-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IbSMaH31ShQyRkaBHpJcU9PB+C8DJ7xCh96f8yktO9dNQqXSefZR6LDTEhdQZSOV hU9g/jIRwKiJWodI/MmXMQ== 0000313616-98-000010.txt : 19980717 0000313616-98-000010.hdr.sgml : 19980717 ACCESSION NUMBER: 0000313616-98-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980626 FILED AS OF DATE: 19980716 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08089 FILM NUMBER: 98666983 BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [ X ] SECURITIES AND EXCHANGE ACT OF 1934 For the Quarter ended June 26, 1998 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-8089 DANAHER CORPORATION (Exact name of registrant as specified in its charter) Delaware 59-1995548 (State of incorporation) (I.R.S. Employer Identification number) 1250 24th Street, N.W., Suite 800 Washington, D.C. 20037 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 202-828-0850 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of common stock outstanding at July 16, 1998 was 117,170,527. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at June 26, 1998 and December 31, 1997 3 Consolidated Condensed Statements of Earnings for the three months and six months ended June 26, 1998 and June 27, 1997 4 Consolidated Condensed Statements of Cash Flow for the six months ended June 26, 1998 and June 27, 1997 5 Notes to Consolidated Condensed Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II - OTHER INFORMATION Item 6. (a) Exhibits: 8-9 (b) Reports on Form 8-K: None DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) June 26, December 31, 1998 1997 (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 32,916 $ 33,317 Accounts receivable, net 359,589 322,600 Inventories: Finished goods 114,807 82,451 Work in process 72,342 54,544 Raw material and supplies 100,164 72,421 Total inventories 287,313 209,416 Prepaid expenses and other current assets 42,906 53,006 Total current assets 722,724 618,339 Property, plant and equipment, net of accumulated depreciation of $292,047 and $263,227, respectively 382,907 335,223 Other assets 63,980 72,739 Excess of cost over net assets of acquired companies, net 1,201,664 853,416 Total assets $2,371,275 $1,879,717 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 162,310 $ 35,527 Accounts payable 158,144 135,190 Accrued expenses 454,009 353,518 Total current liabilities 774,463 524,235 Other liabilities 272,467 275,881 Long-term debt 323,399 162,720 Stockholders' equity: Common stock-$.01 par value 1,287 1,287 Additional paid-in capital 339,231 335,465 Retained earnings 736,992 655,692 Cumulative foreign translation adjustment and other (7,123) (6,122) Treasury Stock (69,441) (69,441) Total stockholders' equity 1,000,946 916,881 Total liabilities and stockholders' equity $2,371,275 $1,879,717 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (000's omitted except per share amounts) (unaudited) Quarter Ended Six Months Ended June 26, June 27, June 26, June 27, 1998 1997 1998 1997 Net revenues $622,271 $502,789 $1,156,689 $969,230 Operating costs and expenses: Cost of sales 409,399 338,725 773,215 657,686 Selling, general and administrative expenses 123,213 92,266 222,872 178,532 Goodwill and other amortization 7,597 5,856 13,493 11,613 Total operating costs and expenses 540,209 436,847 1,009,580 847,831 Operating profit 82,062 65,942 147,109 121,399 Interest expense, net 6,970 3,236 10,156 7,100 Earnings from continuing operations before income taxes 75,092 62,706 136,953 114,299 Income taxes 28,910 24,448 52,727 44,506 Net Earnings $ 46,182 $ 38,258 $ 84,226 $ 69,793 Basic earnings per share $ .39 $ .33 $ .72 $ .59 Average shares outstanding 117,549 117,314 117,499 117,774 Diluted earnings per share $ .38 $ .32 $ .69 $ .58 Average common stock and equivalent shares outstanding 121,295 120,058 121,257 120,407 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Six Months Ended June 26, June 27, 1998 1997 Cash flows from operating activities: Net earnings from operations $ 84,226 $ 69,793 Noncash items, depreciation and amortization 42,492 38,273 (Increase) decrease in accounts receivable 11,391 (21,769) (Increase) decrease in inventories (29,992) (1,270) Increase in accounts payable 6,527 10,654 Change in other assets and liabilities 59,732 40,188 Total operating cash flows 174,376 135,869 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (34,191) (25,976) Cash paid for acquisitions (375,441) (58,962) Net cash provided by (used in) investing activities (409,632) (84,938) Cash flows from financing activities: Acquisition of treasury stock -- (19,842) Proceeds from issuance of common stock 3,766 1,029 Borrowing (repayments) of debt 234,176 (20,605) Payment of dividends (2,926) (2,938) Net cash used in financing activities 235,016 (42,356) Effect of exchange rate changes on cash (161) 29 Net change in cash and cash equivalents (401) 8,604 Beginning balance of cash and cash equivalents 33,317 26,444 Ending balance of cash and cash equivalents $ 32,916 $ 35,048 Supplemental disclosures: Cash interest payments $ 9,825 $ 6,693 Cash income tax payments $ 29,104 $ 44,266 See notes to consolidated condensed financial statements. DANAHER CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) NOTE 1. GENERAL The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements included herein should be read in conjunction with the financial statements and the notes thereto included in the Company's 1997 Annual Report on Form 10-K. In the opinion of the registrant, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company at June 26, 1998 and December 31, 1997, its results of operations for the three months and six months ended June 26, 1998 and June 27, 1997, and its cash flows for the six months ended June 26, 1998 and June 27, 1997. NOTE 2. MERGER WITH FLUKE CORPORATION On July 7, 1998, Fluke Corporation was acquired and merged into the Company. The Company issued 17,748,572 shares of common stock in exchange for all outstanding Fluke shares. The transaction was a tax-free reorganization and will be accounted for as a pooling-of- interests. Accordingly, future financial statements will be restated to reflect the combined companies. Sales reported will increase $441 million in 1997 and $421 million in 1996. Reported net income will increase $21.8 million in 1997 and $26.4 million in 1996. 1997 reported diluted earnings per share will be unchanged and 1996 reported diluted earnings per share from continuing operations will increase from $1.07 to $1.13 per share. Results for interim periods in 1998 have not yet been determined on a combined company basis. It is anticipated that third quarter results will include a one-time after-tax charge of approximately $25 million to $30 million to reflect the costs of the transaction and integrating and implementing efficiencies associated with information, operational and administrative systems. Fluke is engaged in the manufacture and marketing of compact, professional electronic test tools. NOTE 3. ACQUISITION OF PACIFIC SCIENTIFIC COMPANY The Company obtained control of Pacific Scientific Company as of March 9, 1998. Total consideration for Pacific Scientific was approximately $420 million. The fair value of assets acquired was approximately $520 million and approximately $100 million of liabilities were assumed. The transaction is being accounted for as a purchase. The unaudited pro forma information for the period set forth below give effect to the transaction as if it had occurred at the beginning of each period. The pro forma information is presented for information purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time (unaudited, 000's omitted): Year Ended Six Months Ended Six Months Ended December 31, June 27, June 26, 1997 1997 1998 Net Sales $2,361,428 $1,120,297 $1,228,271 Net Earnings 147,810 65,799 82,570 Earnings per Share $ 1.22 $ .55 $ .68 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the 1998 quarter were 24% higher than the 1997 quarter. Net sales for the six-month period were 19% higher than the corresponding period in 1997. This is due both to continued increases in shipment volume in all segments and the effect of acquisitions, with comparable companies accounting for approximately 5% and 6% of sales growth in both the quarter and six-month periods, respectively. Gross profit margin in 1998, as a percentage of sales, was approximately 34.2% for the quarter and 33.2% for the six-month period, an increase of 1.6 and 1.1 percentage points, respectively, from 1997 levels. The gross margin increase was attributable to both the effect of the acquired companies which provide a higher gross margin and productivity improvements within the existing business units. Selling, general and administrative expenses for the 1998 quarter and six-month period increased in total dollars principally due to the higher volume levels. Selling, general and administrative expenses as a percentage of sales was 19.8% for the 1998 quarter and 19.3% for the six month period, respectively. This represents an increase of 1.4 and 0.9 percentage points, respectively, from prior periods. This reflects principally the impact of acquired businesses which have higher cost percentages in this area. Interest expense for the quarter and six-month period was 115% and 43% higher than the 1997 levels, respectively, due to higher average debt levels, reflecting the funding of the Pacific Scientific acquisition, offset in part by strong cash flow experienced in 1998 and 1997. The effective tax rate for both the second quarter and six-month periods is .5 percent points less in 1998 than 1997, reflecting lower tax rates associated with higher expected earnings from foreign operations. Liquidity and Capital Resources Since December 31, 1997, the Company has experienced increases in inventory and accounts payable. This is due to the lower activity levels experienced in the last weeks of 1997 caused by the holiday season. Total debt increased to $486 million at June 26, 1998, primarily as a result of the acquisition of Pacific Scientific, offset in part by strong operating cash flow. A regular quarterly dividend of $.0125 per share was declared, payable on July 31, 1998 to holders of record on June 26, 1998. The Company's cash provided from operations, as well as credit facilities available, should provide sufficient available funds to meet anticipated working capital requirements, capital expenditures, acquisitions, dividends and scheduled debt repayments. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:(10) Material Contracts: (a) As Amended Employment Agreement between Danaher Corporation and George M. Sherman dated as of January 2, 1990 (b) As Amended Credit Agreement Dated As of September 7, 1990. Among Danaher Corporation, the Financial Institutions Listed Therein and Bankers Trust Company as Agent. (c) As Amended Agreement as of November 1, 1990 between Danaher Corporation, Easco Hand Tools, Inc. and Sears, Roebuck and Co. (d) As Amended Note Agreements as of November 1, 1992 and April 1, 1993 Between Danaher Corporation and Lenders Referenced Therein. Exhibits: (3) (a) As Amended Articles of Incorporation Exhibits: (27) Financial Data Schedules (b) Reports on Form 8-K: None 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. DANAHER CORPORATION: Date: July 16, 1998 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: July 16, 1998 By: /s/ C. Scott Brannan C. Scott Brannan Controller EX-27 2
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EX-3 3 CERTIFICATE OF INCORPORATION OF DANAHER CORPORATION FIRST: The name of the Corporation is Danaher Corporation. SECOND: The address of the registered office of the Corporation in the State of Delaware is 4305 Lancaster Pike, in the city of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware as set forth in Title 8 of the Delaware Code (the "GCL"). FOURTH: I. The total number of shares of stock which the Corporation shall have authority to issue is 30,000,000 shares of which 25,000,000 shares, $.01 par value per share, shall be of a class designated "Common Stock" and of which 5,000,000 shares, without par value, shall be designated "Preferred Stock." II. The Board of Directors of the Corporation is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, to provide for the issuance from time to time in one or more series of any number of shares of Preferred Stock, and, by filing a certificate pursuant to the GCL, to establish the number of shares to be included in each such series, and to fix the designation, relative rights, preferences, qualifications and limitations of the shares of each such series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: A. The number of shares constituting that series and the distinctive designation of that series; B. The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and whether they shall be payable in preference to, or in another relation to, the dividends payable on any other class or classes or series of stock; C. Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; D. Whether that series shall have conversion or exchange privileges, and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine; E. Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions or such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption which amount may vary under different conditions and at different redemption dates; F. Whether that series shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of that series, and, if so, the terms and amounts of such sinking fund; G. The right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional stock (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation; H. The right of the shares of that series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and whether such rights shall be in preference to, or in another relation to, the comparable rights of any other class or classes or series of stock; and I. Any other relative, participating, optional or other special rights, qualifications, limitations or restrictions of that series. III. Shares of any series of Preferred Stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall have the status of authorized and unissued shares of Preferred Stock of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of Preferred Stock, all subject to the conditions and the restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock. IV. Subject to the provisions of any applicable law, or except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively possess voting power for the election of directors and for all other purposes, each holder of record of shares of Common Stock being entitled to one vote for each share of Common Stock standing in his name on the books of the Corporation. V. Except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock, after payment shall have been made to the holders of Preferred Stock of the full amount of dividends to which they shall be entitled pursuant to the resolution or resolutions providing for the issue of any series of Preferred Stock the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to receive such dividends as from time to time may be declared by the Board of Directors. VI. Except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment shall have been made to the holders of Preferred Stock of the full amount to which they shall be entitled pursuant to the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to share, ratably according to the number of shares of Common Stock held by them, in all remaining assets of the Corporation available for distribution to its stockholders. VII. The number of authorized shares of any class may be increased or decreased by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote. FIFTH: The name and mailing address for the Sole Incorporator is as follows: Name Mailing Address Sheldon S. Adler Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 SIXTH: I. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than three directors, the exact number of directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. Class I directors initially shall be elected for a one-year term to expire at the 1987 annual meeting of stockholders, Class II directors for a two-year term to expire at 1988 annual meeting of stockholders and Class III directors for a three-year term to expire at the 1989 meeting of stockholders. At each succeeding annual meeting of stockholders, beginning in 1987, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject however, to prior death, resignation, retirement, disqualification or removal from office. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article SIXTH unless expressly provided by such terms. II. Except to the extent prohibited by law, the Board of Directors shall have the right (which, to the extent exercised, shall be exclusive) to establish the rights, powers, duties, rules and procedures that from time to time shall govern the Board of Directors and each of its members, including without limitation the vote required for any action by the Board of Directors, and that from time to time shall affect the directors power to manage the business and affairs of the Corporation; and no By- laws shall be adopted by stockholders which shall impair or impede the implementation of the foregoing. SEVENTH: The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws of the Corporation. In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the statutes of Delaware, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted. EIGHTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors in the By-Laws of the Corporation. NINTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of the equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the GCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the GCL, order a meeting of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. TENTH: The Corporation shall indemnify to the full extent authorized or permitted by law any person made, or threatened to be made, a party to any action or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Corporation or by reason of the fact that such director or officer, at the request of the Corporation, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Nothing contained herein shall affect any rights to indemnification to which employees other than directors and officers may be entitled by law. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such a director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL, or (iv) for any transaction from which such director derived an improper personal benefit. No amendment to or repeal of this Article TENTH shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment. ELEVENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the GCL, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this third day of October, 1986. /s/ Sheldon S. Adler Sheldon S. Adler Sole Incorporator CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF DANAHER CORPORATION _________________________________ Pursuant to Section 242 of the General Corporation Laws of the State of Delaware _________________________________ Danaher Corporation, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), does hereby certify: FIRST: That Paragraph I. of Article FOURTH of the Certificate of Incorporation of the Corporation be amended and read in its entirety as follows: FOURTH: I. The total number of shares of stock which the Corporation shall have authority to issue is 315,000,000 shares of which 300,000,000 shares, $.01 par value per share, shall be of a class designated "Common Stock" and of which 15,000,000 shares, without par value, shall be designated "Preferred Stock". SECOND: That the foregoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, DANAHER CORPORATION has caused this Certificate of Amendment to the Certificate of Incorporation of DANAHER CORPORATION to be executed on its behalf by its President or Vice President, and attested to by its Secretary or Assistant Secretary this 5 day of May, 1998. DANAHER CORPORATION By: /s/ C.S. Brannan Name: C. Scott Brannan Title: Vice President ATTEST: By: /s/ Patrick W. Allender Name: Patrick W. Allender Title: Secretary BY- LAWS OF DANAHER CORPORATION (hereinafter called the "Corporation") ARTICLE I OFFICES Section 1. Registered Office. The registered office of the Corporation shall be in the City of Dover, County of Kent, State of Delaware. Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual Meetings. The Annual Meetings of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect by a plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the Annual Meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Section 3. Special Meetings. Unless otherwise prescribed by law or by the Certificate of Incorporation, Special Meetings of Stockholders, for any purpose or purposes, may be called by either (i) the Chairman, if there be one, or (ii) the President, [(iii) any Vice President, if there be one, (iv) the Secretary or (v) any Assistant Secretary, if there be one,] and shall be called by any such officer at the request in writing of a majority of the Board of Directors [or at the request in writing of stockholders owning a majority of the capital stock of the Corporation issued and outstanding and entitled to vote]. Such request shall state the purpose or purposes of the proposed meeting. Written notice of a Special Meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. Section 4. Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. Section 5. Voting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discre- tion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot. Section 6. Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 7. List of Stockholders Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present. Section 8. Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 7 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders. ARTICLE III DIRECTORS Section 1. Number and Election of Directors. The Board of Directors shall consist of not less than one nor more than fifteen members, the exact number of which shall initially be fixed by the Incorporator and thereafter from time to time by the Board of Directors. Except as provided in Section 2 of this Article, directors shall be elected by a plurality of the votes cast at Annual Meetings of Stockholders, and each director so elected shall hold office until the next Annual Meeting and until his successor is duly elected and qualified, or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders. Section 2. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier resignation or removal. Section 3. Duties and Powers. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 4. Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President, or any [*] director[s]. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Section 5. Quorum. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 6. Actions of Board. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Section 7. Meetings of Conference Telephone. Unless otherwise provided by the Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting. Section 8. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee,. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Each committee shall keep regular minutes and report to the Board of Directors when required. Section 9. Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending meetings. Section 10. Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. ARTICLE IV OFFICERS Section 1. General. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose a Chairman of the Board of Directors (who must be a director) and one or more Vice-Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation. Section 2. Election. The Board of Directors at its first meeting held after each Annual Meeting of Stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. Section 3. Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice-President and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons. Section 4. Chairman of the Board of Directors. The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. He shall be the Chief Executive Officer of the Corporation, and except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors. Section 5. President. The President shall, subject to the control of the Board of Directors and, if there be one, the Chairman of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and the Board of Directors. If there be no Chairman of the Board of Directors, the President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors. Section 6. Vice-Presidents. At the request of the President or in his absence or in the event of his inability or refusal to act (and if there be no Chairman of the Board of Directors), the Vice-President or the Vice-Presidents if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice-President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Section 7. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secre- tary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be. Section 8. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. Section 9. Assistant Secretaries. Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary. Section 10. Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. Section 11. Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers. ARTICLE V STOCK Section 1. Form of Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed, in the name of the Corporation (i) by the Chairman of the Board of Directors, the President or a Vice- President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Section 2. Signatures. Where a certificate is countersigned by (i) a transfer agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 3. Lost Certificates. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board-of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 4. Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued. Section 5. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 6. Beneficial Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. ARTICLE VI NOTICES Section 1. Notices. Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex or cable. Section 2. Waivers of Notice. Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve. Section 2. Disbursements. All checks or demands for money and notes-of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. Section 4. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE VIII INDEMNIFICATION Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than Those by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corpo- ration, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 3. Authorization of Indemnification. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sec- tion 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. Section 4. Good Faith Defined. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 1 or 2 of this Article VIII, as the case may be. Section 5. Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee [or agent] is proper in the circumstances because he has met the applicable standards of conduct set forth in Sections 1 or 2 of this Article VIII, as the case may be. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. Section 6. Expenses Payable in Advance. Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Section 7. Non-exclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 1 or 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. Section 8. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee [or agent] of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee [or agent] of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII. Section 9. Meaning of "Corporation" for Purposes of Article VIII. For purposes of this Article VIII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees [or agents], so that any person who is or was a director, officer, employee [or agent] of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee [or agent] of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. Section 10. Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE IX AMENDMENTS Section 1. These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by the stockholders or by the Board of Directors, provided, however, that notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such meeting of stockholders or Board of Directors as the case may be. All such amendments must be approved by either the holders of a majority of the outstanding capital stock entitled to vote thereon or by a majority of the entire Board of Directors then in office. Section 2. Entire Board. As used in this Article IX and in these By-Laws generally, the term "entire Board of Directors" means the total number of directors which the Corporation would have if there were no vacancies. EX-10 4 EMPLOYMENT AGREEMENT AGREEMENT made this 2nd day of January, 1990, between Danaher Corporation, a Delaware corporation (the "Company"), and George M. Sherman (the "Executive"). The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the future growth and success of the Company is expected to be substantial. The Board desires to provide for the continued employment of the Executive with the Company which the board has determined will reinforce and encourage the continued attention and dedication of the Executive to the Company as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to serve the Company, on the terms and conditions herein provided. In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: 1. Employment. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein. 2. Term. The employment of the Executive by the Company as provided in Section 1 will commence no later than February 15 (The "Commencement Date") and will continue in effect, unless terminated as otherwise herein provided, until either party gives notice to the other that it does not wish to continue the Executive's employment hereunder. A notice given on or before the third anniversary of the Commencement Date will terminate the Executive's employment on the last day of the 36th month following the date of delivery of the notice, and a notice given after the third anniversary of the Commencement Date will terminate the Executive's employment on the last day of the 24th month following the date of the notice. In no event, however, shall the Term of the Executive's employment hereunder extend beyond the end of the month in which the Executive's sixty-fifth (65th) birthday occurs. 3. Position and Duties. The Executive shall serve as Chief Executive Officer and President of the Company with the responsibility and authority to manage and supervise the Company's operations in the ordinary course of its business and shall have such responsibilities, duties and authority as are generally associated with each such position (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. The Company shall nominate the Executive as a director of the Company for election at the earliest practical date consistent with the Company's By-laws following the Commencement Date. 4. Compensation and Related Matters. (a) Salary. During the period of the Executive's employment hereunder, the Company shall pay to the Executive an annual base salary at a rate not less than $675,000 or such higher rate as may from time to time be determined by the Board, such salary to be paid in substantially equal installments in accordance with the normal payroll practices of the Company. The Executive's salary will be reviewed at least annually. (b) (i) Sign-On Bonus. The Company will pay the Executive a sign-on bonus of $250,000, payable in a single sum within 30 days following the Commencement Date. (ii) Annual Bonus. The Company will pay the Executive a guaranteed bonus of $325,000 (the "Guaranteed Bonus") within 30 days following December 31, 1990 (or the end of the Company's fiscal year if such fiscal year is other than calendar year) and, thereafter, an annual bonus (the "Annual Bonus") within 60 days following each subsequent December 31 (or last day of the fiscal year, if other than December 31) in an amount not less than 60% of the Executive's annual base salary then in effect provided the Company achieves its targeted performance objectives for such year based upon that year's operating plan (as approved by the Executive Committee of the Company's Board of Directors), it being understood that if the Company exceeds such objectives, the Company will pay the Executive an additional bonus which shall be reasonable in relation to such corporate performance. The Executive shall be entitled to a pro-rata portion of the Annual Bonus and additional bonus for any period less than a full calendar year (or fiscal year, if other than a calendar year) for which he is entitled to his salary. (c) Stock Options. On the Commencement Date, the Company will grant the Executive 500,000 stock options to purchase shares of common stock of the Company ("Company Stock") at an exercise price equal to 85% of the average of the high and low price of the Company's Stock on the New York Stock Exchange during the day prior to the date of this Agreement during which such stock trades (the "Stock Options"). The Stock Options will become transferable by the Executive and exercisable in the following amounts on the following dates: 166,667 Upon the Commencement Date 166,667 Upon the 2nd Anniversary of the Commencement Date 166,666 Upon the 3rd Anniversary of the Commencement Date. In the event the Executive terminates his employment without Good Reason prior to the third anniversary of the Commencement Date, all Stock Options not theretofore transferrable and exercisable will lapse and be forfeited. In the event the Executive's employment is terminated for any other reason prior to the third anniversary of the Commencement Date all Stock Options not theretofore transferable and exercisable will thereupon become transferable and exercisable. Except as otherwise provided herein or in Section 9 each Stock Option will expire 10 years after it is granted. (d) Incentive Stock. On the Commencement Date, the Company will grant the Executive 100,000 shares of Company Stock (the "Incentive Stock"), of which 33,334 will be nonforfeitable on the Commencement Date, and, 33,333 of the remaining 66,666 shares will become non-forfeitable on the second anniversary of the Commencement Date, and the last 33,333 shares will become non-forfeitable on the third anniversary of the Commencement Date. In the event the Executive terminates his employment hereunder without Good Reason (as defined in Section 6(d)), all Incentive Stock not theretofore non-forfeitable will be forfeited by the Executive and returned to the Company; and in the event the Executive's employment is terminated for any other reason prior to the third anniversary of the Commencement Date all Incentive Stock theretofore subject to forfeiture will thereupon become non-forfeitable and free of any limitation or restriction under this Agreement. Unless and until a share of Incentive Stock is forfeited hereunder, the Executive shall be entitled to all dividends thereon and shall have the right to vote such share at any meeting of the shareholders of the Company. (e) "Gross-Up" Payment. Not less than 10 days prior to the due date of the Executive's federal income tax return for every taxable year of the Executive in which his income tax liability is affected by the receipt of the Stock Options and/or the Incentive Stock, and/or by the lapse of restrictions on the Stock Options and/or the Incentive Stock, the Company will pay the Executive an amount (the "Gross-Up Payment") which will include all federal and state income taxes incurred by the Executive as a result of the receipt by him of, or the lapse of restriction on: (i) the Stock Options or (ii) the grant of Incentive Stock under Section 4(d) hereof or (iii) the Gross- Up Payment under this sub-paragraph, so that the Executive's entire federal and state income tax liabilities attributable to the receipt of the grant of the Stock Options, the receipt of the Incentive Stock, or the lapse of restrictions on the Stock Options or the Incentive Stock, and this Gross-Up Payment, will be included in the Gross-Up Payment. For purposes of determining the Gross-Up Payment, the Executive will be deemed to pay federal income tax for his taxable year in which the Stock Options and Incentive Stock are granted and the taxable years in which the restrictions on the Stock Options lapse or the Incentive Stock becomes non-forfeitable and his taxable year in which the Gross-Up Payment is made, at the highest marginal rate of federal income tax and the highest marginal rate of state income tax in such year(s) net of the maximum reduction of federal income tax which could be realized by deduction of such state and local taxes paid in such year(s). The Executive will timely furnish the Company with a written statement prepared by the Executive's certified public accountant setting forth the amount of the required Gross-Up Payment and the due date or dates of such tax liability. The parties agree that they will cooperate in devising and implementing a viable and reasonable alternative to all or part of the Gross-Up Payment, provided such alternative provides the same economic benefit to the Executive that the Gross-Up Payment hereinabove provides to him and is acceptable to the Executive; the Executive agrees he will not unreasonably withhold his acceptance of an alternative. (f) Expenses. During the term of the Executive's employment hereunder, the Executive shall be entitled to receive prompt reimbursement for all reasonable and customary expenses incurred by the Executive in performing services hereunder, including (i) all expenses of travel and living expenses while away from home on business or at the request of and in the service of the Company and (ii) an automobile, plus all expenses of maintaining and operating the automobile, provided that all such expenses are accounted for in accordance with the policies and procedures established by the Company. (g) Other Benefits. The Company shall maintain in full force and effect, and the Executive shall be entitled to participate in, all of the fringe benefit plans and arrangements in effect on the date hereof in which executives of the Company participate or plans or arrangements providing the Executive with at least equivalent benefits thereunder (including, without limitation, each group life insurance and accident plan, medical and dental insurance plans, and disability plan); provided, however, that, changes in such plans or arrangements may be made, including termination of such plans or arrangements if it occurs pursuant to a program applicable to all executives of the Company and does not result in a proportionately greater reduction in the rights of or benefits to the Executive as compared with any other executive of the Company. Notwithstanding any other provision of this sub-paragraph, during the Term, the Company will provide the Executive with term life insurance (which may include any group life insurance arrangement provided by the Company to its other employees), covering the Executive's life in a face amount each year equal to six times the Executive's base salary for such year through age 55, at which time such insurance coverage may be decreased by the Company to four times the Executive's base salary and thereafter decreasing by .2% upon each birthday of the Executive thereafter. The Executive agrees to cooperate with the Company in obtaining such insurance, including submitting to a physical examination if required to do so by the insurance carrier. The beneficiary of this insurance will be designated by the Executive and if not so designated, the beneficiary will be his estate. Nothing paid to the Executive under any fringe plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary payable to the Executive pursuant to paragraph (a) of this Section. Any payments or benefits payable to the Executive hereunder in respect of any calendar year during which the Executive is employed by the Company for less than the entire such year shall, unless otherwise provided in the applicable plan or arrangement be pro-rated in accordance with the number of days in such calendar year during which he is so employed. (h) Annual Physical Examination. During the Term, the Company shall reimburse the Executive for the reasonable expenses incurred by the Executive in undergoing an annual physical examination by a licensed physician. (i) Club-Membership. During the Term, the Company shall reimburse the Executive for dues and special assessments incurred by the Executive in connection with his membership in the Hillendale Country Club, Baltimore County, Maryland and the Center Club, Baltimore City, Maryland. (j) Tax and Financial Planning. During the Term, the Company shall reimburse the Executive for the reasonable expenses incurred by the Executive in connection with obtaining professional tax and financial planning advice. (k) Second Stock. Upon the earlier to occur of: (i) A person or business organization, or affiliated group of persons or business organizations who, or which, do not now own or control 20% or more of the voting stock of the Company, acquire ownership or control of 20% or more of the voting stock of the Company, or its successor, and Equity Group Holdings and its affiliates and its or their successors then own or control less voting stock of the Company or its successor than such person, business organization, or affiliated group; or (ii) the Executive's 55th birthday, the Company will grant the Executive 100,000 shares of Common Stock (the "Second Stock"); provided, however that if the employment of the Executive is terminated by the Company or by the Executive for any reason prior to the occurrence of either of the events described in paragraphs (i) and (ii) of this Section 4(k), the Executive shall forfeit the right to receive such grant of 100,000 shares of Company Stock, unless on or after his 53rd birthday and before his 55th birthday: (x) the Executive terminates his employment for Good Reason (as defined in Section 6(d)), or (y) his employment is involuntarily terminated by the Company for reasons other than Cause (under subsection 6(c)), death or Disability (under subsection 6(b)) in which event the Executive will receive such grant of shares on the first to occur of the events described in said paragraphs (i) and (ii) above. 5. Offices. Subject to Section 3, the Executive agrees to serve without additional compensation, if elected or appointed thereto, as a director of the Company and any of its subsidiaries and in one or more executive offices of any of the Company's subsidiaries, provided that the Executive is indemnified for serving in any and all such capacities on a basis no less favorable than is currently provided by the Company to any other director of the Company or any of its subsidiaries. 6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances: (a) Death. The Executive's employment hereunder shall terminate upon his death. (b) Disability. If, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from his duties hereunder on a full-time basis for the entire period of six consecutive months, and within thirty (30) days after written notice of termination is given (which may occur before or after the end of such six month period) shall not have returned to the performance of his duties hereunder on a full-time basis, the Company may terminate the Executive's employment hereunder. (c) Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon (i) the willful and continued failure by the Executive to substantially perform his duties hereunder (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination, as defined in Section 6(e), by the Executive for Good Reason, as defined in Section 6(d)), after demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes the Executive has not substantially performed his duties, which is not cured within 10 days after notice of such failure has been given to the Executive by the Company, or (ii) the willful engaging by the Executive in misconduct which is materially injurious to the Company, monetarily or otherwise (including, but not limited to, conduct that constitutes competitive activity pursuant to Section 9 hereof). For purposes of this paragraph, no act, or failure to act, on the Executive's part shall be considered "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. (d) Termination by the Executive. The Executive may terminate his employment hereunder for Good Reason for purposes of this Agreement, "Good Reason" shall mean: (A) a failure by the Company to comply with any material provision of this Agreement which has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive to the Company; (B) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (e) hereof (and for purposes of this Agreement no such purported termination shall be effective); (C) The assignment to the Executive of any duties materially inconsistent with his status as the President and Chief Executive Officer of the Company or a material adverse alteration in the nature or status of his responsibilities in connection with such responsibilities. For purposes of this Agreement, "President and Chief Executive Officer of the Company" shall mean that if a reorganization or merger of the Company occurs, the Executive will be the President and Chief Executive Officer of (1) the Company if it is the surviving entity in any merger, acquisition or other business combination with the Company, or (2) the successor entity to the Company in any merger, acquisition or other business combination with the Company. (D) A person or business organization, or affiliated group of persons or business organizations who, or which, do not now own or control 20% or more of the voting stock of the Company, acquire ownership or control of 20% or more of the voting stock of the Company, or its successor, and Equity Group Holdings and its affiliates and its or their successors then owns or controls less voting stock of the Company (or its successor) than such person, business organization, or affiliated group; (E) Relocation of the Executive to a location which is not within the Baltimore City Metropolitan area, the District of Columbia, or the Suburban Maryland area adjacent to the District of Columbia, except for required travel on the Company's business to an extent substantially consistent with the Executive's business travel obligations; (F) The failure by the Company to continue in effect any compensation or benefit plan in which the Executive participated as of the Commencement Date and which is material to the Executive's aggregate compensation and benefits hereunder, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the Commencement Date; (G) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement. (e) Any termination of the Executive's employment by the Company or by the Executive (other than termination pursuant to subsection (a) hereof) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 13 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean only a notice which is based upon, and shall indicate, the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. (f) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period), (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date on which a Notice of Termination is given; provided, however, that, if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected). 7. Compensation Upon Termination or During Disability. (a) During any period that the Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental illness ("disability period") the Executive shall continue to receive, or receive the benefit of (as the case may be), all items described in Section 4 hereinabove at the rate then in effect for such period until his employment is terminated pursuant to Section 6(b) hereof, provided that payments so made to the Executive during the first 180 days of the disability period shall be reduced by the sum of the amounts, if any, payable to the Executive at or prior to the time of any such payment under disability benefit plans of the Company or under the Social Security disability insurance program, and which amounts were not previously applied to reduce any such payment. (b) The Company shall maintain in full force and effect, for the continued benefit of the Executive for twelve months following the Date of Termination due to Disability, all employee welfare benefit plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plans and programs from which his continued participation is barred. (c) If the Executive's employment is terminated by his death, the Company shall pay any amounts due to, or for the benefit of, the Executive under Section 4 through the date of his death. (d) If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay all amounts under Section 4 hereof due to, or for the benefit of, the Executive through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligations to the Executive under this Agreement. (e) If (A) in breach of this Agreement, the Company shall terminate the Executive's employment other than for disability pursuant to Section 6(b) or for Cause (it being understood that a purported termination for disability pursuant to Section 6(b) or for Cause which is disputed and finally determined not to have been proper shall be a termination by the Company in breach of this Agreement) or (B) the Executive shall terminate his employment for Good Reason, then (i) the Company shall pay all amounts due to, or for the benefit of, the Executive under Section 4 through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid amounts, if any, to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company at the time such payments are due; (ii) In lieu of any further salary or bonus payments to the Executive for periods subsequent to the date of the termination of his employment, the Company shall pay as severance pay to the Executive a salary and bonus severance payment equal to three times 160% of the annual base salary in effect immediately prior to the Executive's termination. Such payment will be made in 18 even monthly payments on the first day of each month beginning on the first day of the month beginning immediately following the Executive's termination; provided, however, that in the event the termination of the Executive's employment occurs after the third anniversary of the Commencement Date, the salary and bonus severance payment will equal two times 160% of the annual base salary in effect immediately prior to the Executive's termination, and such payment will be made in 12 even monthly installments beginning on the first day of the month beginning immediately following the Executive's termination. (iii) The Company shall pay to the Executive any deferred compensation, including, but not limited to deferred bonuses, allocated or credited to the Executive or his account as of the date of termination. For purposes of this subsection, deferred compensation does not include Second Stock under subsection 4(k), the terms and conditions of which are provided elsewhere in this Agreement. (iv) The Company shall pay all reasonable legal fees and expenses incurred by the Executive as a result of such termination, including the reasonable fees and expenses of enforcing the terms of this Agreement, or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Internal Revenue Code of 1986 as amended (the "Code") to any payment or benefit provided hereunder). (v) the Company shall maintain in full force and effect, for the continued benefit of the Executive for 36 months following the date of termination of the Executive's employment if such date is prior to the third anniversary of the Commencement Date, and if such date is on or after the third anniversary of the Commencement Date, for 24 months following the date of the termination of the Executive's employment, all employee welfare benefit plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plans and programs from which his continued participation is barred. 8. Death/Assignment of Stock Options and Stock. In the event of the Executive's death, whether his death occurs during or after the Term of this Agreement, all unexercised Stock Options, and all Stock of the Company then owned by the Executive will be assigned to his Estate. 9. Termination/Unexercised Stock Options. In the event of the termination of the employment of the Executive for any reason, all unexercised stock options granted to him hereunder must be exercised by him, or his estate (or heir(s)) as the case may be, before the first anniversary of the termination of his employment, but in no event after the tenth anniversary of the date of grant thereof, and any such options not exercised by that date will lapse immediately thereafter. 10. Mitigation. In the event that the Executive receives benefits from other employment after the Date of Termination and during the then unexpired Term of this Agreement, the benefits to be provided by the Company under the provisions of Section 7(e)(v) shall be terminated. 11. Anti-Dilution/Recapitalization of the Company. In the Event of any change in the number of issued shares of Company Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend, or other increase or decrease in such shares, then appropriate adjustments shall be made by the Company with respect to the Incentive Stock, the Second Stock, and with respect to outstanding unexercised Stock Options and/or the aggregate number of shares of Company Stock of the Company in respect of which Stock Options may be exercised. 12. Noncompetition. (a) So long as the Executive is employed by the Company under this Agreement and unless this Agreement is terminated for any reason, the Executive agrees not to enter into competitive endeavors and not to undertake any commercial activity which is contrary to the best interests of the Company or its subsidiaries or affiliates, including becoming an employee, owner (except for passive investments of not more than three percent (3%) of the outstanding shares of, or any other equity interest in, any company or entity listed or traded on a national securities exchange or in an over-the- counter securities market), officer, agent, advisor, consultant or director of any firm or person which directly competes with a line or lines of business of the Company. In the event the Executive terminates his employment hereunder for any reason, except Good Reason, the foregoing provisions will be applicable for an additional period of 24 months following the Executive's termination of his employment. (b) During the Term of this Agreement and any period thereafter during which or in respect of which the Executive receives payments from the Company under Section 7, the Executive will retain in confidence any and all confidential information known to him concerning the Company and its business and shall not use or disclose such information without the approval of the Company except to the extent such information has previously become public or as may be required by law. (c) In the event the Executive terminates his employment hereunder for any reason except Good Reason, for a period of 36 months following such termination the Executive will not solicit the employment of any employee of the Company. (d) In the event the Executive terminates his employment hereunder for Good Reason, for a period of 24 months following such termination the Executive will not solicit the employment of any employee of the Company. 13. Successors; Binding Agreement. (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 12 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amount unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive's devisee, legatee, or other designee or, if there be no such designee, to the Executive's estate. 14. Notice. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Mr. George M. Sherman 905 St. Georges Road Baltimore, Maryland 21210 If the Company: Danaher Corporation 1250 24th Street, N.W. Suite 800 Washington, D.C. 20037 Attn: Corporate Secretary or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 15. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designed by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions as the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the District of Columbia without regard to its conflicts of law principles. 16. Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 18. Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and canceled. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. ATTEST: DANAHER CORPORATION /s/ By: /s/ (SEAL) Name: Title: ATTEST: EXECUTIVE /s/ /s/ George M. Sherman George M. Sherman EX-10 5 EXECUTION VERSION CREDIT AGREEMENT DATED AS OF SEPTEMBER 7, 1990 AMONG DANAHER CORPORATION, THE FINANCIAL INSTITUTIONS LISTED HEREIN AND BANKERS TRUST COMPANY, as Agent DANAHER CORPORATION CREDIT AGREEMENT TABLE OF CONTENTS Page SECTION 1. DEFINITIONS. . . . . . . .1 1.1. Certain Defined Terms. . . . . . . . . . . . . . . . . .1 1.2. Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. . . . . . . . 25 1.3. Other Definitional Provisions. . . . . . . . . . . . . 25 SECTION 2. AMOUNTS AND TERMS OF LOANS AND LETTERS OF CREDIT. . . . 26 2.1. Revolving Loans, Swingline Loans and Bid Rate Loans. . 26 2.2. Term Loans . . . . . . . . . . . . . . . . . . . . . . 35 2.3. Interest on the Loans. . . . . . . . . . . . . . . . . 36 2.4. Letters Of Credit. . . . . . . . . . . . . . . . . . . 40 2.5. Fees. . . . . . . . . . . . . . . . . . . . . . . 45 2.6. Prepayments and Payments: Reductions in Commitments. . 47 2.7. Use of Proceeds. . . . . . . . . . . . . . . . . . . . 51 2.8. Special Provisions Governing CD Rate Loans and Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . . 52 2.9. Capital Adequacy Adjustment. . . . . . . . . . . . . . 56 2.10. Pledge and Guaranties . . . . . . . . . . . . . . 57 2.11. Additional Lenders. . . . . . . . . . . . . . . . 57 SECTION 3. CONDITIONS TO LOANS AND LETTERS OF CREDIT57 3.1. Conditions to Effectiveness of this Agreement. . . . . 57 3.2. Conditions to Letters of Credit. . . . . . . . . . . . 60 3.3. Conditions to All Loans and Letters of Credit. . . . . 60 SECTION 4. REPRESENTATIONS AND WARRANTIES62 4.1. Organization, Powers, Good Standing and Business . . . 62 4.2. Authorization of Borrowing, etc. . . . . . . . . . . . 63 4.3. Financial Condition. . . . . . . . . . . . . . . . . . 64 4.4. No Material Adverse Change; No Stock Payments. . . . . 64 4.5. Title to Properties; Liens . . . . . . . . . . . . . . 64 4.6. Litigation: Adverse Facts. . . . . . . . . . . . . . . 65 4.7. Payment of Taxes . . . . . . . . . . . . . . . . . . . 65 4.8. Performance of Agreements. . . . . . . . . . . . . . . 65 4.9. Governmental Regulation. . . . . . . . . . . . . . . . 65 4.10. Securities Activities . . . . . . . . . . . . . . 65 4.11. Employee Benefit Plans. . . . . . . . . . . . . . 66 4.12. Certain Fees. . . . . . . . . . . . . . . . . . . 66 4.13. Environmental Protection. . . . . . . . . . . . . 66 4.14. Solvency. . . . . . . . . . . . . . . . . . . . . 67 4.15. Patents, Trademarks, Etc. . . . . . . . . . . . . 67 4.16. Disclosure. . . . . . . . . . . . . . . . . . . . 67 4.17. Senior Indebtedness . . . . . . . . . . . . . . . 67 4.18. Margin Stock. . . . . . . . . . . . . . . . . . . 67 SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . 68 5.1. Financial Statements and Other Reports . . . . . . . . 68 5.2. Corporate Existence, Etc.. . . . . . . . . . . . . . . 71 5.3. Payment of Taxes and Claims; Tax Consolidation . . . . 71 5.4. Maintenance of Properties; Insurance . . . . . . . . . 71 5.5. Inspection; Lender Meeting . . . . . . . . . . . . . . 72 5.6. Compliance with Laws, Etc. . . . . . . . . . . . . . . 72 5.7. Further Assurances as to Future Material Subsidiaries. 72 5.8. Environmental Disclosure and Inspection. . . . . . . . 72 5.9. Hazardous Materials; Company s Remedial Action . . . . 73 5.10. Equal Security for Loans and Notes. . . . . . . . 73 SECTION 6. COMPANY S NEGATIVE COVENANTS74 6.1. Indebtedness and Contingent Obligations. . .74 6.2. Liens and Related Matters. . . . . . . . . . . . . . . 75 6.3. Investments; Joint Ventures. . . . . . . . . . . . . . 75 6.4. Restricted Junior Payments . . . . . . . . . . . . . . 76 6.5. Financial Covenants. . . . . . . . . . . . . . . . . . 77 6.6. Restriction on Fundamental Changes; Asset Sales. . . . 77 6.7. Transactions with Shareholders and Affiliates. . . . . 78 6.8. Disposal of Subsidiary Stock . . . . . . . . . . . . . 78 6.9. Amendments or Waivers of Charter Documents and Certain Other Documents: Prepayments of Subordinated Indebtedness79 SECTION 7. EVENTS OF DEFAULT. . . . 79 7.1 Failure to Make Payments When Due. . . . . . . . . . . 79 7.2. Default in Other Agreements. . . . . . . . . . . . . . 79 7.3. Breach of Certain Covenants. . . . . . . . . . . . . . 80 7.4. Breach of Warranty . . . . . . . . . . . . . . . . . . 80 7.5. Other Defaults Under Agreement or Loan Documents . . . 80 7.6. Involuntary Bankruptcy; Appointment of Receiver, etc.. 80 7.7. Voluntary Bankruptcy: Appointment of Receiver, etc.. . 81 7.8. Judgements and Attachments . . . . . . . . . . . . . . 81 7.9. Dissolution. . . . . . . . . . . . . . . . . . . . . . 81 7.10. Employee Benefit Plans. . . . . . . . . . . . . . 82 7.11. Invalidity of Guaranties or Pledge Agreement. . . 82 7.12. Change of Control . . . . . . . . . . . . . . . . 82 SECTION 8. AGENT AND BID RATE LOAN AGENT83 8.1. Appointment. . . . . . . . . . . . . . . . . . . . . . 83 8.2. Powers; General Immunity . . . . . . . . . . . . . . . 84 8.3. Representations and Warranties: No Responsibility For Appraisal of Creditworthiness. . . . . . . . . . . . . . . . . . 85 8.4. Right to Indemnity . . . . . . . . . . . . . . . . . . 85 8.5. Registered Person Treated as Owner . . . . . . . . . . 86 8.6. Successor Agent. . . . . . . . . . . . . . . . . . . . 86 SECTION 9. MISCELLANEOUS86 9.1. Assignments and Participations in Loans. . . . . . . . 86 9.2. Expenses . . . . . . . . . . . . . . . . . . . . . . . 87 9.3. Indemnity. . . . . . . . . . . . . . . . . . . . . . . 88 9.4. Set Off. . . . . . . . . . . . . . . . . . . . . . . . 89 9.5. Ratable Sharing. . . . . . . . . . . . . . . . . . . . 89 9.6. Amendments and Waivers . . . . . . . . . . . . . . . . 90 9.7. Independence of Covenants. . . . . . . . . . . . . . . 90 9.8. Notices. . . . . . . . . . . . . . . . . . . . . . . . 90 9.9. Survival of Warranties and Certain Agreements. . . . . 91 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative91 9.11. Marshalling; Payments Set Aside . . . . . . . . . 91 9.12. Severability. . . . . . . . . . . . . . . . . . . 91 9.13. Lenders Obligations Several; Independent Nature of Lenders Rights . . . . . . . . . . . . . . . . . . . . . . . . 92 9.14. Headings. . . . . . . . . . . . . . . . . . . . . 92 9.15. Applicable Law. . . . . . . . . . . . . . . . . . 92 9.16. Successors and Assigns; Subsequent Lenders. . . . 92 9.17. Consent to Jurisdiction and Service of Process. . 92 9.18. Waiver of Jury Trial. . . . . . . . . . . . . . . 93 9.19. Confidentiality . . . . . . . . . . . . . . . . . 93 9.20. Counterparts; Effectiveness . . . . . . . . . . . 93 SECTION 10. TRUSTEE . . . . . . . . 94 10.1. Appointment as Trustee. . . . . . . . . . . . . . 94 10.2. Limitation on Duties. . . . . . . . . . . . . . . 94 10.3. Limitation on Liabilities . . . . . . . . . . . . 94 10.4. Trustee s Action on Communications. . . . . . . . 94 10.5. Continental Bank Entitled to Act as Lender. . . . 95 10.6. Successor Trustee . . . . . . . . . . . . . . . . 