EMPLOYMENT AGREEMENT made as of the 1st day of January, 2000 by and between ARROW ELECTRONICS, INC., a New York corporation with its principal office at 25 Hub Drive, Melville, New York 11747 (the "Company"), and ARTHUR H. BAER, residing at 61 Bushnell Road, Hillsdale, New York 12529 (the "Executive").

WHEREAS, the Company wishes to employ the Executive as President of the Company's European operations, with the responsibilities and duties of a principal executive officer of the Company; and

WHEREAS, the Executive wishes to accept such employment and to render services to the Company on the terms set forth in, and in accordance with the provisions of, this Employment Agreement (the "Agreement");

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

1. Employment and Duties.

a) Employment. The Company hereby employs the Executive for the Employment Period defined in Paragraph 3, to perform such duties for the Company, its subsidiaries and affiliates and to hold such offices as may be specified from time to time by the Company's Board of Directors, subject to the following provisions of this Agreement. The Executive hereby accepts such employment.

b) Duties and Responsibilities. It is contemplated that the Executive will be President of the Company's European operations but the Board of Directors shall have the right to adjust the duties, responsibilities and title of the Executive as the Board of Directors may from time to time deem to be in the interests of the Company (provided, however, that during the employment period, without the consent of the Executive, he shall not be assigned any titles, duties or responsibilities which, in the aggregate, represent a material diminution in, or are materially inconsistent with, his title, duties, and responsibilities as President-Europe). If the Board of Directors does not either continue the Executive in the office of President-Europe or elect him to some other principal executive office satisfactory to the Executive, the Executive shall have the right to decline to give further service to the Company and shall have the rights and obligations which would accrue to him under Paragraph 6 if he were discharged without cause. If the Executive decides to exercise such right to decline to give further service, he shall within forty- five days after such action or omission by the Board of Directors give written notice to the Company stating his objection and the action he thinks necessary to correct it, and he shall permit the Company to have a forty-five day period in which to correct its action or omission. If the Company makes a correction satisfactory to the Executive, the Executive shall be obligated to continue to serve the Company. If the Company does not make such a correction, the Executive's rights and obligations under Paragraph 6 shall accrue at the expiration of such forty-five day period.

c) Time Devoted to Duties. The Executive shall devote substantially all of his normal business time and efforts to the business of the Company, its subsidiaries and its affiliates, the amount of such time to be sufficient, in the reasonable judgment of the Board of Directors, to permit him diligently and faithfully to serve and endeavor to further their interests to the best of his ability.

2. Compensation.

a) Monetary Remuneration and Benefits. During the Employment Period, the Company shall pay to the Executive for all services rendered by him in any capacity:

i. a minimum base salary at the rate of $450,000 per year (payable in accordance with the Company's then prevailing practices, but in no event less frequently than in equal monthly installments), subject to increase from time to time in the sole discretion of the Board of Directors of the Company; provided that, should the Company institute a company-wide pay cut/furlough program, such salary may be decreased by up to 15%, but only for as long as said company-wide program is in effect;

ii. such additional compensation by way of salary or bonus or fringe benefits as the Board of Directors of the Company in its sole discretion shall authorize or agree to pay, payable on such terms and conditions as it shall determine; and

iii. such employee benefits that are made available by the Company to its other principal executives.

b) Annual Incentive Payment. The Executive shall participate in the Company's Management Incentive Plan (or such alternative, successor, or replacement plan or program in which the Company's principal operating executives, other than the Chief Executive Officer, generally participate) and shall have a targeted incentive thereunder of not less than $225,000 per annum; provided, however, that the Executive's actual incentive payment in any year shall be measured by the Company's performance against goals established for that year and that such performance may produce an incentive payment ranging from none to twice the targeted amount. The Executive's incentive payment for any year will be appropriately pro-rated to reflect a partial year of employment. The foregoing notwithstanding, the Executive's incentive for the year ending December 31, 2000 shall be not less than $225,000.

c) Automobile. During the Employment Period, the Company will provide the Executive with an appropriate leased automobile.

d) Expenses. During the Employment Period, the Company agrees to reimburse the Executive, upon the submission of appropriate vouchers, for out- of-pocket expenses (including, without limitation, expenses for travel, lodging and entertainment) incurred by the Executive in the course of his duties hereunder.

e) Office and Staff. The Company will provide the Executive with an office, secretary and such other facilities as may be reasonably required for the proper discharge of his duties hereunder.

f) Indemnification. The Company agrees to indemnify the Executive for any and all liabilities to which he may be subject as a result of his employment hereunder (and as a result of his service as an officer or director of the Company, or as an officer or director of any of its subsidiaries or affiliates), as well as the costs of any legal action brought or threatened against him as a result of such employment, to the fullest extent permitted by law.

g) Participation in Plans. Notwithstanding any other provision of this Agreement, the Executive shall have the right to participate in any and all of the plans or programs made available by the Company (or its subsidiaries, divisions or affiliates) to, or for the benefit of, executives (including the annual stock option and restricted stock grant programs) or employees in general, on a basis consistent with other senior executives. It is agreed, however, that the Executive shall not participate in the Company's Unfunded Pension Plan for Selected Executives (the "SERP").

3. The Employment Period.

The "Employment Period", as used in the Agreement, shall mean the period beginning as of the date hereof and terminating on the last day of the calendar month in which the first of the following occurs:

a) the death of the Executive;

b) the disability of the Executive as determined in accordance with Paragraph 4 hereof and subject to the provisions thereof;

c) the termination of the Executive's employment by the Company for cause in accordance with Paragraph 5 hereof; or

d) December 31, 2002; provided, however, that the Company and the Executive will, at least twelve months prior to December 31, 2002, discuss their mutual intention to continue the Employment Period or to permit this Agreement to expire on December 31, 2002.

4. Disability.

For purposes of this Agreement, the Executive will be deemed "disabled" upon the earlier to occur of (i) his becoming disabled as defined under the terms of the disability benefit program applicable to the Executive, if any, and
(ii) his absence from his duties hereunder on a full-time basis for one hundred eighty (180) consecutive days as a result of his incapacity due to accident or physical or mental illness. If the Executive becomes disabled (as defined in the preceding sentence), the Employment Period shall terminate on the last day of the month in which such disability is determined. Until such termination of the Employment Period, the Company shall continue to pay to the Executive his base salary, any additional compensation authorized by the Company's Board of Directors, and any other remuneration and benefits provided in accordance with Paragraph 2, all without delay, diminution or proration of any kind whatsoever (except that his remuneration hereunder shall be reduced by the amount of any payments he may otherwise receive as a result of his disability pursuant to a disability program provided by or through the Company), and his medical benefits and life insurance shall remain in full force. After termination of the Employment Period as a result of the disability of the Executive, the medical benefits covering the Executive and his family shall remain in place (subject to the eligibility requirements and other conditions continued in the underlying plan, as described in the Company's employee benefits manual, and subject to the requirement that the Executive continue to pay the "employee portion" of the cost thereof), and the Executive's life insurance policy under the Management Insurance Program shall be transferred to him, as provided in the related agreement, subject to the obligation of the Executive to pay the premiums therefor.

In the event that, notwithstanding such a determination of disability, the Executive is determined not to be totally and permanently disabled prior to the then scheduled expiration of the Employment Period, the Executive shall be entitled to resume employment with the Company under the terms of this Agreement for the then remaining balance of the Employment Period.

5. Termination for Cause.

In the event of any malfeasance, willful misconduct, active fraud or gross negligence by the Executive in connection with his employment hereunder, or a breach by the Executive of any of the Company's policies, the Company shall have the right to terminate the Employment Period by giving the Executive notice in writing of the reason for such proposed termination. If the Executive shall not have corrected such conduct to the satisfaction of the Company within thirty days after such notice, the Employment Period shall terminate and the Company shall have no further obligation to the Executive hereunder but the restriction on the Executive's activities contained in Paragraph 7 and the obligations of the Executive contained in Paragraph 8(b) and 8(c) shall continue in effect as provided therein.

6. Termination Without Cause.

In the event that the Company discharges the Executive without cause, the Executive shall be entitled to the salary provided in Paragraph 2(a), two thirds of the targeted incentive provided in Paragraph 2(b), the vesting of any restricted stock awards and the immediate exercisability of any stock options, as well as his rights under Paragraph 4, which would have vested or become exercisable during the full Employment Period (which, in that event, shall continue until December 31, 2002 unless sooner terminated by the Executive's disability or death). Any amounts payable to the Executive under this Paragraph 6 shall be reduced by the amount of the Executive's earnings from other employment (which the Executive shall have an affirmative duty to seek; provided, however, that the Executive shall not be obligated to accept a new position which is not reasonably comparable to his employment with the Company).

7. Non-Competition; Trade Secrets.

During the Employment Period and for a period of two years after the termination of the Employment Period, the Executive will not, directly or indirectly:

a) Disclosure of Information. Use, attempt to use, disclose or otherwise make known to any person or entity (other than to the Board of Directors of the Company or otherwise in the course of the business of the Company, its subsidiaries or affiliates and except as may be required by applicable law):

i. any knowledge or information, including, without limitation, lists of customers or suppliers, trade secrets, know-how, inventions, discoveries, processes and formulae, as well as all data and records pertaining thereto, which he may acquire in the course of his employment, in any manner which may be detrimental to or cause injury or loss to the Company, its subsidiaries or affiliates; or

ii. any knowledge or information of a confidential nature (including all unpublished matters) relating to, without limitation, the business, properties, accounting, books and records, trade secrets or memoranda of the Company, its subsidiaries or affiliates, which he now knows or may come to know in any manner which may be detrimental to or cause injury or loss to the Company its subsidiaries or affiliates.

b) Non-Competition. Engage or become interested in the United States, Europe, Canada or Mexico (whether as an owner, shareholder, partner, lender or other investor, director, officer, employee, consultant or otherwise) in the business of distributing electronic parts, components, supplies or systems, or any other business that is competitive with the principal business or businesses then conducted by the Company, its subsidiaries or affiliates (provided, however, that nothing contained herein shall prevent the Executive from acquiring or owning less than 1% of the issued and outstanding capital stock or debentures of a corporation whose securities are listed on the New York Stock Exchange, American Stock Exchange, or the National Association of Securities Dealers Automated Quotation System, if such investment is otherwise permitted by the Company's Human Resource and Conflict of Interest policies);

c) Solicitation. Solicit or participate in the solicitation of any business of any type conducted by the Company, its subsidiaries or affiliates, during said term or thereafter, from any person, firm or other entity which was or at the time is a supplier or customer, or prospective supplier or customer, of the Company, its subsidiaries or affiliates; or

d) Employment. Employ or retain, or arrange to have any other person, firm or other entity employ or retain, or otherwise participate in the employment or retention of, any person who was an employee or consultant of the Company, its subsidiaries or affiliates, at any time during the period of twelve consecutive months immediately preceding such employment or retention.

The Executive will promptly furnish in writing to the Company, its subsidiaries or affiliates, any information reasonably requested by the Company (including any third party confirmations) with respect to any activity or interest the Executive may have in any business.

Except as expressly herein provided, nothing contained herein is intended to prevent the Executive, at any time after the termination of the Employment Period, from either (i) being gainfully employed or (ii) exercising his skills and abilities outside of such geographic areas, provided in either case the provisions of this Agreement are complied with.

8. Preservation of Business.

a) General. During the Employment Period, the Executive will use his best efforts to advance the business and organization of the Company, its subsidiaries and affiliates, to keep available to the Company, its subsidiaries and affiliates, the services of present and future employees and to advance the business relations with its suppliers, distributors, customers and others.

b) Patents and Copyrights, etc. The Executive agrees, without additional compensation, to make available to the Company all knowledge possessed by him relating to any methods, developments, inventions, processes, discoveries and/or improvements (whether patented, patentable or unpatentable) which concern in any way the business of the Company, it subsidiaries or affiliates, whether acquired by the Executive before or during his employment or retention hereunder.

