PIK BRIDGE LOAN AGREEMENT

Bridge Loan Agreement

You are currently viewing:

This Bridge Loan Agreement involves

K-L SUB 1 INC | Merrill Lynch Capital Corporation,

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: PIK BRIDGE LOAN AGREEMENT
Governing Law: New York Date: 2/11/2005
Law Firm: Simpson Thacher

Search Bridge Loan Agreement by:

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 4.14

PIK BRIDGE LOAN AGREEMENT

among

K-L SUB 1 INC.,
as Borrower,

The Lenders from Time to Time Party Hereto,

MERRILL LYNCH CAPITAL CORPORATION,
as Agent,

Dated as of November 20, 2000

MERRILL LYNCH INTERNATIONAL,
as Arranger

Table of Contents

		Page
SECTION 1.	Definitions	1
1.1	Defined Terms	1
SECTION 2.	Amount and Terms of Credit	19
2.1	Commitment	19
2.2	[Intentionally Omitted.]	19
2.3	Notice of Borrowing	19
2.4	Disbursement of Funds	19
2.5	Maturity Date; Evidence of Debt	20
2.6	Pro Rata Borrowing	21
2.7	Interest	21
SECTION 3.	[Intentionally Omitted.]	21
SECTION 4.	Fees; Voluntary Reduction of Loan Commitments; Mandatory Termination of Commitments	21
4.1	Fees	21
4.2	Voluntary Reduction of Loan Commitments	21
4.3	Mandatory Termination of Commitments	22
SECTION 5.	Payments	22
5.2	Mandatory Prepayments	22
5.3	Method and Place of Payment	23
5.4	Net Payments; Tax Gross-Up	23
5.5	Computations of Interest and Fees	25
5.6	Pro Rata Treatment	25
5.7	Use of Proceeds	26
SECTION 6.	Conditions Precedent to Borrowing of Loans	26
6.1	Credit Documents	26
6.2	Closing Certificate	26
6.3	Corporate Documents	26
6.4	Legal Opinions	26
6.5	No default	26
6.6	Receipt of Senior Term Loans	26
6.7	Equity Contribution and Acquisition	26
6.8	Fees	27
6.9	Notice of Borrowing	27
6.10	Initial Loan	27
SECTION 7.	[Intentionally Omitted.]	27

SECTION 8.	Representations, Warranties and Agreements	27
8.1	Corporate Status	27
8.2	Corporate Power and Authority	27
8.3	No Violation	27
8.4	Litigation	28
8.5	Margin Regulations	28
8.6	Governmental Approvals	28
8.7	Investment Company Act	28
8.8	True and Complete Disclosure	28
8.9	Financial Condition; Financial Statements	28
8.10	Tax Returns and Payments	29
8.11	Compliance with ERISA	29
8.12	Subsidiaries	30
8.13	Patents, etc	30
8.14	Environmental Laws	30
8.15	Properties	30
SECTION 9.	Affirmative Covenants	31
9.1	Information Covenants	31
9.2	Books, Records and Inspections	33
9.3	Maintenance of Insurance	33
9.4	Payment of Taxes	33
9.5	Consolidated Corporate Franchises	34
9.6	Compliance with Statutes, Obligations, etc.	34
9.7	ERISA	34
9.8	Good Repair	34
9.9	End of Fiscal Years; Fiscal Quarters	35
9.10	[intentionally omitted]	35
9.11	Use of Proceeds	35
9.12	Changes in Business	35
9.13	Ownership of Assets	35
9.14	Permanent Notes	35
9.15	Change of Control	36
SECTION 10.	Negative Covenants	37
10.1	Limitation on Asset Sales	37
10.2	Limitation on Restricted Payments	40
10.3	Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock	44
10.4	Liens	47
10.5	Limitation on Fundamental Changes	47
10.6	Transactions with Affiliates	48
10.7	Dividend and Other Payment Restrictions Affecting Subsidiaries	49
SECTION 11.	Events of Default	50
SECTION 12.	The Agent	52
12.1	Appointment	52
12.2	Delegation of Duties	52
12.3	Exculpatory Provisions	52
12.4	Reliance by Administrative Agent	53
12.5	Notice of Default	53
12.6	Non-Reliance on Agent and Other Lenders	53
12.7	Indemnification	54
12.8	Agent in its Individual Capacities	54
12.9	Successor Agent	54

