reasonable detail) evidencing
compliance with the preceding clauses (a)(iii) and (iv).

                                   SECTION 10

                               NEGATIVE COVENANTS.

         The Borrower hereby covenants and agrees that on and after the
Restatement Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case,
together with interest thereon), Fees and all other Obligations (other than any
indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:

         10.01. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
Section 10.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):

                                      -83-



                  (i) inchoate Liens for taxes, assessments or governmental
         charges or levies not yet due or Liens for taxes, assessments or
         governmental charges or levies being contested in good faith and by
         appropriate proceedings for which adequate reserves have been
         established in accordance with GAAP;

                  (ii) Liens in respect of property or assets of the Borrower or
         any of its Subsidiaries imposed by law, which were incurred in the
         ordinary course of business and do not secure Indebtedness for borrowed
         money, such as carriers', warehousemen's, materialmen's and mechanics'
         liens and other similar Liens arising in the ordinary course of
         business, and (x) which do not in the aggregate materially detract from
         the value of the Borrower's or such Subsidiary's property or assets or
         materially impair the use thereof in the operation of the business of
         the Borrower or such Subsidiary or (y) which are being contested in
         good faith by appropriate proceedings, which proceedings have the
         effect of preventing the forfeiture or sale of the property or assets
         subject to any such Lien;

                  (iii) Liens in existence on the Initial Borrowing Date which
         are listed, and the property subject thereto described, in Schedule 6
         of the Disclosure Letter, but only to the respective date, if any, set
         forth in such Schedule 6 for the removal, replacement and termination
         of any such Liens, plus renewals, replacements and extensions of such
         Liens to the extent set forth on such Schedule 6, provided that (x) the
         aggregate principal amount of the Indebtedness, if any, secured by such
         Liens does not increase from that amount outstanding at the time of any
         such renewal, replacement or extension and (y) any such renewal,
         replacement or extension does not encumber any additional assets or
         properties of the Borrower or any of its Subsidiaries;

                  (iv) Liens created pursuant to the Security Documents;

                  (v) leases or subleases granted to other Persons not
         materially interfering with the conduct of the business of the Borrower
         or any of its Subsidiaries;

                  (vi) Liens upon assets of the Borrower or any of its
         Subsidiaries subject to Capitalized Lease Obligations to the extent
         such Capitalized Lease Obligations are permitted by Section 10.04(iv),
         provided that (x) such Liens only serve to secure the payment of
         Indebtedness arising under such Capitalized Lease Obligation and (y)
         the Lien encumbering the asset giving rise to the Capitalized Lease
         Obligation does not encumber any other asset of the Borrower or any
         Subsidiary of the Borrower;

                  (vii) Liens placed upon (x) equipment or machinery acquired
         after the Initial Borrowing Date and used in the ordinary course of
         business of the Borrower or any of its Subsidiaries at the time of the
         acquisition thereof by the Borrower or any such Subsidiary or within 90
         days thereafter to secure Indebtedness incurred to pay all or a portion
         of the purchase price thereof or to secure Indebtedness incurred solely
         for the purpose of financing the acquisition of any such equipment or
         machinery or extensions, renewals or replacements of any

                                      -84-



         of the foregoing for the same or a lesser amount or (y) Real Property
         acquired or constructed after the Initial Borrowing Date and used in
         the ordinary course of business of the Borrower or any of its
         Subsidiaries at the time of the acquisition or construction thereof by
         the Borrower or any of its Subsidiaries or within 180 days thereafter
         to secure Indebtedness incurred to pay all or a portion of the purchase
         price or construction cost thereof or to secure Indebtedness incurred
         solely for the purpose of financing the acquisition or construction of
         any such Real Property or extensions, renewals or replacements of any
         of the foregoing for the same or a lesser amount, provided that (i) the
         Indebtedness secured by all such Liens described in this clause (vii)
         is permitted by Section 10.04(iv) and (y) in all events, the Lien
         encumbering the asset so acquired or constructed does not encumber any
         other asset of the Borrower or such Subsidiary;

                  (viii) easements, rights-of-way, restrictions, encroachments
         and other similar charges or encumbrances, and minor title
         deficiencies, in each case not securing Indebtedness and not materially
         interfering with the conduct of the business of the Borrower or any of
         its Subsidiaries;

                  (ix) Liens arising from precautionary UCC financing statement
         filings regarding Operating Leases;

                  (x) Liens arising out of the existence of judgments or awards
         in respect of which the Borrower or any of its Subsidiaries shall in
         good faith be prosecuting an appeal or proceedings for review and in
         respect of which there shall have been secured a subsisting stay of
         execution pending such appeal or proceedings, provided that the
         aggregate amount of all cash and the fair market value of all other
         property subject to such Liens does not exceed $5,000,000 at any time
         outstanding;

                  (xi) statutory and common law landlords' liens under leases to
         which the Borrower or any of its Subsidiaries is a party;

                  (xii) Liens (other than Liens imposed under ERISA) incurred in
         the ordinary course of business in connection with workers compensation
         claims, unemployment insurance and social security benefits;

                  (xiii) Liens securing the performance of bids, tenders, leases
         and contracts in the ordinary course of business, statutory
         obligations, surety bonds, performance bonds and other obligations of a
         like nature incurred in the ordinary course of business and consistent
         with past practice (exclusive of obligations in respect of the payment
         for borrowed money), provided that the aggregate amount of all cash and
         the fair market value of all other property subject to all Liens
         permitted by this clause (xiii) shall not at any time exceed
         $1,500,000;

                  (xiv) Liens on property or assets acquired pursuant to a
         Permitted Acquisition, or on property or assets of a Subsidiary of the
         Borrower in existence at the time such Subsidiary is acquired pursuant
         to a Permitted Acquisition,

                                      -85-



         provided that (x) any Indebtedness that is secured by such Liens is
         permitted to exist under Section 10.04(ix), and (y) such Liens are not
         incurred in connection with, or in contemplation or anticipation of,
         such Permitted Acquisition and do not attach to any other asset of the
         Borrower or any of its Subsidiaries;

                  (xv) Liens in favor of customs and revenue authorities arising
         as a matter of law to secure payment of customs duties in connection
         with the importation of goods;

                  (xvi) Liens which constitute rights of set-off of a customary
         nature or bankers' Liens with respect to amounts on deposit, whether
         arising by operation of law or by contract, in connection with
         arrangements entered into with banks in the ordinary course of
         business;

                  (xvii) Liens on insurance proceeds securing the payment of
         financed insurance premiums; and

                  (xviii) Permitted Encumbrances.

In connection with the granting of Liens of the type described in clauses (vi)
and (vii) of this Section 10.01 by the Borrower or any of its Subsidiaries, the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate by it in connection therewith (including, without
limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).

         10.02. Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time (unless such
agreement relates to an action otherwise permitted by this Section 10.02, or to
the extent that the respective action is not otherwise permitted by this Section
10.02 (and the Loans will not be repaid in full, and all Commitments terminated,
at the time of the consummation of the respective action), such agreement
expressly provides that the consent of the requisite percentage of Lenders
hereunder is required to be obtained in connection therewith)), except that:

                  (i) Capital Expenditures by the Borrower and its Subsidiaries
         shall be permitted to the extent not in violation of Section 10.07;

                  (ii) each of the Borrower and its Subsidiaries may make sales
         of inventory and license intellectual property in the ordinary course
         of business;

                                      -86-



                  (iii) each of the Borrower and its Subsidiaries may sell
         obsolete, uneconomic or worn-out equipment or materials in the ordinary
         course of business;

                  (iv) Permitted Acquisitions may be made to the extent
         permitted by Section 9.15;

                  (v) each of the Borrower and its Subsidiaries may sell other
         assets (other than the capital stock of any Subsidiary Guarantor), so
         long as (v) no Default or Event of Default then exists or would result
         therefrom, (w) each such sale is in an arm's-length transaction and the
         Borrower or the respective Subsidiary receives at least fair market
         value (as determined in good faith by the Borrower or such Subsidiary,
         as the case may be), (x) the total consideration received by the
         Borrower or such Subsidiary is at least 75% cash and is paid at the
         time of the closing of such sale, (y) the Net Sale Proceeds therefrom
         are applied and/or reinvested as (and to the extent) required by
         Section 5.02(e) and (z) the aggregate amount of the proceeds received
         from all assets sold pursuant to this clause (v) shall not exceed
         $5,000,000 in any fiscal year of the Borrower;

                  (vi) Investments may be made to the extent permitted by
         Section 10.05;

                  (vii) each of the Borrower and its Subsidiaries may lease (as
         lessee) real or personal property (so long as any such lease does not
         create a Capitalized Lease Obligation except to the extent permitted by
         Section 10.04(iv));

                  (viii) each of the Borrower and its Subsidiaries may sell or
         discount, in each case without recourse and in the ordinary course of
         business, accounts receivable arising in the ordinary course of
         business, but only in connection with the compromise or collection
         thereof and not as part of any financing transaction;

                  (ix) each of the Borrower and its Subsidiaries may grant
         leases or subleases to other Persons not materially interfering with
         the conduct of the business of the Borrower or any of its Subsidiaries;

                  (x) any Subsidiary of the Borrower (i) may be merged or
         consolidated with or into the Borrower or liquidated so long as the
         Borrower is the surviving corporation of such merger or consolidation
         or receives the assets of such Subsidiary upon such liquidation and
         (ii) may transfer its assets to the Borrower or to any Subsidiary
         Guarantor; and

                  (xi) any Subsidiary of the Borrower may be merged or
         consolidated with or into any other Subsidiary of the Borrower or
         liquidated so long as (i) in the case of any (x) such merger or
         consolidation involving a Subsidiary Guarantor, a Subsidiary Guarantor
         is the surviving corporation of such merger or consolidation or (y)
         such liquidation involving a Subsidiary Guarantor, a Subsidiary
         Guarantor receives the assets of such Subsidiary upon such liquidation
         and (ii) in the case of any (x) such merger or consolidation involving
         a Wholly-Owned Subsidiary of

                                      -87-



         the Borrower, in addition to the requirements of preceding clause
         (i)(x), a Wholly-Owned Subsidiary is the surviving corporation of such
         merger or consolidation or (y) such liquidation, in addition to the
         requirements of preceding clause (i)(y), a Wholly-Owned Subsidiary
         receives the assets of such Subsidiary upon such liquidation.

To the extent the Required Lenders waive the provisions of this Section 10.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 10.02 (other than to the Borrower or a Subsidiary
thereof), such Collateral shall be sold free and clear of the Liens created by
the Security Documents, and the Administrative Agent and the Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.

         10.03. Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:

                  (i) any Subsidiary of the Borrower may pay cash Dividends to
         the Borrower or to any Wholly-Owned Subsidiary of the Borrower;

                  (ii) any non-Wholly-Owned Subsidiary of the Borrower may pay
         cash Dividends to its shareholders generally so long as the Borrower or
         its respective Subsidiary which owns the equity interest in the
         Subsidiary paying such Dividends receives at least its proportionate
         share thereof (based upon its relative holding of the equity interest
         in the Subsidiary paying such Dividends and taking into account the
         relative preferences, if any, of the various classes of equity
         interests of such Subsidiary);

                  (iii) with prior written consent of the Required Lenders and
         so long as there shall exist no Default or Event of Default (both
         before and after giving effect to the payment thereof), the Borrower
         may repurchase outstanding shares of its common stock (or options to
         purchase such common stock) following the death, disability or
         termination of employment of officers, directors or employees of the
         Borrower or any of its Subsidiaries, provided that the aggregate amount
         of Dividends paid by the Borrower pursuant to this clause (iii) shall
         not exceed $500,000 in any fiscal year of the Borrower;

                  (iv) the Borrower may pay regularly scheduled Dividends on its
         Qualified Preferred Stock pursuant to the terms thereof solely through
         the issuance of additional shares of such Qualified Preferred Stock
         rather than in cash;

                  (v) with the prior written consent of the Required Lenders,
         the Borrower may redeem its outstanding preferred stock purchase rights
         issued under the Borrower's stockholder's rights plan in an aggregate
         amount not to exceed $500,000;

                  (vi) the Borrower may pay cash Dividends in relation to its
         common stock on a pro rata basis, provided that before and after giving
         effect to the payment

                                      -88-



         thereof, (a) no Default or Event of Default shall exist, and (b) the
         aggregate amount of all cash Dividends under this Section 10.03(vi)
         shall not exceed $1,000,000.

         10.04. Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:

                  (i) Indebtedness incurred pursuant to this Agreement and the
         other Credit Documents;

                  (ii) Existing Indebtedness outstanding on the Initial
         Borrowing Date and listed on Schedule 4 of the Disclosure Letter,
         without giving effect to any subsequent extension, renewal or
         refinancing thereof except to the extent set forth on such Schedule 4,
         provided that the aggregate principal amount of the Indebtedness to be
         extended, renewed or refinanced does not increase from that amount
         outstanding at the time of any such extension, renewal or refinancing;

                  (iii) Indebtedness under Interest Rate Protection Agreements
         in notional amounts not to exceed the outstanding Loans pursuant to
         this Agreement, such Interest Rate Protection Agreements to be
         reasonably acceptable to the Administrative Agent and entered into with
         respect to other Indebtedness permitted under this Section 10.04;

                  (iv) Indebtedness of the Borrower and its Subsidiaries
         evidenced by Capitalized Lease Obligations (to the extent permitted
         pursuant to Section 10.07, 10.08 and 10.09) and purchase money
         Indebtedness described in Section 10.01(vii), provided that in no event
         shall the sum of the aggregate principal amount of all Capitalized
         Lease Obligations and purchase money Indebtedness permitted by this
         clause (iv) exceed $10,000,000 at any time outstanding;

                  (v) intercompany Indebtedness among the Borrower and its
         Subsidiaries to the extent permitted by Sections 10.05(xi), (xiii),
         (xiv), (xv) and (xvi);

                  (vi) Indebtedness consisting of guaranties by the Borrower and
         its Subsidiaries of Indebtedness of the Borrower and its Subsidiaries
         otherwise permitted to be incurred under this Section 10.04 (other than
         in respect of the Senior Subordinated Notes), in each case only so long
         as the giving of such guaranty does not require a Subsidiary of the
         Borrower to guaranty the Borrower's obligations in respect of the
         Senior Subordinated Notes;

                  (vii) Indebtedness under Other Hedging Agreements providing
         protection against fluctuations in currency values in connection with
         the Borrower's or any of its Subsidiaries' operations so long as
         management of the Borrower or such Subsidiary, as the case may be, has
         determined that the entering into of such Other Hedging Agreements are
         bona fide hedging activities and are not for speculative purposes;

                                      -89-



                  (viii) Indebtedness of the Borrower under the Senior
         Subordinated Notes and the other Senior Subordinated Note Documents in
         an aggregate principal amount not to exceed $92,000,000 (as reduced by
         any repayments of principal thereof);

                  (ix) Indebtedness of a Subsidiary acquired pursuant to a
         Permitted Acquisition (or Indebtedness assumed at the time of a
         Permitted Acquisition of an asset securing such Indebtedness), provided
         that (x) such Indebtedness was not incurred in connection with, or in
         anticipation or contemplation of, such Permitted Acquisition, (y) such
         Indebtedness does not constitute debt for borrowed money (other than
         debt for borrowed money incurred in connection with industrial revenue
         or industrial development bond financings), it being understood and
         agreed that Capitalized Lease Obligations and purchase money
         Indebtedness of the type described in Section 10.01(vii) shall not
         constitute debt for borrowed money for purposes of this clause (y), and
         (z) at the time of such Permitted Acquisition, the aggregate of all
         Indebtedness permitted under this clause (ix) does not exceed the
         greater of $5,000,000 or 15% of the total value of the assets of all
         Subsidiaries (or assets) so acquired since the Restatement Effective
         Date hereof;

                  (x) Indebtedness arising from the honoring by a bank or other
         financial institution of a check, draft or similar instrument
         inadvertently (except in the case of daylight overdrafts) drawn against
         insufficient funds in the ordinary course of business, so long as such
         Indebtedness not otherwise constituting Indebtedness permitted under
         this Section 10.04 is extinguished within two Business Days of the
         incurrence thereof;

                  (xi) Indebtedness in respect of bid, performance, advance
         payment or surety bonds entered into in the ordinary course of business
         and consistent with past practices in an aggregate amount not to exceed
         $1,500,000 at any time outstanding; and

                  (xii) so long as no Default or Event of Default then exists or
         would result therefrom, additional unsecured Indebtedness incurred by
         the Borrower and its Subsidiaries in an aggregate principal amount not
         to exceed $10,000,000 at any one time outstanding.

         10.05. Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:

                                      -90-



                  (i) the Borrower and its Subsidiaries may acquire and hold
         accounts receivables owing to any of them, if created or acquired in
         the ordinary course of business and payable or dischargeable in
         accordance with customary trade terms of the Borrower or such
         Subsidiary;

                  (ii) the Borrower and its Subsidiaries may acquire and hold
         cash and Cash Equivalents;

                  (iii) the Borrower and its Subsidiaries may hold the
         Investments held by them on the Initial Borrowing Date and described on
         Schedule 7 of the Disclosure Letter, provided that any additional
         Investments made with respect thereto shall be permitted only if
         independently justified under the other provisions of this Section
         10.05;

                  (iv) the Borrower and its Subsidiaries may acquire and own
         investments (including debt obligations) received in connection with
         the bankruptcy or reorganization of suppliers and customers and in good
         faith settlement of delinquent obligations of, and other disputes with,
         customers and suppliers arising in the ordinary course of business;

                  (v) the Borrower and its Subsidiaries may make loans and
         advances in the ordinary course of business to their respective
         employees so long as the aggregate principal amount thereof at any time
         outstanding (determined without regard to any write-downs or write-offs
         of such loans and advances) shall not exceed $500,000;

                  (vi) to the extent permitted by law, the Borrower may acquire
         and hold obligations of one or more officers or other employees of the
         Borrower or any of its Subsidiaries in connection with such officers'
         or employees' acquisition of shares of common stock of the Borrower
         provided, however, that (a) no cash is paid by the Borrower or any of
         its Subsidiaries to such officers or employees in connection with the
         acquisition of any such obligations, and (b) the aggregate of all such
         obligations shall not exceed $3,000,000 at any one time outstanding.

                  (vii) the Borrower and its Subsidiaries may enter into
         Interest Rate Protection Agreements to the extent permitted by Section
         10.04(iii);

                  (viii) the Borrower and its Subsidiaries may enter into Other
         Hedging Agreement to the extent permitted by Section 10.04(vii);

                  (ix) Permitted Acquisitions shall be permitted in accordance
         with Section 9.15;

                  (x) the Borrower and its Subsidiaries may acquire and hold
         promissory notes and other non-cash consideration issued by the
         purchaser of assets in connection with a sale of such assets to the
         extent permitted by Sections 10.02(iv) and (v);

                                      -91-



                  (xi) the Borrower and the Subsidiary Guarantors may make
         Intercompany Loans between or among one another, so long as each
         Intercompany Loan shall be evidenced by an Intercompany Note that is
         pledged to the Collateral Agent pursuant to the Pledge Agreement;

                  (xii) the Borrower may make equity contributions to the
         capital of the Subsidiary Guarantors and the Subsidiary Guarantors may
         make equity contributions to the capital of their respective
         Subsidiaries which are Subsidiary Guarantors, provided that the
         Borrower may not contribute a material portion of its non-cash assets
         to the Subsidiary Guarantors;

                  (xiii) the Borrower and the Subsidiary Guarantors may make
         Intercompany Loans and/or cash equity contributions to Wholly-Owned
         Foreign Subsidiaries of the Borrower for the purpose of enabling such
         Wholly-Owned Foreign Subsidiaries to consummate a Permitted Acquisition
         or to make Capital Expenditures so long as (x) each such Investment
         that is made as an Intercompany Loan shall be evidenced by an
         Intercompany Note that is pledged to the Collateral Agent pursuant to
         the Pledge Agreement, (y) no more than $1,000,000 of such Investments
         in the aggregate may be made in any fiscal year of the Borrower for
         Permitted Acquisitions and (z) no more than $1,000,000 of such
         Investments in the aggregate may be made in any fiscal year of the
         Borrower for Capital Expenditures;

                  (xiv) the Borrower and its Wholly-Owned Subsidiaries may make
         additional Intercompany Loans and/or cash equity contributions to their
         respective Wholly-Owned Foreign Subsidiaries for the purpose of
         enabling such Subsidiaries to make an Investment permitted by clause
         (xvi) of this Section 10.05 so long as (x) each such Investment that is
         made as an Intercompany Loan shall be evidenced by an Intercompany Note
         that is pledged to the Collateral Agent pursuant to the Pledge
         Agreement and (y) no more than $1,000,000 of such Investments in the
         aggregate may be made;

                  (xv) Wholly-Owned Foreign Subsidiaries of the Borrower may
         make intercompany loans (x) between or among one another and (y) to the
         Borrower or any Subsidiary Guarantor so long as each such Intercompany
         Loan made to the Borrower or a Subsidiary Guarantor shall contain (and
         shall be subject to) the subordination provisions described in Exhibit
         M; and

                  (xvi) so long as no Default or Event of Default then exists or
         would result therefrom, the Borrower and its Subsidiaries may make
         additional Investments so long as the aggregate amount of all such
         Investments made pursuant to this clause (xvi) does not exceed
         $2,000,000 in any fiscal year.

         10.06. Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to

                                      -92-



the Borrower or such Subsidiary as would reasonably be obtained by the Borrower
or such Subsidiary at that time in a comparable arm's-length transaction with a
Person other than an Affiliate, except that the following in any event shall be
permitted:

                  (i) Dividends may be paid to the extent provided in Section
         10.03;

                  (ii) loans may be made and other transactions may be entered
         into by the Borrower and its Subsidiaries to the extent permitted by
         Sections 10.02, 10.04 and 10.05;

                  (iii) customary fees may be paid to non-officer directors of
         the Borrower and its Subsidiaries;

                  (iv) the Borrower and its Subsidiaries may enter into, and may
         make payments under, employment agreements, employee benefits plans,
         stock option plans, indemnification provisions and other similar
         compensatory arrangements with officers, employees and directors of the
         Borrower and its Subsidiaries in the ordinary course of business;

                  (v) transactions exclusively between or among the Borrower and
         any of its Wholly-Owned Subsidiaries or exclusively between or among
         such Wholly-Owned Subsidiaries, provided that such transactions are not
         otherwise prohibited by the Credit Documents;

                  (vi) any agreement as in effect as of the Initial Borrowing
         Date or any amendment thereto or any transaction contemplated thereby
         (including pursuant to any amendment thereto) in any replacement
         agreement thereto so long as any such amendment or replacement
         agreement is not more disadvantageous to the Lenders in any material
         respect than the original agreement as in effect on the Initial
         Borrowing Date; and

                  (vii) transactions with Annapurna Corporation aggregating not
         more than $500,000 in any fiscal year of the Borrower.

         10.07. Consolidated Fixed Charge Coverage Ratio. The Borrower will not
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period to be
less than 1.15:1.

         10.08. Maximum Total Leverage Ratio. The Borrower will not permit the
Consolidated Total Leverage Ratio at any time during a period set forth below to
be greater than the ratio set forth opposite such period below:



                        PERIOD                                                            RATIO
                        ------                                                            -----
                                                                                     
Initial Borrowing Date through and including December 30, 2003                          3.25:1.00

December 31, 2003 through and including June 29, 2004                                   3.00:1.00

June 30, 2004 through and including March 30, 2005                                      2.75:1.00

March 31, 2005 and thereafter                                                           2.50:1.00


                                      -93-



In addition, at the Borrower's option, by written notice to the Administrative
Agent, the Borrower may irrevocably reduce to 2.50:1.00 the required
Consolidated Total Leverage Ratio, whereupon the Borrower will not permit the
Consolidated Total Leverage Ratio at any time to be greater than 2.50:1.00.

         10.09. Maximum Senior Leverage Ratio. The Borrower will not permit the
Consolidated Senior Leverage Ratio at any time to be greater than 2.00:1; it
being understood, however, to the extent the that the required Consolidated
Total Leverage Ratio pursuant to Section 10.08 has become equal to or less than
2.50:1, then the Borrower's obligations in respect of this Section 10.09 shall
terminate.

         10.10. Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for any Test Period to be less than $75,000,000.

         10.11. Consolidated Net Worth. The Borrower will not permit the
Consolidated Net Worth as of the end of any fiscal quarter of the Borrower to be
less than the sum of (a) $105,000,000, (b) an amount equal to 50% of the
Consolidated Net Income (with no deduction for any net loss in any such fiscal
quarter) earned in each fiscal quarter ending after December 31, 2002, plus (c)
an amount equal to 100% of the aggregate increases in shareholders' equity of
the Borrower and its Subsidiaries after the Restatement Effective Date by reason
of the issuance and sale of capital stock of the Borrower for cash consideration
(including upon any conversion of debt securities of the Borrower into such
capital stock).

         10.12. Limitation on Voluntary Payments and Modifications of Certain
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements, etc.