Any methods, developments, inventions, processes, discoveries and/or improvements (whether patented, patentable or unpatentable) which the Executive may conceive of or make, related directly or indirectly to the business or affairs of the Company, its subsidiaries or affiliates, or any part thereof, during the Employment Period, shall be and remain the property of the Company. The Executive agrees promptly to communicate and disclose all such methods, developments, inventions, processes, discoveries and/or improvements to the Company and to execute and deliver to it any instruments deemed necessary by the Company to effect the disclosure and assignment thereof to it. The Executive also agrees, on request and at the expense of the Company, to execute patent applications and any other instruments deemed necessary by the Company for the prosecution of such patent applications or the acquisition of Letters Patent in the United States or any other country and for the assignment to the Company of any patents which may be issued. The Company shall indemnify and hold the Executive harmless from any and all costs, expenses, liabilities or damages sustained by the Executive by reason of having made such patent application or being granted such patents.

Any writings or other materials written or produced by the Executive or under his supervision (whether alone or with others and whether or not during regular business hours), during the Employment Period which are related, directly or indirectly, to the business or affairs of the Company, its subsidiaries or affiliates, or are capable of being used therein, and the copyright thereof, common law or statutory, including all renewals and extensions, shall be and remain the property of the Company. The Executive agrees promptly to communicate and disclose all such writings or materials to the Company and to execute and deliver to it any instruments deemed necessary by the Company to effect the disclosure and assignment thereof to it. The Executive further agrees, on request and at the expense of the Company, to take any and all action deemed necessary by the Company to obtain copyrights or other protections for such writings or other materials or to protect the Company's right, title and interest therein. The Company shall indemnify and hold the Executive harmless from any and all costs, expenses, liabilities or damages sustained by the Executive by reason of the Executive's compliance with the Company's request.

c) Return of Documents. Upon the termination of the Employment Period, including any termination of employment described in Paragraph 6, the Executive will promptly return to the Company all copies of information protected by Paragraph 7(a) hereof or pertaining to matters covered by subparagraph (b) of this Paragraph 8 which are in his possession, custody or control, whether prepared by him or others.

9. Separability.

The Executive agrees that the provisions of Paragraphs 7 and 8 hereof constitute independent and separable covenants which shall survive the termination of the Employment Period and which shall be enforceable by the Company notwithstanding any rights or remedies the Executive may have under any other provisions hereof. The Company agrees that the provisions of Paragraph 6 hereof constitute independent and separable covenants which shall survive the termination of the Employment Period and which shall be enforceable by the Executive notwithstanding any rights or remedies the Company may have under any other provisions hereof.

10. Specific Performance.

The Executive acknowledges that (i) the services to be rendered under the provisions of this Agreement and the obligations of the Executive assumed herein are of a special, unique and extraordinary character; (ii) it would be difficult or impossible to replace such services and obligations; (iii) the Company, it subsidiaries and affiliates will be irreparably damaged if the provision hereof are not specifically enforced; and (iv) the award of monetary damages will not adequately protect the Company, its subsidiaries and affiliates in the event of a breach hereof by the Executive. The Company acknowledges that
(i) the Executive will be irreparably damaged if the provisions of Paragraph 6 hereof are not specifically enforced; and (ii) the award of monetary damages will not adequately protect the Executive in the event of a breach thereof by the Company. By virtue thereof, the Executive agrees and consents that if he violates any of the provisions of this Agreement, and the Company agrees and consents that if it violates any of the provisions of Paragraph 6 hereof, the other party, in addition to any other rights and remedies available under this Agreement or otherwise, shall (without any bond or other security being required and without the necessity of proving monetary damages) be entitled to a temporary and/or permanent injunction to be issued by a court of competent jurisdiction restraining the breaching party from committing or continuing any violation of this Agreement, or any other appropriate decree of specific performance. Such remedies shall not be exclusive and shall be in addition to any other remedy which any of them may have.

11. Miscellaneous.

a) Entire Agreement; Amendment. This Agreement constitutes the whole employment agreement between the parties and may not be modified, amended or terminated except by a written instrument executed by the parties hereto. All other agreements between the parties pertaining to the employment or remuneration of the Executive not specifically contemplated hereby or incorporated or merged herein are terminated and shall be of no further force or effect.

b) Assignment. Except as stated below, this Agreement is not assignable by the Company without the written consent of the Executive, or by the Executive without the written consent of the Company, and any purported assignment by either party of such party's rights and/or obligations under this Agreement shall be null and void; provided, however, that, notwithstanding the foregoing, the Company may merge or consolidate with or into another corporation, or sell all or substantially all of its assets to another corporation or business entity or otherwise reorganize itself, provided the surviving corporation or entity, if not the Company, shall assume this Agreement and become obligated to perform all of the terms and conditions hereof, in which event the Executive's obligations shall continue in favor of such other corporation or entity.

c) Waivers, etc. No waiver of any breach or default hereunder shall be considered valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. The failure of any party to insist upon strict adherence to any term of this Agreement on any occasion shall not operate or be construed as a waiver of the right to insist upon strict adherence to that term of any other term of this Agreement on that or any other occasion.

d) Provisions Overly Broad. In the event that any term or provision of this Agreement shall be deemed by a court of competent jurisdiction to be overly broad in scope, duration or area of applicability, the court considering the same shall have the power and hereby is authorized and directed to modify such term or provision to limit such scope, duration or area, or all of them, so that such term or provision is no longer overly broad and to enforce the same as so limited. Subject to the foregoing sentence, in the event any provision of this Agreement shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall attach only to such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement.

e) Notices. Any notice permitted or required hereunder shall be in writing and shall be deemed to have been given on the date of delivery or, if mailed by registered or certified mail, postage prepaid, on the date of mailing:

i. if to the Executive to:

Arthur H. Baer
61 Bushnell Road
Hillsdale, NY 12529

ii. if to the Company to:

Arrow Electronics, Inc.
25 Hub Drive
Melville, New York 11747
Attention: Robert E. Klatell
Executive Vice President

Either party may, by notice to the other, change his or its address for notice hereunder.

f) New York Law. This Agreement shall be construed and governed in all respects by the internal laws of the State of New York, without giving effect to principles of conflicts of law.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

Attest:

ARROW ELECTRONICS, INC.

THE EXECUTIVE

/s/ Arthur H. Baer
------------------
Arthur H. Baer

CONFORMED COPY

ARROW ELECTRONICS, INC.
25 Hub Drive
Melville, New York 11747

New York, New York
As of March 25, 1999

Re: Amendment No. 5 to Senior Note Purchase Agreements dated as of December 29, 1992

To the Noteholders
Referred to Below

Ladies and Gentlemen:

Reference is made to the several Senior Note Purchase Agreements, each dated as of December 29, 1992 (collectively, as in effect on the date hereof, the "Agreements"), between Arrow Electronics, Inc., a New York corporation (the "Company") and the financial institutions identified in Annex A thereto, pursuant to which said financial institutions purchased $75,000,000 aggregate principal amount of the Company's 8.29% Senior Secured Notes due 2000 (the "Senior Notes").

The Company has requested that the holders of the Senior Notes (the "Noteholders") agree, and the Noteholders party hereto are willing, to amend various provisions of the Agreements, all on the terms and conditions of this Amendment.

Accordingly, in consideration of the premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. Unless otherwise defined herein, all terms used herein that are defined in the Agreements (as amended hereby) shall have their respective meanings as therein defined.

2. Amendments to Agreements. Subject to the satisfaction of the condition to effectiveness specified in 5 below, but with effect on and after the date hereof, the Agreements are amended as follows:

2.1 Amendment to Section 2.02. Section 2.02 of the Agreements is amended by deleting the definition of "Credit Agreement" therein and adding the following new definitions thereto (in their appropriate alphabetic locations):

"Bank' means any lender party to a Credit Agreement."

"Credit Agreement' means, collectively, (i) the Credit Agreement dated as of August 16, 1995 among the Company, the Foreign Subsidiaries party thereto, the financial institutions party thereto and The Chase Manhattan Bank, as successor by merger to Chemical Bank, as Administrative Agent, (ii) the Credit Agreement dated as of March 30, 1999 among the Company, the Foreign Subsidiaries party thereto, the financial institutions party thereto and The Chase Manhattan Bank, as Administrative Agent and (iii) any agreement evidencing Indebtedness incurred by the Company or any Foreign Subsidiary to refinance any Credit Agreement referred to in clause (i) or (ii), in each case as such agreement may be amended, restated, modified, supplemented and in effect from time to time.".

2.2. Amendment to Section 8.01. Section 8.01 of the Agreements is amended by re-designating subsections "(p)" and "(q)" thereof as subsections "(q)" and "(r)", respectively, and adding the following new subsection (p):

"(p) Guarantees by Subsidiaries of Bank Debt (subject to the provisions of Section 8.16);".

3. Additional Undertaking. In consideration of the amendments set forth in 2 above, the Company hereby acknowledges to and agrees with each of the Noteholders that, notwithstanding anything to the contrary herein or in the Agreements, no Subsidiary of the Company (other than any Foreign Subsidiary) will borrow, or become obligated to borrow, under any Credit Agreement. The Company acknowledges that a failure to comply with this 3 shall constitute an Event of Default for purposes of Section 9.01 of the Agreements.

4. Representations and Warranties. The Company represents and warrants to the Noteholders as follows (and the parties hereto agree that the following representations and warranties shall be deemed to have been made pursuant to the Agreements for all relevant purposes thereof):

4.1. Power and Authority. The Company has the corporate power and authority to execute and deliver this Amendment and to perform the Agreements as amended hereby (the "Amended Agreements").

4.2. Authorization, etc. This Amendment has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company, and the Amended Agreements constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

4.3. No Conflicts. The execution and delivery by the Company of this Amendment and the performance by the Company of this Amendment and of the Amended Agreements will not (i) violate any material provision of law applicable to the Company or any of its Subsidiaries or any Order binding on the Company or any of its Subsidiaries, (ii) to the best knowledge of the Company, conflict with, result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any agreement or instrument binding on the Company or any of its Subsidiaries or affecting their Properties or (iii) require any approval or consent of any Governmental Authority or, to the best knowledge of the Company, any other Person under any agreement or instrument binding on the Company or any of its Subsidiaries or affecting their Properties.

4.4. No Defaults. Both immediately prior and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

5. Condition to Effectiveness. The amendments to the Agreements set forth in 2 shall become effective, as of the date hereof, upon the execution and delivery of this Amendment by the Company and the Required Holders.

6. Miscellaneous.

6.1. Costs and Expenses. As provided in Section 10.02 of the Agreements, the Company agrees to pay on demand all reasonable out-of- pocket costs and expenses of the Noteholders in connection with the negotiation, preparation, execution and delivery of this Amendment and any documents executed pursuant hereto.

6.2. Ratification; Waiver. The Agreements, except as amended pursuant hereto, are in all respects ratified and confirmed, and the terms, covenants and agreements thereof shall remain in full force and effect.

6.3. References to Agreements and Senior Notes. From and after the date hereof, all references to the Agreements in the Agreements, the Senior Notes, the Subsidiary Guarantees and the other Loan Documents shall be deemed to be references to the Agreements as amended by this Amendment.

6.4. Governing Law. This Amendment shall be construed in accordance with and governed by the laws of the State of New York.

6.5. Execution in Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

If you are in agreement with the foregoing, please sign the form of acceptance in the space provided below whereupon this Amendment shall become a binding agreement between you and the Company.

Very truly yours,

ARROW ELECTRONICS, INC.