SECTION 13.	Miscellaneous	54
13.1	Amendments and Waivers	54
13.2	Notices	55
13.3	No Waiver; Cumulative Remedies	56
13.4	Survival of Representations and Warranties	56
13.5	Payment of Expenses and Taxes	56
13.6	Successors and Assigns; Participations and Assignments	57
13.7	Replacements of Lenders under Certain Circumstances	59
13.8	Adjustments; Setoff	59
13.9	Counterparts	59
13.10	Severability and Integration	60
13.11	Governing Law	60
13.12	Submission to Jurisdiction; Waivers	60
13.13	Acknowledgments	60
13.14	Waivers of Jury Trial	61
13.15	Confidentiality	61
13.16	Conversion of Currencies	61
SCHEDULES
Schedule 2.1	Commitments of Lenders
Schedule 8.12	Subsidiaries
Schedule 13.2	Addresses for Notices
EXHIBITS
Exhibit A	Term Sheet
Exhibit A-1	Form of Bridge Note
Exhibit A-2	Form of Bridge PIK Note
Exhibit B	Form of Assignment and Acceptance
Exhibit C	[intentionally omitted]
Exhibit D	Form of Confidentiality Agreement
Exhibit E	Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit F	Form of Legal Opinion of In-House Counsel

This PIK BRIDGE LOAN AGREEMENT is dated as of November 20, 2000, and is made among K-L SUB 1, INC., a Delaware corporation, as borrower (the "Borrower"), the Lenders (as defined in Section 1), Merrill Lynch Capital Corporation, as Agent (the "Agent"), Merrill Lynch International, as Arranger, (in such capacity, the "Arranger").

RECITALS:

Pursuant to an acquisition agreement dated September 25, 2000 (the "Acquisition Agreement"), K-L Holdings, Inc., a newly formed Delaware corporation (the "Parent") agreed to acquire (the "Acquisition") the Plastics and Compoundings, Water Technologies, Timber Technologies, Water Treatments, GD Holmes, Electronics, Pigments and Additives divisions (the "Target Business") of Laporte Plc (the "Seller"). In connection with the financing of the Acquisition, (a) an affiliate of Kohlberg Kravis Roberts & Co. L.P. (the "Sponsor") will invest in newly issued common stock of the Parent which owns directly 100% of the issued share capital of the Borrower for consideration paid to the Parent of approximately $282,000,000 in cash (the "Equity Financing") with further consideration of $3,000,000 upon issuance of the Senior Subordinated Notes (as defined in Section 1.1), such amounts to be contributed to the Borrower as common equity, (b) the Borrower will borrow an aggregate principal amount of up to $100,000,000 pursuant to this Agreement (the "PIK Proceeds"), (c) the Borrower will contribute the PIK Proceeds and the Equity Financing to K-L Sub 2, Inc. ("Holdings") as common equity, (d) Holdings will contribute the PIK Proceeds and the Equity Financing to K-L Sub 3, Inc. (the "Acquiror") as common equity, (e) the Acquiror will borrow (i) an aggregate principal amount of up to $325,000,000 under a senior subordinated facility (the "High Yield Bridge Facility") provided by The Chase Manhattan Bank, Merrill Lynch Capital Corporation, Goldman Sachs Credit Partners L.P. and a syndicate of lenders pursuant to a credit agreement dated as of the date hereof (the "Bridge Loan Agreement"), among the Acquiror as borrower, the Parent, the Borrower, Holdings, the lenders party thereto and The Chase Manhattan Bank, as Agent thereunder, Merrill Lynch & Co., as syndication agent thereunder and Goldman Sachs Credit Partners L.P., as documentation agent thereunder, and (ii) an aggregate principal amount of up to $520,000,000 under senior secured facilities provided by The Chase Manhattan Bank, Merrill Lynch Capital Corporation, Goldman Sachs Credit Partners L.P. and a syndicate of lenders pursuant to a credit agreement dated as of the date hereof (the "Senior Secured Credit Agreement"), among the Parent, Holdings, the Borrower, the lenders party thereto, The Chase Manhattan Bank, as administrative agent thereunder, Merrill Lynch & Co., as syndication agent thereunder and Goldman Sachs Credit Partners L.P., as documentation agent thereunder and (f) certain fees and expenses incurred in connection with the transactions described in this paragraph will be paid. Concurrently with the borrowing of the Senior Term Loans (as herein defined) under the Senior Secured Credit Agreement and the loans under the High Yield Bridge Facility, the Borrower will borrow the Loans. The proceeds of the Loans will be used solely to contribute common equity and to pay a portion of the purchase price under the Acquisition Agreement and to pay related fees and expenses. The transactions described above are referred to collectively as the "Transactions".