95 EXHIBITS I FORM OF NOTICE OF BORROWING II FORM OF NOTICE OF REQUEST FOR LETTER OF CREDIT III FORM OF NOTICE OF CONVERSION/CONTINUATION IV FORM OF TERM NOTE V FORM OF REVOLVING NOTE VI FORM OF COMPLIANCE CERTIFICATE VII FORM OF SUBSIDIARY GUARANTY VIII FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM (COUNSEL TO COMPANY AND ITS SUBSIDIARIES) IX FORM OF OPINION OF O MELVENY & MYERS X FORM OF PLEDGE AGREEMENT XI FORM OF BID RATE LOAN QUOTE REQUEST XII FORM OF BID RATE LOAN QUOTE XIII FORM OF INVITATION FOR BID RATE LOAN QUOTES XIV FORM OF ASSIGNMENT AND ASSUMPTIONSCHEDULES A EXISTING LETTERS OF CREDIT (Subsection 1.1) B LENDERS; INITIAL REVOLVING LOAN and TERM LOAN COMMITMENTS; PRO RATA SHARES (Subsection 1.1; Subsection 2.1.A) C SUBSIDIARIES (Subsection 1.1; Subsection 4.1.C) D CONFLICTS AND CONSENTS (Subsection 4.2) E LIENS (Subsection 1.1) F ERISA EVENTS (Subsection 4.11) G ENVIRONMENTAL MATTERS (Subsection 4.13) H EXISTING INDEBTEDNESS AND CREDIT FACILITIES (Subsection 1.1; Subsection 4.8; Subsection 6.1) I CONTINGENT OBLIGATIONS (Subsection 1.1; Subsection 6.1) J RESTRICTIONS ON SUBSIDIARIES (Subsection 6.2)DANAHER CORPORATION CREDIT AGREEMENT This CREDIT AGREEMENT is dated as of September 7, 1990 and entered into by and among DANAHER CORPORATION, a Delaware corporation ( Company ), the FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a Lender and collectively as Lenders ) and BANKERS TRUST COMPANY ( Bankers ) as agent (in such capacity, Agent ). RECITALS WHEREAS, the parties hereto and WPI (such term and other capitalized terms being used herein as defined in Section 1 of the Agreement) have heretofore entered into the Old Credit Agreement whereby lenders agreed to extend and have extended certain credit facilities to Company; WHEREAS, the parties to the Old Credit Agreement desire to terminate the Old Credit Agreement and extinguish the commitments thereunder; WHEREAS, Company desires that Lenders extend to Company certain new credit facilities to (i) repay the loans outstanding under the Old Credit Agreement, (ii) fund the general corporate needs of Company and its Subsidiaries and (iii) provide for the issuance of Letters of Credit to support repayment obligations of Company and its Subsidiaries; WHEREAS, Company owns, directly or indirectly, all of the issued and out- standing capital stock of the Guarantors; WHEREAS, Company desires to secure its Obligations to Lenders under this Agreement by granting to Agent on behalf of Lenders on the Closing Date a first priority security interest in all of the capital stock of Easco pursuant to the Pledge Agreement; and WHEREAS, each of the Material Subsidiaries of Company (other than Easco) desires to guaranty the Obligations of Company under this Agreement by executing and delivering on the Closing Date its Subsidiary Guaranty. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Company, Lenders and Agent agree as follows: SECTION 1. DEFINITIONS 1.1. Certain Defined Terms The following terms used in this Agreement shall have the meanings indicated: Additional Lender has the meaning assigned to that term in subsection 2.11. Adjusted Certificate of Deposit Rate means, for any Interest Rate Determination Date, the sum (rounded upward to the next highest one hundredth of one percent) of (i) the rate obtained by dividing (x) the Certificate of Deposit Rate for that day by (y) a percentage equal to 100% minus the full reserve requirement percentage as specified by the Board of Governors of the Federal Reserve System that Bankers determines would be applicable on that day to a certificate of deposit of Bankers in excess of $100,000 with a maturity comparable to the Interest Period to which the interest rate being determined will apply (including, without limitation, any marginal, emergency, supplemental, special or other reserves if Bankers determines that it is required to maintain any such reserves on such day), plus (ii) the then daily net annual assessment rate as estimated by Agent for determining the current annual assessment payable by Bankers to the Federal Deposit Insurance Corporation for insuring certificates of deposit with a maturity comparable to the Interest Period to which the interest rate being determined will apply. Adjusted Eurodollar Rate means, for any Interest Rate Determination Date, the rate (rounded upward to the next highest 1/100 of one percent) obtained by dividing (i) the Eurodollar Rate for that date by (ii) a percentage equal to 100% minus the stated maximum rate of all reserves required to be maintained against Eurocurrency liabilities as specified in Regulation D (or against any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Rate Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to United States residents). Adjusted Interest Coverage Ratio means, for any period, the ratio of (i) Consolidated Adjusted EBDITA (less Net Capital Expenditures made during the period of determination) to (ii) Consolidated Net Interest Expense. Adjusted Leverage Ratio means, for any date of determination, the ratio of (i) Consolidated Total Debt and Guarantees to (ii) Adjusted Tangible Net Worth. Adjusted Tangible Net Worth means, as at any date of determination, the sum of the capital stock (excluding any capital stock of Company that, by its terms or by the terms of any Securities into which it is convertible or exchangeable, is or upon the happening of an event or the passage of time would be, required to be repurchased, including at the option of the holder, in whole or in part, or have, or upon the happening of an event would have, a redemption or similar payment due) and additional paid-in capital plus retained earnings (or minus accumulated deficit) of Company and its Subsidiaries on a consolidated basis, minus intangible assets (including, without limitation, all write-ups (other than write-ups resulting from foreign currency transactions)) subsequent to the Closing Date in the book value of any asset owned by such Person or consolidated Subsidiary of such Person, unamortized deferred charges, unamortized debt discount and expense, franchises, patents, patent applications, licenses, trade marks, service marks, trade names and brand names (but not goodwill associated with acquisitions made by Company or any of its Subsidiaries of operating businesses or operating assets, which shall be included in Adjusted Tangible Net Worth). Affected Lender has the meaning assigned to that term in subsection 2.8.A.(ii). Affected Loan has the meaning assigned that term in subsection 2.8.A.(ii). Affiliate , as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, control (including with correlative meanings, the terms controlling , controlled by and under common control with ), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. Agent means Bankers, in its capacity as Agent hereunder and under the other Loan Documents. Agreement means this Credit Agreement dated as of September 7, 1990, as it may be amended, supplemented or otherwise modified from time to time. Aggregate Amounts Due has the meaning assigned to that term in subsection 9.5. Aggregate Excess Proceeds means all amounts received by Company or any of its Subsidiaries from and after the Closing Date in respect of Cash Proceeds of Asset Sales, Condemnation Proceeds and Insurance Proceeds (other than (i) amounts received pursuant to Receivables Purchase Agreement dated as of September 30, 1988 between the Jacobs Manufacturing Company and Continental Bank, as amended, and (ii) any residual interest in the securities issued by Allied Steel & Tractor Products, Inc. or its parent corporation) that exceed, in the aggregate, an amount equal to the difference between $50,000,000 and the fair market value of all assets distributed to Company s shareholders pursuant to subsection 6.6.E. Applicable Base Rate Pricing Margin shall mean zero; provided that, upon notice to Company by Agent of the commencement of an HLT Classification Period, the Applicable Base Rate Pricing Margin shall become and remain 1.00% per annum for so long as such HLT Classification Period continues. Applicable CD Rate Pricing Margin means: during any Pricing Period for which Company s Pricing Level is Pricing Level I, 0.4375% per annum; during any Pricing Period for which Company s Pricing Level is Pricing Level II, 0.500% per annum; and during any Pricing Period for which Company s Pricing Level is Pricing Level III, 0.8750% per annum; provided that, upon notice to Company by Agent of the commencement of an HLT Classification Period, the Applicable CD Rate Pricing Margin shall become and remain 2.00% per annum for so long as such HLT Classification Period continues. Applicable Commitment Fee Percentage means: during any Pricing Period for which Company s Pricing Level is Pricing Level I, 0.10% per annum; during any Pricing Period for which Company s Pricing Level is Pricing Level II, 0.10% per annum; and during any Pricing Period for which Company s Pricing Level is Pricing Level III, 0.25% per annum; provided that, upon notice to Company by Agent of the commencement of an HLT Classification Period, the Applicable Commitment Fee Percentage shall become and remain 0.40% per annum for so long as such HLT Classification Period continues. Applicable Eurodollar Rate Pricing Margin means: during any Pricing Period for which Company s Pricing Level is Pricing Level I, 0.3125% per annum; during any Pricing Period for which Company s Pricing Level is Pricing Level II, 0.4375% per annum; and during any Pricing Period for which Company s Pricing Level is Pricing Level III, 0.7500% per annum; provided that, upon notice to Company by Agent of the commencement of an HLT Classification Period, the Applicable Eurodollar Rate Pricing Margin shall become and remain 2.00% per annum for so long as such HLT Classification Period continues. Applicable Facility Fee Percentage means: during any Pricing Period for which Company s Pricing Level is Pricing Level I, 0.100% per annum; during any Pricing Period for which Company s Pricing Level is Pricing Level II, 0.100% per annum; and during any Pricing Period for which Company s Pricing Level is Pricing Level III, 0.125% per annum. Applicable Letter of Credit Fee Percentage means: during any Pricing Period for which Company s Pricing Level is Pricing Level I, 0.50% per annum; during any Pricing Period for which Company s Pricing Level is Pricing Level II, 0.50% per annum; and during any Pricing Period for which Company s Pricing Level is Pricing Level III, 0.75% per annum; provided that, upon notice to Company by Agent of the commencement of an HLT Classification Period, the Applicable Letter of Credit Fee Percentage shall become and remain 2.00% per annum for so long as such HLT Classification Period continues. Asset Sale means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its wholly-owned Subsidiaries of (i) any of the stock of any of Company s Subsidiaries; (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries; or (iii) any other assets (including, without limitation, any assets that do not constitute substantially all of the assets of any division or line of business of Company or any of its Subsidiaries), which in the case of clause (i), (ii) or (iii) above individually has a Fair Market Value in excess of $250,000 (it being understood that if the Fair Market Value thereof exceeds $250,000, the entire value and not just the portion in excess of $250,000 shall be subject to subsection 2.6.B.(i)(a)), other than (a) the sale in the ordinary course of business of personal property held for resale in the ordinary course of business of Company or any of its Subsidiaries and (b) sales of obsolete or worn out property to the extent the proceeds of such sales are applied to the purchase of replacement assets of the same or similar type that are purchased, ordered or contracted for within six months of the date of such sale. Bankers has the meaning assigned to that term in the introduction to this Agreement. Bankruptcy Code means Title 11 of the United States Code entitled Bankruptcy as now and hereafter in effect, or any successor statute. Base Rate means, at any time, the highest of (x) the Prime Rate and (y) the rate that is one half of one percent in excess of the Federal Funds Effective Rate. Base Rate Loans means Loans made by Lenders pursuant to subsections 2.1.A, 2.1.B and 2.2.A and bearing interest at rates determined by reference to the Base Rate as provided in subsection 2.3.A. Benefitted Subsidiary means, with respect to any Letter of Credit, the Person for whose benefit such Letter of Credit was issued, which shall be either Company or one of its Subsidiaries, as specified by Company in the request for issuance of such Letter of Credit made pursuant to subsection 2.4.B. Bid Rate Loan Agent means either (i) if Company has appointed Continental Bank to act as Bid Rate Loan Agent hereunder and Continental Bank has accepted such appointment, for so long as Continental Bank is acting as Bid Rate Loan Agent hereunder, Continental Bank in its capacity as Bid Rate Loan Agent hereunder, or (ii) so long as Company elects to act as Bid Rate Loan Agent hereunder, Company in its capacity as Bid Rate Loan Agent; provided that the provisions of Section 8 shall not apply to the rights and duties of Company acting as Bid Rate Loan Agent. Anything contained herein to the contrary notwithstanding, Continental Bank shall have no rights, duties or obligations in the capacity of Bid Rate Loan Agent hereunder until such time as it may be appointed to act as Bid Rate Loan Agent pursuant to and in accordance with the terms of Section 8. Bid Rate Loans means Loans made by one or more Lenders to Company pursuant to subsection 2.1.E. Bid Rate Loan Interest Payment Date means, with respect to any Bid Rate Loan, the last day of the Bid Rate Loan Interest Period applicable to such Bid Rate Loan. Bid Rate Loan Interest Period means, with respect to any Bid Rate Loans, the period commencing on the date such Bid Rate Loans are made and ending on any date not less than 7 and not more than 180 days thereafter, as Company may select pursuant to subsection 2.1.E.(ii). Notwithstanding the foregoing, (i) if any Bid Rate Loan Interest Period would otherwise end after the Term Loan Funding Date, such Bid Rate Loan Interest Period shall end on the Term Loan Funding Date, (ii) each Bid Rate Loan Interest Period which would otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day and (iii) subject to clause (ii) above and notwithstanding clause (i) above, no Bid Rate Loan Interest Period for any Bid Rate Loans shall have a duration of less than 7 days or greater than 180 days and, if the Bid Rate Loan Interest Period for any Bid Rate Loans would otherwise be a shorter or longer period, such Bid Rate Loans shall not be available hereunder. Bid Rate Loan Quote means an offer by a Lender to make Bid Rate Loans, substantially in the form of Exhibit XII annexed hereto, delivered to Trustee by such Lender pursuant to subsection 2.1.E. Bid Rate Loan Quote Request means a request by Company to each Lender to submit Bid Rate Loan Quotes, substantially in the form of Exhibit XI annexed hereto, delivered by Company to Trustee pursuant to subsection 2.1.E. Bid Rate Loan Shortfall Amount means the amount, if any, by which the amount of Bid Rate Loans requested in a Bid Rate Loan Quote Request exceeds the amount equal to (i) the aggregate amount of Bid Rate Loans offered in any Bid Rate Loan Quotes delivered by Lenders relating to such Bid Rate Loan Quote Request minus (ii) the amount of Bid Rate Loans so offered which are rejected in good faith by Company. Bid Rate Loan Shortfall Date means a proposed Funding Date of Bid Rate Loans in respect of which a Bid Rate Loan Shortfall Amount exists. Bid Rate Register has the meaning assigned thereto in subsection 2.1.E. (xii). Business Day means (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day that is a legal holiday under the laws of the State of New York or, with respect to Bid Rate Loans, the State of Illinois, or is a day on which banking institutions located in either such state are authorized or required by law or other governmental action to close, and (ii) with respect to all notices, determinations, fundings and payments in connection with Eurodollar Rate Loans, any day that is a Business Day described in clause (i) and that is also a day for trading by and between banks in Dollar deposits in the applicable interbank Eurodollar market. Capital Expenditure Credit means, as at the end of any fiscal quarter of Company, twenty-five percent of the Capital Expenditure Cushion calculated as at the most recent Cushion Determination Date, plus the unused portion, if any, of the Capital Expenditure Credits attributable to the preceding fiscal quarters of Company occurring since the immediately preceding Cushion Determination Date; provided that, the Capital Expenditure Credit for any fiscal quarter shall not exceed the amount by which Consolidated Capital Expenditures made during the four fiscal quarter period ending at the end of the fiscal quarter as at the end of which such determination is being made, exceeded total depreciation of Company and its Subsidiaries for such four fiscal quarter period; provided further that the Capital Expenditure Credit for any fiscal quarter of Company occurring during 1990 shall be zero. Capital Expenditure Cushion means, for the most recent Cushion Determination Date, the amount by which Consolidated Adjusted EBDITA minus Net Capital Expenditures for the fiscal year ending on such Cushion Determination Date exceeded three times the Consolidated Net Interest Expense for such period. Capital Lease , as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. Cash means money, currency or a credit balance in a Deposit Account. Cash Equivalents means (i) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by any agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of 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 a rating not less than one full grade below the highest rating obtainable from either Standard & Poor s Corporation or Moody s Investors Service, Inc.; (iii) commercial paper maturing no more than nine months from the date of creation thereof and, at the time of acquisition, having a rating of at least A-2 from Standard & Poor s Corporation or at least P-2 from Moody s Investors Service, Inc. or any money-market type obligation of an issuer the commercial paper of which has such a rating, which obligation matures no later than one year from the date of creation thereof; (iv) certificates of deposit (whether or not Eurodollar in nature) or bankers acceptances maturing within one year from the date of acquisition thereof issued by any Lender or any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any foreign country having combined capital and surplus of not less than $250,000,000 (each such commercial bank herein called a Cash Equivalent Bank ); (v) Eurodollar time deposits having a maturity of less than one year purchased directly from any Cash Equivalent Bank (whether such deposit is with such Cash Equivalent Bank or any other Cash Equivalent Bank); and (vi) repurchase agreements and reverse repurchase agreements with any Lender relating to marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; provided that the terms of such agreements comply with the guidelines set forth in the Federal Financial Institutions Examination Council Supervisory Policy -- Repurchase Agreements of Depository Institutions with Securities, Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985 (the Supervisory Policy ). Cash Proceeds means, with respect to any Asset Sale, cash payments (including any cash received by way of deferred payment pursuant to, or monetization of, a note receivable or otherwise (other than the portion of such deferred payment constituting interest), but only as and when so received) received from such Asset Sale. CD Rate Loans means Loans bearing interest at rates determined by reference to the Adjusted Certificate of Deposit Rate as provided in subsection 2.3.A. Certificate of Deposit Rate means, for any Interest Rate Determination Date, the arithmetic average (rounded upward to the nearest one hundredth of one percent) of the consensus bid rates determined by each Reference Lender as of approximately 10:00 A.M. (New York time) on that date of two or more New York certificate of deposit dealers of recognized standing selected by such Reference Lender for the purchase at face value from such Reference Lender in New York of certificates of deposit in amounts comparable to the outstanding principal amount of the CD Rate Loans of such Reference Lender for which the Adjusted Certificate of Deposit Rate is then being determined with maturities comparable to the Interest Period to which the Adjusted Certificate of Deposit Rate being determined will apply. If any Reference Lender fails to provide its bid rate to Agent, the Certificate of Deposit Rate shall be determined on the basis of the bid rate of the other Reference Lender. Change of Control Event means such time as a Schedule 13D has been filed, or should have been filed, with respect to a Person or group (as defined in the rules (the Rules ) promulgated under Section 13 of the Exchange Act) which Person or group, as the case may be, owns beneficially (as such term is defined in the Rules) or of record at such time a greater number of shares of Company Common Stock than does Steven M. Rates and Mitchell P. Rales collectively. Closing Date means the date on or before September 30, 1990, on which the initial Loans are made. Commercial Paper means a short-term instrument issued by Company evidencing Indebtedness commonly known as commercial paper, with a maximum maturity of 270 days from the date of issuance thereof. Commitment Letter means the letter agreement dated August 24, 1990 by and between Company and Bankers. Commitment Termination Date means the earliest of (i) the fifth anniversary of the Closing Date, (ii) if earlier than the Term Loan Funding Date, the date on which all Revolving Loans, Swingline Loans and Bid Rate Loans are paid in full and the Revolving Loan Commitments are reduced to zero, and (iii) the date on which all Term Loans are paid in full. Commitments means the commitments of Lenders to make Loans as set forth in subsections 2.1 and 2.2. Company has the meaning given that term in the introduction to this Agreement. Company Common Stock means the common stock of Company, par value $.01 per share. Compliance Certificate means a certificate substantially in the form annexed hereto as Exhibit VI delivered to Lenders by Company pursuant to subsection 5.1.C. Condemnation Proceeds means any cash payments in respect of compensa- tion, awards, damages, rights of action (including, without limitation, causes of action arising in tort or contract and causes of action for fraud or concealment of a material fact) and proceeds awarded to Company or any of its Subsidiaries by reason of any such taking or damage that have not been reinvested in Productive Assets. Consolidated Adjusted EBDITA means, for any period, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) provisions for taxes based on income and intercompany dividends and transfers, (iii) Consolidated Net Interest Expense, (iv) total depreciation expense, (v) total amortization expense, and (vi) other unusual and nonrecurring non-cash items reducing Consolidated Net Income less other unusual and nonrecurring non-cash items increasing Consolidated Net Income, all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP. Consolidated Capital Expenditures means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated balance sheet of Company and its Subsidiaries) by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in additions to property, plant or equipment or comparable items reflected in the consolidated statements of cash flows of Company and its Subsidiaries. Consolidated Current Assets means, as at any date of determination, the sum of (x) the total assets of Company and its Subsidiaries on a consolidated basis that properly may be classified as current assets in conformity with GAAP, with most domestic inventories calculated on a LIFO basis, plus (y) during the Revolving Period, the unutilized Revolving Loan Commitments. Consolidated Current Liabilities means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis that properly may be classified as current liabilities in conformity with GAAP, provided that the Current Maturities of the Term Loans, the Revolving Loans, the Swingline Loans, and the Bid Rate Loans which are classified as a current liability in conformity with GAAP shall be excluded from the definition of Consolidated Current Liabilities. Consolidated Net Income means, for any period, the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period in conformity with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest (except for Joint Ventures in which Company or any of its Subsidiaries has effective managerial control of the operations of such Joint Venture and has the ability to cause such Joint Venture to become a Subsidiary of Company by Company or such Subsidiary exercising an option that is subject to no contingency outside the exclusive control of Company and its Subsidiaries), except to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during such period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person s assets are acquired by Company or any of its Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (iv) any after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan and (v) without duplication, any extraordinary gain or loss for such period determined in conformity with GAAP, and, in addition, shall include, without limitation, gains or losses resulting from the sale, conversion or other disposition of Investments and other material assets of Company and its Subsidiaries other than in the ordinary course of business, or from the repayment of Indebtedness. Consolidated Net Interest Expense means, for any twelve-month period, total interest expense (net of interest income) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, including, without limitation, all capitalized interest, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under Interest Rate Agreements, determined in conformity with GAAP. Consolidated Total Debt means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness (including, without limitation, the Loans) of Company and its Subsidiaries, determined on a consolidated basis in conformity with GAAP. Consolidated Total Debt and Guarantees means Consolidated Total Debt plus the aggregate amount of the Contingent Obligations of Company and its Subsidiaries, other than the Subsidiary Guaranties and those certain Contingent Obligations set forth on Schedule I annexed hereto that are specifically excluded from the calculation of the Adjusted Leverage Ratio. Continental Bank means Continental Bank, National Association. Contingent Obligation , as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof and (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings thereunder. Contingent Obligations shall include, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co- making, discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligations of another through any agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (y) to maintain the solvency or any balance sheet item, level of income or financial condition of another, if in the case of any agreement described under subclauses (x) or (y) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported. Contractual Obligation , as applied to any Person, means any provision of any security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject. Credit Party means each of Company, all of the Guarantors and, for so long as the Pledge Agreement is in effect, Easco; and Credit Parties means all such Persons collectively. Current Maturities means, as applied to any Person as at any date of determination, all payments of principal due under the terms of any Indebtedness of such Person within twelve calendar months after that date. Cushion Determination Date means the last day of the most recently ended fiscal year of Company. Date of Determination means, for purposes of determining the applicable Pricing Level on any Pricing Level Calculation Date, the last day of the most recently ended fiscal quarter of Company. Deposit Account means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit. Dollars and the sign $ means the lawful money of the United States of America. Easco means Easco Hand Tools, Inc., a Delaware corporation and a wholly owned Subsidiary of Company. Easco Debt means the 12-7/8% Senior Subordinated Notes due September 1, 1998 of Easco in the form issued pursuant to that certain Indenture dated September 1, 1988 by and between Easco and Maryland National Bank, as Trustee, as in effect on the Closing Date. Employee Benefit Plan means any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multi employer Plan, which is maintained for employees of Company or any of its ERISA Affiliates. Environmental Claim means any notice of violation, claim, demand, abatement order or other order by any governmental authority or any Person for any damage, including, without limitation, personal injury (including sickness, disease or death), tangible or intangible property damage, contribution, indemnity, indirect or consequential damages, damage to the environment, nuisance, pollution, contamination or other adverse effects on the environment, or for fines, penalties or restrictions, resulting from or based upon (i) the existence of a Release (whether sudden or non- sudden or accidental or non-accidental) of, or exposure to, any Hazardous Material in, into or onto the environment at, in, by, from or related to any Facility, (ii) the use, handling, transportation, storage, treatment or disposal of Hazardous Materials in connection with the operation of any Facility, or (iii) the violation, or alleged violation, of any statutes, ordinances, orders, rules, regulations, permits, licenses or authorizations of or from any governmental authority, agency or court relating to environmental matters connected with the Facilities. Environmental Laws means all laws relating to environmental matters, including, without limitation, those relating to (i) fines, orders, injunctions, penalties, damages, contribution, cost recovery compensation, losses or injuries resulting from the Release or threatened Release of Hazardous Materials and to the generation, use, storage, transportation, or disposal of Hazardous Materials, in any manner applicable to Company or any of its Subsidiaries or any or their respective properties, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.) and (ii) environmental protection, including, without limitation, the National Environmental Policy Act (42 U.S.C. Section 4321 et seq.) and comparable state laws, each as amended or supplemented, and any similar or analogous local, state and federal statutes and regulations promulgated pursuant thereto, each as in effect as of the date of determination. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute. ERISA Affiliate means Company and (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which Company is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which Company is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which Company, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. ERISA Event means (i) the occurrence of a reportable event within the meaning of Section 4043 of ERISA (other than a reportable event as to which the requirement for thirty-day notice to the PBGC has been waived) with respect to any Pension Plan, (ii) failure with respect to any Pension Plan to meet the minimum funding standard of Section 412 of the Internal Revenue Code or of Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Internal Revenue Code or Section 302(e) of ERISA; (iii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA) if such termination would result in liability that would constitute a Material Adverse Effect; (iv) the withdrawal by Company or any ERISA Affiliate from a Pension Plan during a plan year for which it was a substantial employer within the meaning of Section 4001(a)(2) of ERISA resulting in liability of any such entity pursuant to Section 4062(e) or 4063 or ERISA which constitutes a Material Adverse Effect; (v) the institution by the PBGC of proceedings to terminate a Pension Plan, or for the appointment of a trustee to administer a Pension Plan, pursuant to Section 4042 of ERISA; (vi) the withdrawal by Company or any ERISA Affiliate in a complete or partial withdrawal from a Multiemployer Plan, or the receipt by Company or any ERISA Affiliate of notice from a Multi employer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA where any such event results in liability which constitutes a Material Adverse Effect; (vii) the imposition on Company or any ERISA Affiliate of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Sections 502(c), (i) or (l) or 4071 of ERISA where liability for such charges constitutes a Material Adverse Effect; (viii) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan or the assets thereof, or against Company or any ERISA Affiliate in connection with any such plan where liability for such claim would constitute a Material Adverse Effect; (ix) the existence, as of any valuation date for a Pension Plan, of an excess of the present value (determined on the basis of reasonable assumptions used by the independent actuary for such Pension Plan) of the accrued benefits (whether or not vested) of the participants and beneficiaries of such Pension Plan over the fair market value of the assets of such Pension Plan, if such excess, when added to the excesses calculated in the same manner for each of the other Pension Plans as of the most recently preceding valuation date for each such other Pension Plan, exceeds $20,000,000; or (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of a Pension Plan to fail to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code. Eurodollar Rate means, for any Interest Rate Determination Date, the arithmetic average (rounded upwards to the nearest 1/16 of 1%) of the offered quotation, if any, to first class banks in the Eurodollar market by each of the Reference Lenders for Dollar deposits of amounts in immediately available funds comparable to the principal amount of the Eurodollar Rate Loan of the Reference Lender for which the Eurodollar Rate is being determined with maturities comparable to the Interest Period for which such Eurodollar Rate will apply as of approximately 10:00 A.M. (New York time) two Business Days prior to the commencement of such Interest Period. If any Reference Lender fails to provide its offered quotation to Agent, the Eurodollar Rate shall be determined on the basis of the offered quotation of the other Reference Lender. Eurodollar Rate Loans means Loans bearing interest at rates determined by reference to the Adjusted Eurodollar Rate as provided in subsection 2.3.A. Event of Default means each of the events set forth in Section 7. Excess Investments in Securities means, as at any date of determination, the amount by which the aggregate Investments of Company and its Subsidiaries in Marketable Securities and Non-Marketable Securities exceeds the amount of such Investments permitted by subsection 6.3.B hereof. Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. Exchange Rate means, on any date, when an amount expressed in a currency other than Dollars is to be determined with respect to any Letter of Credit, the nominal rate of exchange of the applicable Issuing Lender in the New York foreign exchange market for the purchase by such Issuing Lender (by cable transfer) of such currency in exchange for Dollars at 12:00 noon (New York City time), one Business Day prior to such date, expressed as the number of units of such currency per $1.00. Existing Indebtedness means Indebtedness of Company and its Subsidiaries existing on the Closing Date and listed in Schedule H annexed hereto. Existing Letters of Credit means each of the Letters of Credit issued pursuant to the Old Credit Agreement and outstanding on the Closing Date naming Company as account party that is listed on Schedule A annexed hereto. Facilities means any and all real property (including, without limitation, all buildings, fixtures or other improvements located thereon) now, or heretofore, owned, leased, operated or used (under permit or otherwise) by Company or any of its Subsidiaries or any of their respective predecessors. Fair Market Value means, with respect to any asset sale, the price that would be paid by a willing buyer to a willing seller in a transaction effected at arms length. Federal Funds Effective Rate means for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three federal funds brokers of recognized standing selected by Agent. Financial Statements means the audited financial statements, and the notes attached thereto, of Company and its Subsidiaries prepared on a consolidated basis for the fiscal year ending December 31, 1989, as delivered to Agent and Lenders prior to the date of execution of this Agreement. First Chicago means The First National Bank of Chicago. Funding Date means the date of the funding of a Loan or the date of the issuance of a Letter of Credit, as applicable. GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination. Guarantor means each Material Subsidiary, other than, for so long as the Easco Debt is outstanding, Easco. Guaranty means any of the Subsidiary Guaranties, and Guaranties means all such guaranties, collectively. Hazardous Materials means (i) any chemical, material or substance defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste, or toxic substances or words of similar import under any applicable Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, any flammable substances or explosives, any radioactive materials, any hazardous wastes or substances, any toxic wastes or substances or any other materials or pollutants that (a) pose a hazard to any property of Company or any of its Subsidiaries or to Persons on or about such property or (b) cause such property to be in violation of any Environmental Laws; (iii) friable asbestos, urea formaldehyde foam insulation, electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million; and (iv) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority. HLT Classification Date means any date on which Agent determines, or is advised by any Lender that such Lender has received notice from any Regulatory Authority to the effect, that the Loans or Commitments hereunder should be or are classified as a highly leveraged transaction pursuant to any objective criteria included in guidelines established by any Regulatory Authority (whether or not having the force of law and including without limitation those announced or published prior to the date of this Agreement). HLT Classification Period means any period commencing on an HLT Classification Date and ending on the day that Agent first determines that the Loans or Commitments previously classified as a highly leveraged transaction by any Regulatory Authority, or that previously should have been classified as a highly leveraged transaction , no longer is or should be so classified. Indebtedness , as applied to any Person, means, without duplication (i) all indebtedness for borrowed money, (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred with respect to any Employee Benefit Plan) which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof, or (b) evidenced by a note or similar written instrument, and (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; provided, however, Indebtedness shall not include obligations incurred in the ordinary course of business with respect to the deferred purchase price of property that are (x) noninterest-bearing, (y) not evidenced by a note or similar written instrument and (z) mature no more than nine months from the date of incurrence of the obligation in respect thereof. Indemnitee has the meaning assigned to that term in subsection 9.3. Insurance Proceeds means any cash payments received by Company or any of its Subsidiaries under any of the insurance policies maintained pursuant to subsection 5.4 that have not been reinvested in Productive Assets. Interest Payment Date means, with respect to any CD Rate Loan or Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of longer than ninety days in respect of a CD Rate Loan or three months in respect of a Eurodollar Rate Loan, Interest Payment Date shall also include each Interim Payment Date for such Interest Period. Interest Period means any interest period applicable to a Loan as determined pursuant to subsection 2.3.B. Interest Rate Agreement means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect Company or any of its Subsidiaries against fluctuations in interest rates; provided that the calculation of payments for early termination shall be made on a reasonable basis in accordance with customary industry practices; provided further that all such obligations with respect to payments for early termination (guaranteed or unguaranteed) as may have been incurred shall constitute Indebtedness. Interest Rate Determination Date means each date for calculating the Eurodollar Rate or Certificate of Deposit Rate, as the case may be, for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period for any Eurodollar Rate Loan and the first day of the related Interest Period for a CD Rate Loan. Interim Payment Date means, (x) for each Interest Period applicable to a CD Rate Loan that is longer than ninety days, the date that is ninety days after the commencement of that Interest Period and each date that is ninety days after an Interim Payment Date and (y) for each Interest Period applicable to a Eurodollar Rate Loan that is longer than three months, the date that is three months after the commencement of that Interest Period and each date that is three months after an Interim Payment Date. Internal Revenue Code means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter. Investment , as applied to any Person, means (i) any direct or indirect purchase or other acquisition by that Person of, or a beneficial interest in, stock or other Securities of any other Person other than a Subsidiary, or (ii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by that Person to any other Person other than a Subsidiary, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. Invitation for Bid Rate Loan Quotes means an invitation to each Lender to submit a Bid Rate Loan Quote, substantially in the form of Exhibit XIII annexed hereto, delivered by Bid Rate Loan Agent to such Lender pursuant to subsection 2.1.E with respect to a Bid Rate Loan Quote Request. Issuing Lender means, with respect to any Letter of Credit, the Lender that agrees or is otherwise obligated to issue such Letter of Credit, determined as provided in subsection 2.4.B. Joint Venture means a joint venture, partnership or other similar arrange- ment, whether in corporate, partnership or other legal form; provided that, as to any such arrangement in corporate form, such corporation shall not, as to any Person of which such corporation is a Subsidiary, be considered to be a Joint Venture to which such Person is a party. Lender and Lenders means the persons identified as Lenders and listed on the signature pages of this Agreement and Additional Lender, together with their successors and permitted assigns pursuant to subsection 9.1; provided that the term Lenders when used in the context of a particular Commitment, shall mean those Lenders having that Commitment. Letter of Credit Commitment means the commitment of Issuing Lenders to issue Letters of Credit as set forth in subsection 2.4.A. Letter of Credit Usage means, as at any date of determination, with respect to all outstanding Letters of Credit, the sum of (i) the maximum aggregate amount which is or at any time thereafter may become available for drawing under such Letters of Credit plus (ii) the aggregate amount of all drawings under such Letters of Credit honored by Issuing Lenders and not theretofore reimbursed by Company; provided, however, the Letter of Credit Usage of an Issuing Lender shall be deemed to be only such portion of the Letter of Credit Usage of such Issuing Lender which Lenders have not bought by participation pursuant to subsection 2.4.A. For purposes of this definition, any amount described hereunder which is denominated in a currency other than Dollars shall be valued based on the applicable Exchange Rate for such currency as of such date of determination. Letters of Credit means the Existing Letters of Credit and the standby letters of credit or similar instruments issued pursuant to subsection 2.4 for the purpose of supporting (i) workers compensation liabilities of Company or any of its Subsidiaries, (ii) the obligations of third party insurers of Company or any of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring third party insurers to obtain such letters of credit, (iii) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue or development bonds or financings, (iv) obligations with respect to Capital Leases or Operating Leases of Company or any of its Subsidiaries, (v) per- formance, payment, deposit or surety obligations of Company or any of its Subsidiaries, in any case if required by law or governmental rule or regulation or in accordance with custom and practice in the industry, or (vi) obligations of Company or any of its Subsidiaries in respect of payment of customary indemnification and purchase price adjustment obligations incurred in connection with Asset Sales and other sales of assets. Lien means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest). Loan or Loans means one or more of the Term Loans, the Revolving Loans, the Swingline Loans and the Bid Rate Loans, or any combination thereof. Loan Documents means this Agreement, the Notes, the Commitment Letter, the Pledge Agreement, the Subsidiary Guaranties, the Letters of Credit and any applications for, or reimbursement agreements and other documents or certificates executed in favor of an Issuing Lender relating to, the Letters of Credit. Margin Stock has the meaning assigned to that term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. Marketable Securities means shares of capital stock that trade on the New York Stock Exchange, the American Stock Exchange or the London Stock Exchange, and bonds, debentures, notes and other evidences of Indebtedness that bear ratings issued by Standard & Poor s Corporation or Moody s Investors Service, Inc. and that trade freely in the secondary markets established for such respective types of Indebtedness. Material Adverse Effect means (i) a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of Company and its Subsidiaries (taken as a whole), (ii) the impairment of the ability of any Credit Party to perform its Obligations, or (iii) the impairment of the ability of Agent or Lenders to enforce the Obligations. Material Subsidiary means each Subsidiary of Company now existing or hereof acquired or formed by Company which (x) for the most recent fiscal year of Company accounted for more than five percent of the consolidated revenues of Company or (y) as at the end of such fiscal year, was the owner of more than five percent of the consolidated assets of Company. Minimum Adjusted Tangible Net Worth means $240,164,000. Such amount shall increase on the first day of each fiscal quarter of Company by an amount equal to fifty percent of the Consolidated Net Income of Company, if positive, calculated as of the last day of the immediately preceding fiscal quarter. Multiemployer Plan means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which Company or any ERISA Affiliate is, or ever has, contributed or to which Company or any ERISA Affiliate has, or ever has had, an obligation to contribute. Net Cash Proceeds means, in the case of any Asset Sale, Cash Proceeds, net of (i) bona fide direct costs of sale (including without limitation (a) taxes reasonably estimated to be actually payable as a result of such Asset Sale within two years of the date of the Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans and other Obligations) required to be repaid under the terms thereof as a result of such Asset Sale, and (c) brokerage fees) and (ii) appropriate amounts provided by Company as a reserve, in accordance with GAAP, against any liabilities directly associated with the assets sold in such Asset Sale and retained by Company or any of its Subsidiaries after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such Asset Sale. Net Capital Expenditures means, for any twelve-month period, Consolidated Capital Expenditures made during the period of determination, minus the Capital Expenditure Credit calculated as at the last day of the most recently ended fiscal quarter of Company. Non-Marketable Securities means capital stock, shares, bonds, debentures, notes and other evidences of indebtedness that do not satisfy the definition of Marketable Securities set forth in this Agreement. Notes means one or more of the Term Notes and Revolving Notes or any combination thereof. Notice of Bid Rate Loan Borrowing has the meaning assigned to that term in subsection 2.1.E. Notice of Borrowing means a notice substantially in the form of Exhibit I annexed hereto with respect to a proposed borrowing. Notice of Conversion/Continuation means a notice substantially in the form of Exhibit III annexed hereto with respect to a proposed conversion or continuation. Notice of Request for Letter of Credit means a notice substantially in the Form of Exhibit II annexed hereto with respect to a request for issuance of a Letter of Credit. Obligations means all obligations of every nature (including Contingent Obligations) of each Credit Party from time to time owed to Agent or Lenders or any of them under the Loan Documents. Officers Certificate means, as applied to any corporation, a certificate executed on behalf of such corporation by its Chairman of the Board (if an officer) or its President or one of its financial officers, who must hold the rank of at least vice president or secretary, and by its chief financial officer, controller or treasurer; provided that every Officers Certificate with respect to the compliance with a condition precedent to the making of any Loans hereunder shall include (i) a statement that the officer or officers making or giving such Officers Certificate have read such condition and any definitions or other provisions contained in this Agreement relating thereto, (ii) a statement that, in the opinion of the signers and on behalf of the Person for whom such certificate is being delivered, they have made or have caused to be made such examination or investigation as is necessary to enable them to determine whether or not such condition has been complied with, and (iii) a statement that, based on such investigation, such signers believe such condition has been complied with. Old Credit Agreement means that certain Amended and Restated Credit Agreement dated as of June 16, 1989 among Company, WPI, the lenders listed therein, Bankers, as agent and as co-manager, National Westminster Bank USA, as co-manager and Continental Bank, as trustee, as amended. Operating Lease means, as applied to any Person, any lease (including, without limitation, leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capital Lease, other than any such lease under which such Person is the lessor. PBGC means the Pension Benefit Guaranty Corporation (or any successor thereto). Pension Plan means any Employee Benefit Plan that is subject to the provisions of Title IV of ERISA and that is maintained for employees of Company or any of its ERISA Affiliates. Permitted Encumbrances means the following types of Liens: (i) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by subsection 5.3; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP or applicable statute shall have been made therefor; (iii) Liens (other than any Lien imposed under Section 401(a)(29) or 412(n) of the Internal Revenue Code or under ERISA or arising from or as a result of any Environmental Laws) incurred or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations (but not any Liens or obligations arising from or as a result of any Environmental Law), surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), the existence of which individually or in the aggregate would not have a Material Adverse Effect; (iv) Liens with respect to deposits made in connection with social security withholding taxes, which taxes are paid within five Business Days of the date such deposits are required to be paid over; (v) any attachment or judgment Lien not in excess of $5,000,000 individually or in the aggregate unless the judgment it secures shall, within thirty days after the entry thereof, not have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within thirty days after the expiration of any such stay; (vi) leases or subleases granted to others not interfering in any material respect with the business of Company or any of its Subsidiaries; (vii) easements, rights-of-way, restrictions, minor defects, encroach- ments or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries; (viii) any interest or title of a lessor or sublessor under any lease; (ix) Liens arising from filing UCC financing statements relating solely to the specific asset subject to a lease or the specific assets sold pursuant to a receivables financing facility established for the benefit of Company or any of its Subsidiaries; (x) Liens to secure Indebtedness incurred by Company or any of its Subsidiaries to finance the acquisition of the assets purchased with the proceeds of such Indebtedness; provided that the Lien encumbers only the assets so purchased and is created within ninety days of the date of such acquisition; (xi) 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 incurred in the ordinary course of business; and (xii) Liens described in Schedule E annexed hereto. Person means and includes natural persons, corporations, limited partnerships, general partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. Pledge Agreement means the Pledge Agreement to be executed and delivered by Company on the Closing Date, substantially in the form of Exhibit X annexed hereto, as such Pledge Agreement may hereafter be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof and thereof. Potential Event of Default means, as of any date of determination, a condition or event that, after the giving of notice or lapse of time or both, would constitute an Event of Default if that condition or event were not cured or removed within any applicable grace or cure period. Prescribed Forms shall mean such duly executed form(s) or statement(s), and in such number of copies, which may, from time to time, be prescribed by law and which pursuant to applicable provisions of (a) any income tax treaty between the United States of America and the country of residence of the Lender providing the form(s) or statement(s), (b) the Internal Revenue Code of 1986, as amended or (c) any applicable rule or regulation under the Internal Revenue Code of 1986, as amended, permit Company to make payments hereunder for the account of such Lender free of deduction or withholding of income or similar taxes. Pricing Level means for any Pricing Period, Pricing Level I, Pricing Level II, or Pricing Level III, as may be in effect for such Pricing Period. The Pricing Level in effect from the Closing Date to but excluding the first Pricing Level Calculation Date following the Closing Date shall be deemed to be Pricing Level II. Notwithstanding anything to the contrary contained herein, if any Event of Default has occurred and been in existence for ten Business Days or longer, the Pricing Level in effect shall be Pricing Level III for so long as such Event of Default is continuing. Pricing Level I means the Pricing Level that will be in effect for the applicable Pricing Period if, as at the relevant Date of Determination, (i) the Adjusted Leverage Ratio is less than 0.5:1 and (ii) the Adjusted Interest Coverage Ratio is greater than 3:1. Pricing Level II means the Pricing Level that will be in effect for the applicable Pricing Period if, as at the relevant Date of Determination, (i) the Adjusted Leverage Ratio is greater than or equal to 0.5:1 and less than 0.9:1 and (ii) the Adjusted Interest Coverage Ratio is greater than 3:1. Pricing Level III means the Pricing Level that will be in effect for the applicable Pricing Period if, as at the relevant Date of Determination, (i) the Adjusted Leverage Ratio is greater than or equal to 0.9:1 or (ii) the Adjusted Interest Coverage Ratio is less than or equal to 3:1. Pricing Level Calculation Date means the date that is forty-five days after the most recent Date of Determination. Pricing Period means the period commencing on the last preceding Pricing Level Calculation Date and ending on the forty-fourth day of the next succeeding fiscal quarter of Company following such Pricing Level Calculation Date. Prime Rate means the rate that Agent announces from time to time as its prime lending rate, as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Bankers or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate. Pro Rata Share means, with respect to matters relating to a particular Commitment (including the making or payment of Loans pursuant to that Commitment) of a Lender, the percentage obtained by dividing (x) such Commitment of that Lender by (y) all such Commitments of all Lenders, as such percentage may be adjusted by assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of each Lender is set forth opposite the name of that Lender on Schedule B annexed hereto. Productive Assets means productive replacement assets of a similar nature to those so replaced that are then used or usable in the business of Company or any of its Subsidiaries. Reference Lender means Bankers and The Chase Manhattan Bank, N.A. Register has the meaning assigned to that term in subsection 2.1.E. Regulation D means Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time. Regulatory Authority means any United States governmental authority, central bank or comparable agency having jurisdiction over any Lender. Release means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of any Facility, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property. Reporting Division means each of the divisions of the operations of Company or any of its Material Subsidiaries, as set forth on Schedule C annexed hereto as such Schedule may hereafter be amended, supplemented or modified from time to time by Company. Requisite Lenders means (i) during the Revolving Period, Lenders having 66-2/3% or more of the Revolving Loan Commitments or if the Revolving Loan Commitments have been terminated, Lenders holding 66-2/3% or more of the aggregate principal amount of the Revolving Loans, Swingline Loans and Bid Rate Loans outstanding; or (ii) during the Term Period, Lenders holding 66-2/3% or more of the aggregate principal amount of the Term Loans outstanding. As used herein, Requisite Lenders includes Bankers in its capacity as a Lender; where references are made to Agent and Requisite Lenders , Bankers interest shall be included both as Agent and as Lender. Restricted Junior Payment means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Company now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company now or hereafter outstanding and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Company now or hereafter outstanding. Revolving Loan Commitment or Revolving Loan Commitments means the commitment or commitments of a Lender or Lenders to make Revolving Loans, Bid Rate Loans and Swingline Loans as set forth in subsection 2.1, subject to the terms and conditions contained therein. Revolving Loans means the Revolving Loans made by Lenders to Company pursuant to subsection 2.1.A. Revolving Notes means the promissory notes of Company issued pursuant to subsection 2.1.F and in substantially the form of Exhibit V annexed hereto, as they may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof. Revolving Period means the period commencing on the Closing Date and ending on the date occurring on the third anniversary of the Closing Date. Scheduled Term Loans Principal Payments means, with respect to the prin- cipal payments of Term Loans required pursuant to subsection 2.2.B, for each date set forth below, the correlative amount set forth opposite thereto, as adjusted by operation of the following sentence: Date Scheduled Term Loans Principal Payment December 31, 1993 12.50% of Term Loans made on Term Loan Funding Date March 31, 1994 12.50% of Term Loans made on Term Loan Funding Date June 30, 1994 12.50% of Term Loans made on Term Loan Funding Date September 30, 1994 12.50% of Term Loans made on Term Loan Funding Date December 31, 1994 12.50% of Term Loans made on Term Loan Funding Date March 31, 1995 12.50% of Term Loans made on Term Loan Funding Date June 30, 1995 12.50% of Term Loans made on Term Loan Funding Date September 30, 1995 12.50% of Term Loans made on Term Loan Funding Date On the date any Loans are prepaid pursuant to subsection 2.6.A or 2.A.B.(i), the Scheduled Term Loans Principal Payments set forth above shall be reduced by the amount of such prepayment, such reduction to be effected by reducing the amounts set forth above that correspond to the maturity or maturities of the Scheduled Term Loans Principal Payment required to be reduced in the manner provided in subsection 2.6.A or 2.6.B.(ii), as the case may be; provided that the Scheduled Term Loans Principal Payment for the Commitment Termination Date shall be an amount, if such amount is different from that specified above, sufficient to repay all amounts owing by Company under the Term Loans. Securities means any capital stock, shares, voting trust certificates, bonds, debentures, options, warrants, notes or other evidences of indebtedness (secured or unsecured, convertible, subordinated or otherwise), any instruments commonly known as securities , and any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. Separate Letter of Credit Facility means the letter of credit facility or facilities established for the benefit of Company and its Subsidiaries by The Bank of Tokyo Trust Company or one of its affiliates, or by any other commercial banking institution or institutions, on terms and conditions reasonably satisfactory to Requisite Lenders, for the purpose of issuing letters of credit for the account of Company that support obligations of Company and any of its Subsidiaries. Separate Letter of Credit Facility Usage means, as at any date of deter- mination with respect to all outstanding letters of credit under the Separate Letter of Credit Facility, the sum of (i) the maximum aggregate amount which is or at any time thereafter may become available for drawing under such letters of credit plus (ii) the aggregate amount of all drawings under such letters of credit honored by the issuer thereof and not theretofore reimbursed. Solvent means, with respect to any Person, that as of the date of determina- tion, both (A) (i) the then fair saleable value of the property of such Person is (y) greater than the total amount of liabilities (including the maximum amount of contingent liabilities identified by such Person) of such Person and (z) greater than the amount that will be required to pay the probable liabilities of such Person s then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person will not lack sufficient capital for the needs and anticipated needs for capital of such Person s business, including identified contingent liabilities; and (iii) such Person does not intend to incur, or believe or reasonably should believe that it will incur, debts beyond its ability to pay such debts as they become due and (B) such Person is solvent within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers. Subordinated Indebtedness means the Easco Debt and the WPI Debt. Subsidiary means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof. Subsidiary Guaranty means each guaranty to be executed and delivered by each Material Subsidiary pursuant to subsection 3.1 or 5.7, as the case may be, each substantially in the form of Exhibit VII annexed hereto, as each such guaranty may hereafter be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof and thereof, and Subsidiary Guaranties means all such guaranties collectively. Swingline Loan Commitment means the commitment of Bankers to make Swingline Loans as set forth in subsection 2.1.B. Swingline Loans means the Swingline Loans made by Bankers to Company on or after the Closing Date pursuant to subsection 2.1.B. Term Loan Commitment or Term Loan Commitments means the commitment or commitments of a Lender or Lenders to make Term Loans as set forth in subsection 2.2.A. Term Loan Funding Date means the date that is the third anniversary of the Closing Date. Term Loans means the Loans made by Lenders to Company pursuant to subsection 2.2.A. Term Notes means the promissory note of Company issued pursuant to subsection 2.1.F substantially in the form of Exhibit IV annexed hereto, as they may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof. Term Period means the period commencing on the date occurring on the third anniversary of the Closing Date and ending on the date occurring on the fifth anniversary of Closing Date. Total Utilization of Revolving Loan Commitments means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans, plus (ii) the aggregate principal amount of all outstanding Swingline Loans, plus (iii) the aggregate principal amount of all outstanding Bid Rate Loans, plus (iv) the Letter of Credit Usage, plus (v) the amount by which the Separate Letter of Credit Facility Usage exceeds $25,000,000, plus (vi) the amount of the Excess Investments in Securities. Trustee means either (i) if Company has appointed Continental Bank to act as Trustee hereunder and Continental Bank has accepted such appointment, for so long as Continental Bank is acting as Trustee hereunder, Continental Bank solely in its capacity as Trustee hereunder, or (ii) so long as Company elects to act as Trustee hereunder, Company in its capacity as Trustee; provided that the provisions of Section 10 shall not apply to the rights and duties of Company acting as Trustee. Anything contained herein to the contrary notwithstanding, Continental Bank shall have no rights, duties or obligations in the capacity of Trustee hereunder until such time as it may be appointed to act as Trustee pursuant to and in accordance with the terms of Section 10. WPI means Western Pacific Industries, Inc., a Delaware corporation and a wholly-owned Subsidiary of Company. WPI Debt means the 10% Subordinated Debentures due July 1, 2001 of WPI in the form issued pursuant to that certain Indenture dated June 15, 1976 by and between WPI and The Connecticut Bank & Trust Company, as Trustee, as in effect on the Closing Date. 1.2. Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Calculations made in connection with the definitions, covenants and other provisions of this Agreement shall utilize accounting principles and policies in conformity with those used to prepare the Financial Statements. 1.3. Other Definitional Provisions References to Sections and subsections shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in subsection 1.1 may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. SECTION 2. AMOUNTS AND TERMS OF LOANS AND LETTERS OF CREDIT 2.1.Revolving Loans, Swingline Loans and Bid Rate Loans A. Revolving Loan Commitments. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, each Lender hereby severally agrees, subject to the limitations set forth below with respect to the maximum amount of Revolving Loans permitted to be outstanding from time to time, to make Revolving Loans to Company during the period from the Closing Date through but excluding the Term Loan Funding Date in an amount not exceeding its Pro Rata Share of the aggregate Revolving Loan Commitments for the purposes identified in subsection 2.7.B. Each Lender s commitment to make Revolving Loans to Company pursuant to this subsection 2.1.A is herein called its Revolving Loan Commitment and such commitments of all Lenders in the aggregate are herein called the Revolving Loan Commitments . The initial amount of each Lender s Revolving Loan Commitment is set forth opposite its name on Schedule B annexed hereto and the aggregate initial amount of all Revolving Loan Commitments is $285,000,000. The amount of the Revolving Loan Commitments shall be reduced by the amount of all reductions thereof made pursuant to subsection 2.6 through the date of determination. In no event shall the aggregate principal amount of the Revolving Loans from any Lender outstanding at any time exceed the amount of its Revolving Loan Commitment then in effect. Each Lender s Revolving Loan Commitment shall expire on the Term Loan Funding Date and all Revolving Loans shall be paid in full no later than that date. Notwithstanding the foregoing provisions of this subsection 2.1.A, the amount otherwise available to be borrowed or maintained as Revolving Loans under the Revolving Loan Commitments as of any time of determination (other than (x) to repay Swingline Loans or Bid Rate Loans and accrued and unpaid interest thereon and (y) to reimburse any Issuing Lender for the amount of any drawings under any Letters of Credit honored by such Issuing Lender and not theretofore reimbursed by Company) shall be reduced by an amount equal to the sum of (a) the principal amount of all outstanding Swingline Loans plus (b) the principal amount of all outstanding Bid Rate Loans plus (c) the Letter of Credit Usage in respect of Letters of Credit plus (d) the amount by which the Separate Letter of Credit Facility Usage exceeds $25,000,000 as at such date of determination plus (e) the amount of the Excess Investments in Securities as at such date of determination. Subject to subsection 2.8.A.(ii), all Revolving Loans under this Agreement shall be made by Lenders simultaneously and proportionately to their Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in that other Lender s obligation to make Revolving Loans hereunder nor shall the Revolving Loan Commitment of any Lender be increased or decreased as a result of the default by any other Lender in that other Lender s obligation to make Revolving Loans hereunder. Amounts borrowed by Company under this subsection 2.1.A may be repaid and, through but excluding the Term Loan Funding Date, reborrowed. Revolving Loans made on any Funding Date shall be in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount. Anything contained in this subsection 2.1.A to the contrary notwithstanding, Company may not borrow Revolving Loans more than three times during any week other than Revolving Loans used solely to repay Swingline Loans or Bid Rate Loans. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Total Utilization of Revolving Loan Commitments exceed the Revolving Loan Commitments then in effect. B. Swingline Loan Commitment. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company set forth herein, Bankers hereby agrees, subject to the limitations set forth below with respect to the maximum amount of Swingline Loans permitted to be outstanding from time to time, to make a portion of the Revolving Loan Commitments available to Company from time to time during the period from the Closing Date through and excluding the Term Loan Funding Date in an aggregate principal amount of up to $10,000,000 by making Swingline Loans to Company, notwithstanding the fact that such Swingline Loans, when aggregated with Bankers outstanding Revolving Iowans and Bid Rate Loans, may exceed Bankers Revolving Loan Commitment. The commitment of Bankers to make Swingline Loans to Company pursuant to this subsection 2.1.B is herein called its Swingline Loan Commitment . In no event shall (a) the aggregate principal amount of Swingline Loans outstanding at any time exceed the Swingline Loan Commitment, (b) the Total Utilization of Revolving Loan Commitments exceed the aggregate Revolving Loan Commitments then in effect or (c) the Swingline Loan Commitment exceed the aggregate Revolving Loan Commitments. Any reduction of the Revolving Loan Commitments made pursuant to subsection 2.6 which reduces the Revolving Loan Commitments below the then current amount of the Swingline Loan Commitment shall result in an automatic corresponding reduction of the Swingline Loan Commitments to the amount of the Revolving Loan Commitments, as so reduced, without any further action on the part of Bankers. The proceeds of Swingline Loans shall be used for the purposes identified in subsection 2.7.B. The Swingline Loan Commitment shall expire on the Term Loan Funding Date and all Swingline Loans shall be paid in full no later than that date. Amounts borrowed by Company under this subsection 2.1.B may be repaid and, through but excluding the Term Loan Funding Date, reborrowed. All Swingline Loans shall be made as Base Rate Loans and shall not be entitled to be converted into CD Rate Loans or Eurodollar Rate Loans. Swingline Loans made on any Funding Date shall be in an aggregate minimum amount of $100,000. Bankers may, at any time in its sole and absolute discretion, and on the fifth Business Day after the making of a Swingline Loan which has not been voluntarily prepaid by Company pursuant to subsection 2.6.A shall, on one Business Day s notice to Agent and Company, so long as amounts are available to be borrowed under the Revolving Loan Commitments, require each other Lender, and each Lender hereby agrees, subject to this subsection 2.1.B, to make a Revolving Loan (which shall initially be funded as a Base Rate Loan) in an amount equal to such Lender s Pro Rata Share of the amount of the Swingline Loans ( Refunded Swingline Loans ) outstanding on the date notice is given which Bankers requests the Lenders to prepay; provided, however, the obligation of each Lender to make any such Revolving Loan is subject to the condition that (i) Bankers believed in good faith that all conditions under Section 3 to the making of such Swingline Loan were satisfied at the time such Swingline Loan was made, or (ii) such other Lender had actual knowledge, by receipt of the statements required pursuant to subsection 5.1 or otherwise, that any such condition had not been satisfied and failed to notify Agent in writing at or before the time for the making of the relevant Refunded Swingline Loans that it had no obligation to make Revolving Loans until such condition was satisfied (which notice shall be effective as of the date of receipt by Agent), or (iii) the satisfaction of any such condition not satisfied had been waived by Bankers prior to or at the time such Swingline Loan was made. In the case of Revolving Loans made by Lenders other than Bankers under the immediately preceding sentence, each such other Lender shall make the amount of its Revolving Loan available to Bankers, in same day funds, at the office of Bankers located at One Bankers Trust Plaza, New York, New York, not later than 11:00 A.M. (New York time) on the Business Day next succeeding the date such notice is given. The proceeds of such Revolving Loans shall be immediately applied to repay the Refunded Swingline Loans. On the day such Revolving Loans are made, Bankers Pro Rata Share of the Refunded Swingline Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Bankers and such portion of the Swingline Loans deemed to be so paid shall no longer be outstanding as Swingline Loans and shall be due as Revolving Loans. Company authorizes Bankers to charge Company s accounts with Bankers (up to the amount available in each such account) in order to immediately pay Bankers the amount of such Refunded Swingline Loans to the extent amounts received by Bankers, including amounts deemed to be received from Bankers, are not sufficient to repay in full such Refunded Swingline Loans. If any portion of any such amount paid (or deemed to be paid) to Bankers should be recovered by or on behalf of Company from Bankers in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by subsection 9.5. Subject to the proviso contained in the first sentence of this paragraph, each Lender s obligation to make the Revolving Loans referred to in this paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Bankers, Company or anyone else for any reason whatsoever; (ii) the occurrence or continuance of an Event of Default or a Potential Event of Default; (iii) any adverse change in the condition (financial or otherwise) of Company; (iv) any breach of this Agreement by Company or any other Lender; (v) the acceleration or maturity of any Loans or the termination of the Revolving Loan Commitments after the making of the Swingline Loans; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. In the event that Company or any of its Subsidiaries has filed for protection under the Bankruptcy Code, or otherwise if Bankers requests, and, in any event, subject to satisfaction of the conditions set forth in the proviso to the first sentence of the preceding paragraph, each Lender shall acquire without recourse or warranty an undivided participation interest equal to such Lender s Pro Rata Share of any Swingline Loan otherwise required to be repaid by such Lender pursuant to the preceding paragraph by paying to Bankers on the date on which such other Lender would otherwise have been required to make a Revolving Loan in respect of such Swingline Loan pursuant to the preceding paragraph, in immediately available funds, an amount equal to such Lender s Pro Rata Share of such Swingline Loan, and no Revolving Loans shall be made by such Lender pursuant to the preceding paragraph. If such amount is not in fact made available to Bankers by such other Lender on the date when Revolving Loans would otherwise be required to be made pursuant to the preceding paragraph, Bankers shall be entitled to recover such amount on demand from such other Lender together with interest accrued from such date at the customary rate set by Bankers for the correction of errors among banks for three Business Days and thereafter at the rate of interest then applicable to Base Rate Loans. From and after the date on which any Lender purchases an undivided participation interest in a Swingline Loan pursuant to this paragraph, Bankers shall promptly distribute to such other Lender such Lender s Pro Rata Share of all payments of principal and interest in respect of such Swingline Loan. A copy of each notice given by Bankers to Lenders pursuant to the preceding paragraph shall be promptly delivered by Bankers to Company. Upon the making of a Revolving Loan by a Lender pursuant to this subsection 21.B, the amount so funded shall become due as a Revolving Loan and shall no longer be owed as a Swingline Loan. Notwithstanding anything herein to the contrary, Bankers shall not be obligated to make any Swingline Loans if it has elected after the occurrence and during the continuation of a Potential Event of Default or Event of Default not to make Swingline Loans and has notified Company in writing or by telephone of such election. C. Notice of Borrowing. Whenever Company desires that Lenders make Revolving Loans under subsection 2.1.A or Term Loans under subsection 2.2.A, it shall deliver to Agent a No- tice of Borrowing no later than 11:00 A.M. (New York time) on the proposed Funding Date in the case of Revolving Loans to be made as Base Rate Loans on a Bid Rate Loan Shortfall Date in an aggregate amount not to exceed the applicable Bid Rate Loan Shortfall Amount or at least one Business Day in advance of the proposed Funding Date in the case of any other Base Rate Loan or any CD Rate Loan or three Business Days in advance of the proposed Funding Date in the case of a Eurodollar Rate Loan. Whenever Company desires to borrow a Swingline Loan under subsection 2.1.B, it shall deliver to Bankers a Notice of Borrowing no later than 12:00 noon (New York time) on the proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the amount of the proposed Loans and whether such Loans are to be made as Swingline Loans, Revolving Loans or Term Loans; provided that in the case of a Notice of Borrowing delivered on a Bid Rate Loan Shortfall Date requesting Base Rate Loans to be made as Revolving Loans on such Bid Rate Loan Shortfall Date, the amount of such proposed Revolving Loans may not exceed the Bid Rate Loan Shortfall Amount in respect of such Bid Rate Loan Shortfall Date, (iii) whether such Revolving Loans or Term Loans are initially to consist of Base Rate Loans, CD Rate Loans or Eurodollar Rate Loans or a combination thereof, (iv) if such Revolving Loans or Term Loans, or any portion thereof, are initially to be CD Rate Loans or Eurodollar Rate Loans, the amounts thereof and the initial Interest Periods therefor and (v) in the case of a Notice of Borrowing delivered on a Bid Rate Loan Shortfall Date requesting Base Rate Loans to be made as Revolving Loans on such Bid Rate Loan Shortfall Date, that the amount of such proposed Revolving Loans does not exceed the Bid Rate Loan Shortfall Amount in respect of such Bid Rate Loan Shortfall Date; and such Notice of Borrowing shall further certify that subsection 3.3 is satisfied on and as of that Funding Date; provided that (a) the minimum amount of CD Rate Loans with a particular Interest Period included as a portion of any such combination, if any, shall be $5,000,000 and integral multiples of $1,000,000 in excess of that amount, and (b) the minimum amount of Eurodollar Rate Loans with a particular Interest Period included as a portion of any such combination, if any, shall be $5,000,000 and integral multiples of $1,000,000 in excess of that amount. Revolving Loans and Term Loans may be continued as or converted into Base Rate Loans, CD Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.3.E. In lieu of delivering the above-described Notice of Borrowing, Company may give Agent telephonic notice by the required time of any proposed borrowing under this subsection 2.1; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Borrowing to Agent on or prior to the Funding Date of the requested Revolving Loans, Term Loans or Swingline Loans, as the case may be. Neither Agent nor any Lender shall incur any liability to Company in acting upon any telephonic notice referred to above which Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of Company or for otherwise acting in good faith under this subsection 2.1.C and upon funding of Revolving Loans or Term Loans by any Lender or Swingline Loans by Bankers in accordance with this Agreement pursuant to any such telephonic notice Company shall have effected Revolving Loans, Term Loans or Swingline Loans, as applicable, hereunder. Except as provided in subsection 2.8.D, a Notice of Borrowing for a Eurodollar Rate Loan or a CD Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to make a borrowing in accordance therewith. D. Disbursement of Funds. Promptly after receipt of a Notice of Borrowing for Revolving Loans pursuant to subsection 2.1.C (or telephonic notice in lieu thereof) or the deemed receipt of a Notice of Borrowing pursuant to subsection 2.4.C, Agent shall notify each Lender of the proposed borrowing. Promptly after receipt of a Notice of Borrowing for a Swingline Loan, Bankers shall make the amount of its Swingline Loan available, in same day funds, at the office of Bankers located at One Bankers Trust Plaza, New York, New York, not later than 12:00 noon (New York time) on the Funding Date. Each Lender shall make the amount of its Revolving Loan available to Agent, in same day funds, at the office of Agent located at One Bankers Trust Plaza, New York, New York, not later than 12:00 noon (New York time) on the Funding Date. Except as provided in subsection 2.1.B with respect to the repayment of Swingline Loans and subsection 2.4.D, upon satisfaction or waiver of the conditions precedent specified in subsection 3.3, Agent shall make the proceeds of such Loans available to Company on such Funding Date by causing an amount of same day funds equal to the proceeds of all such Loans received by Agent to be credited to the account of Company at such office of Agent. Unless Agent shall have been notified by any Lender prior to any Funding Date that such Lender does not intend to make available to Agent such Lender s Loan on such Funding Date, Agent may assume that such Lender has made such amount available to Agent on such Funding Date and Agent in its sole discretion may, but shall not be obligated to, make available to Company a corresponding amount on such Funding Date. If such corresponding amount is not in fact made available to Agent by such Lender, Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to Agent, at the customary rate set by Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Agent s demand therefor, Agent shall promptly notify Company, and Company shall immediately pay such corresponding amount to Agent. Nothing in this subsection 2.1.D shall be deemed to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights which Company may have against any Lender as a result of any default by such Lender hereunder. E. Bid Rate Loans. (i) The Bid Rate Option. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company set forth herein, in addition to Company requesting that Lenders make Revolving Loans pursuant to subsection 2.1.A, Company may, as set forth in this subsection 2.1.E, request Lenders having Revolving Loan Commitments during the period from and including the Closing Date to but excluding the Term Loan Funding Date to make offers to make Bid Rate Loans to Company; provided that the Total Utilization of Revolving Loan Commitments shall in no event exceed the Revolving Loan Commitments then in effect. Lenders may, but shall have no obligation to, make such offers and Company may, but shall have no obligation to, accept any such offers in the manner set forth in this subsection 2.1.E. (ii) Bid Rate Loan Quote Request. Whenever Company desires to request offers to make Bid Rate Loans, it shall transmit to Bid Rate Loan Agent (if other than Company) by telecopy a Bid Rate Loan Quote Request substantially in the form of Exhibit XI annexed hereto no later than 11:00 A.M. (New York time) at least one Business Day in advance of the proposed Funding Date set forth therein. The Bid Rate Loan Quote Request shall specify (i) the proposed Funding Date (which shall be a Business Day not later than seven calendar days prior to the Term Loan Funding Date, (ii) the amount of Bid Rate Loans for each Bid Rate Loan Interest Period (of which there may be up to three) for which offers are requested, which shall be in a minimum principal amount of $5,000,000 and in integral multiples of $1,000,000 in excess of that amount and (iii) the duration of the Bid Rate Loan Interest Period or Periods applicable thereto, subject to the provisions set forth in the definition of Bid Rate Loan Interest Period. Such Bid Rate Loan Quote Request shall further certify that subsection 3.3 is satisfied on and as of the date of such Bid Rate Loan Quote Request and will be satisfied on and as of the date of the making of such Bid Rate Loans. No Bid Rate Loan Quote Request shall be given within three Business Days of any other Bid Rate Loan Quote Request. (iii) Invitation for Bid Rate Loan Quotes. Promptly upon any request by Company for Bid Rate Loan Quotes pursuant to the delivery of a Bid Rate Loan Quote Request in accordance with the provisions of subsection 2.1.E.(ii), but in no event later than the close of business on the date of receipt thereof, Bid Rate Loan Agent shall send to Lenders by telecopy an Invitation for Bid Rate Loan Quotes substantially in the form of Exhibit XIII annexed hereto, which shall constitute an invitation by Company to each Lender to submit Bid Rate Loan Quotes offering to make Bid Rate Loans to which such Bid Rate Loan Quote Request relates in accordance with this subsection 2.1.E. (iv) Submission and Contents of Bid Rate Loan Quotes. (a) Each Lender may, in its sole discretion, submit a Bid Rate Loan Quote containing an offer or offers to make Bid Rate Loans in response to any Invitation for Bid Rate Loan Quotes. Each Bid Rate Loan Quote must comply with the requirements of this subsection 2.1.E.(iv) and must be received by Trustee by telecopy no later than 10:00 A.M. (New York time) on the proposed Funding Date of such Bid Rate Loans. Any Bid Rate Loan Quote so made shall be irrevocable, subject to amendment or modification solely in accordance with subsection 2.1.E.(v), except with the written consent of Trustee given on the instructions of Company. (b) Each Bid Rate Loan Quote shall be in substantially the form of Exhibit XII annexed hereto and shall refer to this Agreement and specify (a) the proposed Funding Date, (b) the principal amount of the Bid Rate Loan offered, which principal amount (x) may be greater than or less than the Revolving Loan Commitment of the quoting Lender, (y) must be in a minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount and (z) may not exceed the principal amount of Bid Rate Loans for such Bid Rate Loan Interest Period for which offers were requested, (c) the rate of interest per annum (expressed as an absolute number and not in terms of a specified margin over the quoting Lender s cost of funds, and rounded to the nearest 1/10,000 of 1%) at which such Lender is willing to make each such Bid Rate Loan and (d) the identity of the quoting Lender. (c) Any Bid Rate Loan Quote shall be disregarded that (a) is not substantially in the form of Exhibit XII annexed hereto or does not specify all of the information required in subsection 2.1.E. (iv)(b), (b) contains qualifying, conditional or similar language, (c) proposes terms other than or in addition to those set forth in the applicable Invitation for Bid Rate Loan Quotes or (d) arrives after 10:00 A.M. on the proposed Funding Date. (d) If any Lender shall elect not to make such an offer, such Lender shall so notify Trustee via telecopy no later than 10:00 A.M. (New York time) on the proposed Funding Date; provided, however, that failure by any Lender to give such notice shall not constitute a breach or default by such Lender nor cause such Lender to be liable to Company or any other party or be obligated to make any Bid Rate Loan as part of such requested Bid Rate Loans. (v) Notice to Agent and Company. Trustee (if other than Company) shall (by telephone confirmed by telecopy) promptly notify Company of the terms (x) of any Bid Rate Loan Quote submitted by a Lender that is in accordance with subsection 2.1.E.(iv) and (y) of any Bid Rate Loan Quote that amends, modifies or is otherwise inconsistent with a previous Bid Rate Loan Quote submitted by such Lender with respect to the same Bid Rate Loan Quote Request; provided that any such amending or modifying Bid Rate Loan Quote shall be disregarded by Trustee unless such amending or modifying Bid Rate Loan Quote is submitted solely to correct a manifest error in such former Bid Rate Loan Quote. Trustee s notice to Company shall specify (i) the aggregate principal amount of Bid Rate Loans for which offers have been received in response to a Bid Rate Loan Quote Request, (ii) the respective principal amounts and interest rates so offered and (iii) the identity of each quoting Lender. (vi) Acceptance and Notice by Company. Not later than 11:00 A.M. (New York time) on the proposed Funding Date, Company shall (by telephone confirmed by telecopy) notify Trustee (if other than Company) (who shall promptly so notify Agent and Lenders as set forth in subsection 2.1.E(viii)) of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection 2.1.E.(v). For the purposes of this subsection 2.1.E.(vi), silence on the part of Company shall be deemed to be a non-acceptance of all offers so notified to it pursuant to subsection 2.1.E.(v). In the case of acceptance, such notice (a Notice of Bid Rate Loan Borrowing ) shall specify the aggregate principal amount of offers for each Bid Rate Loan Interest Period that are accepted. Company may accept any Bid Rate Loan Quote in whole or in part; provided that (i) acceptance of offers may only be made on the basis of ascending interest rates, (ii) the aggregate principal amount of each borrowing of Bid Rate Loans may not exceed the applicable amount set forth in the related Bid Rate Loan Quote Request, (iii) the principal amount of each Bid Rate Loan must be $5,000,000 or integral multiples of $1,000,000 in excess of that amount and (iv) Company may not accept any offer that is described in subsection 2.1.E.(iv)(c) or that otherwise fails to comply with the requirements of this Agreement. Subject to the foregoing requirements, Company may accept or reject, in its sole discretion, any Bid Rate Loan Quote. A Notice of Bid Rate Loan Borrowing given by Company pursuant to this subsection 2.1.E.(vi) shall be irrevocable. (vii) Allocation by Company. If offers are made by two or more Lenders at the same rate of interest for a greater aggregate principal amount than the amount in respect of which offers are accepted for the related Bid Rate Loan Interest Period, the principal amount of Bid Rate Loans in respect of which such offers are accepted shall be allocated pro rata by Company among such Lenders; provided that no Lender whose Bid Rate Loan Quote is accepted shall be allocated a Bid Rate Loan in a principal amount less than $1,000,000. Determinations by Company of the amounts of Bid Rate Loans shall be conclusive in the absence of manifest error. (viii) Notice to Agent and Lenders. Trustee shall (by telephone promptly confirmed by telecopy) promptly notify each Lender that has submitted a Bid Rate Loan Quote as described in subsection 2.1.E.(iv)(a), if any, which of its offers have been accepted by Company pursuant to the delivery of a Notice of Bid Rate Loan Borrowing, whereupon such Lender will become bound, subject to the other applicable conditions hereof, to make the Bid Rate Loan in respect of which its offer has been accepted. Promptly after giving such notice, Trustee will deliver to Agent and each Lender a confirmation specifying the date and amount of the aggregate Bid Rate Loans made, the amount, interest rate, Bid Rate Loan Interest Period and Lender for each Bid Rate Loan made. (ix) Funding of Bid Rate Loans. Not later than 12:00 noon (New York time) on the proposed Funding Date specified for each Bid Rate Loan hereunder, each Lender participating therein shall make the amount of its Bid Rate Loan available to Company, in same day funds, at Company s account number 50-194704 at the office of Agent located at One Bankers Trust Plaza, New York, New York. Upon satisfaction or waiver of the conditions precedent specified in subsection 3.3, Agent shall make the proceeds of all such Bid Rate Loans available to Company on such Funding Date by causing an amount of same day funds equal to the proceeds of all such Bid Rate Loans received by Agent to be credited to the account of Company at such office of Agent. Unless Agent shall have received notice from a Lender participating in a Bid Rate Loan prior to the Funding Date of such Bid Rate Loan that such Lender will not make available to Agent such Lender s Bid Rate Loan, Agent may (but shall not be obligated to) assume that such Lender has made such Bid Rate Loan available to Agent on the Funding Date of such Bid Rate Loan in accordance with this subsection 2.1.E.(ix) and Agent may, in reliance upon such assumption, make available to Company a corresponding amount on such Funding Date. If and to the extent such Lender shall not have so made such Bid Rate Loan available to Agent, then Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to Agent, at the customary rate set by Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Agent s demand therefor, Agent shall promptly notify Company of the amount of such Bid Rate Loan not funded by such Lender and Company shall immediately pay such corresponding amount to Agent. Nothing in this subsection 2.1.E.(ix) shall be deemed to relieve any Lender from its obligation to fulfill its commitment hereunder or to prejudice any rights which Company may have against any Lender as a result of any default by such Lender hereunder. (x) Payment of Interest. Interest with respect to each outstanding Bid Rate Loan shall be payable in arrears on and to each Bid Rate Loan Interest Payment Date applicable to that Bid Rate Loan, upon any prepayment of such Bid Rate Loan (to the extent accrued on the amount being prepaid) and at maturity. (xi) Compensation. Company shall compensate each Lender, upon written request by that Lender (which request shall set forth in reasonable detail the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including, without limitation, any interest paid by that Lender to lenders of funds borrowed by it to make or carry its Bid Rate Loans and any loss sustained by that Lender in connection with re-employment of such funds), which that Lender may sustain with respect to Bid Rate Loans: (i) if for any reason (other than a default or error by that Lender) a borrowing of any Bid Rate Loan does not occur on the date specified therefor in a Notice of Bid Rate Loan Borrowing, (ii) if any prepayment of any of such Lender s Bid Rate Loans occurs on a date which is not the last day of the Bid Rate Loan Interest Period applicable to that Bid Rate Loan, (iii) if any prepayment of any of such Lender s Bid Rate Loans is not made on any date specified in a notice of prepayment given by Company and consented to by such Lender, or (iv) as a consequence of any other default by Company to repay such Lender s Bid Rate Loans when required by the terms of this Agreement. (xii) Bid Rate Register. Agent shall maintain a register for the recordation of the names and addresses of Lenders and the principal amount of the Bid Rate Loans owing to each Lender from time to time together with the maturity and interest rates applicable to each Bid Rate Loan, and other terms applicable thereto (the Bid Rate Register ). The entries in the Bid Rate Register shall be prima facie evidence with respect to the entries therein. The Bid Rate Register shall be available for inspection by Company or any Lender at any reasonable time and from time to time upon reasonable prior notice. (xiii) Maturity. Each Bid Rate Loan shall be payable on the maturity date specified in the Bid Rate Request relating to such Bid Rate Loan. (xiv) Liability. Bid Rate Loan Agent shall not incur any liability to Company in acting upon any telephonic notice referred to herein which Bid Rate Loan Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of Company or for otherwise acting in good faith under this subsection 2.1.E and upon funding of Bid Rate Loans by any Lender in accordance with this Agreement pursuant to any such telephonic notice Company shall have effected Bid Rate Loans hereunder. F. Register. (i) Agent shall maintain a register (the Register ) on which it will record the Commitments from time to time of each Lender, the Loans made by each Lender and each repayment in respect of the principal amount of the Loans of each Lender. Any such recordation shall be conclusive and binding, absent manifest error. (ii) Each Lender will record in its internal records the amount of each Loan made by it and each payment in respect thereof. Failure to make any such recordation, or any error in such recordation, shall not affect Company's or any other Credit Party s Obligations in respect of such Loans. Any such recordation shall be conclusive and binding, absent manifest error. (iii) Any Lender may, by notice to Agent and Company, request that all or part of the principal amount of the Obligations of Company to such Lender in respect of its Commitments hereunder be evidenced by a Term Note or a Revolving Note, as applicable. Within three Business Days of Company s receipt of such notice, Company shall execute and deliver to Agent for delivery to the appropriate Lender a Note or Notes in the principal amount(s) specified in such notice, payable to the notifying Lender or, if so specified in such notice, any Person who is an assignee of such Lender pursuant to Section 9.1 hereof. 2.2. Term Loans A. Term Loan Commitments. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, each Lender severally agrees to lend to Company on the Term Loan Funding Date an amount not exceeding its Pro Rata Share of the aggregate Term Loan Commitments to be used solely for the purposes identified in subsection 2.7.A. Each Lender s commitment to make Term Loans to Company pursuant to this subsection 2.2.A is herein called its Term Loan Commitment , and such commitments of all Lenders in the aggregate are herein called the Term Loan Commitments . The original amount of each Lender s Term Loan Commitment is set forth opposite its name on Schedule B annexed hereto and the aggregate original amount of the Term Loan Commitments is $285,000,000. Each Lender s Term Loan Commitment shall expire immediately after the making of the Term Loans on the Term Loan Funding Date and all Term Loans and all other amounts owed hereunder with respect to Term Loans shall be paid in full no later than the Commitment Termination Date; provided that each Lender s Term Loan Commitment shall expire immediately and without further action on the Term Loan Funding Date if the Term Loans are not made on that date. Company may make only one borrowing under the Term Loan Commitments. Amounts borrowed and repaid under this subsection 2.2.A may not be reborrowed. In connection with the making of the Term Loans, Company shall deliver a Notice of Borrowing, and perform in all other relevant respects, in accordance with subsection 2.1.C. Each Lender will make the amount of its Term Loan available to Agent, in same day funds, at the office of Agent located at One Bankers Trust Plaza, New York, New York, not later than 12:00 noon (New York time) on the Term Loan Funding Date. Agent shall make the proceeds of such Term Loans available to Company by causing the aggregate amount of such Term Loans to be applied to the full extent thereof to repay the principal amount of the Revolving Loans, Swingline Loans and Bid Rate Loans outstanding on such date. B. Scheduled Payment of Term Loans. Company agrees to make principal payments in the amount of the applicable Scheduled Term Loans Principal Payment on the dates and in the amounts set forth in the definition of Scheduled Term Loans Principal Payments. 2.3. Interest on the Loans A. Rate of Interest. Subject to the provisions of subsection 2.3.F, each Loan (other than Bid Rate Loans, which shall bear interest as provided in subsection 2.1.E) shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate, the Adjusted Certificate of Deposit Rate or the Adjusted Eurodollar Rate, as the case may be. Except to the extent that this Agreement specifically provides that certain Loans are to be made at the Base Rate, the applicable basis for determining the rate of interest with respect to Term Loans and Revolving Loans shall be selected by Company initially at the time a Notice of Borrowing is given pursuant to subsection 2.1.C (or is deemed to be given pursuant to subsection 2.4.C) or at the time a Notice of Conversion/Continuation is given pursuant to subsection 2.3.E. The basis for determining the interest rate with respect to any Term Loan or Revolving Loan may be changed from time to time pursuant to subsection 2.3.E. If on any day a Term Loan or Revolving Loan is outstanding with respect to which notice has not been delivered to Agent in accordance with the terms of this Agreement specifying the basis for determining the rate of interest then, for that day, that Loan shall bear interest determined by reference to the Base Rate. B. Determination of Interest Rate. As soon as practicable after 10:00 A.M. (New York time) on each Interest Rate Determination Date, Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rates that shall apply to CD Rate Loans and Eurodollar Rate Loans for which interest rates are then being determined for the applicable Interest Periods and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each Lender. Subject to the provisions of subsections 2.3.F and 2.8.F, Loans shall bear interest through maturity as follows: (i) if a Base Rate Loan, then at the sum of the Base Rate plus the Applicable Base Rate Pricing Margin; (ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate plus the Applicable Eurodollar Rate Pricing Margin; or (iii) if a CD Rate Loan, then at the sum of the Adjusted CD Rate plus the Applicable CD Rate Pricing Margin. On each Pricing Level Calculation Date, commencing with the first such date to occur after the end of the fiscal quarter of Company immediately succeeding the Closing Date, the Pricing Level in effect for the Pricing Period commencing on such Pricing Level Calculation Date and continuing for the term of the Pricing Period that begins on such Pricing Level Calculation Date shall be the applicable Pricing Level that is determined by reference to the definitions of Pricing Level I, Pricing Level II and Pricing Level III, subject to the proviso to the definition of Pricing Level. Notwithstanding the fact that the actual calculation of the applicable Pricing Level for a Pricing Period to commence during the first fiscal quarter of Company s fiscal year may be performed on a date subsequent to the Pricing Level Calculation Date occurring in such quarter, such Pricing Period shall commence on such Pricing Level Calculation Date. Upon the actual calculation of the applicable Pricing Level for the Pricing Period commencing during the first fiscal quarter of Company s fiscal year, adjustments to the amount of accrued interest shall be made to reflect retroactive application of the applicable Pricing Level to the first day of such Pricing Period. C. Interest Periods for CD Rate Loans and Eurodollar Rate Loans. In connection with each CD Rate Loan and Eurodollar Rate Loan, Company, by giving notice as set forth in subsection 2.1.C, shall elect an interest period (each an Interest Period ) to be applicable to such Loan, which Interest Period (x) in the case of CD Rate Loans, be either a 30, 60, 90 or 180 day period and (y) in the case of Eurodollar Rate Loans, shall be either a one, two, three or six month period; provided that: (i) the initial Interest Period for any Loan shall commence on the Funding Date of such Loan or on the date of conversion or continuation of such Loan pursuant to subsection 2.3.E, as the case may be; (ii) in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires; (iii) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; (iv) any Interest Period in respect of a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.3.C, end on the last Business Day of a calendar month; (v) no Interest Period with respect to any Revolving Loan shall extend beyond the Term Loan Funding Date and no Interest Period with respect to the Term Loan shall extend beyond the Commitment Termination Date; (vi) no Interest Period with respect to a particular Loan shall extend beyond a date on which Company is required to make a scheduled payment of principal of the Loans unless the aggregate principal amount of CD Rate Loans and Eurodollar Rate Loans with Interest Periods expiring on such date, together with all Base Rate Loans, equals or exceeds the principal amount required to be paid on the Loans on such date; and (vii) there shall be no more than twelve Interest Periods relating to CD Rate Loans or Eurodollar Rate Loans or any combination thereof outstanding at any time. D. Interest Payments. Subject to the provisions of subsection 2.3.F, interest shall be payable on the Loans as follows: (i) interest on each Base Rate Loan shall be payable in arrears on and to each March 31, June 30, September 30 and December 31, commencing on the first such date to occur after the Closing Date, and at final maturity; and (ii) interest on each CD Rate Loan or Eurodollar Rate Loan shall be payable in arrears on and to each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity (including final maturity). (iii) interest in respect of the unpaid principal amount of each Bid Rate Loan shall be payable from the date of incurrence thereof to maturity (whether by acceleration or otherwise) at the rate or rates per annum specified in the Bid Rate Loan Quote accepted by Company in accordance with subsection 2.1.E.(iv). E. Conversion or Continuation. Subject to the provisions of subsection 2.8, Company shall have the option (i) to convert at any time all or any part of its outstanding Loans (other than Swingline Loans and Bid Rate Loans) equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount, from Loans bearing interest at a rate determined by reference to one basis to Loans bearing interest at a rate determined by reference to an alternative basis or (ii) upon the expiration of any Interest Period applicable to a CD Rate Loan or a Eurodollar Rate Loan, to continue all or any portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount as a CD Rate Loan or a Eurodollar Rate Loan, as the case may be, and the succeeding Interest Period(s) of such continued Loan shall commence on the date of expiration of the Interest Period of the Loan to be continued; provided, however, that a CD Rate Loan or a Eurodollar Rate Loan may only be converted into a Loan bearing interest by reference to an alternative basis on the expiration date of an Interest Period applicable thereto; further provided that no outstanding Loan may be continued as, or be converted into, a CD Rate Loan or a Eurodollar Rate Loan when any Event of Default or Potential Event of Default has occurred and is continuing. Company shall deliver a Notice of Conversion/Continuation to Agent no later than 1:00 P.M. (New York time) at least one Business Day in advance of the proposed conversion/continuation date in the case of a conversion to a Base Rate Loan or a CD Rate Loan and at least three Business Days in advance of the proposed conversion/continuation date in the case of a conversion to, or continuation of, a Eurodollar Rate Loan. A Notice of Conversion/Continuation shall certify (i) the proposed conversion/continuation date (which shall be a Business Day), (ii) the amount of the Loan to be converted/continued, (iii) the nature of the proposed conversion/continuation, (iv) in the case of conversion to or continuation of a CD Rate Loan or a Eurodollar Rate Loan, the requested Interest Period, and (v) in the case of conversion to or continuation of a CD Rate Loan or a Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has occurred and is continuing. In lieu of delivering the above-described Notice of Conversion/Continuation, Company may give Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.3.E; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Conversion/Continuation to Agent on or before the proposed conversion/continuation date. If Company has failed to timely deliver a Notice of Conversion/Continuation for conversion to, or continuation of, a CD Rate Loan or a Eurodollar Rate Loan, Company shall be deemed to have delivered to Agent a Notice of Conversion/Continuation to convert such CD Rate Loan or Eurodollar Rate Loan, as the case may be, to a Base Rate Loan. Neither Agent nor any Lender shall incur any liability to Company in acting upon any telephonic notice referred to in this subsection 2.3.E that Agent believes in good faith to have been given by a duly authorized officer or other person authorized to act on behalf of Company or for otherwise acting in good faith under this subsection 2.3.E, and upon conversion/continuation in accordance with this Agreement pursuant to any such telephonic notice, Company shall have effected a conversion or continuation, as the case may be, hereunder. Except as otherwise provided in subsection 2.8, a Notice of Conversion/Contin- uation for conversion to, or continuation of, a CD Rate Loan or a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to convert or continue in accordance therewith. F. Post-Maturity Interest. Any principal payments on the Loans not paid when due and, to the extent permitted by applicable law, any interest payments on the Loans not paid when due and any fees in respect of Letters of Credit payable pursuant to subsection 2.5.B not paid when due, in any case whether at stated maturity, by notice of prepayment, by acceleration or otherwise, shall thereafter bear interest payable upon demand at a rate that is 2% per annum in excess of the rate of interest otherwise payable under this Agreement; provided that any unpaid principal or, to the extent permitted by applicable law, interest payments in respect of the Bid Rate Loans shall bear interest at a rate that is 2% per annum in excess of the rate of interest borne by Base Rate Loans. G. Computation of Interest. Interest on the Loans and on the fees payable pursuant to subsection 2.5 shall be computed on the basis of a 360-day year and the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of the Loan or the first day of an Interest Period, as the case may be, shall be included and the date of payment or the expiration date of an Interest Period, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day s interest shall be paid on that Loan. 2.4. Letters of Credit A. Letters of Credit. In addition to Company requesting that Lenders make Loans pursuant to subsection 2.1.A Company may request, in accordance with the provisions of this sub- section 2.4, that one or more Issuing Lenders issue Letters of Credit for the account of Company; provided that Company shall not request that any Lender issue any Letter of Credit if, after giving effect to such issuance (i) the Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitments then in effect, as the amount available under the Revolving Loan Commitments may be limited from time to time pursuant to subsection 2.1.A, or (ii) the Letter of Credit Usage would exceed $25,000,000. In no event shall Company request that any Letter of Credit be issued to the extent that Company would be able to arrange for such letter of credit to be issued pursuant to the Separate Letter of Credit Facility. The commitment of each Issuing Lender to issue Letters of Credit pursuant to this subsection 2.4.A is herein called its Letter of Credit Commitment and such commitments of the Issuing Lenders collectively are herein called the Letter of Credit Commitments . The original amount of the Letter of Credit Commitment is $25,000,000 and shall expire on the date occurring three months prior to the Term Loan Funding Date, after which date no Letter of Credit shall be issued hereunder. In no event shall any Issuing Lender issue any Letter of Credit having an expiration date later than the earlier of (y) the Term Loan Funding Date and (z) the date which is one year from the date of issuance of such Letter of Credit; provided that this clause (z) shall not prevent such Issuing Lender from agreeing that a Letter of Credit will automatically be extended for a period not to exceed one year unless such Issuing Lender elects not to extend for such additional period. Each Letter of Credit issued pursuant to this subsection 2.4 shall be in a minimum stated amount of at least $25,000. Any Existing Letters of Credit issued pursuant to the Old Credit Agreement and outstanding as of the Closing Date shall for all purposes of this Agreement be deemed to have been issued under and pursuant to the terms of this Agreement. The issuance of any Letter of Credit in accordance with the provisions of this subsection 2.4 shall be given effect in the calculation of the Total Utilization of Revolving Loan Commitments and shall require the satisfaction of each condition set forth in subsection 3.1 and 3.3. Immediately upon the issuance of each Letter of Credit, Agent shall promptly notify each Lender of such issuance and each Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Lender a participation in such Letter of Credit and drawings thereunder in an amount equal to such Lender s Pro Rata Share (determined by reference to the Revolving Loan Commitments of the Lenders) of the maximum amount which is or at any time may become available to be drawn thereunder. Each Letter of Credit may provide that the Issuing Lender may (but shall not be required to) pay the beneficiary thereof upon the occurrence of an Event of Default and the acceleration of the maturity of the Loans or, if payment is not then due to the beneficiary, provide for the deposit of funds in an amount sufficient to secure payment to the beneficiary of the Letter of Credit if conditions to such payment are satisfied, which amount shall be returned to the Issuing Lender for distribution to Lenders (or, if all Letters of Credit have been cancelled and all Obligations shall have been indefeasibly paid in full, to Company) if no payment to the beneficiary has been made and the final date available for drawings under the Letter of Credit has passed. Each payment or deposit of funds by an Issuing Lender as provided in this paragraph shall be treated for all purposes of this Agreement as a drawing duly honored by such Issuing Lender under the related Letter of Credit. B. Notice of Issuance. Whenever Company desires to cause the issuance of a Letter of Credit, Company shall deliver to Agent a Notice of Request for Letter of Credit no later than 11:00 A M. (New York time) at least five Business Days in advance of the proposed date of issuance or such shorter time as may be agreed to by any Issuing Lender in any particular instance. The notice shall specify (i) the proposed date of issuance (which shall be a Business Day), (ii) the stated amount of the Letter of Credit, (iii) the effective date of the Letter of Credit, (iv) the expiration date of the Letter of Credit, (v) the name and address of the beneficiary, and shall include such other documents or materials as the Issuing Lender may reasonably request, (vi) the Benefitted subsidiary or Benefitted Subsidiaries, if any, with respect to such Letter of Credit and the amount inuring to the benefit of each such Benefitted Subsidiary, and (vii) the verbatim text of the proposed Letter of Credit or the proposed terms and conditions, including a precise description of any documentation required to be complied with by the beneficiary which, if complied with by the beneficiary prior to the expiration date of the Letter of Credit, would require the Issuing Lender to make payment under the Letter of Credit; provided that the Issuing Lender, in its reasonable discretion, may require changes in any such documentation; provided further that the Issuing Lender shall not be required to issue any Letter of Credit that by its terms requires payment thereunder against a conforming draft on the same business day (under the laws of the jurisdiction of the Issuing Lender) that such draft is presented if such presentation is made after 11:00 A.M. in the time zone of the Issuing Lender on such business day. As soon as practicable after delivery of such Notice of Request for Letter of Credit, the Issuing Lender for such Letter of Credit shall be determined as provided in this subsection. Promptly upon the issuance or amendment of a Letter of Credit, Agent shall notify each other Lender of the issuance or amendment, the Issuing Lender therefor and the amount of each such other Lender s respective participation therein determined in accordance with subsection 2.4.D. Upon receipt by Agent of a notice from Company pursuant to this subsection 2.4.B requesting the issuance of a Letter of Credit, in the event Bankers elects to issue such Letter of Credit, in its sole discretion, Agent shall so notify Company and Bankers shall be the Issuing Lender with respect thereto. In the event that Bankers elects not to issue such Letter of Credit, Bankers shall promptly so notify Company and Company may request First Chicago to issue such Letter of Credit. If First Chicago is requested to issue such Letter of Credit, it shall promptly notify Company and Agent whether or not, in its sole discretion, it has elected to issue such Letter of Credit, and it shall be the Issuing Lender with respect to such Letter of Credit in the event it elects to issue such Letter of Credit. In the event that both Bankers and First Chicago shall have declined to issue such Letter of Credit, notwithstanding the prior election of each of Bankers and First Chicago not to issue such Letter of Credit, each of Bankers and First Chicago shall be obligated to issue a Letter of Credit in a maximum aggregate amount available for drawing equal to such Lender s proportionate share (based upon the relative Pro Rata Shares of such Lenders) of the Letter of Credit requested by Company and each such Lender shall be an Issuing Lender with respect to the Letter of Credit issued by it. Each Issuing Lender which elects to issue a Letter of Credit shall promptly give written notice to Agent and each other Lender of the information required under clauses (i)-(iv) of the first paragraph of this subsection 2.4.B relating to such Letter of Credit. C. Payment of Amounts Drawn Under Letters of Credit. In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to determine that the documentation required to be delivered under such Letter of Credit has been delivered and that it complies on its face with the requirements of such Letter of Credit. In the event the Issuing Lender has determined to honor such a request for drawing, such Issuing Lender shall notify Company and Agent on or before the date on which such Issuing Lender intends to honor such drawing, and Company shall reimburse such Issuing Lender on the day on which such drawing is honored in an amount in same day funds equal to the amount of such drawing; provided that, anything contained in this Agreement to the contrary notwithstanding (i) unless prior to the close of business of the Business Day immediately preceding the date of such drawing (a) Company shall have notified Agent and Issuing Lender that it intends to reimburse such Issuing Lender for the amount of such drawing with funds other than the proceeds of Revolving Loans or (b) Company shall have delivered a Notice of Borrowing requesting Revolving Loans in an amount equal to the amount of such drawing, Company shall be deemed to have delivered a Notice of Borrowing to Agent requesting Lenders to make Revolving Loans which are Base Rate Loans on the date on which such drawing is honored in an amount equal to the amount of such drawing to be used to reimburse such drawing, and (ii) Lenders shall, on the date of such drawing, make Revolving Loans in the amount of such drawing to be made in accordance with subsection 2.1.A and 2.7.B, the proceeds of which shall be applied directly by Agent to reimburse such Issuing Lender for the amount of such drawing; provided further that, if for any reason proceeds of Revolving Loans are not received by such Issuing Lender on such date in an amount equal to the amount of such drawing, Company shall reimburse such Issuing Lender, on the Business Day immediately following the date of such drawing, in an amount in same day funds equal to the excess of the amount of such drawing over the amount of such Revolving Loans, if any, which are so received, plus accrued interest on such amount at the rate set forth in subsection 2.5.B.(ii). D. Payment by Lenders. If Company shall fail to reimburse an Issuing Lender, for any reason, as provided in subsection 2.4.C (including, without limitation, by means of the making of Revolving Loans by Lenders pursuant to the terms of subsection 2.4.C) in an amount equal to the amount of any drawing honored by such Issuing Lender under a Letter of Credit, such Issuing Lender shall promptly notify each Lender of the unreimbursed amount of such drawing and of such Lender s respective participation therein based on such Lender s Pro Rata Share. Each Lender shall make available to Issuing Lender an amount equal to its respective participation, in same day funds, at the office of such Issuing Lender specified in such notice, not later than 1:00 P.M. (New York time) on the Business Day after the date notified by such Issuing Lender. If any Lender fails to make available to such Issuing Lender the amount of such Lender s participation in such Letter of Credit as provided in this subsection 2.4.D, such Issuing Lender shall be entitled to recover such amount on demand from such Lender together with interest at the customary rate set by Agent for the correction of errors among banks for one Business Day and thereafter at the Base Rate. Nothing in this subsection 2.4.D shall be deemed to prejudice the right of any Lender to recover from such Issuing Lender any amounts made available by such Lender to such Issuing Lender pursuant to this subsection 2.4.D if it is determined by a court of competent jurisdiction that the payment with respect to such Letter of Credit by such Issuing Lender in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of such Issuing Lender. Each Issuing Lender shall distribute to each other Lender which has paid all amounts payable by it under this subsection 2.4.D with respect to any Letter of Credit, such other Lender s Pro Rata Share of all payments received by such Issuing Lender from Company in reimbursement of drawings honored by such Issuing Lender under such Letter of Credit when such payments are received. E. Obligations Absolute. The obligation of Company to reimburse each Issuing Lender for drawings made under the Letters of Credit and to repay any Revolving Loans made by Lenders pursuant to and in accordance with subsection 2.4.C and the obligations of Lenders under subsection 2.4.D shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances including, without limitation, the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off, defense or other right which Company or a Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any persons or entities for whom any such transferee may be acting), such Issuing Lender, any Lender or any other Person or, in the case of a Lender, against Company, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which the Letter of Credit was procured); (iii) any draft, demand, 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) payment by such Issuing Lender under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit; (v) any adverse change in the condition (financial or otherwise) of Company or any of its Subsidiaries; (vi) any breach of this Agreement or any other Loan Document by any Credit Party; (vii) any other circumstance or happening whatsoever, which is similar to any of the foregoing; or (viii) the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing. F. Indemnification; Nature of Issuing Lenders Duties. In addition to amounts payable as elsewhere provided in this subsection 2.4, Company hereby agrees to protect, indemnify, pay and save harmless each Issuing Lender from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees and disbursements of counsel) that such Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit, other than as a result of the gross negligence or willful misconduct of such Issuing Lender or (ii) the failure of such Issuing Lender to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions herein called Government Acts ). Each Lender, proportionately to its Pro Rata Share, severally agrees to indemnify such Issuing Lender to the extent such Issuing Lender shall not have been reimbursed in accordance with the terms of the Loan Documents for drawings under any Letter of Credit, for and against any of the foregoing claims, demands, liabilities, damages, losses, costs, charges and expenses to which such Issuing Lender is entitled to reimbursement under the Loan Documents. As between Company and each Issuing Lender, Company assumes all risks of the acts and omissions of, or misuse of such Letters of Credit by, the beneficiary or beneficiaries of each Letter of Credit. In furtherance and not in limitation of the foregoing, such Issuing Lender shall not be responsible (absent gross negligence or willful misconduct of such Issuing Lender (as determined by a court of competent jurisdiction)) for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with any Notice of Request for Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) any consequences arising from causes beyond the control of such Issuing Lender, including, without limitation, any Government Acts, and none of the above shall affect, impair, or prevent the vesting of any of such Issuing Lender s rights or powers hereunder. G. Additional Payments. If by reason of (a) any change in any applicable law, regulation, rule, decree or regulatory requirement or any change in the interpretation or application thereof by any judicial or regulatory authority or (b) compliance by any Issuing Lender or any Lender with any direction, request or requirement (whether or not having the force of law) of any governmental or monetary authority including, without limitation, Regulation D: (i) such Issuing Lender or any Lender shall be subject to any tax, levy, charge or withholding of any nature or to any variation thereof or to any penalty with respect to the maintenance or fulfillment of its obligations under this subsection 2.4, whether directly or by such being imposed on or suffered by such Issuing Lender or any Lender; (ii) any reserve, special deposit, premium, Federal Deposit Insurance Corporation assessment, capital adequacy or similar requirement is or shall be applicable, imposed or modified in respect of any Letters of Credit issued by such Issuing Lender or participations therein purchased by any Lender; or (iii) there shall be imposed on such Issuing Lender or any Lender any other condition regarding this subsection 2.4, any Letter of Credit or any participation therein; and the result of the foregoing is to directly or indirectly increase the cost to such Issuing Lender or any Lender of issuing, making or maintaining any Letter of Credit or of purchasing or maintaining any participation therein, or to directly or indirectly reduce the amount receivable in respect thereof by such Issuing Lender or any Lender, then and in any such case such Issuing Lender or such Lender may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Company and Agent, and Company shall pay on demand such amounts as such Issuing Lender or such Lender may specify to be necessary to compensate such Issuing Lender or such Lender for such additional cost or reduced receipt, together with interest on such amount from the date demanded until payment in full thereof at a rate equal at all times to the Base Rate plus 2% per annum. The determination by such Issuing Lender or any Lender, as the case may be, of any amount due pursuant to this subsection 2.4.G as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest error, be final and conclusive and binding on all of the parties hereto. 