By: /s/ Robert E. Klatell
   -------------------------
   Name:   Robert E. Klatell
   Title:  Executive Vice President

ACCEPTED AND AGREED:

CIG & CO.

By: /s/ Edward Lewis
    -------------------
    Name:  Edward Lewis
    Title: Partner

PRINCIPAL LIFE INSURANCE COMPANY
By Principal Capital Management, LLC,
a Delaware limited liability company,
its Authorized Signatory

By: /s/ Jon C. Heiny
    -------------------
    Name:  Jon C. Heiny
    Title: Counsel

By: /s/ Dennis D. Ballard
    ------------------------
    Name:  Dennis D. Ballard
    Title: Counsel

TEACHERS INSURANCE & ANNUITY
ASSOCIATION OF AMERICA

By: /s/ Estelle Simsolo
    ----------------------
    Name:  Estelle Simsolo
    Title: Director - Private Placements

THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY
By: Lincoln Investment Management, Inc., It's Attorney-in-Fact

By: /s/ David C. Patch
    ---------------------
    Name:  David C. Patch
    Title: Vice President

CONFORMED COPY

$350,000,000

364-DAY CREDIT AGREEMENT

among

ARROW ELECTRONICS, INC.,

THE SUBSIDIARY BORROWERS,

The Several Banks
from Time to Time Parties Hereto,

CHASE SECURITIES INC.,
as Arranger

and

THE CHASE MANHATTAN BANK,
as Administrative Agent

Dated as of March 30, 1999

                           TABLE OF CONTENTS

                                                                         Page


SECTION 1.  DEFINITIONS                                                    1
1.1  Defined Terms                                                         1
1.2  Other Definitional Provisions                                        19
1.3  Accounting Determinations                                            19

SECTION 2.  THE COMMITTED RATE LOANS                                      20
2.1  Committed Rate Loans                                                 20
2.2  Procedure for Committed Rate Loan Borrowing                          20
2.3  Repayment of Committed Rate Loans; Evidence of Debt                  20
2.4  Termination or Reduction of Commitments                              21
2.5  Optional Prepayments                                                 21
2.6  Conversion and Continuation Options                                  21
2.7  Minimum Amounts of Tranches                                          22
2.8  Interest Rates and Payment Dates for Committed Rate Loans            22
2.9  Inability to Determine Interest Rate                                 23

SECTION 3.  THE COMPETITIVE ADVANCE LOANS                                 23
3.1  Competitive Advance Loans                                            23
3.2  Procedure for Competitive Advance Loan Borrowing                     24
3.3  Repayment of Competitive Advance Loans; Evidence of Debt             25
3.4  Prepayments                                                          26

SECTION 4.  THE SWING LINE LOANS                                          26
4.1  Swing Line Loans                                                     26
4.2  Procedure for Swing Line Borrowing                                   26
4.3  Repayment of Swing Line Loans; Evidence of Debt                      27
4.4  Allocating Swing Line Loans; Swing Line Loan Participations          27

SECTION 5.  CERTAIN PROVISIONS APPLICABLE TO THE LOANS                    29
5.1  Facility Fee; Utilization Fee; Other Fees                            29
5.2  Computation of Interest and Fees                                     29
5.3  Pro Rata Treatment and Payments                                      30
5.4  Illegality                                                           30
5.5  Requirements of Law                                                  31
5.6  Taxes                                                                33
5.7  Company's Options upon Claims for Increased Costs and Taxes          35
5.8  Indemnity                                                            36
5.9  Determinations                                                       36
5.10  Change of Lending Office                                            36
5.11  Company Controls on Exposure; Calculation of Exposure;
      Prepayment if Exposure exceeds Commitments                          37

SECTION 6.  REPRESENTATIONS AND WARRANTIES                                38
6.1  Financial Condition                                                  38
6.2  No Change                                                            38
6.3  Corporate Existence; Compliance with Law                             38
6.4  Corporate Power; Authorization; Enforceable Obligations              39
6.5  No Legal Bar                                                         39
6.6  No Material Litigation                                               39
6.7  No Default                                                           39
6.8  Ownership of Property; Liens                                         39
6.9  Intellectual Property                                                40
6.10  Year 2000 Matters                                                   40
6.11  Taxes                                                               40
6.12  Federal Regulations                                                 40
6.13  ERISA                                                               41
6.14  Investment Company Act; Other Regulations                           41
6.15  Subsidiaries                                                        41
6.16  Accuracy and Completeness of Information                            42
6.17  Purpose of Loans                                                    42
6.18  Senior Indebtedness                                                 42
6.19  Environmental Matters                                               42

SECTION 7.  CONDITIONS PRECEDENT                                          43
7.1  Conditions to Closing Date                                           43
7.2  Conditions to Each Loan                                              45

SECTION 8.  AFFIRMATIVE COVENANTS                                         46
8.1  Financial Statements                                                 46
8.2  Certificates; Other Information                                      47
8.3  Payment of Obligations                                               48
8.4  Conduct of Business and Maintenance of Existence                     48
8.5  Maintenance of Property; Insurance                                   48
8.6  Inspection of Property; Books and Records; Discussions               49
8.7  Notices                                                              49
8.8  Environmental Laws                                                   50
8.9  Additional Subsidiary Guarantees                                     50

SECTION 9.  NEGATIVE COVENANTS                                            50
9.1  Financial Condition Covenants                                        50
9.2  Limitation on Indebtedness of Domestic Subsidiaries                  50
9.3  Limitation on Liens                                                  51
9.4  Limitation on Fundamental Changes                                    51
9.5  Limitation on Modifications of Debt Instruments                      52

SECTION 10.  EVENTS OF DEFAULT                                            52

SECTION 11.     THE ADMINISTRATIVE AGENT; THE ARRANGER                        55
11.1  Appointment                                                         55
11.2  Delegation of Duties                                                55
11.3  Exculpatory Provisions                                              55
11.4  Reliance by Administrative Agent                                    55
11.5  Notice of Default                                                   56
11.6  Non-Reliance on Administrative Agent and Other Banks                56
11.7  Indemnification                                                     57
11.8  Administrative Agent in Its Individual Capacity                     57
11.9  Successor Administrative Agent                                      57
11.10  The Arranger                                                       58

SECTION 12.  MISCELLANEOUS                                                58
12.1  Amendments and Waivers                                              58
12.2  Notices                                                             59
12.3  No Waiver; Cumulative Remedies                                      60
12.4  Survival of Representations and Warranties                          61
12.5  Payment of Expenses and Taxes                                       61
12.6  Successors and Assigns; Participations and Assignments              62
12.7  Adjustments; Set-off                                                64
12.8  Power of Attorney                                                   65
12.9  Judgment                                                            65
12.10  Counterparts                                                       66
12.11  Severability                                                       66
12.12  Integration                                                        66
12.13  GOVERNING LAW                                                      66
12.14  Submission To Jurisdiction; Waivers                                66
12.15  Acknowledgments                                                    67
12.16  WAIVERS OF JURY TRIAL                                              67



SCHEDULES

I    -   Banks and Commitments
II   -   Subsidiary Borrowers
III  -   Certain Information Concerning Swing Line Loans
IV   -   Administrative Schedule
6.13 -   Excluded ERISA Arrangements
6.15 -   Subsidiaries
6.19 -   Environmental Matters





        364-DAY CREDIT AGREEMENT, dated as of March 30, 1999, among:

            (i)  ARROW ELECTRONICS, INC., a New York corporation (the
"Company");

            (ii)  the SUBSIDIARY BORROWERS (as hereinafter defined);

            (iii)  the several banks and other financial institutions from time
to time parties to this Agreement (the "Banks");

            (iv)  CHASE SECURITIES INC., as advisor, lead arranger and book
manager (in such capacity, the "Arranger"); and

            (v)  THE CHASE MANHATTAN BANK, as administrative agent for the Banks
hereunder (in such capacity, the "Administrative Agent").

W I T N E S S E T H :

WHEREAS, the Company has requested the Banks to make available a 364-day revolving credit facility; and

WHEREAS, the Banks are willing to make such credit facility available upon and subject to the terms and conditions hereafter set forth;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:

1. SECTION DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

1.2
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by Chase as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by Chase in connection with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which is one and the denominator of which is one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month Secondary CD Rate" shall mean, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day shall not be a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three-month certificates of deposit of major money center banks in New York City received at approximately 10:00 A.M., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by the Administrative Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it; and "Federal Funds Effective Rate" shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate, or both, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the ABR shall be determined without regard to clause (b) or (c), or both, of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the ABR due to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.

"ABR Loans": Loans denominated in Dollars the rate of interest applicable to which is based upon the ABR.

"Adjusted Consolidated EBITDA": for any fiscal period, (a) the Consolidated Net Income of the Company and its Subsidiaries for such period, plus (b) to the extent deducted from earnings in determining Consolidated Net Income for such period, the sum, in each case for such period, of income taxes, interest expense, depreciation expense, amortization expense, including amortization of any goodwill or other intangibles, minus (c) to the extent included in determining Consolidated Net Income for such period, non-cash equity earnings of unconsolidated Affiliates, plus (d) to the extent excluded in determining Consolidated Net Income for such period, cash distributions received by the Company from unconsolidated Affiliates, all as determined on a consolidated basis in accordance with GAAP.

"Administrative Schedule": Schedule IV to this Agreement, which contains interest rate definitions and administrative information in respect of each Currency and each Type of Loan.

"Administrative Agent": as defined in the preamble hereto.

"Affected Bank": any Bank affected by the events described in subsection 5.4, 5.5 or 5.6, as the case may be, but only for the period during which such Bank shall be affected by such events.

"Affiliate": as to any Person, (a) any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person or (b) any Person who is a director or officer of the Company or any of its Subsidiaries. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (ii) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

"Agents": as defined in the preamble hereto (individually, each an "Agent").

"Agreement": this 364-Day Credit Agreement, as amended, supplemented or otherwise modified from time to time.

"Aggregate 1995 Exposure": at any time, the aggregate Exposure (as defined in the 1995 Credit Agreement) of the Foreign Subsidiary Borrowers (as defined in the 1995 Credit Agreement) and the Local Currency Borrowers (as defined in the 1995 Credit Agreement).

"Allocable Share": as to any Assenting Bank at any time, a fraction, the numerator of which shall be the Commitment of such Assenting Bank then in effect and the denominator of which shall be the aggregate of the Commitments of all Assenting Banks then in effect.

"Applicable Margin": for each Type of Loan on any date, the rate per annum determined based upon the Rating in effect on such date by both S&P and Moody's set forth under the relevant column heading below opposite such Rating:

Rating         Applicable Margin (in basis points)   Applicable Margin (in basis
(S&P/Moody's)     for Eurocurrency Loans points)          for ABR Loans

Greater than or
equal to A/A2               32.00                               0

Greater than or
equal to A-/A3              35.00                               0

Greater than or
equal to BBB+/Baa1          45.00                               0

Greater than or
equal to BBB/Baa2           52.50                               0

Greater than or
equal to BBB-/Baa3          75.00                               0

Less than or equal
To BB+/Ba1                 92.50                                0

; provided that, in the event that the Ratings of S&P and Moody's do not coincide, the Applicable Margin set forth above opposite the higher of such Ratings will apply, unless one of the Ratings is BB+/Ba1 or lower, or if there is no rating, in which case the Applicable Margin will be based on the rating of BB+/Ba1.

"Assenting Bank": as defined in subsection 5.7(a).

"Assignee": as defined in subsection 12.6(c).

"Assignment and Acceptance": each Assignment and Acceptance, substantially in the form of Exhibit I, executed and delivered pursuant to subsection 12.6(c).

"Available Foreign Currencies": Pounds Sterling and euro.

"Banks": as defined in the preamble hereto.

"Board": the Board of Governors of the Federal Reserve System or any successor.

