Exhibit 10.26

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 29, 2004

among

ROLLER BEARING COMPANY OF AMERICA, INC.,

as Borrower,

THE OTHER CREDIT PARTIES SIGNATORY HERETO,

as Credit Parties,

THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent and Lender,

and

GECC CAPITAL MARKETS GROUP, INC.,

as Lead Arranger

TABLE OF CONTENTS

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INDEX OF APPENDICES

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This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “ Agreement ”), dated as of June 29, 2004, among ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware corporation (“ Borrower ”); the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “ GE Capital ”), for itself, as Lender, and as Agent for Lenders, and the other Lenders signatory hereto from time to time.

RECITALS

WHEREAS, certain parties hereto are parties to a Third Amended and Restated Credit Agreement dated as of December 19, 2003 (the “ Prior Credit Agreement ”), pursuant to which the Lenders extended revolving and term credit facilities to Borrower of up to Ninety-Six Million Nine Hundred Thousand Dollars ($96,900,000) in the aggregate for the purpose of refinancing certain Indebtedness of Borrower and the other Credit Parties and to provide (a) working capital financing for Borrower and the other Credit Parties, (b) funds for other general corporate purposes of Borrower and the other Credit Parties and (c) funds for other purposes not prohibited hereunder, including financing of Permitted Loan Funded Acquisitions;

WHEREAS, the parties hereto desire to amend and restate the Prior Credit Agreement on the terms set forth herein (a) to increase the aggregate Commitments of the Lenders to One Hundred Sixty-Five Million Dollars ($165,000,000) for the purpose of funding the repayment of the balance of the outstanding amounts under the Prior Credit Agreement, the redemption of the Borrower’s Prior Senior Subordinated Notes (as defined below) and the payment of related transaction costs and expenses and (b) the other purposes provided herein; and

WHEREAS, capitalized terms used in this Agreement shall have the meanings ascribed to them in Annex A and, for purposes of this Agreement and the other Loan Documents, the rules of construction set forth in Annex A shall govern.  All Annexes, Disclosure Schedules, Exhibits and other attachments (collectively, “ Appendices ”) hereto, or expressly identified to this Agreement, are incorporated herein by reference, and taken together with this Agreement, shall constitute but a single agreement.  These Recitals shall be construed as part of the Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the parties hereto agree as follows:

1.      AMOUNT AND TERMS OF CREDIT

1.1            Credit Facilities.

(a)           Revolving Credit Facility .

(i)            Subject to the terms and conditions hereof, each Revolving Lender agrees to make available to Borrower from time to time until the Commitment Termination Date its Pro Rata Share of advances (each, a “ Revolving Credit Advance ”).  The Pro Rata Share of the Revolving Loan of any Revolving Lender shall not at any time exceed its separate Revolving Loan Commitment.  The obligations of each Revolving Lender hereunder shall be several and

not joint.  Until the Commitment Termination Date, Borrower may from time to time borrow, repay (without notice) and reborrow under this Section 1.1(a) ; provided , that the amount of any Revolving Credit Advance to be made at any time shall not exceed Borrowing Availability at such time.  Borrowing Availability may be further reduced by Reserves imposed by Agent in accordance with this Agreement.  Each Revolving Credit Advance shall be made on notice by Borrower to one of the representatives of Agent identified in Schedule 1.1 at the address specified therein.  Any such notice must be given no later than (1) 11:00 a.m. (Chicago time) on the Business Day of the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or (2) 11:00 a.m. (Chicago time) on the date which is three (3) Business Days prior to the proposed Revolving Credit Advance, in the case of a LIBOR Loan.  Each such notice (a ” Notice of Revolving Credit Advance ”) must be given in writing (by telecopy or overnight courier) substantially in the form of Exhibit 1.1(a)(i) , and shall include the information required in such Exhibit.  If Borrower desires to have the Revolving Credit Advances bear interest by reference to a LIBOR Rate, it must comply with Section 1.5(e) .

(ii)           Except as provided in Section 1.12 , Borrower shall execute and deliver to each Revolving Lender a note to evidence the Revolving Loan Commitment of that Revolving Lender.  Each note shall be in the principal amount of the Revolving Loan Commitment of the applicable Revolving Lender, dated the Effective Date and substantially in the form of Exhibit 1.1(a)(ii) (each a “ Revolving Note ” and, collectively, the “ Revolving Notes ”).  Each Revolving Note shall represent the obligation of Borrower to pay the amount of the relevant Revolving Lender’s Revolving Loan Commitment or, if less, such Revolving Lender’s Pro Rata Share of the aggregate unpaid principal amount of all Revolving Credit Advances to Borrower together with interest thereon as prescribed in Section 1.5 .  The entire unpaid balance of the Revolving Loan and all other non-contingent monetary Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date.

(iii)          Any provision of this Agreement to the contrary notwithstanding, at the request of Borrower, in its discretion Agent may (but shall have absolutely no obligation to), make Revolving Credit Advances to Borrower on behalf of Revolving Lenders in amounts that cause Borrowing Availability to be less than $0 (any such excess Revolving Credit Advances are herein referred to collectively as “ Overadvances ”); provided, that (A) no such event or occurrence shall cause or constitute a waiver of Agent’s, the Swing Line Lender’s or Revolving Lenders’ right to refuse to make any further Overadvances, Swing Line Advances or Revolving Credit Advances, or incur any Letter of Credit Obligations, as the case may be, at any time that an Overadvance exists, and (B) no Overadvance shall result in a Default or Event of Default due to Borrower’s failure to comply with Section 1.3(b)(i) for so long as Agent permits such Overadvance to remain outstanding, but solely with respect to the amount of such Overadvance.  In addition, Overadvances may be made even if the conditions to lending set forth in Section 2 have not been met.  All Overadvances shall constitute Index Rate Loans, shall bear interest at the Default Rate and shall be payable within three (3) Business Days after demand.  Except as otherwise provided in Section 1.11(b) , the authority of Agent to make Overadvances is limited to an aggregate amount not to exceed $4,000,000 at any time, shall not cause the Revolving Loan to exceed the Maximum Amount, and the authority of Agent to make Overadvances that exceed $2,000,000 in the aggregate amount may be revoked prospectively by a written notice to Agent signed by Requisite Revolving Lenders.  No Overadvance shall be

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outstanding for more than sixty (60) consecutive days, and not more than two Overadvances shall be made in any period of one hundred eighty (180) consecutive days, in each case without the consent of Requisite Revolving Lenders.

(b)           Term Loan .

(i)            Subject to the terms and conditions hereof, each Term Lender agrees to make a term loan (collectively, the “ Term Loan ”) on the Effective Date to Borrower in the original principal amount of its Term Loan Commitment.  The obligations of each Term Lender hereunder shall be several and not joint.  The Term Loan shall be evidenced by promissory notes substantially in the form of Exhibit 1.1(b) (each a “ Term Note ” and collectively the “ Term Notes ”), and, except as provided in Section 1.12 , Borrower shall execute and deliver each Term Note to the applicable Term Lender.  Each Term Note shall represent the obligation of Borrower to pay the amount of the applicable Term Lender’s Term Loan Commitment, together with interest thereon as prescribed in Section 1.5 .

(ii)           Borrower shall repay the principal amount of the Term Loan in twenty-five (25) consecutive quarterly installments on the first day of January, April, July and October of each year, commencing October 1, 2004, as follows:

and by making the final payment, which shall be due on December 29, 2010 and shall be in the amount of $103,125,000 or, if different, the remaining principal balance of the Term Loan.

(iii)          Notwithstanding Section 1.1(b)(ii) , the aggregate outstanding principal balance of the Term Loan shall be due and payable in full in immediately available funds on the Commitment Termination Date, if not sooner paid in full.  No payment with respect to the Term Loan may be reborrowed.

(iv)          Each payment of principal with respect to the Term Loan shall be paid to Agent for the ratable benefit of each Term Lender, ratably in proportion to each such Term Lender’s respective Term Loan Commitment.

(c)           Swing Line Facility .

(i)            Agent shall notify the Swing Line Lender upon Agent’s receipt of any Notice of Revolving Credit Advance.  Subject to the terms and conditions hereof, the Swing Line Lender may, in its discretion, make available from time to time until the Commitment Termination Date advances (each, a “ Swing Line Advance ”) in accordance with any such notice.  The provisions of this Section 1.1(c) shall not relieve Revolving Lenders of their obligations to make Revolving Credit Advances under Section 1.1(a) ; provided, that if the Swing Line Lender makes a Swing Line Advance pursuant to any such notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance that otherwise may be made by Revolving Credit Lenders pursuant to such notice.  The aggregate amount of Swing Line Advances outstanding shall not

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exceed at any time the lesser of (A) the Swing Line Commitment and (B) the lesser of the Maximum Amount and (except for Overadvances) the Borrowing Base, in each case, less the outstanding balance of the Revolving Loan at such time (“ Swing Line Availability ”).  Until the Commitment Termination Date, Borrower may from time to time borrow, repay and reborrow under this Section 1.1(c) .  Each Swing Line Advance shall be made pursuant to a Notice of Revolving Credit Advance delivered by Borrower to Agent in accordance with Section 1.1(a) .  Any such notice must be given no later than 11:00 a.m. (Chicago time) on the Business Day of the proposed Swing Line Advance.  Unless the Swing Line Lender has received at least one (1) Business Day’s prior written notice from Requisite Revolving Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure of any condition precedent set forth in Sections 2.2 , be entitled to fund that Swing Line Advance, and to have such Revolving Lender make Revolving Credit Advances in accordance with Section 1.1(c)(iii) or purchase participating interests in accordance with Section 1.1(c)(iv) .   Notwithstanding any other provision of this Agreement or the other Loan Documents, the Swing Line Loan shall constitute an Index Rate Loan.  Borrower shall repay the aggregate outstanding principal amount of the Swing Line Loan upon demand therefor by Agent.

(ii)           Borrower shall execute and deliver to the Swing Line Lender a promissory note to evidence the Swing Line Commitment.  Such note shall be in the principal amount of the Swing Line Commitment of the Swing Line Lender, dated the Effective Date and substantially in the form of Exhibit 1.1(c)(ii) (the “ Swing Line Note ”). The Swing Line Note shall represent the obligation of Borrower to pay the amount of the Swing Line Commitment or, if less, the aggregate unpaid principal amount of all Swing Line Advances made to Borrower together with interest thereon as prescribed in Section 1.5 .  The entire unpaid balance of the Swing Line Loan and all other non-contingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date if not sooner paid in full.

(iii)          The Swing Line Lender, at any time and from time to time in its sole and absolute discretion, but not less frequently than once each week, shall on behalf of Borrower (and Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its behalf) request each Revolving Lender (including the Swing Line Lender) to make a Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an amount equal to that Revolving Lender’s Pro Rata Share of the principal amount of the Swing Line Loan (the “ Refunded Swing Line Loan ”) outstanding on the date such notice is given.  Unless any of the events described in Sections 8.1(h) or 8.1(i) has occurred (in which event the procedures of Section 1.1(c)(iv) shall apply) and regardless of whether the conditions precedent set forth in this Agreement to the making of a Revolving Credit Advance are then satisfied, each Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a Revolving Credit Advance on behalf of the Swing Line Lender, prior to 2:00 p.m. (Chicago time), in immediately available funds on the Business Day next succeeding the date that notice is given.  The proceeds of those Revolving Credit Advances shall be immediately paid to the Swing Line Lender and applied to repay the Refunded Swing Line Loan.

(iv)          If, prior to refunding a Swing Line Loan with a Revolving Credit Advance pursuant to Section 1.1(c)(iii) , one of the events described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of Section 1.1(c)(v) below, each Revolving Lender

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shall, on the date such Revolving Credit Advance was to have been made for the benefit of Borrower, purchase from the Swing Line Lender an undivided participation interest in the Swing Line Loan in an amount equal to its Pro Rata Share of such Swing Line Loan.  Upon request, each Revolving Lender shall promptly transfer to the Swing Line Lender, in immediately available funds, the amount of its participation interest.

(v)           Each Revolving Lender’s obligation to make Revolving Credit Advances in accordance with Section 1.1(c)(iii) and to purchase participation interests in accordance with Section 1.1(c)(iv) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender may have against the Swing Line Lender, Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of any Default or Event of Default; (C) any inability of Borrower to satisfy the conditions precedent to borrowing set forth in this Agreement at any time or (D) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  If any Revolving Lender does not make available to Agent or the Swing Line Lender, as applicable,  the amount required pursuant to Sections 1.1(c)(iii) or 1.1(c)(iv) , as the case may be, the Swing Line Lender shall be entitled to recover such amount on demand from such Revolving Lender, together with interest thereon for each day from the date of non-payment until such amount is paid in full at the Federal Funds Rate for the first two (2) Business Days and at the Index Rate thereafter.

(d)           Reliance on Notices .  Agent shall be entitled to rely upon, and shall be fully protected in relying upon, any Notice of Revolving Credit Advance, Notice of Conversion/Continuation or similar notice reasonably believed by Agent to be genuine.  Agent may assume that each Person executing and delivering any notice in accordance herewith was duly authorized, unless the responsible individual acting thereon for Agent has actual knowledge to the contrary.

1.2            Letters of Credit .  Subject to and in accordance with the terms and conditions contained herein and in Annex B , Borrower shall have the right to request, and Revolving Lenders agree to incur, or purchase participations in, Letter of Credit Obligations in respect of Borrower or any Secured Guarantor.

1.3            Prepayments.

(a)           Voluntary Prepayments; Reductions in Revolving Loan Commitments .  Borrower may at any time on at least three (3) days’ prior written notice to Agent (i) voluntarily prepay all or part of the Term Loan and/or (ii) permanently reduce (but not terminate) the Revolving Loan Commitment; provided that (A) any such prepayments or reductions shall be in a minimum amount of $500,000 and integral multiples of $100,000 in excess of such amount, (B) the Revolving Loan Commitment shall not be reduced pursuant to this sentence to an amount less than $30,000,000 and (C) after giving effect to such reductions, Borrower shall comply with Section 1.3(b)(i) .  In addition, Borrower may at any time on at least ten (10) days’ prior written notice to Agent terminate the Revolving Loan Commitment, provided, that upon such termination all Loans and other Obligations shall be immediately due and payable in full and all Letter of Credit Obligations shall be cash collateralized or otherwise satisfied in accordance with Annex B hereto.  Any such voluntary prepayment and any reduction or termination of the

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Revolving Loan Commitment must be accompanied by the payment of any applicable LIBOR funding breakage costs in accordance with Section 1.13(b) .  Upon any such reduction or termination of the Revolving Loan Commitment, Borrower’s right to request Revolving Credit Advances, or request that Letter of Credit Obligations be incurred on its behalf, or request Swing Line Advances, shall simultaneously be permanently reduced or terminated, as the case may be.  Each notice of partial prepayment shall designate the Loan or other Obligations to which such prepayment is to be applied; provided, that any partial prepayments of the Term Loan made by Borrower shall be applied to prepay the scheduled installments of the Term Loan in inverse order of maturity.