2.5. Fees A. Commitment Fees. Company agrees to pay to Agent for distribution to each Lender in proportion to such Lender s Pro Rata Share of the Revolving Loan Commitments, commitment fees for the period from and including the Closing Date, to and excluding the Term Loan Funding Date, equal to the average of the daily excess of the Loan Commitments over the sum of the aggregate principal amount of Revolving Loans and Swingline Loans outstanding and the Letter of Credit Usage, multiplied by the Applicable Commitment Fee Percentage, such commitment fees to be calculated on the basis of a 360-day year and the actual number of days elapsed and to be payable quarterly in arrears each March 31, June 30, September 30 and December 31 commencing on the first such date to occur after the Closing Date, and on the Commitment Termination Date. B. Letter of Credit Fees. Company agrees to pay the following amounts to each Issuing Lender with respect to each Letter of Credit issued by such Issuing Lender: (i) a commission equal to the Applicable Letter of Credit Fee Percentage multiplied by the maximum amount available from time to time to be drawn under any Letter of Credit, payable quarterly in arrears on each March 31, June 30, September 30 and December 31 and upon expiration of such Letter of Credit and calculated on the basis of a 360-day year and the actual number of days elapsed to be applied as follows: .1875% of the maximum amount available under each Letter of Credit shall be distributed to the Issuing Lender thereof, and the remainder of such commission shall be distributed to each Lender (including the Issuing Lenders) in proportion to such Lender s Pro Rata Share of the Revolving Loan Commitments; (ii) with respect to drawings made under any Letter of Credit, interest, payable on demand, on the amount paid by such Issuing Lender in respect of each such drawing from the date of the drawing through the date such amount is reimbursed by Company (including any such reimbursement derived from the proceeds of Revolving Loans made pursuant to subsection 2.4.C) at a rate that is at all times equal to 2% per annum in excess of the rate of interest otherwise payable under this Agreement for Base Rate Loans; and (iii) with respect to the issuance, amendment or transfer of each Letter of Credit and each drawing made thereunder (without duplication of the fees payable under clause (a) above), documentary and processing charges in accordance with such Issuing Lender s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or drawing, as the case may be, or as otherwise agreed by such Issuing Lender. Promptly upon receipt by such Issuing Lender of any amount described in clauses (ii) or (iii) of this subsection 2.5.B with respect to a Letter of Credit, such Issuing Lender shall distribute to each Lender which has purchased a participation in such Letter of Credit pursuant to subsection 2.4.A, its Pro Rata Share of such amount. C. Facility Fees. Company agrees to pay to Agent, for distribution to each Lender in proportion to such Lender s Pro Rata Share of (i) the Revolving Loan Commitments, facility fees for the period from and including the Closing Date to and excluding the Term Loan Funding Date, equal to the daily amount of the Revolving Loan Commitments and (ii) the Term Loans, facility fees for the period from the Term Loan Funding Date to but excluding the Commitment Termination Date, equal to the aggregate principal amount of the Term Loans outstanding on each day, in either case multiplied by the Applicable Facility Fee Percentage, such facility fee to be calculated on the basis of 360-day year and the actual number of days elapsed and to be payable quarterly in advance on the Closing Date and on each March 31, June 30, September 30 and December 31, commencing on the first such date to occur after the Closing Date, and on the Commitment Termination Date. D. Other Fees. Company agrees to pay to Agent such fees in the amounts and at the times separately agreed upon between Company and Agent. Company agrees to pay to Continental Bank upon its appointment as Bid Rate Loan Agent and Trustee a fee for services provided by Bid Rate Loan Agent and Trustee hereunder in the amounts and at the times separately agreed upon between Company and Continental Bank. E. Determination of Applicable Fee Percentage. On each Pricing Level Calculation Date, commencing with the first such date to occur after the end of the fiscal quarter of Company immediately succeeding the Closing Date, the Pricing Level in effect for the Pricing Period commencing on such Pricing Level Calculation Date and continuing for the term of the Pricing Period that begins on such Pricing Level Calculation Date shall be the applicable Pricing Level that is determined by reference to the definitions of Pricing Level I, Pricing Level II and Pricing Level III, subject to the proviso to the definition of Pricing Level. Notwithstanding the fact that the actual calculation of the applicable Pricing Level for a Pricing Period to commence during the first fiscal quarter of Company s fiscal year may be performed on a date subsequent to the Pricing Level Calculation Date occurring in such quarter, such Pricing Period shall commence on such Pricing Level Calculation Date. Upon the actual calculation of the applicable Pricing Level for the Pricing Period commencing during the first fiscal quarter of Company s fiscal year, adjustments to the amount of accrued fees shall be made to reflect retroactive application of the applicable Pricing Level to the first day of such Pricing Period. F. HLT Classification Period and HLT Fees. Agent shall notify Company and Lenders of the commencement of any HLT Classification Period, and Company shall pay to Agent for distribution to Lenders in accordance with their Pro Rata Shares, a fee equal to 1-1/4% of (i) during the Revolving Period, the Revolving Loan Commitments as in effect on the later of the Closing Date and the date occurring ninety days prior to the HLT Classification Date for which such notice was given and (ii) for the Term Period, the Term Loans outstanding on the HLT Classification Date for which such notice was given, which fee shall be due and payable in five equal installments commencing on the date that is 180 days after the relevant HLT Classification Date and on each date that occurs each three months thereafter until paid in full; provided that no such fee shall be payable at any time that the Commitments have been terminated and the Obligations paid in full or if no HLT Classification Period is in effect. Nothing herein contained shall be construed to impose on Agent any duty to determine that an HLT Classification Period has commenced. 2.6. Prepayments and Payments: Reductions in Commitments A. Voluntary Prepayments. Company may, upon not less than one Business Day s prior written or telephonic notice confirmed in writing to Agent (which notice Agent will promptly transmit by telegram, telex or telephone to each Lender), at any time and from time to time prepay any Loans in whole or in part in an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in excess of that amount (or, with respect to Swingline Loans only, in an aggregate minimum amount of $100,000); provided, however, that a Eurodollar Rate Loan or a CD Rate Loan may only be prepaid on the expiration of the Interest Period applicable thereto unless Company tenders to Agent at the time of such prepayment the payment of all amounts required to be paid by subsection 2.8.B. Company may not prepay any Bid Rate Loan without the consent of the applicable Lender. Notice of prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date. During the Revolving Period, Company may elect to apply such voluntary prepayment to the outstanding Loans without such prepayment effecting a reduction of the Revolving Loan Commitments. In the event that Company does not specify the Loan to which a prepayment is to be applied, such prepayment shall be applied to the full extent thereof pro rata to outstanding Swingline Loans and Revolving Loans that are Base Rate Loans, then to Eurodollar Rate Loans or CD Rate Loans, as determined by Agent, and then to cash collateralize outstanding Letters of Credit. During the Term Period, such voluntary prepayment shall be applied to prepay outstanding Term Loans to the full extent thereof, first to the next two immediately succeeding Scheduled Term Loans Principal Payments in their respective order of maturity and then pro rata to the remaining Scheduled Term Loans Principal Payments. B. Mandatory Prepayments and Reduction of Revolving Loan Commitments. (i) Prepayment Events. (a) Prepayments and Reductions from Asset Sales. No later than the second Business Day following the date of receipt by Company or any of its Subsidiaries of Cash Proceeds of any Asset Sale (including Cash Proceeds in respect of principal payments received on promissory notes received in connection with Asset Sales occurring on or after the date hereof), Company shall prepay the Loans in an amount equal to the Net Cash Proceeds of such Asset Sale that constitute Aggregate Excess Proceeds. Concurrently with the making of any prepayment or reduction pursuant to this subsection 2.6.B.(i)(a), Company shall deliver an Officers Certificate demonstrating the derivation of Net Cash Proceeds from the gross sales price of the correlative Asset Sale. In the event that Company shall, at any time after receipt of Cash Proceeds of any Asset Sale requiring a prepayment or commitment reduction pursuant to this subsection 2.6.B.(i)(a), determine that the prepayments and/or Commitment reductions previously made in respect of such Asset Sale were in an aggregate amount less than required by the terms of this subsection 2.6.B.(i)(a), Company shall promptly make an additional prepayment of the Loans and reduce the Revolving Loan Commitments and cash collateralize outstanding Letters of Credit) in an amount equal to the amount of any such deficit, and Company shall concurrently therewith deliver an Officers Certificate demonstrating the derivation of the additional Net Cash Proceeds resulting in such deficit. (b) Prepayments and Reductions Due to Insurance Proceeds. No later than the fifth Business Day following the date of receipt by Company or any of its Subsidiaries of any Insurance Proceeds or Condemnation Proceeds that constitute Aggregate Excess Proceeds, Company shall prepay the Loans in an amount equal to the aggregate amount of such Insurance Proceeds or Condemnation Proceeds that have not then been applied to reimburse Company or its Subsidiaries for investments previously made in corresponding Productive Assets, in the manner specified in subsection 2.6.B.(ii)(a). (c) Prepayments Due to Reductions of Revolving Loan Commitments. Company shall make prepayments of Revolving Loans and Swingline Loans so that the Total Utilization of Revolving Loan Commitments shall not at any time exceed the Revolving Loan Commitments then in effect. (ii) Application of Certain Prepayments and Reductions of Revolving Loan Commitments. (a) Application by Type of Loans and Order of Maturity. Amounts prepaid pursuant to subsection 2.6.B.(i)(a)-2.6.B.(i)(b) shall be applied as follows: during the Revolving Period, any such prepayment shall be applied first, to the full extent thereof to outstanding Revolving Loans that are Base Rate Loans, second to the full extent thereof to Eurodollar Rate Loans or CD Rate Loans, third to the full extent thereof to Swingline Loans, fourth to the full extent thereof to prepay or cash collateralize Bid Rate Loans (at the election of the Lenders who have made such Bid Rate Loans), and fifth to the full extent thereof to cash collateralize outstanding Letters of Credit; and during the Term Period, any such prepayment shall be applied to prepay Term Loans to the full extent thereof, first to the next two immediately succeeding Scheduled Term Loans Principal Payments in their respective order of maturity and then pro rata to the remaining Scheduled Term Loans Principal Payments; provided that, following an acceleration of the Obligations pursuant to Section 7, and until such acceleration may have been rescinded or annulled, all such prepayments shall be applied pro rata to the outstanding Loans and then to cash collateralize Letters of Credit. (b) Application to Principal and Interest of Loans. All prepayments shall include payment of accrued interest on the principal amount so prepaid and shall be applied to the payment of interest before application to principal. Any prepayment shall be applied first to Base Rate Loans to the full extent thereof before application to CD Rate Loans or Eurodollar Rate Loans. C. Manner and Time of Payment. All payments by Company of principal, interest, reimbursements, fees and other Obligations hereunder and under the Notes shall be made without defense, set-off or counterclaim and in same day funds and delivered to Agent not later than 2:00 p.m. (New York time) on the date due at its office located at One Bankers Trust Plaza, New York, New York for the account of Lenders; funds received by Agent after that time on such due date shall be deemed to have been paid on the next succeeding Business Day. Company hereby authorizes Agent to charge its accounts with Agent in order to cause timely payment to be made to Agent of all principal, interest, reimbursements, fees and expenses due hereunder (subject to sufficient funds being available in its respective accounts for that purpose). D. Apportionment of Payments. Aggregate principal and interest payments shall be apportioned among all out- standing Loans (other than Swingline Loans and Bid Rate Loans) and fees to which such payments relate, in each case proportionately to Lenders respective Pro Rata Shares. Reimbursement payments in respect of Letters of Credit shall be paid over by Agent to the Issuing Lender who issued the respective Letter of Credit. Agent shall promptly distribute to each Lender at its primary address set forth below its name on the appropriate signature page hereof or such other address as such Lender may request, its Pro Rata Share of all such payments received by Agent and the commitment fees and compensation amounts of such Lender when received by Agent pursuant to subsection 2.5. Notwithstanding the foregoing provisions of this subsection 2.6.D if, pursuant to the provisions of subsection 2.8, any Notice of Borrowing or Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of Eurodollar Rate Loans, Agent shall give effect thereto in apportioning payments received thereafter. E. Payments on Business Days. Whenever any payment to be made hereunder or under the Notes shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or under the Notes or of the commitment and other fees hereunder, as the case may be. F.Notation of Payment. Each Lender agrees that before disposing of any Loan recorded for such Lender s benefit in the Register, or any part thereof (other than by granting participations therein), such Lender will make a notation in such Lender s internal register of all Loans made in respect thereof and principal payments previously made thereon and of the date to which interest thereon has been paid, and will notify Company and Agent of the name and address of the transferee of such Loan or portion thereof; provided that the failure to make (or any error in the making of) a notation of any Loan or to notify Company and Agent of the name and address of such transferee shall not limit or otherwise affect the obligation of Company hereunder with respect to any Loan and payments of principal or interest on any such Loan. G. Voluntary Reductions of Revolving Loan Commitments. Company shall have the right, at any time and from time to time, to terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitments in an amount up to the amount by which the Revolving Loan Commitments exceed the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or reduction. Company shall give not less than one Business Day s prior written notice to Agent designating the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction. Promptly after receipt of a notice of such termination or partial reduction, Agent shall notify each Lender of the proposed termination or reduction. Such termination or reduction of the Revolving Loan Commitments shall be effective on the date specified in Company s notice and shall reduce the Revolving Loan Commitment of each Lender proportionately to its applicable Pro Rata Share. Any such partial reduction of the Revolving Loan Commitments shall be in an aggregate minimum amount of $1,000,000, and integral multiples of $500,000 in excess of that amount. H. Mandatory Reductions of Revolving Loan Commitments. The Revolving Loan Commitments shall be permanently reduced on each date that Company is required to make mandatory prepayments of Loans (or would be required to prepay Loans if Loans were outstanding) pursuant to subsection 2.6.B in the full amount of the Net Cash Proceeds, Insurance Proceeds or Condemnation Proceeds received by Company or any of its Subsidiaries in the amount that would be required to be applied to repay Loans if Loans in at least such amount were outstanding. To the extent that, as of any date of determination, Letter of Credit Usage exceeds the Revolving Loan Commitments then in effect, Company shall use its best efforts to obtain such substitute letters of credit and surrender to the Issuing Lenders thereof for cancellation the Letters of Credit being replaced, as may be necessary to reduce Letter of Credit Usage to an amount not in excess of the Revolving Loan Commitments. In the event that Company is unable to arrange for such substitution and cancellation of Letters of Credit on or before a date of determination, Company shall cash collateralize the Letters of Credit in an amount not less than the difference between the Revolving Loan Commitments and the Letter of Credit Usage. 2.7. Use of Proceeds A. Term Loans. The proceeds of the Term Loans shall be applied by Company to repay in full the principal amount of all Loans made pursuant to the Revolving Loan Commitments outstanding on the Term Loan Funding Date. B. Revolving Loans Swingline Loans and Bid Rate Loans. The proceeds of the Revolving Loans made on the Closing Date shall be used to repay the obligations of Company and its Subsidiaries arising under the Old Credit Agreement. The proceeds of the Revolving Loans, the Swingline Loans and the Bid Rate Loans shall also be used, and Company shall cause such proceeds to be used, only for Company s general corporate purposes, which may include the repayment of the Swingline Loans pursuant to subsection 2.1.B, the payment of the Bid Rate Loans, the reimbursement to any Issuing Lender of any amounts drawn under any Letters of Credit issued by such Issuing Lender as provided in subsection 2.4.D the payment of fees, costs and expenses payable by Company pursuant to the Old Credit Agreement and this Agreement, the making of intercompany loans to Company s Subsidiaries for their own general corporate purposes and the repurchase from the holders thereof of any Commercial Paper. C. Letters of Credit. Letters of Credit shall be issued solely for the purposes specified in the definition of Letters of Credit. D. Margin Regulations. No portion of the proceeds of any borrowing under this Agreement shall be used by Company or any of its Subsidiaries in any manner that might cause the borrowing or the application of such proceeds to violate Regulation G, Regulation U, Regulation T, or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of the Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds. E. Benefits to Subsidiaries. In consideration of the issuance of the Subsidiary Guaranties, Company agrees to make certain of the benefits of the Revolving Loans, Bid Rate Loans, Swingline Loans and Letters of Credit available to the Subsidiaries of Company executing and delivering such Subsidiary Guaranties. 2.8. Special Provisions Governing CD Rate Loans and Eurodollar Rate Loans Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to CD Rate Loans and Eurodollar Rate Loans as to the matters covered: A. Increased Costs, Illegality, etc. (i) In the event that any Lender, including Agent, shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clauses (a) and (b)(y) below, shall be made only after consultation with Company and Agent): (a) on any date for determining the Adjusted Eurodollar Rate for any Interest Period that, by reason of any changes arising on or 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 Adjusted Eurodollar Rate so that the determined rate will not adequately and fairly reflect the costs of the Lender making the relevant Eurodollar Rate Loan; or (b) at any time, that such Lender shall incur increased costs or reductions in the amounts or in the rate of return received or receivable hereunder with respect to any Loan bearing interest by reference to the Adjusted Eurodollar Rate because of (x) any change since the date of this Agreement in any applicable law, governmental rule, regulation, guideline or order 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, guideline or order) (such as, for example, but not limited to, 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 Adjusted Eurodollar Rate); (y) any other circumstances affecting such Lender, the interbank Eurodollar market or the position of such Lender in such market and/or (z) the maintenance of reserves not reflected in the determination of the Adjusted Eurodollar Rate, as the case may be; or (c) at any time, that the making or continuance of any Loan has become unlawful as a result of compliance by such Lender in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the date of this Agreement which materially and adversely affects the interbank Eurodollar market; then, and in any such event, such Lender on such date may give notice (by telephone, confirmed in writing) to Company and to Agent of such determina- tion (which notice Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (a) above, Eurodollar Rate Loans shall no longer be available until such time as Agent notifies Company and Lenders that the circumstances giving rise to such notice by Agent no longer exist, and any Notice of Borrowing or Notice of Conversion/Continuation pursuant to subsections 2.1.B or 2.3.E respectively, given by Company with respect to such Loans which have not yet been incurred shall be deemed rescinded by Company, (y) in the case of clause (b) above, Company shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing the basis for the calculation thereof, submitted to Company by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto) and (z) in the case of clause (c) above, Company shall take one of the actions specified in subsection 2.8.A.(ii) as promptly as possible and, in any event, within the time period required by law. (ii) At any time that any Loan is affected by the circumstances described in subsection 2.8.A (an Affected Loan ), Company may (and in the case of an Affected Loan pursuant to subsection 2.8.A.(i)(c) shall) either (a) if the Affected Loan is then being made pursuant to a Notice of Borrowing or being converted or continued pursuant to a Notice of Conversion/Continuation, cancel said Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, by giving Agent telephonic notice (confirmed promptly in writing) thereof on the same date that Company was notified by a Lender pursuant to subsection 2.8.A, or (b) if the Affected Loan is then outstanding, upon at least three Business Days notice to Agent, require the Lender (the Affected Lender ) who has made such Affected Loan to convert each such Affected 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 in the same manner pursuant to this subsection 2.8.A.(ii). B. Compensation. Company shall compensate each Lender, upon written request to Company by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including, without limitation, any interest paid by such Lender to lenders of funds borrowed by it to make or carry its CD Rate Loans or Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds) such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any CD Rate Loans or Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Borrowing, a Notice of Conversion/Continuation (whether or not withdrawn by Company or deemed withdrawn pursuant to subsections 2.8.A) or a telephonic request for borrowing or conversion/continuation or a successive Interest Period does not commence after notice therefor is given pursuant to subsection 2.3.E, (ii) if any repayment or conversion of any of its CD Rate Loans or Eurodollar Rate Loans occurs on a date that is not the last day of an Interest Period applicable to such Loan, (iii) if any repayment of any of its CD Rate Loans or Eurodollar Rate Loans is not made on any date specified in a notice of repayment given by Company, or (iv) as a consequence of (y) any other default by Company to repay its CD Rate Loans or Eurodollar Rate Loans when required by the terms of this Agreement or (z) an election made pursuant to subsection 2.8.A. C. Eurodollar Rate Taxes and Tax Withholding. Promptly upon notice from any Lender to Company, Company will pay, prior to the date on which penalties attach thereto, all present and future income, stamp and other taxes, levies, or costs and charges whatsoever imposed, assessed, levied or collected on or in respect of a Loan solely as a result of the interest rate being determined by reference to the Adjusted Eurodollar Rate and/or the provisions of this Agreement relating to the Adjusted Eurodollar Rate and/or the recording, registration, notarization or other formalization of any thereof and/or any payments of principal, interest or other amounts made on or in respect of a Loan when the interest rate is determined by reference to the Adjusted Eurodollar Rate (all such taxes, levies, costs and charges being herein collectively called Eurodollar Rate Taxes ), without duplication of such amounts reflected in the calculation of the Adjusted Eurodollar Rate performed in accordance with the definition thereof contained herein; provided that Eurodollar Rate Taxes shall not include: taxes imposed on or measured by the overall net income of such Lender (whether gross or net income) by the United States of America or any political subdivision or taxing authority thereof or therein, or taxes on or measured by the overall income of any foreign branch, operation or subsidiary of such Lender (whether gross or net income) by any foreign country or subdivision thereof in which such branch, operation or subsidiary is doing business or any withholding taxes imposed by the United States of America with respect to the payment of interest. Company shall also pay such additional amounts equal to increases in taxes payable by such Lender described in the foregoing proviso which increases are attributable to payments made by Company described in the immediately preceding sentence or this sentence. Promptly after the date on which payment of any such Eurodollar Rate Tax is due pursuant to applicable law, Company will, at the request of such Lender, furnish to such Lender evidence, in form and substance satisfactory to such Lender, that Company have met their obligations under this subsection 2.8.C. Company will indemnify each Lender against, and reimburse each Lender on demand for, any Eurodollar Rate Taxes, as determined by such Lender in its good faith discretion. Such Lender shall provide Company with appropriate receipts for any payments or reimbursements made by Company pursuant to this clause (ii) of subsection 2.8.C. Notwithstanding the foregoing, Company shall be entitled, to the extent it is required to do so by law, to deduct or withhold (and shall not be required to make payments as otherwise required in this subsection on account of such deductions or withholding) income or other similar taxes imposed by the United States of America from interest, fees or other amounts payable hereunder for the account of any Lender other than a Lender (i) who is a domestic corporation (as such term is defined in Section 7701 of the Internal Revenue Code of 1986, as amended) for federal income tax purposes or (ii) who has the Prescribed Forms on file with Company for the applicable year to the extent deduction or withholding of such taxes is not required as a result of the filing of such Prescribed Forms; provided that if Company shall so deduct or withhold any such taxes, it shall provide a statement to Agent and such Lender setting forth the amount of such taxes so deducted or withheld, the applicable rate and any other information or documentation which such Lender may reasonably request for assisting such Lender to obtain any allowable credits or deductions for the taxes so deducted or withheld in the jurisdiction or jurisdictions in which such Lender is subject to tax. Company agrees to indemnify any Lender referred to in the previous sentence who has the Prescribed Forms on file with Company (but in respect of which, despite the filing of such Prescribed Forms, deduction or withholding of taxes is required) for such taxes referred to above other than taxes of the type excluded from the definition of Eurodollar Rate Taxes in such amounts as may be necessary so that such Lender receives payment of all amounts due hereunder as provided for herein, after giving effect to the tax effect of all such deductions and withholding. D. Booking of Eurodollar Rate Loans. Any Lender may make, carry or, provided that such transfer will not result in increased cost to Company under this subsection 2.8, transfer Eurodollar Rate Loans at, to, or for the account of, any of its branch offices or the office of an Affiliate of such Lender; provided that each Lender agrees that upon the occurrence of any event giving rise to the operation of subsections 2.8.A.(i)(b) or 2.8.A.(i)(c) with respect to such Lender, such Lender will if so requested by Company use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office for any Affected Loans with the objective of avoiding the consequence of the event giving rise to the operation of such subsections, but only if, in the sole judgment of such Lender, such designation would not be otherwise disadvantageous to such Lender. Nothing in this proviso shall affect or postpone any of the obligations of Company or the rights of any Lender pursuant to subsections 2.8.A or 2.8.C, and Company hereby agrees to pay all expenses incurred by any Lender in designating and using another lending office pursuant to this proviso. E. Assumptions Concerning Funding of CD Rate Loans and Eurodollar Rate Loans. Calculation of all amounts payable to a Lender under this subsection 2.8 shall be made as though such Lender had actually funded its relevant CD Rate Loan through the issuance of a certificate of deposit by one of its domestic offices bearing interest by reference to the Adjusted Certificate of Deposit Rate in an amount equal to the amount of the CD Rate Loan and having a maturity comparable to the relevant Interest Period or had funded its relevant Eurodollar Rate Loan through the purchase of a Eurodollar deposit bearing interest by reference to the Adjusted Eurodollar Rate in an amount equal to the amount of the Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America, as the case may be; provided, however, that each Lender may fund each of its CD Rate Loans and Eurodollar Rate Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection 2.8. F. CD Rate Loans and Eurodollar Rate Loans After Default. After the occurrence of and during the continuance of a Potential Event of Default or Event of Default, Company may not elect to have a Loan be made or maintained as, or converted to, a CD Rate Loan or a Eurodollar Rate Loan after the expiration of any Interest Period then in effect for such Loan. G. Replacement Lender In the event Company becomes obligated to pay any material additional amounts to any Lender pursuant to subsections 2.8.A.(i)(b), 2.8.C or 2.9, or it becomes illegal for any Lender to continue to fund or to make Eurodollar Loans pursuant to subsection 2.8.A.(i)(c), as a result of any event or condition described in any such subsection, then, unless such Lender has theretofore taken steps to remove or cure, and has removed or cured, the conditions creating the cause for such obligation to pay such additional amounts or for such illegality, Company may designate a substitute lender acceptable to Agent (such lender herein called a Replacement Lender ) to purchase such Lender s rights and obligations hereunder, without recourse to or warranty by, or expense to, such Lender, for a purchase price equal to the outstanding principal amounts payable to such Lender hereunder, plus any accrued and unpaid interest on such amount and accrued and unpaid fees in respect of Lender s Commitment. Upon such purchase by Replacement Lender and payment of all other amounts owing to the Lender being replaced hereunder, such Lender shall no longer be a party hereto or have any rights or obligations hereunder, and the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder. 2.9. Capital Adequacy Adjustment If any Lender shall have determined that the adoption or effectiveness, after the date hereof, of any applicable law, rule or regulation (or any provision thereof), regarding capital adequacy, or any change therein or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within fifteen days after demand (given in writing or by telephone and confirmed in writing) by such Lender (with a copy to Agent), Company shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this subsection 2.9, will give prompt written notice thereof to Company, which notice shall set forth the basis of the calculation of such additional amounts, although the failure to give any such notice shall not release or diminish any obligation of Company to pay additional amounts under this subsection 2.9. 2.10. Pledge and Guaranties To secure the full performance of the Obligations, Company shall grant to Agent on behalf of Lenders a duly perfected, first priority Lien on all shares of capital stock now owned or hereafter acquired by Company in Easco (to be held until Easco delivers to Agent its duly executed Subsidiary Guaranty in accordance with subsection 5.7, whereupon the pledge will be terminated) and each Guarantor shall have executed and delivered to Agent on behalf of Lenders, its Subsidiary Guaranty. 2.11. Additional Lenders By due execution and delivery of a written instrument acceptable to and signed by Company, Agent and the financial institution party thereto, such financial institution ( Additional Lender ) may become a party to this Agreement and become a Lender for all purposes hereof and become entitled to all benefits and rights and subject to all duties and obligations hereunder and the other Loan Documents to the same extent as if it had executed copies hereof; provided that the amount of the Commitments of such Additional Lender shall be $15,000,000. Agent shall give written notice of such Additional Lender becoming a Lender hereunder to all other parties hereto reasonably promptly after such written instrument becomes effective and shall enclose therewith a conformed copy of such written instrument, which shall set forth notice address information of the type appearing on the signature pages hereof. Upon the addition of the Additional Lender and the increase of the aggregate amount of the Commitments, the Pro Rata Share of each Lender shall adjust accordingly. SECTION 3. CONDITIONS TO LOANS AND LETTERS OF CREDIT The effectiveness of this Agreement and the obligations of Lenders to make Loans and of Issuing Lenders to issue Letters of Credit are subject to the satisfaction of all of the following conditions. 3.1. Conditions to Effectiveness of this Agreement The effectiveness of this Agreement is subject to prior or concurrent satisfaction of the following conditions: A. Company Documents. On or before the Closing Date, Company shall deliver or cause to be delivered to Lenders (or to Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Closing Date: (i) Certified copies of its Certificate of Incorporation, together with a good standing certificate from the state of its incorporation and each other state in which it is qualified as a foreign corporation to do business, in each case to be dated a recent date prior to the Closing Date and to be supplemented by a bring-down telegram from the respective Secretary of State; (ii) Copies of its bylaws, certified as of the Closing Date by its corporate secretary or an assistant secretary; (iii) Resolutions of its board of directors approving and authorizing the execution, delivery and performance of this Agreement and the other Loan Documents, in form and substance satisfactory to Agent and its counsel, certified as of the Closing Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) Signature and incumbency certificates of its officers executing this Agreement and the other Loan Documents to which it is a party; (v) Executed originals of this Agreement and the other Loan Documents to which it is a party; and (vi) Such other documents as Agent may reasonably request. B. Delivery of Subsidiary Documents. On or before the Closing Date, each of the Material Subsidiaries shall have delivered to Lenders (or to Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) each, unless otherwise noted, dated as of the Closing Date: (i) Certified copies of its Certificate of Incorporation, together with a good standing certificate from the Secretary of State of the state of its incorporation and each state in which it has material operations in each case dated a recent date prior to the Closing Date; (ii) Copies of its bylaws, certified as of the Closing Date by its corporate secretary or an assistant secretary; (iii) Resolutions of its board of directors approving and authorizing the execution, delivery and performance of each Loan Document to which it is a party, in form and substance satisfactory to Agent and its counsel, each certified as of the Closing Date by its corporate secretary or an assistant sec- retary; (iv) Signature and incumbency certificates of its officers executing each Loan Document to which it is a party; (v) Executed copies of each Loan Document to which it is a party; and (vi) Such other documents as Agent may reasonably request. C. Delivery of Compliance Certificate. Company shall have delivered to Agent a Compliance Certificate as at the most recently ended fiscal quarter of Company, substantially in the form of Exhibit VI annexed hereto, dated as of the Closing Date in form and substance satisfactory to Agent. D. Fees. Company shall have paid to Agent for distribution (as appropriate) to Agent and Lenders the fees payable on the Closing Date, together with all fees and expenses payable pursuant to subsection 9.2. E. Opinions of Credit Parties Counsel. Lenders shall have received originally executed copies of one or more favorable written opinions of Skadden, Arps, Slate, Meagher & Flom, counsel for the Credit Parties, in form and substance reasonably satisfactory to Agent and its counsel, dated as of the Closing Date, and setting forth substantially the matters in the opinions designated in Exhibit VIII annexed hereto, and as to such other matters as Agent or Requisite Lenders may reasonably request. F. Opinions of Agent s Counsel. Lenders shall have received an originally executed copy of one or more favorable written opinions of O Melveny & Myers, dated as of the Closing Date, substantially in the form of Exhibit IX annexed hereto. G. No Action or Injunction. No litigation, inquiry or other action and no injunction or restraining order shall be pending or threatened with respect to the making of the Loans hereunder which Requisite Lenders shall reasonably determine could have a Material Adverse Effect. H. No Material Adverse Effect. Nothing shall have occurred since the date of the Financial Statements, and no fact or condition not previously known has come to the attention of any Lender, that could, in the reasonable determination of Requisite Lenders, have a material adverse effect on the business, property, assets, liabilities, condition (financial or otherwise), operations or results of operations of the Credit Parties, impair the ability of any Credit Party to perform its respective Obligations, or impair the ability of Agent or Lenders to enforce the Obligations. I. Representations and Warranties; Performance of Agreements. Each Credit Party shall have delivered to Agent an Officers Certificate in form and substance satisfactory to Agent to the effect that the representations and warranties contained in Section 4 hereof pertaining to such Credit Parties are true, correct and complete in all material respects on and as of the Closing Date to the same extent as though made on and as of that date and that each such Credit Party shall have performed in all material respects all of its respective obligations which this Agreement provides shall be performed on or before the Closing Date except as otherwise disclosed to and agreed to in writing by Agent and Requisite Lenders. J. Compliance with Laws. Agent shall have been provided with satisfactory evidence that Company and its Subsidiaries are in compliance with all applicable laws, rules, regulations and orders of any federal, state or local governmental authority, including, without limitation, all Environmental Laws, the non-compliance with which could have a Material Adverse Effect. K. Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Agent and such counsel, and Agent and its counsel shall have received all such counterpart originals or certified copies of such documents as Agent may reasonably request. L. Old Credit Agreement. All action shall have been taken as, in the sole judgment of Agent and its counsel or Requisite Lenders, may be necessary or desirable to terminate the Old Credit Agreement and the commitments thereunder, and the guaranties, security agreements, pledge agreements, mortgages, deeds of trust, cash collateral agreements, financing statements and all other agreements, documents and instruments entered into in connection therewith, including, without limitation, the payment of all obligations arising under the Old Credit Agreement simultaneously with the making of the initial Loans hereunder, the termination in writing by Company of the commitments thereunder and the release of all collateral and guaranties held therefor. 3.2. Conditions to Letters of Credit The obligation of the Issuing Lenders to issue any Letter of Credit is, in addition to the conditions precedent specified in subsection 3.3, subject to Agent having received on or before the date of issuance of such Letter of Credit in accordance with the provisions of subsection 2.4.B, a Notice of Request for Letter of Credit and all other information specified in subsection 2.4.B, and such other documents as such Issuing Lender may reasonably require in connection with the issuance of such Letter of Credit. 3.3. Conditions to All Loans and Letters of Credit The obligations of Lenders to make Revolving Loans, Swingline Loans, Bid Rate Loans and Term Loans (which shall not include conversions or continuations of existing Loans pursuant to subsection 2.3.E or 2.8 or the conversion to Term Loans of Revolving Loans outstanding on the Term Loan Funding Date, but which shall include the portion of such Term Loans the proceeds of which are to be applied to repay Bid Rate Loans or Swingline Loans) and the obligation of each Issuing Lender to issue a Letter of Credit on each Funding Date are subject to the following further conditions precedent: A. Agent or Bid Rate Loan Agent, as the case may be, shall have received, in accordance with the provisions of subsection 2.1.C, 2.1.E.(ii) or 2.4.B, as the case may be, before that Funding Date, an originally executed Notice of Borrowing, Bid Rate Loan Quote Request or Notice of Request for Letter of Credit, as the case may be, in each case signed by the chief executive officer, the chief financial officer or the comptroller of Company or by any executive officer of Company designated by any of the above-described officers on behalf of Company in writing delivered to Agent. B. As of such Funding Date: (i) The representations and warranties contained herein shall be true, correct and complete in all material respects on and as of such Funding Date to the same extent as though made on and as of that date except those that by their terms specifically relate only to an earlier date, which shall have been accurate as of such date; (ii) No event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated by such Notice of Borrowing or the issuance of such Letter of Credit that would constitute an Event of Default or a Potential Event of Default (other than the failure to reimburse the Issuing Lender for a drawing under a Letter of Credit in the case of a Notice of Borrowing made to request Revolving Loans the proceeds of which will be applied directly by Agent to reimburse such Issuing Lender for the amount of such unpaid drawing); (iii) Each Credit Party shall have performed in all material respects all agreements and satisfied all conditions that this Agreement provides shall be performed by it on or before that Funding Date; (iv) No order, judgment or decree of any court, arbitrator or govern- mental authority shall purport to enjoin or restrain any Lender from making the Loans or the Issuing Lender from issuing the Letter of Credit; (v) Not more than twenty-five percent of the value of the assets of Company, or of Company and its Subsidiaries on a consolidated basis, shall constitute Margin Stock. The making of the Loans or the issuing of the Letter of Credit requested on such Funding Date shall not violate Regulation G, Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System and no part of the proceeds of any Loan or Letter of Credit will be used to purchase or carry any Margin Stock in violation of Regulation U or to extend credit for the purpose of purchasing or carrying any Margin Stock in violation of Regulation U; and (vi) There shall not be pending or, to the knowledge of Company, threatened, any action, suit, proceeding, governmental investigation or arbitration against or affecting any Credit Party or any property of any Credit Party that has not been disclosed by Company in writing pursuant to subsection 4.6 or 5.1.I prior to the making of the most recent preceding Loans (or, in the case of the initial Loans, prior to the execution of this Agreement) or the issuing of the most recent Letter of Credit (or, in the case of the initial Letter of Credit, prior to the execution of this Agreement) and there shall have occurred no development not so disclosed in any such action, suit, proceeding, governmental investigation or arbitration so disclosed, that, in either event, in the opinion of Requisite Lenders, would be expected to have a Material Adverse Effect. No injunction or other restraining order shall have been issued and no hearing to cause an injunction or other restraining order to be issued shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the performance of this Agreement or the making of Loans or the issuing of a Letter of Credit hereunder. C. Each time Agent or Bid Rate Loan Agent, as the case may be, is notified by Company of a proposed Loan or issuance of a proposed Letter of Credit, such notification shall be deemed to constitute a representation of Company that each of the conditions set forth in this subsection 3.3 will be satisfied on the Funding Date of the proposed Loan or date of issuance of the proposed Letter of Credit. SECTION 4. REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Agreement, Company represents and warrants to each Lender that the following statements are true, correct and complete: 4.1. Organization, Powers, Good Standing and Business A. Organization and Powers. Each Credit Party is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. Each Credit Party has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into and perform under the Loan Documents, to carry out the transactions contemplated thereby and to issue the Notes, in each case to the extent it is a party thereto. B. Good Standing. Each Credit Party is or will as of the Closing Date be in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its present business and operations, except where the failure to be so qualified has not had and will not have a Material Adverse Effect. C. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date are identified in Schedule C annexed hereto. None of the capital stock of the Persons identified on Schedule C is Margin Stock. Each of the Subsidiaries identified on Schedule C is validly existing and in good standing under the laws of its respective jurisdiction of incorporation and has full corporate power and authority to own its assets and properties and to operate its business as presently owned and conducted except where failure to be in good standing or a lack of corporate power and authority has not had and will not have a Material Adverse Effect. Schedule C correctly sets forth the ownership interest of each Credit Party in each of its Subsidiaries identified therein. Each of the Subsidiaries of Company is a direct or indirect wholly-owned Subsidiary of Company. 4.2. Authorization of Borrowing, etc. A. Authorization of Borrowing. The execution, delivery and performance of the Loan Documents has been duly authorized by all necessary corporate action by each Credit Party that is a party thereto. B. No Conflict. The execution, delivery and performance by each Credit Party of the Loan Documents, the issuance, delivery and performance of the Notes and any other trans- action contemplated by the Loan Documents do not and will not (i) violate any provision of law applicable to such Credit Party, the certificate of incorporation or bylaws of such Credit Party or any order, judgment or decree of any court or other agency of government binding on such Credit Party, violation of which could have a Material Adverse Effect, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of such Credit Party in a manner that could have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Credit Party (other than Liens granted by Company in the capital stock of Easco in favor of Agent on behalf of Lenders) or (iv) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of any Credit Party, except for such approvals or consents which will be obtained on or before the Closing Date as set forth on Schedule D annexed hereto. C. Governmental Consents. The execution, delivery and performance by each Credit Party of the Loan Documents to which it is a party, the issuance, delivery and performance of the Notes and the consummation any other transactions contemplated by the Loan Documents do not and will not require any registration with, consent or approval of, or notice to, or other action in respect of, with or by, any federal, state or other governmental authority or regulatory body, except for filings and approvals which have been made or obtained as set forth on Schedule D hereto and filings and approvals the failure to make or obtain which would not have a Material Adverse Effect. All such consents or approvals from or notices to or filings with any federal, state or other regulatory authorities required to be obtained on or before the Closing Date will have been accomplished in all material respects in compliance with all applicable laws and regulations. D. Binding Obligation. Each of the Loan Documents has been duly executed and delivered by each Credit Party that is a party thereto, and is the legally valid and binding obligations of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors rights generally and subject to the availability of equitable remedies. 4.3. Financial Condition Company has heretofore delivered to Lenders, at Lenders request, the Financial Statements. All such statements were prepared in conformity with GAAP and fairly present the consolidated or consolidating, as the case may be, financial position of Company and its Subsidiaries as at the respective dates thereof and the consolidated or consolidating, as the case may be, results of operations and statements of cash flow of Company and its Subsidiaries for each of the periods then ended. Neither Company nor any Subsidiary has (and will not following the funding of the Loans have) any Contingent Obligation, contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment that is not reflected in the foregoing Financial Statements that could have a Material Adverse Effect. 4.4. No Material Adverse Change; No Stock Payments No event or change has occurred since December 31, 1989 that, in the reasonable judgment of Requisite Lenders, has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect. From and after the Closing Date, neither Company nor any of its Subsidiaries has directly or indirectly declared, ordered, paid, made or set apart any sum or property for any Restricted Junior Payment or agreed so to do except as permitted by subsection 6.4. 4.5. Title to Properties; Liens Company and its Subsidiaries have good, sufficient and legal title, subject to Permitted Encumbrances to or a leasehold interest, in all the properties and assets reflected in the more recent of (x) the Financial Statements and (y) the most recent financial statements delivered pursuant to subsection 5.1 of this Agreement, except for properties and assets acquired or disposed of since the date of such financial statements and except for such defects that in the aggregate will not have a Material Adverse Effect. All such properties and assets are free and clear of Liens except as permitted by this Agreement. 4.6. Litigation; Adverse Facts There is no action, suit, proceeding, governmental arbitration or governmental investigation (whether or not purportedly on behalf of any Credit Party) at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, pending or, to the knowledge of Company, threatened against or affecting any Credit Party or any property of any Credit Party that has, or would be expected to result in, any Material Adverse Effect. 4.7. Payment of Taxes Except to the extent permitted by subsection 5.3, all tax returns and reports of Company and its Subsidiaries required to be filed by it have been timely filed, and all taxes, assessments, fees and other governmental charges upon such Persons and upon their respective properties, assets, income and franchises which are due and payable, except where being contested in good faith or where the non-payment of which would not have a Material Adverse Effect, have been paid when due and payable. Company knows of no proposed tax assessment against any such Person which is not being actively contested by such Person, in good faith and by appropriate proceedings; provided that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. 4.8. Performance of Agreements A. No Credit Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, would not in either case have a Material Adverse Effect. Schedule H correctly identifies all credit facilities of Company and its Subsidiaries as of the Closing Date. B. No Credit Party is a party or subject to any agreement or instrument which has or will have, in any case or in the aggregate, a Material Adverse Effect. 4.9. Governmental Regulation No Credit Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or to any federal or state statute or regulation limiting its ability to incur Indebtedness. 4.10. Securities Activities No Credit Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. 4.11. Employee Benefit Plans A. Company and each ERISA Affiliate are in substantial compliance with all applicable provisions and requirements of ERISA with respect to each Employee Benefit Plan, and have substantially performed all their obligations under each Employee Benefit Plan. There are no actions, suits or claims (other than routine claims for benefits) pending or threatened against any Employee Benefit Plan or its assets liability for which would constitute a Material Adverse Effect, and, to the best knowledge of Company, no facts exist which could give rise to any such actions, suits or claims. B. Except as disclosed in Schedule F, within the period of five years ending on the Closing Date, no ERISA Event has occurred, and there is no unpaid liability of Company or any ERISA Affiliate that arose in connection with any ERISA Event that occurred prior to that five-year period. Except as disclosed in Schedule F, no ERISA Event is reasonably expected to occur with respect to any Employee Benefit Plan. 4.12. Certain Fees No broker s or finder s fee or commission are or will be payable with respect to the offer, issuance and sale of the Notes or any of the other transactions contemplated hereby or thereby, and Company hereby indemnifies Lenders against and agrees that it will hold Lenders harmless from any claim, demand or liability for broker s or finder s fees alleged to have been incurred in connection with any such offer, issuance and sale, or any of the other transactions contemplated hereby and any expenses, including legal fees, arising in connection with any such claim, demand or liability. No other similar fees or commissions will be payable by any Credit Party for any other services rendered to Company or any of its Subsidiaries ancillary to the transactions contemplated hereby. 4.13. Environmental Protection Except as set forth in Schedule G annexed hereto: A. the operations of Company and each of its Subsidiaries (including, without limitation, all operations and conditions at or in the Facilities) comply in all material respects with all Environmental Laws non-compliance with which could have a Material Adverse Effect; B. Company and each of its Subsidiaries have obtained all permits under Environmental Laws necessary to their respective operations, and all such permits are in good standing, and Company and each of its Subsidiaries are in compliance with all material terms and conditions of such permits non-compliance with which could have a Material Adverse Effect; and C. neither Company nor any of its Subsidiaries has any liability (contingent or otherwise) in connection with any Release of any Hazardous Materials by Company or any of its Subsidiaries or the existence of any Hazardous Material on, under or about any Facility that could give rise to an Environmental Claim that could have a Material Adverse Effect. 4.14. Solvency Each Credit Party is, and on and after the Closing Date will be, Solvent. 4.15. Patents, Trademarks, Etc. Company and each of its Subsidiaries owns, or is licensed to use, all patents, trademarks, trade names, copyrights, technology, know-how and processes used in or necessary for the conduct of their respective businesses as currently conducted which are material to the condition (financial or otherwise), business or operations of Company and its Subsidiaries (taken as a whole). The use of such patents, trademarks, trade names, copyrights, technology, know-how and processes by Company and its Subsidiaries does not infringe on the rights of any Person, subject to such claims and infringements as do not, in the aggregate, give rise to any liability on the part of Company and its Subsidiaries which is material to either Company and its Subsidiaries. The consummation of the transactions contemplated by this Agreement will not require any consents to be obtained with respect to such patents, trademarks, trade names, copyrights, technology, know-how or processes, the absence of which will in any material manner or to any material extent impair the ownership of (or the license to use, as the case may be) any of such patents, trademarks, trade names, copyrights, technology, know-how or processes by Company and its Subsidiaries (taken as a whole). 4.16. Disclosure No representation or warranty of any Credit Party contained in any Loan Document or any other document, certificate or written statement furnished to Lenders by or on behalf of any Credit Party for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. The projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Company to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results. 4.17. Senior Indebtedness The Loans and interest thereon and Company s reimbursement obligations under the Letters of Credit each constitute Senior Debt or Senior Indebtedness as such terms are defined in any indentures or other instruments defining the rights and obligations of all Existing Indebtedness of Company which by their terms purport to be subordinate in right of payment to any other Indebtedness of Company. 4.18. Margin Stock Not more than twenty-five percent of the value of the assets of Company, or of Company and its Subsidiaries on a consolidated basis, constitutes Margin Stock, and Company intends that its aggregate Investments in Margin Stock shall at no time exceed twenty-five percent of the value of such assets. No part of the proceeds of any Loan or Letter of Credit will be used to purchase or carry any Margin Stock in violation of Regulation U or to extend credit for the purpose of purchasing or carrying any Margin Stock in violation of Regulation U. SECTION 5. AFFIRMATIVE COVENANTS Company covenants and agrees that, so long as any of the Commitments or the Letter of Credit Commitment shall be in effect and until payment in full of all of the Loans and Notes and other Obligations and the repayment in full of amounts due under, or the cancellation or expiration of, all Letters of Credit and all other amounts owing hereunder, unless Requisite Lenders shall otherwise give prior written consent, Company shall perform, and shall cause each of its respective Subsidiaries to perform, all covenants in this Section 5. 