The parties hereto hereby agree as follows:

SECTION 1. Definitions.

As used herein, the following terms shall have the meanings specified in this Section 1 unless the context otherwise requires (it being understood that defined terms in this Agreement shall include in the singular number the plural and in the plural the singular):

1.1 Defined Terms. "Acquired Indebtedness" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted

Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

"Acquisition" is defined in the recitals.

"Acquisition Agreement" is defined in the recitals.

"Acquisition Documents" means the Acquisition Agreement and all other agreements executed from time to time pursuant to the Acquisition Agreement between the parties thereto.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

"Agent" means Merrill Lynch International, together with its affiliates, as the Agent for the Lenders under this Agreement and the other Credit Documents.

"Agent's Office" means the office of the Agent located at 4 World Financial Centre, 7^th Floor, New York, NY 10080 or such other office as the Agent may hereafter designate in writing as such to the other parties hereto.

"Agreement" means this PIK Bridge Loan Agreement.

"Arranger" is defined in the recitals.

"Asset Sale" means (i) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a sale and leaseback) of the Borrower or any Restricted Subsidiary (each referred to in this definition as a "disposition") or (ii) the sale of Equity Interests of any Restricted Subsidiary (whether in a single transaction or a series of related transactions), in each case, other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete or worn out equipment in the ordinary course of business or inventory or goods held for sale in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Borrower in a manner permitted pursuant to Section 10.5 or any disposition that constitutes a Change of Control;

(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 10.2;

(d) any disposition of assets in a single transaction or a series of transactions with an aggregate fair market value of less than $2.5 million;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Borrower or by the Borrower or a Restricted Subsidiary to a Restricted Subsidiary;

(f) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) the lease, assignment or sub-lease of any real or personal property in the ordinary course of business;

(h) the sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary (with the exception of Investments in Unrestricted Subsidiaries acquired pursuant to clause (x) of the definition of Permitted Investments);

(i) foreclosures on assets;

(j) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and

(k) any financing transaction with respect to property built or acquired by the Borrower or any Restricted Subsidiary after the Closing Date, including, without limitation, sale leasebacks and asset securitizations permitted by this Agreement.

"Assignee" is defined in Section 13.6(c).

"Assignor" is defined in Section 13.6(c).

"Assignment and Acceptance" is defined in Section 13.6(c).

"Authorized Officer" means the Chairman of the Board, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Borrower.

"Board" means the Board of Governors of the Federal Reserve System of the United States (or any successor).

"Board of Directors" means, with respect to any Person, the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board.

"Borrower" is defined in the recitals.

"Borrowing" means the incurrence of the Loans.

"Bridge Loan Agreement" is defined in the recitals.

"Bridge Notes" is defined in Section 13.6(d).

"Bridge Obligations" means the Obligations of the Borrower under or in connection with this Agreement and the other Credit Documents.

"Bridge PIK Notes" is defined in Section 13.6(d).

"Business Day" means any day excluding Saturday, Sunday and any day that shall be in The City of New York legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close.