(b)           Mandatory Prepayments .

(i)            If at any time Borrowing Availability is less than $0, Borrower shall immediately repay the aggregate outstanding Revolving Credit Advances to the extent required to eliminate such deficiency.  If any such deficiency remains after repayment in full of the aggregate outstanding Revolving Credit Advances, Borrower shall provide cash collateral for the Letter of Credit Obligations in the manner set forth in Annex B to the extent required to eliminate such deficiency.  Notwithstanding the foregoing, any Overadvance made pursuant to Section 1.1(a)(iii) shall be repaid only on demand in accordance with such Section.

(ii)           Immediately upon receipt by Borrower or any Secured Guarantor of any proceeds of any cash asset disposition (excluding proceeds of asset dispositions permitted by Section 6.8(a) ) to the extent the net cash proceeds of such asset disposition exceed $250,000 in any single transaction or, when added to the net proceeds of all other asset dispositions (other than asset dispositions permitted by Section 6.8(a) ) during a Fiscal Year, exceed $500,000, Borrower shall prepay the Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable transaction costs (including reasonable relocation costs), fees and expenses properly attributable to such transaction and payable by Borrower or any Secured Guarantor in connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if any, (D) appropriate reserves for income taxes payable in cash in connection therewith and any adjustment in respect of the sale price of such assets(s) specified by the definitive documents evidencing such sale (so long as any such unused sale price reserve is applied at the end of the applicable adjustment period as a mandatory prepayment hereunder) and (E) any portion of the purchase price held in escrow (so long as such escrowed funds, upon release to any Credit Party, are applied as a mandatory prepayment hereunder); provided, that if Borrower or the applicable Secured Guarantor intends to reinvest all or any portion of the net proceeds of any asset disposition within 270 days thereafter in fixed assets and Borrower promptly notifies Agent of that intention in writing, and if (x) no Event of Default shall have occurred and be continuing at the date of such written notification, and (y) Borrower or such Secured Guarantor, as the case may be, grants a first security interest to Agent in such replacement assets when acquired, then the amount of any such mandatory prepayment shall be reduced by the amount to be reinvested; provided , further that if and to the extent that Borrower or such Secured Guarantor, as the case may be, does not reinvest such net proceeds within that 270-day period, Borrower shall then repay the Loans with net proceeds that have not been reinvested on the last day of such 270-day period.  Any prepayment pursuant to this Section 1.3(b)(ii) shall be applied in accordance with Section 1.3(c) .

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(iii)          If Borrower or any Secured Guarantor shall suffer any Event of Loss, then such Person shall (A) promptly notify the Agent of such Event of Loss with anticipated net proceeds in excess of $1,000,000 (including the amount of the estimated net insurance proceeds net of amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted Encumbrances hereunder, if any) or other awards payable in connection with such Event of Loss) and (B) promptly upon receipt of such proceeds by such Person, Borrower shall prepay the Obligations in an amount equal to such proceeds net of (x) all money actually applied (or held in reserve pending such application) to repair or reconstruct the damaged property or property affected by condemnation or taking but subject to the terms of Section 5.4(c) , (y) all out-of-pocket transaction costs and (z) related cash taxes.  Any prepayment pursuant to this Section 1.3(b)(iii) shall be applied in accordance with Section 1.3(d) .

(iv)          Proceeds of Keyman Life Insurance pledged to the Agent shall be immediately used to prepay the Obligations in an amount equal to such proceeds, which shall be applied in accordance with Section 1.3(c) .

(v)           If Holdings or Borrower issues Stock, no later than the Business Day following the date of receipt of any cash proceeds thereof net of underwriting discounts and commissions and other reasonable costs, fees and expenses paid to non-Affiliates in connection therewith, Borrower shall prepay the Obligations in an amount , if any, required pursuant to Section 5.8 .  Any prepayment pursuant to Section 5.8(a) shall be applied in accordance with Section 1.3(c) and all prepayments pursuant to Section 5.8(b) shall be applied in accordance with Section 1.3(f) .

(vi)          Until the Termination Date, Borrower shall prepay the Obligations on the date that is ten (10) days after the earlier of (A) the date on which Borrower’s annual audited Financial Statements for the immediately preceding Fiscal Year (commencing with the Fiscal Year of 2004 as such immediately preceding Year) are delivered pursuant to Annex E or (B) the 15th day after the date on which such annual audited Financial Statements were required to be delivered pursuant to Annex E , in an amount equal to seventy-five percent (75%) of Excess Cash Flow for the immediately preceding Fiscal Year.  If Holdings and its Subsidiaries on a consolidated basis maintain a ratio of (i) Funded Debt measured as of the last day of any Fiscal Year to (ii) EBITDA for the four Fiscal Quarters then ended of less than 4.25 to 1.00 but more than 3.75 to 1.0, the Excess Cash Flow percentage shall be equal to fifty percent (50%) for that Fiscal Year.  If Holdings and its Subsidiaries on a consolidated basis maintain a ratio of (i) Funded Debt measured as of the last day of any Fiscal Year to (ii) EBITDA for the four Fiscal Quarters then ended equal to or less than 3.75 to 1.00, the Excess Cash Flow percentage shall be equal to twenty-five percent (25%) for that Fiscal Year.  Any prepayments from Excess Cash Flow paid pursuant to this clause (vi) shall be applied in accordance with Section 1.3(c) .  Each such prepayment shall be accompanied by an Officer Certificate of Borrower’s Chief Financial Officer, or another responsible officer of Borrower having substantially the same authority and responsibility or otherwise acceptable to Agent, certifying the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance satisfactory to Agent.

(c)           Application of Certain Mandatory Prepayments .  Any prepayments made by the Borrower pursuant to Sections 1.3(b)(ii) , 1.3(b)(iv) , 1.3(b)(v) (by reference to Section 5.8(a)) ,

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or 1.3(b)(vi) shall be applied as follows: first , to Fees and reimbursable expenses of Agent then due and payable pursuant to any of the Loan Documents; second , to interest then due and payable on the Term Loan; third , to prepay the scheduled principal installments of the Term Loan in inverse order of maturity, until such Term Loan shall have been prepaid in full; fourth , to interest then due and payable on the Swing Line Loan; fifth , to the principal balance of the Swing Line Loan until the same has been repaid in full; sixth , to interest then due and payable on the Revolving Credit Advances; seventh , to the outstanding principal balance of the Revolving Credit Advances until the same has been paid in full; and eighth , to any Letter of Credit Obligations, to provide cash collateral therefor in the manner set forth in Annex B , until all such Letter of Credit Obligations have been fully cash collateralized in the manner set forth in Annex B .  Neither the Revolving Loan Commitment nor the Swing Line Commitment shall be permanently reduced by the amount of any such prepayments.

(d)           Application of Prepayments from Insurance Proceeds and Condemnation Proceeds .  Prepayments from insurance or condemnation proceeds in connection with an Event of Loss in accordance with Sections 1.3(b)(iii) and 5.4(c) and the Mortgage(s), respectively, shall be applied as follows:  insurance proceeds from casualties or losses to cash or Inventory shall be applied first, to the Swing Line Loans and, second, to the Revolving Credit Advances; insurance or condemnation proceeds from casualties or losses to Equipment, Fixtures and Real Estate shall be applied to scheduled installments of the Term Loan in inverse order of maturity.  Neither the Revolving Loan Commitment nor the Swing Line Loan Commitment shall be permanently reduced by the amount of any such prepayments.  If the precise amount of insurance or condemnation proceeds allocable to Inventory as compared to Equipment, Fixtures and Real Estate are not otherwise determined, the allocation and application of those proceeds shall be jointly determined by Agent and Borrower.

(e)           No Implied Consent .  Nothing in this Section 1.3 shall be construed to constitute Agent’s or any Lender’s consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents.

(f)            Application of Mandatory Prepayments arising from a Qualified Public Offering .  Prepayments made by the Borrower pursuant to Section 1.3(b)(v) (by reference to Section 5.8(b)) shall be applied as follows:  first , to interest then due and payable on the Term Loan; second , to prepay the scheduled principal installments of the Term Loan in inverse order of maturity, until the Term Loan has been prepaid in full; third , to interest then due and payable on the Swing Line Loan; fourth , to the principal balance of the Swing Line Loan until the same has been repaid in full; fifth , to interest then due and payable on the Revolving Credit Advances; sixth , to the outstanding principal balance of the Revolving Credit Advances until the same has been paid in full; and seventh , to any Letter of Credit Obligations, to provide cash collateral therefor in the manner set forth in Annex B , until all such Letter of Credit Obligations have been fully cash collateralized in the manner set forth in Annex B .  Neither the Revolving Loan Commitment nor the Swing Line Commitment shall be permanently reduced by the amount of any such prepayments.

1.4            Use of Proceeds .  Borrower shall utilize the proceeds of the Term Loan, the Revolving Loan and the Swing Line Loan for the Refinancing and any related transaction costs, fees and expenses, for the financing of Borrower’s ordinary working capital and general

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corporate needs and for any other purpose not prohibited hereunder, and Borrower may use the proceeds of the Revolving Loan to finance Permitted Loan Funded Acquisitions, subject to the terms and conditions set forth herein.  Disclosure Schedule (1.4) contains a description of Borrower’s sources and uses of funds as of the Effective Date, including Loans and Letter of Credit Obligations to be made or incurred on that date, and a funds flow memorandum detailing how funds from each source are to be transferred to particular uses.

1.5            Interest and Applicable Margins .

(a)           Borrower shall pay interest to Agent, for the ratable benefit of Lenders in accordance with the various Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the following rates:

(i)            with respect to the Revolving Credit Advances, the Index Rate plus the Applicable Revolver Index Margin per annum or, at the election of Borrower, the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on the aggregate Revolving Credit Advances outstanding from time to time;

(ii)           with respect to the Term Loan, the Index Rate plus the Applicable Term Loan Index Margin per annum or, at the election of Borrower, the applicable LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum; and

(iii)          with respect to the Swing Line Loan, the Index Rate plus the Applicable Revolver Index Margin per annum.

The Applicable Margins are as follows:

(b)           If any payment on any Loan becomes due and payable on a day other than a Business Day, the maturity thereof will be extended to the next succeeding Business Day (except as set forth in the definition of LIBOR Period) and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.

(c)           All computations of Fees calculated on a per annum basis and interest shall be made by Agent on the basis of a 360-day year, in each case for the actual number of days occurring in the period for which such interest and Fees are payable.  The Index Rate is a floating rate determined for each day.  Each determination by Agent of an interest rate and Fees hereunder shall be final, binding and conclusive on Borrower, absent manifest error.

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(d)           So long as an Event of Default has occurred and is continuing under Section 8.1(a), (h) or (i) , or so long as any other Event of Default has occurred and is continuing and at the election of Agent (or upon the written request of Requisite Lenders) confirmed by written notice from Agent to Borrower, the interest rates applicable to the Loans and the Letter of Credit Fees shall be increased by two percentage points (2%) per annum above the rates of interest or the rate of such Fees otherwise applicable hereunder (“ Default Rate ”). Interest and Letter of Credit Fees at the Default Rate shall accrue from the initial date of such Event of Default if such Event of Default arose under Section 8.1(a), (h) or (i) or from the date of the delivery of the written notice from Agent to Borrower for all other Events of Default, until that Event of Default is cured or waived and shall be payable upon demand.

(e)           Subject to the conditions precedent set forth in Section 2.2 , Borrower shall have the option to (i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans (other than the Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in accordance with Section 1.13(b) if such conversion is made prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue all or any portion of any Loan (other than the Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan shall commence on the first day after the last day of the LIBOR Period of the Loan to be continued.  Any Loan or group of Loans having the same proposed LIBOR Period to be made or continued as, or converted into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral multiples of $250,000 in excess of such amount.  Any such election must be made by 11:00 a.m. (Chicago time) on the 3rd Business Day prior to (1) the date of any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be continued as such, or (3) the date on which Borrower wishes to convert any Index Rate Loan (other than the Swing Line) to a LIBOR Loan for a LIBOR Period designated by Borrower in such election.  If no election is received with respect to a LIBOR Loan by 11:00 a.m. (Chicago time) on the 3rd Business Day prior to the end of the LIBOR Period with respect thereto (or if a Default or an Event of Default has occurred and is continuing or if the additional conditions precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.  Borrower must make such election by notice to Agent in writing, by telecopy or overnight courier.  In the case of any conversion or continuation, such election must be made pursuant to a written notice (a “ Notice of Conversion/Continuation ”) in the form of Exhibit 1.5(e) .  No Loan may be made as or converted into a LIBOR Loan until the earlier of (i) 45 days after the Effective Date and (ii) completion of Primary Syndication as determined by Agent.  As used in this Section 1.5(e) , “Primary Syndication” shall occur when GE Capital’s aggregate Commitments, together with the total Loans funded by GE Capital, do not exceed $50,000,000.

(f)            Notwithstanding anything to the contrary set forth in this Section 1.5 , if a court of competent jurisdiction determines in a final order that the rate of interest payable hereunder exceeds the highest rate of interest permissible under law (the “ Maximum Lawful Rate ”), then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder shall be equal to the Maximum Lawful Rate; provided, however , that if at any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate until such time

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as the total interest received by Agent, on behalf of Lenders, is equal to the total interest that would have been received had the interest rate payable hereunder been (but for the operation of this paragraph) the interest rate payable since the Original Closing Date as otherwise provided in this Agreement.  Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the manner provided in Sections 1.5(a) through (e) , unless and until the rate of interest again exceeds the Maximum Lawful Rate, and at that time this paragraph shall again apply.  In no event shall the total interest received by any Lender pursuant to the terms hereof exceed the amount that such Lender could lawfully have received had the interest due hereunder been calculated for the full term hereof at the Maximum Lawful Rate.  If the Maximum Lawful Rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation is made.  If, notwithstanding the provisions of this Section 1.5(f) , a court of competent jurisdiction shall finally determine that a Lender has received interest hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable law, promptly apply such excess in the order specified in Section 1.11 and thereafter shall refund any excess to Borrower or as a court of competent jurisdiction may otherwise order.