         (a) The Borrower will not, and will not permit any of its Subsidiaries
to:

                  (i) make (or give any notice in respect of) any Restricted
         Payment with respect to any Subordinated Debt, unless immediately
         before and after giving effect thereto each of the following conditions
         is satisfied (except as may be permitted under Section 10.12(b):

                           (A) no Default or Event of Default shall exist,

                           (B) such Restricted Payment when added to all other
                  Restricted Payments theretofore made shall not exceed the sum
                  of $50,000,000; and

                  (ii) make any Restricted Payment with respect to any
         Subordinated Debt under this Section 10.12(a), unless at least 10
         Business Days prior to any Restricted Payment with respect to any
         Subordinated Debt, the Borrower shall have furnished to the
         Administrative Agent an officer's certificate executed by a senior
         financial officer of the Borrower certifying compliance with the
         conditions in preceding clauses 10.12(a)(i)(A) and (B) and accompanied
         by reasonable

                                      -94-



         calculations.

         (b) The Borrower will not, and will not permit any of its Subsidiaries
to:

                  (i) make (or give any notice in respect of) any Restricted
         Payment with respect to any Subordinated Debt, unless immediately
         before and after giving effect thereto each of the following conditions
         is satisfied:

                           (A) no Default or Event of Default shall exist,

                           (B) the Consolidated EBITDA as of the day of the last
                  most recent Test Period is greater than 105% of the minimum
                  amount of Consolidated EBITDA required pursuant to Section
                  10.10 in respect of such Test Period,

                           (C) the Total Unutilized Revolving Loan Commitment,
                  when added to the aggregate of unrestricted cash and Cash
                  Equivalents held by the Borrower and its Wholly-Owned Domestic
                  Subsidiaries, shall equal or exceed $7,000,000,

                           (D) the Consolidated Total Leverage Ratio then
                  required to be satisfied by the Borrower pursuant to Section
                  10.08 has decreased to 2.50:1.00;

                  (ii) make any Restricted Payment with respect to any
         Subordinated Debt under this Section 10.12(b), unless at least 10
         Business Days prior to any Restricted Payment with respect to any
         Subordinated Debt, the Borrower shall have furnished to the
         Administrative Agent an officer's certificate executed by a senior
         financial officer of the Borrower certifying compliance with the
         conditions in preceding clauses 10.12(b)(i)(A) through (D) and
         accompanied by reasonable calculations; and

                  (iii) make any Restricted Payment with respect to any
         Subordinated Debt pursuant to this Section 10.12(b), unless Borrower
         and its Subsidiaries have made all Restricted Payments with respect to
         Subordinated Debt that may be made under the limitation of Section
         10.12(a)(i)(B), the Borrower being prohibited from electing to
         categorize Restricted Payments with respect to Subordinated Debt under
         either 10.12(a) or (b).

         (c) The Borrower will not, and will not permit any of its Subsidiaries
to amend or modify, or permit the amendment or modification of, any provision of
any Senior Subordinated Note Document or other agreement relating to
Subordinated Debt.

         (d) The Borrower will not, and will not permit any of its Subsidiaries
to amend, modify or change its certificate or articles of incorporation
(including, without limitation, by the filing or modification of any certificate
or articles of designation) or by-laws (or the equivalent organizational
documents) or any agreement entered into by it with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its

                                      -95-



capital stock, unless such amendment, modification, change or other action
contemplated by this clause (iii) could not reasonably be expected to be adverse
to the interests of the Lenders in any material respect.

         (e) Neither the Borrower nor any of its Subsidiaries shall designate
any Indebtedness, other than the Obligations, as "Designated Senior Debt" for
purposes of the Senior Subordinated Notes.

         10.13. Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary
of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) the Senior Subordinated Note Documents, (iv)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or any Subsidiary of the Borrower, (v)
customary provisions restricting assignment of any licensing agreement (in which
the Borrower or such Subsidiary is the licensee) or other contract entered into
by the Borrower or any Subsidiary of the Borrower in the ordinary course of
business, (vi) any instrument governing Indebtedness described in Section
10.04(ix), which restriction is not applicable to any Person, or the property or
assets of any Person, other than the Person or the properties or assets acquired
pursuant to any such Permitted Acquisition, (vii) agreements existing on the
Initial Borrowing Date to the extent and in the manner such agreements are in
effect on the Initial Borrowing Date, (viii) any agreement for the sale or
disposition of capital stock or assets of any Subsidiary, provided that such
encumbrances and restrictions are only applicable to such Subsidiary or assets,
as applicable, and any such sale or disposition is made in compliance with
Section 10.02, and (ix) restrictions on the transfer of any asset subject to a
Lien permitted by Section 10.01(v), (vi) or (vii).

         10.14. Limitation on Issuance of Capital Stock.

         (a) The Borrower will not, and will not permit any of its Subsidiaries
to, issue (i) any preferred stock other than Qualified Preferred Stock of the
Borrower or (ii) any redeemable common stock other than common stock that is
redeemable at the sole option of the Borrower or such Subsidiary, as the case
may be.

         (b) The Borrower will not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of the Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law, (iv) for issuances to the Borrower or a Wholly-Owned
Subsidiary thereof or (v) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement.

                                      -96-



         10.15. Business. The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than the business engaged in by
the Borrower and its Subsidiaries as of the Initial Borrowing Date and
reasonable extensions thereof and other businesses that are complementary or
reasonably related thereto. Notwithstanding anything to the contrary contained
in this Agreement, the Borrower will not permit any Inactive Subsidiary to
engage in any business activities, to have any material liabilities or to own
assets with an aggregate value in excess of $250,000.

         10.16. Limitation on Creation of Subsidiaries. The Borrower will not,
and will not permit any of its Subsidiaries to, establish, create or acquire
after the Initial Borrowing Date any Subsidiary, provided that the Borrower and
its Wholly-Owned Subsidiaries shall be permitted to establish, create or, to the
extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries and, to
the extent permitted by Section 10.05(xvi) and the definition of "Permitted
Acquisition", non-Wholly-Owned Subsidiaries, so long as

                  (i) the equity interests of each such new Subsidiary (to the
         extent owned by a Credit Party) is pledged pursuant to, and to the
         extent required by, the Pledge Agreement,

                  (ii) each such new Domestic Subsidiary (and, to the extent
         required by Section 9.13, each such new Foreign Subsidiary) executes a
         counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the
         Security Agreement, and

                  (iii) each such new Domestic Subsidiary (and, to the extent
         required by Section 9.13, each such new Foreign Subsidiary), to the
         extent requested by the Administrative Agent or the Required Lenders,
         takes all actions required pursuant to Section 9.11.

         In addition, each such new Domestic Subsidiary (and, to the extent
required by Section 9.13, each such new Foreign Subsidiary) shall execute and
deliver, or cause to be executed and delivered, all other relevant documentation
of the type described in Section 6 as such new Subsidiary would have had to
deliver if such new Subsidiary were a Credit Party on the Initial Borrowing
Date.

         10.17. Operating Leases. The Borrower will not permit the aggregate
obligations of the Borrower and its Subsidiaries with respect to Operating
Leases to exceed $7,500,000 in any fiscal year.

                                   SECTION 11

                               EVENTS OF DEFAULT.

          Upon the occurrence of any of the following specified events (each an
"Event of Default"):

         11.01. Payments. The Borrower shall (i) default in the payment when due
of any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other
amounts owing hereunder or thereunder; or

                                      -97-



         11.02. Representations, etc. Any representation, warranty or statement
made or deemed made by any Credit Party herein or in any other Credit Document
or in any certificate delivered to the Administrative Agent or any Lender
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or

         11.03. Covenants. The Borrower or any of its Subsidiaries shall (i)
default in the due performance or observance by it of any term, covenant or
agreement contained in Section 9.01(g)(i), 9.08, 9.12, 9.14, 9.15 or Section 10
or (ii) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement or any other Credit Document
(other than those set forth in Sections 11.01 and 11.02) and such default shall
continue unremedied for a period of 30 days after written notice thereof to the
defaulting party by the Administrative Agent or the Required Lenders; or

         11.04. Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of the Borrower or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
Section 11.04 unless the aggregate principal amount of all Indebtedness as
described in either of the preceding clauses (i) or (ii) is at least $5,000,000;
or

         11.05. Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is

                                      -98-



taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or

         11.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning of
Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable
law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date
hereof, by any governmental authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan; (b) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, individually and/or in the
aggregate, in the reasonable opinion of the Required Lenders, has had, or could
reasonably be expected to have, a Material Adverse Effect; or

         11.07. Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral (other than an immaterial portion
thereof), in favor of the Collateral Agent, superior to and prior to the rights
of all third Persons (except as permitted by Section 10.01), and subject to no
other Liens (except as permitted by Section 10.01); or

         11.08. Subsidiaries Guaranty. At any time after the execution and
delivery thereof, the Subsidiaries Guaranty or any provision thereof shall cease
to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the

                                      -99-



Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or

         11.09. Judgments. One or more judgments or decrees shall be entered
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments equals or exceeds
$5,000,000; or

         11.10. Change of Control. A Change of Control shall occur;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 11.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):

                  (i) declare the Total Commitment terminated, whereupon all
         Commitments of each Lender shall forthwith terminate immediately and
         any Commitment Fee shall forthwith become due and payable without any
         other notice of any kind;

                  (ii) declare the principal of and any accrued interest in
         respect of all Loans and the Notes and all Obligations owing hereunder
         and thereunder to be, whereupon the same shall become, forthwith due
         and payable without presentment, demand, protest or other notice of any
         kind, all of which are hereby waived by each Credit Party;

                  (iii) terminate any Letter of Credit which may be terminated
         in accordance with its terms;

                  (iv) direct the Borrower to pay (and the Borrower agrees that
         upon receipt of such notice, or upon the occurrence of an Event of
         Default specified in Section 11.05 with respect to the Borrower, it
         will pay) to the Collateral Agent at the Payment Office such additional
         amount of cash or Cash Equivalents, to be held as security by the
         Collateral Agent, as is equal to the aggregate Stated Amount of all
         Letters of Credit issued for the account of the Borrower and then
         outstanding;

                  (v) enforce, as Collateral Agent, all of the Liens and
         security interests created pursuant to the Security Documents; and

                  (vi) apply any cash collateral held by the Administrative
         Agent pursuant to Section 5.02 to the repayment of the Obligations.

                                     -100-



                                   SECTION 12

                            THE ADMINISTRATIVE AGENT.

         12.01. Appointment. The Lenders hereby irrevocably designate Bank of
America as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" also shall include Bank of America in its capacity as
Collateral Agent pursuant to the Security Documents) to act as specified herein
and in the other Credit Documents. Each Lender hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such action on their
behalf under the provisions of this Agreement, the other Credit Documents and
any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of their respective duties hereunder by
or through its officers, directors, agents, employees or affiliates.

         12.02. Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any other Credit Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or in any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.

         12.03. Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance

                                     -101-



of any of the terms, provisions or conditions of this Agreement or any other
Credit Document, or the financial condition of the Borrower or any of its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.

         12.04. Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Lender by reason
of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.

         12.05. Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.

         12.06. Indemnification. To the extent the Administrative Agent (or any
affiliate thereof) is not reimbursed and indemnified by the Borrower, the
Lenders will reimburse and indemnify the Administrative Agent (and any affiliate
thereof) in proportion to their respective "percentage" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders) for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent (or any affiliate thereof) in performing its duties
hereunder or under any other Credit Document or in any way relating to or
arising out of this Agreement or any other Credit Document; 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 Administrative Agent's gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision).

         12.07. The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights and
powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lender," "Required Lenders", "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its respective individual capacities. The Administrative
Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other business with,
or provide debt financing, equity capital or other services (including financial
advisory services) to, any Credit Party or any Affiliate of any Credit Party (or
any Person

                                     -102-



engaged in a similar business with any Credit Party or any Affiliate thereof) as
if they were not performing the duties specified herein, and may accept fees and
other consideration from any Credit Party or any Affiliate of any Credit Party
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.

         12.08. Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.

         12.09. Resignation by the Administrative Agent.

         (a) The Administrative Agent may resign from the performance of all its
respective functions and duties hereunder and/or under the other Credit
Documents at any time by giving 15 Business Days prior written notice to the
Lenders. Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.

         (b) Upon any such notice of resignation by the Administrative Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower which acceptance shall not be unreasonably withheld or delayed
(provided that the Borrower's approval shall not be required if an Event of
Default then exists).

         (c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed, provided that the Borrower's consent shall not be required if an Event
of Default then exists), shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided above.

         (d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.

         12.10. Issuing Lender. The Issuing Lender shall have the rights and
protections hereunder to the same extent as if it were the Administrative Agent.

                                     -103-



                                   SECTION 13

                                 MISCELLANEOUS.

         13.01. Payment of Expenses, etc. The Borrower shall:

                  (i) whether or not the transactions herein contemplated are
         consummated, pay all reasonable out-of-pocket costs and expenses of the
         Administrative Agent (including, without limitation, the reasonable
         fees and disbursements of legal counsel of the Administrative Agent and
         of the Administrative Agent's consultants) in connection with the
         preparation, execution and delivery of this Agreement and the other
         Credit Documents and the documents and instruments referred to herein
         and therein and any amendment, waiver or consent relating hereto or
         thereto, of the Administrative Agent in connection with its syndication
         efforts with respect to this Agreement and of the Administrative Agent
         and, after the occurrence of an Event of Default, each of the Lenders
         in connection with the enforcement of this Agreement and the other
         Credit Documents and the documents and instruments referred to herein
         and therein or in connection with any refinancing or restructuring of
         the credit arrangements provided under this Agreement in the nature of
         a "work-out" or pursuant to any insolvency or bankruptcy proceedings
         (including, in each case without limitation, the reasonable fees and
         disbursements of counsel and consultants for the Administrative Agent
         and, after the occurrence of an Event of Default, counsel for each of
         the Lenders);

                  (ii) pay and hold the Administrative Agent and each of the
         Lenders harmless from and against any and all present and future stamp,
         excise and other similar documentary taxes with respect to the
         foregoing matters and save the Administrative Agent and each of the
         Lenders harmless from and against any and all liabilities with respect
         to or resulting from any delay or omission (other than to the extent
         attributable to the Administrative Agent or such Lender) to pay such
         taxes; and

                  (iii) indemnify the Administrative Agent and each Lender, and
         each of their respective officers, directors, employees,
         representatives, agents, affiliates, trustees and investment advisors
         from and hold each of them harmless against any and all liabilities,
         obligations (including removal or remedial actions), losses, damages,
         penalties, claims, actions, judgments, suits, costs, expenses and
         disbursements (including reasonable attorneys' and consultants' fees
         and disbursements) incurred by, imposed on or assessed against any of
         them as a result of, or arising out of, or in any way related to, or by
         reason of, (a) any investigation, litigation or other proceeding
         (whether or not the Administrative Agent or any Lender is a party
         thereto and whether or not such investigation, litigation or other
         proceeding is brought by or on behalf of any Credit Party) related to
         the entering into and/or performance of this Agreement or any other
         Credit Document or the use of any Letter of Credit or the proceeds of
         any Loans hereunder or the consummation of the Refinancing or any other
         transactions contemplated herein or in any other Credit Document or the
         exercise of any of

                                     -104-



         their rights or remedies provided herein or in the other Credit
         Documents, or (b) the actual or alleged presence of Hazardous Materials
         in the air, surface water or groundwater or on the surface or
         subsurface of any Real Property owned, leased or at any time operated
         by the Borrower or any of its Subsidiaries, the generation, storage,
         transportation, handling or disposal of Hazardous Materials by the
         Borrower or any of its Subsidiaries at any location, whether or not
         owned, leased or operated by the Borrower or any of its Subsidiaries,
         the non-compliance of any Real Property with foreign, federal, state
         and local laws, regulations, and ordinances (including applicable
         permits thereunder) applicable to any Real Property, or any
         Environmental Claim asserted against the Borrower, any of its
         Subsidiaries or any Real Property owned, leased or at any time operated
         by the Borrower or any of its Subsidiaries, including, in each case,
         without limitation, the reasonable fees and disbursements of counsel
         and other consultants incurred in connection with any such
         investigation, litigation or other proceeding (but excluding any
         losses, liabilities, claims, damages or expenses to the extent incurred
         by reason of the gross negligence or willful misconduct of the Person
         to be indemnified (as determined by a court of competent jurisdiction
         in a final and non-appealable decision)).

To the extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.

         13.02. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent and each Lender is hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to any Credit Party or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by the Administrative Agent or such Lender (including, without limitation,
by branches and agencies of such Lender wherever located) to or for the credit
or the account of any Credit Party against and on account of the Obligations and
liabilities of the Credit Parties to the Administrative Agent or such Lender
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Lender
pursuant to Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.

         13.03. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Lender, at its address specified on Schedule II; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party
or the Administrative

                                     -105-



Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Lender, at such other address
as shall be designated by such Lender in a written notice to the Borrower and
the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.

         13.04. Benefit of Agreement; Assignments; Participations.

         (a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided, however, the Borrower may not assign or transfer any of its
rights, obligations or interest hereunder without the prior written consent of
the Lenders and, provided further, that, although any Lender may transfer,
assign or grant participations in its rights hereunder, such Lender shall remain
a "Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments hereunder except as provided in Sections 2.13 and
13.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Lender" hereunder and, provided further, that no Lender shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would

                  (i) extend the final scheduled maturity of any Loan, Note or
         Letter of Credit (unless such Letter of Credit is not extended beyond
         the Revolving Loan Maturity Date) in which such participant is
         participating, or reduce the rate or extend the time of payment of
         interest or Fees thereon (except in connection with a waiver of
         applicability of any post-default increase in interest rates) or reduce
         the principal amount thereof (it being understood that any amendment or
         modification to the financial definitions in this Agreement or to
         Section 13.07(a) shall not constitute a reduction in the rate of
         interest or Fees payable hereunder), or increase the amount of the
         participant's participation over the amount thereof then in effect (it
         being understood that a waiver of any Default or Event of Default or of
         a mandatory reduction in the Total Commitment shall not constitute a
         change in the terms of such participation, and that an increase in any
         Commitment (or the available portion thereof) or Loan shall be
         permitted without the consent of any participant if the participant's
         participation is not increased as a result thereof),

                  (ii) consent to the assignment or transfer by the Borrower of
         any of its rights and obligations under this Agreement, or

                  (iii) release all or substantially all of the Collateral under
         all of the Security Documents (except as expressly provided in the
         Credit Documents) supporting the Loans or Letters of Credit hereunder
         in which such participant is participating or release all or
         substantially all of the Subsidiary Guarantors.

                                     -106-



In the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the participant
relating thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation.

         (b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to (i) its parent company and/or any affiliate of such Lender which is
at least 50% owned by such Lender or its parent company or to one or more
Lenders or (ii) in the case of any Lender that is a fund that invests in loans,
any other fund that invests in loans and is managed or advised by the same
investment advisor of such Lender or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least $1,000,000
in the aggregate for the assigning Lender or assigning Lenders, of such
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is managed or advised by the
same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Assumption
Agreement, provided that,

                  (i) at such time Schedule I shall be deemed modified to
         reflect the Commitments and/or outstanding Loans, as the case may be,
         of such new Lender and of the existing Lenders,

                  (ii) upon the surrender of the relevant Notes by the assigning
         Lender (or, upon such assigning Lender's indemnifying the Borrower for
         any lost Note pursuant to a customary indemnification agreement) new
         Notes will be issued, at the Borrower's expense, to such new Lender and
         to the assigning Lender upon the request of such new Lender or
         assigning Lender, such new Notes to be in conformity with the
         requirements of Section 2.05 (with appropriate modifications) to the
         extent needed to reflect the revised Commitments and/or outstanding
         Loans, as the case may be,

                  (iii) the consent of the Administrative Agent and, so long as
         no Default or Event of Default then exists, the consent of the
         Borrower, shall (in each case) be required in connection with any
         assignment to an Eligible Transferee pursuant to clause (y) above (each
         of which consents shall not be unreasonably withheld or delayed),

                  (iv) the Administrative Agent shall receive at the time of
         each such assignment, from the assigning or assignee Lender, the
         payment of a non-refundable assignment fee of $3,500 (only one such fee
         shall be payable in the event of a simultaneous assignment to multiple
         assignees that are Affiliates or from multiple assignors that are
         Affiliates), and

                                     -107-



                  (v) no such transfer or assignment will be effective until
         recorded by the Administrative Agent on the Register pursuant to
         Section 13.15.

To the extent of any assignment pursuant to this Section 13.04(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments and outstanding Loans. At the time of each assignment
pursuant to this Section 13.04(b) to a Person which is not already a Lender
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall, to the extent legally entitled to do so, provide to the
Borrower the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 5.04(b)(ii) Certificate) described in Section 5.04(b). To the extent
that an assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 2.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 2.10,
3.06 or 5.04 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).

         (c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, upon written
notice to the Administrative Agent, any Lender which is a fund may pledge all or
any portion of its Loans and Notes to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall release the
transferor Lender from any of its obligations hereunder.

         13.05. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent, the Collateral Agent, the Issuing Lender or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Borrower or any other
Credit Party and the Administrative Agent, the Collateral Agent, the Issuing
Lender or any Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender to
any other or further action in any circumstances without notice or demand.

         13.06. Payments Pro Rata.

         (a) Except as otherwise provided in this Agreement, the Administrative
Agent agrees that promptly after its receipt of each payment from or on behalf
of the Borrower in respect of

                                     -108-



any Obligations hereunder, it shall distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of any such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.

         (b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Fee or Letter of Credit Fees, of a
sum which with respect to the related sum or sums received by other Lenders is
in a greater proportion than the total of such Obligation then owed and due to
such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lenders, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.

         (c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

         13.07. Calculations; Computations; Accounting Terms.

         (a) The financial statements to be furnished to the Lenders pursuant
hereto shall be made and prepared in accordance with GAAP in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders); provided that, except as otherwise specifically provided herein, all
computations of Excess Cash Flow, and all computations and all definitions used
in determining compliance with Sections 10.07 through 10.11, inclusive, shall
utilize accounting principles and policies in conformity with those used to
prepare the latest audited historical financial statements of the Borrower
referred to in Section 8.05(a).

         (b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Credit Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

                                     -109-



         (c) All computations of interest, Commitment Fee and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day; except that in the
case of Letter of Credit Fees, the last day shall be included) occurring in the
period for which such interest, Commitment Fee or other Fees are payable;
provided that interest in respect of Base Rate Loans determined by reference to
the prime rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, for the actual number of days occurring in the period for which
such interest is payable.

         13.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.

         (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF ILLINOIS. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS, OR OF THE UNITED STATES
FOR THE NORTHERN DISTRICT OF ILLINOIS. IN EACH CASE WHICH ARE LOCATED IN THE
CITY OF CHICAGO, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS.

         (b) THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY
SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT
SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.

         (c) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN

                                     -110-



CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

         (d) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

         13.09. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.

         13.10. [Intentionally omitted.]

         13.11. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

         13.12. Amendment or Waiver; etc.

         (a) Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be amended, changed, waived, discharged or terminated
unless such amendment, change, waiver, discharge or termination is in writing
signed by the respective Credit Parties party thereto and the Required Lenders,
provided that no such amendment, change, waiver, discharge or termination shall,
without the consent of each Lender (other than a Defaulting Lender) (with
Obligations being directly affected in the case of following clause (i)):

                  (i) extend the final scheduled maturity of any Loan or Note or
         extend the stated expiration date of any Letter of Credit beyond the
         Revolving Loan Maturity Date, or reduce the rate or extend the time of
         payment of interest or Fees thereon (except in connection with the
         waiver of applicability of any post-default increase in interest
         rates), or reduce the principal amount thereof (it being understood
         that any amendment or modification to the financial definitions in this
         Agreement or to Section 13.07 shall not constitute a reduction in the
         rate of interest or Fees for the purposes of this clause (i)),

                  (ii) release all or substantially all of the Collateral
         (except as expressly provided in the Credit Documents) under all the
         Security Documents or release all or substantially all of the
         Subsidiary Guarantors,

                                     -111-



                  (iii) amend, modify or waive any provision of this Section
         13.12 (except for technical amendments with respect to additional
         extensions of credit pursuant to this Agreement which afford the
         protections to such additional extensions of credit of the type
         provided to the Term Loans and the Revolving Loan Commitments on the
         Restatement Effective Date),

                  (iv) reduce the percentage specified in the definition of
         Required Lenders (it being understood that, with the consent of the
         Required Lenders, additional extensions of credit pursuant to this
         Agreement may be included in the determination of the Required Lenders
         on substantially the same basis as the extensions of Term Loans and
         Revolving Loan Commitments are included on the Restatement Effective
         Date),

                  (v) consent to the assignment or transfer by the Borrower of
         any of its rights and obligations under this Agreement,

                  (vi) amend Section 2.09 so as to permit Interest Periods that
         are greater than six months,

                  (vii) amend Section 13.04(b), or

                  (viii) amend, modify or waive any Term Loan Scheduled
         Repayment to be made pursuant to Section 5.02(b);

provided further, that no such amendment, change, waiver, discharge or
termination shall:

         (1) increase the Commitments of any Lender over the amount thereof then
in effect without the consent of such Lender (it being understood that waivers
or modifications of conditions precedent, covenants, Defaults or Events of
Default or of a mandatory reduction in the Total Commitment shall not constitute
an increase of the Commitment of any Lender, and that an increase in the
available portion of any Commitment of any Lender shall not constitute an
increase of the Commitment of such Lender),

         (2) affect the rights or duties of the Administrative Agent, the
Collateral Agent, the Issuing Lender or the Swingline Lender hereunder or under
any other Credit Document, without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Lender or the Swingline
Lender, as the case may be,

         (3) (i) amend, change, modify or waive Section 5.02(a) or (ii) have the
effect (either immediately) or at some later time) of enabling the Borrower to
satisfy a condition precedent to the making of a Revolving Loan or Swingline
Loan or the issuance of a Letter of Credit, unless such amendment, modification
or waiver shall have been consented to by the holders of more than 50% of the
aggregate principal amount of the Revolving Loan Commitments, or

         (4) amend, change, modify or waive the provisions of Section 5.02 (h),
or adversely affect the rights of Lenders participating in any Tranche different
from those of the Lenders participating in other Tranches, unless, in any such
case, such amendment, modification or waiver shall have been consented to by the
holders of (in Dollars) more than 50% of the

                                     -112-



aggregate amount of Loans outstanding under the Tranche or Tranches affected by
such modification, or, in the case of a modification affecting the Revolving
Loan Commitments, the Lenders holding more than 50% of the aggregate principal
amount of Revolving Loan Commitments (it being agreed and understood that
modifications which affect all Lenders ratably shall not be considered hereunder
as affecting Lenders of any Tranche differently).