"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Capitalized Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

"Cash Equivalents" means (i) United States Dollars, (ii) pounds sterling, (iii) (a) Euro, or any national currency of a Participating Member State or (b) in the case of any Foreign Subsidiary, such local currencies held by them from time to time in the ordinary course of business, (iv) securities issued or directly and fully and unconditionally guaranteed or insured by the United States government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government, with maturities of 24 months or less from the date of acquisition, (v) certificates of deposit, time deposits and eurodollar time deposits with maturities of one

year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500.0 million, (vi) repurchase obligations for underlying securities of the types described in clauses (iv) and (v) entered into with any financial institution meeting the qualifications specified in clause (v) above, (vii) commercial paper rated at least P-1 by Moody's or at least A-1 by S&P and in each case maturing with 12 months after the date of creation thereof, (viii) investment funds investing 95% of their assets in securities of the types described in clauses (i)-(viii) above, (ix) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P with maturities of 24 months or less from the date of acquisition and (x) Indebtedness or Preferred Stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's with maturities of 12 months or less from the date of acquisition. Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (i) and (ii) above, provided that such amounts are converted into any currency listed in clauses (i) and (ii) above as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

"Change of Control" means the occurrence of any of the following:

(i): the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder; or
(ii): the Borrower becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Borrower or the Parent.

"Closing Date" means the date on which the funding of the Loans is made, which date shall be no later than December 31, 2000.

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

"Commitments" means as to any Lender, its obligation to make a Loan to the Borrower pursuant to Section 2.1 in an aggregate amount not to exceed the amount set forth under such Lender's name in Schedule 2.1 opposite the caption "Commitment Amount" or in the Assignment and Acceptance pursuant to which a Lender acquires its Commitment, as the same may be adjusted pursuant to Section 13.6.

"Confidential Information" is defined in Section 13.15.

"Confidential Information Memorandum" means the Confidential Information Memorandum of the Borrower dated October, 2000, delivered to the Lenders in connection with the Senior Secured Facilities.

"Consolidated Depreciation and Amortization Expense" means with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of

deferred financing fees, and other noncash charges (excluding any noncash item that represents an accrual or reserve for a cash expenditure for a future period) of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of: (a) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, non-cash interest payments, the interest component of Capitalized Lease Obligations and net payments (if any) pursuant to Hedging Obligations, but excluding amortization of deferred financing fees) and (b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, in each case other than interest expense in respect of the Loans and the Permanent Notes.

"Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that (i) any net after-tax extraordinary gains or losses (less all fees and expenses relating thereto) shall be excluded, (ii) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period, (iii) any net after-tax income (loss) from discontinued operations and any net after-tax gains (or losses) on disposal of discontinued operations shall be excluded, (iv) any net after-tax gains (or losses) (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business (as determined in good faith by the Board of Directors of the Borrower) shall be excluded, (v) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided, to the extent not already included, that Consolidated Net Income of the Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period, (vi) the Net Income of any Person acquired in a pooling of interests transaction shall not be included for any period prior to the date of such acquisition; (vii) the Net Income for such period of any Restricted Subsidiary shall be excluded if the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or in similar distributions has been legally waived; provided that this clause (vii) shall not apply to restrictions on the declaration or payment of dividends or similar distributions by any Restricted Subsidiary of its Net Income pursuant to the (x) Senior Secured Credit Agreement, the Bridge Loan Agreement, the Exchange Note Indenture and the High Yield Notes or (y) any refinancing thereof or any other Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, in either case with restrictions on such payments, taken as a whole, not materially more restrictive than those in the Bridge Loan Agreement, the Exchange Note Indenture and the High Yield Notes; and provided further that Consolidated Net Income of the Borrower will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Borrower or a Restricted Subsidiary in respect of such period, to the extent not already included therein; and (viii) any increase in amortization or depreciation resulting from purchase accounting in relation to (i) the Transaction or (ii) any acquisition that is consummated after the Closing Date, net of taxes, shall be excluded.

"Contingent Obligations" means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly,

including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

"Credit Documents" means this Agreement and any promissory notes issued by the Borrower hereunder.