1.6            Eligible Accounts .  All of the Accounts owned by Borrower or any Secured Guarantor and reflected in the most recent Borrowing Base Certificate delivered by Borrower to Agent shall be “ Eligible Accounts ” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies.  Agent shall have the right to establish or modify or eliminate Reserves against Eligible Accounts from time to time in its reasonable credit judgment to reflect issues with respect to the collectability of Accounts arising or discovered by Agent after the Original Closing Date.  In addition, Agent reserves the right, at any time and from time to time after the Original Closing Date, to adjust any of the criteria set forth below or to establish new criteria in its reasonable credit judgment to reflect changes in the Borrower’s or the applicable Secured Guarantor’s business operations or the collectability of Accounts, subject to the approval of Requisite Revolving Lenders in the case of adjustments or new criteria which have the effect of making more credit available.  Eligible Accounts shall not include any Account of Borrower or a Secured Guarantor:

(a)           that does not arise from the sale of goods or the performance of services by Borrower or a Secured Guarantor in the ordinary course of its business;

(b)           (i) upon which Borrower’s or the applicable Secured Guarantor’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (ii) as to which Borrower or the applicable Secured Guarantor is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to Borrower’s or the applicable Secured Guarantors’ completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;

(c)           to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account;

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(d)           that is not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;

(e)           with respect to which an invoice has not been sent to the applicable Account Debtor;

(f)            that (i) is not owned by Borrower or a Secured Guarantor or (ii) is subject to any right, claim, security interest or other interest of any other Person, other than Liens described in clauses (a) , (e) and (t) of the definition of Permitted Encumbrances and Liens in favor of Agent, on behalf of itself and Lenders but only to the extent of such right, claim, security interest or other interest;

(g)           that arises from a sale to any director, officer, other employee or Affiliate of any Credit Party, or to any entity that has any common officer with any Credit Party;

(h)           that constitutes an Eligible Government Account or is the obligation of an Account Debtor that is the United States government or a political subdivision thereof, or any state, county or municipality or department, agency or instrumentality thereof, unless Borrower or the applicable Secured Guarantor has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, or any applicable state, county or municipal law restricting assignment thereof;

(i)            that is the obligation of an Account Debtor located in a foreign country other than Canada (excluding the province of Newfoundland, the Northwest Territories and the Territory of Nunavut), unless payment thereof is assured by a letter of credit or credit insurance assigned and delivered to Agent, satisfactory to Agent as to form, amount and issuer;

(j)            to the extent Borrower or any Secured Guarantor or any Subsidiary thereof is liable for goods sold or services rendered by the applicable Account Debtor to Borrower or any Secured Guarantor or any Subsidiary thereof but only to the extent of the potential offset;

(k)           that arises with respect to goods that are delivered on a bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;

(l)            that is in default; provided, that, an Account shall be deemed in default upon the occurrence of any of the following:

(i)            the Account is not paid within the earlier of: sixty (60) days following its due date or one hundred twenty (120) days following its original invoice date unless payment thereof is secured by a letter of credit satisfactory to Agent as to form, substance and issuer;

(ii)           the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or

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(iii)          a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;

(m)          that is the obligation of an Account Debtor if 50% or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the criteria set forth in clause (l) above;

(n)           as to which Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;

(o)           as to which any of the representations or warranties in the Loan Documents are untrue in any material respect;

(p)           to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper;

(q)           to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates (excluding the United States government as Account Debtor) as of any date of determination exceed 15% of all Eligible Accounts; or

(r)            that is payable in any currency other than Dollars, Canadian Dollars, Pounds Sterling or Euros.

It is understood and agreed that any Account excluded from eligibility under clause (l) above shall be excluded in its entirety, meaning that any past due credits with respect thereto shall also be excluded thereunder.

1.7            Eligible Inventory .  All of the Inventory owned by the Borrower or any Secured Guarantor and reflected in the most recent Borrowing Base Certificate delivered by Borrower to Agent shall be “ Eligible Inventory ” for purposes of this Agreement, except any Inventory to which any of the exclusionary criteria set forth below applies.  Agent shall have the right to establish, modify, or eliminate Reserves against Eligible Inventory from time to time in its reasonable credit judgment to reflect issues with respect to the salability of Inventory arising or discovered by Agent after the Effective Date.  In addition, Agent reserves the right, at any time and from time to time after the Effective Date, to adjust any of the criteria set forth below or to establish new criteria in its reasonable credit judgment to reflect changes in the Borrower’s or the applicable Secured Guarantor’s business operations or salability of Inventory, subject to the approval of Requisite Revolving Lenders in the case of adjustments or new criteria which have the effect of making more credit available.  Eligible Inventory shall not include any Inventory of Borrower or any Secured Guarantor that:

(a)           is not owned by Borrower or any Secured Guarantor free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure Borrower’s or a Secured Guarantor’s performance with respect to that Inventory), except Liens described in clauses (a) , (d) , (e) and (t) of the definition of Permitted Encumbrances and the Liens in favor of Agent, on behalf of itself and Lenders;

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(b)           (i) is not located on premises owned, leased or rented by Borrower or any Secured Guarantor and set forth in Disclosure Schedule (3.2) , (ii) is not located on premises acquired or leased by Borrower or any Secured Guarantor in connection with any Permitted Loan Funded Acquisition, or (iii) is stored at a leased location, unless Agent has given its prior consent thereto and unless either (x) a reasonably satisfactory landlord waiver has been delivered to Agent, or (y) Reserves reasonably satisfactory to Agent have been established with respect thereto, or (iii) is stored with a bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee letter has been received by Agent and Reserves reasonably satisfactory to Agent have been established with respect thereto, or (iv) is located at a location owned by Borrower or any Secured Guarantor subject to a mortgage in favor of a lender other than Agent, unless a reasonably satisfactory mortgagee waiver has been delivered to Agent, or (v) is located at any site if the aggregate book value of Inventory at any such location is less than $50,000;

(c)           is placed on consignment or is in transit, except for Inventory in transit between domestic locations of Credit Parties as to which Agent’s Liens have been perfected at origin and destination;

(d)           is covered by a negotiable document of title, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and Lenders;

(e)           is excess, obsolete, slow moving (in excess of 2-years’ supply), unsalable, shopworn, seconds, damaged or unfit for sale;

(f)            consists of display items or packing or shipping materials, manufacturing supplies, custom-made Inventory which is not subject to an outstanding purchase order that is not revocable by its terms or is not sold in the ordinary course of business, work-in-process Inventory or replacement parts (excluding Component Parts and Purchased Parts);

(g)           is not of a type held for sale in the ordinary course of Borrower’s or the applicable Secured Guarantor’s business;

(h)           is not subject to a first priority lien in favor of Agent on behalf of itself and Lenders;

(i)            breaches in any material respect any of the representations or warranties pertaining to Inventory set forth in the Loan Documents;

(j)            consists of any costs associated with “freight-in” charges;

(k)           consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available; or

(l)            is not covered by casualty insurance in accordance with Section 5.4 .

1.8            Cash Management Systems .  On or prior to the Effective Date, Borrower will establish and will maintain until the Termination Date, the cash management systems described in Annex C (the “ Cash Management Systems ”).

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1.9            Fees .

(a)           Borrower has paid and shall pay to GE Capital, individually, the Fees specified in the GE Capital Fee Letter, at the times specified for payment therein.

(b)           As additional compensation for the Revolving Lenders, Borrower shall pay to Agent, for the ratable benefit of such Lenders, in arrears, on the first Business Day of each month prior to the Commitment Termination Date and on the Commitment Termination Date, a Fee for Borrower’s non-use of available funds in an amount equal to one-half of one percent (0.50%) per annum (calculated on the basis of a 360 day year for actual days elapsed) multiplied by the difference between (x) the Maximum Amount (as it may be reduced from time to time) and (y) the average for the period of the daily closing balances of the Revolving Loan and the Swing Line Loan outstanding during the period for which such Fee is due.

(c)           Borrower shall pay to Agent, for the ratable benefit of Revolving Lenders, the Letter of Credit Fee as provided in Annex B .

1.10          Receipt of Payments .  Borrower shall make each payment under this Agreement not later than 1:00 p.m. (Chicago time) on the day when due in immediately available funds in Dollars to the Collection Account.  For purposes of computing interest and Fees and determining Borrowing Availability as of any date, all payments shall be deemed received on the Business Day on which immediately available funds therefor are received in the Collection Account prior to 1:00 p.m. (Chicago time).  Payments received after 1:00 p.m. (Chicago time) on any Business Day or on a day that is not a Business Day shall be deemed to have been received on the following Business Day.

1.11          Application and Allocation of Payments .

(a)           So long as no Event of Default has occurred and is continuing and the Commitment Termination Date has not occurred, (i) payments received in the ordinary course of business and not subject to clauses (ii), (iii) and (iv) below shall be applied, first, to the Swing Line Loan and, second, to the Revolving Loan; (ii) payments matching specific scheduled payments then due shall be applied to those scheduled payments; (iii) voluntary prepayments shall be applied as determined by Borrower, subject to the provisions of Section 1.3(a) ; and (iv) mandatory prepayments shall be applied as set forth in Sections 1.3(c), 1.3(d) and 1.3(f) .  All payments and prepayments applied to a particular Loan shall be applied ratably to the portion thereof held by each Lender as determined by its Pro Rata Share.  As to any other payment, and as to all payments made when an Event of Default has occurred and is continuing or following the Commitment Termination Date, Borrower and each other Credit Party hereby irrevocably waive the right to direct the application of any and all payments (including monetary proceeds of collections of or realizations upon any Collateral) received from or on behalf of Borrower or any other Credit Party, and Borrower and each other Credit Party hereby irrevocably agree that Agent and the Requisite Lenders shall have the continuing exclusive right to apply any and all such payments against the Obligations as Agent and the Requisite Lenders may deem advisable notwithstanding any previous entry by Agent in the Loan Account or any other books and records and agree to be bound by all such payment applications.  In the absence of a specific determination by Agent and the Requisite Lenders with respect thereto, payments shall be

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applied to amounts then due and payable in the following order: (1) to Fees and Agent’s expenses reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to principal payments on the Swing Line Loan; (4) to interest on the other Loans, ratably in proportion to the interest accrued as to each Loan; (5) to principal payments on the other Loans and to provide cash collateral for Letter of Credit Obligations in the manner described in Annex B , ratably to the aggregate, combined principal balance of the other Loans and outstanding Letter of Credit Obligations; and (6) to all other Obligations, including any Hedging Termination Value owed by Borrower and/or one or more Secured Guarantors with respect to the Specified Hedging Agreements and expenses of Lenders to the extent reimbursable under Section 11.3 .

(b)           Agent is authorized to, and at its sole election may, charge to the Revolving Loan balance on behalf of Borrower and cause to be paid all Fees, Charges, reimbursable expenses (including insurance premiums in accordance with Section 5.4(a) ) and interest and principal, other than principal of the Revolving Loan, owing by Borrower under this Agreement or any of the other Loan Documents if and to the extent Borrower fails to pay promptly any such amounts as and when due, even if the amount of such charges would exceed Borrowing Availability at such time.  At Agent’s option and to the extent permitted by law, any charges so made shall constitute part of the Revolving Loan hereunder.

1.12          Loan Account and Accounting .  Agent shall maintain a loan account (the “ Loan Account ”) on its books to record all Advances and the Term Loan, all payments made by or on behalf of Borrower, and all other debits and credits as provided in this Agreement with respect to the Loans or any other Obligations.  All entries in the Loan Account shall be made in accordance with Agent’s customary accounting practices as in effect from time to time. The balance in the Loan Account, as recorded on Agent’s most recent printout or other written statement, shall be presumptive evidence of the amounts due and owing to Agent and Lenders by Borrower; provided that any failure to so record or any error in so recording shall not limit or otherwise affect Borrower’s duty to pay the Obligations.  Agent shall render to Borrower a monthly accounting of transactions with respect to the Loans setting forth the balance of the Loan Account for the immediately preceding month.  Unless Borrower notifies Agent in writing of any objection to any such accounting (specifically describing the basis for such objection), within ninety (90) days after the date thereof, each and every such accounting shall, absent manifest error, be deemed conclusive.  Only those items expressly objected to in such notice shall be deemed to be disputed by Borrower.  Notwithstanding any provision herein contained to the contrary, any Lender may elect (which election may be revoked) to dispense with the issuance of Notes to that Lender and may rely on the Loan Account as evidence of the amount of Obligations from time to time owing to it.

1.13          Indemnity .

(a)           Each Credit Party that is a signatory hereto shall jointly and severally indemnify and hold harmless each of Agent, Lenders and their respective Affiliates, and each such Person’s respective officers, directors, employees, attorneys, agents and representatives (each, an “ Indemnified Person ”), from and against any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including reasonable attorneys’ fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal) that may be instituted or asserted against or incurred by any such Indemnified Person as the result of credit

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having been extended, suspended or terminated under this Agreement and the other Loan Documents and the administration of such credit, and in connection with or arising out of the transactions contemplated hereunder and thereunder and any actions or failures to act in connection therewith, and legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Loan Documents (other than disputes between and among Agent/or the Lenders arising when no Event of Default has occurred and is continuing) (collectively, “ Indemnified Liabilities ”); provided , that no such Credit Party shall be liable for any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding, claim, damage, loss, liability or expense results from that Indemnified Person’s gross negligence or willful misconduct; and, provided further , that any obligations of the Credit Parties to the Indemnified Persons with respect to Environmental Liabilities and Hazardous Materials shall be governed exclusively by the terms and provisions of the Environmental Indemnity Agreement and not by the terms and provisions of this Section 1.13 or any other term and provision of this Agreement or any other Loan Document other than the Environmental Indemnity Agreement.  NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

(b)           To induce Lenders to provide the LIBOR Rate option on the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to the last day of any applicable LIBOR Period (whether that repayment is made pursuant to any provision of this Agreement or any other Loan Document or occurs as a result of acceleration, by operation of law or otherwise); (ii) Borrower shall default in payment when due of the principal amount of or interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing of, or shall request a termination of any borrowing, conversion into or continuation of LIBOR Loans after Borrower has given notice requesting the same in accordance herewith; or (iv) Borrower shall fail to make any prepayment of a LIBOR Loan after Borrower has given a notice thereof in accordance herewith, then Borrower shall indemnify and hold harmless each Lender from and against all losses, costs and expenses resulting from or arising from any of the foregoing.  Such indemnification shall include any loss (including loss of margin) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate deposits from which such funds were obtained.  For the purpose of calculating amounts payable to a Lender under this subsection, each Lender shall be deemed to have actually funded its relevant LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a maturity comparable to the relevant LIBOR Period; provided , that each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection.  This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.  As promptly as practicable under the circumstances, each Lender shall provide Borrower with its written calculation of all amounts payable pursuant to this Section 1.13(b) , and such calculation shall be presumed to be correct unless Borrower shall object in writing within twenty (20) Business Days of receipt thereof,

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specifying the basis for such objection in detail.  The payment of any amounts due under this Section 1.13(b) by Borrower as a result of any of the events described in clause (i) (other than as a result of acceleration following an Event of Default) , clause (iii) or clause (iv) above shall constitute a cure of any Default or Event of Default arising solely from such events.