         (b)  [Intentionally omitted.]

         13.13. Survival. All indemnities set forth herein including, without
limitation, in Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.

         13.14. Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 2.10, 2.11, 3.06 or 5.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).

         13.15. Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note (if
any) evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender at the request of any such Lender. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 13.15.

         13.16. Confidentiality.

                                     -113-




         (a) Subject to the provisions of clause (b) of this Section 13.16, each
Lender agrees that it will use its reasonable efforts not to disclose without
the prior consent of the Borrower (other than to its employees, auditors,
advisors or counsel or to another Lender if such Lender or such Lender's holding
or parent company in its sole discretion determines that any such party should
have access to such information, provided such Persons shall be subject to the
provisions of this Section 13.16 to the same extent as such Lender) any
information with respect to the Borrower or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Borrower to the Lenders in writing as
confidential, provided that any Lender may disclose any such information (i) as
has become generally available to the public other than by virtue of a breach of
this Section 13.16(a) by the respective Lender, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Lender, (v)
to the Administrative Agent or the Collateral Agent, (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Commitments or any interest therein by such
Lender, provided that such prospective transferee agrees to be bound by the
confidentiality provisions contained in this Section 13.16, and (vii) to any
direct or indirect contractual counterparty to swap agreements with a Lender or
such contractual counterparty's professional advisor provided that such
contractual counterparty or professional advisor agrees to be bound by the
provisions of this Section 13.16.

         (b) The Borrower hereby acknowledges and agrees that each Lender may
share with any of its affiliates, and such affiliates may share with such Lender
any information related to the Borrower or any of its Subsidiaries (including,
without limitation, any non-public customer information regarding the
creditworthiness of the Borrower and its Subsidiaries), provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Lender.

         13.17. Certain Agreements with respect to the Senior Subordinated
Notes.

         (a) The Borrower hereby (A) represents and warrants that (i)
$100,000,000 of Term Loans may be incurred under this Agreement on the Initial
Borrowing Date in reliance on the proviso to Section 4.12 of the Senior
Subordinated Note Indenture, and (ii) $45,000,000 of Revolving Loans, Swingline
Loans and Letters of Credit in the aggregate incurred pursuant to the Total
Revolving Loan Commitment as in effect on the Initial Borrowing Date may be
incurred and outstanding from time to time in reliance on clause (ii) of the
definition of "Permitted Indebtedness" contained in the Senior Subordinated Note
Indenture and (B) agrees that it will not take any position contrary to the
representations and warranties set forth in preceding clause (A).

         (b) The Borrower hereby represents and warrants that this (i) Agreement
constitutes the "Credit Facility" under, and as defined in, the Senior
Subordinated Note Indenture, and (ii) the Obligations (as defined herein)
constitute (and are hereby designated by the Borrower as) Designated Senior Debt
(as defined in the Senior Subordinated Note Indenture).

                                     -114-



         13.18. Debt Rating. The Borrower shall, within 90 days after the
Initial Borrowing Date, obtain a reaffirmation of all debt ratings (each a "Debt
Rating") from Moody's Investors Service, Inc., or any successor thereto
("Moody's") or Standard & Poor's Ratings Services, or any successor thereto
("S&P") for all of the Borrower's long term debt, including but not limited to
the Indebtedness and the Subordinated Debt, actual and implied.

                                    *  *  *

                                     -115-



         IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.

Address:

5711 South 86th Circle                    INFOUSA INC.
Omaha, Nebraska  68127
Attn: Chief Financial Officer
Telephone No.: (402) 593-4500             By: _________________________________
Telecopier No.: (402) 331-1505                Title: Chief Financial Officer

                                 Signature Page
                                       to
                                Credit Agreement



                                          BANK OF AMERICA, N.A.,
                                          as Administrative Agent

                                          By: _________________________________
                                          Title: ______________________________

                                          BANK OF AMERICA, N.A.,
                                          individually

                                          By: _________________________________
                                          Title: ______________________________

                                          U.S. BANK, N.A.

                                          By: _________________________________
                                          Title: ______________________________

                                          WELLS FARGO BANK, NATIONAL ASSOCIATION

                                          By: _________________________________
                                          Title: ______________________________

                                          FIRST NATIONAL BANK OF OMAHA

                                          By: _________________________________
                                          Title: ______________________________

                                          CIBC INC.

                                          By: _________________________________
                                          Title: ______________________________

                                 Signature Page
                                       to
                                Credit Agreement



                                          KZH CypressTree-1 LLC

                                          By: _________________________________
                                          Title: ______________________________

                                          KZH STERLING LLC

                                          By: _________________________________
                                          Title: ______________________________

                                          KZH STERLING LLC

                                          By: _________________________________
                                          Title: ______________________________

                                          ORIX Capital Markets, LLC

                                          By: _________________________________
                                          Title: ______________________________

                                 Signature Page
                                       to
                                Credit Agreement



                                   SCHEDULE I
                                   COMMITMENTS



                                                                                  REVOLVING
                                                         TERM LOAN                   LOAN
           LENDER                                        COMMITMENT               COMMITMENT            PRO RATA SHARE
           ------                                        ----------               ----------            --------------
                                                                                               
Bank of America, N.A.                                  $ 48,750,000.00          $17,500,000.00          45.689655172%
U.S. Bank, N.A.                                        $  8,000,000.00          $10,000,000.00          12.413793103%
Wells Fargo Bank, National Association                 $  7,500,000.00          $ 7,500,000.00          10.344827586%
First National Bank of Omaha                           $  5,000,000.00          $10,000,000.00          10.344827586%
CIBC Inc.                                              $ 10,000,000.00                                   6.896551724%
KZH CypressTree-1 LLC                                  $  5,250,000.00                                   3.620689655%
KZH ING-2 LLC                                          $  5,250,000.00                                   3.620689655%
KZH STERLING LLC                                       $  3,250,000.00                                   2.241379310%
ORIX Capital Markets, LLC                              $  7,000,000.00                                   4.827586207%
TOTAL:                                                 $100,000,000.00          $45,000,000.00




                                   SCHEDULE II
                                LENDER ADDRESSES



             Lender                                       Address
             ------                                       -------
                                               
Bank of America, N.A.                             231 South LaSalle Street
                                                  Chicago, Illinois 60697
                                                  Attn: David Johanson
                                                  Tel. No.: (312) 828-7933
                                                  Fax No.: (312) 974-9102

U.S. Bank, N.A.                                   8800 West Center Road
                                                  Omaha, Nebraska 68124
                                                  Attn: Kevin D. Munro
                                                  Tel. No.: (402) 399-2729
                                                  Fax No.: (402) 399-2778

Wells Fargo Bank, National Association            Sixth & Marquette
                                                  MAC: N9305-051
                                                  Minneapolis, Minnesota  55479
                                                  Attn: Joseph G. Colianni
                                                  Tel. No.: (612) 667-0094
                                                  Fax No.: (612) 667-7266

First National Bank of Omaha                      1620 Dodge Street
                                                  MS 1050
                                                  Omaha, Nebraska 68197
                                                  Attn: Jeff Sims
                                                  Tel. No.: (402) 633-3511
                                                  Fax No.: (402) 633-3519

CIBC Inc.                                         425 Lexington Avenue
                                                  New York, NY 10017
                                                  Attn: Vincent Spencer
                                                  Tel. No.: (212) 885-4579
                                                  Fax No.: (212) 856-3991
                                                  425 Lexington Avenue, 8th Floor
                                                  New York, NY 10017

KZH ING-2 LLC                                     c/o JPMorgan Chase Bank
                                                  4 MetroTech Center - 10th Floor
                                                  Brooklyn, New York  11245
                                                  Attn:  Virginia Conway
                                                  Tel. No.: (718) 242-4932
                                                  Fax No.: (718) 242-6220




                                               
Copies To:                                        Weil, Gotschal & Manges LLP
                                                  767 Fifth Avenue, 34th Floor
                                                  New York, New York  10153
                                                  Attn:  Shan D. McSweeney
                                                  Tel. No.: (212) 310-6857
                                                  Fax No.: (212) 310-8007

KZH CypressTree-1 LLC                             c/o JPMorgan Chase Bank
                                                  4 MetroTech Center - 10th Floor
                                                  Brooklyn, New York  11245
                                                  Attn:  Virginia Conway
                                                  Tel. No.: (718) 242-4932
                                                  Fax No.: (718) 242-6220

Copies To:                                        Weil, Gotschal & Manges LLP
                                                  767 Fifth Avenue, 34th Floor
                                                  New York, New York  10153
                                                  Attn:  Shan D. McSweeney
                                                  Tel. No.: (212) 310-6857
                                                  Fax No.: (212) 310-8007

KZH STERLING LLC                                  c/o JPMorgan Chase Bank
                                                  4 MetroTech Center - 10th Floor
                                                  Brooklyn, New York  11245
                                                  Attn:  Virginia Conway
                                                  Tel. No.: (718) 242-4932
                                                  Fax No.: (718) 242-6220

Copies To:                                        Weil, Gotschal & Manges LLP
                                                  767 Fifth Avenue, 34th Floor
                                                  New York, New York  10153
                                                  Attn:  Shan D. McSweeney
                                                  Tel. No.: (212) 310-6857
                                                  Fax No.: (212) 310-8007

ORIX Capital Markets, LLC                         1717 Main Street
                                                  Suite 900
                                                  Dallas, Texas 75201
                                                  Attn: Sheppard H.C. Davis, Jr.
                                                  Tel. No.: (214) 237-2348
                                                  Fax No.: (214) 237-2016

EX-10.2

                                                                    EXHIBIT 10.2

                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of March 6, 2002, as amended and
restated as of May 27, 2003, made by each of the undersigned pledgors (each a
"Pledgor" and, together with any other entity that becomes a pledgor hereunder
pursuant to Section 25 hereof, the "Pledgors") to BANK OF AMERICA, N.A., as
Collateral Agent together with any successor Collateral Agent (the "Pledgee"),
for the benefit of the Secured Creditors (as defined below). Except as otherwise
defined herein, capitalized terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.

                              W I T N E S S E T H:

                  WHEREAS, infoUSA Inc. (the "Borrower"), the lenders from time
to time party thereto (the "Lenders"), and Bank of America, N.A., as
Administrative Agent (together with any successor Administrative Agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of March
6, 2002, as amended and restated as of May 27, 2003 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (the Lenders, the Administrative Agent, the
Issuing Lender and the Pledgee are herein called the "Lender Creditors");

                  WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors,"
and together with the Lender Creditors, the "Secured Creditors");

                  WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;

                  WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Pledgor shall have executed and delivered to the Pledgee
this Agreement; and

                  WHEREAS, each Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;

                  NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Pledgor, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the



Secured Creditors and hereby covenants and agrees with the Pledgee for the
benefit of the Secured Creditors as follows:

                  1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:

                  (i)      the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         indebtedness (including, without limitation, indemnities, Fees and
         interest thereon) of such Pledgor to the Lender Creditors, whether now
         existing or hereafter incurred under, arising out of, or in connection
         with the Credit Agreement and the other Credit Documents to which such
         Pledgor is a party (including, in the case of each Pledgor which is a
         Subsidiary Guarantor, all such obligations and indebtedness of such
         Pledgor under the Subsidiaries Guaranty) and the due performance and
         compliance by such Pledgor with all of the terms, conditions and
         agreements contained in the Credit Agreement and in such other Credit
         Documents (all such obligations and liabilities under this clause (i),
         except to the extent consisting of obligations or indebtedness with
         respect to Interest Rate Protection Agreements or Other Hedging
         Agreements, being herein collectively called the "Credit Document
         Obligations");

                  (ii)     the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         liabilities owing by such Pledgor to the Other Creditors under, or with
         respect to (including, in the case of each Pledgor which is a
         Subsidiary Guarantor, by reason of the Subsidiaries Guaranty), any
         Interest Rate Protection Agreement or Other Hedging Agreement, whether
         such Interest Rate Protection Agreement or Other Hedging Agreement is
         now in existence or hereafter arising, and the due performance and
         compliance by such Pledgor with all of the terms, conditions and
         agreements contained therein (all such obligations and liabilities
         described in this clause (ii) being herein collectively called the
         "Other Obligations");

                  (iii)    any and all sums advanced by the Pledgee in order to
         preserve the Collateral (as hereinafter defined) or preserve its
         security interest in the Collateral;

                  (iv)     in the event of any proceeding for the collection or
         enforcement of any indebtedness, obligations or liabilities of such
         Pledgor referred to in clauses (i) and (ii) above, after an Event of
         Default (which term to mean and include any Event of Default under, and
         as defined in, the Credit Agreement or any payment default by the
         Borrower under any Interest Rate Protection Agreement or Other Hedging
         Agreement and shall, in any event, include, without limitation, any
         payment default on any of the Obligations (as hereinafter defined))
         shall have occurred and be continuing, the reasonable expenses of
         retaking, holding, preparing for sale or lease, selling or otherwise
         disposing of or realizing on the Collateral, or of any exercise by the
         Pledgee of its rights hereunder, together with reasonable attorneys'
         fees and court costs; and

                  (v)      all amounts paid by any Secured Creditor as to which
         such Secured Creditor has the right to reimbursement under Section 11
         of this Agreement;

                                      -2-



all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.

                  2. DEFINITIONS.

                  (a) Unless otherwise defined herein, all capitalized terms
used herein and defined in the Credit Agreement shall be used herein as therein
defined. Reference to singular terms shall include the plural and vice versa.

                  (b) The following capitalized terms used herein shall have the
definitions specified below:

                  "Administrative Agent" has the meaning set forth in the
Recitals hereto.

                  "Adverse Claim" has the meaning given such term in Section
8-102(a)(1) of the UCC.

                  "Agreement" has the meaning set forth in the first paragraph
hereof.

                  "Certificated Security" has the meaning given such term in
Section 8-102(a)(4) of the UCC.

                  "Class" has the meaning set forth in Section 22 hereof.

                  "Clearing Corporation" has the meaning given such term in
Section 8-102(a)(5) of the UCC.

                  "Collateral" has the meaning set forth in Section 3.1 hereof.

                  "Collateral Accounts" means any and all accounts established
and maintained by the Pledgee in the name of any Pledgor to which Collateral may
be credited.

                  "Credit Agreement" has the meaning set forth in the Recitals
hereto.

                  "Credit Document Obligations" has the meaning set forth in
Section 1 hereof.

                  "Domestic Corporation" has the meaning set forth in the
definition of "Stock."

                  "Event of Default" has the meaning set forth in Section 1
hereof.

                  "Financial Asset" has the meaning given such term in Section
8-102(a)(9) of the UCC.

                  "Foreign Corporation" has the meaning set forth in the
definition of "Stock."

                                      -3-



                  "Indemnitees" has the meaning set forth in Section 11 hereof.

                  "Instrument" has the meaning given such term in Section
9-102(a)(47) of the UCC.

                  "Investment Property" has the meaning given such term in
Section 9-102(a)(49) of the UCC.

                  "Lender Creditors" has the meaning set forth in the Recitals
hereto.

                  "Lenders" has the meaning set forth in the Recitals hereto.

                  "Limited Liability Company Assets" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.

                  "Limited Liability Company Interests" means the entire limited
liability company membership interest at any time owned by any Pledgor in any
limited liability company.

                  "Non-Voting Stock" means all capital stock which is not Voting
Stock.

                  "Notes" means all promissory notes from time to time issued
to, or held by, each Pledgor (including each Intercompany Note).

                  "Obligations" has the meaning set forth in Section 1 hereof.

                  "Other Creditors" has the meaning set forth in the Recitals
hereto.

                  "Other Obligations" has the meaning set forth in Section 1
hereof.

                  "Partnership Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.

                  "Partnership Interest" means the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.

                  "Pledged Notes" has the meaning set forth in Section 3.5
hereof.

                  "Pledgee" has the meaning set forth in the first paragraph
hereof.

                  "Pledgor" has the meaning set forth in the first paragraph
hereof.

                  "Proceeds" has the meaning given such term in Section
9-102(a)(64) of the UCC.

                  "Required Lenders" has the meaning given such term in the
Credit Agreement.

                                      -4-



                  "Requisite Creditors" has the meaning set forth in Section 22
hereof.

                  "Secured Creditors" has the meaning set forth in the Recitals
hereto.

                  "Secured Debt Agreements" has the meaning set forth in Section
5 hereof.

                  "Securities Account" has the meaning given such term in
Section 8-501(a) of the UCC.

                  "Securities Act" means the Securities Act of 1933, as amended,
as in effect from time to time.

                  "Security" and "Securities" has the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event also include all Stock
and all Notes.

                  "Security Entitlement" has the meaning given such term in
Section 8-102(a)(17) of the UCC.

                  "Stock" means (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any corporation at any time owned by any Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations (each
a "Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of any Foreign Corporation.

                  "Termination Date" has the meaning set forth in Section 20
hereof.

                  "UCC" means the Uniform Commercial Code as in effect in the
State of Illinois from time to time; provided that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of Illinois on the date hereof.

                  "Uncertificated Security" has the meaning given such term in
Section 8-102(a)(18) of the UCC.

                  "Voting Stock" means all classes of capital stock of any
Foreign Corporation entitled to vote.

                  3. PLEDGE OF SECURITIES, ETC.

                  3.1 Pledge. To secure the Obligations now or hereafter owed or
to be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Secured Creditors, and does hereby
create a continuing security interest in favor of the Pledgee for the benefit of
the Secured Creditors in, all of the right, title and interest in and to the
following, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):

                                      -5-



                  (a) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by such Pledgor in such Collateral
Account, whether now owned or hereafter acquired, existing or arising,
including, without limitation, all Financial Assets, Investment Property,
moneys, checks, drafts, Instruments, Securities or interests therein of any type
or nature deposited or required by the Credit Agreement or any other Secured
Debt Agreement to be deposited in such Collateral Account, and all investments
and all certificates and other Instruments (including depository receipts, if
any) from time to time representing or evidencing the same, and all dividends,
interest, distributions, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing;

                  (b) all Securities owned by such Pledgor from time to time and
all options or warrants owned by such Pledgor from time to time to purchase
Securities;

                  (c) all Limited Liability Company Interests owned by such
Pledgor from time to time and all of its right, title and interest in each
limited liability company to which each such interest relates, whether now
existing or hereafter acquired, including, without limitation:

                           (A) all the capital thereof and its interest in all
                  profits, losses, Limited Liability Company Assets and other
                  distributions to which such Pledgor shall at any time be
                  entitled in respect of such Limited Liability Company
                  Interests;

                           (B) all other payments due or to become due to such
                  Pledgor in respect of Limited Liability Company Interests,
                  whether under any limited liability company agreement or
                  otherwise, whether as contractual obligations, damages,
                  insurance proceeds or otherwise;

                           (C) all of its claims, rights, powers, privileges,
                  authority, options, security interests, liens and remedies, if
                  any, under any limited liability company agreement or
                  operating agreement, or at law or otherwise in respect of such
                  Limited Liability Company Interests;

                           (D) all present and future claims, if any, of such
                  Pledgor against any such limited liability company for moneys
                  loaned or advanced, for services rendered or otherwise;

                           (E) all of such Pledgor's rights under any limited
                  liability company agreement or operating agreement or at law
                  to exercise and enforce every right, power, remedy, authority,
                  option and privilege of such Pledgor relating to such Limited
                  Liability Company Interests, including any power to terminate,
                  cancel or modify any limited liability company agreement or
                  operating agreement, to execute any instruments and to take
                  any and all other action on behalf of and in the name of any
                  of such Pledgor in respect of such Limited Liability Company
                  Interests and any such limited liability company, 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, amendment, waiver or approval,
                  together with full

                                      -6-



                  power and authority to demand, receive, enforce, collect or
                  receipt for any of the foregoing or for any Limited Liability
                  Company Asset, to enforce or execute any checks, or other
                  instruments or orders, to file any claims and to take any
                  action in connection with any of the foregoing; and

                           (F) all other property hereafter delivered in
                  substitution for or in addition to any of the foregoing, all
                  certificates and instruments representing or evidencing such
                  other property and all cash, securities, interest, dividends,
                  rights and other property at any time and from time to time
                  received, receivable or otherwise distributed in respect of or
                  in exchange for any or all thereof;

                  (d) all Partnership Interests owned by such Pledgor from time
to time and all of its right, title and interest in each partnership to which
each such interest relates, whether now existing or hereafter acquired,
including, without limitation:

                           (A) all the capital thereof and its interest in all
                  profits, losses, Partnership Assets and other distributions to
                  which such Pledgor shall at any time be entitled in respect of
                  such Partnership Interests;

                           (B) all other payments due or to become due to such
                  Pledgor in respect of Partnership Interests, whether under any
                  partnership agreement or otherwise, whether as contractual
                  obligations, damages, insurance proceeds or otherwise;

                           (C) all of its claims, rights, powers, privileges,
                  authority, options, security interests, liens and remedies, if
                  any, under any partnership agreement or operating agreement,
                  or at law or otherwise in respect of such Partnership
                  Interests;

                           (D) all present and future claims, if any, of such
                  Pledgor against any such partnership for moneys loaned or
                  advanced, for services rendered or otherwise;

                           (E) all of such Pledgor's rights under any
                  partnership agreement or operating agreement or at law to
                  exercise and enforce every right, power, remedy, authority,
                  option and privilege of such Pledgor relating to such
                  Partnership Interests, including any power to terminate,
                  cancel or modify any partnership agreement or operating
                  agreement, to execute any instruments and to take any and all
                  other action on behalf of and in the name of any of such
                  Pledgor in respect of such Partnership Interests and any such
                  partnership, 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, amendment,
                  waiver or approval, together with full power and authority to
                  demand, receive, enforce, collect or receipt for any of the
                  foregoing or for any Partnership Asset, to enforce or execute
                  any checks, or other instruments or orders, to file any claims
                  and to take any action in connection with any of the foregoing
                  and

                           (F) all other property hereafter delivered in
                  substitution for or in addition to any of the foregoing, all
                  certificates and instruments representing or evidencing

                                      -7-



                  such other property and all cash, securities, interest,
                  dividends, rights and other property at any time and from time
                  to time received, receivable or otherwise distributed in
                  respect of or in exchange for any or all thereof;

                  (e) all Security Entitlements owned by such Pledgor from time
to time in any and all of the foregoing;

                  (f) all Financial Assets and Investment Property owned by such
Pledgor from time to time; and

                  (g) all Proceeds of any and all of the foregoing.

                  Notwithstanding anything to the contrary contained in this
Section 3.1, (x) except as otherwise provided in Section 9.13 of the Credit
Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic
Subsidiary of the Borrower) shall be required at any time to pledge hereunder
more than 65% of the Voting Stock of any Foreign Corporation, and (y) each
Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at
any time and from time to time acquired by such Pledgor of any Foreign
Corporation.