"Borrowers": the collective reference to the Company and the Subsidiary Borrowers.

"Borrowing Date": any Business Day on which the Company or any Subsidiary Borrower requests the Banks to make Loans hereunder.

"Business": as defined in subsection 6.19(b).

"Business Day": (a) when such term is used in respect of any amount denominated or to be denominated in (i) any Available Foreign Currency, a London Banking Day which is also a day other than a Saturday or Sunday on which banks are open for general banking business in (x) the city which is the principal financial center of the country of issuance of such Available Foreign Currency (or, in the case of Pounds Sterling, Paris), (y) in the case of euro only, Frankfurt am Main, Germany (or such other principal financial center as the Administrative Agent may from time to time nominate for this purpose) and
(z) New York City and (ii) Dollars, a London Banking Day which is also a day other than a Saturday or Sunday on which banks are open for general banking business in New York City and (b) when such term is used for the purpose of determining the date on which the Eurocurrency Rate is determined under this Agreement for any Loan denominated in euro for any Interest Period therefor and for purposes of determining the first and last day of any Interest Period, references in this Agreement to Business Days shall be deemed to be references to Target Operating Days.

"C/D Assessment Rate": for any day as applied to any ABR Loan, the net annual assessment rate (rounded upward to the nearest 1/100th of 1%) determined by Chase to be payable on such day to the Federal Deposit Insurance Corporation or any successor ("FDIC") for FDIC's insuring time deposits made in Dollars at offices of Chase in the United States.

"C/D Reserve Percentage": for any day as applied to any ABR Loan, that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board, for determining the maximum reserve requirement for a Depositary Institution (as defined in Regulation D of the Board) in respect of new non-personal time deposits in Dollars having a maturity of 30 days or more.

"Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, options or rights to purchase any of the foregoing.

"Capitalization Documents": the collective reference to the Governing Documents of the Company and each of its Subsidiaries, the certificates of designation and other agreements governing the issuance of, or setting forth the terms of, any Capital Stock (including, without limitation, the common stock) issued or to be issued by the Company or any of its Subsidiaries and the Rights Agreement.

"Change in Control": one or more of the following events:

(a) less than a majority of the members of the Company's board of directors shall be persons who either (i) were serving as directors on the Closing Date or (ii) were nominated as directors and approved by the vote of the majority of the directors who are directors referred to in clause (i) above or this clause (ii); or

(b) the stockholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company; or

(c) a Person or group of Persons acting in concert (other than the direct or indirect beneficial owners of the Capital Stock of the Company as of the Closing Date) shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, have become the direct or indirect beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended from time to time) of securities of the Company representing 40% or more of the combined voting power of the outstanding voting securities for the election of directors or shall have the right to elect a majority of the board of directors of the Company.

"Chase": The Chase Manhattan Bank.

"Closing Date": the date on which the conditions precedent set forth in subsection 7.1 shall be satisfied.

"Code": the Internal Revenue Code of 1986, as amended from time to time.

"Commitment": as to any Bank, the obligation of such Bank to make and/or acquire participating interests in Committed Rate Loans or Swing Line Loans hereunder in an aggregate Dollar Equivalent Amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I, as such amount may be changed from time to time in accordance with the provisions of this Agreement.

"Commitment Percentage": as to any Bank at any time, the percentage which such Bank's Commitment then constitutes of the aggregate Commitments (or, at any time after the Commitments shall have expired or terminated, the percentage which the amount of such Bank's Exposure at such time constitutes of the aggregate amount of the Exposure of all the Banks at such time).

"Commitment Period": the period from and including the Closing Date to but not including the Termination Date or such earlier date on which the Commitments shall terminate as provided herein.

"Committed Exposure": as to any Bank, the sum of (a) the aggregate Dollar Equivalent Amount of the principal amount of all outstanding Committed Rate Loans and made by such Bank plus (b) such Bank's Commitment Percentage of the aggregate Dollar Equivalent Amount of the principal amount of all outstanding Swing Line Loans.

"Committed Rate Loan": as defined in subsection 2.1; a Committed Rate Loan bearing interest based upon the ABR shall be a "Committed Rate ABR Loan", and a Committed Rate Loan bearing interest based upon a Eurocurrency Rate shall be a "Committed Rate Eurocurrency Loan".

"Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code.

"Company": as defined in the preamble hereto.

"Company Guarantee": the Guarantee of the Company, substantially in the form of Exhibit F-1, as amended, supplemented or otherwise modified from time to time.

"Company Guarantee Ratio": at any time, the ratio (expressed as a percentage) of (a) the excess of (i) the aggregate Exposure of the Subsidiary Borrowers at such time plus the Aggregate 1995 Exposure at such time over (ii) the Guarantee Ceiling Amount at such time (the "Excess Exposure") to (b) the aggregate Exposure of the Subsidiary Borrowers at such time plus the Aggregate 1995 Exposure at such time; provided that, if the Excess Exposure at any time is less than or equal to zero, the Company Guarantee Ratio shall be zero.

"Competitive Advance Loan": as defined in subsection 3.1.

"Competitive Advance Loan Offer": with respect to any Competitive Advance Loan Request in any Currency, an offer from a Bank in respect of such Competitive Advance Loan Request, containing the information in respect of such Competitive Advance Loan Offer and delivered to the Person, in the manner and by the time specified for a Competitive Advance Loan Offer in respect of such Currency in the Administrative Schedule.

"Competitive Advance Loan Request": with respect to any Competitive Advance Loan in any Currency, a request from the Borrower in respect of such Loan, containing the information in respect of such Competitive Advance Loan and delivered to the Person, in the manner and by the time specified for a Competitive Advance Loan Request in respect of such Currency in the Administrative Schedule.

"Consolidated Cash Interest Expense": for any period, (a) the amount which would, in conformity with GAAP, be set forth opposite the caption "interest expense" or any like caption on a consolidated income statement of the Company and its Subsidiaries minus (b) the amount of non-cash interest (including interest paid by the issuance of additional securities) included in such amount.

"Consolidated Net Income": for any fiscal period, the consolidated net income (or loss) of the Company and its Subsidiaries after excluding all unusual, extraordinary and non-recurring gains and after adding all unusual, extraordinary and non-recurring losses, in all cases of the Company and its Subsidiaries determined on a consolidated basis during the relevant period in accordance with GAAP.

"Consolidated Net Worth": at a particular date, all amounts which would be included under shareholders' equity on a consolidated balance sheet of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

"Consolidated Total Capitalization": at a particular date, the sum of (a) Consolidated Net Worth plus (b) Consolidated Total Debt as at such date.

"Consolidated Total Debt": all Indebtedness of the Company and its Subsidiaries (excluding Indebtedness of the Company owing to any of its Subsidiaries or Indebtedness of any Subsidiary of the Company owing to the Company or any other Subsidiary of the Company), as determined on a consolidated basis in accordance with GAAP.

"Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

"Credit Documents": this Agreement, the Subsidiary Guarantees and the Company Guarantee.

"Currencies": the collective reference to Dollars and Available Foreign Currencies.

"Default": any of the events specified in Section 10, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

"Dollar Equivalent Amount": with respect to (i) the amount of any Available Foreign Currency on any date, the equivalent amount in Dollars of such amount of Available Foreign Currency, as determined by the Administrative Agent using the Exchange Rate and (ii) any amount in Dollars, such amount.

"Dollars" and "$": dollars in lawful currency of the United States of America.

"Domestic Subsidiary": as to any Person, a Subsidiary of such Person organized
under the laws of a State of the United States or the District of Columbia.

"Domestic Subsidiary Borrower": each Subsidiary of the Company listed as a Domestic Subsidiary Borrower in Schedule III as amended from time to time in accordance with subsection 12.1(b)(i).

"Environmental Laws": any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including, without limitation, common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time hereafter be in effect.

"ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time.

"euro": the single currency of participating member states of the European Union.

"Eurocurrency Loan": any Loan bearing interest based upon a Eurocurrency Rate.

"Eurocurrency Rate": in respect of Dollars and each Available Foreign Currency, the rate determined as the Eurocurrency Rate for Dollars or such Available Foreign Currency in the manner set forth in the Administrative Schedule.

"Event of Default": any of the events specified in Section 10, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

"Exchange Rate": with respect to any Available Foreign Currency on any date, the rate at which such Available Foreign Currency may be exchanged into Dollars, as set forth on such date on the relevant Reuters currency page at or about 11:00 A.M. London time on such date. In the event that such rate does not appear on any Reuters currency page, the "Exchange Rate" with respect to such Available Foreign Currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Company or, in the absence of such agreement, such "Exchange Rate" shall instead be the Administrative Agent's spot rate of exchange in the interbank market where its foreign currency exchange operations in respect of such Available Foreign Currency are then being conducted, at or about 10:00 A.M., local time, at such date for the purchase of Dollars with such Available Foreign Currency, for delivery two Business Days later; provided, that if at the time of any such determination, no such spot rate can reasonably be quoted, the Administrative Agent may use any reasonable method as it deems applicable to determine such rate, and such determination shall be conclusive absent manifest error (without prejudice to the determination of the reasonableness of such method).

"Exposure": at any date, (a) as to all the Banks, the aggregate Dollar Equivalent Amount of the outstanding principal amount of all Loans then outstanding and (b) as to any Bank, the aggregate Dollar Equivalent Amount of
(i) the outstanding principal amount of all Committed Rate Loans and Competitive Advance Loans made by such Bank and (ii) such Bank's Commitment Percentage of the outstanding principal amount of all Swing Line Loans.

"Facility Fee Rate": for any date, a rate per annum determined based upon the Rating in effect on such date by both S&P and Moody's set forth under the relevant column heading below opposite such Rating:

Rating                      Facility Fee Rate (in basis points)
(S&P/Moody's)

Greater than or equal to                 8.00
A/A2

Greater than or equal to                10.00
A-/A3

Greater than or equal to                12.50
BBB+/Baa1

Greater than or equal to                17.50
BBB/Baa2

Greater than or equal to                25.00
BBB-/Baa3

Less than or equal to                   32.50
BB+/Ba1

; provided that, in the event that the Ratings of S&P and Moody's do not coincide, the Facility Fee Rate set forth above opposite the higher of such Ratings will apply, unless one of the Ratings is BB+/Ba1 or lower, in which case the Facility Fee Rate will be based on the rating of BB+/Ba1.

"Financing Lease": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

"Foreign Currency Exposure": at any date, the aggregate Dollar Equivalent Amount of the outstanding principal amount of all Loans then outstanding which are denominated in a currency other than Dollars.

"Foreign Subsidiary Borrower": each Subsidiary of the Company listed as a Foreign Subsidiary Borrower in Schedule III as amended from time to time in accordance with subsection 12.1(b)(i); provided that with respect to any Subsidiary for which a Foreign Subsidiary Opinion has not previously been delivered, if the aggregate Exposure of such Subsidiary owing to all Banks exceeds $20,000,000 for a period of 30 consecutive days, then, unless a Foreign Subsidiary Opinion is delivered within 30 days after the end of such period, such Subsidiary shall cease to be a Foreign Subsidiary Borrower 30 days after the end of such period with respect to all Exposure of such Subsidiary owing to the Banks in excess of $20,000,000.

"Foreign Subsidiary Opinion": with respect to any Foreign Subsidiary Borrower, a legal opinion of counsel to such Foreign Subsidiary Borrower addressed to the Administrative Agent and the Banks concluding that such Foreign Subsidiary Borrower and the Credit Documents to which it is a party substantially comply with the matters listed on Exhibit G-3 hereto, with such deviations therefrom as the Administrative Agent shall consent (such consent not to be unreasonably withheld).

"Funding Office": for each Type of Committed Rate Loan and each Currency, the Funding Office set forth in respect thereof in the Administrative Schedule.