5.1. Financial Statements and Other Reports Company will maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of consolidated financial statements in conformity with GAAP. Company will deliver to Lenders: A. Quarterly Financials: as soon as practicable and in any event within forty-five days after the end of each fiscal quarter (other than fiscal quarters ending on the last day of a fiscal year) ending after the Closing Date in Company s fiscal year, (i) the consolidated balance sheet of Company and its Subsidiaries, and (ii) the consolidating balance sheets of Company and Subsidiaries presented on a basis substantially consistent with the format previously presented to Lenders under the Old Credit Agreement, in each case, as at the end of such period, and (iii) the related consolidated statements of earnings and statements of cash flow of Company and its Subsidiaries, and (iv) the consolidating statements of earnings of Company and its Subsidiaries; in each case, the financial statements shall be certified by the chief financial officer or controller of Company to the effect that they fairly present the financial condition of the respective entity as at the dates indicated and the results of their operations and statements of cash flow subject to changes resulting from audit and normal year-end adjustments, based on their respective normal accounting procedures applied on a consistent basis; B. Year-End Financials: as soon as practicable and in any event within ninety days after the end of each fiscal year, (i) the consolidated balance sheet of Company and its Subsidiaries, and (ii) the consolidating balance sheets of Company and its Subsidiaries presented on a basis reasonably satisfactory to Requisite Lenders, in each case, as at the end of such period, and (iii) the related consolidated statements of earnings and statements of cash flow of Company and its Subsidiaries, and (iv) the consolidating statements of earnings of Company and its Subsidiaries and, in the case of items (i) and (iii), as certified by independent public accountants of recognized national standing reasonably acceptable to Agent; C. Officers and Compliance Certificates: together with each delivery of financial statements of Company and its Subsidiaries pursuant to subsection 5.1.A and subsection 5.1.B above, (i) an Officers Certificate of Company stating that the signers have reviewed the terms of this Agreement and have made, or caused to be made under their supervision, a review in reasonable detail of the transactions and condition of Company and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signers do not have knowledge of the existence as at the date of the Officers Certificate, of any condition or event which constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto; and (ii) a Compliance Certificate demonstrating in reasonable detail compliance (as determined in accordance with GAAP) during and at the end of such accounting periods with the restrictions contained in subsections 6.1, 6.2, 6.3, 6.5, and 6.6 and, in addition, a written statement of the chief accounting officer, chief financial officer or controller of Company describing in reasonable detail the differences between the financial information contained in such financial statements and the information contained in the Compliance Certificate relating to Company s compliance with subsection 6.5; D. Reconciliation Statement: if, as a result of any change in accounting principles and policies from those used in the preparation of the Financial Statements, the consolidated financial statements of Company and its Subsidiaries delivered pursuant to subsections A, B or L of this subsection 5.1 will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subsections had no such change in accounting principles and policies been made, then, together with the first delivery of financial statements pursuant to subsection A, B or L following such change, consolidated financial statements of Company and its Subsidiaries prepared on a pro forma basis, for (i) the current year to the effective date of such change and (ii) the two full fiscal years immediately preceding the fiscal year in which such change is made, as if such change had been in effect during such period; E. Accountants Certification: together with each delivery of consolidated financial statements of Company and its Subsidiaries pursuant to subsection 5.1.B above, a written statement by the independent public accountants giving the report thereon (i) stating that their audit examination has included a review of the terms of this Agreement as they relate to accounting matters, (ii) stating whether, in connection with their audit examination, any condition or event which constitutes an Event of Default or Potential Event of Default has come to their attention, and if such a condition or event has come to their attention, specifying the nature and period of existence thereof; provided that such accountants shall not be liable by reason of any failure to obtain knowledge of any such Event of Default or Potential Event of Default that would not be disclosed in the course of their audit examination, and (iii) stating that based on their audit examination nothing has come to their attention which causes them to believe that the information contained in either or both of the certificates delivered therewith pursuant to subsection C above is not correct or that the matters set forth in the Compliance Certificate delivered therewith pursuant to clause (ii) of such subsection C above for the applicable fiscal year are not stated in accordance with the terms of this Agreement; F. Audit Reports: promptly upon receipt thereof, copies of all reports submitted to Company by independent public accountants in connection with each annual, interim or special audit of the financial statements of Company made by such accountants, including, without limitation, the comment letter submitted by such accountants to management in connection with their annual audit; G. SEC Filings: promptly upon their becoming available, copies of all financial statements, reports, notices and proxy statements sent or made available generally by Company to its security holders or by any Subsidiary of Company to its security holders other than Company or another Subsidiary, of all regular and periodic reports and all registration statements and prospectuses, if any, filed by Company or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission and of all press releases and other statements made available generally by Company or any Subsidiary to the public concerning material developments in the business of Company and its Subsidiaries; H. Events of Default: promptly upon any officer of Company obtaining knowledge (i) of any condition or event which constitutes an Event of Default or Potential Event of Default, (ii) that any Person has given any notice to Company or any Subsidiary of Company or taken any other action with respect to a claimed default or event or condition of the type referred to in subsection 7.2, (iii) of any condition or event which would be required to be disclosed in a current report filed by Company with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4 and 5 of such Form as in effect on the date hereof) if Company were required to file such reports under the Exchange Act, or (iv) of a material adverse change in the business, operations, properties, assets or condition (financial or otherwise) of Company and its Subsidiaries (taken as a whole), an Officers Certificate specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken by such holder or Person and the nature of such claimed default, Event of Default, Potential Event of Default, event or condition, and what action Company has taken, is taking and proposes to take with respect thereto; I. Litigation: promptly upon any officer of Company obtaining knowledge of (i) the institution of, or non-frivolous threat of, any action, suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed by Company to Lenders, or (ii) any material development in any such action, suit, proceeding, governmental investigation or arbitration, which in either case, if adversely determined, could have a Material Adverse Effect, Company shall give notice thereof the Lenders and provide such other information as may be reasonably available to it (without waiver of any applicable evidentiary privilege) to enable Lenders and their counsel to evaluate such matters; J. ERISA Events: promptly upon becoming aware of the occurrence of any ERISA Event that could result in liability that would constitute a Material Adverse Effect, a written notice specifying the nature thereof, what action Company has taken, is taking or proposes to take with respect thereto, and, when known, any action taken or threatened by and any notices received from the Internal Revenue Service, the Department of Labor, the PBGC or a Multiemployer Plan sponsor with respect thereto; K. Financial Plans: as soon as practicable and in any event by the fifteenth day following the last day of each fiscal year of Company, a consolidated plan and financial forecast, prepared in accordance with Company s normal accounting procedures applied on a consistent basis, for the next succeeding fiscal year of Company and its Subsidiaries, including, without limitation, (i) a forecasted consolidated balance sheet and a consolidated statement of earnings and a consolidated statement of cash flows of Company for such fiscal year, (ii) forecasted consolidated balance sheets, statement of earnings and retained earnings, and cash flows of Company for each fiscal quarter of such fiscal year and forecasted balance sheets and statements of earnings and cash flows for each Reporting Division for each fiscal quarter of such fiscal year, and (iii) the amount of forecasted capital expenditures for such fiscal year; L. Insurance: as soon as practicable and in any event by the March 31 following the last day of each fiscal year of Company, a report in form and substance reasonably satisfactory to Agent and Requisite Lenders outlining all material insurance coverage maintained as of the date of such report by Company and its Subsidiaries and all material insurance coverage planned to be maintained by such Persons in the subsequent fiscal year; and M. Other Information: with reasonable promptness, such other information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by any Lender. 5.2. Corporate Existence, Etc. Except as otherwise provided in subsection 6.6, Company will, and will cause each of its Material Subsidiaries to, at all times preserve and keep in full force and effect its corporate existence and rights and franchises material to its business and those of each of Company s Material Subsidiaries; provided, however, that the corporate existence of any such Material Subsidiary may be terminated if such termination is in the best interests of its parent or Company and would not have a Material Adverse Effect. 5.3. Payment of Taxes and Claims; Tax Consolidation A. Company will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto, which Liens secure taxes, assessments or other governmental charges or claims, individually or in the aggregate, in excess of $500,000; provided that no such charge or claim need be paid if being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor. B. Company will not file or consent to the filing of, or permit any of its respective Subsidiaries to file or consent to the filing of, any consolidated income tax return with any Person (other than Company or any of their respective Subsidiaries). 5.4. Maintenance of Properties; Insurance Company will maintain or cause to be maintained in good repair, working order and condition all material properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof on a timely basis considering the nature of the repair. Company will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its properties and businesses and the properties and businesses of its Subsidiaries against loss or damage of the kinds customarily carried or maintained under similar circumstances by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in amounts as are customarily carried under similar circumstances by such other corporations. 5.5. Inspection; Lender Meeting Company shall permit any authorized representatives designated by any Lender to visit and inspect any of the properties of Company or any of its Subsidiaries, including its and their financial and accounting records, and to make copies and take extracts therefrom, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested, provided such information is not subject to privilege. Without in any way limiting the foregoing, Company will, upon the request of Requisite Lenders, participate in a meeting of Agent and Lenders at least once during each fiscal year to be held at a location acceptable to Company, at such time as may be agreed to by Company and Requisite Lenders. 5.6. Compliance with Laws, Etc. Company shall, and shall cause its Subsidiaries to, comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority non-compliance with which could have a Material Adverse Effect. Company shall not engage in any transaction or permit the occurrence of any act or omission, and shall cause each ERISA Affiliate not to engage in any transaction or to permit the occurrence of any act or omission, which would constitute, or would give rise to, an ERISA Event that could have a Material Adverse Effect. 5.7. Further Assurances as to Future Material Subsidiaries Company will notify Agent promptly in the event that any Person becomes a Material Subsidiary of Company, will cause each such new Material Subsidiary to promptly execute and deliver to Agent on behalf of Lenders a Subsidiary Guaranty, and will take all such further action as may be required to guaranty the Obligations of Company under this Agreement as may be reasonably required by Agent or Requisite Lenders. Immediately upon the repayment of the Easco Debt, Company shall cause Easco to execute and deliver to Agent on behalf of Lenders its Subsidiary Guaranty. 5.8. Environmental Disclosure and Inspection A. Company shall, and shall cause each of its Subsidiaries to, exercise all due diligence in order to comply and cause (i) all tenants under any lease or occupancy agreement affecting any portion of the Facilities and (ii) all other Persons on or occupying such property, to comply with all Environmental Laws, noncompliance with which could have a Material Adverse Effect. B. Company agrees that Agent may, from time to time if in the reasonable judgment of Agent it is advisable to do so, retain, at Company s expense, an independent professional consultant to review any report relating to Hazardous Materials prepared by or for Company disclosing an event or occurrence that could result in liability that could have a Material Adverse Effect, and, if advisable in light of the results of such review, to conduct its own investigation of any Facility; provided that with respect to any Facility no longer owned or operated by Company or any of its Subsidiaries, Company shall use its best efforts to obtain from the owner or operator thereof for Agent to have access thereto. Company hereby grants to Agent, its agents, employees, consultants and contractors the right to enter into or onto the Facilities to perform such tests on such property as are reasonably necessary to conduct such a review and/or investigation. Lenders shall have no duty to disclose or discuss any information produced by such reviews or investigations with Company or any of its Subsidiaries. C. Company shall promptly advise Lenders in writing and in reasonable detail of (i) any Release of any Hazardous Material required to be reported to any federal, state or local governmental or regulatory agency under any applicable Environmental Laws, (ii) any and all written communications with respect to Environ- mental Claims or any Release of Hazardous Material required to be reported to any federal, state or local governmental or regulatory agency, (iii) any remedial action taken by Company or any other Person in response to (a) any Hazardous Material on or under any Facility, the existence of which could result in an Environmental Claim having a Material Adverse Effect or (b) any Environmental Claim that could have a Material Adverse Effect, and (iv) any request for information from any governmental agency that indicates such agency is investigating whether Company or any of its Subsidiaries may be potentially responsible for a Release of Hazardous Materials. D. Company shall promptly notify Lenders of any proposed acquisition of stock, assets or property by Company or any of its Subsidiaries, that could reasonably be expected to expose Company or any of its Subsidiaries to, or result in, Environmental Claims that could have a Material Adverse Effect. E. Company shall, at is own expense, provide copies of such documents or information as Agent may reasonably request in relation to any matters disclosed pursuant to this subsection 5.8. 5.9. Hazardous Materials; Company s Remedial Action Company shall, and shall cause each of its Subsidiaries to, promptly take any and all remedial action in connection with the presence, storage, use, disposal, transportation or Release of any Hazardous Materials on or under any Facility (excluding any Facility no longer owned or operated by Company or any of its Subsidiaries) the failure of which to take could have a Material Adverse Effect. In the event Company or any of its Subsidiaries undertakes any remedial action with respect to any Hazardous Material on or under any such Facility, Company or such Subsidiary shall conduct and complete such remedial action in material compliance with all applicable Environmental Laws, except when and only to the extent that Company s or such Subsidiary s liability for such presence, storage, use, disposal, transportation or discharge of any Hazardous Material is being contested in good faith by Company or such Subsidiary. 5.10. Equal Security for Loans and Notes If Company or any of its Subsidiaries shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than Liens by the provisions of subsection 6.2 (unless prior written consent to the creation or assumption thereof shall have been obtained from Requisite Lenders), it shall, at the request of Requisite Lenders, make or cause to be made effective provision whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness thereby secured as long as any such Indebtedness shall be secured; provided, that this covenant shall not be construed as consent by Agent or any Lender to any violation of the provisions of subsection 6.2. SECTION 6. COMPANY S NEGATIVE COVENANTS Company covenants and agrees that, so long as any of the Commitments or the Letter of Credit Commitment shall be in effect and until payment in full of all of the Loans and the Notes and other Obligations and the repayment in full of all amounts due under, or the cancellation or expiration of, all Letters of Credit and all other amounts owing hereunder, unless Requisite Lenders shall otherwise give prior written consent, Company will perform, and shall cause each of its Subsidiaries to perform, all of its covenants contained in this Section 6. 6.1. Indebtedness and Contingent Obligations Company will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness or Contingent Obligations, except: A. Each Guarantor may become and remain liable with respect to the Subsidiary Guaranties; B. The Subsidiaries of Company may become and remain liable with respect to intercompany Indebtedness; C. The Subsidiaries of Company may become and remain liable with respect to Indebtedness and Contingent Obligations not otherwise covered by a separate clause of this subsection 6.1 in an aggregate principal amount outstanding at any one time incurred from and after the Closing Date not to exceed $50,000,000; provided that, the entire principal amount of any Indebtedness and Contingent Obligations with respect to which a Subsidiary of Company is liable, if such Person became a Subsidiary of Company on or after the Closing Date, shall be included in the calculation of such aggregate Indebtedness and Contingent Obligations; and D. Contingent Obligations of the Subsidiaries of Company resulting from endorsement of negotiable instruments for collection in the ordinary course of business; E. Contingent Obligations of the Subsidiaries of Company respecting customary indemnification and purchase price adjustment obligations incurred in connection with Asset Sales or other sales of assets; F. Contingent Obligations of the Subsidiaries of Company under guarantees in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Company and its Subsidiaries not exceeding at any time outstanding $2,000,000 in aggregate liability; G. Existing Indebtedness described in Schedule H annexed hereto; and H. Contingent Obligations described in Schedule I annexed hereto. 6.2. Liens and Related Matters A. Prohibitions on Liens. Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset (including any document or instrument in respect of goods or accounts receivable) of any Credit Party, whether now owned or hereafter acquired, or any income or profits therefrom, except: (i) Permitted Encumbrances; (ii) Liens on assets of any Subsidiary of Company that secure Indebtedness of such Subsidiary outstanding at the time such Person became a Subsidiary of Company, provided that such Indebtedness was not incurred in connection with or anticipation of such event; and (iii) The liens on the capital stock of Easco created by the Pledge Agreement. B. No Restrictions on Subsidiary Distributions to Company. Except pursuant to this Agreement, Company will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind (other than those restrictions in existence prior to the Closing Date as set forth on Schedule J annexed hereto) on the ability of any Subsidiary to (i) pay dividends or make any other distribution on any of such Subsidiary s capital stock owned by Company or any Subsidiary of Company; (ii) pay any Indebtedness owed to Company or any other Subsidiary; (iii) make loans or advances to Company or any other Subsidiary; or (iv) transfer any of its property or assets to Company or any other Subsidiary. 6.3. Investments; Joint Ventures Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in the Securities of any Person or in any Joint Venture, except: A. Company and its Subsidiaries may make purchases of or otherwise acquire all or substantially all of the assets of any Person or the capital stock of any Person if Company shall (i) be entitled to purchase and shall purchase such number of shares of the capital stock of such Person such that Company will have the ability to cause the merger of such Person with and into a Subsidiary of Company without the necessity that holders of such capital stock (other than Company, Affiliates or Persons acting in concert with Company) approve such merger and such merger or acquisition actually occurs as soon as practicable following the purchase of such shares, (ii) directly or indirectly own all of the voting stock (on a fully diluted basis) of such Person or (iii) acquire all or substantially all of the assets of such Person; provided that Company and its Subsidiaries may make no such acquisition of all or substantially all of the assets of any Person or the capital stock of any Person if such acquisition is not approved in advance by affirmative vote of the board of directors of such Person; provided further that, prior to the consummation of any such acquisition, Company shall have delivered to Agent an Officers Certificate of Company stating that, after giving effect to the proposed acquisition, Company will be in compliance on a pro forma basis with the covenants contained in subsection 6.5, recomputed as at the last day of the most recently ended fiscal quarter of Company and including for purposes of such pro forma calculation the relevant financial information for the Person whose capital stock, or all or substantially all the assets of which, are proposed to be acquired; B. Company and its Subsidiaries may purchase and hold, for investment purposes only, Marketable Securities and Non-Marketable Securities, valued at the original cost thereof, as follows: (i) during any Pricing Period for which Company s Pricing Level is Pricing Level I, Company and its Subsidiaries may have Investments in Marketable Securities or Non-Marketable Securities, or any combination thereof, in an aggregate amount not to exceed $100,000,000; (ii) during any Pricing Period for which Company s Pricing Level is Pricing Level II, Company and its Subsidiaries may have Investments in Marketable Securities or Non-Marketable Securities, or any combination thereof, in an aggregate amount not to exceed $75,000,000, provided that the portion thereof held in Non-Marketable Securities shall in no event exceed $35,000,000; and (iii) during any Pricing Period for which Company s Pricing Level is Pricing Level III, Company and its Subsidiaries may have Investments in Marketable Securities or Non-Marketable Securities, or any combination thereof, in an aggregate amount not to exceed $25,000,000, provided further that the portion thereof held in Non-Marketable Securities shall in no event exceed $12,500,000; provided still further that in the event that Company and its Subsidiaries have Excess Investments in Securities, to the extent that the Total Utilization of Revolving Loan Commitments exceeds the Revolving Loan Commitments then in effect, Company and its Subsidiaries shall commence to dispose of such excess Securities in a prudent and diligent manner; provided still further that the aggregate Investments under this subsection 6.3.B in any one Person may not exceed ten percent of Adjusted Tangible Net Worth determined as at the time of such Investment; C. Company and its Subsidiaries may make Investments in Joint Ventures in which Company or such Subsidiary has an active managerial role in the decision making and operations; and D. Company and its Subsidiaries may make and own Investments in Cash Equivalents. 6.4. Restricted Junior Payments Upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default, Company will not, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment. 6.5. Financial Covenants A. Consolidated Current Ratio. Company will not permit, at any time, the ratio of Consolidated Current Assets to Consolidated Current Liabilities to be less than 1.25:1. B. Adjusted Leverage Ratio. Company will not permit, at any time, the Adjusted Leverage Ratio to exceed 1.10:1. C. Minimum Adjusted Tangible Net Worth. Company will not permit, at any time, the Adjusted Tangible Net Worth to be less than the Minimum Adjusted Tangible Net Worth. D. Interest Coverage Ratio. Company will not permit the Adjusted Interest Coverage Ratio to be less than 2.50:1. Such ratio will be calculated on a cumulative quarterly basis as of the last day of each of the four-fiscal quarters immediately succeeding the Closing Date, and, thereafter, calculated as of the last day of each fiscal quarter for the immediately preceding four fiscal quarters. 6.6. Restriction on Fundamental Changes; Asset Sales Subject to subsection 5.2, Company and its Subsidiaries will not alter in any material respect their respective corporate, capital or legal structure or enter into any transaction of merger, or consolidate, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of their respective business, property or fixed assets, whether now owned or hereafter acquired, or acquire by purchase or otherwise all or substantially all the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person, except in accordance with subsection 6.3.A, 6.3.D or as follows: A. Company and its Subsidiaries may sell or dispose of assets for the Fair Market Value thereof; provided that (x) in the case of a sale or disposition, or a series of related sales or dispositions, in excess of $500,000, the determination of the value thereof shall be made in good faith by the board of directors of Company or such Subsidiary, as the case may be, (y) fifty percent of the consideration therefor is received in cash at the consummation of the sale thereof, and (z) after giving effect thereto, the aggregate of all notes or other evidences of Indebtedness in respect of the non-cash portion of all such dispositions made by Company and its Subsidiaries shall in no event exceed $50,000,000 outstanding at any one time; B. Company and its Subsidiaries may sell or otherwise dispose of obsolete or worn out property and may sell, resell or otherwise dispose of real or personal property held for sale or resale in the ordinary course of business; C. any Subsidiary of Company may be merged or consolidated with or into any wholly-owned Subsidiary of Company if such wholly-owned Subsidiary shall be the surviving corporation; D. any wholly-owned Subsidiary of Company may be wound-up, liquidated or dissolved, or all or substantially all of its business, property or assets may be con- veyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to, any other wholly-owned Subsidiary of Company; and E. Company may make distributions on account of any class of shares of its capital stock in accordance with subsection 6.4; provided that, if any such distribution is made with assets other than Cash or shares of common stock of Company, the fair market value of such assets, plus the fair market value of all assets previously distributed to Company s shareholders pursuant to this subsection 6.6.E, plus all amounts received by Company or any of its Subsidiaries from and after the Closing Date in respect of Cash Proceeds of Asset Sales, Condemnation Proceeds and Insurance Proceeds (other than those items specifically excluded in the parenthetical contained in the definition of Aggregate Excess Proceeds) shall in no event exceed $50,000,000. To the extent necessary to consummate any transaction permitted by this subsection 6.6, Agent and the Lenders agree to release from the pledge of the Pledge Agreement the capital stock of Easco if it is the subject of such transaction and to release the Subsidiary Guaranty of any Subsidiary Guarantor that is the subject of such transaction. 6.7. Transactions with Shareholders and Affiliates Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of 5% or more of any class of equity securities of Company or with any Affiliate of Company or any Affiliate of any such holder, as the case may be, on terms that are less favorable to Company or that Subsidiary, as the case may be, than those which might be obtained at the time from Persons who are not such a holder or Affiliate; provided that the foregoing restriction shall not apply to (a) any transaction between Company and any of its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries and (b) customary fees paid to members of the board of directors of Company and its Subsidiaries. 6.8. Disposal of Subsidiary Stock Company will not, and will not permit any of its Subsidiaries to (except as permitted by subsection 6.7); A. directly or indirectly sell, assign, pledge or otherwise encumber or dispose of any shares of capital stock or other equity securities of (or warrants, rights or options to acquire shares or other equity securities of) any of its Subsidiaries, except to qualify directors if required by applicable law; or B. permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise encumber or dispose of any shares of capital stock or other securities of (or warrants, rights or options to acquire shares or other securities of) any of its Sub- sidiaries, except to Company, another Subsidiary of Company, or to qualify directors if required by applicable law. 6.9. Amendments or Waivers of Charter Documents and Certain Other Documents: Prepayments of Subordinated Indebtedness Company will not, and will not permit any of its Subsidiaries to, agree to any amendment to, or waive any of its rights under, any of its articles of incorporation or bylaws or other documents relating to the Company Common Stock, or the equity securities of Company or its Subsidiaries, if such amendment or waiver of such right would have a Material Adverse Effect. Company will not amend or otherwise change any material term of any agreement, instrument or other document establishing the terms and conditions of any Separate Letter of Credit Facility. Neither Company nor any of its Subsidiaries will amend or otherwise change the terms of any Subordinated Indebtedness except as specifically permitted hereby, or make any payment consistent with an amendment or change thereto, if the effect of such amendment or change is to increase the interest rate on such Subordinated Indebtedness, change the dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect to such Subordinated Indebtedness, grant any security interest in favor of such Subordinated Indebtedness, change the redemption provisions thereof, change the subordination provisions thereof, cause the Subordinated Indebtedness to be guaranteed by any Person or which, together with all other amendments or changes made, increase materially the obligations of the obliger or confer additional rights on the holder of such Subordinated Indebtedness which would be adverse to Company or Lenders. SECTION 7. EVENTS OF DEFAULT IF any of the following conditions or events ( Events of Default ) shall occur and be continuing: 7.1. Failure to Make Payments When Due Failure to pay any installment of principal of any Loan when due, or any amount payable in reimbursement of the Issuing Lender in respect of a Letter of Credit when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise; or failure to pay any installment of interest on any Loan or any other amount due under this Agreement within five days after the date due; or 7.2. Default in Other Agreements A. Failure of the Credit Parties to pay when due (x) any principal or interest on any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an individual principal amount of $5,000,000 or more or items of Indebtedness with an aggregate principal amount of $5,000,000 or more, or (y) any Contingent Obligation in an individual principal amount of $5,000,000 or more or Contingent Obligations with an aggregate principal amount of $5,000,000 or more, in each case beyond the end of any grace period provided therefor; provided that, in the event that and for so long as the Revolving Loan Commitments then in effect exceed the Total Utilization of Revolving Loan Commitments by an amount equal to or greater than the principal amount of, and unpaid accrued interest and premium on, the Easco Debt, no payment default on the Easco Debt shall constitute an Event of Default hereunder; or B. Breach or default of the Credit Parties with respect to any other material term of (x) any evidence of any Indebtedness in an individual principal amount of $5,000,000 or more or items of Indebtedness with an aggregate principal amount of $5,000,000 or more or any Contingent Obligation in an individual principal amount of $5,000,000 or more or Contingent Obligations with an aggregate principal amount of $5,000,000 or more; or (y) any loan agreement, mortgage, deed of trust, indenture or other agreement relating thereto, if the effect of such failure, default or breach is to cause, or to permit the holder or holders of that Indebtedness or Contingent Obligation (or a trustee on behalf of such holder or holders) to cause, that Indebtedness or Contingent Obligation to become or be declared due prior to its stated maturity (or the stated maturity of any underlying obligation, as the case may be); provided that, in the event that and for so long as the Revolving Loan Commitments then in effect exceed the Total Utilization of Revolving Loan Commitments by an amount equal to or greater than the principal amount of, and unpaid accrued interest and premium on, the Easco Debt, no such default on the Easco Debt shall constitute an Event of Default hereunder; or 7.3. Breach of Certain Covenants Failure of any Credit Party to perform or comply with any term or condition contained in subsection 2.6, 2.7, 5.2 or 5.10 or Section 6 beyond any grace period provided for in such respective section, or any material term of any Loan Document (other than this Agreement); or 7.4. Breach of Warranty Any representation, warranty, certification or other statement made by any Credit Party in any Loan Document or in any statement or certificate at any time given by any Credit Party in writing pursuant hereto or in connection herewith or therewith, shall be false in any material respect on the date as of which made; or 7.5. Other Defaults Under Agreement or Loan Documents Any Credit Party shall default in the performance of or compliance with any term contained in this Agreement or the other Loan Documents other than those otherwise referred to in this Section 7 and such default shall not have been remedied or waived within thirty days after receipt by Company of notice from any Lender of such default; or 7.6. Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of any Credit Party, in an involuntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case is commenced against any Credit Party, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Credit Party, or over all or a substantial part of its property, shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of any Credit Party, for all or a substantial part of its property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of any Credit Party, and the continuance of any such event in clause (ii) for sixty days unless dismissed, bonded or discharged; or 7.7. Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Any Credit Party shall have an order for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; the making by any Credit Party of any assignment for the benefit of creditors; or (ii) the inability or failure of any Credit Party, or the admission by any Credit Party in writing of its inability, to pay its debts as such debts become due; or the board of directors of any Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes action to approve any of the actions referred to in clause (i) or this clause (ii) of subsection 7.7; or 7.8. Judgements and Attachments Any money judgment, writ or warrant of attachment, or similar process involving (i) in any individual case an amount in excess of $5,000,000 or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in either case not adequately covered by insurance as to which the insurance company has acknowledged coverage) shall be entered or filed against any Credit Party or any of its respective assets and shall remain undischarged, unvacated, unhanded or unstayed for a period of sixty days or in any event later than five days prior to the date of any proposed sale thereunder; or 7.9. Dissolution Any order, judgment or decree shall be entered against any Credit Party decreeing the dissolution or split up of Company or any Material Subsidiary and such order shall remain undischarged or unstayed for a period in excess of thirty days; or 7.10. Employee Benefit Plans There occurs one or more ERISA Events resulting (i) in any individual case, liability to Company or any ERISA Affiliate in excess of $5,000,000 or (ii) in the aggregate during the term of this Agreement, liability of Company and its ERISA Affiliates in excess of $10,000,000; provided, however, that it shall be an Event of Default if there exists, as of any valuation date for a Pension Plan, an excess of the present value (determined on the basis of reasonable assumptions used by the independent actuary for such Pension Plan) of the accrued benefits (whether or not vested) of the participants and beneficiaries of such Pension Plan over the fair market value of the assets of such Pension Plan, only if such excess, when added to the excesses calculated in the same manner for each of the other Pension Plans as of the most recently preceding valuation date for each such other Pension Plan, exceeds $20 million; or 7.11. Invalidity of Guaranties or Pledge Agreement Any Guaranty or the Pledge Agreement for any reason, other than the satisfaction in full of all Obligations or the termination or release thereof in accordance with the provisions hereof and thereof, ceases to be in full force and effect or is declared to be null and void, or any Credit Party denies that it has any further liability, including without limitation with respect to future advances by Lenders, under any Loan Document to which it is a party, or gives notice to such effect; or 7.12. Change of Control There shall occur a Change of Control Event. THEN (i) upon the occurrence of any Event of Default described in the foregoing subsections 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued interest on the Loans, (b) an amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (whether or not any beneficiary under any Letter of Credit shall have been presented or be entitled to present, the drafts and other documents required to draw under the Letter of Credit) (the Maximum Available Amount ), and (c) all other Obligations, shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company, and the obligation of each Lender to make any Loan or to issue any Letter of Credit shall thereupon terminate, and (ii) upon the occurrence and during the continuance of any other Event of Default, Agent shall, upon the written request of Requisite Lenders, by written notice to Company, declare all or any portion of the amounts described in clauses (a) through (c) above to be, and the same shall forthwith become, immediately due and payable, together with accrued interest thereon, and the obligation of each Lender to make any Loan or to issue any Letter of Credit shall thereupon terminate and Lenders may pursue any and all remedies under the Loan Documents; provided, that the foregoing shall not affect in any way the obligations of Lenders under subsection 2.4.D or the obligations of Lenders to make Revolving Loans to reimburse drawings under Letters of Credit as provided in subsection 2.4.C. So long as any Letter of Credit shall remain outstanding, any amounts described in clause (b) above with respect to Letters of Credit, when received by any Issuing Lender, shall be held by such Issuing Lender, pursuant to such documentation as such Issuing Lender shall request, as cash collateral for the obligation of Company to reimburse such Issuing Lender in the event of any drawing under such Letters of Credit, and so much of such funds shall at all times remain on deposit as cash collateral as aforesaid as shall equal the Maximum Available Amount; provided further that in the event of cancellation or expiration of any Letter of Credit or any reduction in the Maximum Available Amount, the Issuing Lender shall apply the difference between the Maximum Available Amount immediately prior to such cancellation, expiration or reduction and the Maximum Available Amount immediately after such cancellation, expiration or reduction first to the payment of any outstanding Obligation, and then to the payment to whomsoever shall be lawfully entitled to receive such funds. If at any time within sixty days after acceleration of the maturity of the Loans, Company shall pay all arrears of interest and all payments on account of the principal which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rate specified in this Agreement) and all Events of Default and Potential Events of Default (other than non-payment of principal of and accrued interest on the Loans, and payments of amounts referred to in clause (b) above, in each case due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to subsection 9.6, then Agent on behalf of Requisite Lenders by written notice to Company may, but shall not be obligated to, rescind and annul the acceleration and its consequences; and Agent shall return to Company any amounts held by Agent as cash collateral in respect of amounts described in clause (b) above; but such action shall not affect any subsequent Event of Default or Potential Event of Default or impair any right attendant to such subsequent Event of Default or Potential Event of Default. SECTION 8. AGENT AND BID RATE LOAN AGENT 8.1. Appointment Bankers is hereby appointed Agent hereunder and under the other Loan Documents. Each Lender hereby authorizes Agent to act as its agent in accordance with the terms hereof and the other Loan Documents and under the other instruments and agreements referred to herein and therein. Agent agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. Company may appoint Continental Bank to act as Bid Rate Loan Agent hereunder and Continental Bank may accept or decline such appointment. In the event that Continental Bank accepts such appointment, each Lender shall be deemed to have authorized Continental Bank to act in the capacity of Bid Rate Loan Agent as agent for such Lender in accordance with the terms hereof. Continental Bank agrees that if it is so appointed, it will act upon the express conditions contained in this Agreement. The provisions of this Agreement are solely for the benefit of Agent, Bid Rate Loan Agent (other than Company acting as Bid Rate Loan Agent) and Lenders and no Credit Party shall have rights as a third party beneficiary of any of the provisions hereof. In performing their respective functions and duties under this Agreement, Agent and Bid Rate Loan Agent shall each act solely as agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any Credit Party. In acting as Bid Rate Loan Agent hereunder, Company shall not be entitled to the benefits accorded by this Section 8. 8.2. Powers; General Immunity A. Duties Specified. Each Lender irrevocably authorizes Agent and Bid Rate Loan Agent to take such action on such Lender s behalf and to exercise such powers hereunder and under the other instruments and agreements referred to herein as are specifically delegated to Agent or Bid Rate Loan Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Each of Agent and Bid Rate Loan Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and may perform such duties by or through its agents or employees. Neither Agent nor Bid Rate Loan Agent shall have by reason of this Agreement any fiduciary relationship in respect of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent or Bid Rate Loan Agent any obligations in respect of this Agreement or the other instruments and agreements referred to herein except as expressly set forth herein or therein. B. No Responsibility for Certain Matters. Neither Agent nor Bid Rate Loan Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or Letters of Credit or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by Agent or Bid Rate Loan Agent to Lenders or by or on behalf of any Credit Party to any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Event of Default or Potential Event of Default. Anything contained in this Agreement to the contrary notwithstanding, neither Agent not Bid Rate Loan Agent shall have any liability arising from confirmations of the amount of outstanding Loans or Letters of Credit. C. Exculpatory Provisions. Neither Agent nor Bid Rate Loan Agent, or any of its respective officers, directors, employees or agents, shall be liable to Lenders for any action taken or omitted hereunder or in connection herewith (including, without limitation, any act or omission under this Agreement) by Agent or Bid Rate Loan Agent except to the extent caused by its respective gross negligence or willful misconduct. If Agent or Bid Rate Loan Agent, as the case may be shall request instructions from Lenders with respect to any act or action (including the failure to take an action) in connection with this Agreement or the other instruments or agreements referred to herein, Agent or Bid Rate Loan Agent, as the case may be, shall be entitled to refrain from such act or taking such action unless and until Agent or Bid Rate Loan Agent shall have received instructions from Requisite Lenders. Without prejudice to the generality of the foregoing, (i) Agent and Bid Rate Loan Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for one or more of the Credit Parties and their respective Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against Agent or Bid Rate Loan Agent as a result of Agent or Bid Rate Loan Agent acting or (where so instructed) refraining from acting under this Agreement or the other instruments and agreements referred to herein in accordance with the instructions of Requisite Lenders. Agent and Bid Rate Loan Agent shall be entitled to refrain from exercising any power, discretion or authority vested in it under this Agreement or the other instruments and agreements referred to herein unless and until it has obtained the instructions of Requisite Lenders. D. Agent and Bid Rate Loan Agent Entitled to Act as Lenders. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, Agent or Bid Rate Loan Agent in its individual capacity as a Lender hereunder. With respect to its respective participation in the Loans, Agent and Bid Rate Loan Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder and the term Lender or Lenders or any similar term shall, unless the context clearly otherwise indicates, include Agent and Bid Rate Loan Agent in its respective individual capacity. Agent and Bid Rate Loan Agent and their respective Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust, financial advisory or other business with any Credit Party or any Affiliate of any Credit Party as if it were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to Lenders. 8.3. Representations and Warranties; No Responsibility For Appraisal of Creditworthiness Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company in connection with the making of the Loans hereunder and has made and shall continue to make its own appraisal of the creditworthiness of Company. Neither Agent nor Bid Rate Loan Agent shall have any duty or responsibility either initially or on a continuing basis to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto whether coming into its possession before the making of the Loans, or any time or times thereafter and neither Agent nor Bid Rate Loan Agent shall have any responsibility with respect to the accuracy of or the completeness of the information provided to Lenders. 8.4. Right to Indemnity Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify Agent and Bid Rate Loan Agent to the extent that Agent or Bid Rate Loan Agent shall not have been reimbursed by Company, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, counsel and legal assistants fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent or Bid Rate Loan Agent in performing its duties hereunder or under the other instruments and agreements referred to herein in its capacity as Agent or Bid Rate Loan Agent in any way relating to or arising out of this Agreement or such instruments and agreements; 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 Agent s or Bid Rate Loan Agent s gross negligence or willful misconduct. If any indemnity furnished to Agent or Bid Rate Loan Agent for any purpose shall, in the opinion of Agent or Bid Rate Loan Agent, as the case may be, be insufficient or become impaired, Agent or Bid Rate Loan Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. 8.5. Registered Person Treated as Owner Agent may deem and treat each respective Person listed as a Lender in the Register as the owner of the corresponding Loan listed therein for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with Agent and recorded in the Register. Any request, authority or consent of any Person or entity who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent transferee or assignee of the corresponding Loan. 8.6. Successor Agent Agent may resign at any time by giving thirty days prior written notice thereof to Lenders and Company, and Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to Company, Agent and signed by Requisite Lenders. Upon any such notice of resignation or any such removal, Requisite Lenders shall have the right, upon five days notice to Company, to appoint a successor Agent. Upon the acceptance of any appointment as an Agent hereunder by a successor Agent that successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent and the retiring or removed Agent shall be discharged from its duties and obligations under this Agreement. After any retiring or removed Agent s resignation or removal hereunder as Agent, the provisions of this Section 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. SECTION 9. MISCELLANEOUS 9.1. Assignments and Participations in Loans Each Lender shall have the right at any time, to (y) sell, assign, transfer or negotiate all or any part of any Loan or Loans made by it or its Commitments, its participations in the Letters of Credit or any other interest herein or any other Obligations owed to it, to any Person or (z) sell participations in all or any part of any Loan or Loans made by it or its Commitments, its participations in the Letters of Credit or any other interest herein or any other Obligations owed to it, to any Person; provided that (i) no participation or assignment shall, without the consent of Company, require Company to file a registration statement with the Securities and Exchange Commission or apply to qualify the Loans under the blue sky law of any state; (ii) in the case of an assignment, such assignment may (a) be assigned in any amount to another Lender or an Affiliate of such Lender or another Lender with the giving of notice to Company and Agent or (b) be otherwise assigned with the consent of Company (which consent shall not be unreasonably withheld) and the consent of Agent in an aggregate amount of at least $10,000,000; provided further, that, to the extent of such assignment in either clause (a) or (b), the assigning Lender shall be relieved of its obligations with respect to such Commitments as it has so assigned; provided still further that any assignment shall become effective five Business Days after Agent s receipt of (x) a written notice of such assignment from the assigning Lender and the assignee Lender and (y) a processing and recordation fee of $2,500, together with a copy of the assignment agreement, in connection with Agent s recording of such sale, assignment, transfer or negotiation; provided still further that all assignments pursuant to this subsection 9.1 shall be effected pursuant to an assignment agreement between the assigning Lender and the assignee Lender substantially in the form of Exhibit XIV annexed hereto; and (iii) in the case of a participation, the holder of any such participation, other than an Affiliate of such Lender, shall not be entitled to require such Lender to take or omit to take any action hereunder, except action directly affecting the extension of the regularly scheduled maturity of any portion of the principal amount of or interest on a Loan or any fees related thereto allocated to such participation, or a reduction of the principal amount of or the rate of interest payable on the Loans or any fees related thereto allocated to such participation, and all amounts payable by Company hereunder shall be determined as if that Lender had not sold such participation. In the case of an assignment authorized under this subsection 9.1, the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations as it would if it were a Lender, including, without limitation, the right to indemnification pursuant to subsection 9.3 and the right to approve or disapprove actions which, in accordance with the terms hereof, require the approval of the Requisite Lenders and the assigning Lender shall be relieved of its obligations hereunder with respect to its Commitment, or, as the case may be, the assigned portion thereof. In the event of an assignment hereunder the Commitments hereunder shall be modified to reflect the Commitment of such assignee and, if any such assignment occurs while any Loan is outstanding, Agent shall, no later than five Business Days following receipt of notice thereof, record such assignment in the Register as provided in subsection 2.1.F and such assignment shall become effective upon such recordation. In the event of an assignment of Notes, upon surrender of the assigning Lender s Notes, Company shall issue and deliver to Agent for delivery to such assignee and to assigning Lender, if applicable, new Notes pursuant to subsection 2.1.F as necessary to reflect the new Commitments of Lender and of assignee. Each Lender may furnish any information concerning Company and its Subsidiaries in the possession of that Lender from time to time to assignees and participants (including prospective assignees and participants), subject to subsection 9.19. Company hereby acknowledges and agrees that any participation will give rise to a direct obligation of Company to the participant and the participant shall for purposes of subsections 2.3.G, 2.4.G, 2.8.A, 2.8.B, 2.8.C, 2.9, 2.10, 9.4 and 9.5 be considered to be a Lender ; provided that no participant shall be entitled to receive any greater amount pursuant to subsections 2.3, 2.4, 2.8 or 2.9 than the transferor Lender would have been entitled to receive in respect of the amount of the participation effected by such transferor Lender to such participant had no such participation occurred. Except as otherwise provided in the immediately preceding paragraph, no Lender shall, as between Company and such Lender, be relieved of any of its obligations hereunder as a result of any sale, assignment, transfer or negotiation of, or granting of participations in, all or any part of the Loans or other Obligations owed to such Lender. 9.2. Expenses Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly (i) all the actual and reasonable costs and expenses of preparation of the Loan Documents and all the costs of furnishing all opinions by counsel for the Credit Parties (including without limitation any opinions requested by Lenders as to any legal matters arising hereunder), and of the Credit Parties perfor- mance of and compliance with all agreements and conditions contained herein and in the other Loan Documents on its part to be performed or complied with; (ii) the reasonable fees, expenses and disbursements of counsel to Agent in connection with the negotiation, preparation, execution and administration of the Loan Documents and the Loans and any consents, amendments, waivers or other modifications hereto or thereto and any other documents or matters requested by any Credit Party; (iii) all other actual and reasonable costs and expenses (without duplication) incurred by Agent (including reasonable fees, expenses and disbursements of counsel) in connection with the negotiation, preparation and execution of the Loan Documents, the issuance of the Letters of Credit and the transactions contemplated hereby and thereby, including the arrangement by Agent for one or more Lenders (as defined in the Commitment Letter) to participate in the Bank Financing (as defined in the Commitment Letter), but excluding the costs and expenses of such Lenders (other than Bankers) and their counsel in connection with such arrangements; and (iv) after the occurrence of an Event of Default, all costs and expenses (including reasonable fees, expenses and disbursements of counsel, including allocated costs of internal counsel, and costs of settlement) incurred by Lenders in enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the Notes or the other Loan Documents or any Letter of Credit by reason of such Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a work-out or of any insolvency or bankruptcy proceedings. 9.3. Indemnity In addition to the payment of expenses pursuant to subsection 9.2, whether or not the transactions contemplated hereby shall be consummated, Company agrees to indemnify, pay and hold Agent, Bid Rate Loan Agent, Trustee and Lenders and the officers, directors, employees, agents, and affiliates of Agent, Bid Rate Loan Agent, Trustee and Lenders (collectively called the Indemnitees ) harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable and documented fees and disbursements of counsel and its legal assistants for such Indemnitee in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be designated a party thereto), that may be imposed on, incurred by, suffered by or asserted against that Indemnitee, in any manner relating to or arising out of this Agreement or the other Loan Documents, the statements contained in the commitment letter delivered by any Lender, Lenders agreement to make the Loans hereunder, Issuing Lenders agreement to issue Letters of Credit, the use or intended use of the proceeds of any of the Loans or any Letter of Credit or under or on account of any Environmental Law or Release of any Hazardous Materials (the indemnified liabilities ); provided that Company shall not have any obligation to an Indemnitee hereunder with respect to indemnified liabilities arising from gross negligence or willful misconduct of that Indemnitee (treating, for this purpose only, any Lender and its directors, officers, employees, agents and affiliates as a single Indemnitee). To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Company shall contribute the maximum portion that they are permitted to pay and satisfy under applicable law, to the payment and satisfaction of all indemnified liabilities incurred by the Indemnitees or any of them. 9.4. Set Off 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 continuation of any Event of Default, each Lender is hereby authorized by Company at any time or from time to time, without notice to Company, or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, Indebtedness evidenced by certificates of deposit, whether matured or unmatured but not including trust accounts) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of Company, against and on account of the obligations and liabilities of Company to such Lender under this Agreement, including, without limitation, all claims of any nature or description arising out of or connected with this Agreement, the Notes or any other Loan Document, regardless of whether or not (a) such Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or Notes, amounts in respect of the Letters of Credit or any other Obligations of Company in respect of and other amounts due hereunder shall have become due and payable pursuant to Section 7 and although said obligations and liabilities, or any of them, may be contingent or unmatured. 9.5. Ratable Sharing Lenders agree among themselves that if any of them shall, whether by voluntary payment, by realization upon security, through the exercise of any right of counterclaim, cross action, set-off, bankers lien, by enforcement of any right under the Loan Documents or otherwise or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal and interest then due in respect of any Loans held by such Lender or amounts payable in respect of Letters of Credit or the other Obligations, the amount then due to such Lender with respect to any participation therein or amounts due to such Lender in respect of facility fees or commitment fees hereunder (collectively, the Aggregate Amounts Due to such Lender), which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (y) notify each other Lender and Agent of such receipt and (z) purchase participations (which it shall be deemed to have purchased from each seller simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by Lenders in proportion to the Aggregate Amounts Due them; provided that if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such Lender to the extent of such recovery, with interest only to the extent actually paid over by such purchasing Lender. Company expressly consents to the foregoing arrangement and agree that any holder of a participation so purchased and any other subsequent holder of a participation in any Loan otherwise acquired may exercise any and all rights of bankers lien, set-off or counterclaim with respect to any and all monies owing by Company to that holder as fully as if that holder were a Lender in the amount of the participation held by that holder. 9.6. Amendments and Waivers No amendment, modification, termination or waiver of any provision of this Agreement or of the Notes, the Guaranties or the Pledge Agreement, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of Requisite Lenders; except that any amendment, modification, termination, or waiver of: the amount of the Commitments or the principal amount of the Loans or payments or prepayments by Company in respect thereof (other than the order of application of proceeds pursuant to subsection 2.6); each Lender s Pro Rata Share; the definitions of Requisite Lenders , Scheduled Term Loans Principal Payments ; any provision expressly requiring the approval or concurrence of all Lenders; the scheduled maturity dates of the Loans; the dates on which interest is payable; decreases in the interest rates borne by the Loans; the dates and amount of fees payable hereunder; the maximum duration of interest periods; the termination of the Pledge Agreement or the release of the collateral pledged thereunder or the release of all or substantially all of the Obligations of the Guarantors (except as expressly permitted herein and therein); and the provisions contained in subsections 7.1 and 9.6 shall be effective only if evidenced by a writing signed by or on behalf of all Lenders. Any amendment, modification, termination or waiver of any of the provisions contained in Section 3 shall be effective only if evidenced by a writing signed by or on behalf of Requisite Lenders. No amendment, modification, termination or waiver of any provision of Section 8 hereof shall be effective without the written concurrence of Agent and no amendment, modification, termination or waiver of Section 10 hereof shall be effective without the written concurrence of Trustee. Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Company in any case shall entitle Company to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this subsection 9.6 shall be binding upon each Lender at the time listed in the Register, each future Lender, and if signed by Company, on Company. 9.7. Independence of Covenants All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if such action is taken or condition exists. 9.8. Notices Unless otherwise specifically provided herein, any notice or other communica- tion herein required or permitted to be given shall be in writing and may be personally served, telecopied or sent by United States mail or courier service and shall be deemed to have been given when delivered in person, receipt of telecopy or four Business Days after depositing it in the United States mail, registered or certified, with postage prepaid and properly addressed; provided that notices to Agent shall not be effective until received. For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this subsection 9.8) shall be as set forth under each party s name on the signature pages hereof. In connection with the solicitation and making of Bid Rate Loans in accordance with subsection 2.1.E, Agent, Bid Rate Loan Agent, Trustee and each Lender shall be entitled to rely upon all telephonic notices without awaiting receipt of written versions of such notices and Company shall hold Agent, Bid Rate Loan Agent, Trustee and each Lender harmless from, and shall indemnify Agent, Bid Rate Loan Agent and Trustee against, any loss, cost or expense ensuing from any such reliance. 9.9. Survival of Warranties and Certain Agreements A. All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement, the making of the Loans hereunder, the issuances of the Letters of Credit and the execution and delivery of the Notes. B. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Company set forth in subsections 2.3.G, 2.4.G, 2.8.A, 2.8.B, 2.8.C, 2.9, 9.2, and 9.3 and the agreements of Lenders set forth in subsections 8.2.C, 8.4, 9.4 and 9.5 shall survive the payment of the Loans and the Notes, the termination of the Letters of Credit and the termination of this Agreement. 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative No failure or delay on the part of any Lender or issuer of any Letter of Credit in the exercise of any power, right or privilege hereunder or under the Notes or the Letters of Credit shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing under this Agreement and the Notes, the Letters of Credit and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise available. 9.11. Marshalling; Payments Set Aside Neither any Lender nor Agent shall be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that Company makes a payment or payments to Agent or Lenders (or to Agent for the benefit of Lenders) or Agent or Lenders or exercise their rights of setoff, and such payment or payments or the proceeds of setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred. 9.12. Severability In case any provision in or obligation under this Agreement or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 9.13. Lenders Obligations Several; Independent Nature of Lenders Rights The obligation of each Lender hereunder is several and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder. Nothing contained in any Loan Document and no action taken by Lenders pursuant hereto or thereto shall be deemed to constitute Lenders to be a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and, subject to subsection 9.5, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose. 9.14. Headings Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 9.15. Applicable Law This Agreement and the other Loan Documents shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflicts of laws principles. 9.16. Successors and Assigns; Subsequent Lenders This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. The terms and provisions of this Agreement shall inure to the benefit of any assignee or transferee of the Loans, and in the event of such transfer or assignment, the rights and privileges herein conferred upon Lenders shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. Company s rights or any interest therein hereunder may not be assigned without the written consent of all Lenders. Lenders rights of assignment are subject to subsection 8.2. 9.17. Consent to Jurisdiction and Service of Process All judicial proceedings brought against Company arising out of or relating to this Agreement, any Note or other Loan Document or any Obligation may be brought in any state or federal court of competent jurisdiction in the State of New York and by execution and delivery of this Agreement, Company accepts for itself and in connection with its properties, generally and unconditionally, the nonexclusive jurisdiction of the aforesaid courts and waives any defense of forum non conveniens, and irrevocably agrees (subject to appeal) to be bound by any judgment rendered thereby in connection with this Agreement, such Note, such other Loan Document or such Obligation. Company designates and appoints the Controller and Chief Financial Officer of Company, at the address set forth under Company s name on the signature page hereof and such other Persons as may hereafter be selected by Company irrevocably in writing to so serve, as its agent to receive on its behalf service of all process in any such proceedings in any such court, such service being hereby acknowledged by Company to be effective and binding service in every respect. A copy of any such process so served shall be mailed by registered mail to Company at its address provided in the applicable signature page hereto, except that unless otherwise provided by applicable law, any failure to mail such copy shall not affect the validity of service of process. If any agent appointed by Company refuses to accept service, Company hereby agrees that service upon it by mail shall upon receipt constitute sufficient notice. Nothing herein contained shall affect the right to serve process in any other manner permitted by law or shall limit the right of any Lender to bring proceedings against Company in the courts of any other jurisdiction. 9.18. Waiver of Jury Trial Each of the parties to this Agreement hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement, the Loan Documents or the transactions contemplated hereby or thereby. 9.19. Confidentiality Lenders and participants shall hold all non-public information obtained pursuant to the requirements of this Agreement which has been identified as such by Company in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosures (x) reasonably required by any bona fide assignee, transferee or participant who has agreed to comply with this subsection 9.19 as if it were a Lender hereunder in connection with the contemplated assignment or transfer of any Loans or participation therein or (y) as required or requested by any governmental agency or representative thereof or pursuant to legal process; provided that, unless specifically prohibited by applicable law or court order, each Lender shall notify Company of any request by any governmental agency or representative thereof (other than any such request in connection with any examination of the financial condition of such Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information, and provide Company with an opportunity to respond; provided further that in no event shall any Lender be obligated or required to return any materials furnished by Company or any of its Subsidiaries. 9.20. Counterparts; Effectiveness This Agreement and any amendments, waivers, consents, or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts, together shall constitute but one and the same instrument. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and written or telephonic notification of such execution and authorization of delivery thereof has been received by Company and Agent. SECTION 10. TRUSTEE 10.1. Appointment as Trustee Company may appoint Continental Bank to act as Trustee hereunder and Continental Bank may accept or decline such appointment. In the event that Continental Bank accepts such appointment, it will accept solely in its capacity as Trustee, subject to the terms and conditions of this Section 10, to follow the procedures set forth in subsection 2.1.E. Each Lender shall be deemed to have authorized Continental Bank to act in the capacity of Trustee as agent for such Lender in accordance with the terms hereof. In acting as Trustee hereunder, Company shall not be entitled to the benefits accorded by this Section 10. 10.2. Limitation on Duties Trustee shall have no duties or responsibilities except those expressly specified in this Agreement and those duties and liabilities shall be subject to the limitations and qualifications set forth herein. The duties of Trustee shall be mechanical and administrative in nature. 10.3. Limitation on Liabilities Neither Trustee nor any of its directors, officers or employees shall be liable for any action taken or omitted (whether or not such action taken or omitted is within or without Trustee s responsibilities and duties expressly specified in this Agreement) under or in connection with this Agreement or any other instrument or document executed in connection herewith, except to the extent caused by its gross negligence or willful misconduct. Without prejudice to the generality of the foregoing, neither Trustee nor any of its directors, officers or employees shall be responsible for, or have any duty to inquire into (a) the genuineness, execution, validity, effectiveness, or sufficiency of (i) any Bid Rate Loan Quote Request, Bid Rate Loan Quote, Notice of Bid Rate Loan Borrowing or Invitation for Bid Rate Loan Quotes, or (ii) any document or instrument furnished pursuant to or in connection with this Agreement, or (b) any failure of any party to this Agreement to receive any communication sent. 10.4. Trustee s Action on Communications Trustee shall be entitled to receive, and shall be fully protected in acting upon, any communication in whatever form believed by Trustee in good faith to be genuine and correct and to have been signed or sent or made by a proper person or persons or entity. Trustee may consult counsel and shall be entitled to act, and shall be fully protected in any action taken in good faith, in accordance with advice given by counsel. Trustee may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by Trustee with reasonable care. Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, provisions or conditions of this Agreement. 10.5. Continental Bank Entitled to Act as Lender With respect to the Commitments of Continental Bank and Loans made by Continental Bank hereunder, Continental Bank shall have the same rights and powers and duties under this Agreement as any other Lender and may exercise such rights and duties as though it were not also acting as Trustee hereunder. Continental Bank and its Affiliates may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with Company as if Continental Bank were not also acting as Trustee hereunder. 10.6. Successor Trustee Trustee may resign at any time by giving at least thirty days written notice thereof to Lenders and Company. Upon any such notice of resignation, Lenders with the consent of the Company (which consent shall not be unreasonably withheld) shall have the right to appoint a successor Trustee. If no successor Trustee shall have been appointed by Lenders and accepted such appointment within thirty days after the retiring Trustee s giving notice of resignation, then the retiring Trustee may, but shall not be required to, on behalf of the Lenders, appoint a successor Trustee.WITNESS the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above. COMPANY: DANAHER CORPORATION By: /s/ Patrick W. Allender Title: Chief Financial Officer and Secretary Notice Address: DANAHER CORPORATION 1250 24th Street, N.W. Washington, D.C. 20037 Attention: Patrick W. Allender Telecopier: (202) 828-0860 with copies to: SKADDEN, ARPS, SLATE, MEAGHER & FLOM 919 Third Avenue New York, New York 10022 Attention: Scott V. Simpson, Esq. Telecopier: (212) 735-2001 LENDERS: BANKERS TRUST COMPANY, individually, and as Agent By: /s/ Title: Vice President Notice Address: BANKERS TRUST COMPANY Operations 280 Park Avenue 14th Floor New York, New York 10017 Attention: Robert R. Telesca with copies to: BANKERS TRUST COMPANY Operations 280 Park Avenue 14th Floor New York, New York 10017 Attention: Fred J. Angelo Telecopier: (212) 850-2605 O MELVENY & MYERS 153 East 53rd Street 54th Floor New York, New York 10022-4611 Attention: Marc P. Hanrahan, Esq. THE BANK OF NOVA SCOTIA By: /s/ J. Alan Edwards Title: Assistant General Manager Notice Address: THE BANK OF NOVA SCOTIA One Liberty Plaza New York, New York 10066 Attention: Jim Trimble Telecopier: (212) 225-5090 THE BANK OF TOKYO TRUST COMPANY By: /s/ S.W. Starr Title: Vice President and Manager Notice Address: THE BANK OF TOKYO TRUST COMPANY 1825 K Street, N.W. Suite 703 Washington, D.C. 20006 Attention: Stanley W. Starr Telecopier: (202) 293-3416 THE CHASE MANHATTAN BANK, NA By: /s/ Title: Vice President Notice Address: THE CHASE MANHATTAN BANK, NA One Chase Manhattan Plaza New York, New York 10081 Attention: Brian McDonagh Telecopier: (212) 552-5189 CONTINENTAL BANK, NATIONAL ASSOCIATION in its individual corporate capacity By: /s/ Title: Vice President Notice Address as Lender: CONTINENTAL BANK, NATIONAL ASSOCIATION 231 S. LaSalle Street Chicago, Illinois 60697 Attention: Timothy J. Pepowski Telecopier: (312) 828-3864 FOR BID RATE LOAN QUOTE REQUESTS: MR. WILLIAM M. LUPOLETTI Phone: (312) 828-1946 Fax: (312) 346-3575 or (313) 372-3206 CREDIT SUISSE By: /s/ Thomas N. George Title: Vice President By: /s/ Jay Hall Title: Vice President Notice Address: CREDIT SUISSE 100 Wall Street New York, New York 10005 Attention: Jay Chall Telecopier: (212) 943-1598 THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Title: Vice President Notice Address: THE FIRST NATIONAL BANK OF CHICAGO 1776 I Street, N.W. Suite 800 Washington, D.C. 20006 Attention: Ted Wozniak Telecopier: (202) 833-6677 THE TORONTO-DOMINION BANK By: /s/ Title: Director Notice Address: THE TORONTO-DOMINION BANK 31 West 52nd Street New York, New York 10019 Attention: Eric I. Skillins Attention: Duncan Robertson Telecopier: (212) 262-1926 EX-10 6 THIS AGREEMENT is made this 7th day of March, 1988 between EASCO HAND TOOLS, INC., a Delaware corporation ("Seller") , and SEARS, ROEBUCK AND CO., a New York corporation ("Sears") ; WITNESSETH The Parties hereto mutually agree as follows: 1. (a) Seller agrees to manufacture and sell to Sears, and Sears agrees to purchase from Seller, in each contract year during the term hereof, seventy percent (70%) of Sears requirements of Sears "Craftsman" grade socket wrenches and accessories and flat wrenches (open end, box end and combination end) of the types currently being manufactured by Seller for Sears, as purchased through Sears Department 609 (hereinafter collectively called "Product"). Sears shall have the right, at its option, to purchase from Seller and to require Seller to manufacture and sell to Sears in any contract year during the term hereof, at the prices and subject to the terms of this Agreement, additional quantities of product, not exceeding, however, Sears total requirements thereof for such year. (b) The parties may agree to the sale and purchase of item(s) of product outside of this Agreement and under different prices, terms and conditions except that such purchases shall be counted as if purchased hereunder for purposes of determining whether Sears has met its minimum purchase obligation. Such purchases shall be subject to the terms and conditions of this Agreement unless otherwise modified. Such purchases and any additional costs incurred because of them shall not be considered in establishing, in accordance with Schedule A, estimated manufacturing costs and prices for goods purchased under this Agreement. Such product purchased outside this Agreement shall be treated as if such purchases were additional, unanticipated, and unestimated sales by Seller for purposes of estimating manufacturing costs and establishing prices. However, purchases of product made outside this Agreement and the costs attributable or allocable, in accordance with Schedule A, to product purchased outside of this Agreement, shall be included in the determinations of any excess under Paragraph 5 hereof as if such product were purchased by Sears under this Agreement. All such agreements to purchase items outside of this Agreement shall be in writing and signed by the Vice President in charge of the appropriate Sears merchandise group. 2. It is the intent of the parties that product manufactured by Seller for Sears will be scheduled for production during the term hereof so as to meet Sears reasonable delivery requirements, and insofar as possible to achieve manufacturing efficiency and economical production. Each contract year shall be divided into two (2) production periods beginning, respectively on the first day of January and July. Sears shall furnish to Seller, at least one hundred and twenty (120) days before the beginning of each contract year, a written estimate of Sears requirements of product for the ensuing contract year. This estimate will not be a firm commitment by Sears, it will be provided as a guide to Seller for purposes of production scheduling and cost development. Within fifteen (15) days after receipt of such written estimate of Sears requirements of product for the contract year, Seller shall furnish Sears Department 609 a written statement of its estimated capacity for production of product during such contract year, and a written statement of Seller's computation of its estimated "manufacturing cost", as defined in Schedule "A" hereof, of product to be manufactured for Sears during such contract year, based an Sears estimated requirements for said contract year. Such statements of estimated cost shall show, as accurately as Seller can determine each element entering into "manufacturing cost" of product and Seller's standard cost hereinafter referred to. Thereafter, and at least thirty (30) days before the beginning of each contract year, the estimated "manufacturing cost" to be used in fixing the contract price to be charged for product to be manufactured during such contract year (including both production periods) shall be agreed upon by Seller and Sears, or otherwise established as provided in Paragraph 7 hereof. Sears shall then immediately after the estimated manufacturing cost is so agreed upon or otherwise established, place with Seller a firm production order for the first production period of the contract year at the contract price determined in accordance with the provisions of Paragraph 3 hereof. Sears shall place with Seller a firm production order for the second production period of the contract year, at least thirty (30) days prior to the beginning of such production period, at the same contract price as determined in accordance with the provisions of Paragraph 3 hereof for the contract year. Notwithstanding the foregoing, prior to the due date of the firm production order for the second production period of the contract year, Sears, at its sole discretion, may revise its written estimate of Sears requirements of any product for the contract year, and in the event Sears does such a revision, Sears and Seller shall review the sales, inventory, production and cost and may agree to adjust the estimated manufacturing cost to be used to establish the contract price for any such product the subject of such a revision, to the extent necessary as a result of Sears revision of the written estimate of Sears requirements of such product for the contract year provided that Seller may include considerations of updating its estimate of manufacturing cost. The revised contract price established by any such adjusted estimated manufacturing cost shall be calculated in accordance with paragraph 3(a). The contract price for the second production period order shall then be adjusted upward or downward in amounts determined by Sears for each product so that the total contract prices paid by Sears for all estimated product requirements for the contract year, as revised would equal the amount which would be paid if the revised contract price had been in effect for the entire year. If Sears purchases two or more products of different specifications from Seller, the foregoing procedure shall be followed with respect to each item of product. 3. (a) Except for items of product purchased by Sears from Seller which are of like grade and quality as items then sold domestically by Seller to its other customers and subject to the provisions of Paragraph 4 hereof, the contract price for each item of product to be produced for Sears during each production period shall equal the amount determined by dividing the estimated "manufacturing cost," excluding the no profit items thereof, by the number determined by subtracting from one the decimal figure equivalent to the net operating profit rate plus the no profit items of "manufacturing cost". [Contract Price = "manufacturing cost" - no profit items of manufacturing cost" = 1- .127) + no profit items of "manufacturing cost".] The net operating profit rate shall be twelve and seven-tenths percentage (12.7%). The contract price during each production period for buyout items, which are defined for purposes of this Agreement, as items approved by Sears purchased by Seller from other sources for inclusion in combination with product manufactured by Seller in product its sold by Seller to Sears hereunder, shall equal (1) the estimated net landed cost thereof and (2) any "manufacturing cost," as defined in Schedule A, allocable in accordance with sound and accepted accounting principles to any such buyout items (which allocable "manufacturing cost" shall not be included in the "manufacturing cost" of any product), both (1) and (2) as established for such period by agreement of the parties, plus (3) a profit equal to seven percent (7%) of such costs excluding any no profit cost items. There shall not be any settlement between Seller and Sears with respect to any variance between the amount of the actual net landed cost and the estimated net landed cost of the buyout items provided, however, that any cost increase or decrease accepted by Sears from current Sears sources for items, which are purchased by Easco after the effective date of such increase or decrease and are included as buyout items in product sets Easco provides to Sears pursuant to this Agreement, may result in an increase or decrease, respectively, in the cost of such product sets, but only to extent of the amount of the net aggregate cost increase or decrease resulting from Sears accepted price increase or decrease for items included as buy out items in such sets. (b) Subject to the provisions of Paragraph 4 hereof, Seller's price to Sears (F.O.B. shipping point) for each item of product to be manufactured for Sears during each production period which is of like grade and quality as an item sold domestically by Seller to any of its other customers, shall equal the net price for said item then charged by Seller to such other customers less a differential (if any) which makes due allowance for differences in the cost of manufacture, sale, or delivery for or to Sears, resulting from the differing methods or quantities in which said item of product is sold or delivered to Sears as compared to such other customers of Seller. Said differential shall be computed prospectively in accordance with generally accepted accounting principles, and shall be based upon estimates which fairly reflect past results. 4. Seller's "delivered price" of product for any production period to a Sears Catalog Merchandise Distribution Center ("CMDC") shall mean Seller's proposed contract price for such period, determined pursuant to Paragraph 3 hereof, plus the cost of transportation of product from Seller's plant to such CMDC. The term "competitive delivered price" shall mean the lowest price (except a distress price) quoted to Sears for said production period by any other reputable manufacturer or source for the same or similar product of comparable kind and quality, plus the cost of transportation of said product from the plant of such other manufacturer or source to a Sears CMDC. If Seller's "delivered price" of product to any Sears CMDC exceeds the "competitive delivered price" to such CMDC, and Sears gives Seller written notice to that effect before placing its order with Seller for any production period, then Seller shall, within ten (10) days after receipt of such notice, advise Sears in writing that it will reduce or refuses to reduce its contract price to each such CMDC and to the retail stores served by each such CMDC, to such extent that Seller's "delivered price" to each such CMDC will not exceed the "competitive delivered price" to that CMDC. If Seller refuses to so reduce said contract price or fails to advise Sears of its decision within the aforesaid ten (10) day period, Sears shall have the right, in its discretion, to purchase from such other manufacturer or source all or any part of the quantity of product required by Sears in the territory served by any such CMDC, and Sears obligations to purchase and Seller's obligation to manufacture and sell product hereunder shall be reduced by the amount of such purchases from such other manufacturer or source. 5. Within ninety (90) days after the end of each contract year hereof, Seller shall determine by audit the actual "manufacturing cost", as defined in Schedule A, of product sold to Sears hereunder during such contract year and the actual net landed cost of, and "manufacturing cost" allocable to, buyout items sold to Sears during such year. The actual manufacturing cost shall be allocated between product sold to Sears under the provisions of Paragraph 3(a) and product sold under the provisions of Paragraph 3(b). If the total contract prices paid to Seller for product and buyout items sold to Sears hereunder during such year shall exceed the total contract prices for the products, determined by the actual "manufacturing cost" in accordance with Paragraph 3, and for buyout items, determined by the actual net landed cost of, and actual "manufacturing costs" allocable to, buyout items, plus the profit specified in Paragraph 3 hereof applicable to buyout items sold to Sears during such year, then Seller shall promptly pay, or, at Sears option, credit to Sears, one-half of such excess. Seller shall furnish to Sears within the aforesaid period of time a copy of each such determination and a statement showing the amount due Sears hereunder, if any. 6. The parties recognize that a standard cost accounting system is desirable in order to establish effective cost control procedures, to provide a means of accurately determining the length of most efficient production runs and methods of reducing seasonal production curver to enable the parties to evaluate the costs peculiar to different specifications and assortments of product, and to otherwise enable the parties to achieve economical production. Accordingly, during the term hereof, Seller shall maintain a standard cost accounting system based upon sound and accepted accounting practice, using standard cost representing Seller's determination of the most economical costs attainable with its facilities under existing conditions. Since lower costs and efficient production can best be attained through the joint effort of Seller and Sears, it is agreed that all books and records pertaining to such cost system, including the budget for control of overhead, shall be available for examination by Sears at all reasonable times. Seller shall also furnish to Sears Department 609 monthly operating reports, prepared from such standard cost accounting system and showing a comparison of actual manufacturing cost, as defined in Schedule "A", of product produced for Sears as compared to standard cost and a statement of actual profit earned for the period covered by each report. 7. Sears shall have the right to examine Seller's accounting and cost records in connection with establishing periodic contract prices and for the purpose of auditing the year-end determination of actual "manufacturing cost". If the parties do not agree on the computation of "manufacturing cost" in establishing periodic contract prices or in making the year-end cost determination, either party may have Seller's books and records audited by a firm of independent certified public accountants approved by the other party for that purpose. Said audit and determination shall be final and binding upon both parties hereto, and each party shall bear one-half the cost of such audit. 8. Seller guarantees and warrants that product sold to Sears under this Agreement will be of good workmanship and material, free of defects, merchantable, and will conform to specifications agreed upon by the parties. In the event any product or buyout item sold to Sears under this Agreement proves to be not in compliance with the above warranty, then the same may be rejected by Sears and held or returned to Seller at Seller's expense and risk, and Seller shall, at Sears option, either replace such item of product or buyout item with a new item of product or new buyout item respectively, and deliver the same, shipping charges prepaid, to Sears, or to such person, and at such place, as Sears may in writing direct, or give Sears full credit for said returned item of product or buyout item, plus transportation charges paid thereon by Sears. Ratchet wrench warrantees hereunder shall be as modified by Letter Agreement dated December 31, 1985, as amended by letter dated June 1, 1986, between Sears and Seller regarding the Ratchet Warranty Reimbursement Policy Agreement. 9. Seller shall provide space on its premises for storage of product and buyout items pending delivery and sale to Sears. Product manufactured for Sears and buyout items shall be stored at Seller's risk, shall be packed in accordance with Sears written specifications, and shall be shipped by Seller at such time, and in such manner as Sears shall reasonable direct in its shipping instructions to Seller. In the event Seller shall fail to ship, in compliance with Sears shipping instructions, product or buyout item ordered by Sears from Seller under this Agreement, then Sears shall have the right, at its option, to purchase or commit itself to purchase any of such product or buyout item from other manufacturers or sources, and to the extent of the purchase or commitments which Sears may place with other manufacturers or sources in the exercise of such right, Sears obligations in respect to orders placed with Seller shall be reduced accordingly, and the amount required to be purchased by Sears under this Agreement shall likewise be so reduced. 10. Product and buyout items shall be billed at the time of actual shipment by Seller to Sears pursuant to Sears written shipping instructions. Terms of payment shall be net thirty (30) days from receipt of goods with no anticipation. 11. Seller guarantees that product manufactured and sold and buyout items sold to Sears under this Agreement will not infringe any patent, and agrees without cost to Sears, to protect, defend, hold harmless, and indemnify Sears from and against any and all claims, demands, suits, judgments, damages, royalties, actions and causes of action whatsoever arising out of any alleged infringement of any patent or claim of patent by reason of the manufacture, sale, or use of product or buyout items sold by Seller to Sears under this Agreement. In the event of any claim that the manufacture, sale, or use of product or buyout items sold by Seller to Sears under this Agreement constitutes an infringement of any patent, Sears shall have the right, at its option, in addition to all other rights and remedies it may have, to cease purchasing from Seller the product or buyout items affected by such claim, and to purchase such product or buyout item from other manufacturers or sources until such time during the term hereof as there shall be a final adjudication of such claim favorable to Seller, and the total quantity of product or buyout item required to be purchased by Sears from Seller under this Agreement shall be reduced by the amount of such purchases. For the purposes of this paragraph, "product" shall be deemed to include any packaging supplied by Seller. 12. Seller agrees to protect, defend, hold harmless, and indemnify Sears from and against any and all liability and expense resulting from any alleged or claimed defect in product or buyout items, whether latent or patent, including allegedly improper construction and design, or from the failure of product to comply with specifications or with any express or implied warranties of Seller or arising out of the alleged violation by product or buyout items or in the manufacture or sale of any law, statute, ordinance or administrative order, rule or regulation. These agreements and obligations shall not be affected or limited in any way by Sears extending express or implied warranties to its customer, except to the extent that Sears warranties extend beyond the scope of Seller's warranties, express or implied, to Sears. Nor shall these agreements and obligations be affected or limited in any way by any action or inaction on the part of Sears pursuant to Paragraph 8 hereof. Seller further agrees to obtain at its expense product liability insurance, with a vendors' endorsement, in such form and amount and in such company as may be approved by Sears in writing. Satisfactory evidence of such insurance shall be submitted to Sears upon request. For the purposes of this paragraph, "product" shall he deemed to include any packaging supplied by Seller. 13. Neither party shall be liable for any failure, inability, or delay to perform hereunder, if such failure, inability or delay be due to war, strike, fire, explosion or sabotage accident, casualty, government law order or regulation, or any cause beyond the reasonable control of the party so failing, but due diligence shall be used in curing such cause and in resuming performance. If Seller's performance shall be prevented, delayed or materially impaired by any such cause, then this Agreement, if Sears so elects shall be inoperative, in whole or in part, so long as such situation continues, but without thereby effecting an extension of the term of this Agreement, and all costs and expenses incurred by Seller while this Agreement is inoperative as aforesaid shall be excluded from the determination of Seller's "manufacturing cost" in calculating contract prices, but shall be included in the end determination of cost provided under Paragraph 5 hereof. 14. Seller represents and warrants that product or buyout items sold to Sears under this Agreement and any extension thereof, will be produced in compliance with the requirements of the Fair Labor Standards Act of 1938, as amended, and any regulation issued thereunder. Seller further agrees that a certificate of such compliance will be printed or stamped upon each invoice issued to Sears covering purchases made hereunder. 15. If any voluntary petition in bankruptcy or for corporate reorganization or any similar relief shall be filed by either party hereto, or if any involuntary petition in bankruptcy shall be filed against either party and shall not have been dismissed within sixty (60) days from the filing thereof under any Federal or State Bankruptcy or Insolvency Act, or if a receiver shall be appointed for either party or the property of either party by any court of competent jurisdiction, and such receiver shall not have been dismissed within sixty (60) days from the date of his appointment, or if either party shall make an assignment for the benefit of creditors, or if either party shall admit in writing its inability to meet its debts as they mature, then, in any such event, the other party hereto shall have the right, at its option, to cancel this agreement by giving written notice of such cancellation to the first-mentioned party, whereupon this agreement shall immediately cease and terminate. 16. The term of this Agreement shall extend for the period of one (1) year commencing January 1, 1988, and ending December 31, 1988, and thereafter for successive additional periods of one (1) year each unless terminated as of December 31, 1988, or as of the end of any such additional one (1) year period, by either party giving the other party at least one (1) year prior written notice of such termination. Each "contract year," as the term is used herein, shall commence on January 1, and shall end on the succeeding December 31. 17. The parties hereto agree that as of January 1, 1988, this Agreement shall supersede and cancel the Agreement dated January 3, 1967 between Sears and Seller as amended but that the Letter Agreement dated September 1, 1986 between Sears and Seller regarding the exclusive manufacture and purchase of Sears Best Products shall survive the cancellation of said January 3, 1967 Agreement for the term of the Letter Agreement as otherwise provided in paragraph 6 thereof or for such time thereafter as Sears may decide during the term of this Agreement. 18. All notices herein provided for, or which may be given in connection with this Agreement, shall be in writing. Notices given by Seller shall be addressed to: SEARS ROEBUCK AND CO Sears Tower Attention: Vice President and Comptroller. Chicago, IL 60684 or at such other address as Sears by written notice to Seller shall have specified for that purpose. Notices given by Sears shall be addressed to Seller at: EASCO HAND TOOLS INC. SPECIAL MARKETS GROUP East Windsor Industrial Park Attention: Vice President-Operations East Windsor, CT 06088 or at such other address as Seller by written notice to Sears shall have specified for that purpose. 19. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns, provided, however, no assignment hereof by either party shall be of any force or effect except with the prior written consent of the other party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers duly authorized thereunto, as of the day and year first above written. ATTEST: EASCO HAND TOOLS, INC. /s/ By: /s/ Secretary Vice-President, Operations ATTEST: SEARS, ROEBUCK AND CO. /s/ By : /s/ Secretary Senior-Executive Vice President Merchandising Approved for Signature by Department 700-7 /s/ Group Vice President Approved for Signature by Department 609 /s/ National Merchandise Manager /s/ Senior Buyer /s/ Buyer SCHEDULE A Definition of Manufacturing Cost of Product (Including Warehousing and Shipping Expense) Produced by EASCO HAND TOOLS, INC. ("Seller") Under Agreement with SEARS, ROEBUCK AND CO. ("Sears") Dated: March 7, 1988 General Definition The term "Manufacturing Cost" as used in the attached Agreement, shall mean the actual costs incurred by Seller, which, under sound and accepted accounting principle; consistently applied are applicable to product manufactured for and sold to Sears, or buyout items sold to Sears. Specific Definition I DIRECT MATERIALS Actual net landed cost (after deducting trade discounts) of materials used directly in manufacturing product, to the extent that they can be definitely measured and charged to specific cost units. II DIRECT LABOR The portion of payroll covering those employees working directly on the product which can be definitely measured and charged to specific cost units. III FACTORY OVERHEAD The portion of Seller's overhead which under sound and accepted accounting principles is assignable to product produced for Sears under the attached Agreement. Overhead shall consist of that portion of the following items of cost which are properly chargeable to manufacturing operations. (a) Indirect Materials supplies and those materials used in manufacturing product other than those of direct material classifications. (b) Indirect Labor that portion of the wages of employes engaged manufacturing operations which are not classified as direct labor; including down time, shift and overtime premiums, vacations and holiday pay, and the salary and wages of factory supervisory personnel, of employes engaged in receiving, packing, production engineering, quality control, inspection warehousing, (including salary of field warehouse custodian), shipping, and factory clerical employes, of such departments as timekeeping, methods, time study, scheduling, purchasing, cost accounting, payroll, first aid, and other departments performing related manufacturing functions. (c) Power, Light, Heat, Water and Rent. (d) Repairs and Maintenance cost of keeping buildings and equipment in repair and working condition; but excluding expenditures covering new building and additions to or extraordinary repairs to existing equipment or buildings, whether owned or leased, if such expenditures, under sound and accepted accounting principles, should be capitalized or amortized over the life of a lease. The depreciation or amortization on such expenditures however, shall be allowed as an item of cost, as hereinafter provided. (e) Insurance net premiums for all insurance, except premiums for insurance covering lives of officers when Seller is directly or indirectly a beneficiary. (f) Taxes all taxes, excluding, however, any tax, or the of any tax which is based on income. (g) Depreciation and Amortization fixed asset valuation and the rate of depreciation or amortization shall be based on the actual cost and the useful life of the asset, but shall not in any case exceed the values and rates used by the Internal Revenue Service in determinating the allowable depreciation or amortization for income tax purposes and must conform to generally accepted accounting principles. Asset cost will not be revalued for redetermination purposes. (h) Factory Employee Bonuses payments made to factory employes, other than management or officers, resulting from a definite bonus policy shall be considered an allowable item of cost. (i) Other Factory Expense general factory supplies, perishable tools, telephone and telegraph, illness benefits, workmen's compensation and such other factory expenses incurred by factory departments as are properly chargeable to manufacturing operations. IV ADMINISTRATIVE EXPENSE The portion of Seller's administrative expense applicable to product sold to Sears shall be determined in accordance with generally accepted accounting principles most appropriate to Seller's business. This involves the principle of allocating specifically to each customer or product those expenses which can be identified as having been incurred directly for or with respect to a particular customer or product. Costs of departments performing common functions for more than one customer or product shall be allocated on an equitable basis, taking into account the value of the services of such department to each customer or product. Costs which do not lend themselves to the above methods of allocation shall be distributed to Sears product in the same proportion that the cost of sales (direct materials, direct labor and factory overhead) of product sold to Sears bears to the total cost of sales of all goods sold by Seller during the contract year. Administrative expense shall consist of executive, administrative and general office and clerical salaries; including bonuses paid office employees as a result of a definite policy, and such portion of other expenses incurred by Seller as are properly chargeable to administrative functions, such as supplies, stationery, printing, postage, telephone, telegraph, dues, subscriptions, legal fees, professional services, depreciation of office machinery and equipment, office rent, Federal and State Unemployment Insurance, and Federal Old Age Benefit taxes applicable to administrative, executive and general clerical salaries. V. RESEARCH AND DEVELOPMENT EXPENSE The amount of research and development expense charged to Sears product shall be based upon the amount of time spent on research and development work for Sears product versus the amount of time spent on that work for products other than Sears. The amount charged to Sears product on this basis must be approved by Sears in advance as part of the written computation of estimated manufacturing cost at the time periodic estimated "manufacturing cost" are agreed upon. For the year-end redetermination of "manufacturing cost", the item shall be the lesser of the amount approved by Sears in advance or the actual amount spent. VI PENSION AND PROFIT SHARING PLANS Contributions to pension or profitsharing plans shall not be considered an item of cost unless approved in writing in advance by Sears. VII BONUSES TO OFFICERS AND MANAGEMENT The parties recognize that management incentive bonus plans are desirable; however, a part of bonuses paid to management, at times, may represent a distribution of profits, and as such, is not proper element of cost. Therefore, it is agreed that bonus payments to management to be included in cost of Sears product shall he agreed to by Sears in writing in advance. VIII OTHER INCOME AND OTHER DEDUCTIONS That portion of other income and other deductions which under sound and accepted accounting principles is applicable to cost of product produced and sold to Sears. Such items may include cash discounts, recovery from sale of scrap and waste, the net of short term interest income and short term interest expense and fees paid to field warehousing companies for issuing warehouse receipts on raw materials and finished goods pledged by Seller. IX SELLING EXPENSE It is understood that no selling or advertising expense is necessary, nor will be incurred by Seller in the production and sale of product to Sears. However, the cost of handling Sears orders, including invoicing, etc., shall be considered as part of the cost of Sears product. In those instances where it is necessary to incur expenses for contacting or servicing the Sears account, such contacting or servicing expenses will be included in the cost of Sears product where the amounts involved have been agreed to by Sears in writing in advance. For the year-end redetermination of "manufacturing cost", this cost item shall be the lesser of the amount approved by Sears in advance or the actual amount spent. X. INTERCOMPANY TRANSFERS Where materials, parts or services are furnished to Seller by a division, wholly-owned subsidiary or parent company, all intercompany or interplant profit on such items will be eliminated in computing the cost of product manufactured for Sears. In the event that any substantial amount of materials, parts or services are furnished to Seller by a partially owned subsidiary or a company having substantially similar ownership, then all inter-company charges therefor shall be approved in writing by Sears in advance. Provided, however, that there shall be allowed as an item of manufacturing cost, the corporate charge levied upon Seller by Seller's parent corporation, which is applicable to product sold to Sears, to the extent that said corporate charge does not exceed the lesser of Five Hundred Thousand Dollars ($500,000) or Eight-Tenths of One Percent (0.8%) of the contract price to Sears of product manufactured by Seller and sold to Sears under the provisions of Paragraph 3 of this Agreement. XI NONPROFIT ITEM Patent royalties and excise taxes which Seller is required to pay on the product that is manufactured for Sears, and transportation prepaid by Seller pursuant to Sears request for delivery of product purchased by Sears, shall be reimbursed to Seller by adding such items to the manufacturing cost; however, the percentage of profits specified in the attached Agreement shall not be added to such items in the determination of contract prices or in the year-end redetermination of prices. XII ITEMS NOT APPLICABLE The parties recognize that the following expenditures and receipts are not applicable to the product sold Sears, and therefore, shall be excluded in the determination of the manufacturing cost of product produced for Sears: (a) Cost of collecting other than Sears accounts and losses due to uncollectible notes and accounts receivable. (b) Interest on indebtedness of Seller having an original maturity of one (1) year or more and dividends on capital stock. (c) Organization or reorganization expense, unless otherwise mutually agreed in writing by the parties; including, but not limited to business acquisition or disposition costs and expenses, parent charges resulting from, or in connection with, an acquisition or reorganization, costs resulting from changes in accounting methods or cost systems; capitalized cost resulting from a reevaluation of assets; or expense in connection with issuance or retirement of stock or funded debt. (d) Expenditures for patents, profit or loss on investments, and sales of capital assets. (e) Selling and advertising expense, except expense incurred in contacting (excluding commissions) and servicing Sears account. (f) Expenditures covering erection of new building, or expenditures covering additions or extraordinary repairs to equipment if, under sound accounting principles, such expenditures, should be capitalized or amortized over the life of a lease. The amortization or depreciation on such expenditures, however, shall be allowed as an item of cost. (g) All Federal and State income taxes and other taxes, or portion thereof, based on income. (h) Research and development expense not approved in writing by Sears as specified herein. (i) Bonuses paid to management of Seller, or bonuses based on profits not approved in writing by Sears as specified herein. (j) Contributions to pension or profit sharing plans not approved in writing by Sears as specified herein. The above schedule is hereby made a part of the aforesaid Agreement between the undersigned parties. EASCO HAND TOOLS, INC. By: /s/ SEARS, ROEBUCK AND CO. By : /s/ Senior-Executive Vice President MerchandisingAGREEMENT This is an agreement dated as of November 1, 1990, between Danaher Corporation, a Delaware corporation ("Danaher"), and its wholly owned subsidiary Easco Hand Tools, Inc, a Delaware corporation ("Easco"), as one party, and Sears, Roebuck and Co., a New York corporation ("Sears"), as the other party. Danaher, Easco and Sears mutually agree as follows: Reference is hereby made to the Agreement dated March 7, 1988 between Easco and Sears whereby Easco agreed to manufacture and sell to Sears and Sears agreed to purchase from Easco in each contract year during the term thereof a certain percentage of Sears Craftsman mechanics hand tool products (the "Products") as specified in such Agreement (the "Basic Contract"). 1. (a) In the event that, during the term of the Basic Contract, Danaher determines to sell or otherwise convey a controlling interest in Easco or any other business entity or group of assets owned directly or indirectly by Danaher which includes the plants and infrastructure necessary to support the supply of the Products for Sears under the Basic Contract, Sears shall have a prior right to purchase such interest, entity or assets on economically equivalent and otherwise substantially the same terms and conditions as shall have been offered to Danaher by a bona fide nonaffiliated purchaser. For purposes of this Agreement, "control" or "controlling" shall mean any person or entity owning more than 25% of the voting securities and more voting securities than the persons currently controlling the entity or those persons' affiliates, and "change of control" shall exclude any spinoff of the business entity to Danaher's shareholders or broadly based public offering (one not made to a controlling interest, other than to the persons who currently control that entity), and shall exclude any transfer of control within the Danaher group or the transfer of Danaher shares to any entity controlled by the persons currently controlling Danaher. (b) This right of first refusal shall be exercisable by Sears only if Sears business represents 60% or more of the past twelve month's sales (in dollars) or manufacturing output (in dollars) of the entity, entities or assets being sold. If Sears purchases any such business entity, entities or assets, all existing business relationships between such entity and Danaher, its subsidiaries or affiliates, will continue under the same terms and conditions that existed prior to the purchase by Sears. 2. In the event that, during the term of the Basic Contract, Danaher sells or otherwise conveys, directly or indirectly, control of plants, assets or infrastructure necessary to meet Sears requirements for the Products to a named competitor of the craftsman brand, as defined below, Danaher shall make a "Partners Payment" to Sears equal to 7% of Sears purchases of the Products during the twelve-month period immediately preceding such sale or conveyance. The Partners Payment will be paid in cash to Sears upon a sale to a named competitor and shall not affect any other rights Sears has under this Agreement or the Basic Contract. A named direct competitor means any of four companies whose names are contained on a list delivered by Sears to Easco every other year in connection with budgeting meetings held under the Basic Contract, or any subsidiary or affiliate of such named competitor. In case of a merger, reorganization, sale of business or similar occurrence of any named competitor, the successor to the business of such named competitor shall be substituted for such named competitor, whether or not notice of any such substitution is specifically given by Sears to Easco. 3. Danaher shall commit and utilize sufficient funds as shall be necessary and appropriate, to modernize and expand Easco's manufacturing and related facilities to permit increased production of the Products for Sears under the Basic Contract. Easco's capacity will be increased with an initial target of reaching an annual $250 million production rate of the Products by December 31, 1992. In order to provide a source of short term cash to assist Danaher in funding the expansion and modernization, Sears will negotiate in good faith with Easco at the 1991 budget meeting to reduce existing payment terms on Easco's receivables from Sears on purchases made on or after February 1, 1991 and returning to normal payment terms on purchases beginning January 1, 1992. The reduction in payment terms will be tied to actual cash outflows associated with Easco's capital expenditure program and will be based on a portion of the total cash outlay required by Easco. 4. The Basic Contract, as previously amended, shall remain in place except as amended by this Agreement. Following are agreed upon amendments to the Basic Contract: (a) Easco's agreement to manufacture and sell to Sears and Sears agreement to purchase from Easco, in each contract year, seventy percent (70%) of Sears requirements of Products under Paragraph l(a) of the Basic Contract is hereby modified so that now Easco shall have the right of first supply of Sears requirements of the Products sold domestically through Sears or its domestic subsidiaries or divisions (including Sears retail, catalog, QVC and commercial sales operations and Western Auto) or sold domestically through Sears authorized dealers of the Products or, in order to protect the integrity of the Craftsman trademark and, to the extent legally permissible, sold domestically under a Craftsman brand license ("Product Requirements") and Easco hereby agrees to manufacture and sell to Sears such Product Requirements; provided that Easco meets Sears requirements with respect to competitive costs, quality Service of supply and production capacity and is able to produce such Product Requirements in accordance with the terms and conditions of the Basic Contract; and provided further that Sears may purchase up to $59 million dollars, based on Sears 1990 purchase cost per year of Product Requirements from third party sources (The "$59 million exclusion"). In the event that Sears discontinues purchasing Products from its current major third-party source, Easco will have the right to bid for up to one-half of the volume no longer purchased from such major third-party source. If Easco meets Sears re- quirements with respect to competitive costs, quality, service of supply and available production capacity, such volume bid upon will thereafter be included under the Basic Contract. In the event of a change in control of Danaher or any entity controlling Easco, or any other business entity or group of assets which includes the plants and infrastructure necessary to meet Sears Product Requirements, Sears shall have the option of excluding up to $25 Million of purchases (based on Sears 1990 purchase costs) from the Product Requirements in the next to the last year of the Basic Contract and up to $50 million of purchases (based on Sears 1990 purchase costs) in the last year of the Basic Contract term. This optional exclusion shall be in addition to the $59 million exclusion. The $59 million, $25 million and $50 million figures will be adjusted for increases in Sears purchase costs above 1990 costs. (b) Easco must first take into account the Product Requirements in determining its production schedules and product availability. Sears shall have the first right to review and obtain exclusivity on new product developments or innovations on the types of mechanics hand tools described in the Basic Contract. The time period for exclusivity and purchase volume required to support these products shall be negotiated in good faith between Easco and Sears. (c) At each annual budget meeting, Sears and Easco will negotiate an allowance for certain overhead costs incurred by Danaher to be included in manufacturing costs under the Basic Contract. Such overhead costs included will be only for functions that replaced those previously performed by Easco under the Basic Contract and included only to the extent the total cost thereof will be less than the total costs previously incurred by Easco for such functions as permitted under the Basic Contract; subject to increases or decreases after 1991, based on actual costs, but not to exceed the percentage of sales of those costs to 1991 sales to Sears. (d) The competitive price clause of the Basic Contract shall not be invoked by Sears with respect to Product Requirements for purchases made through the 1993 contract year. (e) Interest costs allowable under the Basic Contract shall be limited to debt incurred for the working capital required to operate the business as currently handled in redetermination audits. Specifically excluded will be any debt incurred in an acquisition of or by Easco or Danaher, or for the capital required to modernize and expand Easco's facilities. (f) Sears will receive product pricing consistent with its position as Easco's largest volume customer of mechanics hand tools. As such, Sears will receive all legal price advantages relative to sale of product to others consistent with the total cost of manufacturing and going to market with Sears versus other customers. (g) Paragraph 16 of the Basic Contract is modified to read in its entirety as follows: "The term of this Agreement shall extend for the period commencing January 1, 1988 and ending December 31, 1995; provided, however, that the term shall be extended automatically one day at a time commencing January 1, 1991, until terminated by either party giving the other party at least five (5) years prior written notice of such termination. Each "contract year", as the term is used in this Agreement, shall continue to mean each calendar year, or, in the event of the earlier termination of this Agreement, the remaining portion of such calendar year, commencing on January 1, and ending on the succeeding December 31. In the event of a change of control of Danaher or any other entity controlling Easco, Sears shall have the right to extend the term of this Agreement to a date certain that is up to five (5) years after the termination date as determined according to the preceding paragraph of this Paragraph 16." 5. This Agreement shall be binding upon the assignees and successors of the parties hereto; provided, however; that no assignment hereof by either party shall be of any force or effect except with the prior written consent of the other party. 6. Danaher shall give Sears 60 days prior written notice of any event that would trigger Sears right of first refusal or to extend the term of the Basic Contract, and Sears will respond in writing within 60 days after receipt of such notice as to Sears decision whether to exercise this right. 7. This Agreement shall have a term beginning as of the date first above written, and ending with the termination date of the Basic Contract. 8. This Agreement contains the entire understanding between the parties concerning the subject matter hereof and supersedes all prior negotiations and agreements, whether written or verbal. This Agreement shall not be supplemented, modified or amended except in writing by the parties hereto and no person or individual has or shall have the authority to supplement, modify or amend this Agreement in any manner whatsoever. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers duly authorized thereunto as of the date first above written. DANAHER CORPORATION By: /s/ George M. Sherman George M. Sherman, Chief Executive Officer EASCO AND TOOLS, INC. By: /s/ George M. Sherman George M. Sherman, Chief Executive Officer SEARS, ROEBUCK AND C0. By: /s/ W. E. Patterson W. E. Patterson. Vice President AGREEMENT This Amendment Agreement is made as of this 22nd day of December 1995 by and between Danaher Corporation, a Delaware corporation ("Danaher"), and its wholly owned subsidiary Easco II Hand Tools, Inc., a Delaware corporation ("Easco"), (Danaher and Easco are referred to herein as "Danaher") as one party, and Sears, Roebuck and Co., a New York Corporation ("Sears"), as the other party. Reference is hereby made to the Agreement dated March 7, 1988 between Easco and Sears, whereby Easco agreed to manufacture and sell to Sears and Sears agreed to purchase from Easco in each contract year during the term thereof a certain percentage of Sears Craftsman mechanics hand tool products (the "Products") as specified in such Agreement (the "Basic Contract") and the Agreement dated as of November 1, 1990 between Danaher and Easco, as one party, and Sears, as the other party, relating to certain right of first refusal of Sears, Partners payment, Danaher's and Easco's commitment to expand and modernize relating to the Basic Contract and certain amendments to the Basic Contract. Whereas, the Parties hereto desire to make certain additional agreements with respect to, and amendments of the Basic Contract as provided herein. The parties hereto mutually agree as follows: 1. Paragraph 10 of the Basic Contract is hereby amended to read as follows: 10. Product and buyout items shall be billed at the time of actual shipment by Seller to Sears pursuant to Sears purchase order. Terms of payment shall be net sixty (60) days receipt of goods. 2. The parties hereby agree that they shall in good faith negotiate an agreement mutually acceptable to Sears and Danaher to replace the Basic Contract and that this process shall commence and be completed by the end of 1996. The parties agree that until the completion of the negotiation of such Agreement, Sears shall not be entitled pursuant to paragraph 5 of the Basic Contract to any portion of the amount the total contract prices paid to Easco for product and buyout items sold to Sears under the Basic Contract during a contract year exceeds the total contract prices for the products, determined by the actual "manufacturing cost" in accordance with Paragraph 3 of the Basic Contract, and contract prices for buyout items, determined by the actual net landed costs of, and actual manufacturing costs allocable to, buyout items, plus the profit specified in Paragraph 3 of the Basic Contract applicable to buyout items sold to Sears during a contract year. Notwithstanding the foregoing, this waiver of certain provisions of Paragraph 3 shall only be in effect as long as Danaher continues to invest to remain the low cost domestic provider and share any such cost reductions with Sears and to provided to Sears industry leading quality, delivery and costs. 