                  3.2 Procedures.

                  (a) To the extent that any Pledgor at any time or from time to
time owns, acquires or obtains any right, title or interest in any Collateral,
such Collateral shall automatically (and without the taking of any action by the
respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in
addition thereto, such Pledgor shall (to the extent provided below) take the
following actions as set forth below (as promptly as practicable and, in any
event, within 10 days after it obtains such Collateral) for the benefit of the
Pledgee and the Secured Creditors:

                  (i)      with respect to a Certificated Security (other than a
         Certificated Security credited on the books of a Clearing Corporation),
         the respective Pledgor shall deliver such Certificated Security to the
         Pledgee, indorsed to the Pledgee or indorsed in blank;

                  (ii)     with respect to an Uncertificated Security (other
         than an Uncertificated Security credited on the books of a Clearing
         Corporation), the respective Pledgor shall cause the issuer of such
         Uncertificated Security (or, in the case of an issuer that is not a
         Subsidiary of such Pledgor, will use its best efforts to cause such
         issuer) to duly authorize and execute, and deliver to the Pledgee, an
         agreement for the benefit of the Pledgee and the Secured Creditors
         substantially in the form of Annex G hereto (appropriately completed to
         the reasonable satisfaction of the Pledgee and with such modifications,
         if any, as shall be reasonably satisfactory to the Pledgee) pursuant to
         which such issuer agrees to comply with any and all instructions
         originated by the Pledgee without further consent by the registered
         owner and not to comply with instructions regarding such Uncertificated
         Security (and any Partnership Interests and Limited Liability Company
         Interests issued by such issuer) originated by any other Person other
         than a court of competent jurisdiction;

                                      -8-



                  (iii)    with respect to a Certificated Security,
         Uncertificated Security, Partnership Interest or Limited Liability
         Company Interest credited on the books of a Clearing Corporation
         (including a Federal Reserve Bank, Participants Trust Company or The
         Depository Trust Company), the respective Pledgor shall promptly notify
         the Pledgee thereof and shall promptly take all actions required (i) to
         comply with the applicable rules of such Clearing Corporation and (ii)
         to perfect the security interest of the Pledgee under applicable law
         (including, in any event, under Sections 9-106(a) and (b), 9-312(a),
         9-314(c) and 8-106 (d) of the UCC). The Pledgor further agrees to take
         such actions as the Pledgee deems reasonably necessary or desirable to
         effect the foregoing;

                  (iv)     with respect to a Partnership Interest or a Limited
         Liability Company Interest (other than (x) a Partnership Interest or
         Limited Liability Interest credited on the books of a Clearing
         Corporation or (y) a Limited Liability Company Interest of an Inactive
         Subsidiary to the extent that same remains an "Inactive Subsidiary"),
         (1) if such Partnership Interest or Limited Liability Company Interest
         is represented by a certificate, the procedure set forth in Section
         3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited
         Liability Company Interest is not represented by a certificate, the
         procedure set forth in Section 3.2(a)(ii) hereof;

                  (v)      with respect to any Note, delivery of such Note to
         the Pledgee, indorsed to the Pledgee or indorsed in blank;

                  (vi)     with respect to cash, (i) establishment by the
         Pledgee of a cash account in the name of such Pledgor over which the
         Pledgee shall have exclusive and absolute control and dominion (and no
         withdrawals or transfers may be made therefrom by any Person except
         with the prior written consent of the Pledgee) and (ii) deposit of such
         cash in such cash account;

                  (vii)    with respect to Collateral Accounts, the respective
         Pledgor shall cause each securities intermediary or deposit account
         bank to duly execute and deliver to the Pledgee an agreement for the
         benefit of the Pledgee and the Secured Creditors, substantially in the
         form of Annex H or I, as applicable (appropriately completed to the
         reasonable satisfaction of the Pledgee and with such modifications, if
         any, as shall be reasonably satisfactory to the Pledgee).

                  (b) In addition to the actions required to be taken pursuant
to proceeding Section 3.2(a) hereof, each Pledgor shall take the following
additional actions with respect to the Securities and Collateral :

                  (i) with respect to all Collateral of such Pledgor whereby or
         with respect to which the Pledgee may obtain "control" thereof within
         the meaning of Section 8-106 of the UCC (or under any provision of the
         UCC as same may be amended or supplemented from time to time, or under
         the laws of any relevant State other than the State of Illinois), the
         respective Pledgor shall take all actions as may be reasonably
         requested from time to time by the Pledgee so that "control" of such
         Collateral is obtained and at all times held by the Pledgee; and

                                      -9-



                  (ii) each Pledgor shall from time to time cause appropriate
         financing statements (on Form UCC-1 or other appropriate form) under
         the Uniform Commercial Code as in effect in the various relevant
         States, on form covering all Collateral hereunder (with the form of
         such financing statements to be satisfactory to the Pledgee), to be
         filed in the relevant filing offices so that at all times the Pledgee
         has a security interest in all Investment Property and other Collateral
         which is perfected by the filing of such financing statements (in each
         case to the maximum extent perfection by filing may be obtained under
         the laws of the relevant States, including, without limitation, Section
         9-312(a) of the UCC).

                  3.3 Subsequently Acquired Collateral. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Collateral at
any time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to
be taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver
to the Pledgee (i) a certificate executed by a principal executive officer of
such Pledgor describing such Collateral and certifying that the same has been
duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors)
hereunder and (ii) supplements to Annexes A through F hereto as are reasonably
necessary to cause such annexes to be complete and accurate at such time.
Without limiting the foregoing, each Pledgor shall be required to pledge
hereunder any shares of stock at any time and from time to time after the date
hereof acquired by such Pledgor of any Foreign Corporation, provided that (x)
except as provided in Section 9.13 of the Credit Agreement, no Pledgor (to the
extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall
be required at any time to pledge hereunder more than 65% of the Voting Stock of
any Foreign Corporation and (y) each Pledgor shall be required to pledge
hereunder 100% of any Non-Voting Stock at any time and from time to time
acquired by such Pledgor of any Foreign Corporation.

                  3.4 Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps
required in connection with the pledge of such Collateral.

                  3.5 Definition of Pledged Notes. All Notes at any time pledged
or required to be pledged hereunder are hereinafter called the "Pledged Notes".

                  3.6 Certain Representations and Warranties Regarding the
Collateral. Each Pledgor represents and warrants that on the date hereof (i)
each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in
Annex A hereto; (ii) the Stock (and any warrants or options to purchase Stock)
held by such Pledgor consists of the number and type of shares of the stock (or
warrants or options to purchase any stock) of the corporations as described in
Annex B hereto; (iii) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex B
hereto; (iv) the Notes held by such Pledgor consist of the promissory notes
described in Annex C hereto where such Pledgor is listed as the lender; (v) the
Limited Liability Company Interests held by such Pledgor consist of the number
and type of interests of the Persons described in Annex D hereto; (vi) each such
Limited Liability

                                      -10-



Company Interest constitutes that percentage of the issued and outstanding
equity interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor consist of the number and type of
interests of the Persons described in Annex E hereto; (viii) each such
Partnership Interest constitutes that percentage or portion of the entire
partnership interest of the Partnership as set forth in Annex E hereto; (ix) the
Pledgor has complied with the respective procedure set forth in Section 3.2(a)
hereof with respect to each item of Collateral described in Annexes A through E
hereto; and (x) on the date hereof, such Pledgor owns no other Securities,
Limited Liability Company Interests or Partnership Interests.

                  4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the
extent necessary to enable the Pledgee to perfect its security interest in any
of the Collateral or to exercise any of its remedies hereunder, the Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.

                  5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; provided, that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or be inconsistent with any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Interest Rate
Protection Agreement or Other Hedging Agreement (collectively, the "Secured Debt
Agreements"), or which would have the effect of impairing the value of the
Collateral or any part thereof or the position or interests of the Pledgee or
any other Secured Creditor in the Collateral. All such rights of each Pledgor to
vote and to give consents, waivers and ratifications shall cease in case an
Event of Default has occurred and is continuing, and Section 7 hereof shall
become applicable.

                  6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor. The Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:

                  (i)      all other or additional stock, notes, limited
         liability company interests, partnership interests, instruments or
         other securities or property (including, but not limited to, cash
         dividends other than as set forth above) paid or distributed by way of
         dividend or otherwise in respect of the Collateral;

                  (ii)     all other or additional stock, notes, limited
         liability company interests, partnership interests, instruments or
         other securities or property (including, but not limited to, cash) paid
         or distributed in respect of the Collateral by way of stock-split,
         spin-off, split-up, reclassification, combination of shares or similar
         rearrangement; and

                                      -11-



                  (iii)    all other or additional stock, notes, limited
         liability company interests, partnership interests, instruments or
         other securities or property (including, but not limited to, cash)
         which may be paid in respect of the Collateral by reason of any
         consolidation, merger, exchange of stock, conveyance of assets,
         liquidation or similar corporate reorganization.

Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
and Section 7 hereof shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).

                  7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If there
shall have occurred and be continuing an Event of Default, then and in every
such case, the Pledgee shall be entitled to exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in respect
of the Collateral, and the Pledgee shall be entitled to exercise all the rights
and remedies of a secured party under the Uniform Commercial Code as in effect
in any relevant jurisdiction and also shall be entitled, without limitation, to
exercise the following rights, which each Pledgor hereby agrees to be
commercially reasonable:

                  (i)      to receive all amounts payable in respect of the
         Collateral otherwise payable under Section 6 hereof to the respective
         Pledgor;

                  (ii)     to transfer all or any part of the Collateral into
         the Pledgee's name or the name of its nominee or nominees;

                  (iii)    to accelerate any Pledged Note which may be
         accelerated in accordance with its terms, and take any other lawful
         action to collect upon any Pledged Note (including, without limitation,
         to make any demand for payment thereon);

                  (iv)     to vote all or any part of the Collateral (whether or
         not transferred into the name of the Pledgee) and give all consents,
         waivers and ratifications in respect of the Collateral and otherwise
         act with respect thereto as though it were the outright owner thereof
         (each Pledgor hereby irrevocably constituting and appointing the
         Pledgee the proxy and attorney-in-fact of such Pledgor, with full power
         of substitution to do so);

                  (v)      at any time and from time to time to sell, assign and
         deliver, or grant options to purchase, all or any part of the
         Collateral, or any interest therein, at any public or private sale,
         without demand of performance, advertisement or notice of intention to
         sell or of the time or place of sale or adjournment thereof or to
         redeem or otherwise (all of which are hereby waived by each Pledgor),
         for cash, on credit or for other property, for immediate or future
         delivery without any assumption of credit risk, and for such price or
         prices and on such terms as the Pledgee in its absolute discretion may
         determine,

                                      -12-



         provided that at least 10 days' written notice of the time and place of
         any such sale shall be given to the respective Pledgor. The Pledgee
         shall not be obligated to make any such sale of Collateral regardless
         of whether any such notice of sale has theretofore been given. Each
         Pledgor hereby waives and releases to the fullest extent permitted by
         law any right or equity of redemption with respect to the Collateral,
         whether before or after sale hereunder, and all rights, if any, of
         marshalling the Collateral and any other security for the Obligations
         or otherwise. At any such sale, unless prohibited by applicable law,
         the Pledgee on behalf of the Secured Creditors may bid for and purchase
         all or any part of the Collateral so sold free from any such right or
         equity of redemption. Neither the Pledgee nor any other Secured
         Creditor shall be liable for failure to collect or realize upon any or
         all of the Collateral or for any delay in so doing nor shall any of
         them be under any obligation to take any action whatsoever with regard
         thereto; and

                  (vi)     to set-off any and all Collateral against any and all
         Obligations, and to withdraw any and all cash or other Collateral from
         any and all Collateral Accounts and to apply such cash and other
         Collateral to the payment of any and all Obligations.

The Pledgee shall not exercise any rights under Section 3 of any Securities
Account Control Agreement, executed and delivered pursuant to Section
3.2(a)(vii) of this Agreement, or under Section 2 of any Deposit Account Control
Agreement, executed and delivered pursuant to Section 3.2(a)(vii) of this
Agreement, unless an Event of Default shall exist.

                  8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or in any other Secured
Debt Agreement, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by the Pledgee
or any other Secured Creditor of any one or more of the rights, powers or
remedies provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute or otherwise shall
not preclude the simultaneous or later exercise by the Pledgee or any other
Secured Creditor of all such other rights, powers or remedies, and no failure or
delay on the part of the Pledgee or any other Secured Creditor to exercise any
such right, power or remedy shall operate as a waiver thereof. No notice to or
demand on any Pledgor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Pledgee or any other Secured Creditor to any other or
further action in any circumstances without notice or demand. The Secured
Creditors agree that this Agreement may be enforced only by the action of the
Pledgee, in each case acting upon the instructions of the Required Lenders (or,
after the date on which all Credit Document Obligations have been paid in full,
the holders of at least the majority of the outstanding Other Obligations) and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Pledgee for the benefit of the Secured Creditors upon the
terms of this Agreement.

                  9. APPLICATION OF PROCEEDS. All monies collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided

                                      -13-



in the Security Agreement. It is understood and agreed that the Pledgors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral hereunder and the aggregate amount of
the Obligations.

                  10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

                  11. INDEMNITY. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor and their respective successors, assigns, employees, agents and
affiliates (individually an "Indemnitee," and collectively the "Indemnitees")
from and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all reasonable costs and expenses, including
reasonable attorneys' fees, in each case growing out of or resulting from this
Agreement or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement (but excluding any claims,
demands, losses, judgments and liabilities or expenses to the extent incurred by
reason of gross negligence or willful misconduct of such Indemnitee). In no
event shall the Pledgee be liable, in the absence of gross negligence or willful
misconduct on its part, for any matter or thing in connection with this
Agreement other than to account for monies actually received by it in accordance
with the terms hereof. If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, such Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

                  12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.

                  (a) Nothing herein shall be construed to make the Pledgee or
any other Secured Creditor liable as a member of any limited liability company
or as a partner of any partnership and neither the Pledgee nor any other Secured
Creditor by virtue of this Agreement or otherwise (except as referred to in the
following sentence) shall have any of the duties, obligations or liabilities of
a member of any limited liability company or partnership. The parties hereto
expressly agree that, unless the Pledgee shall become the absolute owner of
Collateral consisting of a Limited Liability Company Interest or Partnership
Interest pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured Creditor, any
Pledgor and/or any other Person.

                  (b) Except as provided in the last sentence of paragraph (a)
of this Section 12, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or a partner of any partnership
or otherwise be deemed to be a co-venturer with respect to any Pledgor, any
limited liability company, partnership and/or any other Person either before

                                      -14-



or after an Event of Default shall have occurred. The Pledgee shall have only
those powers set forth herein and the Secured Creditors shall assume none of the
duties, obligations or liabilities of a member of any limited liability company
or as a partner of any partnership or any Pledgor except as provided in the last
sentence of paragraph (a) of this Section 12.

                  (c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.

                  (d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is not
a party, or to take any action hereunder or thereunder, or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.

                  13. FURTHER ASSURANCES; POWER-OF-ATTORNEY.

                  (a) Each Pledgor agrees that it will join with the Pledgee in
executing and, at such Pledgor's own expense, file and refile under the Uniform
Commercial Code or other applicable law such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem
reasonably necessary and wherever required by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem necessary to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.

                  (b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time solely after
the occurrence and during the continuance of an Event of Default in the
Pledgee's reasonable discretion to take any action and to execute any instrument
which the Pledgee may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement.

                  14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of this Agreement each such Secured Creditor
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in Section 12 of the Credit Agreement.

                                      -15-



                  15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).

                  16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.

                  (a) Each Pledgor represents, warrants and covenants that:

                  (i)      it is the legal, beneficial and record owner of, and
         has good and marketable title to, all Collateral consisting of one or
         more Securities and that it has sufficient interest in all Collateral
         in which a security interest is purported to be created hereunder for
         such security interest to attach (subject, in each case, to no pledge,
         lien, mortgage, hypothecation, security interest, charge, option,
         Adverse Claim or other encumbrance whatsoever, except the liens and
         security interests created by this Agreement);

                  (ii)     it has full power, authority and legal right to
         pledge all the Collateral pledged by it pursuant to this Agreement;

                  (iii)    this Agreement has been duly authorized, executed and
         delivered by such Pledgor and constitutes a legal, valid and binding
         obligation of such Pledgor enforceable against such Pledgor in
         accordance with its terms, except to the extent that the enforceability
         thereof may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or other similar laws generally affecting
         creditors' rights and by equitable principles (regardless of whether
         enforcement is sought in equity or at law);

                  (iv)     except to the extent already obtained or made, no
         consent of any other party (including, without limitation, any
         stockholder, partner, member or creditor of such Pledgor or any of its
         Subsidiaries) and no consent, license, permit, approval or
         authorization of, exemption by, notice or report to, or registration,
         filing or declaration with, any governmental authority is required to
         be obtained by such Pledgor in connection with (a) the execution,
         delivery or performance of this Agreement, (b) the validity or
         enforceability of this Agreement, (c) the perfection or enforceability
         of the Pledgee's security interest in the Collateral or (d) except for
         compliance with or as may be required by applicable securities laws,
         the exercise by the Pledgee of any of its rights or remedies provided
         herein;

                  (v)      the execution, delivery and performance of this
         Agreement will not violate any provision of any applicable law or
         regulation or of any order, judgment, writ, award or decree of any
         court, arbitrator or governmental authority, domestic or foreign,
         applicable to such Pledgor, or of the certificate of incorporation,
         operating agreement, limited liability company agreement, partnership
         agreement or by-laws of such Pledgor or of any securities issued by
         such Pledgor or any of its Subsidiaries, or of any mortgage, deed of
         trust, indenture, lease, loan agreement, credit agreement or other
         material contract, agreement or instrument or undertaking to which such
         Pledgor or any of its

                                      -16-



         Subsidiaries is a party or which purports to be binding upon such
         Pledgor or any of its Subsidiaries or upon any of their respective
         assets and will not result in the creation or imposition of (or the
         obligation to create or impose) any lien or encumbrance on any of the
         assets of such Pledgor or any of its Subsidiaries except as
         contemplated by this Agreement;

                  (vi)     all of the Collateral (consisting of Securities,
         Limited Liability Company Interests or Partnership Interests) has been
         duly and validly issued and acquired, is fully paid and non-assessable
         and is subject to no options to purchase or similar rights;

                  (vii)    each of the Pledged Notes constituting an
         Intercompany Note constitutes, or when executed by the obligor thereof
         will constitute, the legal, valid and binding obligation of such
         obligor, enforceable in accordance with its terms, except to the extent
         that the enforceability thereof may be limited by applicable
         bankruptcy, insolvency, reorganization, moratorium or other similar
         laws generally affecting creditors' rights and by equitable principles
         (regardless of whether enforcement is sought in equity or at law); and

                  (viii)   the pledge and collateral assignment to, and
         possession by, the Pledgee of the Collateral consisting of Certificated
         Securities and Pledged Notes pursuant to this Agreement creates a valid
         and perfected first priority security interest in such Certificated
         Securities and Pledged Notes, and the proceeds thereof, subject to no
         prior Lien or encumbrance or to any agreement purporting to grant to
         any third party a Lien or encumbrance on the property or assets of such
         Pledgor which would include the Securities and the Pledgee is entitled
         to all the rights, priorities and benefits afforded by the UCC or other
         relevant law as enacted in any relevant jurisdiction to perfect
         security interests in respect of such Collateral; and

                  (ix)     "control" (as defined in Section 8-106 of the UCC)
         has been obtained by the Pledgee over all Collateral consisting of
         Securities (including Notes which are Securities) with respect to which
         such "control" may be obtained pursuant to Section 8-106 of the UCC.

                  (b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
each Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.

                  17. CHIEF EXECUTIVE OFFICE; JURISDICTION OF ORGANIZATION
RECORDS. The full legal name and jurisdiction of organization of Pledgor is as
set forth in Annex F hereto. The chief executive office of each Pledgor is
located at the address specified in Annex F hereto. Each Pledgor will not move
its chief executive office except to such new location as such Pledgor may
establish in accordance with the last sentence of this Section 17. The originals
of all documents in the possession of such Pledgor evidencing all Collateral,

                                      -17-



including but not limited to all Limited Liability Company Interests and
Partnership Interests, and the only original books of account and records of
such Pledgor relating thereto are, and will continue to be, kept at such chief
executive office as specified in Annex F hereto, or at such new locations as
such Pledgor may establish in accordance with the last sentence of this Section
17. All Limited Liability Company Interests and Partnership Interests are, and
will continue to be, maintained at, and controlled and directed (including,
without limitation, for general accounting purposes) from, such chief executive
office as specified in Annex F hereto, or such new locations as such Pledgor may
establish in accordance with the last sentence of this Section 17. No Pledgor
shall change its chief executive office, name, form of organization from that of
a corporation or jurisdiction of organization until (i) it shall have given to
the Pledgee not less than 30 days' prior written notice of its intention so to
do, clearly describing the proposed changes and providing such other information
in connection therewith as the Pledgee may reasonably request and (ii) with
respect to such changes, it shall have taken all action, satisfactory to the
Pledgee, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect. Promptly after establishing a new location for such
offices in accordance with the immediately preceding sentence, the respective
Pledgor shall deliver to the Pledgee a supplement to Annex F hereto so as to
cause such Annex F hereto to be complete and accurate.

                  18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.

                  19. REGISTRATION, ETC.

                  (a) If there shall have occurred and be continuing an Event of
Default then, and in every such case, upon receipt by any Pledgor from the
Pledgee of a written request or requests that such Pledgor cause any
registration, qualification or compliance under any Federal or state securities
law or laws to be effected with respect to all or any part of the Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests, such Pledgor as soon as practicable and at its expense will cause
such registration to be effected (and be kept effective) and will cause such
qualification and compliance to be declared effected (and be kept effective)

                                      -18-



as may be so requested and as would permit or facilitate the sale and
distribution of such Collateral, including, without limitation, registration
under the Securities Act, as then in effect (or any similar statute then in
effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other government
requirements, provided, that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may reasonably request in
writing and as shall be required in connection with any such registration,
qualification or compliance. Such Pledgor will cause the Pledgee to be kept
advised in writing as to the progress of each such registration, qualification
or compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of such Collateral against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such
Pledgor by the Pledgee or such other Secured Creditor expressly for use therein.

                  (b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests
pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Collateral, as the case may be, or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Collateral
or part thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of the Collateral at a
price which the Pledgee, in its sole and absolute discretion, in good faith
deems reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.

                  20. TERMINATION; RELEASE.

                  (a) After the Termination Date, this Agreement and the
security interest created hereby shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination), and the Pledgee, at the request and expense of
any Pledgor, will execute and deliver to such Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly

                                      -19-



assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement, together with
any monies at the time held by the Pledgee or any of its sub-agents hereunder.
As used in this Agreement, "Termination Date" shall mean the date upon which the
Total Commitment and all Interest Rate Protection Agreements and Other Hedging
Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been repaid in full), all Letters of Credit have
been terminated and all Obligations then due and payable have been paid in full.

                  (b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 10.02 of the Credit Agreement (other
than a sale to any Pledgor or any Subsidiary thereof) or is otherwise released
at the direction of the Required Lenders (or all Lenders if required by Section
13.12 of the Credit Agreement) and the proceeds of such sale or sales or from
such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, the Pledgee, at the request
and expense of any Pledgor, will duly assign, transfer and deliver to such
Pledgor (without recourse and without any representation or warranty) such of
the Collateral (and releases therefor) as is then being (or has been) so sold or
released and has not theretofore been released pursuant to this Agreement.

                  (c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as provided in
Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate
signed by a principal executive officer of such Pledgor stating that the release
of the respective Collateral is permitted pursuant to such Section 20(a) or (b).

                  (d) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with this Section 20.

                  21. NOTICES, ETC. All such notices and communications
hereunder shall be sent or delivered by mail, telegraph, telex, telecopy, cable
or overnight courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier and when mailed shall be effective three Business Days
following deposit in the mail with proper postage, except that notices and
communications to the Pledgee or any Pledgor shall not be effective until
received by the Pledgee or such Pledgor, as the case may be. All notices and
other communications shall be in writing and addressed as follows:

                  (a) if to any Pledgor, at:

                  c/o infoUSA Inc.
                  5711 South 86th Circle
                  Omaha, Nebraska 68127
                  Attention:  Chief Financial Officer
                  Telephone No.: (402) 593-4500
                  Telecopier No.: (402) 331-1505

                                      -20-



                  (b) if to the Pledgee, at:

                  Bank of America, N.A.
                  231 South LaSalle Street
                  Chicago, Illinois 60697
                  Attention: David Johanson
                  Telephone No.: (312) 828-7933
                  Telecopier No.: (312) 974-9102

                  (c) if to any Lender Creditor, either (x) to the
Administrative Agent, at the address of the Administrative Agent specified in
the Credit Agreement or (y) at such address as such Lender Creditor shall have
specified in the Credit Agreement;

                  (d) if to any Other Creditor at such address as such Other
Creditor shall have specified in writing to the Pledgors and the Pledgee;

                  or at such other address as shall have been furnished in
writing by any Person described above to the party required to give notice
hereunder.

                  22. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of either (x) the Required
Lenders (or all of the Lenders to the extent required by Section 13.12 of the
Credit Agreement) at all times prior to the time on which all Credit Document
Obligations have been paid in full or (y) the holders of at least 50% of the
aggregate principal amount of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full);
provided, that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall also require the
written consent of the Requisite Creditors (as defined below) of such affected
Class. For the purpose of this Agreement, the term "Class" shall mean each class
of Secured Creditors, i.e., whether (i) the Lender Creditors as holders of the
Credit Document Obligations or (ii) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (i) with respect to the Credit
Document Obligations, the Required Lenders and (ii) with respect to the Other
Obligations, the holders of at least 50% of the aggregate principal amount of
the outstanding Other Obligations.

                  23. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns, provided that no Pledgor may assign any of its rights or
obligations under this Agreement without the prior consent of the Collateral
Agent. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. EACH PLEDGOR IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS

                                      -21-



CONTEMPLATED HEREBY. The headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument. In the event that
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto.

                  24. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.

                  25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall become a
Pledgor hereunder by executing a counterpart hereof and delivering the same to
the Pledgee.

                                    * * * *

                                      -22-



                  IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.