"Funding Time": for each Type of Committed Rate Loan and each Currency, the Funding Time set forth in respect thereof in the Administrative Schedule.

"GAAP": generally accepted accounting principles in the United States of America in effect from time to time.

"Gates": Gates/Arrow Distributing, Inc., a Delaware corporation.

"Governing Documents": as to any Person, the certificate or articles of incorporation and by-laws or other organizational or governing documents of such Person.

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

"Guarantee Ceiling Amount": at any time, the aggregate amount of obligations that, pursuant to the restrictions contained in the Note Purchase Agreement, may be guaranteed by the Company under the Company Guarantee on a basis pari passu with the 1992 Private Placement Notes.

"Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Company in good faith.

"Guarantor": the Company or any Subsidiary in its capacity as a party to the Company Guarantee or a Subsidiary Guarantee, as the case may be.

"Hedging Agreements": (a) Interest Rate Agreements and (b) any swap, futures, forward or option agreements or other agreements or arrangements designed to limit or eliminate the risk and/or exposure of a Person to fluctuations in currency exchange rates.

"Hedging Banks": any Bank or any of its subsidiaries or affiliates which from time to time enter into Hedging Agreements with the Company or any of its Subsidiaries.

"Indebtedness": of any Person at any date, without duplication, (a) the principal amount of all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) the principal amount of any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) the portion of all obligations of such Person under Financing Leases which must be capitalized in accordance with GAAP, (d) the principal or stated amount of all obligations of such Person in respect of letters of credit, banker's acceptances or similar obligations issued or created for the account of such Person, (e) all liabilities arising under Hedging Agreements of such Person, (f) the principal or stated amount of all Guarantee Obligations of such Person (other than guarantees by the Company or any Subsidiary in respect of current trade liabilities of the Company or any Subsidiary incurred in the ordinary course of business and payable in accordance with customary terms), and (g) the principal amount of all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof.

"Initial Subsidiary Guarantee": the Subsidiary Guarantee executed on the Closing Date by Gates, substantially in the form of Exhibit F-2, as the same may be amended, supplemented or otherwise modified from time to time.

"Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

"Insolvent": pertaining to a condition of Insolvency.

"Interest Payment Date": (a) as to any ABR Loan, the last day of each March, June, September and December, (b) as to any Committed Rate Eurocurrency Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Committed Rate Eurocurrency Loan having an Interest Period longer than three months, each day which is three months after the first day of such Interest Period and the last day of such Interest Period, (d) as to any Swing Line Loan, the last Business Day of each calendar month during which such Swing Line Loan is outstanding, and (e) as to any Competitive Advance Loan, the date or dates set forth in the applicable Competitive Advance Loan Request or otherwise agreed upon by the relevant Borrower and Bank at the time the terms of such Competitive Advance Loan are determined as provided in Section 3.2.

"Interest Period": with respect to any Committed Rate Eurocurrency Loan:

(i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurocurrency Loan and ending one, two, three or six months thereafter, as selected by the relevant Borrower in its Notice of Borrowing or Notice of Conversion, as the case may be, given with respect thereto; and

(i) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurocurrency Loan and ending one, two, three or six months thereafter, as selected by the relevant Borrower by a Notice of Continuation with respect thereto;

provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(1) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(1) any Interest Period that would otherwise extend beyond the Termination Date shall end on the Termination Date; and

(1) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

"Interest Rate Agreement": any interest rate protection agreement, interest rate future, interest rate option, interest rate swap, interest rate cap or other interest rate hedge or arrangement under which the Company is a party or a beneficiary.

"Joinder Agreement": each Joinder Agreement, substantially in the form of Exhibit A, from time to time executed and delivered hereunder pursuant to subsection 12.1 (b).

"Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing).

"Loan": any Committed Rate Loan, Competitive Advance Loan or Swing Line Loan.

"Loan Parties": the Company and each Subsidiary of the Company which is a party to a Credit Document.

"London Banking Day": any day on which banks in London are open for general banking business, including dealings in foreign currency and exchange.

"Material Adverse Effect": a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement or other Credit Documents or (c) the validity or enforceability of this Agreement or any of the other Credit Documents or the rights or remedies of the Administrative Agent, or the Banks hereunder or thereunder.

"Materials of Environmental Concern": any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

"Moody's": Moody's Investors Service, Inc.

"Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

"1995 Credit Agreement": the Second Amended and Restated Credit Agreement, dated as of August 16, 1995, as amended, among the Company, the other borrowers named therein, Chase, as administrative agent, and others.

"1992 Private Placement Notes": the $75,000,000 Senior Secured Notes issued by the Company pursuant to the Note Purchase Agreement, as any of the same may be amended, supplemented, endorsed or otherwise modified from time to time; provided the aggregate principal amount thereof is not increased.

"Non-Excluded Taxes": as defined in subsection 5.6.

"Note Purchase Agreement": the collective reference to the several Senior Note Purchase Agreements, each dated as of December 29, 1992, among the Company and the respective financial institutions party thereto as purchasers, as the same may be amended, supplemented or otherwise modified from time to time.

"Notice of Borrowing": with respect to a Committed Rate Loan of any Type in any Currency, a notice from the Borrower in respect of such Loan, containing the information in respect of such Loan and delivered to the Person, in the manner and by the time specified for a Notice of Borrowing in respect of such Currency and such Type of Loan in the Administrative Schedule.

"Notice of Continuation": with respect to a Committed Rate Eurocurrency Loan in any Currency, a notice from the Borrower in respect of such Loan, containing the information in respect of such Loan and delivered to the Person, in the manner and by the time specified for a Notice of Continuation in respect of such Currency in the Administrative Schedule.

"Notice of Conversion": with respect to a Committed Rate Loan in Dollars which a Borrower wishes to convert from a Eurocurrency Loan to an ABR Loan, or from an ABR Loan to a Eurocurrency Loan, as the case may be, a notice from such Borrower setting forth the amount of such Loan to be converted, the date of such conversion and, in the case of conversions of ABR Loans to Eurocurrency Loans, the length of the initial Interest Period applicable thereto. Each Notice of Conversion shall be delivered to the Administrative Agent at its address set forth in subsection 12.2 and shall be delivered before 12:00 Noon, New York City time, on the Business Day of the requested conversion in the case of conversions to ABR Loans, and before 12:00 Noon, New York City time, three Business Days before the requested conversion in the case of conversions to Eurocurrency Loans.

"Notice of Guarantee Ceiling Amount": a certificate of the Company substantially in the form of Exhibit J delivered to the Administrative Agent and calculating the Guarantee Ceiling Amount.

"Notice of Prepayment": with respect to prepayment of any Committed Rate Loan of any Type in any Currency, a notice from the Borrower in respect of such Loan, containing the information in respect of such prepayment and delivered to the Person, in the manner and by the time specified for a Notice of Prepayment in respect of such Currency and such Type of Loan in the Administrative Schedule.

"Notice of Swing Line Borrowing": with respect to a Swing Line Loan of any Type in any Currency, a notice from the Borrower in respect of such Loan, containing the information in respect of such Swing Line Loan and delivered to the Person, in the manner and by the time agreed by the Company and the applicable Swing Line Bank in respect of such Currency and such Type of Loan.

"Notice of Swing Line Outstandings": with respect to each Swing Line Bank, a notice from such Swing Line Bank containing the information, delivered to the Person, in the manner and by the time, specified for a Notice of Swing Line Outstandings in the Administrative Schedule.

"Notice of Swing Line Refunding": with respect to each Swing Line Bank, a notice from such Swing Line Bank containing the information, delivered to the Person, in the manner and by the time, specified for a Notice of Swing Line Refunding in the Administrative Schedule.

"Participant": as defined in subsection 12.6(b).

"Payment Office": for each Type of Committed Rate Loan and each Currency, the Payment Office set forth in respect thereof in the Administrative Schedule.

"Payment Time": for each Type of Committed Rate Loan and each Currency, the Payment Time set forth in respect thereof in the Administrative Schedule.

"PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

"Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

"Plan": at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Properties": as defined in subsection 6.19(a).

"Ratings": the actual or implied senior unsecured non-credit enhanced debt ratings of the Company in effect from time to time by Moody's or S&P, as the case may be, the bank debt rating of the Company in effect from time to time by Moody's or the corporate credit rating of the Company in effect from time to time by S&P..

"Register": as defined in subsection 12.6(d).

"Regulation U": Regulation U of the Board as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

"Replacement Bank": as defined in subsection 5.7(b).

"Reportable Event": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.

"Required Banks": at any time, Banks the Commitment Percentages of which aggregate more than 50%.

"Requirement of Law": as to any Person, the Governing Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"Responsible Officer": as to any Person, the chief executive officer, the chairman of the board, the president, the chief financial officer, the chief accounting officer, any executive or senior vice president or the treasurer of such Person.

"Restricted Payments": as defined in subsection 9.5.

"Rights Agreement": the Rights Agreement, dated as of March 2, 1988, between the Company and Chase, as successor by merger to Manufacturers Hanover Trust Company, as rights agent, as amended, supplemented or otherwise modified from time to time.

"S&P": Standard & Poor's Ratings Group.

"Schedule Amendment": each Schedule Amendment, substantially in the form of Exhibit B, executed and delivered pursuant to subsection 12.1.

"Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

"Subordinated Debentures": the Company's 5-3/4% Convertible Subordinated Debentures due 2002.

"Subordinated Indebtedness": Indebtedness outstanding under the Subordinated Debentures.

"Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.

"Subsidiary Borrower": the collective reference to the Foreign Subsidiary Borrowers and the Domestic Subsidiary Borrowers

"Subsidiary Guarantee": each of (a) the Initial Subsidiary Guarantee and (b) each other Subsidiary Guarantee, substantially in the form of the Initial Subsidiary Guarantee with such changes as shall be approved by the Administrative Agent, to be executed and delivered from time to time by any other Domestic Subsidiary that accounts for more than 5% of Total Assets at any date, in each case, as the same may be amended, supplemented or otherwise modified from time to time.

"Swing Line Bank": in respect of any Borrower and any Currency, each Bank listed as a Swing Line Bank in respect of such Borrower and Currency in Schedule III.

"Swing Line Currency": in respect of any Borrower, the Currency set forth for such Borrower in Schedule III.

"Swing Line Limit": in respect of any Borrower, the amount listed as the Swing Line Limit in respect of such Borrower in Schedule III, but not in any case for all Borrowers to exceed a Dollar Equivalent Amount equal to $25,000,000.

"Swing Line Loan": as defined in subsection 4.1.

"Swing Line Rate": in respect of each Swing Line Currency for each Swing Line Bank, the interest rate agreed from time to time between the Company and such Swing Line Bank.

"Target Operating Day": any day that is not (a) a Saturday or Sunday, (b) Christmas Day or New Year's Day or (c) any other day on which the Trans-European Real-time Gross Settlement Operating System (or any successor settlement system) is not operating (as determined by the Administrative Agent).

"Termination Date": March 28, 2000.

"Total Assets": at a particular date, the assets of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

"Tranche": the collective reference to Committed Rate Eurocurrency Loans in any Currency the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

"Transferee": as defined in subsection 12.6(f).

"Type": in respect of any Loan, its character as a Committed Rate Loan, Competitive Advance Loan or Swing Line Loan, as the case may be.

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

"Undrawn Commitment": as to any Bank at any time, the amount of such Bank's Commitment minus the amount of such Bank's Committed Exposure at such time but not less than zero.