"Credit Facilities" means, with respect to the Borrower or the Restricted Subsidiaries, one or more debt facilities (including, without limitation, the Senior Secured Facilities) or commercial paper facilities with banks or other institutional lenders or indentures providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including increasing the amount borrowed thereunder) in whole or in part from time to time.

"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

"Designated Noncash Consideration" means the fair market value of noncash consideration received by the Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officer's Certificate, setting forth the basis of such valuation, executed by an executive vice president and the principal financial officer of the Borrower, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

"Designated Preferred Stock" means preferred stock of the Borrower or the Parent (other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an Officers' Certificate executed by an executive vice president and the principal financial officer of the Borrower or the Parent on the issuance date thereof.

"Disqualified Stock" means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is putable or exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than as a result of a change of control or asset sale), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the earlier of the Maturity Date of the Loans or the date the Loans are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Parent or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Parent or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

"Dollar", "dollar" and "$" means lawful currency of the United States.

"Domestic Subsidiary" means, with respect to any Person, any Restricted Subsidiary of such Person other than a Foreign Subsidiary.

"EBITDA" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (a) provision for taxes based on income or profits of such Person for such period deducted in computing Consolidated Net Income, plus (b) Consolidated Interest Expense of such Person for such period incurred by such Person or any Restricted Subsidiary during such period, in each case to the extent the same was deducted in calculating such Consolidated Net Income, plus (c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent

such depreciation and amortization were deducted in computing Consolidated Net Income, plus (d) any expenses or charges related to any Equity Offering, Permitted Investment, acquisition recapitalization or Indebtedness permitted to be incurred under this Agreement (whether or not successful) (including such fees, expenses or charges related to the Transactions) and deducted in such period in computing Consolidated Net Income, plus (e) the amount of any one-time restructuring charge deducted in such period in computing Consolidated Net Income (including any one-time costs incurred in connection with acquisitions after the Closing Date), plus (f) without duplication, any other noncash charges reducing Consolidated Net Income for such period (excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period), plus (g) the amount of any minority interest expense deducted in calculating Consolidated Net Income (less the amount of any cash dividends paid to the holders of such minority interests) plus (h) in the case of the periods ending December 31, 2000 and December 31, 2001, Systems Establishment Expenses plus (i) interest expense in respect of the Loans and the Permanent Notes, less, without duplication (j) noncash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period).

"Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by the Borrower or any of its Subsidiaries (a) in the ordinary course of such Person's business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, "Claims"), including, without limitation, (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

"Environmental Law" means any applicable United States Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the environment, human health or safety or Hazardous Materials.

"Equity Contributions" is defined in the recitals.

"Equity Financing" is defined in the recitals.

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means any public or private sale of common stock or Preferred Stock of the Borrower or the Parent (excluding Disqualified Stock), other than (x) public offerings with respect to common stock registered on Form S-8 and (y) any such public or private sale that constitutes an Excluded Contribution.

"ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended from time to time. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.

"ERISA Affiliate" means each person (as defined in Section 3(9) of ERISA) that together with the Borrower or a Subsidiary of the Borrower would be deemed to be a "single employer" within the meaning of Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

"Euro" means the single currency of Participating Member States.

"Event of Default" is defined in Section 11.

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

"Exchange Note Indenture" means an indenture in substantially the form of Exhibit G to the Bridge Loan Agreement.

"Exchange Notes" means the notes to be issued under the Exchange Note Indenture.

"Excluded Contribution" means net cash proceeds, marketable securities or Qualified Proceeds received by the Borrower from:

(a) contributions to its common equity capital; and

(b) the sale (other than to a Subsidiary of the Borrower or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Borrower or any Subsidiary of the Borrower) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Borrower;

in each case designated as Excluded Contributions pursuant to an Officers' Certificate executed by an executive vice president and the principal financial officer of the Borrower on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be.

"Existing Indebtedness" means Indebtedness of the Borrower or the Restricted Subsidiaries in existence on the Closing Date, plus interest accruing thereon.

"Fees" means all amounts payable pursuant to, or referred to in, Section 4.1.

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Borrower or any Restricted Subsidiary incurs, assumes, guarantees or redeems any Indebtedness or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period. For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Borrower or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. If any Indebtedness bears a floating rate of interest and is being given pro forma effect,

the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate.