1.14          Access .  Each Credit Party that is a party hereto shall, during normal business hours, from time to time upon three (3) Business Days’ prior notice as frequently as Agent determines to be appropriate: (a) provide Agent and any of its officers, employees and agents access to its properties, facilities, advisors, officers, employees of each Credit Party and to the Collateral, (b) permit Agent, and any of its officers, employees and agents, to inspect, audit and make extracts from any Credit Party’s books and records, and (c) permit Agent, and its officers, employees and agents, to inspect, review, evaluate and make test verifications and counts of the Accounts, Inventory and other Collateral of any Credit Party.  If an Event of Default has occurred and is continuing or if access is necessary to preserve or protect the Collateral as determined by the Agent, each such Credit Party shall provide such access to Agent and to each Lender at all times and without advance notice.  Furthermore, so long as any Event of Default has occurred and is continuing, Borrower shall provide Agent and each Lender with access to its suppliers and customers.  Each Credit Party shall make available to Agent and its counsel, as quickly as is possible under the circumstances, originals or copies of all books and records of the Credit Parties that Agent may reasonably request.  Each Credit Party shall deliver any document or instrument necessary for Agent, as it may from time to time reasonably request, to obtain records from any service bureau or other Person that maintains records for such Credit Party.  As long as a Trigger Event has occurred and is continuing, Agent and Lenders agree that Agent shall conduct a field Collateral audit of Borrower, the Secured Guarantors and Schaublin every six months from the date of the last field Collateral audit.  Agent will give Lenders at least five (5) days’ prior written notice of regularly scheduled audits.  Representatives of other Lenders may accompany Agent’s representatives on regularly scheduled audits at no charge to Borrower.

1.15          Taxes .

(a)           Any and all payments by Borrower hereunder or under the Notes shall be made, in accordance with this Section 1.15 , free and clear of and without deduction for any and all present or future Taxes.  If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under the Notes, (i) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 1.15 ) Agent or Lenders, as applicable, receive an amount equal to the sum they would have received had no such deductions been made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law.  Within thirty (30) days after the date of any payment of any such Taxes, Borrower shall furnish to Agent the original or a certified copy of a receipt evidencing payment thereof.

(b)           Each Credit Party that is a signatory hereto shall indemnify and, within thirty (30) days of demand therefor, pay Agent and each Lender for the full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 1.15 ) paid by Agent or such Lender, as appropriate, and any liability (including penalties, interest and

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expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.

(c)           Each Lender organized under the laws of a jurisdiction outside the United States (a “ Foreign Lender ”) shall provide to Borrower and Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or other applicable form, certificate or document prescribed by the IRS or the United States certifying as to such Foreign Lender’s entitlement to an exemption from United States withholding tax (a “ Certificate of Exemption ”).  Any foreign Person that seeks to become a Lender under this Agreement shall provide a Certificate of Exemption to Borrower and Agent prior to becoming a Lender hereunder.  No foreign Person may become a Lender hereunder if such Person fails to deliver a Certificate of Exemption in advance of becoming a Lender.  Any foreign Person that has become a Lender hereunder and that has provided a Certificate of Exemption shall, to the extent legally able to do so, renew its Certificate of Exemption upon the expiration of the previously delivered Certificate of Exemption.

1.16          Capital Adequacy; Increased Costs; Illegality .

(a)           If any Lender shall have determined that any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by any Lender with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law), in each case, adopted after the Effective Date, from any central bank or other Governmental Authority increases or would have the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Lender and thereby reducing the rate of return on such Lender’s capital as a consequence of its obligations hereunder, then Borrower shall from time to time upon demand by such Lender issued within ninety (90) days after adoption thereof and setting forth a calculation of the reduction (with a copy of such demand to Agent) pay to Agent, for the account of such Lender, additional amounts sufficient to compensate such Lender for such reduction.  A certificate as to the amount of that reduction and showing the basis of the computation thereof submitted by such Lender to Borrower and to Agent shall, absent manifest error, be presumptive evidence of the matters set forth therein.

(b)           If, due to either (i) the introduction of or any change in any law or regulation (or any change in the interpretation thereof) or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), in each case adopted after the Original Closing Date, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining any Loan, then Borrower shall from time to time, upon demand by such Lender issued within ninety (90) days after the introduction thereof or compliance therewith and setting forth a calculation of such increased costs (with a copy of such demand to Agent), pay to Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost.  A certificate as to the amount of such increased cost, submitted to Borrower and to Agent by such Lender, shall be presumptive evidence of the matters set forth therein, absent manifest error.  Each Lender agrees that, as promptly as practicable after it becomes aware of any circumstances referred to above which would result in any such increased cost, the affected Lender shall, to the extent not inconsistent with such Lender’s internal policies of general application, use reasonable

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commercial efforts to minimize costs and expenses incurred by it and payable to it by Borrower pursuant to this Section 1.16(b) .

(c)           Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the interpretation thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to agree to make or to make or to continue to fund or maintain any LIBOR Loan, then, unless that Lender is able to make or to continue to fund or to maintain such LIBOR Loan at another branch or office of that Lender without, in that Lender’s opinion, adversely affecting it or its Loans or the income obtained therefrom, on notice thereof and demand therefor by such Lender to Borrower through Agent, (i) the obligation of such Lender to agree to make or to make or to continue to fund or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing to such Lender, together with interest accrued thereon, unless Borrower, within five (5) Business Days after the delivery of such notice and demand, converts all LIBOR Loans into Index Rate Loans.

(d)           Within fifteen (15) days after receipt by Borrower of written notice and demand from any Lender (an “ Affected Lender ”) as provided in Sections 1.15(a), 1.15(b), 1.16(a) or 1.16(b) , Borrower may, at its option, notify Agent and such Affected Lender of its intention to replace the Affected Lender.  So long as no Default or Event of Default has occurred and is continuing, Borrower, with the consent of Agent, may obtain, at Borrower’s expense, a replacement Lender (“ Replacement Lender ”) for the Affected Lender, which Replacement Lender must be reasonably satisfactory to Agent.  If Borrower obtains a Replacement Lender within one hundred eighty (180) days following notice of its intention to do so, the Affected Lender must sell and assign its Loans and Commitments to such Replacement Lender for an amount equal to the principal balance of all Loans held by the Affected Lender and all accrued interest and Fees with respect thereto through the date of such sale; provided , that Borrower shall have reimbursed such Affected Lender for the additional amounts or increased costs that it is entitled to receive under Sections 1.15(a), 1.15(b), 1.16(a) or 1.16(b) through the date of such sale and assignment.  Notwithstanding the foregoing, Borrower shall not have the right to obtain a Replacement Lender if the Affected Lender rescinds its demand for increased costs or additional amounts within fifteen (15) days following its receipt of Borrower’s notice of intention to replace such Affected Lender.  Furthermore, if Borrower gives a notice of intention to replace and does not so replace such Affected Lender within one hundred eighty (180) days thereafter, Borrower’s rights under this Section 1.16(d) shall terminate with respect to the increased costs or additional amounts of such Affected Lender giving rise to such notice to replace such Affected Lender and Borrower shall promptly pay all increased costs and or additional amounts demanded by such Affected Lender pursuant to Sections 1.15(a), 1.15(b), 1.16(a) and 1.16(b) .

1.17          Single Loan .  All Loans to Borrower and all of the other Obligations of Borrower arising under this Agreement, the Prior Credit Agreement and the other Loan Documents shall constitute one general obligation of Borrower secured, until the Termination Date, by all of the Collateral.

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2.      CONDITIONS PRECEDENT

2.1            Conditions to the Initial Loans .  No Lender shall be obligated to make any Loan or incur any Letter of Credit Obligations on the Effective Date, or to take, fulfill, or perform any other action hereunder, until the following conditions have been satisfied or provided for in a manner satisfactory to Agent, or waived in writing by Agent and Requisite Lenders:

(a)           Credit Agreement; Loan Documents .  This Agreement or counterparts hereof shall have been duly executed by, and delivered to, Borrower, each other Credit Party, Agent and Lenders; and Agent shall have received such documents, instruments, agreements and legal opinions as Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including all those listed in the Closing Checklist attached hereto as Annex D , each in form and substance reasonably satisfactory to Agent.

(b)           Prior Debt Obligations .  Agent shall have received evidence satisfactory to Agent confirming that all required actions have been taken and required notices have been given under the Prior Senior Subordinated Indenture to redeem all of the outstanding Prior Senior Subordinated Notes on a date not later than 30 days from the Effective Date.  Concurrently with the funding of the Loans and the SCIL Loan and the deposit of the Refinancing Proceeds with the trustee under the Prior Senior Subordinated Indenture (the “ Trustee ”), the Agent shall have received a copy of the written acknowledgment from the Trustee confirming the satisfaction and discharge of the Prior Senior Subordinated Indenture in accordance with the terms of Section 8.01(a) thereof.  In addition, the Agent shall be satisfied that the SCIL Lenders have agreed to advance all net proceeds of the SCIL Loan to the Trustee in respect of the Refinancing on the Effective Date and that Borrower has directed Agent to disburse a portion of the Term Loan to fund the remaining Refinancing Proceeds to the Trustee on the Effective Date.

(c)           Approvals .  Agent shall have received (i) satisfactory evidence that the Credit Parties have obtained all required consents and approvals of all Persons (including all requisite Governmental Authorities) to the execution, delivery and performance of this Agreement, the other Loan Documents and the consummation of the Related Transaction or (ii) an Officer Certificate in form and substance reasonably satisfactory to Agent affirming that no such consents or approvals are required.

(d)           Opening Availability .  The Eligible Accounts and Eligible Inventory supporting the Revolving Credit Advances to be made on the Effective Date and the outstanding Letter of Credit Obligations and the amount of the Reserves to be established on the Effective Date shall be sufficient in value, as reasonably determined by Agent, to provide Borrower with Borrowing Availability on the Effective Date, after adding thereto all unrestricted cash on hand of Borrower and after giving effect to the Revolving Credit Advance to be made on the Effective Date, the outstanding Letter of Credit Obligations and the consummation of the Related Transactions (on a pro forma basis, with trade payables being paid currently, and expenses and liabilities being paid in the ordinary course of business and without acceleration of sales) of at least $15,000,000.

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(e)           Effective Date Draw .  After giving effect to the payment of, or the creation of a Reserve for, all fees and expenses related to the Related Transactions, no more than $25,000,000 in Revolving Loans (including, without duplication, all Letter of Credit Obligations) will be drawn as of the Effective Date.

(f)            Consummation of the Related Transactions .  The Agent shall have received fully executed copies of final and complete copies of the documents relating to the SCIL Loan, each of which shall be in full force and effect and in form and substance reasonably satisfactory to Agent.  The Related Transactions shall, on the Effective Date, be consummated in accordance with the terms of the Related Transactions Documents simultaneously with the making of the Loans on the Effective Date.

(g)           Payment of Fees .  Borrower shall have paid the Fees required to be paid on the Effective Date in the respective amounts specified in Section 1.9 (including the Fees specified in the GE Capital Fee Letter), and shall have reimbursed Agent for all reimbursable fees, costs and expenses of closing presented as of the Effective Date.

(h)           Term Loan Rating .  The Term Loan shall be rated “B” or better by S&P and “B2” or better by Moody’s, as evidenced by ratings letters received from such rating agencies.

(i)            Life Insurance .  Agent shall have received evidence that the Keyman Life Insurance is in effect.

(j)            Capital Structure: Other Indebtedness .  The capital structure of each Credit Party and the terms and conditions of all Indebtedness of each Credit Party shall be acceptable to Agent in its sole discretion.  Without limiting the generality of the foregoing,

(i)            Unaudited Adjusted EBITDA for the period of 12 consecutive months ended on April 30, 2004 shall be not less than $39,200,000 (it being understood and agreed that the unaudited Adjusted EBITDA is subject to normal year end audit adjustments);

(ii)           Senior Debt of Holdings and its Subsidiaries ( less Holdings’ and its Subsidiaries’ consolidated unrestricted cash and Cash Equivalents on hand) shall not exceed 3.54 times Adjusted EBITDA for the period of 12 consecutive months ended on April 30, 2004;

(iii)          Funded Debt of Holdings and its Subsidiaries ( less Holdings’ and its Subsidiaries’ consolidated unrestricted cash and Cash Equivalents on hand) shall not exceed 5.66 times Adjusted EBITDA for the period of 12 consecutive months ended on April 30, 2004; and

(iv)          Aggregate Indebtedness of Holdings and its Subsidiaries on a consolidated basis on the Effective Date (including Loans and the SCIL Loan to be made on the Effective Date and after taking into account the repayment of existing Indebtedness on the Effective Date) shall not exceed $223,500,000.

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(k)           Field Exams .  Agent shall have completed its field examination of Borrower’s and its Subsidiaries respective businesses, operations, financial conditions, and assets, including a roll forward of its previous Collateral audit, with results reasonably satisfactory to Agent.

2.2            Further Conditions to Each Loan .  Except as otherwise expressly provided herein, no Lender shall be obligated to fund any Advance or incur any Letter of Credit Obligation, if, as of the date thereof:

(a)           any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect as of such date in any material respect, except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted or expressly contemplated by this Agreement, and Agent or Requisite Revolving Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect;

(b)           any event or circumstance (i) having a Material Adverse Effect as set forth in clauses (c) or (d) of the definition thereof or (ii) which could reasonably be expected to result in costs, liabilities or damages, individually or in the aggregate, to any Credit Party or Credit Parties in an amount that would have caused any of the Financial Covenants to have been breached if such event or occurrence had occurred and such costs, liabilities or damages had been paid on the first day of the Fiscal Quarter most recently ended or (iii) which results in an uninsured loss of tangible assets with a value in excess of $4,000,000 has occurred since the date hereof as determined by the Requisite Revolving Lenders, and Agent or Requisite Revolving Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such event or circumstance has occurred; or

(c)           any Event of Default has occurred and is continuing or would result after giving effect to any Advance (or the incurrence of any Letter of Credit Obligation), and Agent or Requisite Revolving Lenders shall have determined not to make any Advance or incur any Letter of Credit Obligation as a result of that Event of Default.