                       INFOUSA INC., as a Pledgor

                       By _________________________________________
                       Title: Chief Financial Officer

                       AMERICAN CHURCH LISTS, INC.,
                       BJ HUNTER INFORMATION, INC.,
                       CD-ROM TECHNOLOGIES, INC.,
                       CITY DIRECTORIES, INC.,
                       CLICKACTION INC.,
                       DONNELLEY MARKETING, INC.,
                       HILL-DONNELLY CORPORATION
                       IDEXEC, INC.,
                       INFOUSA MARKETING, INC.,
                       LIST BAZAAR.COM, INC.,
                       STRATEGIC INFORMATION MANAGEMENT, INC.,
                       TGMVC CORPORATION
                       WALTER KARL, INC.,
                       YESMAIL, INC.,
                       each as a Pledgor

                       By _________________________________________
                       Title: Chief Financial Officer of each

                                 Signature Page
                                       to
                                Pledge Agreement



Accepted and Agreed to:

BANK OF AMERICA, N.A.,
  as Pledgee, Collateral Agent

By _________________________________
   Title: Vice President

                                 Signature Page
                                       to
                                Pledge Agreement



                                                                         ANNEX A
                                                                              to
                                                                PLEDGE AGREEMENT

                              LIST OF SUBSIDIARIES

See Schedule 3 and 7 of the Disclosure Letter to the Credit Agreement.



                                                                         ANNEX B
                                                                              to
                                                                PLEDGE AGREEMENT

                                 LIST OF STOCK

See Schedule 3 and 7 of the Disclosure Letter to the Credit Agreement, provided
that with respect to the common stock of BJ Hunter Information, Inc., only 65%
of such common stock is required to be pledged.



                                                                         ANNEX C
                                                                              to
                                                                PLEDGE AGREEMENT

                                  LIST OF NOTES

Various members of senior management of the Borrower owe the Borrower pursuant
to promissory notes an aggregate of $840,645 (as of April 30, 2003) in
connection with the exercise of stock options to acquire common stock of the
Borrower.



                                                                         ANNEX D
                                                                              to
                                                                PLEDGE AGREEMENT

                   LIST OF LIMITED LIABILITY COMPANY INTERESTS

None.



                                                                         ANNEX E
                                                                              to
                                                                PLEDGE AGREEMENT

                          LIST OF PARTNERSHIP INTERESTS

None.



                                                                         ANNEX F
                                                                              to
                                                                PLEDGE AGREEMENT

                      LIST OF JURISDICTIONS OF ORGANIZATION

See Annex A to the Security Agreement.

                         LIST OF CHIEF EXECUTIVE OFFICES

See Annex B to the Security Agreement.



                                                                         ANNEX G
                                                                              to
                                                                PLEDGE AGREEMENT

    Form of Agreement Regarding Uncertificated Securities, Limited Liability
                   Company Interests and Partnership Interests

                  AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of _______ __, ____, among the undersigned
pledgor (the "Pledgor"), Bank of America, N.A., not in its individual capacity
but solely as Collateral Agent (the "Pledgee"), and __________, as the issuer of
the Uncertificated Securities, Limited Liability Company Interests and/or
Partnership Interests (each as defined below) (the "Issuer").

                              W I T N E S S E T H :

                  WHEREAS, the Pledgor, certain of its affiliates and the
Pledgee have entered into a Pledge Agreement, dated as of March 6, 2002, as
amended and restated as of May 27, 2003 (as amended, amended and restated,
modified or supplemented from time to time, the "Pledge Agreement"), under
which, among other things, in order to secure the payment of the Obligations (as
defined in the Pledge Agreement), the Pledgor will pledge to the Pledgee for the
benefit of the Secured Creditors (as defined in the Pledge Agreement), and grant
a security interest in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest of the Pledgor in and to any
and all (1) "uncertificated securities" (as defined in Section 8-102(a)(18) of
the Uniform Commercial Code, as adopted in the State of Illinois)
("Uncertificated Securities"), (2) Partnership Interests (as defined in the
Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the
Pledge Agreement), in each case issued from time to time by the Issuer, whether
now existing or hereafter from time to time acquired by the Pledgor (with all of
such Uncertificated Securities, Partnership Interests and Limited Liability
Company Interests being herein collectively called the "Issuer Pledged
Interests"); and

                  WHEREAS, the Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control
of the Issuer Pledge Interests and to provide for the rights of the parties
under this Agreement;

                  NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                  1. The Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the Pledgee (and its successors and assigns) regarding
any and all of the Issuer Pledged Interests without the further consent by the
registered owner (including the Pledgor), and not to comply with any

                                      G-1



instructions or orders regarding any or all of the Issuer Pledged Interests
originated by any person or entity other than the Pledgee (and its successors
and assigns) or a court of competent jurisdiction.

                  2. The Issuer hereby certifies that (i) no notice of any
security interest, lien or other encumbrance or claim affecting the Issuer
Pledged Interests (other than the security interest of the Pledgee) has been
received by it, and (ii) the security interest of the Pledgee in the Issuer
Pledged Interests has been registered in the books and records of the Issuer.

                  3. The Issuer hereby represents and warrants that (i) the
pledge by the Pledgor of, and the granting by the Pledgor of a security interest
in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured
Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and
nonassessable.

                  4. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to the Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:

                                 Bank of America, N.A.
                                 231 South LaSalle Street
                                 Chicago, Illinois 60697
                                 Attention: David Johanson
                                 Telephone No.: (312) 828-7933
                                 Telecopier No.: (312) 974-9102

                  5. Until the Pledgee shall have delivered written notice to
the Issuer that all of the Obligations have been paid in full and this Agreement
is terminated, the Issuer will, upon receiving notice from the Pledgee stating
that an "Event of Default" has occurred and is continuing, send any and all
redemptions, distributions, interest or other payments in respect of the Issuer
Pledged Interests from the Issuer for the account of the Pledgor only by wire
transfers to the following address:

                           ________________________
                           ________________________
                           ________________________
                           ABA No.: __________________________
                           Account in the Name of: ___________
                           Account No.: ______________________

                  6. Except as expressly provided otherwise in Sections 4 and 5,
all notices, shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or overnight courier service and all such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier and when mailed shall be effective three Business
Days following deposit in the mail with proper

                                      G-2



postage, except that notices and communications to the Pledgee, the Pledgor or
the Issuer shall not be effective until received by the Pledgee, the Pledgor or
the Issuer, as the case may be. All notices and other communications shall be in
writing and addressed as follows:

                  (a)      if to the Pledgor, at:

                           c/o infoUSA Inc.
                           5711 South 86th Circle
                           Omaha, Nebraska 68127
                           Attention: Chief Financial Officer
                           Tel: (402) 593-4500
                           Fax: (402) 331-1505

                  (b)      if to the Pledgee, at:

                           Bank of America, N.A.
                           231 South LaSalle Street
                           Chicago, Illinois 60697
                           Attention: David Johanson
                           Telephone No.: (312) 828-7933
                           Telecopier No.: (312) 974-9102

                  (c)      if to the Issuer, at:

                           _______________________________
                           _______________________________
                           _______________________________

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in Illinois are authorized to remain closed.

                  7. This Agreement shall be binding upon the successors and
assigns of the Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in the manner
whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor.

                                      G-3



                  8. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without regard to its
principles of conflict of laws.

                                      * * *

                  IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer
have caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.

                                 [________________________________],
                                    as Pledgor

                                 By ______________________________________
                                    Name:
                                    Title:

                                 BANK OF AMERICA, N.A.,
                                    not in its individual capacity but solely as
                                    Collateral Agent and Pledgee

                                 By ______________________________________
                                    Name:
                                    Title:

                                 [________________________________],
                                    the Issuer

                                 By ______________________________________
                                    Name:
                                    Title:

                                      G-4



                                                                         ANNEX H
                                                                              to
                                                                PLEDGE AGREEMENT

                      SECURITIES ACCOUNT CONTROL AGREEMENT

         This Securities Account Control Agreement dated as of (this
"Agreement") among ___________________(the "Debtor"), Bank of America, N.A., as
collateral agent for the Secured Parties (the "Collateral Agent") and
_______________________, in its capacity as a "securities intermediary" as
defined in Section 8-102 of the UCC (in such capacity, the "Securities
Intermediary"). Capitalized terms used but not defined herein shall have the
meaning assigned thereto in the Pledge Agreement, dated [as of the date hereof]
[as of March 6, 2002, as amended and restated as of May 27, 2003], among the
Debtor and the Collateral Agent (as amended, modified or supplemented from time
to time, the "Pledge Agreement"). All references herein to the "UCC" shall mean
the Uniform Commercial Code as in effect in the State of Illinois.

         SECTION 1. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities
Intermediary hereby confirms and agrees that:

                  (a) The Securities Intermediary has established account number
         [IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF
         ACCOUNT]" (such account and any successor account, the "Securities
         Account") and the Securities Intermediary shall not change the name or
         account number of the Securities Account without the prior written
         consent of the Collateral Agent;

                  (b) All securities or other property underlying any financial
         assets credited to the Securities Account shall be registered in the
         name of the Securities Intermediary, indorsed to the Securities
         Intermediary or in blank or credited to another securities account
         maintained in the name of the Securities Intermediary and in no case
         will any financial asset credited to the Securities Account be
         registered in the name of the Debtor, payable to the order of the
         Debtor or specially indorsed to the Debtor except to the extent the
         foregoing have been specially indorsed to the Securities Intermediary
         or in blank;

                  (c) All property delivered to the Securities Intermediary
         pursuant to the Pledge Agreement will be promptly credited to the
         Securities Account; and

                  (d) The Securities Account is a "securities account" within
         the meaning of Section 8-501 of the UCC.

         SECTION 2. "FINANCIAL ASSETS" ELECTION. The Securities Intermediary
hereby agrees that each item of property (including, without limitation, any
investment property, financial asset, security, instrument, general intangible
or cash) credited to the Securities Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.

                                      H-1



         SECTION 3. CONTROL OF THE SECURITIES ACCOUNT. If at any time the
Securities Intermediary shall receive any order from the Collateral Agent
directing transfer or redemption of any financial asset relating to the
Securities Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Debtor or any other person. The
Debtor is otherwise entitled to issue entitlement orders and such orders
conflict with any entitlement order issued by the Collateral Agent, the
Securities Intermediary shall follow the orders issued by the Collateral Agent.

         SECTION 4. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that
the Securities Intermediary has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in the Securities Account or
any security entitlement credited thereto, the Securities Intermediary hereby
agrees that such security interest shall be subordinate to the security interest
of the Collateral Agent. The financial assets and other items deposited to the
Securities Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Collateral Agent (except
that the Securities Intermediary may set off (i) all amounts due to the
Securities Intermediary in respect of customary fees and expenses for the
routine maintenance and operation of the Securities Account and (ii) the face
amount of any checks which have been credited to such Securities Account but are
subsequently returned unpaid because of uncollected or insufficient funds).

         SECTION 5. CHOICE OF LAW. This Agreement and the Securities Account
shall each be governed by the laws of the State of Illinois. Regardless of any
provision in any other agreement, for purposes of the UCC, Illinois shall be
deemed to be the Securities Intermediary's jurisdiction (within the meaning of
Section 8-110 of the UCC) and the Securities Account (as well as the securities
entitlements related thereto) shall be governed by the laws of the State of
Illinois.

         SECTION 6. CONFLICT WITH OTHER AGREEMENTS.

                  (a) In the event of any conflict between this Agreement (or
         any portion thereof) and any other agreement now existing or hereafter
         entered into, the terms of this Agreement shall prevail;

                  (b) No amendment or modification of this Agreement or waiver
         of any right hereunder shall be binding on any party hereto unless it
         is in writing and is signed by all of the parties hereto;

                  (c) The Securities Intermediary hereby confirms and agrees
         that:

                           (i) There are no other agreements entered into
                  between the Securities Intermediary and the Debtor with
                  respect to the Securities Account;

                           (ii) It has not entered into, and until the
                  termination of this Agreement, will not enter into, any
                  agreement with any other person relating to the Securities
                  Account and/or any financial assets credited thereto pursuant
                  to which it has agreed to comply with entitlement orders (as
                  defined in Section 8-102(a)(8) of the UCC) of such other
                  person; and

                                      H-2



                           (iii) It has not entered into, and until the
                  termination of this Agreement, will not enter into, any
                  agreement with the Debtor or the Collateral Agent purporting
                  to limit or condition the obligation of the Securities
                  Intermediary to comply with entitlement orders as set forth in
                  Section 3 hereof.

         SECTION 7. ADVERSE CLAIMS. Except for the claims and interest of the
Collateral Agent and of the Debtor in the Securities Account, the Securities
Intermediary does not know of any claim to, or interest in, the Securities
Account or in any "financial asset" (as defined in Section 8-102(a) of the UCC)
credited thereto. If any person asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Securities Account or in any financial asset
carried therein, the Securities Intermediary will promptly notify the Collateral
Agent and the Debtor thereof.

         SECTION 8. MAINTENANCE OF SECURITIES ACCOUNT. In addition to, and not
in lieu of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 3 hereof, the Securities Intermediary agrees to
maintain the Securities Account as follows:

                  (a) Notice of Sole Control. If at any time the Collateral
         Agent delivers to the Securities Intermediary a Notice of Sole Control
         in substantially the form set forth in Exhibit A hereto, the Securities
         Intermediary agrees that after receipt of such notice, it will take all
         instruction with respect to the Securities Account solely from the
         Collateral Agent.

                  (b) Voting Rights. Until such time as the Securities
         Intermediary receives a Notice of Sole Control pursuant to subsection
         (a) of this Section 8, the Debtor shall direct the Securities
         Intermediary with respect to the voting of any financial assets
         credited to the Securities Account.

                  (c) Permitted Investments. Until such time as the Securities
         Intermediary receives a Notice of Sole Control signed by the Collateral
         Agent, the Debtor shall direct the Securities Intermediary with respect
         to the selection of investments to be made for the Securities Account;
         provided, however, that the Securities Intermediary shall not honor any
         instruction to purchase any investments other than investments of a
         type describe on Exhibit B hereto.

                  (d) Statements and Confirmations. The Securities Intermediary
         will promptly send copies of all statements, confirmations and other
         correspondence concerning the Securities Account and/or any financial
         assets credited thereto simultaneously to each of the Debtor and the
         Collateral Agent at the address for each set forth in Section 12 of
         this Agreement.

                  (e) Tax Reporting. All items of income, gain, expense and loss
         recognized in the Securities Account shall be reported to the Internal
         Revenue Service and all state and local taxing authorities under the
         name and taxpayer identification number of the Debtor.

                                      H-3




         SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES
INTERMEDIARY. The Securities Intermediary hereby makes the following
representations, warranties and covenants:

                  (a) The Securities Account has been established as set forth
         in Section I above and such Securities Account will be maintained in
         the manner set forth herein until termination of this Agreement; and

                  (b) This Agreement is the valid and legally binding
         obligations of the Securities Intermediary.

         SECTION 10. INDEMNIFICATION OF SECURITIES INTERMEDIARY. The Debtor and
the Collateral Agent hereby agree that (a) the Securities Intermediary is
released from any and all liabilities to the Debtor and the Collateral Agent
arising from the terms of this Agreement and the compliance of the Securities
Intermediary with the terms hereof, except to the extent that such liabilities
arise from the Securities Intermediary's negligence and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Securities Intermediary from and against any and all claims, actions and suits
of others arising out of the terms of this Agreement or the compliance of the
Securities Intermediary with the terms hereof, except to the extent that such
arises from the Securities Intermediary's negligence, and from and against any
and all liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising by reason of the same, until the
termination of this Agreement.

         SECTION 11. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Agent may assign its
rights hereunder only with the express written consent of the Securities
Intermediary and by sending written notice of such assignment to the Debtor.

         SECTION 12. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.

         Debtor:  [INSERT ADDRESS)

         Attention:

         Telecopier:

         Collateral Agent: Bank of America, N.A.
                           231 South LaSalle Street
                           Chicago, Illinois 60697

         Attention: David Johanson

                                      H-4



         Telecopier: (312) 974-9102

         Financial Institution: [INSERT ADDRESS]

         Attention:

         Telecopier:

Any party may change its address for notices in the manner set forth above.

         SECTION 13. TERMINATION. The obligations of the Securities Intermediary
to the Collateral Agent pursuant to this Agreement shall continue in effect
until the security interest of the Collateral Agent in the Securities Account
has been terminated pursuant to the terms of the Pledge Agreement and the
Collateral Agent has notified the Securities Intermediary of such termination in
writing. The Collateral Agent agrees to provide Notice of Termination in
substantially the form of Exhibit C hereto to the Securities Intermediary upon
the request of the Debtor on or after the termination of the Collateral Agent's
security interest in the Securities Account pursuant to the terms of the Pledge
Agreement. The termination of this Agreement shall not terminate the Securities
Account or alter the obligations of the Securities Intermediary to the Debtor
pursuant to any other agreement with respect to the Securities Account.

         SECTION 14. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.

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

                                      H-5



                                    EXHIBIT A

                     TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Collateral Agent]

[Date]

[Name and Address of Financial Institution]

Attention:

Re: Notice of Sole Control

Ladies and Gentlemen:

         As referenced in the Securities Account Control Agreement dated as of
__________ __, 2003, among ____________________, you and the undersigned (a copy
of which is attached), we hereby give you notice of our sole control over
securities account number [ACCOUNT NUMBER] (the "Securities Account") and all
financial assets credited thereto. You are hereby instructed not to accept any
direction, instructions or entitlement orders with respect to the Securities
Account or the financial assets credited thereto from any person other than the
undersigned, unless otherwise ordered by a court of competent jurisdiction. You
are instructed to deliver a copy of this notice by facsimile transmission to
[NAME OF DEBTOR].

                                Very truly yours,

                                Bank of America, N.A., as Collateral Agent

                                By: ______________________________________

                                Name: ____________________________________

                                Title: ___________________________________

cc: [NAME OF THE DEBTOR]

                                      H-6



                                    EXHIBIT B

                     TO SECURITIES ACCOUNT CONTROL AGREEMENT

Permitted Investments

                                      H-7



                                    EXHIBIT C

                     TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of the Collateral Agent]

[Date]

[Name and Address of Financial Institution]

Attention:

Re: Termination of Securities Account Control Agreement

         You are hereby notified that the Securities Account Control Agreement
dated as of ____________ among you, ___________________ (the "Debtor") and the
undersigned (a copy of which is attached) is terminated and you have no further
obligations to the undersigned pursuant to such Agreement. Notwithstanding any
previous instructions to you, you are hereby instructed to accept all future
directions with respect to [ACCOUNT NUMBER(S)] from the Debtor. This notice
terminates any obligations you may have to the undersigned with respect to such
account, however nothing contained in this notice shall alter any obligations
which you may otherwise owe to the Debtor pursuant to any other agreement.

         You are instructed to deliver a copy of this notice by facsimile
transmission to the Debtor.

                                Very truly yours,

                                Bank of America, N.A., as Collateral Agent

                                By: ______________________________________

                                Name: ____________________________________

                                Title: ___________________________________

                                      H-8





                                                                         ANNEX I
                                                                              to
                                                                PLEDGE AGREEMENT

                        DEPOSIT ACCOUNT CONTROL AGREEMENT

         This Deposit Account Control Agreement dated as of ___________ (this
"Agreement") among _________________ (the "Debtor"), Bank of America, N.A., as
collateral agent for the Secured Parties (the "Collateral Agent") and _______ ,
in its capacity as a "bank" as defined in Section 9-102 of The UCC (in such
capacities, the "Financial Institution"). Capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Pledge Agreement, dated
[as of the date hereof] [______ __, 2003, among the Debtor and the Collateral
Agent (as amended, modified or supplemented from time to time, the "Pledge
Agreement"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of Illinois.

         SECTION 1. ESTABLISHMENT OF DEPOSIT ACCOUNT. The Financial Institution
hereby confirms and agrees that:

                  (a) The Financial Institution has established account number
         [IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF
         ACCOUNT]" (such account and any successor account, the "Deposit
         Account") and the Financial Institution shall not change the name or
         account number of the Deposit Account without the prior written consent
         of the Collateral Agent; and

                  (b) The Deposit Account is a "deposit account" within the
         meaning of Section 9-102(a)(29) of the UCC.

         SECTION 2. CONTROL OF THE DEPOSIT ACCOUNT. If at any time the Financial
Institution shall receive any instructions originated by the Collateral Agent
directing the disposition of funds in the Deposit Account, the Financial
Institution shall comply with such instructions without further consent by the
Debtor or any other person. [The Financial Institution hereby acknowledges that
for purposes of Section 9-309 of the Illinois Uniform Commercial Code it has
received notice of the security interest of the Collateral Agent in the Deposit
Account and hereby acknowledges and consents to such lien.]

         SECTION 3. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that
the Financial Institution has or subsequently obtains by agreement, by operation
of law or otherwise a security interest in the Deposit Account or any funds
credited thereto, the Financial Institution hereby agrees that such security
interest shall be subordinate to the security interest of the Collateral Agent.
Money and other items credited to the Deposit Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Collateral Agent (except that the Financial Institution may set
off (i) all amounts due to the Financial Institution in respect of customary
fees and expenses for the routine maintenance and operation of the Deposit
Account and (ii) the face amount of any checks which have been credited to such
Deposit Account but are subsequently returned unpaid because of uncollected or
insufficient funds).

                                      I-1



         SECTION 4. CHOICE OF LAW. This Agreement and the Deposit Account shall
each be governed by the laws of the State of Illinois. Regardless of any
provision in any other agreement, for purposes of the UCC, Illinois shall be
deemed to be the Financial Institution's jurisdiction (within the meaning of
Section 9-304 of the UCC and the Deposit Account shall be governed by the laws
of the State of Illinois.

         SECTION 5. CONFLICT WITH OTHER AGREEMENTS.

                  (a) In the event of any conflict between this Agreement (or
         any portion thereof) and any other agreement now existing or hereafter
         entered into, the terms of this Agreement shall prevail;

                  (b) No amendment or modification of this Agreement or waiver
         of any right hereunder shall be binding on any party hereto unless it
         is in writing and is signed by all of the parties hereto; and

                  (c) The Financial Institution hereby confirms and agrees that:

                           (i) There are no other agreements entered into
                  between the Financial Institution and the Debtor with respect
                  to the Deposit Account; and

                           (ii) It has not entered into, and until the
                  termination of this Agreement, will not enter into, any
                  agreement with any other person relating the Deposit Account
                  and/or any funds credited thereto pursuant to which it has
                  agreed to comply with instructions originated by such persons
                  as contemplated by Section 9-104 of the UCC.

         SECTION 6. ADVERSE CLAIMS. The Financial Institution does not know of
any liens, claims or encumbrances relating to the Deposit Account. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Deposit Account, the Financial Institution will promptly notify the Collateral
Agent and the Debtor thereof.

         SECTION 7. MAINTENANCE OF DEPOSIT ACCOUNT. In addition to, and not in
lieu of, the obligation of the Financial Institution to honor instructions as
set forth in Section 2 hereof, the Financial Institution agrees to maintain the
Deposit Account as follows:

                  (a) STATEMENTS AND CONFIRMATIONS. The Financial Institution
         will promptly send copies of all statements, confirmations and other
         correspondence concerning the Deposit Account simultaneously to each of
         the Debtor and the Collateral Agent at the address for each set forth
         in Section 11 of this Agreement; and

                  (b) TAX REPORTING. All interest, if any, relating to the
         Deposit Account, shall be reported to the Internal Revenue Service and
         all state and local taxing authorities under the name and taxpayer
         identification number of the Debtor.

                                      I-2



         SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FINANCIAL
INSTITUTION. The Financial Institution hereby makes the following
representations, warranties and covenants:

                  (a) The Deposit Account has been established as set forth in
         Section 1 and such Deposit Account will be maintained in the manner set
         forth herein until termination of this Agreement; and

                  (b) This Agreement is the valid and legally binding
         obligations of the Financial Institution.

         SECTION 9. INDEMNIFICATION OF FINANCIAL INSTITUTION. The Debtor and the
Collateral Agent hereby agree that (a) the Financial Institution is released
from any and all liabilities to the Debtor and the Collateral Agent arising from
the terms of this Agreement and the compliance of the Financial Institution with
the terms hereof, except to the extent that such liabilities arise from the
Financial Institution's negligence and (b) the Debtor, its successors and
assigns shall at all times indemnify and save harmless the Financial Institution
from and against any and all claims, actions and suits of others arising out of
the terms of this Agreement or the compliance of the Financial Institution with
the terms hereof, except to the extent that such arises from the Financial
Institution's negligence, and from and against any and all liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising by reason of the same, until the termination of this
Agreement.

         SECTION 10. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Agent may assign its
rights hereunder only with the express written consent of the Financial
Institution and by sending written notice of such assignment to the Debtor.

         SECTION 11. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.

         Debtor:  INSERT ADDRESS]

         Attention:

         Telecopier:

         Collateral Agent: Bank of America, N.A.
                           231 South LaSalle Street
                           Chicago, Illinois  60697

                                      I-3



         Attention: David Johanson

         Telecopier: (312) 974-9102

         Financial Institution: [INSERT ADDRESS]

         Attention:

         Telecopier:

Any party may change its address for notices in the manner set forth above.

         SECTION 12. TERMINATION. The obligations of the Financial Institution
to the Collateral Agent pursuant to this Agreement shall continue in effect
until the security interest of the Collateral Agent in the Deposit Account has
been terminated pursuant to the terms of the Pledge Agreement and the Collateral
Agent has notified the Financial Institution of such termination in writing. The
Collateral Agent agrees to provide Notice of Termination in substantially the
form of Exhibit A hereto to the Financial Institution upon the request of the
Debtor on or after the termination of the Collateral Agent's security interest
in the Deposit Account pursuant to the terms of the Pledge Agreement. The
termination of this Agreement shall not terminate the Deposit Account or alter
the obligations of the Financial Institution to the Debtor pursuant to any other
agreement with respect to the Deposit Account.