"Fixed Charges" means, with respect to any Person for any period, the sum of, without duplication, (a) Consolidated Interest Expense of such Person for such period, (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock (including any Designated Preferred Stock) of such Person, and (c) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock.

"Foreign Subsidiary" means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any State thereof, the District of Columbia, or any territory thereof.

"GAAP" means generally accepted accounting principles in the United States, which are in effect on the Closing Date. For the purposes of this Agreement, the term "consolidated" with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary.

"Governmental Authority" means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

"Group" means Holdings, the Borrower and each of their respective Subsidiaries, but excluding any Joint Ventures, and "member of the Group" means any one of them.

"guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

"Hazardous Materials" means (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances", "hazardous waste", "hazardous materials", "extremely hazardous waste", "restricted hazardous waste", "toxic substances", "toxic pollutants", "contaminants", or "pollutants", or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority.

"Hedging Obligations" means, with respect to any Person, the obligations of such Person under (a) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements and (b) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

"High Yield Bridge Facility" is defined in the recitals.

"High Yield Notes" means the notes to be issued under an indenture to be entered into between, inter alia, K-L Sub 3 and a trustee to refinance the High Yield Bridge Facility.

"Holders" means the registered holders of Permanent Notes.

"Holdings" is defined in the recitals.

"Indebtedness" means, with respect to any Person, (a) any indebtedness (including principal and premium) of such Person, whether or not contingent (i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without double counting, reimbursement agreements in respect thereof), (iii) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business or (iv) representing any Hedging Obligations, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP, (b) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business) and (c) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that Contingent Obligations incurred in the ordinary course of business shall be deemed not to constitute Indebtedness and obligations under or in respect of Receivables Facilities shall be deemed not to constitute Indebtedness. In addition, "Indebtedness" of any Person includes Indebtedness described in the foregoing paragraph that would not appear as a liability on the balance sheet of such Person if (1) such Indebtedness is the obligation of a partnership or a joint venture that is not a Restricted Subsidiary (a "Joint Venture"), (2) such Person or a Restricted Subsidiary is a general partner of the Joint Venture (a "General Partner") and (3) there is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to property or assets of such Person or a Restricted Subsidiary; and such Indebtedness shall be included in an amount not to exceed (x) the greater of (A) the net assets of the General Partner and (B) the amount of such obligations to the extent that there is recourse by, contract or operation of law, to the property or assets of such Person or a Restricted Subsidiary (other than the General Partner) or (y) if less than the amount determined pursuant to clause (x) immediately above, the actual amount of such Indebtedness that is recourse to such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount and the related interest expense shall be included in Consolidated Interest Expense to the extent paid by the Borrower or the Restricted Subsidiaries.

"Independent Financial Advisor" means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Borrower, qualified to perform the task for which it has been engaged.

"Interest Payment Date" is defined in Section 2.7(c).

"Investment Grade Securities" means (a) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents), (b) debt securities or debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Moody's or the equivalent of such rating by such rating organization, or, if no rating of S&P or Moody's then exists, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or advances among the Borrower and its Subsidiaries, (c) investments in any fund that invests exclusively in investments of the type described in clauses (a) and (b) which fund may also hold immaterial amounts of cash pending investment and/or distribution and (d) corresponding instruments issued in countries other than the United States customarily utilized for high quality investments.

"Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and Section 10.2, (i) "Investments" shall include the portion (proportionate to the Borrower's equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Borrower's "Investment" in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Borrower's equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Borrower; and (iii) any transfer of Voting Stock that results in an entity, which became a Restricted Subsidiary after the Closing Date and not in connection with the Transactions, ceasing to be a Restricted Subsidiary shall be deemed to be an Investment in an amount equal to the fair market value (as determined by the Board of Directors of the Borrower in good faith as of the date of initial acquisition) of the Capital Stock of such entity owned by the Borrower and the Restricted Subsidiary immediately after such transfer.

"Investor Contribution" is defined in the recitals.