The request and acceptance by Borrower of the proceeds of any Advance, the incurrence of any Letter of Credit Obligations or the conversion or continuation of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower of the granting and continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the Collateral Documents.

2.3            Conditions to Revolving Credit Advances Funding Permitted Loan Funded Acquisitions .  In addition to the conditions set forth in Section 2.2 with respect to all Advances, no Lender shall be obligated to advance its Pro Rata Share of any Revolving Credit Advance used for the purpose of funding all or part of the purchase price of any acquisition of Stock, any purchase of all or substantially all of the assets of any Person, or any business or division of any Person or any acquisition of a Person by a merger, consolidation or any other combination unless the conditions set forth in the definition of the term “Permitted Loan Funded

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Acquisition” have been satisfied (or provided for in a manner satisfactory to Agent) or waived in writing by Agent and Lenders (including, without limitation, the condition in clause(vi) of the definition of the term “Permitted Loan Funded Acquisition” applicable to any Foreign Qualified Target).

2.4            Commitment Increase Conditions .  

(a)           From time to time after the Effective Date, the Commitments may be increased at the option of the Borrower pursuant to a proposed Commitment Increase if each of the following conditions have been met:

(i)            The conditions set forth in Section 2.2 have been satisfied;

(ii)           Agent has received evidence satisfactory to it that Borrower (i) would have been in compliance with the Financial Covenants set forth in Annex G for the quarterly period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Annex E on or prior to the proposed Commitment Increase (after giving effect to the Indebtedness to be incurred as a result of the proposed Commitment Increase as if such Indebtedness was incurred on the first day of such period) and (ii) will remain in compliance with the Financial Covenants set forth in Annex G for the four consecutive quarterly periods beginning on the Business Day after the Fiscal Quarter following the proposed Commitment Increase (after giving effect to the Indebtedness to be incurred as a result of the proposed Commitment Increase as if such Indebtedness was incurred on the first day of such period);

(iii)          The second anniversary of the Effective Date has not occurred;

(iv)          The Borrower has not previously caused the Commitments and this Agreement or the commitments under the SCIL Credit Agreement to have been increased more than once;

(v)           Borrower has forwarded to GE Capital and Agent a written offer to GE Capital to provide on the proposed Commitment Increase whereupon GE Capital shall have the right, but no obligation, to commit to all or any portion of the proposed Commitment Increase, provided that, no later than fourteen (14) days after receipt of such written request, GE Capital shall advise Agent and the Borrower whether GE Capital will commit to provide all or any portion of the proposed Commitment Increase and, if so, the amount of its proposed Commitment (the “ First Offer Requirement ”).  After satisfying the First Offer Requirement, Borrower shall be entitled to offer participation in the portion of the proposed Commitment Increase not committed to by GE Capital, if any, to other Lenders and/or New Lenders.  Borrower acknowledges and agrees that GE Capital and/or its Affiliates may elect to syndicate all or any portion of any Commitment Increase to which GE Capital may hereafter commit; provided , that Borrower shall not be obligated to pay any additional fees or provide any increase in pricing to ensure a successful syndication of such commitments by GE Capital or its Affiliates;

(vi)          The proposed Commitment Increase has been consented to in writing by the Lenders or New Lenders whose increase in Commitments or New Commitments in the aggregate equals such proposed Commitment Increase (it being understood and agreed that

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no Commitment of a Lender may be increased hereunder without such Lender’s written consent);

(vii)         Any increase in the Term Loan Commitment shall be in the minimum amount of $5,000,000;

(viii)        Any increase in the Revolving Loan Commitment shall be in the minimum amount of $5,000,000;

(ix)           the proposed Commitment Increase together with any prior Commitment Increase shall not exceed the Commitment Increase Cap;

(x)            The Applicable Margins pertaining to the type of Loan or Loans which are the subject of any Commitment Increase shall be equal to the Applicable Margins pertaining to same type of Loan or Loans under this Agreement.  If, in connection with any Commitment Increase, any Applicable Margin for a particular type of Loan is increased, a reciprocal increase in the relevant Applicable Margin(s) for such type of Loan under this Agreement shall be required to occur from and after the effective date of such Commitment Increase.   By way of example, if a proposed Commitment Increase consists of $20,000,000 of additional Term Loan Commitments and Borrower agrees to increase the Applicable Term Loan LIBOR Margin by 0.20% over the levels then in effect under this Agreement to attract such additional Term Loan Commitments, the Applicable Term Loan LIBOR Margin for all Term Loans from and after the effective date of such Commitment Increase would be increased by such amount; and

(xi)           Agent shall have received amendments to this Agreement and the Loan Documents, joinders and other agreements, documents and instruments reasonably satisfactory to Agent in its sole discretion evidencing and setting forth the terms of the Commitment Increase.

(b)           Borrower, Credit Parties, Lenders and Agent acknowledge and agree that each Commitment Increase meeting the conditions set forth in Section 2.4(a) (each, a “ Qualifying Commitment Increase ”) shall not require the consent of any Lender other than those Lenders, if any, which have agreed to increase their Commitments in connection with such proposed Qualifying Commitment Increase.  Each Lender hereby authorizes the Agent, without any further consent from or agreement of such Lender, to execute on behalf of such Lender such amendments to this Agreement and/or the other Loan Documents as may be necessary to implement each such Qualifying Commitment Increase.

3.      REPRESENTATIONS AND WARRANTIES

To induce Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit Parties executing this Agreement, jointly and severally, make the following representations and warranties to Agent and each Lender with respect to all Credit Parties, each and all of which shall survive the execution and delivery of this Agreement.

3.1            Corporate Existence; Compliance with Law .  Each Credit Party (a) is a corporation, limited liability company or limited partnership duly organized, validly existing and

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in good standing under the laws of its respective jurisdiction of incorporation or organization set forth in Disclosure Schedule (3.1) ; (b) is duly qualified to conduct business and is in good standing in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; (c) has the requisite power and authority and the legal right to own, pledge, mortgage or otherwise encumber and operate its properties, to lease the property it operates under lease and to conduct its business as now conducted; (d) subject to specific representations regarding Environmental Laws contained in the Environmental Indemnity Agreement, has all material licenses, permits, consents or approvals from or by, and has made all material filings with, and has given all material notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct, except as could not reasonably be expected to have a Material Adverse Effect; (e) is in compliance with its charter and bylaws or partnership or operating agreement, as applicable; and (f) subject to specific representations set forth herein regarding ERISA, tax and other laws, or specific representations regarding Environmental Laws set forth in the Environmental Indemnity Agreement, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

3.2            Executive Offices, Collateral Locations, FEIN .  As of the Effective Date, each Credit Party’s name as it appears in official filings in its state of incorporation or organization, state of incorporation or organization, organization type, organization number, if any, issued by its state incorporation or organization, and the location of each Credit Party’s chief executive office and the warehouses and premises at which any Collateral is located on the Effective Date are set forth in Disclosure Schedule (3.2) , and each Credit Party has only one state of incorporation or organization.  In addition, Disclosure Schedule (3.2) lists the federal employer identification number of each domestic Credit Party.

3.3            Corporate Power, Authorization, Enforceable Obligations .  The execution, delivery and performance by each Credit Party of the Loan Documents to which it is a party and the creation of all Liens provided for therein: (a) are within such Person’s power; (b) have been duly authorized by all necessary corporate, limited liability company or limited partnership action; (c) do not contravene any provision of such Person’s charter, bylaws or partnership or operating agreement as applicable; (d) do not violate any applicable law or regulation, or any order or decree of any court or Governmental Authority; (e) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, or other material agreement or instrument to which such Person is a party or by which such Person or any of its property is bound; (f) do not result in the creation or imposition of any Lien upon any of the property of such Person other than those in favor of Agent, on behalf of itself and Lenders, or the counterparty to any Specified Hedging Agreement pursuant to the Loan Documents; and (g) do not require the consent or approval of any Governmental Authority or any other Person, except those referred to in Section 2.1(c) , all of which will have been duly obtained, made or complied with prior to or on the Effective Date unless otherwise agreed to by Agent in writing.  As of the Effective Date, each of the Loan Documents shall be duly executed and delivered by each Credit Party that is a party thereto and each such Loan Document shall constitute a legal, valid and binding obligation of such Credit Party enforceable against it in accordance with its terms,

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except as the enforceability thereof may be limited by applicable bankruptcy laws or similar laws affecting creditors’ rights in general.

3.4            Financial Statements and Projections .  Except for the Projections, all Financial Statements concerning Holdings, Borrower and its Subsidiaries that are referred to in this Section 3.4 have been prepared in accordance with GAAP consistently applied throughout the periods covered (except as disclosed therein and except, with respect to unaudited Financial Statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended.

(a)           Financial Statements .  The following Financial Statements attached hereto as Disclosure Schedule (3.4(a)) have been delivered to Agent on or before the Effective Date:

(i)            The audited consolidated and consolidating balance sheets at March 31, 2003 and the related statements of income and cash flows of Holdings, Borrower and its Subsidiaries for the Fiscal Year then ended, certified by Ernst & Young LLP.

(ii)           The unaudited balance sheet(s) at April 30, 2004 and the related statement(s) of income and cash flows of Holdings, Borrower and its Subsidiaries for the four Fiscal Quarters then ended.

(b)           Pro Forma .  The Pro Forma delivered to Agent on or before the Effective Date and attached hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower giving pro forma effect to the Related Transactions, was based on the unaudited consolidated and consolidating balance sheets of Borrower and its Subsidiaries dated December 27, 2003, and was prepared in accordance with GAAP, with only such adjustments thereto as would be required in accordance with GAAP.

(c)           Projections .  The Projections delivered to Agent on or before the Effective Date and attached hereto as Disclosure Schedule (3.4(c)) have been prepared by Borrower in light of the past operations of its and its Subsidiaries’ businesses, but including future payments of known contingent liabilities, and reflect projections for the three year period beginning on April 4, 2004, on a month-by-month basis solely in respect of the income statement and on a quarterly basis for all other financial statements for the first year and on a year-by-year basis thereafter.  The Projections are based upon material and relevant estimates and assumptions stated therein, all of which Borrower believes to be reasonable and fair in light of current conditions and current facts known to Borrower and, as of the Effective Date, reflect Borrower’s good faith and reasonable estimates of the future financial performance of Borrower and of the other information projected therein for the period set forth therein.

3.5            Material Adverse Effect .  Between March 31, 2003 and the Effective Date, (a) no Credit Party has incurred any obligations, contingent or noncontingent liabilities, liabilities for Charges, long-term leases or unusual forward or long-term commitments that are not reflected in the Pro Forma and that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (b) no contract, lease or other agreement or instrument has been entered into by any Credit Party or has become binding upon any Credit Party’s assets and no

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law or regulation applicable to any Credit Party has been adopted, in each case, that has had or could reasonably be expected to have a Material Adverse Effect, and (c) no Credit Party is in default and to the best of Borrower’s knowledge no third party is in default under any material contract, lease or other agreement or instrument, in any case which default alone or in the aggregate could reasonably be expected to have a Material Adverse Effect.  Between March 31, 2003 and the Effective Date no event has occurred, that alone or together with other events, could reasonably be expected to have a Material Adverse Effect.

3.6            Ownership of Property; Liens .  As of the Effective Date, the real estate (“ Real Estate ”) listed in Disclosure Schedule (3.6) includes all of the real property owned, leased, subleased, or used by any Credit Party.  As of the Effective Date, each Credit Party owns good and marketable fee simple title to all of its owned Real Estate, and valid leasehold interests in all of its leased Real Estate, all as described on Disclosure Schedule (3.6) , and copies of all such leases have been delivered to Agent.  Disclosure Schedule (3.6) further describes any Real Estate with respect to which any Credit Party is a lessor, sublessor or assignor as of the Effective Date.  Each Credit Party also has good and marketable title to, or valid leasehold interests in, all of its personal property and assets.  As of the Effective Date, none of the properties and assets of any Credit Party are subject to any Liens other than Permitted Encumbrances, and no Credit Party has received written notice of any facts, circumstances or conditions that are likely to result in any Liens (including Liens arising under Environmental Laws) on any Collateral other than Permitted Encumbrances.  As of the Effective Date, the Liens granted to Agent pursuant to the Loan Documents are first priority perfected Liens, subject only to Permitted Encumbrances.  As of the Effective Date, each Credit Party has to its knowledge received all deeds, assignments, waivers, consents, nondisturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected all recordings, filings and other actions reasonably necessary to establish, protect and perfect such Credit Party’s right, title and interest in and to all such Real Estate and other properties and assets.  Disclosure Schedule (3.6) also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate.  During the period from March 31, 2003 through the Effective Date, no portion of any Credit Party’s Real Estate has suffered any material damage by fire or other casualty loss that has not heretofore been repaired and restored in all material respects to its original condition or otherwise remedied.  As of the Effective Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect, except as could not reasonably be expected to have a Material Adverse Effect.

3.7            Labor Matters .  As of the Effective Date (a) no strikes or other material labor disputes against any Credit Party are pending or, to any Credit Party’s knowledge, threatened; (b) hours worked by and payment made to employees of each Credit Party comply with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters; (c) all payments due from any Credit Party for employee health and welfare insurance have been paid or accrued as a liability on the books of such Credit Party; (d) except as set forth in Disclosure Schedule (3.7) , no Credit Party is a party to or bound by any collective bargaining agreement, management agreement, consulting agreement, employment agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement (and true and complete copies of any agreements described on Disclosure Schedule (3.7) have been delivered to Agent); (e) to any Credit Party’s knowledge,

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there is no organizing activity involving any Credit Party pending or threatened by any labor union or group of employees; (f) there are no representation proceedings pending or, to any Credit Party’s knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of any Credit Party has made a pending demand for recognition; and (g) except as set forth in Disclosure Schedule (3.7) , there are no material complaints or charges against any Credit Party pending or, to the knowledge of any Credit Party, threatened to be filed with any Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment by any Credit Party of any individual; in each case except as could not reasonably be expected to have a Material Adverse Effect.

3.8            Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness .  Except as set forth in Disclosure Schedule (3.8) , as of the Effective Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person.  As of the Effective Date, all of the issued and outstanding Stock of each Credit Party is owned by each of the Stockholders and in the amounts set forth in Disclosure Schedule (3.8) .  Except as set forth in Disclosure Schedule (3.8) , as of the Effective Date there are no outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any of its Stock or other equity securities or any Stock or other equity securities of its Subsidiaries.  All outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party as of the Effective Date (except for the Obligations) is described in Section 6.3 (including Disclosure Schedule (6.3) ).