         SECTION 13. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.

         IN WITNESS WHEREOF, the parties hereto have caused this Deposit Account
Control Agreement to be executed as of the date first above written by their
respective officers thereunto duty authorized.

                                      I-4




                                    EXHIBIT A

                      TO DEPOSIT ACCOUNT CONTROL AGREEMENT

[Letterhead of the Collateral Agent]

[Date]

[Name and Address of Financial Institution]

Attention:

Re: Termination of Deposit Account Control Agreement

         You are hereby notified that the Deposit Account Control Agreement
dated as of ____________, 2003 among ____________________ (the "Debtor"), you
and the undersigned (a copy of which is attached) is terminated and you have no
further obligations to the undersigned pursuant to such Agreement.
Notwithstanding any previous instructions to you, you are hereby instructed to
accept all future directions with respect to account number(s) from the Debtor.
This notice terminates any obligations you may have to the undersigned with
respect to such account, however nothing contained in this notice shall alter
any obligations which you may otherwise owe to the Debtor pursuant to any other
agreement.

         You are instructed to deliver a copy of this notice by facsimile
transmission to the Debtor.

                                Very truly yours,

                                Bank of America, N.A., as Collateral Agent

                                By: ______________________________________

                                Name: ____________________________________

                                Title: ___________________________________


                                      I-5

EX-10.3

                                                                    EXHIBIT 10.3

                               SECURITY AGREEMENT

                                      among

                                  INFOUSA INC.,

                           CERTAIN OF ITS SUBSIDIARIES

                                       and

                             BANK OF AMERICA, N.A.,

                               as COLLATERAL AGENT

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

                          Dated as of March 6, 2002 as
                           Amended and Restated as of
                                  May 27, 2003

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





                                                                                                                 
ARTICLE I

         SECURITY INTERESTS.....................................................................................    2

         1.1.     Grant of Security Interests...................................................................    2

         1.2.     Power of Attorney.............................................................................    3

ARTICLE II

         GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................    3

         2.1.     Necessary Filings.............................................................................    3

         2.2.     No Liens......................................................................................    3

         2.3.     Other Financing Statements....................................................................    3

         2.4.     Chief Executive Office, Record Locations......................................................    4

         2.5.     Jurisdiction of Organization..................................................................    4

         2.6.     Location of Inventory and Equipment...........................................................    4

         2.7.     Recourse......................................................................................    5

         2.8.     Names, Trade Names; Change of Name............................................................    5

         2.9.     Investment Related Property...................................................................    5

ARTICLE III

         SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER.................    5

         3.1.     Additional Representations and Warranties.....................................................    5

         3.2.     Maintenance of Records........................................................................    6

         3.3.     Direction to Account Debtors; Contracting Parties; etc........................................    6

         3.4.     Modification of Terms; etc....................................................................    7

         3.5.     Collection....................................................................................    7

         3.6.     Instruments...................................................................................    7

         3.7.     Assignors Remain Liable Under Receivables.....................................................    7

         3.8.     Assignors Remain Liable Under Contracts.......................................................    8

         3.9.     Changes of  Name, Jurisdiction of Organization, etc...........................................    8

         3.10.    Purchase Money Security Interests.............................................................    8

         3.11.    Protection of the Collateral Agent's Security.................................................    8

         3.12.    Further Actions...............................................................................    8





                                                                                                                
ARTICLE IV

         SPECIAL PROVISIONS CONCERNING TRADEMARKS...............................................................    9

         4.1.     Additional Representations and Warranties.....................................................    9

         4.2.     Licenses and Assignments......................................................................    9

         4.3.     Infringements.................................................................................    9

         4.4.     Preservation of Marks.........................................................................    9

         4.5.     Maintenance of Registration...................................................................    9

         4.6.     Future Registered Marks.......................................................................   10

         4.7.     Remedies......................................................................................   10

ARTICLE V

         SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS....................................   10

         5.1.     Additional Representations and Warranties.....................................................   10

         5.2.     Licenses and Assignments......................................................................   11

         5.3.     Infringements.................................................................................   11

         5.4.     Maintenance of Patents or Copyright...........................................................   11

         5.5.     Prosecution of Patent Applications............................................................   11

         5.6.     Future Patents and Copyrights.................................................................   12

         5.7.     Remedies......................................................................................   12

ARTICLE VI

         PROVISIONS CONCERNING ALL COLLATERAL...................................................................   12

         6.1.     Protection of Collateral Agent's Security.....................................................   12

         6.2.     Warehouse Receipts Non-negotiable.............................................................   12

         6.3.     Further Actions...............................................................................   13

         6.4.     Financing Statements..........................................................................   13

         6.5.     Authorization to File.........................................................................   13

ARTICLE VII

         REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...........................................................   13

         7.1.     Remedies; Obtaining the Collateral Upon Default...............................................   13

         7.2.     Remedies; Disposition of the Collateral.......................................................   15

         7.3.     Waiver of Claims..............................................................................   16

         7.4.     Application of Proceeds.......................................................................   16



                                      -ii-



                                                                                                                
         7.5.     Remedies Cumulative...........................................................................   18

         7.6.     Discontinuance of Proceedings.................................................................   19

ARTICLE VIII

         INDEMNITY..............................................................................................   19

         8.1.     Indemnity.....................................................................................   19

         8.2.     Indemnity Obligations Secured by Collateral; Survival.........................................   20

ARTICLE IX

         DEFINITIONS............................................................................................   21

ARTICLE X

         MISCELLANEOUS..........................................................................................   27

         10.1.    Notices.......................................................................................   27

         10.2.    Waiver; Amendment.............................................................................   28

         10.3.    Obligations Absolute..........................................................................   28

         10.4.    Successors and Assigns........................................................................   28

         10.5.    Headings Descriptive..........................................................................   28

         10.6.    Governing Law.................................................................................   29

         10.7.    Assignor's Duties.............................................................................   29

         10.8.    Termination; Release..........................................................................   29

         10.9.    Counterparts..................................................................................   29

         10.10.  Severability...................................................................................   30

         10.11.  The Collateral Agent...........................................................................   30

         10.12.  Benefit of Agreement...........................................................................   30

         10.13.  Additional Assignors...........................................................................   30



ANNEX A      Schedule of Names and Jurisdictions of Organization
ANNEX B      Schedule of Chief Executive Offices/Record Locations
ANNEX C      Schedule of Inventory and Equipment Location
ANNEX D      Schedule of Trade and Fictitious Names
ANNEX E      Schedule of Marks
ANNEX F      Schedule of Patent
ANNEX G      Schedule of Copyrights
ANNEX H      Investment Related Property
ANNEX I      Form of Grant of Security Interest in
             United States Trademarks and Patents
ANNEX J      Form of Grant of Security Interest in United States Copyrights

                                     -iii-



                  SECURITY AGREEMENT, dated as of March 6, 2002, and amended and
restated as of May 27, 2003, made by each of the undersigned assignors (each an
"Assignor" and, together with any other entity that becomes an assignor
hereunder pursuant to Section 10.13 hereof, the "Assignors") in favor of Bank of
America, N.A., as Collateral Agent together with any successor collateral agent
(the "Collateral Agent"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as so
defined.

                              W I T N E S S E T H :

                  WHEREAS, infoUSA Inc. (the "Borrower"), the lenders party from
time to time party thereto (the "Lenders"), and Bank of America, N.A., as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of March
6, 2002, as amended and restated as of May 27, 2003, providing for the making of
Loans to, and the issuance of Letters of Credit for the account of, the Borrower
as contemplated therein (as amended, modified or supplemented from time to time,
the "Credit Agreement") (the Lenders, the Administrative Agent, the Issuing
Lender and the Collateral Agent are herein called the "Lender Creditors");

                  WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors",
and together with the Lender Creditors, are herein called the "Secured
Creditors");

                  WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;

                  WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of Letters of Credit for the account of, the Borrower under
the Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and

                  WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans to, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, each Assignor desires to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph;

                  NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the



following representations and warranties to the Collateral Agent for the benefit
of the Secured Creditors and hereby covenants and agrees with the Collateral
Agent for the benefit of the Secured Creditors as follows:

                                   ARTICLE I

                               SECURITY INTERESTS

                  1.1. Grant of Security Interests.

                  (a)      As security for the prompt and complete payment and
performance when due of all of its Obligations, each Assignor does hereby
pledge, hypothecate and grant to the Collateral Agent for the benefit of the
Secured Creditors, a continuing security interest in, all of the right, title
and interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired (all of the following being
collectively called, the "Collateral"): all Accounts, all Chattel Paper, all
Documents, all General Intangibles, all Goods, all Instruments, all Insurance,
all Intellectual Property, all Investment Related Property, all Letter of Credit
Rights, all Money, all Supporting Obligations (to the extent not otherwise
included above), and all Proceeds, products, accessories, rents and profits of
or in respect of the foregoing, it being understood, that without limitation of
the foregoing, the Collateral shall include (i) all Receivables, (ii) all
Contracts, together with all Contract Rights arising thereunder, (iii) all
Equipment, (iv) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks, (v) all Patents and Copyrights and all reissues, renewals or
extensions thereof, (vi) all computer programs of such Assignor and all
intellectual property rights therein and all other Proprietary Information of
such Assignor, including, but not limited to, Trade Secrets Rights, and (vii)
all Deposit Accounts (including any and all Cash Collateral Accounts) and all
monies, securities, instruments and other investments deposited or required to
be deposited in such Deposit Accounts.

                  (b)      Notwithstanding anything herein to the contrary, in
no event shall the Collateral include and no Assignor shall be deemed to have
granted a security interest in, any of Assignor's right, title or interest in
(i) any Intellectual Property (collectively, the "Non-Assignable Intellectual
Property") to the extent that the grant of such security interest would
constitute or result in the abandonment or invalidation thereof or the
unenforceability of any right, title or interest of any Assignor therein; (ii)
any license, contract or agreement to the extent that the grant of such security
interest is prohibited by or would constitute a default under or a termination
of, such license, contract or agreement (each, a "Non-assignable Contract"), and
the terms restricting such grant are enforceable under applicable law (including
UCC section 9-406), it being understood that each Assignor hereby agrees to use
all reasonable efforts to obtain all requisite consent to enable Assignor to
grant a security interest in such asset and, in any event, immediately upon the
ineffectiveness, lapse or termination of any such restriction, the Collateral
shall include, and Assignor shall be deemed to have granted a security interest
in, all such rights and interests as if such restriction had never been in
effect; or (iii) any of the outstanding capital stock of a Foreign Subsidiary in
excess of 65% of the voting power of all classes of capital stock of such
entitled to vote.

                                      -2-



                  (c)      The security interest of the Collateral Agent under
this Agreement extends to all Collateral of the kind which is the subject of
this Agreement which any Assignor may acquire at any time during the term of
this Agreement.

                  1.2.     Power of Attorney. Each Assignor hereby constitutes
and appoints the Collateral Agent its true and lawful attorney, irrevocably,
with full power after the occurrence of and during the continuance of an Event
of Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.

                                   ARTICLE II

                GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

                  Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:

                  2.1.     Necessary Filings. Upon (i) the filing by the
Collateral Agent of appropriate financing statements in the applicable filing
offices in the jurisdictions set forth in Annex A, and (ii) the filing of the
appropriate Grants of Security Interest in the form of Annex I or J attached
hereto in the United States Patent and Trademark Office or in the United States
Copyright Office, as applicable, all filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral will have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral will create
a perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and will be
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests, in each case to the extent that the Collateral
consists of the type of property in which a security interest may be perfected
by filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction or in the United States Patent and Trademark Office or
in the United States Copyright Office.

                  2.2.     No Liens. Such Assignor owns the Collateral purported
to be owned by it and otherwise has the rights it purports to have in each item
of Collateral and, as to all Collateral whether now existing or hereafter
acquired, will continue to own or have such rights in each item of the
Collateral, in each case free and clear of any and all Liens, rights or claims
of all other Persons (other than Permitted Liens). Such Assignor shall defend
the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.

                  2.3.     Other Financing Statements. As of the date hereof,
there is no financing

                                      -3-



statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Collateral (other than financing statements filed in respect of Permitted
Liens), and so long as the Termination Date has not occurred, such Assignor will
not execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by such Assignor or in connection with Permitted Liens.

                  2.4.     Chief Executive Office, Record Locations. The chief
executive office of such Assignor is located at the address indicated on Annex B
hereto for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents evidencing
all Receivables and Contract Rights of such Assignor and the only original books
of account and records of such Assignor relating thereto are, and will continue
to be, kept at such chief executive office, at one or more of the other
locations set forth on Annex B hereto or at such new locations as such Assignor
may establish in accordance with the last sentence of this Section 2.4. All
Receivables and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this Section
2.4. No Assignor shall establish new locations for such offices until (i) it
shall have given to the Collateral Agent not less than 15 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request, and (ii) with respect to such new location, it shall
have taken all action reasonably satisfactory to the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.

                  2.5.     Jurisdiction of Organization. The full legal name and
jurisdiction of organization of such Assignor is as set forth on Annex A. If the
chief executive office or sole place of business of any Assignor is located
outside of the United States, then Annex A shall also include the address of the
major executive office in the United States, if any, of Assignor.

                  2.6.     Location of Inventory and Equipment. All Inventory
and Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex C hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex C
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.6. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 15 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.

                                      -4-



                  2.7.     Recourse. This Agreement is made with full recourse
to each Assignor (including, without limitation, with full recourse to all
assets of such Assignor) and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of such Assignor contained
herein, in the other Secured Debt Agreements and otherwise in writing in
connection herewith or therewith.

                  2.8.     Names, Trade Names; Change of Name. No Assignor has
or operates in any jurisdiction under, or in the preceding one year has had or
has operated in any jurisdiction under, any trade names, fictitious names or
other names except its legal name and such other trade or fictitious names as
are listed on Annex D hereto for such Assignor. No Assignor shall change its
legal name or assume or operate in any jurisdiction under any trade, fictitious
or other name except those names listed on Annex D hereto for such Assignor and
new names established in accordance with the last sentence of this Section 2.8.
No Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 15 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new name,
it shall have taken all action reasonably requested by the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.

                  2.9.     Investment Related Property. Annex H sets forth a
complete list of all Investment Related Property, including all Deposit
Accounts, Securities Accounts and Commodities Accounts. Assignor has taken all
actions necessary or desirable to: (a) establish the Collateral Agent's
"control" (within the meaning of Section 9-106 of the Illinois UCC) over any
portion of the Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements or
Commodities Accounts; (b) establish the Collateral Agent's "control" (within the
meaning of Section 9-104 of the Illinois UCC) over all Deposit Accounts
(including any and all Cash Collateral Accounts); and (c) to deliver all
Instruments to the Collateral Agent. Assignor will not create or permit to exist
any Securities Account or Deposit Account unless such Assignor shall have
executed and delivered to the Collateral Agent a Control Agreement in respect of
such Securities Account or Deposit Account, as the case may be. Such Assignor
will not create or permit to exist any Commodities Account unless the Required
Lenders shall otherwise consent.

                  2.10.    Non-Assignable Collateral. Neither the Non-Assignable
Intellectual Property nor the Non-Assignable Contracts are individually or
collectively material to the Borrower and its Subsidiaries taken as a whole.

                                  ARTICLE III

                   SPECIAL PROVISIONS CONCERNING RECEIVABLES;
                   CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER

                  3.1.     Additional Representations and Warranties. As of the
time when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such

                                      -5-



Receivable, and all records, papers and documents relating thereto (if any) are
genuine and what they purport to be, and that all papers and documents (if any)
relating thereto (i) will, to the knowledge of such Assignor, represent the
genuine legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
inventory, materials, equipment or merchandise listed therein, or both, and (ii)
will, to the knowledge of such Assignor, be in compliance and will conform in
all material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.

                  3.2.     Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon prior notice to such
Assignor. Upon the occurrence and during the continuance of an Event of Default
and at the request of the Collateral Agent, such Assignor shall, at its own cost
and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Agent so directs, such Assignor shall legend, in
form and manner satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.

                  3.3.     Direction to Account Debtors; Contracting Parties;
etc. Upon the occurrence and during the continuance of an Event of Default, if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
one or more Cash Collateral Accounts (as the Collateral Agent shall so direct),
(y) that the Collateral Agent may, at its option, directly notify the obligors
with respect to any Receivables and/or under any Contracts to make payments with
respect thereto as provided in the preceding clause (x), and (z) that the
Collateral Agent may enforce collection of any such Receivables and Contracts
and may adjust, settle or compromise the amount of payment thereof, in the same
manner and to the same extent as such Assignor. Without notice to or assent by
any Assignor, the Collateral Agent may, upon the occurrence and during the
continuance of an Event of Default, apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Accounts which application shall be
effected in the manner provided in Section 7.4 of this Agreement. The reasonable
costs and expenses (including reasonable attorneys' fees) of collection, whether
incurred by an Assignor or the Collateral Agent, shall be borne by the relevant
Assignor. The Collateral Agent shall deliver a copy of each notice referred to
in the preceding clause (y) to the relevant Assignor, provided, that the failure
by the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.3.

                                      -6-



                  3.4.     Modification of Terms; etc. Except in accordance with
such Assignor's ordinary course of business and consistent with reasonable
business judgment, no Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or
make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Receivable or Contract, or interest therein,
without the prior written consent of the Collateral Agent. No Assignor will do
anything to impair the rights of the Collateral Agent in the Receivables or
Contracts.

                  3.5.     Collection. Each Assignor shall endeavor in
accordance with reasonable business practices to cause to be collected from the
account debtor named in each of its Receivables or obligor under any Contract,
as and when due (including, without limitation, amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except as otherwise directed by the Collateral Agent after
the occurrence and during the continuation of an Event of Default, any Assignor
may allow in the ordinary course of business as adjustments to amounts owing
under its Receivables and Contracts (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance, which
such Assignor finds appropriate in accordance with reasonable business judgment
and (ii) a refund or credit due as a result of returned or damaged merchandise
or improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.

                  3.6.     Instruments. If any Assignor owns or acquires any
Instrument with a value of $50,000 or more constituting Collateral (other than
checks and other payment instruments received and collected in the ordinary
course of business), such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.

                  3.7.     Assignors Remain Liable Under Receivables. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Receivables to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Receivables. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Creditor of any payment relating to such Receivable pursuant
hereto, nor shall the Collateral Agent or any other Secured Creditor be
obligated in any manner to perform any of the obligations of any Assignor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by them or as to the sufficiency of any performance by any
party under any Receivable (or any agreement giving rise

                                      -7-



thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.

                  3.8.     Assignors Remain Liable Under Contracts. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Contracts to observe and perform all of the conditions and
obligations to be observed and performed by them thereunder, all in accordance
with and pursuant to the terms and provisions of each Contract. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Contract by reason of or arising out of this Agreement or
the receipt by the Collateral Agent or any other Secured Creditor of any payment
relating to such Contract pursuant hereto, nor shall the Collateral Agent or any
other Secured Creditor be obligated in any manner to perform any of the
obligations of any Assignor under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any
performance by any party under any Contract, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to them or to which they may be entitled at
any time or times.

                  3.9.     Changes of Name, Jurisdiction of Organization, etc.
No Assignor shall change its name, form of organization (from that of a
corporation) or jurisdiction of organization, unless it shall have (a) given the
Collateral Agent not less than 30 days' prior written notice thereof, (b)
provided the Collateral Agent with such other information in connection
therewith as the Collateral Agent may reasonably request, and (c) taken all
actions necessary or advisable to maintain the continuous validity, perfection
and the same or better priority of the Collateral Agent's security interest in
the Collateral intended to be granted and agreed to hereby.

                  3.10.    Purchase Money Security Interests. If the Collateral
Agent or any Secured Creditor gives value as defined in Section 9-103 of the UCC
to enable Assignor to acquire rights in or the use of any Collateral, it shall
use such value for such purposes and Assignor further agrees that repayment of
any Obligation shall apply on a "first-in, first-out" basis so that the portion
of the value used to acquire rights in any Collateral shall be paid in the
chronological order Assignor acquired rights therein.

                  3.11.    Protection of the Collateral Agent's Security. Each
Assignor will do nothing to impair the rights of the Secured Creditors in the
Collateral. Each Assignor assumes all liability and responsibility in connection
with the Collateral owned by it and the liability of each Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to it.

                  3.12.    Further Actions. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and take
such further steps relating to its Receivables, Contracts, Instruments and other
property or rights covered by the security interest hereby granted, as the
Collateral Agent may reasonably require.

                                      -8-



                                   ARTICLE IV

                    SPECIAL PROVISIONS CONCERNING TRADEMARKS

                  4.1.     Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of or
otherwise has the right to use the registered Marks listed in Annex E hereto for
such Assignor and that said listed Marks include all United States registered
marks and applications for United States registered marks in the United States
Patent and Trademark Office that such Assignor owns or uses in connection with
its business as of the date hereof (or intends to use in the case of an Intent
to Use application for trademark registration). Each Assignor represents and
warrants that it owns, is licensed to use or otherwise has the right to use, all
Marks that it uses. Each Assignor further warrants that it has no knowledge of
any material third party claim received by it that any aspect of such Assignor's
present or contemplated business operations infringes or will infringe any
trademark, service mark or trade name of any other Person. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use all U.S. trademark registrations and applications listed in
Annex E hereto and that said registrations are valid, subsisting, have not been
canceled and that such Assignor is not aware of any material third-party claim
that any of said registrations is invalid or unenforceable, or is not aware that
there is any reason that any of said registrations is invalid or unenforceable,
or is not aware that there is any reason that any of said applications will not
pass to registration. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Mark, and record the same.

                  4.2.     Licenses and Assignments. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor hereby agrees not to
divest itself of any right under any Mark absent prior written approval of the
Collateral Agent.

                  4.3.     Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who may be infringing or diluting or otherwise violating
any of such Assignor's rights in and to any significant Mark, or with respect to
any party claiming that such Assignor's use of any Mark violates in any material
respect any property right of that party. Each Assignor further agrees to
prosecute diligently in accordance with reasonable business practices any Person
infringing any significant Mark.

                  4.4.     Preservation of Marks. Each Assignor agrees to use or
license (along with the associated goodwill) the use of its Marks in interstate
commerce during the time in which this Agreement is in effect and to take all
such other actions as are necessary to preserve such Marks as trademarks or
service marks under the laws of the United States including, without limitation,
maintaining the quality of all associated products or services and assuring the
use of proper statutory notice of such Marks in association with each associated
product or service.

                  4.5.     Maintenance of Registration. Each Assignor shall, at
its own expense, dili-

                                      -9-



gently process all documents required to maintain trademark registrations and/or
to prosecute pending applications for registration, including but not limited to
affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office for all of its significant registered Marks
or applications for registration, and shall pay all fees and disbursements in
connection therewith and shall not abandon any such application for registration
of a Mark, filing of affidavit of use or any such application of renewal prior
to the exhaustion of all administrative and judicial remedies without prior
written consent of the Collateral Agent (other than with respect to
registrations and applications deemed by such Assignor to be no longer desirable
in the conduct of its business). Each Assignor shall, at its own expense,
vigorously defend the validity and enforceability of any Mark or registration of
a Mark in any proceeding or litigation.

                  4.6.     Future Registered Marks. If any Mark registration is
issued hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and a grant of a security interest in such Mark, to
the Collateral Agent and at the expense of such Assignor, confirming the grant
of a security interest in such Mark to the Collateral Agent hereunder, the form
of such security to be substantially in the form of Annex I hereto or in such
other form as may be reasonably satisfactory to the Collateral Agent.

                  4.7.     Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare and assign the
entire right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same, vested
in the Collateral Agent for the benefit of the Secured Creditors, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Creditors, and the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 4.1 hereof to
execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and use or sell the Marks and
the goodwill of such Assignor's business symbolized by the Marks and the right
to carry on the business and use the assets of such Assignor in connection with
which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and such Assignor shall execute such further
documents that the Collateral Agent may reasonably request to further confirm
this and to transfer ownership of the Marks and registrations and any pending
trademark application in the United States Patent and Trademark Office to the
Collateral Agent.

                                   ARTICLE V

                          SPECIAL PROVISIONS CONCERNING
                      PATENTS, COPYRIGHTS AND TRADE SECRETS

                  5.1.     Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of all
rights in or has the right to use (i) all Trade Secret Rights, (ii) the Patents
listed in Annex F hereto for such Assignor and that said Patents

                                      -10-



constitute all the United States or non-United States patents and applications
for United States or non-United States patents that such Assignor owns as of the
date hereof and (iii) the Copyrights listed in Annex G hereto for such Assignor
and that said Copyrights constitute all the United States copyrights registered
with the United States Copyright Office and applications to register United
States copyrights that such Assignor owns as of the date hereof. Each Assignor
further warrants that it has no knowledge of any third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any patent or copyright of any other Person or such Assignor
has misappropriated any trade secret or proprietary information. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark Office
or the United States Copyright Office in order to effect an absolute assignment
of all right, title and interest in each Patent, including the right to past
damages and to record the same.

                  5.2.     Licenses and Assignments. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor hereby agrees not to
divest itself of any right under any Patent or Copyright acquired after the date
hereof absent prior written approval of the Collateral Agent.