"Investors' Rights Agreement" means the Investors' Rights Agreement dated as of the date hereof among K-L Holdings, Inc., each of the Investors referred to therein and each of the KKR Investors referred to therein.

"Lenders" means (a) the financial institutions listed on the signature pages of this Agreement (other than any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any financial institution that has become a party hereto pursuant to an Assignment and Acceptance.

"Letter of Credit Obligations" means all Obligations in respect of Indebtedness of the Borrower with respect to letters of credit issued pursuant to the Senior Secured Facilities which Indebtedness shall be deemed to consist of (a) the aggregate maximum amount available to be drawn under all such letters of credit (the determination of such aggregate maximum amount to assume compliance with all conditions for drawing) and (b) the aggregate amount that has been paid by, and not reimbursed to, the fronting bank and the lenders under such letters of credit.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

"Loan" is defined in Section 2.1.

"Management Group" means at any time, the Chairman of the Board, any President, any Executive Vice President or Vice President, any Managing Director, any Treasurer and any Secretary or other executive officer of any of the Parent, Holdings, the Borrower or any Subsidiary of any such company at such time.

"Margin Stock" is defined in Regulation U.

"Material Adverse Change" means any change in the business, assets, operations, properties or financial condition of the Borrower and its Subsidiaries, taken as a whole, that would materially adversely affect the ability of the Borrower to perform its obligations under this Agreement and the other Credit Documents.

"Material Adverse Effect" means a circumstance or condition affecting the business, assets, operations, properties or financial condition of the Borrower and the Restricted Subsidiaries, taken as a whole, that would materially adversely affect (a) the ability of the Borrower to perform its obligations under this Agreement or any other Credit Document or (b) the rights and remedies of the Agent and the Lenders under this Agreement or any other Credit Document.

"Material Subsidiary" means, at any date of determination, any Restricted Subsidiary (a) whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 9.1 Financial Statements have been delivered were equal to or greater than 5% of the consolidated total assets of the Borrower and the Restricted Subsidiaries at such date or (b) whose gross revenues for such Test Period were equal to or greater than 5% of the consolidated gross revenues of the Borrower and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.

"Maturity Date" means the date that is eleven years after the Closing Date.

"Moody's" means Moody's Investors Service Inc.

"Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

"Net Proceeds" means the aggregate cash proceeds received by the Borrower or any Restricted Subsidiary in respect of any Asset Sale, including, without limitation, any cash received upon the sale or other disposition of any Designated Noncash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Pari-Passu Indebtedness required (other than required by Section 10.1(b)(1)) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Borrower as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Borrower after such sale or other disposition, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

"Non-Excluded Taxes" is defined in Section 5.4(a).

"Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and banker's acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

"Officer" means the Chairman of the Board, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Borrower.

"Officers' Certificate" means a certificate signed on behalf of the Borrower by two Officers of the Borrower one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Borrower.

"Parent" is defined in the recitals.

"Pari-Passu Indebtedness" means with respect to the Borrower, Indebtedness which ranks pari passu in right of payment to the Loans.

"Participant" is defined in Section 13.6(b).

"Participating Member State" means any member state which adopts the euro unit as the single currency pursuant to the Treaty on European Union.

"Payment Sharing Notice" means a notice from any Lender to the Agent stating that an Event of Default has occurred and that such Lender requires that all payments received by the Agent under this Agreement or any Note or any Credit Document be distributed in accordance with Section 5.6(b)(ii).

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

"Pension Payment" means any periodic payment required to be made to a trustee or other administrator of a Pension Plan or to a governmental authority in respect of a Pension Plan.

"Pension Plan" means any plan in which the Borrower or more of its Subsidiaries participates that provides for retirement, health, medical or other similar benefits for employees or retirees of the Borrower or one or more of its Subsidiaries.

"Permanent Notes" shall mean permanent payment in kind notes having substantially the terms set forth on Exhibit A, including Permanent PIK Notes.

"Permanent PIK Notes" shall mean any additional notes issued in lieu of cash interest payments on the Permanent Notes pursuant to the PIK Note Facility.

"Permitted