3.9            Government Regulation .  No Credit Party is an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” that is required to register as such under the Investment Company Act of 1940, in each case as such terms are defined in such act.  No Credit Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, or any other federal or state statute that restricts or limits its ability to incur Indebtedness or to perform its obligations hereunder.  The making of the Loans by Lenders to Borrower, the incurrence of the Letter of Credit Obligations on behalf of Borrower, the application of the proceeds thereof and repayment thereof and the consummation of the Related Transactions will not violate any provision of any such statute or any rule, regulation or order issued by the Securities and Exchange Commission.

3.10          Margin Regulations .  No Credit Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in effect (such securities being referred to herein as “ Margin Stock ”).  No Credit Party owns any Margin Stock, and none of the proceeds of the Loans or other extensions of credit under this Agreement will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any of the Loans or other extensions of credit under this Agreement to be considered a “purpose credit” within the meaning of Regulations T, U or X of the Federal Reserve Board.  No Credit Party will take or permit to be

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taken any action that might cause any Loan Document to violate any regulation of the Federal Reserve Board.

3.11          Taxes .  As of the Effective Date, all tax returns, reports and statements, including information returns, required by any Governmental Authority to be filed by any Credit Party have been filed with the appropriate Governmental Authority and all Charges have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or any such fine, penalty, interest, late charge or loss has been paid),  excluding Charges or other amounts being contested in accordance with the terms described in Section 5.2(b) .  As of the Effective Date, proper and accurate amounts have been withheld by each Credit Party from its respective employees for all periods in compliance in all material respects with all applicable federal, state, local and foreign laws and such withholdings have been timely paid to the respective Governmental Authorities.  Disclosure Schedule (3.11) sets forth as of the Effective Date those taxable years for which any Credit Party’s tax returns are currently being audited by the IRS or any other applicable Governmental Authority and any assessments or threatened assessments in connection with such audit, or that are otherwise currently outstanding.  Except as described in Disclosure Schedule (3.11) , as of the Effective Date, no Credit Party has executed or filed with the IRS or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any Charges.  As of the Effective Date, none of the Credit Parties and their respective predecessors are liable for any Charges: (a) under any agreement (including any tax sharing agreements), except as described in Disclosure Schedule (3.11) or (b) to each Credit Party’s knowledge, as a transferee.  As of the Effective Date, no Credit Party has agreed or been requested to make any adjustment under IRC Section 481(a), by reason of a change in accounting method or otherwise, which would have a Material Adverse Effect.

3.12          ERISA .

(a)           Disclosure Schedule (3.12) lists (i) all ERISA Affiliates and (ii) all Plans and separately identifies all Pension Plans, including Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans.  Copies of all such listed Plans (other than Multiemployer Plans), together with a copy of the latest form IRS/DOL 5500-series form for each such Plan and the most recent actuarial report for any Title IV Plans and Welfare Plans have been delivered to Agent.  Except with respect to Multiemployer Plans, each Qualified Plan has been determined by the IRS to qualify under Section 401 of the IRC, the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the IRC, and nothing has occurred that would cause the loss of such qualification or tax-exempt status.  Except as could not reasonably be expected to have a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA and the IRC, including the timely filing of all reports required under the IRC or ERISA, including the statement required by 29 CFR Section 2520.104-23.  Neither any Credit Party nor ERISA Affiliate has failed to make any contribution or pay any amount due as required by either Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.  Except as could not be reasonably be expected to have a Material Adverse Effect, no “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan has occurred that would subject any Credit Party to a material tax on prohibited transactions imposed by Section 502(l) of ERISA or Section

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4975 of the IRC, and no event has occurred with respect to a Plan which would subject any Credit Party to any material liability under Section 502(l) of ERISA.

(b)           Except as set forth in Disclosure Schedule (3.12) : (i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is reasonably expected to occur; (iii) there are no pending, or to the knowledge of any Credit Party, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to incur any liability as a result of a complete or partial withdrawal from a Multiemployer Plan; (v) within the last five years no Title IV Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not in a “standard termination” as that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at any time within the past five years) with Unfunded Pension Liabilities been transferred outside of the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such time); (vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair market value of the assets of any Plan measured on the basis of fair market value as of the latest valuation date of any Plan; and (vii) no liability under any Title IV Plan has been satisfied with the purchase of a contract from an insurance company that is not rated AAA by the Standard & Poor’s Corporation or an equivalent rating by another nationally recognized rating agency.

3.13          No Litigation .  No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the knowledge of any Credit Party, threatened in writing against any Credit Party, before any Governmental Authority or before any arbitrator or panel of arbitrators (collectively, “ Litigation ”), (a) that challenges any Credit Party’s right or power to enter into or perform any of its obligations under the Loan Documents to which it is a party, or the validity or enforceability of any Loan Document or any action taken thereunder, or (b) that is reasonably likely to be determined adversely to any Credit Party and that, if so determined, would have a Material Adverse Effect.  Except as set forth on Disclosure Schedule (3.13) , as of the Effective Date there is no Litigation pending or, to any Credit Party’s knowledge, threatened that seeks damages in excess of $250,000 or injunctive relief against, or alleges criminal misconduct of, any Credit Party.

3.14          Brokers .  No broker or finder acting on behalf of any Credit Party or Affiliate thereof brought about the obtaining, making or closing of the Loans or the Related Transactions, and no Credit Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

3.15          Intellectual Property .  As of the Effective Date, each Credit Party owns or has rights to use all Intellectual Property necessary to continue to conduct its business as now or heretofore conducted by it or proposed to be conducted by it, and each Patent, registered Trademark, registered Copyright and License is listed, together with application or registration numbers, as applicable, in Disclosure Schedule (3.15) .  To the knowledge of each Credit Party, as of the Effective Date, each Credit Party conducts its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any material respect. 

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Except as set forth in Disclosure Schedule (3.15) , as of the Effective Date, no Credit Party is aware of any infringement claim by any other Person with respect to any Intellectual Property.

3.16          Full Disclosure .  No information contained in this Agreement, any of the other Loan Documents, any Projections, Financial Statements or Collateral Reports or other written reports from time to time delivered hereunder or any written statement furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to the terms of this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made; provided that, with respect to Projections from time to time delivered hereunder, Borrower represents only that (A) such Projections are based on good faith estimates and assumptions believed by Borrower to be reasonable and attainable at the time made and (B) such Projections are or will be based upon the material and relevant estimates and assumptions stated therein, all of which Borrower believed at the time of delivery to be reasonable and fair in light of current conditions and current facts known to Borrower as of such delivery date, and reflect Borrower’s good faith and reasonable estimates of the future financial performance of Borrower and of the other information projected therein for the period set forth therein.  Each Credit Party will use its best efforts to ensure that the Liens granted to Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents will at all times be fully perfected first priority Liens in and to the Collateral described therein, subject, as to priority, only to Permitted Encumbrances (other than clause (t) of the definition of the term “Permitted Encumbrances”).  On the Effective Date, after giving effect to the consummation of the Related Transactions, no default or event of default under or with respect to any of the Related Transactions Documents has occurred and is continuing

3.17          [ Intentionally Omitted ] .

3.18          Insurance .  Disclosure Schedule (3.18) lists all insurance policies of any nature maintained, as of the Effective Date, for current occurrences by each Credit Party, as well as a summary of the terms of each such policy.

3.19          Deposit and Disbursement Accounts .  Disclosure Schedule (3.19) lists all banks and other financial institutions at which any Credit Party maintains deposit or other accounts as of the Effective Date, including any Disbursement Accounts, and such Schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

3.20          Government Contracts .  Except as set forth in Disclosure Schedule (3.20) , as of the Effective Date, no Credit Party is a party to any contract or agreement with any Governmental Authority and no Credit Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local law.

3.21          Customer and Trade Relations .  During the twelve months preceding the Effective Date, there was no termination or cancellation of:  the business relationship of any Credit Party with any customer or group of related customers whose purchases during the most

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recent Fiscal Year caused it to be ranked among the ten largest customers of such Credit Party; or the business relationship of any Credit Party with any supplier that cannot be easily replaced.

3.22          Agreements and Other Documents .  As of the Effective Date, each Credit Party has provided to Agent or its counsel, on behalf of Lenders, complete copies (or accurate summaries) of all of the following agreements or documents to which it is subject and each of which is listed in Disclosure Schedule (3.22) without duplication of the agreements or documents provided as of the Original Closing Date or as of the date of the Prior Credit Agreement:  supply agreements and purchase agreements not terminable by such Credit Party within sixty (60) days following written notice issued by such Credit Party and involving transactions in excess of $1,000,000 per annum; leases of Equipment having a remaining term of one year or longer and requiring aggregate rental and other payments in excess of $500,000 per annum; licenses and permits held by the Credit Parties, the absence of which could be reasonably likely to have a Material Adverse Effect; instruments and documents evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party in excess of $500,000 and any Lien granted by such Credit Party with respect thereto; and instruments and agreements evidencing the issuance of any equity securities, warrants, rights or options to purchase equity securities of such Credit Party.

3.23          Solvency .  Both before and after giving effect to (a) the Loans and Letter of Credit Obligations to be made or incurred on or prior to the Effective Date, if any, or such other date as Loans and Letter of Credit Obligations requested hereunder are made or incurred, (b) the disbursement of the proceeds of such Loans pursuant to the instructions of Borrower, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs, fees and expenses in connection with the foregoing, each Credit Party is and will be Solvent.

3.24          Status of Holdings .  As of the Effective Date, Holdings has not engaged in any trade or business and has not incurred any Indebtedness other than holding, managing and directing its equity and debt positions in Borrower and performing its obligations under existing arrangements with its stockholders and taking actions incident thereto.

3.25          Subordinated Debt; other Indebtedness .  As of the Effective Date, Borrower has delivered to Agent a complete and correct copy of the Discount Debentures Documents and any other debt instrument of any Credit Party evidencing Indebtedness in excess of $500,000 (including, in each case, all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).  As of the relevant dates, Holdings had the corporate power and authority to incur the Indebtedness evidenced by the Discount Debentures Documents.  The execution, delivery and performance of this Agreement and the other Loan Documents and the funding of the Loans do not violate any term or provision of any of Discount Debentures Documents.

3.26          Motor Vehicles .  As of the Effective Date, the value of all motor vehicles owned by Credit Parties does not exceed $100,000 in the aggregate.

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4.      FINANCIAL STATEMENTS AND INFORMATION

4.1            Reports and Notices .

(a)           From and after the Effective Date and until the Termination Date, Borrower shall deliver to Agent for distribution to the Lenders, the Financial Statements, notices, Projections and other information at the times, to the Persons and in the manner set forth in Annex E .

(b)           From and after the Effective Date and until the Termination Date, Borrower shall deliver to Agent or to Agent for distribution to the Lenders, the various Collateral Reports (including Borrowing Base Certificates in the form of Exhibit 4.1(b) ) at the times, to the Persons and in the manner set forth in Annex F .

4.2            Communication with Accountants .  Each Credit Party executing this Agreement authorizes (a) Agent and (b) so long as an Event of Default has occurred and is continuing, each Lender, to communicate directly with its independent certified public accountants, including Ernst & Young LLP, and authorizes and shall instruct those accountants and advisors to disclose and make available to Agent and each Lender any reasonably requested information in its possession or under its control relating to any Credit Party with respect to the business, results of operations and financial condition of any Credit Party.

5.      AFFIRMATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the date hereof and until the Termination Date:

5.1            Maintenance of Existence and Conduct of Business .  Except as otherwise permitted by the Loan Documents, each Credit Party shall:  (i) do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and its rights and franchises; (ii) continue to conduct its business substantially as now conducted or as otherwise permitted hereunder; and (iii) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices, except in each case where the failure to do so would result in a Material Adverse Effect.  Each Credit Party shall transact business only in such corporate and trade names as are set forth in Disclosure Schedule (5.1) or such other names as such Credit Party may provide to Agent on at least thirty (30) days’ prior written notice.

5.2            Payment of Charges .

(a)           Subject to Section 5.2(b) , each Credit Party shall pay and discharge or cause to be paid and discharged promptly all Charges payable by it, including (i) Charges imposed upon it, its income and profits, or any of its property (real, personal or mixed) and all Charges with respect to tax, social security and unemployment withholding with respect to its employees, (ii) lawful claims for labor, materials, supplies and services or otherwise, and (iii) all

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storage or rental charges payable to warehousemen and bailees, in each case, before any thereof shall become thirty (30) days past due.

(b)           Each Credit Party may in good faith contest, by appropriate proceedings, the validity or amount of any Charges, Taxes or claims described in Section 5.2(a) ; provided , that (i) adequate reserves with respect to such contest are maintained on the books of such Credit Party, in accordance with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other than payments to warehousemen and/or bailees) that is superior to any of the Liens securing the Obligations and such contest is maintained and prosecuted continuously and with diligence and operates to suspend collection or enforcement of such Charges, (iii) no tangible asset of any Credit Party becomes subject to forfeiture or loss during the pendency of such contest, and (iv) such Credit Party shall promptly pay or discharge such contested Charges, Taxes or claims and all additional charges, interest, penalties and expenses, if any, and shall deliver to Agent evidence reasonably acceptable to Agent of such compliance, payment or discharge, if such contest is terminated or discontinued adversely to such Credit Party or the conditions set forth in this Section 5.2(b) are no longer met.

5.3            Books and Records .  The Credit Parties shall keep adequate books and records with respect to their business activities in which proper entries, reflecting all material financial transactions, are made in accordance with GAAP and on a basis consistent with the Financial Statements attached as Disclosure Schedule (3.4(a) ).

5.4            Insurance; Damage to or Destruction of Collateral .

(a)           The Credit Parties shall, at their sole cost and expense, maintain the policies of insurance described on Disclosure Schedule (3.18) as in effect on the date hereof or otherwise in form and amounts determined by the Credit Parties and reasonably acceptable to Agent and with insurers selected by the Credit Parties and reasonably acceptable to Agent.  Such policies of insurance (or the loss payable and additional insured endorsements delivered to Agent) shall contain provisions pursuant to which the insurer agrees to provide thirty (30) days’ prior written notice to Agent in the event of any non-renewal, cancellation or amendment of any such insurance policy.  If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay all premiums relating thereto, Agent may at any time or times thereafter obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto that Agent deems reasonably advisable.  Agent shall have no obligation to obtain insurance for any Credit Party or pay any premiums therefor.  By doing so, Agent shall not be deemed to have waived any Default or Event of Default arising from any Credit Party’s failure to maintain such insurance or pay any premiums therefor.  All sums so disbursed, including reasonable attorneys’ fees, court costs and other charges related thereto, shall be payable on demand by Borrower to Agent and shall be additional Obligations hereunder secured by the Collateral.