(a) Other Definitional Provisions. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.
(b)
(c) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Company and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

(e) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified.
(f)
(g) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(h)
(i) The phrases "to the knowledge of the Company" and "of which any Subsidiary is aware" and phrases of similar import when used in this Agreement shall mean to the actual knowledge of a Responsible Officer of the Company or any such Subsidiary, as the case may be.
(j)
1.2 Accounting Determinations. Unless otherwise specified herein, all accounting determinations for purposes of calculating or determining compliance with the terms found in subsection 1.1 or the standards and covenants found in subsection 9.1 and otherwise to be made under this Agreement shall be made in accordance with GAAP applied on a basis consistent in all material respects with that used in preparing the financial statements referred to in subsection 6.1. If GAAP shall change from the basis used in preparing such financial statements, the certificates required to be delivered pursuant to subsection 8.1 demonstrating compliance with the covenants contained herein shall set forth calculations setting forth the adjustments necessary to demonstrate how the Company is in compliance with the financial covenants based upon GAAP as in effect on the Closing Date. 1.3 1.4
2. SECTION THE COMMITTED RATE LOANS

(a) Committed Rate Loans. Subject to the terms and conditions hereof, each Bank severally agrees to make loans on a revolving credit basis ("Committed Rate Loans") to any Borrower from time to time during the Commitment Period; provided, that (i) no Committed Rate Loan shall be made if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, (A) the aggregate amount of the Exposure of all the Banks would exceed $350,000,000 (the aggregate amount of the Commitments) or (B) the aggregate amount of the Foreign Currency Exposure would exceed $100,000,000, and (ii) no Committed Rate Loan shall be made to any Subsidiary Borrower if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, the Company Guarantee Ratio would exceed 25%. During the Commitment Period, the Borrowers may use the Commitments by borrowing, prepaying the Committed Rate Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.
(b)
(c) The Committed Rate Loans may be made in Dollars or any Available Foreign Currency and may from time to time be (i) Committed Rate Eurocurrency Loans,
(ii) in the case of Committed Rate Loans in Dollars only, Committed Rate ABR Loans or (iii) a combination thereof, as determined by the relevant Borrower and set forth in the Notice of Borrowing or Notice of Conversion with respect thereto; provided, that no Committed Rate Eurocurrency Loan shall be made after the day that is one month prior to the Termination Date.

1.2 Procedure for Committed Rate Loan Borrowing. Any Borrower may request the Banks to make Committed Rate Loans on any Business Day during the Commitment Period by delivering a Notice of Borrowing. Each borrowing of Committed Rate Loans (other than pursuant to a Swing Line Refunding pursuant to subsection 4.4) shall be in an amount equal to (a) in the case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if the then aggregate undrawn amount of the Commitments is less than $1,000,000, such lesser amount) and (b) in the case of Eurocurrency Loans,
(i) if in Dollars, $2,000,000 or increments of $500,000 thereafter, and
(ii) if in any Available Foreign Currency, an amount in such Available Foreign Currency of which the Dollar Equivalent Amount is at least $2,000,000. Upon receipt of any such Notice of Borrowing from a Borrower, the Administrative Agent shall promptly notify each Bank of receipt of such Notice of Borrowing and of such Bank's Commitment Percentage of the Committed Rate Loans to be made pursuant thereto. Subject to the terms and conditions hereof, each Bank will make its Commitment Percentage of each such borrowing available to the Administrative Agent for the account of such Borrower at the Funding Office, and at or prior to the Funding Time, for the Currency of such Loan in funds immediately available to the Administrative Agent in the applicable Currency. The amounts made available by each Bank will then be made available to such Borrower at the Funding Office, in like funds as received by the Administrative Agent. 1.3
1.4 Repayment of Committed Rate Loans; Evidence of Debt.
(a) Each Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Bank on the Termination Date (or such earlier date on which the Loans become due and payable pursuant to Section 10), the then unpaid principal amount of each Committed Rate Loan made by such Bank to such Borrower. Each Borrower hereby further agrees to pay interest on the unpaid principal amount of the Committed Rate Loans made to such Borrower from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.8. 1.5
1.6 (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Bank resulting from each Committed Rate Loan of such Bank from time to time, including the amounts of principal and interest payable and paid to such Bank from time to time under this Agreement. 1.7
1.8 (c) The Administrative Agent shall maintain the Register pursuant to subsection 12.6(d), and a subaccount therein for each Bank, in which shall be recorded (i) the amount of each Committed Rate Loan made hereunder and each Interest Period (if any) applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Bank under Committed Rate Loans and (iii) the amount of any sum received by the Administrative Agent from each Borrower in respect of Committed Rate Loans, and the amount of each Bank's share thereof. 1.9
1.10 (d) The entries made in the Register and the accounts of each Bank maintained pursuant to subsection 2.3(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded; provided, however, that the failure of any Bank or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of each Borrower to repay (with applicable interest) the Committed Rate Loans made to such Borrower by such Bank in accordance with the terms of this Agreement. 1.11
1.12 Termination or Reduction of Commitments. The Company shall have the right, upon not less than five Business Days' notice to the Administrative Agent, to terminate the Commitments or, from time to time, to reduce the amount of the Commitments. Any such reduction shall be in an amount equal to $5,000,000 or a whole multiple thereof and shall reduce permanently the Commitments then in effect; provided that the Commitments may not be optionally reduced at any time to an amount which is less than the amount of the Exposure of all the Banks at such time; and provided further that the Commitments may not be reduced to an amount which is less than $50,000,000 unless they are terminated in full. 1.13
1.14 Optional Prepayments. By giving a Notice of Prepayment, any Borrower may, at any time and from time to time, prepay the Committed Rate Loans made to such Borrower, in whole or in part, without premium or penalty (except as provided in subsection 5.8). Upon receipt of any such notice the Administrative Agent shall promptly notify each Bank thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to subsection 5.8. Partial prepayments shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof or an aggregate principal Dollar Equivalent Amount of at least $1,000,000 for Loans denominated in a Foreign Currency. 1.15
(a) Conversion and Continuation Options. By giving a Notice of Conversion, any Borrower may elect from time to time
(i) to convert such Borrower's Eurocurrency Loans in Dollars to ABR Loans or (ii) to convert such Borrower's ABR Loans to Eurocurrency Loans in Dollars. Upon receipt of any Notice of Conversion the Administrative Agent shall promptly notify each Bank thereof. All or any part of Eurocurrency Loans outstanding in Dollars or ABR Loans may be converted as provided herein, provided that (i) no ABR Loan may be converted into a Eurocurrency Loan when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Banks have determined that such a conversion is not appropriate and (ii) no ABR Loan may be converted into a Eurocurrency Loan after the date that is one month prior to the Termination Date.
(b)
(c) By giving a Notice of Continuation, any Borrower may continue any of such Borrower's Eurocurrency Loans as Eurocurrency Loans in the same Currency for additional Interest Periods.

(e) Any Borrower may convert Committed Rate Loans outstanding in Dollars or one Available Foreign Currency to Committed Rate Loans in Dollars or a different Currency by repaying such Loans in the first Currency and borrowing Loans of such different Currency in accordance with the applicable provisions of this Agreement.
(f)
(g) If any Borrower shall fail to timely give a Notice of Continuation or a Notice of Conversion in respect of any of such Borrower's Eurocurrency Loans with respect to which an Interest Period is expiring, such Borrower shall be deemed to have given a Notice of Continuation for an Interest Period of one month.
(h)
1.16 Minimum Amounts of Tranches. All borrowings, conversions and continuations of Committed Rate Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Committed Rate Loans comprising (i) each Tranche in Dollars shall be not less than $2,000,000 and (ii) each Tranche in any Available Foreign Currency shall be not less than the Dollar Equivalent Amount in such Currency of $2,000,000. 1.17
(a) Interest Rates and Payment Dates for Committed Rate Loans tc " Interest Rates and Payment Dates for Committed Rate Loans " \l 2 . Each Committed Rate Eurocurrency Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Margin.
(b)
(c) Each Committed Rate ABR Loan shall bear interest at a rate per annum equal to the ABR.

(e) If all or a portion of (i) the principal amount of any Committed Rate Loan or (ii) any interest payable thereon shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of overdue interest, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such amount is paid in full (as well after as before judgment).
(f)
(g) Interest on Committed Rate Loans shall be payable in arrears on each Interest Payment Date; provided, that interest accruing pursuant to paragraph
(c) of this subsection shall be payable from time to time on demand.
(h)
1.18 Inability to Determine Interest Rate. If on or prior to the date on which the Eurocurrency Rate is determined for any Interest Period in respect of any Eurocurrency Loan in any Currency:
1.19
(a) the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that, by reason of circumstances affecting the relevant market generally, adequate and reasonable means do not exist for ascertaining the Eurocurrency Rate for such affected Currency or such affected Interest Period, or

(a) the Administrative Agent shall have received notice from Banks having Commitments comprising at least 25% of the aggregate amount of the Commitments that the Eurocurrency Rate determined or to be determined for such affected Interest Period will not adequately and fairly reflect the cost to such Banks (as conclusively certified by such Banks) of making or maintaining their affected Committed Rate Loans during such affected Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Company and the Banks as soon as practicable thereafter. If such notice is given (x) any Eurocurrency Loans requested to be made in such affected Currency on the first day of such affected Interest Period shall be made as ABR Loans in Dollars in the Dollar Equivalent Amount, (y) any Committed Rate Loans that were to have been converted on the first day of such affected Interest Period from ABR Loans to Eurocurrency Loans shall be continued as ABR Loans and (z) any Eurocurrency Loans in such affected Currency that were to have been continued as such shall be converted, on the first day of such Interest Period, to ABR Loans in Dollars in the Dollar Equivalent Amount. Until such notice has been withdrawn by the Administrative Agent, no further Eurocurrency Loans in such affected Currency shall be made, converted to or continued as such.

1. SECTION THE COMPETITIVE ADVANCE LOANS

(a) Competitive Advance Loans. Subject to the terms and conditions hereof, any Borrower may, from time to time during the Commitment Period, request the Banks to offer bids, and any Bank may, in its sole discretion, offer such bids, to make competitive advance loans ("Competitive Advance Loans") to such Borrower on the terms and conditions set forth in such bids. Each Competitive Advance Loan shall bear interest at the rates, be payable on the dates, and shall mature on the date, agreed between such Borrower and Bank at the time such Competitive Advance Loan is made; provided, that (i) each Competitive Advance Loan shall mature not earlier than 1 day and not later than 180 days, after the date such Competitive Advance Loan is made and (ii) no Competitive Advance Loan shall mature after the Termination Date. During the Commitment Period, the Borrowers may accept bids from Banks from time to time for Competitive Advance Loans, and borrow and repay Competitive Advance Loans, all in accordance with the terms and conditions hereof; provided, that (i) no Competitive Advance Loan shall be made if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, (A) the aggregate amount of the Exposure of all the Banks would exceed the aggregate amount of the Commitments or (B) the aggregate amount of the Foreign Currency Exposure would exceed $100,000,000, and
(ii) no Competitive Advance Loan shall be made to any Subsidiary Borrower if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, the Company Guarantee Ratio would exceed 25%. Subject to the foregoing, any Bank may, in its sole discretion, make Competitive Advance Loans in an aggregate outstanding amount exceeding the amount of such Bank's Commitment.
(b)
(c) The Competitive Advance Loans may be made in Dollars or any Available Foreign Currency, as agreed between the Borrower and Bank in respect thereof at the time such Competitive Advance Loan is made.

1.2 Procedure for Competitive Advance Loan Borrowing. 1.3
(a) Any Borrower may request Competitive Advance Loans by delivering a Competitive Advance Loan Request. The Administrative Agent shall notify each Bank promptly by facsimile transmission of the contents of each Competitive Advance Loan Request received by the Administrative Agent. Each Bank may elect, in its sole discretion, to offer irrevocably to make one or more Competitive Advance Loans to the Borrower by delivering a Competitive Advance Loan Offer to the Administrative Agent.
(b)
(c) Before the acceptance time set forth in the applicable Competitive Advance Loan Request, the relevant Borrower, in its absolute discretion, shall:

(i) cancel such Competitive Advance Loan Request by giving the Administrative Agent telephone notice to that effect, or

(1) by giving telephone notice to the Administrative Agent immediately confirmed in writing or by facsimile transmission subject to the provisions of subsection 3.2(c) accept one or more of the offers made by any Bank or Banks pursuant to subsection 3.2(a) of the amount of Competitive Advance Loans for each relevant maturity date and reject any remaining offers made by Banks pursuant to subsection 3.2(a).