                  5.3.     Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe or other violation of
such Assignor's rights in any significant Patent or significant Copyright or to
any claim that the practice of any Patent or use of any Copyright violates any
property right of a third party, or with respect to any misappropriation of any
Trade Secret Right or any claim that practice of any Trade Secret Right violates
any property right of a third party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, to diligently prosecute any
Person infringing any significant Patent or significant Copyright or any Person
misappropriating any significant Trade Secret Right in accordance with
reasonable business practices.

                  5.4.     Maintenance of Patents or Copyright. At its own
expense, each Assignor shall make timely payment of all post-issuance fees and
take all actions necessary to maintain in force its rights under each Patent or
Copyright, absent prior written consent of the Collateral Agent, except to the
extent that such Assignor has determined in its reasonable business judgment
that the maintenance of such Patent or Copyright is no longer necessary in the
conduct of its business. Assignor shall assure that proper statutory notice is
used in conjunction with all products or services covered by any Patent or
Copyright. Each Assignor shall, at its own expense, vigorously defend the
validity and enforceability of any Patent in any proceeding or litigation.

                  5.5.     Prosecution of Patent Applications. At its own
expense, each Assignor shall diligently prosecute all significant applications
for (i) United States Patents listed in Annex F hereto, (ii) Copyrights listed
on Annex G hereto, and (iii) all after-acquired or filed patent or copyright
applications in each case for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies
absent written consent of the Collateral Agent, except to the extent that such
Assignor has determined in its reasonable business judgment that such
application is no longer necessary in the conduct of its business.

                                      -11-



                  5.6.     Future Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a Copyright,
or acquisition of a registered Copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright or certificate or registration of, or
application therefor, said Patents, as the case may be, with a grant of a
security interest in such Patent or Copyright, as the case may be, to the
Collateral Agent and at the expense of such Assignor, confirming the grant of a
security interest, the form of such grant of a security interest to be
substantially in the form of Annex I or J hereto, as appropriate, or in such
other form as may be reasonably satisfactory to the Collateral Agent.

                  5.7.     Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant Assignor,
take any or all of the following actions: (i) declare and assign the entire
right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent, including the right to sue for past
damages, for the benefit of the Secured Creditors, in which event such right,
title, and interest and right to sue for past damages shall immediately vest in
the Collateral Agent for the benefit of the Secured Creditors, in which case the
Collateral Agent shall be entitled to exercise the power of attorney referred to
in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to
record said absolute assignment with the applicable agency; (ii) take and
practice or sell the Patents and Copyrights; and (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from practicing the Patents
and using the Copyrights directly or indirectly, and such Assignor shall execute
such further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.

                                   ARTICLE VI

                      PROVISIONS CONCERNING ALL COLLATERAL

                  6.1.     Protection of Collateral Agent's Security. Each
Assignor will do nothing to impair the rights of the Collateral Agent in the
Collateral. Each Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at such Assignor's own expense to the
extent and in the manner provided in the Credit Agreement. Except to the extent
otherwise permitted to be retained by such Assignor or applied by such Assignor
pursuant to the terms of the Credit Agreement, the Collateral Agent shall, at
the time any proceeds of such insurance are distributed to the Secured
Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.

                  6.2.     Warehouse Receipts Non-negotiable. To the extent
practicable, each Assignor agrees that if any warehouse receipt or receipt in
the nature of a warehouse receipt is issued with respect to any of its
Inventory, such Assignor shall request that such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other

                                      -12-



relevant law).

                  6.3.     Further Actions. Each Assignor will, at its own
expense and upon the reasonable request of the Collateral Agent, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such lists, descriptions and designations of its Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Collateral Agent deems reasonably appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral.

                  6.4.     Financing Statements. Each Assignor agrees to execute
and deliver to the Collateral Agent such financing statements, in form
reasonably acceptable to the Collateral Agent, as the Collateral Agent may from
time to time reasonably request or as are reasonably necessary or desirable in
the opinion of the Collateral Agent to establish and maintain a valid,
enforceable, first priority perfected security interest in the Collateral as
provided herein and the other rights and security contemplated hereby all in
accordance with the UCC as enacted in any and all relevant jurisdictions or any
other relevant law. Each Assignor will pay any applicable filing fees,
recordation taxes and related expenses relating to its Collateral. Each Assignor
hereby authorizes the Collateral Agent to file any such financing statements
without the signature of such Assignor where permitted by law.

                  6.5.     Authorization to File. Each Assignor hereby
authorizes the Collateral Agent to file a record or records (as defined in
Article 9 of the UCC), including, without limitation, financing statements, in
all jurisdictions and with all filing offices as the Collateral Agent may
determine, in its sole discretion, are necessary or advisable to perfect the
security interest granted to the Collateral Agent herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the Collateral Agent herein,
including, without limitation, describing such property as "all assets" or "all
personal property," and such financing statements may be filed prior to the date
of this Agreement.

                                  ARTICLE VII

                  REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

                  7.1.     Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under any UCC, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect, in all relevant
jurisdictions and may:

                                      -13-



                  (i)      personally, or by agents or attorneys, immediately
         take possession of the Collateral or any part thereof, from such
         Assignor or any other Person who then has possession of any part
         thereof with or without notice or process of law, and for that purpose
         may enter upon such Assignor's premises where any of the Collateral is
         located and remove the same and use in connection with such removal any
         and all services, supplies, aids and other facilities of such Assignor;

                  (ii)     instruct the obligor or obligors on any agreement,
         instrument or other obligation (including, without limitation, the
         Receivables and the Contracts) constituting the Collateral to make any
         payment required by the terms of such agreement, instrument or other
         obligation directly to the Collateral Agent and may exercise any and
         all remedies of such Assignor in respect of such Collateral;

                  (iii)    withdraw all monies, securities and instruments in
         the Cash Collateral Account(s) for application to the Obligations in
         accordance with Section 7.4 hereof;

                  (iv)     sell, assign or otherwise liquidate any or all of the
         Collateral or any part thereof in accordance with Section 7.2 hereof,
         or direct the relevant Assignor to sell, assign or otherwise liquidate
         any or all of the Collateral or any part thereof, and, in each case,
         take possession of the proceeds of any such sale or liquidation;

                  (v)      personally, or by agents or attorneys, immediately
         take possession of the Collateral or any part thereof, by directing the
         relevant Assignor in writing to deliver the same to the Collateral
         Agent at any reasonable place or places designated by the Collateral
         Agent, in which event such Assignor shall at its own expense:

                           (x)      forthwith cause the same to be moved to the
                  place or places so designated by the Collateral Agent and
                  there delivered to the Collateral Agent;

                           (y)      store and keep any Collateral so delivered
                  to the Collateral Agent at such place or places pending
                  further action by the Collateral Agent as provided in Section
                  7.2 hereof; and

                           (z)      while the Collateral shall be so stored and
                  kept, provide such guards and maintenance services as shall be
                  necessary to protect the same and to preserve and maintain
                  them in good condition; and

                  (vi)     license or sublicense, whether on an exclusive or
         nonexclusive basis, any Marks, Patents, Copyrights or Proprietary
         Information included in the Collateral for such term and on such
         conditions and in such manner as the Collateral Agent shall in its sole
         judgment determine;

it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor

                                      -14-



of said obligation. By accepting the benefits of this Agreement, the Secured
Creditors agree that this Agreement may be enforced only by the action of the
Collateral Agent acting upon the instructions of the Required Secured Creditors
and that no other Secured Creditor shall have any right individually to seek to
enforce this Agreement or to realize upon the security to be granted hereby, it
being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent for the benefit of the Secured Creditors upon the terms of
this Agreement and the Credit Agreement.

                  7.2.     Remedies; Disposition of the Collateral. If any Event
of Default shall have occurred and be continuing, then any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' prior written notice to the relevant Assignor specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' prior written notice
to the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction (where required by applicable law) not less than 10
days prior thereto. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned. To the
extent permitted by any such requirement of law, the Collateral Agent may bid
for and become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such

                                      -15-



Assignor's expense.

                  7.3.     Waiver of Claims. Except as otherwise provided in
this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives,
to the extent permitted by law:

                           (i)      all damages occasioned by such taking of
         possession except any damages which are the direct result of the
         Collateral Agent's gross negligence or willful misconduct (as
         determined by a court of competent jurisdiction in a final and
         non-appealable decision);

                           (ii)     all other requirements as to the time, place
         and terms of sale or other requirements with respect to the enforcement
         of the Collateral Agent's rights hereunder; and

                           (iii)    all rights of redemption, appraisement,
         valuation, stay, extension or moratorium now or hereafter in force
         under any applicable law in order to prevent or delay the enforcement
         of this Agreement or the absolute sale of the Collateral or any portion
         thereof, and each Assignor, for itself and all who may claim under it,
         insofar as it or they now or hereafter lawfully may, hereby waives the
         benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.

                  7.4.     Application of Proceeds.

                  (a)      All moneys collected by the Collateral Agent (or, to
the extent the Pledge Agreement, any Mortgage or any Additional Security
Document require proceeds of collateral under such other Security Document to be
applied in accordance with the provisions of this Agreement, the Pledge or
Collateral Agent under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows.

                           (i)      first, to the payment of all amounts owing
         the Collateral Agent of the type described in clauses (iii) and (iv) of
         the definition of "Obligations";

                           (ii)     second, to the extent proceeds remain after
         the application pursuant to the preceding clause (i), an amount equal
         to the outstanding Primary Obligations shall be paid to the Secured
         Creditors as provided in Section 7.4(e) hereof, with each Secured

                                      -16-



         Creditor receiving an amount equal to such outstanding Primary
         Obligations or, if the proceeds are insufficient to pay in full all
         such Primary Obligations, its Pro Rata Share of the amount remaining to
         be distributed;

                           (iii)    third, to the extent proceeds remain after
         the application pursuant to the preceding clauses (i) and (ii), an
         amount equal to the outstanding Secondary Obligations shall be paid to
         the Secured Creditors as provided in Section 7.4(e) hereof, with each
         Secured Creditor receiving an amount equal to its outstanding Secondary
         Obligations or, if the proceeds are insufficient to pay in full all
         such Secondary Obligations, its Pro Rata Share of the amount remaining
         to be distributed; and

                           (iv)     fourth, to the extent proceeds remain after
         the application pursuant to the preceding clauses (i) through (iii),
         inclusive, and following the termination of this Agreement pursuant to
         Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
         lawfully entitled to receive such surplus.

                  (b)      For purposes of this Agreement, (x) "Pro Rata Share"
shall mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, premium, fees and
interest on, all Loans, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), the aggregate Stated Amount of all Letters of Credit
issued or deemed issued under the Credit Agreement and all Fees and (ii) in the
case of the Other Obligations, all amounts due under such Interest Rate
Protection Agreements or Other Hedging Agreements (other than indemnities, fees
(including, without limitation, attorneys' fees) and similar obligations and
liabilities) and (z) "Secondary Obligations" shall mean all Obligations other
than Primary Obligations.

                  (c)      When payments to Secured Creditors are based upon
their respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.

                  (d)      Each of the Secured Creditors, by their acceptance of
the benefits hereof, agrees and acknowledges that if the Lender Creditors are to
receive a distribution on account of undrawn amounts with respect to Letters of
Credit issued under the Credit Agreement (which

                                      -17-



shall only occur after all outstanding Loans and Unpaid Drawings with respect to
such Letters of Credit have been paid in full), such amounts shall be paid to
the Administrative Agent under the Credit Agreement and held by it, for the
equal and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit, and after the
application of all such cash security to the repayment of all Obligations owing
to the Lender Creditors after giving effect to the termination of all such
Letters of Credit, if there remains any excess cash, such excess cash shall be
returned by the Administrative Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.

                  (e)      All payments required to be made hereunder shall be
made (x) if to the Lender Creditors, to the Administrative Agent under the
Credit Agreement for the account of the Lender Creditors, and (y) if to the
Other Creditors, to the trustee, paying agent or other similar representative
(each a "Representative") for the Other Creditors or, in the absence of such a
Representative, directly to the Other Creditors.

                  (f)      For purposes of applying payments received in
accordance with this Section 7.4, the Collateral Agent shall be entitled to rely
upon (i) the Administrative Agent under the Credit Agreement and (ii) the
Representative for the Other Creditors or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative for any Other Creditors and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Primary Obligations and Secondary
Obligations owed to the Lender Creditors or the Other Creditors, as the case may
be. Unless it has actual knowledge (including by way of written notice from a
Lender Creditor or an Other Creditor) to the contrary, the Administrative Agent
and each Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.

                  (g)      It is understood that the Assignors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral and the aggregate amount of the Obligations.

                  7.5.     Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
other Secured Debt Agreements 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 or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any obligations shall impair any such right, power

                                      -18-




or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.

                  7.6.     Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.

                                  ARTICLE VIII

                                    INDEMNITY

                  8.1.     Indemnity.

                  (a)      Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees and agents
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 8.1 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith or therewith or in any
other way connected with the administration of the transactions contemplated
hereby or thereby or the enforcement of any of the terms of, or the preservation
of any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee (a) determined by a court of competent jurisdiction in a
final and non-appealable decision). Each Assignor agrees that upon written
notice by any Indemnitee of

                                      -19-




the assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, the relevant Assignor shall assume full
responsibility for the defense thereof. Each Indemnitee agrees to use its best
efforts to promptly notify the relevant Assignor of any such assertion of which
such Indemnitee has knowledge.

                  (b)      Without limiting the application of Section 8.1(a)
hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Agent for any and all reasonable fees, costs and expenses of whatever
kind or nature incurred in connection with the creation, preservation or
protection of the Collateral Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees, costs
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.

                  (c)      Without limiting the application of Section 8.1(a) or
(b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and
hold each Indemnitee harmless from and against any loss, costs, damages and
expenses which such Indemnitee may suffer, expend or incur in consequence of or
growing out of any misrepresentation by any Assignor in this Agreement, any
other Secured Debt Agreement or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement or any other Secured
Debt Agreement.

                  (d)      If and to the extent that the obligations of any
Assignor under this Section 8.1 are unenforceable for any reason, such Assignor
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law.

                  8.2.     Indemnity Obligations Secured by Collateral;
Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement shall constitute Obligations secured by the Collateral.
The indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made under the Credit Agreement, the termination of all Interest Rate
Protection Agreements, Other Hedging Agreements and Letters of Credit and the
payment of all other Obligations and notwithstanding the discharge thereof.

                                      -20-




                                   ARTICLE IX

                                   DEFINITIONS

                  The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.

                  "Account" shall mean an "account" as defined in the Illinois
UCC.

                  "Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.

                  "Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.

                  "Assignor" shall have the meaning provided in the first
paragraph of this Agreement.

                  "Borrower" shall have the meaning provided in the recitals of
this Agreement.

                  "Cash Collateral Account" shall mean a Deposit Account which
is (i) maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors, and (ii) is the subject of a
Control Agreement.

                  "Certificated Security" shall mean a "certificated security"
as defined in the Illinois UCC.

                  "Chattel Paper" shall mean "chattel paper" as defined in the
Illinois UCC.

                  "Class" shall have the meaning provided in Section 10.2 of
this Agreement.

                  "Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.

                  "Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.

                  "Commodities Accounts" shall mean a "commodity account" as
defined in the Illinois UCC. The term "Commodities Accounts" shall include,
without limitation, all of the accounts listed on Annex H under the heading
"Commodities Accounts" as such annex may be amended or supplemented from time to
time.

                  "Contract Rights" shall mean all rights of any Assignor under
each Contract, including, without limitation, (i) any and all rights to receive
and demand payments under any or all Contracts, (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.

                                      -21-



                  "Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, and any partnership agreements,
joint venture agreements and limited liability company agreements), but
excluding any contract to the extent that (but only as long as) the terms
thereof prohibit the assignment of, or granting a security interest in, such
contract (it being understood and agreed, however, (i) that notwithstanding the
foregoing, all rights to payment for money due or to become due pursuant to any
such excluded contract shall be subject to the security interests created by
this Agreement and (ii) such excluded contract shall otherwise be subject to the
security interests created by this Agreement upon receiving any necessary
approvals or waivers permitting the assignment thereof).

                  "Control Agreement" shall mean, in the case of a Securities
Account, an agreement substantially in the form of Annex H to the Pledge
Agreement, and in the case of a Deposit Account, an agreement substantially in
the form of Annex I to the Pledge Agreement.

                  "Copyrights" shall mean any United States or foreign copyright
now or hereafter owned by any Assignor, including any registrations of any
Copyrights, in the United States Copyright Office or any foreign equivalent
office, as well as any application for a copyright registration now or hereafter
made with the United States Copyright Office or any foreign equivalent office by
any Assignor.

                  "Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.

                  "Credit Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.

                  "Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.

                  "Deposit Account" shall mean a "deposit account" as defined in
the Illinois UCC. The term "Deposit Accounts" shall include, without limitation,
all of the accounts listed on Annex H under the heading "Deposit Accounts" as
such schedule may be amended or supplemented from time to time.

                  "Document" shall mean a "document" as defined in the Illinois
UCC.

                  "Equipment" shall mean any "equipment," as such term is
defined in the Illinois UCC, now or hereafter owned by any Assignor and, in any
event, shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.

                  "Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Other Obligations after the
expiration of any applicable grace period.

                                      -22-



                  "General Intangible" shall mean a "general intangible" as
defined in the Illinois UCC. The term "General Intangibles" shall include,
without limitation, all interest rate or currency protection or hedging
arrangements, all tax refunds, all licenses, permits, concessions and
authorizations, all Contracts, all Intellectual Property, all Payment
Intangibles, all partnership interests, and all limited liability company and
membership interests (in each case, regardless of whether characterized as
general intangibles under the UCC).

                  "Goods" shall mean "goods" as defined in the Illinois UCC.

                  "Illinois UCC" shall mean the UCC as in effect in Illinois on
the date hereof.

                  "Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.

                  "Instrument" shall mean an "instrument" as defined in the
Illinois UCC.

                  "Insurance" shall mean (i) all insurance policies covering all
Collateral (regardless of whether the Collateral Agent is the loss payee) and
(ii) all key-man life insurance policies.

                  "Intellectual Property" shall mean all Patents, Copyrights and
Marks of the Assignors or any of them.

                  "Inventory" shall mean "inventory" as defined in the Illinois
UCC.

                  "Investment Property" shall mean "investment property" as
defined in the Illinois UCC.

                  "Investment Related Property" shall mean Investment Property,
and without limitation, shall include all Deposit Accounts (including the
Collateral Account(s)), all Securities Accounts, and all Commodities Accounts
(in each case regardless of whether classified as Investment Property under the
UCC).

                  "Lender Creditors" shall have the meaning provided in the
recitals of this Agreement.

                  "Lenders" shall have the meaning provided in the recitals of
this Agreement.

                  "Letter of Credit Right" shall mean a "Letter of Credit Right"
as defined in the Illinois UCC.

                  "Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.

                  "Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by an Assignor,
which are registered in the United States Patent and

                                      -23-



Trademark Office or the equivalent thereof in any state of the United States or
any foreign equivalent office; as well as any unregistered marks used by any
Assignor and any trade dress including logos, designs, company names, business
names, fictitious business names and other business identifiers used by any
Assignor, excluding, however, from the term "Marks" any United States
Intent-to-Use trademark application prior to the filing and acceptance of a
Statement of Use or an Amendment to allege use in connection therewith to the
extent that a valid security interest may not be taken in such an Intent-to-Use
trademark application under applicable law.

                  "Money" shall mean Money as defined in the Illinois UCC.

                  "Non-Assignable Contract" - see Section 1(b) of this
Agreement..

                  "Non-Assignable Intellectual Property" - see Section 1(b) of
this Agreement.

                  "Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, Fees
and interest thereon) of each Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which such Assignor is a
party (including, in the case of each Assignor which is a Subsidiary Guarantor,
all such obligations and indebtedness of such Assignor under the Subsidiaries
Guaranty) and the due performance and compliance by such Assignor with all of
the terms, conditions and agreements contained in the Credit Agreement and in
such other Credit Documents (all such obligations and liabilities under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "Credit Document Obligations"); (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations and liabilities owing by such
Assignor to the Other Creditors under, or with respect to (including, in the
case of each Assignor which is a Subsidiary Guarantor, by reason of the
Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance and
compliance by such Assignor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of such Assignor referred to in clauses (i) and (ii) above, after
an Event of Default shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement; it being acknowledged and agreed that the "Obligations" shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.

                                      -24-



                  "Other Creditors" shall have the meaning provided in the
recitals of this Agreement.

                  "Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.

                  "Patents" shall mean all right, title and interest in and to
any United States or non-United States patent to which any Assignor now or
hereafter has title and any divisions continuations, reissues or reexaminations
thereof, as well as any application for a patent now or hereafter made or
acquired by any Assignor.

                  "Payment Intangible" shall mean a "payment intangible" as
defined in the Illinois UCC.

                  "Permits" shall mean, to the extent permitted to be assigned
by the terms thereof or by applicable law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency.

                  "Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.

                  "Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.

                  "Proceeds" shall mean "proceeds" as defined in the Illinois
UCC. Proceeds shall include, but not be limited to, (i) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to the Collateral Agent
or any Assignor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable to any
Assignor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.

                  "Proprietary Information" shall mean all information and
know-how worldwide, including, without limitation, data collections; technical
data; manufacturing data; research and development data; data relating to
compositions, processes and formulations, manufacturing and production know-how
and experience; management know-how; training programs; manufacturing,
engineering and other drawings; specifications; performance criteria; operating
instructions; maintenance manuals; technology; technical information; software;
engineering and computer data and databases; design and engineering
specifications; catalogs; financial, business and marketing plans; inventions
and invention disclosures.

                  "Receivables" shall mean all Accounts, all Chattel Paper, and
all Payment Intangibles, now or hereafter owned by any Assignor and, in any
event, shall include all Supporting Obligations, including without limitation
all of such Assignor's rights to payment for goods sold or leased or services
performed by such Assignor, whether now in existence or arising from time to
time hereafter, including, without limitation, rights evidenced by an account,
note,

                                      -25-



contract, security agreement, chattel paper, or other evidence of indebtedness
or security, together with (a) all security pledged, assigned, hypothecated or
granted to or held by such Assignor to secure the foregoing, (b) all of any
Assignor's right, title and interest in and to any goods, the sale of which gave
rise thereto, (c) all guarantees, endorsements and indemnifications on, or of,
any of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(e) all books, records, ledger cards, and invoices relating thereto, (f) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers, (g) all credit information, reports and
memoranda relating thereto and (h) all other writings related in any way to the
foregoing.

                  "Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.

                  "Required Secured Creditors" shall mean (i) the Required
Lenders (or, to the extent required by Section 13.12 of the Credit Agreement,
each of the Lenders) under the Credit Agreement so long as any Credit Document
Obligations remain outstanding and (ii) in any situation not covered by the
preceding clause (i), the holders of a majority of the outstanding principal
amount of the Other Obligations.

                  "Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.

                  "Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.

                  "Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.

                  "Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements.

                  "Securities Account" shall mean a "securities account" as
defined in the Illinois UCC. The term "Securities Accounts" shall include,
without limitation, all of the accounts listed on Annex H under the heading
"Securities Accounts" (as such schedule may be amended or supplemented from time
to time).

                  "Securities Entitlement" shall mean a "securities entitlement"
as defined in the Illinois UCC.

                  "Supporting Obligation" shall mean a "supporting obligation"
as defined in the Illinois UCC.

                  "Termination Date" shall have the meaning provided in Section
10.8 of this Agreement.

                                      -26-



                  "Trade Secrets" means any secretly held existing engineering
and other data, information, production procedures and other know-how relating
to the design, manufacture, assembly, installation, use, operation, marketing,
sale and servicing of any products or business of an Assignor worldwide whether
written or not written.

                  "Trade Secret Rights" shall mean the rights of an Assignor in
any Trade Secret it holds.

                  "UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.

                  "Uncertificated Security" shall mean an "uncertificated
security" as defined in the Illinois UCC.

                                   ARTICLE X

                                  MISCELLANEOUS

                  10.1.    Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or overnight courier service and all such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier and when mailed shall be effective three Business
Days following deposit in the mail with proper postage, except that notices and
communications to the Collateral Agent or any Assignor shall not be effective
until received by the Collateral Agent or such Assignor, as the case may be. All
notices and other communications shall be in writing and addressed as follows:

                  (a)      if to any Assignor, at:

                           c/o infoUSA Inc.
                           5711 South 86th Circle
                           Omaha, Nebraska  68127
                           Attention:  Chief Financial Officer
                           Telephone No.:  (402) 593-4500
                           Telecopier No.:  (402) 331-1505

                  (b)      if to the Collateral Agent, at:

                           Bank of America, N.A.
                           231 South LaSalle Street
                           Chicago, Illinois 60697
                           Attention: David Johanson
                           Tel. No.:    (312) 828-7933
                           Fax. No.:    (312) 974-9102;

                                      -27-



                  (c)      if to any Lender Creditor, at such address as such
Lender Creditor shall have specified in the Credit Agreement;

                  (d)      if to any Other Creditor, at such address as such
Other Creditor shall have specified in writing to each Assignor and the
Collateral Agent;

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.