(b)           Agent reserves the right at any time upon any change in any Credit Party’s risk profile (including any material change in the product mix maintained by any Credit Party or any laws affecting the potential liability of such Credit Party) to require additional forms and limits of insurance customary in the industry for such changed risk profile.  If reasonably requested by Agent, each Credit Party shall deliver to Agent from time to time a report of a

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reputable insurance broker, reasonably satisfactory to Agent, with respect to its insurance policies.

(c)           Each Credit Party shall deliver to Agent, in form and substance reasonably satisfactory to Agent, endorsements to (i) all “All Risk” and business interruption insurance naming Agent, on behalf of itself and Lenders, as loss payee, and (ii) all general liability and other liability policies maintained by such Credit Party naming Agent, on behalf of itself and Lenders, as additional insured.  Each Credit Party irrevocably makes, constitutes and appoints Agent (and all officers, employees or agents designated by Agent), so long as any Event of Default has occurred and is continuing, as each Credit Party’s true and lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims under such “All Risk” policies of insurance, endorsing the name of each Credit Party on any check or other item of payment for the proceeds of such “All Risk” policies of insurance and for making all determinations and decisions with respect to such “All Risk” policies of insurance.  Agent shall have no duty to exercise any rights or powers granted to it pursuant to the foregoing power-of-attorney.  Borrower shall promptly notify Agent of any Event of Loss and of any loss, damage, or destruction to the Collateral in the amount of $250,000 or more, whether or not covered by insurance.  After deducting from the insurance proceeds received in connection with such Event of Loss the costs, fees and expenses, if any, incurred by Agent in the collection or handling thereof, Agent shall either, at its option, apply such proceeds to the reduction of the Obligations in accordance with Section 1.3(d) or permit or require each Credit Party to use such money, or any part thereof, to replace, repair, restore or rebuild the Collateral in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the loss, damage or destruction.  Notwithstanding the foregoing, if an Event of Loss giving rise to insurance proceeds could not reasonably be expected to have a Material Adverse Effect (after giving effect to the application of the insurance proceeds to repair and restoration) and such insurance proceeds do not exceed $2,000,000 in the aggregate, the applicable Credit Party may elect, in its discretion, to replace, restore, repair or rebuild the property; provided that if such Credit Party has not completed or entered into binding agreements to complete such replacement, restoration, repair or rebuilding within 270 days of such casualty, Agent may apply such insurance proceeds to the Obligations in accordance with Section 1.3(d) .  All insurance proceeds that are to be made available to Borrower to replace, repair, restore or rebuild the Collateral shall be applied by Agent to reduce the outstanding principal balance of the Revolving Loan (which application shall not result in a permanent reduction of the Revolving Loan Commitment) and upon such application, Agent shall establish a Reserve against the Borrowing Base in an amount equal to the amount of such proceeds so applied.  Thereafter, such funds shall be made available to such Credit Party to provide funds to replace, repair, restore or rebuild the Collateral as follows: (i) Borrower shall request a Revolving Credit Advance be made to such Credit Party in the amount requested to be released; (ii) so long as the conditions set forth in Section 2.2 have been met and subject to the provisions of any Mortgage encumbering such Collateral, Revolving Lenders shall make such Revolving Credit Advance; and (iii) in the case of insurance proceeds applied against the Revolving Loan, the Reserve established with respect to such insurance proceeds shall be reduced by the amount of such Revolving Credit Advance.  To the extent not used to replace, repair, restore or rebuild the Collateral, such insurance proceeds shall be applied in accordance with Section 1.3(d) ; provided , that in the case of insurance proceeds pertaining to any Credit Party other than Borrower, such insurance proceeds shall be applied to the Loans owing by Borrower in accordance with Section 1.3(d) .

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5.5            Compliance with Laws .  Each Credit Party shall comply with all federal, state, local and foreign laws and regulations applicable to it, including those relating to FAA, ERISA and labor matters and Environmental Laws and Environmental Permits, except to the extent that the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.6            Supplemental Disclosure .  From time to time as may be reasonably requested by Agent (which request will not be made more frequently than once each year absent the occurrence and continuance of an Event of Default), the Credit Parties shall supplement each Disclosure Schedule hereto, or any representation herein or in any other Loan Document, with respect to any matter hereafter arising that, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such Disclosure Schedule or as an exception to such representation or that is necessary to correct any information in such Disclosure Schedule or representation which has been rendered inaccurate thereby (and, in the case of any supplements to any Disclosure Schedule, such Disclosure Schedule shall be appropriately marked to show the changes made therein); provided that (a) no such supplement to any such Disclosure Schedule or representation shall amend, supplement or otherwise modify any Disclosure Schedule or representation, or be or be deemed a waiver of any Event of Default resulting from the matters disclosed therein, except as consented to by Agent and Requisite Lenders in writing, and (b) no supplement shall be required or permitted as to representations and warranties that relate solely to the Original Closing Date or the Effective Date, as applicable.

5.7            Intellectual Property .  Each Credit Party will conduct its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any material respect, except as could not reasonably be expected to have a Material Adverse Effect.

5.8            Proceeds from Stock Issuances .  If Holdings or Borrower issues Stock, the cash proceeds thereof (net of underwriting discounts and commissions and other reasonable costs, fees and expenses paid to non-Affiliates of Holdings or Borrower in connection therewith) shall be used as follows:

(a)           in the case of an issuance of such Stock other than pursuant to a Qualified Public Offering, after repayment of outstanding Holdco Debenture Debt elected to be repaid by Holdings from the proceeds of issuance of Stock (other than Disqualified Stock) to the extent permitted by Section 6.14(a)(J) , 50% of any remaining net proceeds shall be used to prepay Obligations in accordance with Section 1.3(b)(v) and the other 50% of such remaining net proceeds shall be used by Borrower or Holdings for general corporate purposes subject to the terms and conditions of this Agreement.

(b)           in the case of an issuance of Stock pursuant to a Qualified Public Offering, such proceeds shall be used as follows:

(i)            first , up to 100% of such proceeds shall be used to repay outstanding Holdco Debenture Debt, if any, until paid in full;

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(ii)           second , 50% of any proceeds remaining after application of clause (b)(i) above (such remaining proceeds being the “ Post-Holdco Debenture Debt Proceeds ”) shall be used to repay obligations owing in respect of the SCIL Loan and/or to prepay Obligations in accordance with Section 1.3(b)(v) (the application of such proceeds being allocated between the prepayment of the Obligations and the SCIL Loan by Borrower); and

(iii)          third , the remaining 50% of any Post-Holdco Debenture Proceeds (such amount, (the “ Credit Party Post-Holdco Debenture Debt Proceeds ”) shall be used by Borrower or Holdings for one or more of the following purposes: (A) general corporate purposes, (B) to prepay obligations in respect of the SCIL Loan in accordance with the SCIL Credit Agreement or (C) to make Restricted Payments in respect of the Holdings’ preferred Stock to the extent permitted by Section 6.14(a)(I) , subject in each case to terms and conditions of this Agreement; provided that Holdings and Borrower may use no more than 50% of the Credit Party Post-Holdco Debenture Debt Proceeds to (x) make Restricted Payments in respect of Holding’s preferred Stock promptly upon receipt thereof to the extent permitted by Section 6.14(a)(I) or (y) prepay obligations owing in respect of the SCIL Loan in accordance with the SCIL Credit Agreement promptly upon receipt thereof to the extent permitted by Section 6.14(a)(I) .

(c)           Notwithstanding the foregoing, Section 5.8(a) and (b) shall not apply to:

(i)            issuances of Stock (other than Disqualified Stock) of Holdings to the existing Stockholders of Holdings (and in the case such Stockholders are Michael J. Hartnett or Whitney & Co., issuance of Stock of Holdings to any Person controlled by or under common control with Michael J. Hartnett or Whitney & Co. (any such Person being a “ Related Stockholder Party ”) in the aggregate amount not to exceed $10,000,000 ;

(ii)           issuances of Stock (other than Disqualified Stock) of Holdings to the existing Stockholders of Holdings (and/or any Related Stockholder Party) or to seller(s) involved in a Permitted Acquisition, in each case to the extent (but only to the extent) that such Stock or the proceeds thereof are immediately used as a consideration for all or a portion of the purchase price of a Permitted Acquisition, so long as no Change of Control results after giving effect to such issuance or series of related issuances (proceeds from Stock issuances to the existing Stockholders (and/or any Related Stockholder Party) used as a consideration for Permitted Acquisitions described in this clause (ii) being the “ Stockholder Proceeds ”);

(iii)          issuance of directors’ qualifying shares;

(iv)          issuances of Stock of Holdings issued to any holder of Indebtedness of Holdings or Borrower to the extent (but only to the extent) issued in connection with an issuance, refinancing or restructuring of Indebtedness permitted hereunder, so long as no Change of Control results after giving effect to such issuance or a series of related issuances; or

(v)           sales or issuances of common Stock to officers, directors or employees of Holdings, Borrower or any Subsidiary, as the case may be, pursuant to a director, management or employee compensation benefit plan, to the extent the aggregate cash proceeds received from the issuance of such common Stock in excess of the aggregate redemption

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proceeds paid in connection with redemptions of common Stock of employees does not exceed $2,000,000 in any Fiscal Year.

5.9            Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases .  Unless Agent shall otherwise agree in writing, each Credit Party shall use commercially reasonable efforts to obtain a landlord’s agreement, mortgagee agreement or bailee letter, as applicable, from the lessor of each leased property, mortgagee of owned property or bailee with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located, which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord, mortgagee or bailee may assert against the Collateral at that location, and shall otherwise be satisfactory in form and substance to Agent. With respect to such locations or warehouse space leased or owned as of the Effective Date and thereafter, if Agent has not received a landlord or mortgagee agreement or bailee letter as of the Effective Date (or, if later, as of the date such location is acquired or leased), Borrower’s Eligible Inventory at that location shall be subject to such Reserves as may be established by Agent in its reasonable credit judgment.  After the Effective Date, no real property or warehouse space shall be leased by any Credit Party, and no material amount of Inventory shall be shipped to a processor or converter under arrangements established after the Effective Date without the prior written consent of Agent (which consent, in Agent’s discretion, may be conditioned upon the exclusion from the Borrowing Base of Eligible Inventory at that location or the establishment of Reserves reasonably acceptable to Agent) or, unless and until a reasonably satisfactory landlord agreement or bailee letter, as appropriate, shall first or simultaneously have been obtained with respect to such location.  Each Credit Party shall timely and fully pay and perform its obligations in all material respects under all leases and other agreements with respect to each leased location or public warehouse where any Collateral is or may be located.  Except to the extent otherwise permitted hereunder, if any Credit Party proposes to acquire a fee ownership interest in Real Estate after the Effective Date, it shall first provide to Agent a mortgage or deed of trust granting Agent a first priority Lien on such Real Estate, together with environmental audits, mortgage title insurance commitment, real property survey, local counsel opinion(s), and, if required by Agent, casualty insurance and flood insurance, and such other documents, instruments or agreements reasonably requested by Agent, in each case, in form and substance reasonably satisfactory to Agent.

5.10          Motor Vehicles .  In the event the value of all motor vehicles owned by Credit Parties shall exceed $100,000 in the aggregate, each Credit Party will grant to Agent perfected Liens on all motor vehicles owned by such Credit Party and deliver all title certificate for each motor vehicle owned by such Credit Party noting Agent’s security interest therein, signed by the relevant Credit Party, in a manner satisfactory to Agent.

5.11          Interest Rate . Within one hundred and eighty (180) days after the Effective Date and at all times thereafter prior to the Termination Date, Borrower shall enter into and maintain one or more Specified Hedging Agreements designed to provide protection against fluctuations in interest rates, and pursuant to which Borrower is protected against increases in interest rates as currently in effect from and after the date of such contracts such that aggregate principal amount equal to at least 50% of the aggregate outstanding principal amount of the Term Loan and the SCIL Loan is either (i) fixed rate Indebtedness or (ii) subject to Specified Hedging Agreements.

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5.12          Maturity of the Holdco Debenture Debt No later than the 180 ^th day prior to June 15, 2009, the Holdco Debenture Debt shall be refinanced or the terms and provisions of the Discount Debentures Documents shall be amended, in each case on terms and conditions satisfactory to Agent in its sole discretion, so that the Indebtedness refinancing the Holdco Debenture Debt or the Indebtedness evidenced by the amended the Discount Debentures Documents, as the case may be, matures no earlier than December 29, 2011.

5.13          Further Assurances .  Each Credit Party shall, at such Credit Party’s expense, execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Code and other financing statements, mortgages and deeds of trust) as may be required under applicable law, or that the Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Loan Documents.

6.      NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the Effective Date hereof until the Termination Date:

6.1            Mergers, Subsidiaries, Etc.   No Credit Party shall, nor shall it cause or permit any Subsidiaries to, directly or indirectly, by operation of law or otherwise, (i) form or acquire any Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially all of the assets or Stock of, or otherwise combine with or acquire, any Person, except (A) any Credit Party may merge with another Credit Party, provided that Borrower shall be the survivor of any such merger to which it is a party; (B) any Credit Party may form one or more wholly owned Domestic Subsidiaries so long as (i) no Event of Default shall have occurred and be continuing or result therefrom, (ii) Agent receives an Officer Certificate of Borrower executed by the Chief Financial Officer of Borrower, or another responsible officer of Borrower having substantially the same authority and responsibility or otherwise acceptable to Agent, certifying as to the purpose of such New Subsidiary, the amount of cash and fair market value of any other assets being contributed to such New Subsidiary and Borrower’s compliance with the terms of the restrictions on such investments in Section 6.2 hereof, and (iii) such Subsidiary shall have become a Secured Guarantor and Borrower and/or its Subsidiaries shall have caused to be executed and delivered such documents and taken such actions as may be reasonably required by Agent in connection therewith, including, without limitation, delivery of financing statements, supplemental security agreements, mortgages, joinder agreements, a Guaranty, environmental indemnity agreements, blocked account agreements, and other documents, certificates and opinions, in each case in form and substance acceptable reasonably to Agent; (C) Borrower or any Secured Guarantor may consummate a Permitted Loan Funded Acquisition; and (D) any Foreign Subsidiary may consummate a Permitted Non-Loan Funded Acquisition.