(a) The relevant Borrower's acceptance of Competitive Advance Loans in response to any Competitive Advance Loan Request shall be subject to the following limitations:
(b)
(i) The amount of Competitive Advance Loans accepted for each maturity date specified by any Bank in its Competitive Advance Loan Offer shall not exceed the maximum amount for such maturity date specified in such Competitive Advance Loan Offer;

(ii) the aggregate amount of Competitive Advance Loans accepted for all maturitydates specified by any Bank in its Competitive Advance Loan Offer shall not exceed the aggregate maximum amount specified in such Competitive Advance Loan Offer for all such maturity dates;

(iii) such Borrower may not accept offers for Competitive Advance Loans for any maturity date in an aggregate principal amount in excess of the maximum principal amount requested in the related Competitive Advance Loan Request; and

(iv) if such Borrower accepts any of such offers, it must accept offers based solely upon pricing for such relevant maturity date and upon no other criteria whatsoever and if two or more Banks submit offers for any maturity date at identical pricing and such Borrower accepts any of such offers but does not wish to (or by reason of the limitations set forth in this subsection 3.2(c)(iii) cannot) borrow the total amount offered by such Banks with such identical pricing, the Administrative Agent shall allocate offers from all of such Banks in amounts among them pro rata according to the amounts offered by such Banks (or as nearly pro rata as shall be practicable).

(d) If the relevant Borrower notifies the Administrative Agent that a Competitive Advance Loan Request is cancelled, the Administrative Agent shall give prompt telephone notice thereof to the Banks.

(e) If the relevant Borrower accepts one or more of the offers made by any Bank or Banks, the Administrative Agent promptly shall notify each Bank which has made such a Competitive Advance Loan Offer of (i) the aggregate amount of such Competitive Advance Loans to be made for each maturity date and (ii) the acceptance or rejection of any offers to make such Competitive Advance Loans made by such Bank. Before the Funding Time for Committed Rate Loans of the applicable Currency, each Bank whose Competitive Advance Loan Offer has been accepted shall make available to the Administrative Agent for the account of the relevant Borrower at the Funding Office for Committed Rate Loans of the applicable Currency the amount of Competitive Advance Loans in the applicable Currency to be made by such Bank, in immediately available funds.

1.1 Repayment of Competitive Advance Loans; Evidence of Debt tc " Repayment of Competitive Advance Loans; Evidence of Debt " \l 2 . (a) Each Borrower that borrows any Competitive Advance Loan hereby unconditionally promises to pay to the Bank that made such Competitive Advance Loan on the maturity date, as agreed by such Borrower and Bank (or such earlier date on which all the Loans become due and payable pursuant to Section 10), the then unpaid principal amount of such Competitive Advance Loan. Each Borrower hereby further agrees to pay interest on the unpaid principal amount of the Competitive Advance Loans made by any Bank to such Borrower from time to time outstanding from the date thereof until payment in full thereof at the rate per annum, and on the dates, agreed by such Borrower and Bank at the time such Competitive Advance Loan is made. All payments in respect of Competitive Advance Loans shall be made by such Borrower to the Administrative Agent for the account of the Bank that makes such Competitive Advance Loan to the Payment Office and by the Payment Time specified for Committed Rate Loans in the applicable Currency. 1.2
1.3 (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Bank resulting from each Competitive Advance Loan of such Bank from time to time, including the amounts of principal and interest payable and paid to such Bank from time to time in respect of Competitive Advance Loans. The entries made in the accounts of each Bank maintained pursuant to this subsection 3.3(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded, absent manifest error; provided, however, that the failure of any Bank to maintain any such account, or any error therein, shall not in any manner affect the obligation of each Borrower to repay (with applicable interest) the Competitive Advance Loans made to such Borrower by such Bank in accordance with the terms of this Agreement. 1.4
1.5 Prepayments. Unless otherwise agreed by the Bank making a Competitive Advance Loan, upon giving a Notice of Prepayment at the address and time specified for Committed Rate Loans in the applicable Currency such Competitive Advance Loan may be optionally prepaid prior to the scheduled maturity date thereof. 1.6 1.7

2. SECTION THE SWING LINE LOANS

1.1 Swing Line Loans. Subject to the terms and conditions hereof, each Borrower may borrow from such Borrower's Swing Line Bank swing line loans ("Swing Line Loans") from time to time during the Commitment Period in a Swing Line Currency of such Borrower; provided, that (i) no Swing Line Loan shall be made if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, (A) the aggregate amount of the Exposure of all the Banks would exceed the aggregate amount of the Commitments, (B) the aggregate amount of the Foreign Currency Exposure would exceed $100,000,000, or
(C) the aggregate Dollar Equivalent Amount of all outstanding Swing Line Loans of such Borrower would exceed the Swing Line Limit for such Borrower or the Dollar Equivalent Amount of all outstanding Swing Line Loans would exceed the Swing Line Limit, and (ii) no Swing Line Loan shall be made to any Subsidiary Borrower if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, the Company Guarantee Ratio would exceed 25%. During the Commitment Period, the Borrowers may borrow and prepay the Swing Line Loans, in whole or in part, all in accordance with the terms and conditions hereof.

1.1 Procedure for Swing Line Borrowing tc " Procedure for Swing Line Borrowing " \l 2 . (a) Any Borrower may borrow Swing Line Loans during the Commitment Period on any Business Day by giving a Notice of Swing Line Borrowing in respect of such Swing Line Loan. Subject to the terms and conditions hereof, on the Borrowing Date of each Swing Line Loan, the relevant Swing Line Bank shall make the proceeds thereof available to the relevant Borrower in immediately available funds in the applicable Currency in the manner from time to time agreed by such Borrower and such Swing Line Bank. 1.2
1.3 (b) Upon request of the Administrative Agent and on the last Business Day of each month on which a Swing Line Bank has any outstanding Swing Line Loans, such Bank shall deliver to the Administrative Agent a Notice of Swing Line Outstandings. The Administrative Agent will, at the request of any Swing Line Bank, advise such Swing Line Bank of the Exchange Rate used by the Administrative Agent in calculating the Dollar Equivalent Amount of Swing Line Loans of such Swing Line Bank on any date. 1.4
1.5 Repayment of Swing Line Loans; Evidence of Debt.
(a) Each Borrower hereby unconditionally promises to pay to its Swing Line Bank on the Termination Date (or such earlier date on which such Swing Line Loans become due and payable pursuant to subsection 4.4 or on which all the Loans become due and payable pursuant to Section 10), the then unpaid principal amount of all Swing Line Loans made to such Borrower. Each Borrower hereby further agrees to pay interest on the unpaid principal amount of all Swing Line Loans made to such Borrower from time to time outstanding from the date thereof until payment in full thereof at the Swing Line Rate for the Currency of such Swing Line Loan, payable on the last Business Day of each calendar month on which such Swing Line Loans are outstanding. All payments in respect of Swing Line Loans shall be made by such Borrower to its Swing Line Bank at the address set forth in Schedule III for such Swing Line Bank and Swing Line Loans in such Currency. 1.6
1.7 (b) Each Swing Line Bank shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Swing Line Bank resulting from each Swing Line Loan of such Bank from time to time, including the amounts of principal and interest payable and paid to such Swing Line Bank from time to time under this Agreement. The entries made in the accounts of each Swing Line Bank maintained pursuant to this subsection 4.3(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded; provided, however, that the failure of any Swing Line Bank to maintain any such account, or any error therein, shall not in any manner affect the obligation of each Borrower to repay (with applicable interest) the Swing Line Loans made to such Borrower by such Swing Line Bank in accordance with the terms of this Agreement. 1.8
(a) Allocating Swing Line Loans; Swing Line Loan Participations. If any Event of Default shall occur and be continuing, any Swing Line Bank may, in its sole and absolute discretion, direct that the Swing Line Loans owing to it be refunded, by delivering a Notice of Swing Line Refunding. Upon receipt of a Notice of Swing Line Refunding the Administrative Agent shall promptly give notice of the contents thereof to the Banks and, unless an Event of Default described in Section 10(h) in respect of the Company or the relevant Borrower has occurred, to the Company and the relevant Borrower. Each such Notice of Swing Line Refunding shall be deemed to constitute delivery by such Borrower of a Notice of Borrowing of Committed Rate Eurocurrency Loans in the amount and Currency of the Swing Line Loans to which it relates, for an Interest Period of one month's duration. Subject to the terms and conditions hereof, each Bank
(including each Swing Line Bank in its capacity as a Bank having a Commitment) hereby agrees to make a Committed Rate Loan to such Borrower pursuant to Section 2 in an amount equal to such Bank's Borrowing Percentage of the aggregate amount of the Swing Line Loans to which such Notice of Swing Line Refunding relates. Unless any of the events described in Section 10(h) in respect of the Company or such Borrower shall have occurred (in which case the procedures of subsection 4.4(b) shall apply), each Bank shall make the amount of such Committed Rate Loan available to the Administrative Agent at the Funding Office, and at or prior to the Funding Time, for the Currency of such Loan in funds immediately available to the Administrative Agent. The proceeds of such Committed Rate Loans shall be immediately made available to such Swing Line Bank by the Administrative Agent and applied by such Swing Line Bank to repay the Swing Line Loans to which such Notice of Swing Line Refunding related.
(b)
(c) If prior to the time a Committed Rate Loan would have otherwise been made pursuant to subsection 4.4(a), one of the events described in Section 10(h) shall have occurred in respect of the Company or the relevant Borrower, each Bank (other than the relevant Swing Line Bank) shall, on the date such Committed Rate Loan would have been made pursuant to the Notice of Swing Line Refunding referred to in subsection 4.4(a) (the "Refunding Date"), purchase an undivided participating interest in the outstanding Swing Line Loans to which such Notice of Swing Line Refunding related, in an amount equal to (i) such Bank's Commitment Percentage times (ii) the aggregate principal amount of such Swing Line Loans then outstanding which were to have been repaid with Committed Rate Loans (the "Swing Line Participation Amount"). On the Refunding Date, (x) each Bank shall transfer to such Swing Line Bank, in immediately available funds, such Bank's Swing Line Participation Amount, and upon receipt thereof such Swing Line Bank shall, if requested by any Bank, deliver to such Bank a participation certificate dated the date of such Swing Line Bank's receipt of such funds and evidencing such Bank's ownership of its Swing Line Participation Amount and (y) the interest rate on the applicable Swing Line Loan will automatically be converted to the applicable Eurocurrency Rate with an Interest Period of one month plus the Applicable Margin. If any amount required to be paid by any Bank to any Swing Line Bank pursuant to this subsection 4.4 in respect of any Swing Line Participation Amount is not paid to such Swing Line Bank on the date such payment is due from such Bank, such Bank shall pay to such Swing Line Bank on demand an amount equal to the product of (i) such amount, times (ii) (A) in the case of any such payment obligation denominated in Dollars, the daily average Federal funds rate, as quoted by such Swing Line Bank, or (B) in the case of any such payment obligation denominated in an Available Foreign Currency, the rate customary in such Currency for settlement of similar inter-bank obligations, as quoted by such Swing Line Bank, in each case during the period from and including the date such payment is required to the date on which such payment is immediately available to the Swing Line Bank, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of a Swing Line Bank submitted to any Bank with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error.