3. The parties have agreed to negotiate in good faith a new agreement for Ratchet Warranty Returns to supersede the requirements of the December 31, 1985 Ratchet Warranty Reimbursement Policy Agreement (the "Ratchet Warranty Policy") as amended by the June 1, 1986 Letter, and that in the interim, in lieu of the requirements of such Ratchet Warranty Policy, Danaher agrees to pay Sears in December of a contract year $463,000 per contract year of the Basic Contract, beginning with the contract year commencing January 1, 1995 as reimbursement for the ratchet warranty expense pursuant to the Ratchet Warranty Policy; provided, however that i. in the event Sears determines a product recall of a ratchet or ratchets or other course of action is appropriate, Danaher shall be totally responsible for all costs and expense thereof and for refunding to Sears, its full purchase price of all items returned or replaced pursuant to such product recall, and the costs of any such recall or other course of action shall be borne solely by Danaher, and Such cost shall not be charged back to Sears in any manner whatsoever, including its inclusion as an allowable "manufacturing cost" in the Basic Contract; or ii. in the event of a product defect, where the parties reasonably determine that the defective ratchet returns arc excessive based upon the normal rate of return over the past twelve months in which such Product has been in full distribution to Sears provided the parties shall use other measures if such Product has not been in full distribution, Danaher shall reimburse Sears for all such ratchets returned at the rate of 100% of Sears current cost for such ratchets and there shall be no limit on Danaher's liability for such reimbursement for the year or years involved. 4. Danaher shall continue to invest in its operations to remain the low costs provider and to attempt to further reduce its costs of producing Product and will share such costs reductions with Sears. Danaher agrees that there shall be no price increase to Sears for any Product under the Basic Contract prior to the end of 1996 unless mutually agreed to. 5. This Agreement shall be binding upon the assignees and successors of the parties hereto; provided, however, that no assignment hereof by either party shall be of any force or effect except with the prior written consent of the other party. 6. This Agreement contains the entire understanding between the parties concerning the subject matter hereof and supersedes all prior negotiations and agreements, whether written or verbal. This Agreement shall not be supplemented, modified or amended except in writing by the parties hereto and no person or individual has or shall have the authority to supplement, modify or amend this Agreement in any manner whatsoever. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers duly authorized thereunto as of the date first written above. DANAHER CORPORATION By: /s/ EASCO HAND TOOLS, INC. By: /s/ SEARS, ROEBUCK AND CO. By: /s/ AMENDMENT NO. 3 This Third Amendment to the Agreement (this Third Amendment ) is dated as of December 16, 1997, by and between Danaher Corporation, a Delaware corporation ( Danaher Corp. ), its wholly owned subsidiary Easco Hand Tools, Inc., a Delaware corporation ( Easco ) (Danaher Corp. and Easco collectively, Danaher ), and Sears, Roebuck and Co., a New York corporation ( Sears ). Danaher and Sears are parties to that certain Agreement dated as of March 7, 1988 (the Agreement ), as amended as of November 1, 1990 (the First Amendment ) and as further amended as of December 22, 1995 (the Second Amendment ). Danaher and Sears desire to make certain additional agreements and amendments with respect to the Agreement and Second Amendment. Now, therefore, in consideration of the mutual covenants and agreements set forth herein, the parties hereby agree as follows. 1. Amendments to the Agreement: Upon the date hereof, the Agreement shall be amended as follows: a. Paragraph 1(b) shall be amended by deleting the third, fourth, fifth and sixth sentences of Paragraph 1(b). b. Paragraph 2 shall be deleted and replaced and by the following: It is the intent of the parties that product manufactured by Seller for Sears will be scheduled for production during the term hereof so as to meet Sears reasonable delivery requirements, and insofar as possible to achieve manufacturing efficiency and economical production. On November 1 of each year, Seller shall furnish Sears Department 609 a written statement of its estimated capacity for production of product during the following contract year, based on estimated promotional and regular unit volume projections provided by Sears. c. Paragraph 3(a) shall be deleted and replaced as follows: Except for items of product purchased by Sears from Seller which are of like grade and quality as items then sold domestically by Seller to its other customers and subject to the provisions of Paragraph 4 hereof, the contract price for each item of product, including buyout items (as defined hereafter), to be produced for Sears during each production period shall be the price mutually agreed upon in writing by Sears and Seller. The contract price during each production period for buyout items , which are defined for purposes of this Agreement as items approved by Sears purchased by Seller from other sources for inclusion in combination with product manufactured by Seller in product sets sold by Seller to Sears hereunder, shall be as set forth in the preceding sentence. d. Paragraph 5 shall be deleted and replaced by the following: No later than 30 days after the end of each calendar quarter, Seller shall provide Sears with a profit and lossThe information marked below with * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission. statement (the Quarterly P&L ) for Seller's Sears business. No later than March 31 of each year, Seller shall provide Sears with an annual profit and loss statement (the Annual P&L ) for Seller's Sears business. Both the Quarterly P&L and the Annual P&L shall be (i) prepared in accordance with generally accepted accounting principles, consistently applied, and (ii) be consistent with the Seller's internal financial statements utilized by Seller's management. e. Paragraph 6 shall be deleted and replaced by the following: Growth Share Rebate. No later than March 31 of each year, Danaher shall pay Sears by wire transfer of immediately available funds to an account specified in writing by Sears, an amount (the Growth Share Rebate ) equal to a percent (the Designated Percentage , as defined hereafter) [* ] f. Paragraph 7 shall be deleted and replaced by the following: Sears shall have the right to examine Seller's accounting books and other records that Sears deems necessary for the purpose of determining Seller's annual Net Sales to Sears and the Growth Share Rebate (as defined in Section 6). If the parties do not agree on the results of the Net Sales or the Growth Share Rebate, either party may deliver notice of such disagreement to the other (the Objection Notice ) and the parties will use good faith efforts to resolve the dispute. If final resolution is not obtained within 30 days after receipt of the Objection Notice (the Resolution Period ), the parties shall submit the dispute to binding arbitration by a major independent accounting firm. Within 10 business days of the end of the Resolution Period, each party shall select, and designate in writing to the other party, an accounting firm. The two firms selected by the parties, shall, within 15 business days, select a third major independent accounting firm to solely arbitrate the dispute. If a party shall fail to designate an accounting firm within 10 days of the expiration of the Resolution Period, the firm of the party that has selected a firm shall solely pick the major independent accounting firm to conduct the arbitration. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. Sec. 1-16. Such arbitration audit and determination shall be final and binding upon both parties hereto, and each party shall bear one-half the cost of such audit. g. The following shall be deleted from the last sentence of Paragraph 13: and all costs and expenses incurred by Seller while this Agreement is inoperative as aforesaid shall be excluded from the determination of Seller's manufacturing cost in calculating contract prices, but shall be included in the year- end determination of cost provided under Paragraph 5 hereof. 2. Amendments to Second Amendment: a. The following shall be deleted from paragraph number two of the Second Amendment by the end of 1996 and replaced with the following: as soon as practicable . b. The following shall be deleted from paragraph number two of the Second Amendment: Notwithstanding the foregoing, this waiver of certain provisions of Paragraph 3 shall only be in effect as long as Danaher continues to invest to remain the low cost domestic producer and share any such cost reductions with Sears and to provide to Sears industry leading quality, delivery and costs. c. Paragraph number four shall be deleted in its entirety. 3. Miscellaneous. This Third Amendment contains the entire understanding between the parties concerning the subject matter hereof and supersedes all prior negotiations and agreements, whether written or verbal. This Third Amendment shall not be supplemented, modified or amended except in writing by the parties hereto and no person or individual has or shall have the authority to supplement, modify or amend this Third Amendment in any manner whatsoever. Except as otherwise expressly provided by this Third Amendment, all of the terms, conditions and provisions of the Agreement, as amended, shall continue in full force and effect and that this Third Amendment, Second Amendment and First Amendment and the Agreement shall be read and construed as one instrument. In witness whereof, the parties hereto have caused this Agreement to be executed by their respective officers duly authorized thereunto as of the date first written above. DANAHER CORPORATION By: /s/ George C. Moore /s/ Rita F. La Bonte Name: George C. Moore Rita F. La Bonte Its: Vice President Witness EASCO HAND TOOLS, INC. By: /s/ Thomas R. Sulentic /s/ Rita F. La Bonte Name: Thomas R. Sulentic Rita F. La Bonte Its: President Witness SEARS, ROEBUCK AND CO "OFFICIAL SEAL" SHANNON WATTS NOTARY PUBLIC STATE OF ILLINOIS My Commission Expires 06/30/2001 By: /s/ Robert L. Mettler /s/ Shannon Watts Name: Robert L. Mettler Its: President, Merchandising -- Full Line Stores EX-10 7 DANAHER CORPORATION NOTE AGREEMENT Dated as of November 1, 1992 $73,500,000 Principal Amount 7.15% Senior Notes Due December 15, 1999 $26,500,000 Principal Amount 7.63% Senior Notes Due December 15, 1999 PPN: 235851 A# 9 PPN: 235851 B* 2 TABLE OF CONTENTS 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . . . . . . . . . . . . . . . . . .1 1.1 Description of Notes. . . . . . . . . .1 1.2 Commitment; Closing Date. . . . . . . .2 1.3 Guaranty; Release . . . . . . . . . . .2 2. PREPAYMENT OF NOTES. . . . . . . . . . . . .2 2.1 Required Prepayments. . . . . . . . . .2 2.2 Optional Prepayments. . . . . . . . . .2 2.3 Notice of Prepayments . . . . . . . . .3 2.4 Surrender of Notes on Prepayment or Exchange. . . . . . . . . . . . . . . .4 2.5 Direct Payment and Deemed Date of Receipt4 2.6 Allocation of Payments. . . . . . . . .5 2.7 Payments Due on Saturdays, Sundays and Holidays. . . . . . . . . . . . . . . .5 3. REPRESENTATIONS. . . . . . . . . . . . . . .5 3.1 Representations of the Company. . . . .5 3.2 Representations of the Purchasers . . 11 4. CLOSING CONDITIONS . . . . . . . . . . . . 12 4.1 Representations and Warranties. . . . 12 4.2 Legal Opinions. . . . . . . . . . . . 12 4.3 Events of Default . . . . . . . . . . 13 4.4 Payment of Fees and Expenses. . . . . 13 4.5 Sale of Notes to Other Purchasers . . 13 4.6 Guaranty. . . . . . . . . . . . . . . 13 4.7 Legality of Investment. . . . . . . . 13 4.8 Private Placement Numbers . . . . . . 13 4.9 Proceedings and Documents . . . . . . 13 5. INTERPRETATION OF AGREEMENT. . . . . . . . 13 5.1 Certain Terms Defined . . . . . . . . 13 5.2 Accounting Principles.. . . . . . . . 21 5.3 Valuation Principles. . . . . . . . . 22 5.4 Direct or Indirect Actions. . . . . . 22 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . 22 6.1 Corporate Existence. . . . . . . . . 22 6.2 Insurance . . . . . . . . . . . . . . 22 6 . 3 Taxes, Claims for Labor and Materials23 6.4 Maintenance of Properties . . . . . . 23 6.5 Maintenance of Records. . . . . . . . 23 6.6 Financial Information and Reports . . 23 6.7 Inspection of Properties and Records. 26 6.8 ERISA . . . . . . . . . . . . . . . . 26 6.9 Compliance with Laws.. . . . . . . . 26 6.10 Acquisition of Notes. . . . . . . . . 27 6.11 Private Placement Number. . . . . . . 27 7. NEGATIVE COVENANTS . . . . . . . . . . . . 27 7.1 Net Worth . . . . . . . . . . . . . . 27 7.2 Fixed Charge Ratio. . . . . . . . . . 27 7.3 Debt Ratio. . . . . . . . . . . . . . 28 7.4 Subsidiary Debt . . . . . . . . . . . 28 7.5 Liens . . . . . . . . . . . . . . . . 28 7.6 Restricted Payments . . . . . . . . . 29 7.7 Merger or Consolidation . . . . . . . 30 7.8 Sale of Assets. . . . . . . . . . . . 30 7.9 Disposition of Stock of Subsidiaries. 31 7.10 Transactions with Affiliates. . . . . 31 7.11 Guaranties . . . . . . . . . . . 31 7.12 Nature of Business. . . . . . . . . . 31 7.13 Restrictions on Dividends . . . . . . 32 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . . . . . . . . . . . . . . . . . . . . 32 8.1 Nature of Events. . . . . . . . . . . 32 8.2 Remedies on Default . . . . . . . . . 34 8.3 Annulment of Acceleration of Notes. 34 8.4 Other Remedies. . . . . . . . . . . . 34 8.5 Conduct No Waiver; Collection Expenses35 8.6 Remedies Cumulative . . . . . . . . . 35 8.7 Notice of Default . . . . . . . . . . 35 9. AMENDMENTS; WAIVERS AND CONSENTS . . . . . 35 9.1 Matters Subject to Modification.. . . 35 9.2 Solicitation of Holders of Notes. . . 36 9.3 Binding Effect. . . . . . . . . . . . 36 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT. . . . . . . . . . . . . . . . 36 10.1 Form of Notes . . . . . . . . . . . . 36 10.2 Note Register . . . . . . . . . . . . 37 10.3 Issuance of New Notes upon Exchange or Transfer. . . . . . . . . . . . . . . 37 10.4 Replacement of Notes. . . . . . . . . 37 11. MISCELLANEOUS. . . . . . . . . . . . . . . 37 11.1 Expenses. . . . . . . . . . . . . . . 37 11.2 Notices . . . . . . . . . . . . . . . 38 11.3 Reproduction of Documents . . . . . . 38 11.4 Successors and Assigns . . . . . 38 11.5 Law Governing. . . . . . . . . . 38 11.6 Headings. . . . . . . . . . . . . . . 39 11.7 Counterparts. . . . . . . . . . . . . 39 11.8 Reliance on and Survival of Provisions39 11.9 Integration and Severability. . . . . 39 SCHEDULE I - Purchasers and Commitments. . . . . . . 54 ANNEXES I Subsidiaries. . . . . . . . . . . . . . . . II Liens. . . . . . . . . . . . . . . . . . . . III Litigation . . . . . . . . . . . . . . . . . IV ERISA Events . . . . . . . . . . . . . . . . EXHIBITS A Form of 7.15% Senior Note Due December 15, 1999 B Form of 7.63% Senior Note Due December 15, 1999 C Form of Opinion of Purchasers Counsel D Form of Opinion of Company's Counsel E Form of Guaranty Agreement DANAHER CORPORATION NOTE AGREEMENT Dated as of November 1, 1992 To Each of the Purchasers Named in Schedule I Hereto Ladies and Gentlemen: DANAHER CORPORATION, a Delaware corporation (the "Company"), agrees with you as follows: 1. DESCRIPTION OF NOTES AND COMMITMENT 1.1 Description of Notes. The Company has authorized the issuance and sale of $100,000,000 aggregate principal amount of its Senior Notes (the "Notes"), to be dated the date of issuance, to bear interest from such date (computed on the basis of a 360-day year comprised of twelve 30-day months), payable semi-annually on June 15 and December 15 of each year, commencing June 15, 1993, and at maturity, at the following rates: (i) $73,500,000 aggregate principal amount of the Notes (the "Series A Notes") shall bear interest at the rate of 7.15% per annum prior to maturity and shall bear interest on any overdue principal (including any overdue optional or required prepayment), on any overdue Make-Whole Amount, and (to the extent legally enforceable) on any overdue installment of interest at the rate of 9.15% per annum; and (ii) $26,500,000 aggregate principal amount of the Notes (the "Series B Notes") shall bear interest at the rate of 7.63% per annum prior to maturity and shall bear interest on any overdue principal (including any overdue optional or required prepayment), on any overdue Make-Whole Amount, and (to the extent legally enforceable) on any overdue installment at the rate of 9.63% per annum. The Notes shall be expressed to mature on December 15, 1999 and the Series A Notes and Series B Notes shall be substantially in the forms attached as Exhibits A and B, respectively. The term "Notes" as used herein shall include each Note delivered pursuant to this Note Agreement (the "Agreement") and each Note delivered in substitution or exchange therefor and, where applicable, shall include the singular number as well as the plural. Any reference to you in this Agreement shall in all instances be deemed to include any nominee of yours or any separate account or other person on whose behalf you are purchasing Notes. You and the other purchasers are sometimes referred to herein individually as a "Purchaser" and collectively as the "Purchasers." 1.2 Commitment; Closing Date. Subject to the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to you, and you agree to purchase from the Company, Notes in the aggregate principal amount set forth opposite your name in the attached Schedule I at a price of 100% of the principal amount thereof. Delivery of and payment for the Notes shall be made at the offices of Gardner, Carton & Douglas, 321 North Clark Street, Quaker Tower, Chicago, Illinois 60610, at 9:00 a.m., Chicago Time, on December 15, 1992 (the "Closing Date"). The Notes shall be delivered to you in the form of one or more Notes in fully registered form, issued in your name or in the name of your nominee. Delivery of the Notes to you on the Closing Date shall be against payment of the purchase price thereof in Federal funds or other funds in U.S. dollars immediately available at Bankers Trust, One Bankers Trust Plaza, New York, New York, A.B.A. No. 021001033, for deposit in the Company's Account No. 50194704. If on the Closing Date the Company shall fail to tender the Note to you, you shall be relieved of all remaining obligations under this Agreement. Nothing in the preceding sentence shall relieve the Company of any liability occasioned by such failure to deliver the Note. The funding and other obligations of the Purchasers under this Agreement shall be several and not joint. 1.3 Guaranty; Release. The Notes will be guaranteed by each Material Subsidiary pursuant to the Guaranty. In the event any Material Subsidiary has been released from its guaranty under or pursuant to the Credit Agreement the Company will promptly notify you of such release and, upon delivery by the Company to you of evidence reasonably satisfactory to you that such Material Subsidiary has been so released, you agree to release such Material Subsidiary from its obligations under the Guaranty. In the event any other Subsidiary shall at any time guarantee all or any portion of Indebtedness or any other obligation (contingent or otherwise) of the Company outstanding under the Credit Agreement, the Company shall cause such Subsidiary to contemporaneously guarantee the Notes and become a party to the Guaranty. 2. PREPAYMENT OF NOTES 2.1 Required Prepayments. In addition to payment of all outstanding principal of the Notes at maturity and regardless of the amount of Notes which may be outstanding from time to time, the Company shall prepay and there shall become due and payable on December 15 in each year, $14,700,000 of the principal amount of the Series A Notes or such lesser amount as would constitute payment in full on the Notes, commencing December 15, 1995 and ending December 15, 1998, inclusive, with the remaining principal payable on December 15, 1999. Each such prepayment shall be at a price of 100% of the principal amount prepaid, together with interest accrued thereon to the date of prepayment. There shall be no mandatory prepayments on the Series B Notes. 2.2 Optional Prepayments. (a) Upon notice as provided in Section 2.3, the Company may prepay the Notes, in whole or in part, at any time, in an amount not less than $1,000,000, an integral multiple of $100,000 in excess thereof or such lesser amount as shall constitute payment in full of the Notes. Each such prepayment shall be at a price of 100% of the principal amount to be prepaid, plus interest accrued thereon to the date of prepayment, plus the Make-Whole Amount. (b) Upon the effective date of a Change of Control, the Company shall immediately and in any event not later than 5 calendar days after such date, give written notice to each holder of a Note of the Change of Control, accompanied by a certificate of an authorized officer of the Company specifying the nature of the Change of Control. Such notice shall (i) contain the written, irrevocable offer of the Company to prepay, on a date specified in such notice which shall be not less than 30 or more than 45 calendar days after the effective date of such Change of Control, the entire principal amount of the Notes held by each holder at a price equal to 100% thereof, plus interest accrued thereon to the date of prepayment, plus the Make-Whole Amount, (ii) state that notice of acceptance of the Company's offer to prepay under this Section 2.2(b) must be delivered to the Company not later than 10 calendar days prior to the date fixed for prepayment, and (iii) contain the information specified in clauses (iii), (iv) and (v) of the first sentence of Section 2.3. Upon receipt by the Company of such notice of acceptance from any holder, but subject to the following sentence, the aggregate principal amount of Notes held by such holder plus the interest accrued thereon plus the Make-Whole Amount shall become due and payable on the day specified in the Company's notice. Not earlier than 7 calendar days prior to the date fixed for prepayment, the Company shall give written notice to each holder of those holders, and the principal amount of Notes held by each, who have given notices of acceptance of the Company's offer, and thereafter any holder may change its response to the Company's offer by written notice to such effect delivered to the Company not less than 3 business days prior to the date fixed for prepayment. Promptly following the day on which the Company first learns of a proposed Change of Control the Company will give notice thereof to the holders of Notes, which notice shall include the estimated date (if known) on which such Change of Control may occur. (c) Any optional prepayment of less than all of the Series A Notes outstanding pursuant to Section 2.2(a), Section 2.2(b) or Section 7.8 shall be applied to reduce, pro rata, the prepayments and payment at maturity required by Section 2.1. (d) Except as provided in Section 2.1, Section 7.8 and this Section 2.2, the Notes shall not be prepayable in whole or in part. 2.3 Notice of Prepayments. The Company shall give notice of any optional prepayment of the Notes pursuant to Section 2.2(a) to each holder of the Notes not less than 30 days nor more than 60 days before the date fixed for prepayment, specifying (i) such date, (ii) the principal amount of the holder's Notes to be prepaid on such date, (iii) the Determination Date for calculating the Make-Whole Amount, (iv) a calculation of the estimated amount of the Make-Whole Amount showing in detail the method of calculation and (v) the accrued interest applicable to the prepayment. Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with the Make-Whole Amount, if any, and accrued interest thereon shall become due and payable on the prepayment date. The Company also shall give notice to each holder of the Notes to be prepaid pursuant to Section 2.2(a) or (b) or Section 7.8 by telecopy, telegram, telex or other same-day written communication, confirmed by notice delivered by overnight courier, as soon as practicable but in any event no less than 2 business days prior to the prepayment date, of the Make-Whole Amount applicable to such prepayment and the details of the calculations used to determine the amount of such Make-Whole Amount. In the event of a miscalculation of the Make-Whole Amount that results in an additional amount due to holders of the Notes in respect thereof, such additional amount shall be payable not later than 2 business days following notice to the Company by any holder of the Notes. 2.4 Surrender of Notes on Prepayment or Exchange. Subject to Section 2.5, upon any partial prepayment of a Note pursuant to this Section 2 or partial exchange of a Note pursuant to Section 10.3, such Note may, at the option of the holder thereof, (i) be surrendered to the Company pursuant to Section 10.3 in exchange for a new Note or Notes of the same series equal to the principal amount remaining unpaid on the surrendered Note, or (ii) be made available to the Company, at the Company's principal office, for notation thereon of the portion of the principal so prepaid or exchanged. In case the entire principal amount of any Note is prepaid or exchanged, such Note shall be surrendered to the Company for cancellation and shall not be reissued, and no Note shall be issued in lieu of such Note. 2.5 Direct Payment and Deemed Date of Receipt. Notwithstanding any other provision contained in the Notes or this Agreement, the Company will pay all sums becoming due on each Note held by you or any subsequent Institutional Holder by wire transfer of immediately available funds to such account as you or such subsequent Institutional Holder have designated in Schedule I, or as you or such subsequent Institutional Holder may otherwise designate by notice to the Company, in each case without presentment and without notations being made thereon, except that any such Note so paid or prepaid in full shall be surrendered to the Company for cancellation. Any wire transfer shall identify such payment in the manner set forth in Schedule I and shall identify the payment as principal, Make-Whole Amount, if any, and/or interest. You and any subsequent Institutional Holder of a Note to which this Section 2.5 applies agree that, before selling or otherwise transferring any such Note, you or it will make a notation thereon of the aggregate amount of all payments of principal theretofore made and of the date to which interest has been paid and, upon written request of the Company, will provide a copy of such notations to the Company. Any payment made pursuant to this Section 2.5 shall be deemed received on the payment date only if received before 11:00 A.M., Chicago time. Payments received after 11:00 A.M., Chicago time, shall be deemed received on the next succeeding business day. 2.6 Allocation of Payments. In the case of a prepayment pursuant to Section 2.1, if less than the entire principal amount of all of the Series A Notes outstanding is to be paid, the Company will prorate the aggregate principal amount to be prepaid among the outstanding Series A Notes in proportion to the unpaid principal amounts thereof. In the case of a prepayment pursuant to Section 2.2(a), if less than the entire principal amount of all the Notes of both series outstanding is to be paid, the Company will prorate the aggregate principal amount to be paid between the Series A and Series B Notes in proportion to the aggregate unpaid principal amounts thereof and among the outstanding Notes of each series in proportion to the unpaid principal amounts thereof. 2.7 Payments Due on Saturdays, Sundays and Holidays. In any case where the date of any required prepayment of the Notes or any interest payment date on the Notes or the date fixed for any other payment of any Note or exchange of any Note is a Saturday, Sunday or a legal holiday or a day on which banking institutions in the United States of America generally are au- thorized by law to close, then such payment, prepayment or ex- change need not be made on such date but may be made on the next succeeding business day which is not a Saturday, Sunday or a legal holiday or a day on which banking institutions in the United States of America generally are authorized by law to close, with the same force and effect as if made on the due date. 3. REPRESENTATIONS 3.1 Representations of the Company. As an inducement to, and as part of the consideration for, your purchase of the Notes pursuant to this Agreement, the Company represents and warrants to you as follows: (a) Corporate Organization and Authority. The Company is a solvent corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted and as presently proposed to be conducted, to enter into and perform the Agreement and to issue and sell the Notes as contemplated in the Agreement. (b) Qualification to Do Business. The Company is duly licensed or qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where the nature of the business transacted by it or the character of its properties owned or leased makes such qualification or licensing necessary, except for jurisdictions, individually or in the aggregate, where the failure to be so licensed or qualified could not be reasonably expected to have a Material Adverse Effect. (c) Subsidiaries. The Company has no Subsidiaries except those listed in the attached Annex I, which correctly sets forth the jurisdiction of incorporation and the percentage of the outstanding Voting Stock or equivalent interest of each Subsidiary which is owned, of record or beneficially, by the Company and/or one or more Subsidiaries. Each Subsidiary which is a Material Subsidiary and each Subsidiary which is a guarantor under the Credit Agreement is so designated in Annex I. Each Subsidiary has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and is duly licensed or qualified and in good standing as a foreign corporation in each other jurisdiction where the nature of the business transacted by it or the character of its properties owned or leased makes such qualification or licensing necessary, except for jurisdictions, individually or in the aggregate, where the failure to be so licensed or qualified could not be reasonably expected to have a Material Adverse Effect. Each Subsidiary has full corporate power and authority to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted, except for instances, individually or in the aggregate, where the failure to have such power and authority could not be reasonably expected to have a Material Adverse Effect. The Company and each Subsidiary have good and market- able title to all of the shares they purport to own of the capital stock of each Subsidiary, free and clear in each case of any Lien, except as otherwise disclosed in the attached Annex II and except, with respect to Subsidiaries other than Material Subsidiaries, for defects or liens which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and all such shares have been duly issued and are fully paid and nonassessable. (d) Financial Statements. The consolidated balance sheets of the Company and its Subsidiaries as of December 31, 1987, 1988, 1989, 1990 and 1991, and the related consolidated statements of earnings, stockholders' equity and cash flows for each of the years ended on such dates, accompanied by the reports and unqualified opinions of Arthur Andersen & Co., independent public accountants, copies of which have heretofore been delivered to you, were prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved (except as otherwise noted therein) and present fairly the consolidated financial condition of the Company and its Subsidiaries of such dates and their consolidated results of operations and cash flows for the years then ended. The unaudited condensed consolidated balance sheets of the Company and its Subsidiaries as of June 26, 1992 and December 31, 1991 and the related unaudited condensed consolidated statements of earnings for the three months and six months, and cash flows for the six months, ended June 26, 1991 and June 26, 1992, copies of which have heretofore been delivered to you, were, and the comparable financial statements as of and for the periods ended September 25, 1992 to be delivered to you prior to the Closing Date will be, prepared in accordance with generally accepted accounting principles and present or will present fairly the consolidated financial condition of the Company and its Subsidiaries as of such dates and the consolidated results of their operations and changes in their cash flows for the periods then ended. (e) No Contingent Liabilities or Adverse Changes. Neither the Company nor any of its Subsidiaries has any contingent liabilities which, individually or in the aggregate, are material to the Company and its Subsidiaries taken as a whole, other than as indicated in the most recent audited and unaudited financial statements described in the foregoing paragraph (d) of this Section 3.1, and, except as set forth in such financial statements or the Company's Quarterly Report on Form 10-Q for the period ended June 26, 1992, since December 31, 1991, there have been no changes in the condition, financial or otherwise, of the Company and its Subsidiaries except changes occurring in the ordinary course of business, none of which, individually or in the aggregate, has been materially adverse. (f) No Pending Litigation or Proceedings. Except as disclosed in Note 10 of the Notes to the most recent audited financial statements referred to in the foregoing paragraph (d) and in the attached Annex III, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threat- ened against or affecting the Company or any of its Subsidiaries, at law or in equity or before or by any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which might reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect. (g) Compliance with Law. (i) Neither the Company nor any of its Subsidiaries is: (x) in default with respect to any order, writ, injunction or decree of any court to which it is a named party; or (y) in default under any law, rule, regulation, ordinance or order relating to its or their respective businesses, the sanctions and penalties resulting from which defaults described in clauses (x) and (y) might reasonably be expected to have a Material Adverse Effect. (ii) Neither the Company nor any Subsidiary nor any Affiliate of the Company is an entity defined as a "designated national" within the meaning of the Foreign Assets Control Regulations, 31 C.F.R. Chapter V, or is in violation of, any Federal statute or Presidential Executive Order, or any rules or regulations of any department, agency or administrative body promulgated under any such statute or Order, concerning trade or other relations with any foreign country or any citizen or national thereof or the ownership or operation of any property and no restriction or prohibition under any such statute, Order, rule or regulation has a Material Adverse Effect. (h) Pension Reform Act of 1974. Neither the purchase of the Notes by you nor the consummation of any of the other transactions contemplated by this Agreement is or will constitute a "prohibited transaction" within the meaning of Section 4975 of the Code or Section 406 of ERISA. The Company and each ERISA Affiliate are in substantial compliance with all applicable provisions and requirements of ERISA with respect to each Employee Benefit Plan, and have substantially performed all their obligations under each Employee Benefit Plan. There are no actions, suits or claims (other than routine claims for benefits) pending or threatened against any Employee Benefit Plan or its assets liability for which would constitute a Material Adverse Effect, and, to the best knowledge of Company, no facts exist which could give rise to any such actions, suits or claims. Except as disclosed in the attached Annex IV, within the period of five years ending on the Closing Date, no ERISA Event has occurred, there is no unpaid liability of Company or any ERISA Affiliate that arose in connection with any ERISA Event that occurred prior to such five-year period and no ERISA Event is reasonably expected to occur with respect to any Employee Benefit Plan. (i) Title to Properties. The Company and its Subsidiaries have good, sufficient and legal title to all the property and assets reflected in the most recent audited consolidated balance sheet described in the foregoing paragraph (d) of this Section 3.1 or subsequently acquired by the Company or any Subsidiary (except as sold or otherwise disposed of in the ordinary course of business), free from all Liens or defects in title except those permitted by Section 7.5. (j) Leases. The Company and its Subsidiaries enjoy peaceful and undisturbed possession under all leases under which they are a lessee or are operating, except for leases the termination of which, individually or in the aggregate, will not have a Material Adverse Effect. (k) Franchises, Patents, Trademarks and Other Rights. The Company and its Subsidiaries have all franchises, permits, licenses and other authority necessary to carry on their businesses as now being conducted and are not in default there- under, except for such franchises, permits, licenses or other authority and defaults which, individually and in the aggregate, do not and will not have a Material Adverse Effect. The Company and its Subsidiaries own or possess all patents, trademarks, service marks, trade names, copyrights, licenses and rights with respect to the foregoing necessary for the present conduct of their businesses, without any known conflict with the rights of others which might have, individually or in the aggregate, a Material Adverse Effect. (1) Authorization. This Agreement and the Notes have been duly authorized on the part of the Company and the Agreement does, and the Notes when issued will, constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except to the extent that enforcement of the Notes may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in equity or at law. The sale of the Notes and compliance by the Company with all of the provisions of this Agreement and of the Notes (i) are within the corporate powers of the Company, (ii) have been duly authorized by proper corporate action, (iii) are legal and will not violate any provisions of any law or regulation or order of any court, governmental authority or agency and (iv) will not result in any breach of any of the provisions of, or constitute a default under, or result in the creation of any Lien on any property of the Company or any Subsidiary under the provisions of, any charter document, by-law, loan agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them or their property may be bound. The Guaranty has been duly authorized on the part of each Material Subsidiary and when duly executed and delivered will constitute the legal, valid and binding obligation of each Material Subsidiary, en- forceable in accordance with its terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in equity or at law. Compliance by each Material Subsidiary with all of the provisions of the Guaranty (i) is within its corporate powers, (ii) has been duly authorized by proper corporate action, (iii) is legal and will not violate any provisions of any law or regulation or order of any court, governmental authority or agency and (iv) will not result in any breach of any of the provisions of, or constitute a default under, or result in the creation of any Lien on any property of such Material Subsidiary under the provisions of, any charter document, bylaw, loan agreement or other agreement or instrument to which such Material Subsidiary is a party or by which it or its property may be bound. (m) No Defaults. No event has occurred and no condition exists which, upon the issuance of the Notes, would constitute a Default or an Event of Default under this Agreement. Neither the Company nor any Subsidiary is in default under any charter document, by-law, loan agreement or other agreement or instrument to which it is a party or by which it or its property may be bound, except for defaults the consequences of which, indi- vidually and in the aggregate, do not and will not have a Material Adverse Effect. (n) Governmental Consent. Neither the nature of the Company or any of its Subsidiaries, their respective businesses or properties, nor any relationship between the Company or any of its Subsidiaries and any other Person, nor any circumstances in connection with the offer, issue, sale or delivery of the Notes is such as to require a consent, approval or authorization of, or withholding of objection on the part of, or filing, registration or qualification with, any governmental authority on the part of the Company or any Material Subsidiary in connection with the execution and delivery of this Agreement or the Guaranty or the offer, issue, sale or delivery of the Notes. (o) Taxes. All income tax returns and all other material tax returns required to be filed by the Company or any Subsidiary in any jurisdiction have been filed, and all taxes, assessments, fees and other governmental charges upon the Company or any Subsidiary, or upon any of their respective prop- erties, income or franchises, which are due and payable, have been paid timely or within appropriate extension periods or contested in good faith by appropriate proceedings and the collection thereof has been stayed by the applicable governmental authority during the period of the contest, except for such filings and nonpayments which, individually and in the aggregate, do not and will not have a Material Adverse Effect. The Company does not know of any proposed additional tax assessment against it or any Subsidiary for which adequate provision has not been made on its books. The statute of limitations with respect to Federal income tax liability of the Company and its Subsidiaries has expired for all taxable years up to and including the taxable year ended December 31, 1987 (except with respect to utilization of tax loss carryforwards) and no material controversy in respect of additional taxes due since such date is pending or, to the Company's knowledge, threatened. The provisions for taxes on the books of the Company and each Subsidiary are adequate for all open years and for the current fiscal period. (p) Status under Certain Statutes. Neither the Company nor any Subsidiary is: (i) a "public utility company" or a "holding company," or an "affiliate" or a "subsidiary company" of a "holding company," or an "affiliate" of such a "subsidiary com- pany," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined in the Federal Power Act, as amended, or (iii) an "in- vestment company" or an "affiliated person" thereof or an "af- filiated person" of any such "affiliated person," as such terms are defined in the Investment Company Act of 1940, as amended. (q) Private Offering. Neither the Company, BT Securities Corporation nor The First National Bank of Chicago (the only Persons authorized or employed by the Company as agent, broker, dealer or otherwise in connection with the offering of the Notes or any similar security of the Company) has offered any of the Notes or any similar security of the Company for sale to, or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any prospective purchaser, other than not more than 76 institutional investors, including the Purchasers, each of whom was offered all or a portion of the Notes at private sale for investment. Neither the Company nor anyone acting on its authorization will offer the Notes or any part thereof or any similar securities for issue or sale to, or solicit any offer to acquire any of the same from, anyone so as to bring the issuance and sale of the Notes within the provisions of Section 5 of the Securities Act. (r) Effect of Other Instruments. Neither the Company nor any Subsidiary is bound by any agreement or instrument or subject to any charter or other corporate restriction which (i) in any way materially restricts Company's ability to perform its obligations under this Agreement or the Notes or any Subsidiary's ability to pay dividends or make advances to the Company or to perform under the Guaranty or (ii) has a Material Adverse Effect. (s) Use of Proceeds. The Company will initially apply the net proceeds from the sale of the Notes to repay Indebtedness to banks, and thereafter for working capital and general corporate purposes and for possible future acquisitions. None of the transactions contemplated in this Agreement (including, without limitation thereof, the use of the proceeds from the sale of the Notes) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System (12 C.F.R. Chapter II). Neither the Company nor any Subsidiary owns or presently intends to carry or purchase any "margin stock" within the meaning of Regulation G, and none of the proceeds from the sale of the Notes will be used to purchase or carry or refinance any borrowing the proceeds of which were used to purchase or carry any "margin stock" or "margin security" in violation of Regulations G, T, U or X. (t) Condition of Property. All of the facilities of the Company and its Subsidiaries are in sound operating condition and repair except for facilities being repaired in the ordinary course of business or facilities which individually or in the aggregate are not material to the Company and its Subsidiaries, taken as a whole. (u) Books and Records. The Company and each of its Subsidiaries (i) maintain books, records and accounts in reasonable detail which accurately and fairly reflect their respective transactions and business affairs, and (ii) maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are executed in accordance with management's general or specific authorization and to permit preparation of financial statements in accordance with generally accepted accounting principles. (v) Full Disclosure. Neither the Private Placement Memorandum dated July 1992 (including the attachments and enclosures), the financial statements referred to in paragraph (d) of this Section 3.1, nor this Agreement, nor any other written statement or document furnished by the Company to you in connection with the negotiation of the sale of the Notes, taken together, contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading in light of the circumstances under which they were made. There is no fact (exclusive of general economic, political or social conditions or trends) particular to the Company and known by the Company which the Company has not disclosed to you in writing and which has a Material Adverse Effect on or, so far as the Company can now foresee, will have a Material Adverse Effect. (w) Environmental Compliance. The operations of the Company and each Subsidiary (including, without limitation, all operations and conditions at or in the Facilities) comply in all material respects with all Environmental Laws non-compliance with which could have a Material Adverse Effect; the Company and each of its Subsidiaries have obtained all permits under Environmental Laws necessary to their respective operations, and all such permits are in good standing, and the Company and each of its Subsidiaries are in compliance with all material terms and conditions of such permits non-compliance with which could have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has any liability (contingent or otherwise) in connection with any Release of any Hazardous Materials by the Company or any of its Subsidiaries or the existence of any Hazardous Material on, under or about any Facility that could give rise to an Environmental Claim that could have a Material Adverse Effect. (x) Solvency of the Material Subsidiaries. To the best knowledge and belief of the Company, after due and diligent inquiry, and after giving effect to the transactions contemplated herein, (i) the present fair salable value of the assets of each material Subsidiary is in excess of the amount that will be required by each Material Subsidiary to pay its respective probable liability on its existing debts as such debts become absolute and matured, (ii) the property remaining in the hands of each Material Subsidiary is not an unreasonably small amount of capital, and (iii) each Material Subsidiary is able to pay, and does not intend to take or fail to take any action such that it will be unable to pay, its debts as they mature. (y) Antitrust Compliance. There is no action or proceeding pending or, to the Company's knowledge, contemplated by the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission that involves or would involve the Company or any Subsidiary. 3.2 Representations of the Purchasers. You represent, and in entering into this Agreement the Company understands, that you are acquiring Notes for your own account and not with a view to any distribution thereof; provided that the disposition of your property shall at all times be and remain within your control, subject, however, to compliance with Federal securities laws. You acknowledge that the Notes have not been registered under the Securities Act and you understand that the Notes must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. You have been advised that the Company does not contemplate registering, and is not legally required to register, the Notes under the Securities Act. You further represent that either: (i) no part of the funds to be used by you to purchase the Notes will constitute assets allocated to any separate account maintained by you; or (ii) no part of the funds to be used by you to purchase the Notes will constitute assets allocated to any separate account maintained by you such that the application of such funds will constitute a prohibited transaction under Section 406 of ERISA; or (iii) all or a part of such funds will constitute assets of one or more separate accounts maintained by you, and you have disclosed to the Company the names of such employee benefit plans whose assets in such separate account or accounts exceed 10% of the total assets or are expected to exceed 10% of the total assets of such account or accounts as of the date of such purchase and the Company has advised you in writing that the Company is not a party-in-interest nor are the Notes employer securities with respect to the particular employee benefit plans disclosed to the Company by you as aforesaid (for the purpose of this clause (iii), all employee benefit plans maintained by the same employer or employee organization are deemed to be a single plan). As used herein, the terms "separate account," "party-in-interest," "employer securities," and "employee benefit plan" have the meanings assigned to them in ERISA. 4. CLOSING CONDITIONS Your obligation to purchase the Notes on the Closing Date shall be subject to the performance by the Company of its agreements hereunder, which are to be performed at or prior to the time of delivery of the Notes, and to the following conditions to be satisfied on or before the Closing Date: 4.1 Representations and Warranties. The representations and warranties of the Company contained in this Agreement or otherwise made in writing in connection herewith shall be true and correct on or as of the Closing Date and the Company shall have delivered to you a certificate to such effect, dated the Closing Date and executed by the president, the chief financial officer, chief accounting officer or treasurer of the Company. 4.2 Legal Opinions. You shall have received from Gardner, Carton & Douglas, who is acting as your special counsel in this transaction, and from Piper & Marbury, counsel for the Company, their respective opinions, dated such Closing Date, in form and substance satisfactory to you and covering substantially the matters set forth or provided in the attached Exhibits C and D. 4.3 Events of Default. No event shall have occurred and be continuing on the Closing Date which would constitute a Default or an Event of Default, and the Company shall have delivered to you a certificate to such effect, dated the Closing Date and executed by the president, the chief financial officer, chief accounting officer or treasurer of the Company. 4.4 Payment of Fees and Expenses. The Company shall have paid all reasonable fees, expenses, costs and charges, including the reasonable fees and expenses of Gardner, Carton & Douglas, your special counsel, incurred by you through the Closing Date and incident to the proceedings in connection with, and transactions contemplated by, this Agreement and the Notes. 4.5 Sale of Notes to Other Purchasers. The Company shall have consummated the sale of the entire $100,000,000 principal amount of the Notes to be sold on the Closing Date pursuant to this Agreement. 4.6 Guaranty. Each Material Subsidiary shall have executed and delivered the Guaranty. 4.7 Legality of Investment. Your acquisition of the Notes shall constitute a legal investment as of the Closing Date under the laws and regulations of each jurisdiction to which you may be subject (without resort to any "basket" or "leeway" provision which permits the making of an investment without restrictions as to the character of the particular investment being made), and such acquisition shall not subject you to any penalty or other onerous condition in or pursuant to any such law or regu- lation; and you shall have received such certificates or other evidence as you may reasonably request to establish compliance with this condition. 4.8 Private Placement Numbers. Private placement numbers with respect to the Series A Notes and the Series B Notes shall have been issued by Standard & Poor's Corporation. 4.9 Proceedings and Documents. All proceedings taken in connection with the transactions contemplated by this Agreement, and all documents necessary to the consummation of such transactions shall be satisfactory in form and substance to you and your special counsel, and you and your special counsel shall have received copies (executed or certified as may be appropriate) of all legal documents or proceedings which you and they may reasonably request. 5. INTERPRETATION OF AGREEMENT 5.1 Certain Terms Defined. The terms hereinafter set forth when used in this Agreement shall have the following meanings: Affiliate - Any Person (other than a Wholly-Owned Subsidiary) (i) who is a director or executive officer of the Company or any Subsidiary, (ii) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Company, (iii) which beneficially owns or holds securities representing 5% or more of the combined voting power of the Voting Stock of the Company or any Subsidiary or (iv) securities representing 5% or more of the combined voting power of the Voting Stock (or in the case of a Person which is not a corporation, 5% or more of the equity) of which is beneficially owned or held by the Company or a Subsidiary. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Agreement - As defined in Section 1.1. business day - Any day, other than Saturday, Sunday or a legal holiday or any other day on which banking institutions in the United States of America generally are authorized by law to close. Capitalized Lease - Any lease the obligation for Rentals with respect to which, in accordance with generally accepted accounting principles, would be required to be capitalized on a balance sheet of the lessee or for which the amount of the asset and liability thereunder, as if so capitalized, would be required to be disclosed in a note to such balance sheet. CERCLA - The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as now or hereafter amended, and any successor to such law. Change of Control - The acquisition, through purchase or otherwise, by any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) who is or becomes a "beneficial owner" (as such term is defined in Rule 13d- 3 under the Exchange Act) of shares of Voting Stock of the Company which in the aggregate exceed by one the number of shares of Voting Stock of the Company then "beneficially owned" (as such term is defined in the aforesaid Rule 13d-3) collectively by Steven M. Rales and Mitchell P. Rales. Closing Date - As defined in Section 1.2. Code - The Internal Revenue Code of 1986, as amended. Consolidated Debt - The consolidated Debt of the Company and its Subsidiaries, other than Debt of a Subsidiary to the Company or another Wholly-Owned Subsidiary and Debt of the Company to a Wholly-Owned Subsidiary, determined, except as so provided, in accordance with generally accepted accounting principles. Consolidated Income Available for Fixed Charges - For any period, the sum of (i) Consolidated Net Income, plus (to the extent deducted in determining Consolidated Net Income), (ii) all provisions for any Federal, state, or other income taxes made by the Company and its Subsidiaries during such period plus (iii) Fixed Charges. Consolidated Net Income - For any period, the consolidated net income (or deficit) of the Company and its Subsidiaries after deducting, without duplication, all operating expenses, provisions for all taxes and reserves (including reserves for deferred income taxes) and all other proper deductions, all de- termined in accordance with generally accepted accounting prin- ciples and after deducting portions of income properly attributable to outstanding minority interests, if any, in Subsidiaries; provided, however, that there shall be excluded (i) any income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or merges into or consolidates with the Company or a Subsidiary, (ii) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any Subsidiary has any ownership interest (except that any such income actually received by the Company or such Subsidiary in the form of cash dividends or similar distributions shall be included without limitation), (iii) any gains or losses, or other income, properly classified as extraordinary in accordance with generally accepted accounting principles and (iv) any gains or losses, or other income, characterized as non-recurring in the financial statements delivered pursuant to Section 6. Consolidated Net Worth - The sum of consolidated stockholders' equity and, without duplication, outstanding non- redeemable preferred stock of the Company determined in accordance with generally accepted accounting principles. Consolidated Total Assets - The total assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles. Consolidated Total Capitalization - The sum of Consolidated Net Worth and Consolidated Debt. Credit Agreement - The Credit Agreement dated as of September 7, 1990 among the Company, the financial institutions listed therein and Bankers Trust Company, as Agent, as amended from time to time, and any similar agreement entered into by the Company in replacement or substitution therefor or in connection with a refinancing thereof. Debt - (i) All Indebtedness for borrowed money, (ii) all Capitalized Leases and (iii) all Guaranties of Debt of other Persons. Default - Any event which, with the lapse of time or the giving of notice, or both, would become an Event of Default. Determination Date - The day 3 business days before the date fixed for a prepayment pursuant to Section 2.2(a) or (b) or Section 7.8 or the date of declaration pursuant to Section 8.2. Employee Benefit Plan - Any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, which is maintained for employees of the Company or any of its ERISA Affiliates. Environmental Claim - Any notice of violation, claim, demand, abatement order or other order by any governmental authority or any Person for any damage, including, without limitation, personal injury (including sickness, disease or death), tangible or intangible property damage, contribution, indemnity, indirect or consequential damages, damage to the environment, nuisance, pollution, contamination or other adverse effects on the environment, or for fines, penalties or restrictions, resulting from or based upon (i) the existence of a Release (whether sudden or non-sudden or accidental or non-accidental) of, or exposure to, any Hazardous Material in, into or onto the environment at, in, by, from or related to any Facility, (ii) the use, handling, transportation, storage, treatment or disposal of Hazardous Materials in connection with the operation of any Facility, or (iii) the violation, or alleged violation, of any statutes, ordinances, orders, rules, regulations, permits, licenses or authorizations of or from any governmental authority, agency or court relating to environmental matters connected with the Facilities. Environmental Laws - All laws relating to environmental matters, including, without limitation, those relating to (i) fines, orders, injunctions, penalties, damages, contribution, cost recovery compensation, losses or injuries resulting from the Release or threatened Release of Hazardous Materials and to the generation, use, storage, transportation, or disposal of Hazardous Materials, in any manner applicable to the Company or any of its Subsidiaries or any or their respective properties, including, without limitation, the Comprehensive Environmental Response, Compensatiorn, and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Material Transportation Act (49 U. S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.), and (ii) environmental protection, including, without limitation, the National Environmental Policy Act (42 U.S.C. Section 4321 et seq.), and comparable state laws, each as amended or supplemented, and any similar or analogous local, state and federal statutes and regulations promulgated pursuant thereto, each as in effect as of the date of determination. ERISA - The Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute. ERISA Affiliate - The Company and (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Code of which the Company is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code of which the Company is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Code of which the Company, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. ERISA Event - (i) The occurrence of a reportable event within the meaning of Section 4043 of ERISA (other than a reportable event as to which the requirement for thirty-day notice to the PBGC has been waived) with respect to any Pension Plan, (ii) failure with respect to any Pension Plan to meet the minimum funding standard of Section 412 of the Code or of Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA; (iii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA) if such termination would result in liability that would constitute a Material Adverse Effect; (iv) the withdrawal by the Company or any ERISA Affiliate from a Pension Plan during a plan year for which it was a "substantial employer" within the meaning of Section 4001(a)(2) of ERISA resulting in liability of any such entity pursuant to Section 4062(e) or 4063 of ERISA which constitutes a Material Adverse Effect; (v) the institution by the PBGC of proceedings to terminate a Pension Plan, or for the appointment of a trustee to administer a Pension Plan, pursuant to Section 4042 of ERISA; (vi) the withdrawal by the Company or any ERISA Affiliate in a complete or partial withdrawal from a Multiemployer Plan, or the receipt by the Company or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA where any such event results in liability which constitutes a Material Adverse Effect; (vii) the imposition on the Company or any ERISA Affiliate of fines, penalties, taxes or related charges under Chapter 43 of the Code or under Sections 502(c), (i) or (1) or 4071 of ERISA where liability for such charges constitutes a Material Adverse Effect; (viii) the assertion of a claim (other than routine claims for benefits) against any Employee Benefit Plan or the assets thereof, or against the Company or any ERISA Affiliate in connection with any such plan where liability for such claim would constitute a Material Adverse Effect; (ix) the existence, as of any valuation date for a Pension Plan, of an excess of the present value (determined on the basis of reasonable assumptions used by the independent actuary for such Pension Plan) of the accrued benefits (whether or not vested) of the participants and beneficiaries of such Pension Plan over the fair market value of the assets of such Pension Plan, if such excess, when added to the excesses calculated in the same manner for each of the other Pension Plans as of the most recently preceding valuation date for each such other Pension Plan is material to the Company and its Subsidiaries, taken as a whole; or (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan to qualify under Section 401(a) of the Code, or the failure of any trust forming part of a Pension Plan to fail to qualify for exemption from taxation under Section 501(a) of the Code. Event of Default - As defined in Section 8.1. Exchange Act - The Securities Exchange Act of 1934, as amended, and as it may be further amended from time to time. Facilities - Any and all real property (including, without limitation, all buildings, fixtures or other improvements located thereon) now, or heretofore, owned, leased, operated or used (under permit or otherwise) by the Company or any of its Subsidiaries or any of their respective predecessors. Fixed Charges - For any period, the sum of (i) interest expense (including the interest component of Rentals under Capitalized Leases) net of interest income, amortization of debt discount and expense on Indebtedness (including commissions, discounts and other fees or charges in respect of letters of credit and bankers' acceptances, and net costs under interest rate agreements) of the Company and its Subsidiaries during such period and (ii) Operating Rentals. Guaranties - All obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of a Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (i) to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (ii) to advance or supply funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to maintain working capital or other balance sheet condition or (z) otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation against loss in respect thereof, or (iv) otherwise to assure the owner of the Indebtedness or obligation against loss in respect thereof. For the purposes of all computations made under this Agreement, Guaranties in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for borrowed money which has been guaranteed, and Guaranties in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend. Guaranty - The Guaranty Agreement, dated the Closing Date, of each Material Subsidiary in the form attached as Exhibit E. Hazardous Materials - (i) Any chemical, material or substance defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "ex- tremely hazardous waste," "restricted hazardous waste," or "toxic substances" or words of similar import under any applicable Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, any flammable substances or explosives, any radioactive materials, any hazardous wastes or substances, any toxic wastes or substances or any other materials or pollutants that (a) pose a hazard to any property of Company or any of its Subsidiaries or to Persons on or about such property or (b) cause such property to be in violation of any Environmental Laws; (iii) friable asbestos, urea formaldehyde foam insulation, electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million; and (iv) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority. Indebtedness - (i) All obligations, including Capitalized Leases, obligations incurred in connection with the acquisition of assets or property or nonrecourse obligations, which in accordance with generally accepted accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet as of the date at which Indebtedness is to be determined, and (ii) all Guaranties of obligations of other Persons of the character referred to in clause (i). Institutional Holder - Any bank, trust company, insurance company, pension fund, mutual fund or other similar financial institution, including, without limiting the foregoing, any "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act, which is or becomes a holder of any Note. Lien - Any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to file any financing statement under the Uniform Commercial Code of any jurisdiction in connection with any of the foregoing. Make-Whole Amount - As of any Determination Date, to the extent that the Reinvestment Yield on such Determination Date is lower than the interest rate payable on or in respect of the Series A Notes or Series B Notes, as the case may be, the excess of (a) the present value of the principal and interest payments to be foregone by any prepayment (exclusive of accrued interest on such Notes through the date of prepayment) on such Notes to be prepaid (taking into account the manner of application of such prepayment required by Section 2.2(c)), determined by discounting (semi-annually on the basis of a 360-day year com- posed of twelve 30-day months), such payments at a rate that is equal to the Reinvestment Yield over (b) the aggregate principal amount of such Notes then to be paid or prepaid. To the extent that the Reinvestment Yield on any Determination Date is equal to or higher than the interest rate payable on or in respect of such Notes, the Make-Whole Amount is zero. Material Adverse Effect - (i) A material adverse effect on the business, properties, assets, results of operations or condition, financial or otherwise, of the Company and its Subsidiaries, taken as a whole, (ii) the impairment of the ability of the Company or any Material Subsidiary to perform its obligations under this Agreement, the Notes or the Guaranty, or (iii) the impairment of the ability of the holders of the Notes to enforce such obligations. Material Subsidiary - Any Subsidiary the consolidated revenues or total assets of which accounted for more than 5% of the consolidated revenues or Consolidated Total Assets, respectively, of the Company and its Subsidiaries as of the end of the Company's most recently completed fiscal year. Multiemployer Plan - A "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate is, or ever has, contributed or to which the Company or any ERISA Affiliate has, or ever has had, an obligation to contribute. Notes - As defined in Section 1.1. Operating Rentals - For any period, the aggregate Rentals payable by the Company and its Subsidiaries during such period under all leases other than Capitalized Leases. PBGC - The Pension Benefit Guaranty Corporation or any successor thereto. Pension Plan - Any Employee Benefit Plan that is subject to the provisions of Title IV of ERISA and that is maintained for employees of the Company or any of its ERISA Affiliates. Person - Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. Purchaser - As defined in Section 1.1. Reinvestment Yield - The sum of (i) 0.50% plus (ii) the yield as set forth on page "USD" of the Bloomberg Financial Markets Service (or other on-the-run service acceptable to the holders of not less than a majority in principal amount of the outstanding Notes) at 10:00 A.M. (Chicago time) on the Determination Date for actively traded U.S. Treasury securities having a maturity equal to the Weighted Average Life to Maturity of the Notes then being prepaid or paid as of the date of prepayment or payment, rounded to the nearest month, or if such yields shall not be reported as of such time or the yields reported as of such time are not ascertainable in accordance with the preceding clause, then the arithmetic mean of the yields published in the statistical release designated H.15(519) of the Board of Governors of the Federal Reserve System under the caption "U.S. Government Securities--Treasury Constant Maturities" (the "statistical release") for the maturity corresponding to the remaining Weighted Average Life to Maturity of the Notes then being prepaid or paid as of the date of such prepayment or payment rounded to the nearest month. For purposes of calculating the Reinvestment Yield, the most recent weekly statistical release published prior to the applicable Determination Date shall be used. If no maturity exactly corresponding to such rounded Weighted Average Life to Maturity shall appear therein, yields for the two most closely corresponding published maturities (one of which occurs prior and the other subsequent to the Weighted Average Life to Maturity) shall be calculated pursuant to the foregoing sentence and the Reinvestment Yield shall be interpolated from such yields on a straight-line basis (rounding in each of such relevant periods, to the nearest month). Release - Any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of any Facility, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property. Rentals - As of the date of any determination thereof, all fixed payments (including all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Company or a Subsidiary, as lessee or sublessee under a lease of real or personal property, but exclusive of any amounts required to be paid by the Company or a Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes, assessments, amortization and similar charges. Fixed rents under any so-called "percentage leases" shall be computed on the basis of the minimum rents, if any, required to be paid by the lessee, regardless of sales volume or gross revenues. Securities Act - The Securities Act of 1933, as amended, and as it may be further amended from time to time. Subsidiary - Any corporation of which shares of Voting Stock representing more than 50% of the combined voting power of each outstanding class of Voting Stock are owned or controlled by the Company. Voting Stock - Capital stock of any class of a corporation having power to vote for the election of members of the board of directors of such corporation, or persons performing similar functions. Weighted Average Life to Maturity - As applied to any payment or prepayment of principal of the Notes, at any date, the number of years obtained by dividing (a) the principal amount of the Notes to be paid or prepaid into (b) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity, or other required payment, including payment at final maturity, forgone by virtue of such payment or prepayment, by (ii) the number of years (calculated to the nearest 1/12th) which would have elapsed be- tween such date and the making of such required payment. Wholly-Owned - When applied to a Subsidiary, any Subsidiary 100% of the Voting Stock of which is owned by the Company and/or its Wholly-Owned Subsidiaries. Terms which are defined in other Sections of this Agreement shall have the meanings specified therein. 5.2 Accounting Principles. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, the same shall be done in accordance with (and references elsewhere in this Agreement to generally accepted accounting principles shall mean) United States generally accepted accounting principles utilized in the preparation of the Company's audited consolidated financial statements for the year ended December 31, 1991, except where such principles are inconsistent with the requirements of this Agreement and except that financial statements to be delivered pursuant to Sections 6.6(a) or (b) shall be prepared, and the books to be kept pursuant to Section 6.5 shall be kept, in accordance with United States generally accepted accounting principles then in effect. 5.3 Valuation Principles. Except where indicated expressly to the contrary by the use of terms such as "fair value," "fair market value" or "market value," each asset, each liability and each capital item of any Person, and any quantity derivable by a computation involving any of such assets, liabilities or capital items, shall be taken at the net book value thereof for all purposes of this Agreement. "Net book value" with respect to any asset, liability or capital item of any Person shall mean the amount at which the same is recorded or, in accordance with generally accepted accounting principles, should have been recorded in the books of account of such Person, as reduced by any reserves which have been or, in accordance with generally accepted accounting principles, should have been set aside with respect thereto, but in every case (whether or not permitted in accordance with generally accepted accounting principles) without giving effect to any write- up, write-down or write-off (other than any write-down or write-off the entire amount of which was charged to Consolidated Net Income or to a reserve which was a charge to Consolidated Net Income) relating thereto which was made after the date of this Agreement. 5.4 Direct or Indirect Actions. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether the action in question is taken directly or indirectly by such Person. 6. AFFIRMATIVE COVENANTS Pending the Closing Date, the Company agrees to comply with the provisions of Section 6.6(a) and (c). The Company agrees that, for so long as any amount remains unpaid on any Note: 6.1 Corporate Existence. The Company will maintain and preserve, and will cause each Subsidiary to maintain and preserve, its corporate existence and right to carry on its busi- ness and use, and cause each Subsidiary to use, its best efforts to maintain, preserve renew and extend all of its rights, powers, privileges and franchises necessary to the proper conduct of its business; provided, however, that the foregoing shall not prevent any transaction permitted by Section 7.7 or the termination of the corporate existence of any Subsidiary if, in the opinion of the Board of Directors of the Company, such termination is in the best interests of the Company, is not otherwise prohibited by this Agreement and does not, individually or in the aggregate, result in a Material Adverse Effect. 6.2 Insurance. The Company will, and will cause each Subsidiary to, maintain insurance coverage with financially sound and reputable insurers in such forms and amounts, with such deductibles and against such risks as are required by law or sound business practice and are customary for corporations engaged in the same or similar businesses and owning and operating similar properties as the Company and its Subsidiaries. 6 . 3 Taxes, Claims for Labor and Materials. The Company will pay and discharge when due, and will cause each Subsidiary to pay and discharge when due, all taxes, assessments and governmental charges or levies imposed upon it or its property or assets, or upon properties leased by it (but only to the extent required to do so by the applicable lease), other than taxes which individually and in the aggregate are not material in amount or the non-payment of which would not have a Material Adverse Effect, provided that neither the Company nor any Subsidiary shall be required to pay any such tax, assessment, charge, levy or claim, the payment of which is being contested in good faith and by proper proceedings that will stay the forfeiture or sale of any property and with respect to which adequate reserves are maintained in accordance with generally accepted accounting principles. 6.4 Maintenance of Properties. The Company will maintain, preserve and keep, and will cause each Subsidiary to maintain, preserve and keep, its properties (whether owned in fee or a leasehold interest) in good repair and working order, ordinary wear and tear excepted, and from time to time will make all nec- essary repairs, replacements, renewals and additions. 6.5 Maintenance of Records. The Company will keep, and will cause each Subsidiary to keep, at all times proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to the business and affairs of the Company or such Subsidiary, in ac- cordance with generally accepted accounting principles consis- tently applied throughout the period involved (except for such changes as are disclosed in such financial statements or in the notes thereto and concurred in by the independent certified public accountants), and the Company will, and will cause each Subsidiary to, provide reasonable protection against loss or damage to such books of record and account. 6.6 Financial Information and Reports. The Company will furnish to the Securities Valuation Office of the National Association of Insurance Commissioners, 195 Broadway, New York, New York 10007, a copy of the financial statements referred to in Section 6.6(b) as soon as they are available. The Company will furnish to you and to any other Institutional Holder (in duplicate if you or such other holder so request) the following: (a) As soon as available and in any event within 60 days after the end of each of the first three quarterly accounting periods of each fiscal year of the Company, a consolidated condensed balance sheet of the Company and its Subsidiaries as of the end of such period and consolidated condensed statements of earnings and cash flows of the Company and its Subsidiaries for the periods beginning on the first day of such fiscal year and the first day of such quarterly accounting period and ending on the date of such balance sheet, setting forth in comparative form (x) the corresponding consolidated condensed statements of earnings for the corresponding periods of the preceding fiscal year, (y) the corresponding consolidated condensed statements of cash flow for the corresponding year to date period of the preceding fiscal year and (z) a consolidated condensed balance sheet as of the end of the preceding fiscal year, all in reasonable detail prepared in accordance with generally accepted accounting principles consistently applied throughout the period involved (except for changes disclosed in such financial statements or in the notes thereto and concurred in by the Company's independent certified public accountants) and certified by the chief financial officer or chief accounting officer of the Company (i) outlining the basis of presentation, and (ii) stating that the information presented in such statements presents fairly the financial condition of the Company and its Subsidiaries and the results of operations for the period, subject to customary year-end audit adjustments; (b) As soon as available and in any event within 90 days after the last day of each fiscal year, consolidated and consolidating balance sheets of the Company and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of earnings, stockholders' equity, cash flows and consolidating statements of earnings for such fiscal year, in each case setting forth in comparative form figures for the preceding fiscal year, all in reasonable detail, prepared in accordance with generally accepted accounting principles consistently applied throughout the period involved (except for changes disclosed in such financial statements or in the notes thereto and concurred in by independent certified public accountants) and accompanied by a report unqualified as to scope of audit and unqualified as to going concern as to the consolidated balance sheet and the related consolidated statements of earnings, stockholders' equity and cash flows of Arthur Andersen & Co. or any other firm of independent public accountants of recognized national standing selected by the Company to the effect that such financial statements have been prepared in conformity with generally accepted accounting prin- ciples and present fairly, in all material respects, the financial condition of the Company and its Subsidiaries and that the examination of such financial statements by such accounting firm has been made in accordance with generally accepted auditing standards; (c) Together with the financial statements delivered pursuant to paragraphs (a) and (b) of this Section 6.6, (i) a management's discussion and analysis of the financial condition and results of operations for the periods reported upon by such fi- nancial statements, which discussion and analysis shall satisfy the requirements of Item 303 of Securities and Exchange Commission Regulation S-K, (ii) a detailed reconciliation of such financial statements to financial statements prepared in accordance with the generally accepted accounting principles utilized in connection with the preparation of the Company's audited consolidated financial statements for the year ended December 31, 1991, and (iii) a certificate of the chief financial officer or chief accounting officer, (x) to the effect that such officer has re-examined the terms and provisions of this Agreement and that at the date of such certificate, during the periods covered by such financial reports and as of the end of such periods, the Company is not, or was not, in default in the fulfillment of any of the terms, covenants, provisions and conditions of this Agreement and that no Default or Event of Default is occurring or has occurred as of the date of such cer- tificate, during such periods and as of the end of such periods, or if the signer is aware of any Default or Event of Default, such officer shall disclose in such statement the nature thereof, its period of existence and what action, if any, the Company has taken or proposes to take with respect thereto, and (y) stating whether the Company is in compliance with Sections 7.1 through 7.11 and setting forth, in sufficient detail, the information and computations required to establish whether or not the Company was in compliance with the requirements of Sections 7.1 through 7.9 during the periods covered by the financial reports then being furnished and as of the end of such periods; (d) Together with the financial reports delivered pursuant to paragraph (b) of this Section 6.6, a letter of the independent certified public accountants stating (i) that in making the examination necessary for expressing an opinion on such finan- cial statements, nothing came to their attention that caused them to believe that there is in existence or has occurred any Default or Event of Default hereunder (the occurrence of which is ascertainable by accountants in the course of normal audit procedures) or, if such accountants shall have obtained knowledge of any such Default or Event of Default, describing the nature thereof and the length of time it has existed and (ii) that they have reviewed the reconciliation referred to in clause (ii) of the foregoing paragraph (c) of this Section 6.6 and nothing has come to their attention that caused them to believe that such reconciliation does not accurately reconcile the financial statements delivered pursuant to paragraph (b) of this Section 6.1 to financial statements prepared in accordance with the generally accepted accounting principles utilized in connection with the preparation of the Company's audited consolidated financial statements for the year ended December 31, 1991; (e) Promptly after the Company obtains knowledge thereof, notice of any litigation or any governmental proceeding pending against the Company or any Subsidiary in which liability might reasonably be expected to exceed $5,000,000 or which might reasonably be expected to otherwise have a Material Adverse Effect; (f) As soon as available, copies of each financial statement, notice, report and proxy statement which the Company shall furnish to its stockholders; copies of each registration statement and periodic report which the Company may file with the Securities and Exchange Commission, and any other similar or successor agency of the Federal government administering the Securities Act, the Exchange Act or the Trust Indenture Act of 1939, as amended; without duplication, copies of each report (other than reports relating solely to the issuance of, or transactions by others involving, its securities) relating to the Company or its securities which the Company may file with any securities exchange on which any of the Company's securities may be registered; copies of any orders in any material proceedings to which the Company or any of its Subsidiaries is a party, issued by any governmental agency, Federal or state, having jurisdiction over the Company or any of its Subsidiaries; and, except at such times as the Company is a reporting company under Section 13 or 15(d) of the Exchange Act or has complied with the requirements for the exemption from registration under the Exchange Act set forth in Rule 12g-3-2(b), such financial or other information as any holder of the Notes or prospective purchaser of the Notes may reasonably determine is required to permit such holder to comply with the requirements of Rule 144A under the Securities Act in connection with the resale by it of the Notes; (g) As soon as available, a copy of each other report submitted to the Company or any Subsidiary by independent accountants retained by the Company or any Subsidiary in connection with any interim or special audit made by them of the books of the Company or any Subsidiary; (h) Promptly following any change in the composition of the Company's Subsidiaries from that set forth in Annex I, as theretofore updated pursuant to this paragraph, an updated list setting forth the information specified in Annex I; (i) As soon as available, a copy of each final management letter submitted to the Company or any Subsidiary by independent accountants; and (j) Such additional information as you or such other Institutional Holder of the Notes may reasonably request concerning the Company and its Subsidiaries. 6.7 Inspection of Properties and Records. The Company will allow, and will cause each Subsidiary to allow, any representative of you or any other Institutional Holder, so long as you or such other Institutional Holder holds any Note, to visit and inspect any of its properties, to examine its books of record and account and to discuss its affairs, finances and accounts with its officers and its public accountants (and by this provision the Company authorizes such accountants to discuss with you or such Institutional Holder its affairs, finances and accounts), all at such reasonable times and as often as you or such Institutional Holder may reasonably request and, if at the time thereof any Default or Event of Default has occurred and is continuing, at the Company's expense. 6.8 ERISA. (a) All assumptions and methods used to determine the actuarial valuation of employee benefits, both vested and unvested, under each Employee Benefit Plan of the Company or any ERISA Affiliate, and each such Employee Benefit Plan, whether now existing or adopted after the date hereof, will comply in all material respects with ERISA. (b) The Company will not, and will not permit any ERISA Affiliate or any Employee Benefit Plan to, at any time take or permit to be taken any action which will, or is reasonably likely to, result in the occurrence of an ERISA Event which ERISA Event, individually or together with any other ERISA Events which have occurred, would have a Material Adverse Effect. (c) Promptly upon the occurrence thereof, the Company will give you and each other Institutional Holder notice of the occurrence of an ERISA Event. 6.9 Compliance with Laws. (a) The Company will comply, and will cause each Subsidiary to comply, with all laws, rules and regulations, including Environmental Laws, relating to its or their respective businesses, other than laws, rules and regulations the failure to comply with which or the sanctions and penalties resulting therefrom, individually or in the aggregate, would not have a Material Adverse Effect; provided, however, that the Company and its Subsidiaries shall not be required to comply with laws, rules and regulations the validity or applicability of which are being contested in good faith and by appropriate proceedings and as to which the Company has established adequate reserves on its books. (b) Promptly upon the occurrence thereof, the Company will give you and each other Institutional Holder notice of the institution of any proceedings against, or the receipt of notice of any Environmental Claim which if determined adversely to the Company might reasonably be expected to have a Material Adverse Effect. 6.10 Acquisition of Notes. Neither the Company nor any Subsidiary or Affiliate, directly or indirectly, will repurchase or offer to repurchase any Notes unless the offer is made to repurchase Notes pro rata from all holders at the same time and on the same terms. The Company will forthwith cancel any Notes in any manner or at any time acquired by the Company or any Subsidiary or Affiliate and such Notes shall not be deemed to be outstanding for any of the purposes of this Agreement or the Notes. 6.11 Private Placement Number. The Company consents to the filing of copies of this Agreement with Standard & Poor's Corporation to obtain a private placement number and with the National Association of Insurance Commissioners. 7. NEGATIVE COVENANTS The Company agrees that, for so long as any amount remains unpaid on any Note: 7.1 Net Worth. The Company will not permit at any time its Consolidated Net Worth to be less than $255,000,000 plus the cumulative sum of 50% of its Consolidated Net Income (without reduction for any losses) for each of its fiscal years ending after December 31, 1991. 7.2 Fixed Charge Ratio. The Company will not at any time permit the ratio of Consolidated Income Available for Fixed Charges to Fixed Charges for the most recently completed four fiscal quarters to be less than the ratio set forth below: For Fiscal Quarters Ending During the Period Ratio Closing Date Through December 31, 1993 1.50 to 1.00 January 1, 1994 through December 31, 1994 1.25 to 1.00 January 1, 19 95 and Thereafter 1.10 to 1.00 7.3 Debt Ratio. The Company will not permit at any time the ratio of Consolidated Debt to Consolidated Total Capitalization (calculated as of the end of each fiscal quarter) to be more than .60 to 1.00 7.4 Subsidiary Debt. The Company will not permit any Subsidiary to create, assume or incur any Debt, other than Debt to the Company or a Wholly-Owned Subsidiary, unless, after giving effect thereto and to the application of the proceeds thereof, the sum of (i) Debt of the Company and its Subsidiaries secured by Liens incurred pursuant to Section 7.5(g) and, without duplication, (ii) any other Debt of Subsidiaries incurred subsequent to the Closing Date does not exceed 15% of Consolidated Net Worth. 7.5 Liens. The Company will not, and will not permit any Subsidiary to, create, assume, or incur, or permit to exist, directly or indirectly, any Lien on its properties or assets, whether now owned or hereafter acquired, unless the Notes are equally and r atably secured, except: (a) Liens existing on property of the Company or any Subsidiary as of the date of this Agreement that are described in attached Annex II; (b) Liens for taxes, assessments or governmental charges not then due and delinquent or the validity of which is being contested in good faith and as to which the Company has established adequate reserves on its books; (c) Liens arising in connection with court proceedings, provided the execution of such Lien's is effectively stayed and such Liens are being contested in good faith and as to which the Company has established adequate reserves on its books; (d) Protective filings under the Uniform Commercial Code in connection with true leases, defects in title and Liens arising in the ordinary course of business and not incurred in connection with the borrowing of money, including encumbrances in the nature of zoning restrictions, easements, rights and restrictions of record on the use of real property, landlord's and lessor's liens in the ordinary course of business, which in the aggregate do not materially interfere with the conduct of the business of the Company and its Subsidiaries taken as a whole or materially impair the value of the property subject thereto for the purpo se of such business; (e) Liens securing Indebtedness of a Wholly- Owned Subsidiary to the Company or another Wholly-Owned Subsidiary or of the Company to a Wholly-Owned Subsidiary; (f) Liens (i) existing on property at the time of its acquisition by the Company or a Subsidiary and not created in contemplation thereof, whether or not the Indebtedness secured by such Lien is assumed by the Company or such Subsidiary or (ii) on property created substantially contemporaneously with the date of acquisition or within 120 days of the acquisition or completion of construction thereof to secure or provide for all or a portion of the purchase price or cost of construction of such property or (iii) existing on property of a corporation at the time such corporation is merged into or consolidated with or is acquired by, or substantially all of its assets are acquired by, the Company or a Subsidiary and not created in contemplation thereof; provided that such Liens do not extend to other property of the Company or any Subsidiary and that the aggregate principal amount of Indebtedness secured by each such Lien does not exceed 100% of the lesser of the cost or fair market value of the property subject thereto; (g) Liens not otherwise permitted by paragraphs (a) through (f) above incurred subsequent to the Closing Date to secure Debt, provided that, the sum of (x) Debt of the Company and its Subsidiaries secured by Liens incurred pursuant to this paragraph (g) and without duplication, (y) other Debt of Subsidiaries incurred subsequent to the Closing Date does not exceed 15% of Consolidated Net Worth; and (h) Liens resulting from extensions, renewals, refinancings and refundings of Indebtedness secured by Liens permitted by paragraph (a) above, provided there is no increase in the principal amount of Indebtedness secured thereby at the time of renewal, and any new Lien attaches only to the same property theretofore subject to such earlier Lien. In the event any property of the Company or any Subsidiary is subjected to a Lien securing Indebtedness which Lien is not otherwise permitted by this Section 7.5, the Company will make or cause to be made provision whereby the Notes will be secured, to the full extent permitted under applicable law, equally and ratably with all other Indebtedness secured by such Lien, and in any case the Notes shall have the benefit, to the full extent that the holders may be entitled thereto under applicable law, of an equitable Lien on such property equally and ratably securing the Notes and such other Indebtedness. Compliance with the provisions of this paragraph shall not be deemed to constitute a waiver of, or consent to, any violation of the provisions of this Section 7.5. 7.6 Restricted Payments. The Company will not, except a s hereinafter provided: (a) declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Company); (b) directly or indirectly, or through any Subsidiary, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net cash proceeds from the substantially concurrent issuance or sale of other shares of capital stock of the Company subsequent to the Closing Date); or (c) make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock; if, after giving effect thereto a Default or an Event of Default would exist. 7.7 Merger or Consolidation. The Company will not, and will not permit any Subsidiary to, merge or consolidate with, or sell all or substantially all of its assets to, any Person, except that: (a) The Company may consolidate with or merge into, or sell all or substantially all of its assets to, any Person or permit any Person to merge into it, provided that immediately after giving effect thereto, (i) Subject to the provisions of Section 2.2(b), the Company is the successor corporation or, if the Company is not the successor corporation, the successor corporation is a solvent corporation organized under the laws of a state of the United States of America or the District of Columbia and shall expressly assume in writing the Company's obligations under the Notes and this Agreement, the Guaranty of the Material Subsidiaries shall continue in full force and effect, and the holders of the Notes shall receive a favorable opinion of counsel reasonably acceptable to them as to the validity and enforceability of such assumption and the Guaranty; and (ii) There shall exist no Default or Event of Defaul t; and (b) Any Subsidiary may (i) merge into the Company or another Wholly-Owned Subsidiary or (ii) sell, transfer or lease all or any part of its assets to the Company or to another Wholly-Owned Subsidiary or (iii) merge into any Person which, as a result of such merger, becomes a Wholly-Owned Subsidiary, or (iv) merge with any Person in a transaction in which such Subsidiary is the surviving corporation provided the percentage of Voting Stock of such Subsidiary owned by the Company and its Subsidiaries is not reduced as a result of such transaction; provided in each such instance that immediately after giving effect thereto there shall exist no Default or Event of Default. 7.8 Sale of Assets. The Company will not, and will not permit any Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively a "Disposition") any assets (including capital stock of Subsidiaries), in one or a series of transactions (other than in the ordinary course of business or as permitted by Section 7.7) to any Person, other than the Company or a Wholly- Owned Subsidiary, if for the 12 month period ending on and including the date of such Disposition, after giving effect to such Disposition, the aggregate net proceeds from all Dispositions during such twelve month period would exceed 15% of Consolidated Total Assets as of the beginning of such twelve month period unless either (i) after giving effect thereto and to the contemporaneous repayment of any Consolidated Debt, the resulting ratio of Consolidated Income Available for Fixed Charges to Fixed Charges for each fiscal quarter ending during such twelve month period would be not less than 1.50 to 1.00 or (ii) the Company offers to prepay the Notes then outstanding as hereinafter provided. In the event the Company offers to prepay the Notes as herein provided the Company shall immediately give written notice to each holder of a Note of such offer, accompanied by a certificate of an authorized officer of the Company setting forth the calculations described in clause (i) of the preceding sentence. Such notice shall contain the written, irrevocable offer of the Company to prepay, on a date specified in such notice which shall be not less than 30 or more than 45 calendar days after the date of such Disposition, the entire principal amount of the Notes held by each holder at a price equal to 100% of the outstanding principal thereof, plus interest accrued thereon to the date of prepayment, plus the Make-Whole Amount, and shall state that notice of acceptance of the Company's offer to prepay under this Section 7.8 must be delivered to the Company not later than 10 calendar days prior to the date fixed for prepayment. Upon receipt by the Company of such notice from any holder, but subject to the following sentence, the aggregate principal amount and accrued interest and Make-Whole Amount of Notes held by such holder shall become due and payable on the day specified in the Company's notice. Not earlier than 7 calendar days prior to the date fixed for prepayment, the Company shall give written notice to each holder of those holders, and the principal amount of Notes held by each, who have given notices of acceptance of the Company's offer, and thereafter any holder may revoke its acceptance of the Company's offer, or accept such offer, by written notice to such effect delivered to the Company not less than 3 calendar days prior to the date fixed for prepayment. 7.9 Disposition of Stock of Subsidiaries. The Company will not, and will not permit any Subsidiary to, issue, sell or transfer the capital stock of a Subsidiary to any Person other than the Company or another Wholly-Owned Subsidiary if such issuance, sale or transfer would cause it to cease to be a Subsidiary, unless (i) such sale would not be prohibited under Section 7.8 and (ii) such Subsidiary does not own any shares of capital stock or Indebtedness of the Company or another Subsidiary which Subsidiary is not being disposed of as a part of such transaction. 7.10 Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into any transaction or transactions (including the furnishing of goods or services) calling for payments or any other transfer of value in excess of $100,000, individually or in the aggregate in any fiscal year, with an Affiliate except in the ordinary course of business as presently conducted and on terms and conditions no less favorable to the Company or such Subsidiary than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate. 7.11 Guaranties. The Company will not, and will not permit any Subsidiary to become or be liable in respect to any Guaranty of Indebtedness for borrowed money except Guaranties which are limited in amount to a stated maximum principal amount of dollar exposure. 7.12 Nature of Business. The Company will not, and will not permit any Subsidiary to, engage in any new business if, as a result thereof, the general nature of the business then to be engaged in by the Company and its Subsidiaries, taken as a whole, would be substantially changed from the general nature of the businesses engaged in by the Company and its Subsidiaries described in the Private Placement Memorandum dated July 1992. 7.13 Restrictions on Dividends. The Company will not, and it will not permit any Subsidiary to, enter into or become bound by any agreement or instrument or any charter or other corporate restriction which in any way prohibits or restricts any Subsidiary's ability to pay dividends or make advances to the Company or to perform under the Guaranty. 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR 8.1 Nature of Events. An "Event of Default" shall exist if any one or more of the following occurs: (a) Any default in the payment of interest when due on any of the Notes and continuance of such default for a period of five days; (b) Any default in the payment of the principal of any of the Notes or the Make-Whole Amount thereon, if any, at maturity, upon acceleration of maturity or at any date fixed for prepayment; (c) Any default (i) in the payment of the principal of or interest on any other Indebtedness of the Company and its Subsidiaries aggregating in excess of $10,000,000 as and when due and payable (whether by lapse of time, declaration, call for redemption or otherwise) and the continuation of such default beyond the period of grace, if any, allowed with respect thereto, or (ii) (other than a payment default) under any mortgages, agreements or other instruments of the Company and its Subsidiaries under or pursuant to which such Indebtedness aggre- gating in excess of $10,000,000, is issued resulting in the ac- celeration of such Indebtedness; (d) Any default in the observance of any covenant or agreement contained in Sections 7.1 through 7.3, Sections 7.6 or 7.7 or Section 8.7; (e) Any default in the observance or performance of any other covenant or provision of this Agreement which is not remedied within 30 days following the earlier to occur of (i) the day on which an officer of the Company first obtains knowledge of such default or (ii) the day on which written notice thereof is given to the Company by any holder of a Note; (f) Any representation or warranty made by the Company in this Agreement or by any Material Subsidiary in the Guaranty, or made by the Company in any written statement or certificate furnished by the Company in connection with the issuance and sale of the Notes or furnished by the company pursuant to this Agreement, proves incorrect in any material respect as of the date of the issuance or making thereof; (g) Any judgment, writ or warrant of attachment or any similar process in an aggregate amount in excess of $5,000,000 shall be entered or filed against the Company or any Subsidiary or against any property or assets of either and remain unpaid, unvacated, unbonded or unstayed (through appeal or otherwise) for a period of 60 days after the Company or any Subsidiary re ceives notice thereof; (h) This Agreement, the Notes or the Guaranty at any time for any reason cease to be in full force and effect as a result of acts taken by the Company or any Material Subsidiary or shall be declared to be null and void in whole or in part by a court or other governmental or regulatory authority having jurisdiction, or the validity or enforceability thereof shall be contested by the Company or any Material Subsidiary, or the Company or any Material Subsidiary shall renounce any of the same or deny that it has any or further liability thereunder; or (i) The Company or any Material Subsidiary shall (i) generally not pay its debts as they become due or admit in writing its inability to pay its debts generally as they become due; (ii) file a petition in bankruptcy or for reorganization or for the adoption of an arrangement under the Federal Bankruptcy Code, or any similar applicable bankruptcy or insolvency law, as now or in the future amended (herein collectively called "Bankruptcy Laws"); file an answer or other pleading admitting or failing to deny the material allegations of such a petition; fail to file, within the time allowed for such purpose, an answer or other pleading denying or otherwise controverting the material allegations of such a petition; or file an answer or other pleading seeking, consenting to or acquiescing in relief provided for under the Bankruptcy Laws; (iii) make an assignment of all or a substantial part of its property for the benefit of its creditors; (iv) seek or consent to or acquiesce in the appointment of a receiver, liquidator, custodian or trustee of it or for all or a substantial part of its property; (v) be finally adjudicated a bankrupt or insolvent; (vi) be subject to the entry of a court order, which shall not be vacated, set aside or stayed within 60 days from the date of entry, (A) appointing a receiver, liquidator, custodian or trustee of it or for all or a substantial part of its property, or (B) for relief pursuant to an involuntary case brought under, or effecting an arrangement in, bankruptcy or (C) for a reorganization pursuant to the Bankruptcy Laws or (D) for any other judicial modification or alteration of the rights of creditors; or (vii) be subject to the assumption of custody or sequestration by a court of competent jurisdiction of all or a substantial part of its property, which custody or sequestration shall not be suspended or terminated within 60 days from its inception. 8.2 Remedies on Default. When any Event of Default described in paragraphs (a) through (h) of Section 8.1 has occurred and is continuing, the holders of at least 25% in aggregate principal amount of the Notes then outstanding may, by notice to the Company, declare the entire principal, together with the Make- Whole Amount (to the extent permitted by law), and all interest accrued on all Notes to be, and such Notes shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are expressly waived. Notwithstanding the foregoing, when (i) any Event of Default described in paragraphs (a) or (b) of Section 8.1 has occurred and is continuing, any holder may by notice to the Company declare the entire principal, together with the Make- Whole Amount (to the extent permitted by law), and all interest accrued on the Notes then held by such holder to be, and such Notes shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are expressly waived and (ii) where any Event of Default described in paragraph (i) of Section 8.1 has occurred, then the entire principal, together with the Make-Whole Amount (to the extent permitted by law) and all interest accrued on all outstanding Notes shall immediately become due and payable without presentment, demand or notice of any kind. Upon the Notes or any of them becoming due and payable as aforesaid, the Company will forthwith pay to the holders of such Notes the entire principal of and interest accrued on such Notes, plus the Make- Whole Amount which shall be calculated on the Determination Date. 8.3 Annulment of Acceleration of Notes. The provisions of Section 8.2 are subject to the condition that if the principal of and accrued interest on the Notes have been declared immediately due and payable by reason of the occurrence of any Event of Default described in paragraphs (a) through (i), inclusive, of Section 8.1, the holder or holders of 66-2/3% in aggregate principal amount of the Notes then outstanding may, by written instrument filed with the Company, rescind and annul such decla- ration and the consequences thereof, provided that (i) at the time such declaration is annulled and rescinded no judgment or decree has been entered for the payment of any monies due pursuant to the Notes or this Agreement, (ii) all arrears of interest upon all the Notes and all other sums payable under the Notes and under this Agreement (except any principal, interest or premium on the Notes which has become due and payable solely by reason of such declaration under Section 8.2) shall have been duly paid and (iii) each and every Default or Event of Default shall have been cured or waived; and provided further, that no such rescission and annulment shall extend to or affect any subsequent Default or Event of Default or impair any right consequent thereto. 8.4 Other Remedies. If any Event of Default shall be continuing, any holder of Notes may enforce its rights by suit in equity, by action at law, or by any other appropriate pro- ceedings, whether for the specific performance (to the extent permitted by law) of any covenant or agreement contained in this Agreement or in the Notes or in aid of the exercise of any power granted in this Agreement, and may enforce the payment of any Note held by such holder and any of its other legal or equitable rights. 8.5 Conduct No Waiver; Collection Expenses. No course of dealing on the part of any holder of Notes, nor any delay or failure on the part of any holder of Notes to exercise any of its rights, shall operate as a waiver of such rights or otherwise prejudice such holder's rights, powers and remedies. If the Company fails to pay, when due, the principal of, or the interest on, any Note, or fails to comply with any other provision of this Agreement, the Company will pay to each holder, to the extent permitted by law, on demand, such further amounts as shall be sufficient to cover the cost and expenses, including but not limited to reasonable attorneys' fees, incurred by such holders of the Notes in collecting any sums due on the Notes or in otherwise enforcing any of their rights. 8.6 Remedies Cumulative. No right or remedy conferred upon or reserved to any holder of Notes under this Agreement is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to every other right or remedy given under this Agreement or now or hereafter existing under any applicable law. Every right and remedy given by this Agreement or by applicable law to any holder of Notes may be exercised from time to time and as often as may be deemed expedient by such holder, as the case may be. 8.7 Notice of Default. With respect to Defaults, Events of Default or claimed defaults, the Company will give the following notices: (a) The Company promptly, but in any event within 5 days after the day on which an executive officer of the Company first obtains knowledge thereof, will furnish to each holder of a Note written notice of the occurrence of a Default or an Event of Default. Such notice shall specify the nature of such default, the period of existence thereof and what action the Company has taken or is taking or proposes to take with respect thereto. (b) If the holder of any Note or of any other evidence of Indebtedness of the Company or any Subsidiary (i) aggregating $5,000,000 or more or (ii) the default in connection with which, either alone or considered with existing defaults in connection with other Indebtedness, could give rise to an Event of Default pursuant to Section 8.1(c), gives any notice or takes any other action with respect to a claimed default, the Company will forthwith give written notice thereof to each holder of the then outstanding Notes, describing the notice or action and the nature of the claimed default. 9. AMENDMENTS; WAIVERS AND CONSENTS 9.1 Matters Subject to Modification. Any term, covenant, agreement or condition of this Agreement or the Guaranty may, with the consent of the Company, be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), if the Company shall have obtained the consent in writing of the holder or holders of at least 66-2/3% in aggregate principal amount of outstanding Notes; provided, however, that, without the written consent of the holder or holders of all of the Notes then out- standing, no such waiver, modification, alteration or amendment shall be effective which will (i) change the time of payment (including any required prepayment) of the principal of or the interest on any Note, (ii) reduce the principal amount thereof or the premium, if any, or change the rate of interest thereon, (iii) change any provision of any instrument affecting the preferences between holders of the Notes or between holders of the Notes and other creditors of the Company, or (iv) change any of the provisions of Section 8.2, Section 8.3 or this Section 9. For the purpose of determining whether holders of the requisite principal amount of Notes have made or concurred in any waiver, consent, approval, notice or other communication under this Agreement, Notes held in the name of, or owned beneficially by, the Company, any Subsidiary or any Affiliate thereof, shall not be deemed outstanding. 9.2 Solicitation of Holders of Notes. The Company will not solicit, request or negotiate for or with respect to any proposed waiver or amendment of any of the provisions of this Agreement or the Notes unless each holder of the Notes (irrespective of the amount of Notes then owned by it) shall concurrently be informed thereof by the Company and shall be afforded the opportunity of considering the same and shall be supplied by the Company with sufficient information to enable it to make an informed decision with respect thereto. Executed or true and correct copies of any waiver or consent effected pursuant to the provisions of this Section 9 shall be delivered by the Company to each holder of outstanding Notes forthwith following the date on which the same shall have been executed and delivered by the holder or holders of the requisite percentage of outstanding Notes. The Company will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any holder of the Notes as consideration for or as an inducement to the entering into by any holder of the Notes of any waiver or amendment of any of the terms and provisions of this Agreement unless such remuneration is concurrently paid, on the same terms, ratably to each holder of the then outstanding Notes. 9.3 Binding Effect. Any such amendment or waiver shall apply equally to all the holders of the Notes and shall be binding upon them, upon each future holder of any Note and upon the Company whether or not such Note shall have been marked to indicate such amendment or waiver. No such amendment or waiver shall extend to or affect any obligation not expressly amended or waived or impair any right related thereto. 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT 10.1 Form of Notes. Each Series A Note and Series B Note initially delivered under this Agreement will be in the form of one fully registered Note in the form attached as Exhibit A or Exhibit B, respectively. The Notes are issuable only in fully registered form and in denominations of at least $100,000 (or the remaining outstanding balance thereof, if less than $100,000). 10.2 Note Register. The Company shall cause to be kept at its principal office a register (the "Note Register") for the registration and transfer of the Notes. The names and addresses of the holders of Notes, the transfer thereof and the names and addresses of the transferees of the Notes shall be registered in the Note Register. The Company may deem and treat the person in whose name a Note is so registered as the holder and owner thereof for all purposes and shall not be affected by any notice to the contrary, until due presentment of such Note for registration of transfer as provided in this Section 10. 10.3 Issuance of New Notes upon Exchange or Transfer. Upon surrender for exchange or registration of transfer of any Note at the office of the Company designated for notices in accordance with Section 11.2, the Company shall execute and deliver, at its expense, one or more new Notes of any authorized denominations requested by the holder of the surrendered Note, each dated the date to which interest has been paid on the Notes so surrendered (or, if no interest has been paid, the date of such surrendered Note), but in the same aggregate unpaid principal amount as such surrendered Note, and registered in the name of such person or persons as shall be designated in writing by such holder. Every Note surrendered for registration of transfer shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or by his attorney duly authorized in writing. The Company may condition its issuance of any new Note in connection with a transfer by any Person on compliance with Section 3.2, by Institutional Holders on compliance with Section 2.5 and on the payment to the Company of a sum sufficient to cover any stamp tax or other governmental charge imposed in respect of such transfer. 10.4 Replacement of Notes. Upon receipt of evidence satisfactory to the Company of the loss, theft, mutilation or destruction of any Note, and in the case of any such loss, theft or destruction upon delivery of a bond of indemnity in such form and amount as shall be reasonably satisfactory to the Company or in the event of such mutilation upon surrender and cancellation of the Note, the Company, without charge to the holder thereof, will make and deliver a new Note, of like tenor in lieu of such lost, stolen, destroyed or mutilated Note. If any such lost, stolen or destroyed Note is owned by you or any other Institutional Holder, then the affidavit of an authorized officer of such owner setting forth the fact of such loss, theft or destruction and of its ownership of the Note at the time of such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no further indemnity shall be required as a condition to the execution and delivery of a new Note, other than a written agreement of such owner (in form reasonably satisfactory to the Company) to indemnify the Company. 11. MISCELLANEOUS 11.1 Expenses. Whether or not the purchase of Notes herein contemplated shall be consummated, the Company agrees to pay directly all reasonable expenses in connection with the preparation, execution and delivery of this Agreement and the transactions contemplated by this Agreement, including, but not limited to, out-of-pocket expenses, filing lees of Standard & Poor's Corporation in connection with obtaining a private placement number, charges and disbursements of special counsel, photocopying and printing costs and charges for shipping the Notes, adequately insured, to you at your home office or at such other address as you may designate, and all similar expenses (including the fees and expenses of counsel) relating to any amendments, waivers or consents in connection with this Agreement or the Notes, including, but not limited to, any such amendments, waivers or consents resulting from any work-out, renegotiation or restructuring relating to the performance by the Company of its obligations under this Agreement and the Notes. The Company also agrees that it will pay and save you harmless against any and all liability with respect to stamp and other documentary taxes, if any, which may be payable, or which may be determined to be payable in connection with the execution and delivery of this Agreement or the Notes (but not in connection with a transfer of any Notes), whether or not any Notes are then outstanding. The obligations of the Company under this Section 11.1 shall survive the retirement of the Notes. 11.2 Notices. Except as otherwise expressly provided herein, all communications provided for in this Agreement shall be in writing and delivered or sent by registered or certified mail, return receipt requested, or by overnight courier (i) if to you, to the address set forth below your name in Annex I, or to such other address as you may in writing designate, (ii) if to any other holder of the Notes, to such address as the holder may designate in writing to the Company, and (iii) if to the Company, to Danaher Corporation, 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037, Attention: Controller, or to such other address as the Company may in writing designate. 11.3 Reproduction of Documents. This Agreement and all documents relating hereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by you at the closing of the purchase of the Notes (except the Notes themselves), and (iii) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process, and you may destroy any original document so reproduced. The Company agrees and stipulates that any such reproduction which is legible shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence; provided that nothing herein contained shall preclude the Company from objecting to the admission of any reproduction on the basis that such reproduction is not accurate, has been altered or is otherwise incomplete. 11.4 Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 11.5 Law Governing. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. 11.6 Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 11.7 Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart or reproduction thereof per- mitted by Section 11.3. 11.8 Reliance on and Survival of Provisions. All covenants, representations and warranties made by the Company herein and in any certificates delivered pursuant to this Agreement, whether or not in connection with a closing, (i) shall be deemed to have been relied upon by you, notwithstanding any investigation heretofore or hereafter made by you or on your behalf and (ii) shall survive the delivery of this Agreement and the Notes. 11.9 Integration and Severability. This Agreement embodies the entire agreement and understanding between you and the Company, and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any one or more of the provisions contained in this Agreement or in any Note, or application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement and in any Note, and any other application thereof, shall not in any way be affected or impaired thereby. IN WITNESS WHEREOF, the Company and the Purchaser have caused this Agreement to be executed and delivered by their respective officer or officers thereunto duly authorized. DANAHER CORPORATION By: /s/ C. S. Brannan Title: Vice President PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: /s/ Frederick A. Bell Title: Director - Securities Investment By: /s/ Warren Shank Title: Counsel NIPPON LIFE INSURANCE COMPANY OF AMERICA, an Iowa corporation by its attorney-in-fact, Principal Mutual Life Insurance Company, an Iowa corporation By: /s/ Frederick A. Bell Title: Director - Securities Investment By: /s/ Warren Shank Title: Counsel ALLSTATE LIFE INSURANCE COMPANY By: /s/ Patricia W. Wilson By: /s/ Gary W. Fridley Authorized Signatories NEW ENGLAND MUTUAL LIFE INSURANCE COMPANY By: Boylston Capital Advisors, Inc, its asset manager and investment advisor By: /s/ Kenneth J. Frey, Jr. Title: Vice President GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By: /s/ E.A. Marr Its: Assistance Vice President Private Placement Investments By: /s/ Mark Corben Its: Manager Private Placement Investments INTEGRITY LIFE INSURANCE By: /s/ Title: President NATIONAL INTEGRITY LIFE INSURANCE By: /s/ Title: President UNITED OF OMAHA LIFE INSURANCE COMPANY By: /s/ M.G. Echtenkamp Title: Second Vice President COMPANION LIFE INSURANCE COMPANY By: /s/ David S. Lee Its: Vice President By: /s/ Richard A.Witt Its: Second Vice President & Assistant Treasurer UNITED WORLD LIFE INSURANCE COMPANY By: /s/ M.S. Echtenkamp Its: Authorized Signer AMERICAN REPUBLIC INSURANCE COMPANY By: /s/ M. E. Abbott Its: President and Chief Financial Officer By: /s/ Its: Senior Vice President, Investment CENTRAL LIFE ASSURANCE COMPANY By: /s/ Robert B. Lindstrom Its : Vice President - Private Placements GENERAL AMERICAN LIFE INSURANCE COMPANY By: /s/ Leonard M. Rubenstein Its: Executive Vice President and Treasurer PROVIDENT MUTUAL LIFE AND ANNUITY COMPANY OF AMERICA By: /s/ Title: Investment Officer SECURITY MUTUAL LIFE INSURANCE COMPANY By: /s/ Kevin W. Hammond Title: Vice President - Investments THE UNION CENTRAL LIFE INSURANCE COMPANY By: /s/ Joseph A. Tucker Title: Assistant Treasurer By: Title: THE MANHATTAN LIFE INSURANCE COMPANY By: /s/ J.N. Kotsonis Title: Senior VP and CFO -----END PRIVACY-ENHANCED MESSAGE-----