                  10.2.    Waiver; Amendment. None of the terms and conditions
of this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly effected
thereby and the Collateral Agent (with the written consent of the Required
Secured Creditors); provided, however, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such affected Class.
For the purpose of this Agreement, the term "Class" shall mean each class of
Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the
Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Lenders and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the respective Interest Rate Protection Agreements or
Other Hedging Agreements.

                  10.3.    Obligations Absolute. The obligations of each
Assignor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy,
power or privilege under or in respect of this Agreement or any other Secured
Debt Agreement; or (c) any amendment to or modification of any Secured Debt
Agreement or any security for any of the Obligations; whether or not such
Assignor shall have notice or knowledge of any of the foregoing.

                  10.4.    Successors and Assigns. This Agreement shall be
binding upon each Assignor and its successors and assigns (although no Assignor
may assign its rights and obligations hereunder) and shall inure to the benefit
of the Collateral Agent and the Secured Creditors and their respective
successors and assigns. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement and the other Secured Debt
Agreements regardless of any investigation made by the Secured Creditors or on
their behalf.

                  10.5.    Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

                                      -28-



                  10.6.    Governing Law. 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 ILLINOIS.

                  10.7.    Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.

                  10.8.    Termination; Release.

                  (a)      After the Termination Date, this Agreement shall
terminate (provided that all indemnities set forth herein including, without
limitation, in Section 8.1 hereof shall survive such termination) and the
Collateral Agent, at the request and expense of the respective Assignor, will
promptly execute and deliver to such Assignor a proper instrument or instruments
(including Uniform Commercial Code termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection Agreements and Other Hedging Agreements have been
terminated, no Note is outstanding (and all Loans have been repaid in full), all
Letters of Credit have been terminated and all Obligations then due and payable
have been paid in full.

                  (b)      In the event that any part of the Collateral is sold
in connection with a sale permitted by Section 10.02 of the Credit Agreement
(other than a sale to any Assignor or a Subsidiary thereof) or otherwise
released at the direction of the Required Secured Creditors and the proceeds of
such sale or sales or from such release are applied in accordance with the
provisions of the Credit Agreement, to the extent required to be so applied,
such Collateral will be sold free and clear of the Liens created by this
Agreement and the Collateral Agent, at the request and expense of the relevant
Assignor, will duly and promptly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.

                  (c)      At any time that an Assignor desires that the
Collateral Agent take any action to acknowledge or give effect to any release of
Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall
deliver to the Collateral Agent a certificate signed by a senior officer of such
Assignor stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a) or (b).

                  10.9.    Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so

                                      -29-



executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with each Assignor and the Collateral Agent.

                  10.10.   Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  10.11.   The Collateral Agent. The Collateral Agent will hold
in accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in Section
12 of the Credit Agreement. The Collateral Agent shall act hereunder and
thereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.

                  10.12.   Benefit of Agreement. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.

                  10.13.   Additional Assignors. It is understood and agreed
that any Subsidiary of the Borrower that is required to execute a counterpart of
this Agreement after the date hereof pursuant to the Credit Agreement shall
become an Assignor hereunder by executing a counterpart hereof and delivering
the same to the Collateral Agent (it being understood that in connection
therewith, such Subsidiary shall supplement Annexes A through H with information
pertaining to such Subsidiary).

                                      * * *

                                      -30-




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

                                    INFOUSA INC., as an Assignor

                                    By ______________________________________
                                    Title: Chief Financial Officer

                                    AMERICAN CHURCH LISTS, INC.,
                                    BJ HUNTER INFORMATION, INC.,
                                    CD-ROM TECHNOLOGIES, INC.,
                                    CITY DIRECTORIES, INC.,
                                    CLICKACTION INC.,
                                    DONNELLEY MARKETING, INC.,
                                    HILL-DONNELLY CORPORATION
                                    IDEXEC, INC.,
                                    INFOUSA MARKETING, INC.,
                                    LIST BAZAAR.COM, INC.,
                                    STRATEGIC INFORMATION MANAGEMENT, INC.,
                                    TGMVC CORPORATION
                                    WALTER KARL, INC.,
                                    YESMAIL, INC.
                                        each as an Assignor

                                    By ______________________________________
                                    Title: Chief Financial Officer of each

                                 Signature Page
                                       to
                               Security Agreement




Accepted and Agreed to:

BANK OF AMERICA, N.A.,
  as Collateral Agent

By ________________________
    Title: Vice President

                                 Signature Page
                                       to
                               Security Agreement

EX-10.4

                                                                    EXHIBIT 10.4

                              SUBSIDIARIES GUARANTY

                  SUBSIDIARIES GUARANTY, dated as of March 6, 2002, as amended
and restated as of May 27, 2003 (as amended, modified or supplemented from time
to time, this "Guaranty"), made by each of the undersigned guarantors (each a
"Guarantor," and together with any other entity that becomes a guarantor
hereunder pursuant to Section 26 hereof, the "Guarantors"). Except as otherwise
defined herein, capitalized terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.

                              W I T N E S S E T H:

                  WHEREAS, infoUSA Inc. (the "Borrower"), the lenders from time
to time party thereto (the "Lenders"), and Bank of America, N.A., as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of March
6, 2002, as amended and restated as of May 27, 2003 (as amended, modified, or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (the Lenders, the Collateral Agent, the
Issuing Lender and the Administrative Agent are herein called the "Lender
Creditors");

                  WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors,"
and together with the Lender Creditors, the "Secured Creditors");

                  WHEREAS, each Guarantor is a direct or indirect Subsidiary of
the Borrower;

                  WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and

                  WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans to, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph;



                  NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each

                  Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:

                  1.       Each Guarantor, jointly and severally, irrevocably,
absolutely and unconditionally guarantees: (i) to the Lender Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of, premium, if any, and interest on the Notes
issued by, and the Loans made to, the Borrower under the Credit Agreement, and
all reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit issued under the Credit Agreement and (y) all other obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness owing by
the Borrower to the Lender Creditors under the Credit Agreement and any other
Credit Document to which the Borrower is a party (including, without limitation,
indemnities, Fees and interest thereon), whether now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement and
any such other Credit Document and the due performance and compliance by the
Borrower with all of the terms, conditions and agreements contained in all such
Credit Documents (all such principal, premium, interest, liabilities,
indebtedness and obligations being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness owing by the Borrower under any Interest Rate Protection Agreement
and Other Hedging Agreement, whether now in existence or hereafter arising, and
the due performance and compliance by the Borrower with all of the terms,
conditions and agreements contained in the Interest Rate Protection Agreements
and Other Hedging Agreements (all such obligations, liabilities and indebtedness
being herein collectively called the "Other Obligations," and together with the
Credit Document Obligations, the "Guaranteed Obligations"). Each Guarantor
understands, agrees and confirms that the Secured Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against any other Guarantor, the Borrower, against
any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations.

                  2.       Additionally, each Guarantor, jointly and severally,
unconditionally, absolutely and irrevocably, guarantees the payment of any and
all Guaranteed Obligations whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
Section 11.05 of the Credit Agreement, and unconditionally and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the
Secured Creditors, or order, on demand, in legal tender of the United States.
This Guaranty shall constitute a guaranty of payment, and not of collection.

                                      -2-



                  3.       The liability of each Guarantor hereunder is primary,
absolute and unconditional and is exclusive and independent of any security for
or other guaranty of the indebtedness of the Borrower whether executed by such
Guarantor, any other Guarantor, any other guarantor or by any other party, and
the liability of each Guarantor hereunder shall not be affected or impaired by
any circumstance or occurrence whatsoever, including, without limitation: (a)
any direction as to application of payment by the Borrower or by any other
party, (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed Obligations,
(c) any payment on or in reduction of any such other guaranty or undertaking,
(d) any dissolution, termination or increase, decrease or change in personnel by
the Borrower, (e) any payment made to any Secured Creditor on the indebtedness
which any Secured Creditor repays the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.

                  4.       The obligations of each Guarantor hereunder are
independent of the obligations of any other Guarantor, any other guarantor or
the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
Guarantor, any other guarantor or the Borrower and whether or not any other
Guarantor, any other guarantor or the Borrower be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefits of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to each Guarantor.

                  5.       Each Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Secured Creditor against, and any other
notice to, any party liable thereon (including such Guarantor, any other
Guarantor, any other guarantor or the Borrower)

                  6.       Any Secured Creditor may at any time and from time to
time without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the obligations
of such Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:

                  (a)      change the manner, place or terms of payment of,
                           and/or change, increase or extend the time of payment
                           of, renew or alter, any of the Guaranteed Obligations
                           (including any increase or decrease in the rate of
                           interest thereon), any security therefor, or any
                           liability incurred directly or indirectly in respect
                           thereof, and the guaranty herein made

                                      -3-



                           shall apply to the Guaranteed Obligations as so
                           changed, extended, renewed or altered;

                  (b)      take and hold security for the payment of the
                           Guaranteed Obligations and sell, exchange, release,
                           surrender, impair, realize upon or otherwise deal
                           with in any manner and in any order any property by
                           whomsoever at any time pledged or mortgaged to
                           secure, or howsoever securing, the Guaranteed
                           Obligations or any liabilities (including any of
                           those hereunder) incurred directly or indirectly in
                           respect thereof or hereof, and/or any offset
                           thereagainst;

                  (c)      exercise or refrain from exercising any rights
                           against the Borrower, any other Credit Party, any
                           Subsidiary thereof or otherwise act or refrain from
                           acting;

                  (d)      release or substitute any one or more endorsers,
                           Guarantors, other guarantors, the Borrower or other
                           obligors;

                  (e)      settle or compromise any of the Guaranteed
                           Obligations, any security therefor or any liability
                           (including any of those hereunder) incurred directly
                           or indirectly in respect thereof or hereof, and may
                           subordinate the payment of all or any part thereof to
                           the payment of any liability (whether due or not) of
                           the Borrower to creditors of the Borrower other than
                           the Secured Creditors;

                  (f)      apply any sums by whomsoever paid or howsoever
                           realized to any liability or liabilities of the
                           Borrower to the Secured Creditors regardless of what
                           liabilities of the Borrower remain unpaid;

                  (g)      consent to or waive any breach of, or any act,
                           omission or default under, any of the Interest Rate
                           Protection Agreements or Other Hedging Agreements,
                           the Credit Documents or any of the instruments or
                           agreements referred to therein, or otherwise amend,
                           modify or supplement any of the Interest Rate
                           Protection Agreements or Other Hedging Agreements,
                           the Credit Documents or any of such other instruments
                           or agreements;

                  (h)      act or fail to act in any manner referred to in this
                           Guaranty which may deprive such Guarantor of its
                           right to subrogation against the Borrower to recover
                           full indemnity for any payments made pursuant to this
                           Guaranty; and/or

                  (i)      take any other action which would, under otherwise
                           applicable principles of common law, give rise to a
                           legal or equitable discharge of such Guarantor from
                           its liabilities under this Guaranty.

                  7.       This Guaranty is a continuing one and all liabilities
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created

                                      -4-



in reliance hereon. No failure or delay on the part of any Secured Creditor in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Secured Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Secured Creditor to any other or further action in any circumstances
without notice or demand. It is not necessary for any Secured Creditor to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

                  8.       Any indebtedness of the Borrower now or hereafter
held by any Guarantor is hereby subordinated to the indebtedness of the Borrower
to the Secured Creditors, and such indebtedness of the Borrower to any
Guarantor, if the Administrative Agent or the Collateral Agent, after the
occurrence and during the continuance of an Event of Default, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the Secured
Creditors and be paid over to the Secured Creditors on account of the
indebtedness of the Borrower to the Secured Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Without limiting the generality of the foregoing,
each Guarantor hereby agrees with the Secured Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.

                  9.       (a) Each Guarantor waives any right (except as shall
be required by applicable law and cannot be waived) to require the Secured
Creditors to: (i) proceed against the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; (ii) proceed against
or exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any
other remedy in the Secured Creditors' power whatsoever. Each Guarantor waives
any defense based on or arising out of any defense of the Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations
or any other party, or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Borrower other than payment in full of the Guaranteed Obligations. The
Secured Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the other Secured Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the

                                      -5-



extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor
waives any defense arising out of any such election by the Secured Creditors,
even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower or any other party or any security.

                  (b)      Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.

                  10.      The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Administrative Agent or the Collateral Agent,
in each case acting upon the instructions of the Required Lenders (or, after the
date on which all Credit Document Obligations have been paid in full, the
holders of at least the majority of the outstanding Other Obligations) and that
no other Secured Creditors shall have any right individually to seek to enforce
or to enforce this Guaranty or to realize upon the security to be granted by the
Security Documents, it being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent or, after
all the Credit Document Obligations have been paid in full, by the holders of at
least a majority of the outstanding Other Obligations, as the case may be, for
the benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, partner, member or
stockholder of any Guarantor (except to the extent such partner, member or
stockholder is also a Guarantor hereunder).

                  11.      In order to induce the Lenders to make Loans to, and
issue Letters of Credit for the account of, the Borrower pursuant to the Credit
Agreement, and in order to induce the Other Creditors to execute, deliver and
perform the Interest Rate Protection Agreements and Other Hedging Agreements,
each Guarantor represents, warrants and covenants that:

                  (a)      Such Guarantor (i) is a duly organized and validly
                           existing corporation, partnership or limited
                           liability company, as the case may be, in good
                           standing under the laws of the jurisdiction of its
                           organization, (ii) has the corporate, partnership or
                           limited liability company, power and authority, as
                           the case may be, to own its property and assets and
                           to transact the business in which it is engaged and
                           presently proposes to engage and (iii) is duly
                           qualified and is authorized to do business and is in
                           good standing in each jurisdiction where the conduct
                           of its business requires such qualification except
                           for

                                      -6-



                           failures to be so qualified which, individually or in
                           the aggregate, could not reasonably be expected to
                           have a Material Adverse Effect.

                  (b)      Such Guarantor has the corporate, partnership or
                           limited liability company, power and authority, as
                           the case may be, to execute, deliver and perform the
                           terms and provisions of this Guaranty and each other
                           Credit Document to which it is a party and has taken
                           all necessary corporate, partnership or limited
                           liability company, action, as the case may be, to
                           authorize the execution, delivery and performance by
                           it of this Guaranty and each such other Credit
                           Document. Such Guarantor has duly executed and
                           delivered this Guaranty and each other Credit
                           Document to which it is a party, and this Guaranty
                           and each such other Credit Document constitutes the
                           legal, valid and binding obligation of such Guarantor
                           enforceable in accordance with its terms, except to
                           the extent that the enforceability hereof or thereof
                           may be limited by applicable bankruptcy, insolvency,
                           reorganization, moratorium or other similar laws
                           generally affecting creditors' rights and by
                           equitable principles (regardless of whether
                           enforcement is sought in equity or at law).

                  (c)      Neither the execution, delivery or performance by
                           such Guarantor of this Guaranty or any other Credit
                           Document to which it is a party, nor compliance by it
                           with the terms and provisions hereof and thereof,
                           will (i) contravene any provision of any applicable
                           law, statute, rule or regulation or any applicable
                           order, writ, injunction or decree of any court or
                           governmental instrumentality, (ii) conflict with or
                           result in any breach of any of the terms, covenants,
                           conditions or provisions of, or constitute a default
                           under, or result in the creation or imposition of (or
                           the obligation to create or impose) any Lien (except
                           pursuant to the Security Documents) upon any of the
                           property or assets of such Guarantor or any of its
                           Subsidiaries pursuant to the terms of any indenture,
                           mortgage, deed of trust, loan agreement, credit
                           agreement, or any other material agreement, contract
                           or instrument to which such Guarantor or any of its
                           Subsidiaries is a party or by which it or any of its
                           property or assets is bound or to which it may be
                           subject or (iii) violate any provision of the
                           certificate of incorporation or by-laws (or
                           equivalent organizational documents) of such
                           Guarantor or any of its Subsidiaries.

                  (d)      No order, consent, approval, license, authorization
                           or validation of, or filing, recording or
                           registration with (except as have been obtained or
                           made) or exemption by, any governmental or public
                           body or authority, or any subdivision thereof, is
                           required to authorize, or is required for, (i) the
                           execution, delivery and performance of this Guaranty
                           by such Guarantor or any other Credit Document to
                           which such Guarantor is a party or (ii) the legality,
                           validity, binding effect or enforceability of this
                           Guaranty or any other Credit Document to which such
                           Guarantor

                                      -7-



                           is a party.

                  (e)      There are no actions, suits or proceedings pending
                           or, to such Guarantor's knowledge, threatened (i)
                           with respect to this Guaranty or any other Credit
                           Document to which such Guarantor is a party or (ii)
                           with respect to such Guarantor or any of its
                           Subsidiaries that, either individually or in the
                           aggregate, could reasonably be expected to have a
                           Material Adverse Effect.

                  12.      Each Guarantor covenants and agrees that on and after
the Effective Date and until the termination of the Total Commitment and all
Interest Rate Protection Agreements and Other Hedging Agreements and until such
time as no Note or Letter of Credit remains outstanding and all Guaranteed
Obligations have been paid in full, such Guarantor will comply, and will cause
each of its Subsidiaries to comply, with all of the applicable provisions,
covenants and agreements contained in Sections 9 and 10 of the Credit Agreement,
and will take, or will refrain from taking, as the case may be, all actions that
are necessary to be taken or not taken so that it is not in violation of any
provision, covenant or agreement contained in Section 9 or 10 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.

                  13.      The Guarantors hereby jointly and severally agree to
pay all reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and of the Administrative Agent
in connection with any amendment, waiver or consent relating hereto (including
in each case, without limitation, the reasonable fees and disbursements of
counsel employed by each Secured Creditor).

                  14.      This Guaranty shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the Secured
Creditors and their successors and assigns.

                  15.      Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and with the written consent of either
(x) the Required Lenders (or to the extent required by Section 13.12 of the
Credit Agreement, with the written consent of each Lender) at all times prior to
the time on which all Credit Document Obligations have been paid in full or (y)
the holders of at least a majority of the outstanding Other Obligations at all
times after the time on which all Credit Document Obligations have been paid in
full; provided, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class (as defined below) of Secured Creditors
(and not all Secured Creditors in a like or similar manner) shall also require
the written consent of the Requisite Creditors (as defined below) of such Class
of Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released). For the purpose of this Guaranty, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of
the Credit Document Obligations or (y) the Other Creditors as the holders of

                                      -8-



the Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean (x) with respect to the Credit Document
Obligations, the Required Lender (or to the extent required by Section 13.12 of
the Credit Agreement, each Lender) and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection or Other Hedging
Agreements.

                  16.      Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and Interest Rate Protection
Agreements or Other Hedging Agreements has been made available to a senior
officer of such Guarantor and such officer is familiar with the contents
thereof.

                  17.      In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (such term to mean
and include any "Event of Default" as defined in the Credit Agreement or any
payment default under any Interest Rate Protection Agreement or Other Hedging
Agreement continuing after any applicable grace period), each Secured Creditor
is hereby authorized, at any time or from time to time, without notice to any
Guarantor or to any other Person, any such notice being expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by such Secured Creditor to or
for the credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Secured Creditor under
this Guaranty, irrespective of whether or not such Secured Creditor shall have
made any demand hereunder and although said obligations, liabilities, deposits
or claims, or any of them, shall be contingent or un-matured.

                  18.      All notices, requests, demands or other
communications pursuant hereto shall be sent or delivered by mail, telegraph,
telex, telecopy, cable or overnight courier service and all such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier and when mailed shall be effective
three Business Days following deposit in the mail with proper postage, except
that notices and communications to the Administrative Agent or any Guarantor
shall not be effective until received by the Administrative Agent or such
Guarantor, as the case may be. All notices and other communications shall be in
writing and addressed to such party at (i) in the case of any Lender Creditor,
as provided in the Credit Agreement, (ii) in the case of any Guarantor, as
provided in the Security Agreement and (iii) in the case of any Other Creditor,
at such address as such Other Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.

                  19.      If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having

                                      -9-



jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event each Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon
such Guarantor, notwithstanding any revocation hereof or other instrument
evidencing any liability of the Borrower, and such Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.

                  20.      (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. Any legal action
or proceeding with respect to this Guaranty or any other Credit Document to
which any Guarantor is a party may be brought in the courts of the State of
Illinois or of the United States of America for the Northern District of
Illinois in each case located in the City of Chicago, and, by execution and
delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Guarantor hereby further irrevocably waives any
claim that any such court lacks personal jurisdiction over such Guarantor, and
agrees not to plead or claim in any legal action or proceeding with respect to
this Guaranty or any other Credit Document to which such Guarantor is a party
brought in any of the aforesaid courts that any such court lacks personal
jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such Guarantor at its address set forth opposite its
signature below, such service to become effective 30 days after such mailing.
Each Guarantor hereby irrevocably waives any objection to such service of
process and further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under any other Credit Document to
which such Guarantor is a party that such service of process was in any way
invalid or ineffective. Nothing herein shall affect the right of any of the
Secured Creditors to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against each Guarantor in any
other jurisdiction.

                  (b)      Each Guarantor hereby irrevocably waives (to the
fullest extent permitted by applicable law) any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.

                  (c)      EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS
ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL
RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS

                                      -10-



GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  21.      In the event that all of the capital stock of one or
more Guarantors is sold or otherwise disposed of or liquidated in compliance
with the requirements of Section 10.02 of the Credit Agreement (or such sale or
other disposition has been approved in writing by the Required Lenders (or all
Lenders if required by Section 13.12 of the Credit Agreement)) and the proceeds
of such sale, disposition or liquidation are applied in accordance with the
provisions of the Credit Agreement, to the extent applicable, such Guarantor
shall upon consummation of such sale or other disposition (except to the extent
that such sale or disposition is to the Borrower or another Subsidiary thereof)
be released from this Guaranty automatically and without further action and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons that own, directly or indirectly, all of the capital stock of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 21).

                  22.      At any time a payment in respect of the Guaranteed
Obligations is made under this Guaranty, the right of contribution of each
Guarantor against each other Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a "Relevant
Payment") is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate
payments made by such Guarantor in respect of the Guaranteed Obligations to, and
including the date of the Relevant Payment exceeding such Guarantor's
Contribution Percentage (as defined below) of the aggregate payments made by all
Guarantors in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; provided, that no
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 22 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 22: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing

                                      -11-



(x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the
aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth" of
each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of
such Guarantor and (y) zero; and (iii) the "Net Worth" of each Guarantor shall
mean the amount by which the fair salable value of such Guarantor's assets on
the date of any Relevant Payment exceeds its existing debts and other
liabilities (including contingent liabilities, but without giving effect to any
Guaranteed Obligations arising under this Guaranty) on such date. All parties
hereto recognize and agree that, except for any right of contribution arising
pursuant to this Section 22, each Guarantor who makes any payment in respect of
the Guaranteed Obligations shall have no right of contribution or subrogation
against any other Guarantor in respect of such payment until all of the
Guaranteed Obligations have been irrevocably paid in full in cash. Each of the
Guarantors recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution. In this connection, each Guarantor has the right to waive its
contribution right against any Guarantor to the extent that after giving effect
to such waiver such Guarantor would remain solvent, in the determination of the
Required Lenders.

                  23.      Each Guarantor and each Secured Creditor (by its
acceptance of the benefits of this Guaranty) hereby confirms that it is its
intention that this Guaranty not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of
any similar Federal or state law. To effectuate the foregoing intention, each
Guarantor and each Secured Creditor (by its acceptance of the benefits of this
Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed
by such Guarantor shall be limited to such amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise) liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
rights to contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance.

                  24.      This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Administrative Agent.

                  25.      All payments made by any Guarantor hereunder will be
made without setoff, counterclaim or other defense and on the same basis as
payments are made by the Borrower under Sections 5.03 and 5.04 of the Credit
Agreement.

                  26.      It is understood and agreed that any Subsidiary of
the Borrower that is required to execute a counterpart of this Guaranty after
the date hereof pursuant to the Credit Agreement shall become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.

                                      -12-



                  27.      Each Guarantor has independently, and without
reliance on any information supplied by any Secured Creditor, taken, and will
continue to take, whatever steps it deems necessary to evaluate the financial
condition and affairs of the Borrower or any Collateral, and the Secured
Creditors shall have no duty to advise any Guarantor of information at any time
known to them regarding such financial condition or affairs or any Collateral.

                               [Signatures Follow]

                                      -13-




                  IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.

                                    AMERICAN CHURCH LISTS, INC.,
                                    BJ HUNTER INFORMATION, INC.,
                                    CD-ROM TECHNOLOGIES, INC.,
                                    CITY DIRECTORIES, INC.,
                                    CLICKACTION INC.,
                                    DONNELLEY MARKETING, INC.,
                                    HILL-DONNELLY CORPORATION
                                    IDEXEC, INC.,
                                    INFOUSA MARKETING, INC.,
                                    LIST BAZAAR.COM, INC.,
                                    STRATEGIC INFORMATION MANAGEMENT, INC.,
                                    TGMVC CORPORATION
                                    WALTER KARL, INC.,
                                    YESMAIL, INC.
                                        each as a Guarantor

                                    By ______________________________________
                                    Title: Chief Financial Officer of each

                                 Signature Page
                                       to
                              Subsidiaries Guaranty



Accepted and Agreed to:

BANK OF AMERICA, N.A.,
  as Collateral Agent

By _________________________
   Title: Vice President

                                 Signature Page
                                       to
                              Subsidiaries Guaranty

EX-31.1

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EX-31.2

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EX-32.1

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EX-32.2

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