6.2            Investments; Loans and Advances .  Except as otherwise expressly permitted by this Section 6, no Credit Party shall, nor shall it cause or permit any Subsidiaries to, make or permit to exist any investment in, or make, accrue or permit to exist loans or advances of money to, any Person, through the direct or indirect lending of money, holding of securities or otherwise, except that:  (a) Borrower and Credit Parties may hold investments comprised of

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notes payable, or stock or other securities issued by Account Debtors to Borrower pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business or pursuant to a plan of reorganization approved by a court of competent jurisdiction; (b) each Credit Party may maintain (but not increase) its existing investments in its Subsidiaries as of the Effective Date which are not Credit Parties; (c) so long as no Default or Event of Default has occurred and is continuing, Credit Parties may make investments, subject to a Control Letter in favor of Agent for the benefit of Lenders or otherwise subject to a perfected security interest in favor of Agent for the benefit of Lenders, in (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having the highest rating obtainable from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (iii) certificates of deposit maturing no more than one year from the date of creation thereof issued by commercial banks incorporated under the laws of the United States of America, each having combined capital, surplus and undivided profits of not less than $300,000,000 and having a senior unsecured rating of “A” or better by a nationally recognized rating agency (an “ A Rated Bank ”), (iv) time deposits maturing no more than thirty (30) days from the date of creation thereof with A Rated Banks and (v) mutual funds that invest solely in one or more of the investments described in clauses (i) through (iv) above; (d) Borrower may make investments in the capital Stock of any of the Secured Guarantors; (e) Borrower and the Secured Guarantors may make investments in Borrower and Secured Guarantors consisting of the intercompany loans in accordance with Section 6.3 ; (f) Credit Parties may make loans and advances to employees permitted under Section 6.4(b) ; (g) each Credit Party may make Permitted Acquisitions, form Acquisition Companies for the purpose of making Permitted Acquisitions and form new wholly owned Subsidiaries in accordance with the terms of Section 6.1 so long as the value of any cash or other assets contributed by any Credit Party to (1) any one Acquisition Company or new Subsidiary does not exceed five (5%) percent of the consolidated total assets of Holdings and its Subsidiaries on the date of contribution plus any Stockholder Proceeds or (2) all such Acquisition Companies and/or new Subsidiaries do not exceed ten (10%) percent of the consolidated total assets of Holdings and its Subsidiaries on the date of contribution plus any Stockholder Proceeds; (h) each Credit Party may provide cash collateral to Agent in accordance with the Loan Documents; (i) each Credit Party may enter into currency hedging arrangements to the extent permitted by Section 6.3(a)(xiv) , (j) Borrower may make additional investments after the Effective Date in RBC de Mexico S De R.L. de CV in an amount not to exceed $500,000 in the aggregate during any Fiscal Year; (k) Borrower may enter into Specified Hedging Agreements to the extent permitted by Section 6.3(a)(xiii) ; and (l) Credit Parties may make other investments not to exceed $2,000,000 in the aggregate.  For purposes of this Section 6.2 , the value of any non-cash investment shall be, in the case of Equipment, its appraised orderly liquidation value at the time of investment and, in the case of any other non-cash investment, its fair market value at the time of investment.

6.3            Indebtedness .

(a)           No Credit Party shall create, incur, assume or permit to exist any Indebtedness, except (without duplication) (i) Indebtedness secured by purchase money security interests and Capital Leases permitted in Section 6.7(c) , (ii) the Loans and the other Obligations, (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the

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extent they are permitted to remain unfunded under applicable law, (iv) existing Indebtedness described in Disclosure Schedule (6.3) (including earn-outs payable to sellers of businesses, if any, constituting Indebtedness) and refinancings thereof or amendments or modifications thereto that do not have the effect of increasing the principal amount thereof or changing the amortization thereof (other than to extend the same) and that are otherwise on terms and conditions no less favorable to any Credit Party, Agent or any Lender, as reasonably determined by Agent, than the terms of the Indebtedness being refinanced, amended or modified, (v) Indebtedness specifically permitted under Section 6.1 , (vi) Indebtedness consisting of intercompany loans and advances made by Borrower to any Secured Guarantor or by any Secured Guarantor to Borrower or another Secured Guarantor; provided , that:  (A) Borrower shall have executed and delivered to each such Secured Guarantor, and each such Secured Guarantor shall have executed and delivered to Borrower or another such Secured Guarantor, as applicable, a demand note (collectively, the “ Intercompany Notes ”) to evidence any such intercompany Indebtedness owing at any time by Borrower to such Secured Guarantor or by such Secured Guarantor to Borrower or such other Guarantor, which Intercompany Notes shall be in form and substance reasonably satisfactory to Agent and shall be pledged and delivered to Agent pursuant to the applicable Pledge Agreement or Security Agreement as additional collateral security for the Obligations; (B) Borrower and each Secured Guarantor shall record all intercompany transactions on its books and records in a manner reasonably satisfactory to Agent; (C) the obligations of Borrower and each Secured Guarantor under any such Intercompany Notes shall be subordinated to the Obligations of Borrower and each Secured Guarantor hereunder in a manner reasonably satisfactory to Agent; (D) no Event of Default shall be continuing after giving effect to any such proposed intercompany loan; and (E) the aggregate balance of all such intercompany loans owing by any Secured Guarantor incurred during the time that the EBITDA of such Secured Guarantor has been negative for a trailing twelve month period ending on the last day of any Fiscal Month shall not be increased by more than $2,000,000 over the amount of such Secured Guarantor’s intercompany loan obligations as of the last day of such period; provided that a Secured Guarantor shall no longer be subject to that $2,000,000 limitation if that Secured Guarantor has had positive EBITDA for the trailing twelve-month periods ending on the last day of six consecutive Fiscal Months; provided , further , that if a Secured Guarantor has been subject to that $2,000,000 limitation, then became exempt from it and again has a negative EBITDA for a trailing twelve-month period, not more than $2,000,000 of additional intercompany loans may be received by it after the date when it again has a negative EBITDA; (vii) unsecured Indebtedness of Borrower so long as such unsecured Indebtedness is subordinated to the Obligations in a manner and form satisfactory to Agent in its sole discretion, as to right and time of payment and as to any other terms, rights and remedies thereunder and so long as:  (A) no Event of Default has occurred and is continuing or would result after giving effect to such unsecured Indebtedness, (B) Holdings was, on a pro forma basis, in compliance with the Fixed Charge Coverage Ratio Financial Covenant set forth on Annex G as of the last day of the Fiscal Quarter reflected in the Compliance Certificate most recently delivered prior to the date such unsecured Indebtedness is incurred (after giving effect to such unsecured Indebtedness and the use thereof as if incurred on the first day of such period); and (C) the proceeds of such Indebtedness have been wholly used, promptly upon receipt thereof, to directly pay (by way of refinancing or exchange) the following Indebtedness in the following order:  first , Holdco Debenture Debt, until the same has been repaid in full; second , interest then due and payable on the Term Loan; third , the scheduled principal installments of the Term Loan in

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inverse order of maturity; fourth , the SCIL Loan, until the same has been repaid in full; fifth , interest then due and payable on the Revolving Credit Advances; and sixth , the outstanding principal balance of the Revolving Credit Advances until the same has been repaid in full; (viii) Indebtedness of a Qualified Target assumed or incurred in a Permitted Acquisition described in Section 6.1(a)(iv) as long as such Indebtedness was not incurred in contemplation of such Permitted Acquisition; (ix) Indebtedness resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (x) Indebtedness arising with respect to customary indemnification and purchase price adjustment obligations incurred in connection with Permitted Acquisitions; (xii) Indebtedness incurred in the ordinary course of business with respect to surety and appeal bonds, performance and return-of-money bonds and other similar obligations not exceeding at any time $250,000 in aggregate outstanding liability; (xiii) Indebtedness of Borrower under any Specified Hedging Agreement constituting Interest Rate Protection Agreements and providing for hedging obligations specifically permitted under Section 6.17 ; (xiv) currency hedging arrangements providing for hedging obligations specifically permitted under Section 6.17 ; (xv) Indebtedness incurred pursuant to the SCIL Loan Documents as in effect on the Effective Date and as amended or otherwise modified in a manner and to the extent permitted by and in accordance with the Intercreditor Agreement; and (xvi) Indebtedness not permitted by clauses (i) through (xv) above, so long as much Indebtedness, in the aggregate at any time outstanding, does not exceed $500,000.

(b)           No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay: any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance with Sections 6.8(b) or (c) ; (iii) Indebtedness permitted by Section 6.3(a)(iv) upon any refinancing thereof in accordance with Section 6.3(a)(iv) ; (iv) the SCIL Loan, to the extent permitted by Section 1.3(b)(v) or Section 6.3(a)(vii) ; (v) intercompany Indebtedness; and (vi) as otherwise permitted by Section 6.14 .

6.4            Employee Loans and Affiliate Transactions .

(a)           No Credit Party shall enter into or be a party to any transaction with any other Credit Party or any Affiliate thereof except (i) in the ordinary course of and pursuant to the reasonable requirements of such Credit Party’s business and upon fair and reasonable terms that are no less favorable to such Credit Party than would be obtained in a comparable arm’s length transaction with a Person not an Affiliate of such Credit Party; (ii) the intercompany sale in the ordinary course of the Credit Parties’ business on fair and reasonable terms consistent with past practices of work in process Inventory by any Credit Party to RBC de Mexico S. De R.L. de CV (“ RBC Mexico ”) for finishing and resale and shipment back to a Credit Party (“ Intercompany WIP ”); provided , that the aggregate book value of such Intercompany WIP (valued at the lower of cost or market) at any time owned or possessed by RBC Mexico shall not exceed $5,000,000; (iii) as and to the extent permitted in Section 6.14(a)(E) and Section 6.14(a)(G) ; and (iv) as and to the extent permitted by Section 6.3(a)(vi) , Section 6.4(b) or Sections 6.2(d)-(g) .  All such transactions existing as of the date hereof are described in Disclosure Schedule (6.4(a) ).

(b)           Excluding loans set forth in Disclosure Schedule (6.4(b) ), no Credit Party shall enter into any lending or borrowing transaction with any employees of any Credit Party,

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except loans to its respective employees on an arm’s-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $250,000 to any employee and up to a maximum of $1,000,000 in the aggregate at any one time outstanding and except for loans or advances made in connection with a management or employee stock ownership program, the proceeds of which are immediately invested in Holdings’ Stock and contributed to the capital of Borrower.

6.5            Capital Structure and Business .  No Credit Party shall amend its charter or bylaws (or similar governing documents)in a manner that could reasonably be expected to adversely affect Agent or Lenders or such Credit Party’s duty or ability to repay the Obligations.  No Credit Party shall engage in any business other than the businesses currently engaged in by the Credit Parties or any business reasonably related thereto.  No Credit Party other than Borrower shall issue any additional shares of Stock.

6.6            Guaranteed Indebtedness .  No Credit Party shall create, incur, assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement of instruments or items of payment for deposit to the general account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of any other Credit Party if the primary obligation is expressly permitted by this Agreement (including Guaranteed Indebtedness incurred with respect to the SCIL Obligations); provided, that neither Borrower nor any of its Domestic Subsidiaries shall create, incur, assume or permit to exist any Guaranteed Indebtedness for the benefit of Holdings or any Foreign Subsidiary; provided , further , that any such Guaranteed Indebtedness is subordinated to the Obligations to the same extent as the Indebtedness to which it relates is subordinated to the Obligations (and in the case of the Guaranteed Indebtedness incurred with respect to the SCIL Obligations, the Liens securing such Guaranteed Indebtedness are subordinated to the Liens securing Obligations pursuant to and in accordance with the terms of the Intercreditor Agreement).

6.7            Liens .  No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect to its Accounts (whether now owned or hereafter acquired) other than Lien in favor of the Agent, on behalf of itself and Lenders.  No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect to any of its other properties or assets (whether now owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized on Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure Schedule (6.3) and permitted refinancings, extensions and renewals thereof, including extensions or renewals of any such Liens; provided that the principal amount of the Indebtedness so secured is not increased and the Lien does not attach to any other property; (c) Liens created after the date hereof by conditional sale or other title retention agreements (including Capital Leases) or in connection with purchase money Indebtedness with respect to real estate, improvements thereto, or Equipment and Fixtures acquired by any Credit Party in the ordinary course of business, involving the incurrence of an aggregate amount of purchase money Indebtedness and Capital Lease Obligations of not more than $5,000,000 outstanding at any one time for all such Liens ( provided that such Liens attach only to the assets subject to such purchase money debt and such Indebtedness is incurred within thirty (30) days following such purchase and does not exceed 100% of the purchase price of the subject assets); (d) Liens permitted in accordance with Section 6.1 ; (e) Liens securing the SCIL Obligations, subject to the Intercreditor Agreement and (f) Liens securing other obligations not to exceed

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$500,000 in the aggregate.  In addition, no Credit Party shall become a party to any agreement, note, indenture or instrument, or take any other action, that would prohibit the creation of a Lien on any of its properties or other assets in favor of Agent, on behalf of itself and Lenders, as additional collateral for the Obligations, except operating leases, Capital Leases or Licenses which prohibit Liens upon the assets that are subject thereto.

6.8            Sale of Stock and Assets .  No Credit Party shall sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets, including the Stock of any of its Subsidiaries (whether in a public or a private offering or otherwise) or any of its Accounts, other than (a) the sale of Inventory in the ordinary course of business, (b) the sale, transfer, conveyance or other disposition by a Credit Party of Equipment, Fixtures and Real Estate that are obsolete or no longer used or useful in such Credit Party’s business and having a book value not exceeding $500,000 in the aggregate in any Fiscal Year, (c) the sale, transfer, conveyance or other disposition of other Equipment and Fixtures having a value not exceeding $500,000 in the aggregate in any Fiscal Year, (d) assets acquired as part of a Permitted Acquisition and designated for disposition in a written notice to Agent when acquired as long as such assets are disposed of within one year after being acquired in such Permitted Acquisition, (e) Permitted Asset Sales as long as the Fair Market Value of all Permitted Asset Sales does not exceed $15,000,000 in the aggregate and (f) as permitted under Section 6.1 and/or Section 6.2 .  With respect to any disposition of assets or other properties permitted pursuant to clauses (b) and (c) above, subject to compliance with Section 1.3(b) , Agent agrees on reasonable prior written notice to release its Lien on such assets or other properties in order to permit the applicable Credit Party to effect such disposition and shall execute and promptly deliver to Borrower, at Borrower’s expense, appropriate UCC-3 termination statements and other releases as reasonably requested by Borrower.