(e) Whenever, at any time after any Swing Line Bank has received from any Bank such Bank's Swing Line Participation Amount, such Swing Line Bank receives any payment on account of the related Swing Line Loans, such Swing Line Bank will distribute to such Bank its Commitment Percentage of such payment on account of its Swing Line Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Bank's participating interest was outstanding and funded); provided, however, that in the event that such payment received by such Swing Line Bank is required to be returned, such Bank will return to such Swing Line Bank any portion thereof previously distributed to it by such Swing Line Bank.
(f)
(g) Each Bank's obligation to make Committed Rate Loans pursuant to subsection 4.4(a) and to purchase participating interests pursuant to subsection 4.4(b) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against any other Bank or any Borrower, or any Borrower may have against any Bank or any other Person, as the case may be, for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default; (iii) any adverse change in the condition (financial or otherwise) of the Company or any of its Subsidiaries;
(iv) any breach of this Agreement by any party hereto; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.
(h)

2. SECTION CERTAIN PROVISIONS APPLICABLE TO THE LOANS

1.1 Facility Fee; Utilization Fee; Other Fees. (a) The Company agrees to pay to the Administrative Agent for the account of each Bank a facility fee for the period from and including the Closing Date to, but excluding, the Termination Date, computed at the Facility Fee Rate in effect from time to time on the average daily amount of the Commitment (used and unused) of such Bank during the period for which payment is made, payable quarterly in arrears on the last day of each March, June, September and December and on the Termination Date or such earlier date on which the Commitments shall terminate as provided herein, commencing on the first of such dates to occur after the date hereof.

(b) The Company will pay to the Administrative Agent for the amount of each Bank a utilization fee on such Bank's Commitment Percentage of the aggregate outstanding principal amount of Committed Rate Loans and Swing Line Loans ("Aggregate Committed Outstandings") calculated at the rate of (a) 0.10% on the Aggregate Committed Outstandings equal to or exceeding 33-1/3%, but less than 66-2/3%, of the aggregate Commitments and (b).25% on the Aggregate Committed Outstandings equal to or exceeding 66-2/3% of the aggregate Commitments.

(c) The Company agrees to pay to the Administrative Agent, for its own account and for the account of the Arranger, the fees in the amounts and on the dates agreed to by such parties in writing prior to the date of this Agreement.

(a) Computation of Interest and Fees. Facility fees and, whenever it is calculated on the basis of the Prime Rate, interest shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed; and, otherwise, interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the relevant Borrower and the Banks of each determination of a Eurocurrency Rate. Any change in the ABR due to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively. The Administrative Agent shall as soon as practicable notify the relevant Borrower and the Banks of the effective date and the amount of each such change in interest rate.
(b)
(c) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Banks in the absence of manifest error.

(e) Pro Rata Treatment and Payments. Each payment by the Company on account of any facility fee or utilization fee hereunder and any reduction of the Commitments of the Banks shall be made pro rata according to the respective Commitment Percentages of the Banks. Each disbursement of Committed Rate Loans shall be made by the Banks pro rata according to the respective Commitment Percentages of the Banks. Each payment (including each prepayment) by any Borrower on account of principal of and interest on any Loans shall be made pro rata according to the respective principal amounts of the Loans of such Borrower then due and owing to the Banks. All payments (including prepayments) to be made by any Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim. All payments in respect of Loans in any Currency shall be made in such Currency and in immediately available funds at the Payment Office, and at or prior to the Payment Time, for such Type of Loans and such Currency, on the due date thereof. The Administrative Agent shall distribute to the Banks any payments received by the Administrative Agent promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.
(f)
(g) Unless the Administrative Agent shall have been notified in writing by any Bank prior to a Borrowing Date in respect of Committed Rate Loans that such Bank will not make the amount that would constitute its Commitment Percentage of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Bank is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the relevant Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Bank shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to (A) in the case of any such Committed Rate Loans denominated in Dollars, the daily average Federal funds rate, as quoted by the Administrative Agent, or (B) in the case of any Committed Rate Loans denominated in an Available Foreign Currency, the rate customary in such Currency for settlement of similar inter-bank obligations, as quoted by the Administrative Agent, in each case for the period until such Bank makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Bank with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Bank's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Bank within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Swing Line Loans in such Currency hereunder, on demand, from the relevant Borrower.
(h)
1.2 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for any Bank to make or maintain Eurocurrency Loans to one or more Borrowers contemplated by this Agreement, the commitment of such Bank hereunder to make Eurocurrency Loans, continue Eurocurrency Loans as such and convert Loans to Eurocurrency Loans to such Borrowers shall forthwith be cancelled to the extent necessary to remedy or prevent such illegality. Nothing in this subsection 5.4 shall affect the obligation of the Banks to make and maintain ABR Loans to the Company and, to the extent not unlawful, to Subsidiary Borrowers, notwithstanding that a Requirement of Law may make it unlawful to make and maintain Eurocurrency Loans to such Borrowers. 1.3
(a) Requirements of Law. If the adoption of or any change in any Requirement of Law (other than the Certificate of Incorporation and By-Laws or other organizational or governing documents of the Banks) or in the interpretation or application thereof or compliance by any Bank with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(b)
(i) shall subject any Bank or any corporation controlling such Bank or from which such Bank obtains funding or credit to any tax of any kind whatsoever with respect to this Agreement, or any Eurocurrency Loan made by it, or change the basis of taxation of payments to such Bank or such corporation in respect thereof (except for Non-Excluded Taxes covered by subsection 5.6 (including taxes excluded under the first sentence of subsection 5.6(a)) and changes in the rate of tax on the overall net income of such Bank or such corporation);
(i) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Bank or any corporation controlling such Bank or from which such Bank obtains funding or credit which is not otherwise included in the determination of the Eurocurrency Rate hereunder; or

(i) shall impose on such Bank or any corporation controlling such Bank or from which such Bank obtains funding or credit any other condition; and the result of any of the foregoing is to increase the cost to such Bank or such corporation, by an amount which such Bank or such corporation deems to be material, of making, converting into, continuing or maintaining Eurocurrency Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Company shall promptly pay such Bank, within five Business Days after its demand, any additional amounts necessary to compensate such Bank for such increased cost or reduced amount receivable, together with interest on each such amount from the date due until payment in full at a rate per annum equal to the ABR plus 2%. If any Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Company, through the Administrative Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Bank, through the Administrative Agent, to the Company shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of Loans and all other amounts payable hereunder.

(a) If any Bank shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Bank or any corporation controlling such Bank or from which such Bank obtains funding or credit with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Bank's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Bank or such corporation could have achieved but for such change or compliance (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, after submission by such Bank to the Company (with a copy to the Administrative Agent) of a written request therefor (which written request shall be conclusive in the absence of manifest error), the Company shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction.
(b)
(c) In addition to, and without duplication of, amounts which may become payable from time to time pursuant to paragraphs (a) and (b) of this subsection 5.5, each Borrower agrees to pay to each Bank which requests compensation under this paragraph (c) by notice to such Borrower, on the last day of each Interest Period with respect to any Committed Rate Eurocurrency Loan made by such Bank to such Borrower, at any time when such Bank shall be required to maintain reserves against "Eurocurrency liabilities" under Regulation D of the Board (or, at any time when such Bank may be required by the Board or by any other Governmental Authority, whether within the United States or in another relevant jurisdiction, to maintain reserves against any other category of liabilities which includes deposits by reference to which the Eurocurrency Rate is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Bank which includes any such Committed Rate Eurocurrency Loans), an additional amount (determined by such Bank's calculation or, if an accurate calculation is impracticable, reasonable estimate using such reasonable means of allocation as such Bank shall determine) equal to the actual costs, if any, incurred by such Bank during such Interest Period as a result of the applicability of the foregoing reserves to such Committed Rate Eurocurrency Loans.

(e) A certificate of each Bank or Swing Line Bank setting forth such amount or amounts as shall be necessary to compensate such Bank or Swing Line Bank as specified in paragraph (a), (b) or (c) above, as the case may be, and setting forth in reasonable detail an explanation of the basis of requesting such compensation in accordance with paragraph (a) or (b) above, including calculations in detail comparable to the detail set forth in certificates delivered to such Bank in similar circumstances under comparable provisions of other comparable credit agreements, shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. The relevant Borrower shall pay each Bank or Swing Line Bank the amount shown as due on any such certificate delivered to it within 10 days after its receipt of the same.
(f)
(g) The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(h)
(i) Taxes. All payments made by any Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of the Administrative Agent and each Bank, (i) net income taxes, capital taxes, doing business taxes and franchise taxes imposed on the Administrative Agent or such Bank (including, without limitation, each Bank in its capacity as a Swing Line Bank), as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Administrative Agent or such Bank (excluding a connection arising solely from the Administrative Agent or such Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) or any political subdivision or taxing authority thereof or therein, (ii) taxes required to be withheld because of a failure to deliver any certificate described in this subsection 5.6 or subsection 12.6 for any reason and (iii) any and all withholding taxes payable with respect to payments under this Agreement other than any such withholding taxes imposed as a result of any change in or amendment to the laws of any jurisdiction affecting taxation (including any regulation or ruling proposed or promulgated by a taxing authority thereof and any treaty provisions) or any change in the official application, enforcement or interpretation of such laws, regulations, rulings or treaties or any other action taken by a taxing authority or a court of competent jurisdiction, which change, amendment, application, enforcement, interpretation or action becomes effective after the date hereof (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called "Non-Excluded Taxes"). If any Non-Excluded Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Bank hereunder, the amounts so payable to the Administrative Agent or such Bank shall be increased to the extent necessary to yield to the Administrative Agent or such Bank (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement. Whenever any Non-Excluded Taxes are payable by any Borrower, as promptly as possible thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of such Bank, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof. If such Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrative Agent and such Bank for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or such Bank as a result of any such failure. The agreements in this subsection 5.6(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(j)
(i) Each Bank (including each Assignee) that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Company and the Administrative Agent concurrently with the delivery of this Agreement (or, in the case of any Assignee, concurrently with the delivery of an Assignment and Acceptance) two duly completed copies of (x) United States Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the case may be, and (y) an Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the case may be. Each such Bank also agrees to deliver to the Company and the Administrative Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event
(including, without limitation, a change in such Bank's lending office) requiring a change in the most recent form previously delivered by it to the Company and the Administrative Agent, and such extensions or renewals thereof as may reasonably be requested by the Company or the Administrative Agent, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Bank from duly completing and delivering any such form with respect to it and such Bank so advises the Company and the Administrative Agent. Such Bank shall certify (x) in the case of a Form 1001 or 4224, that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes and (y) in the case of a Form W-8 or W-9, that it is entitled to an exemption from United States backup withholding tax.

(iii) Upon the written request of any Borrower, each Bank promptly will provide to such Borrower and to the Administrative Agent, or file with the relevant taxing authority (with a copy to the Administrative Agent) such form, certification or similar documentation (each duly completed, accurate and signed) as is required by the relevant jurisdiction in order to obtain an exemption from, or reduced rate of Non-Excluded Taxes to which such Bank or the Administrative Agent is entitled pursuant to an applicable tax treaty or the law of the relevant jurisdiction; provided, however, such Bank will not be required to (x) disclose information which in its reasonable judgment it deems confidential or proprietary or (y) incur a cost if such cost would, in its reasonable judgment, be substantial in comparison to the cost of the Borrower under this subsection 5.6 of such Bank's failure to provide such form, certification or similar documentation. Such Bank shall certify in the case of any such form, certification or similar documentation so provided (to the extent it may accurately and properly do so) that it is entitled to receive payments under this Agreement without deduction or withholding, or at a reduced rate of deduction or withholding of Non-Excluded Taxes.

(i) A Bank shall be required to furnish a form under this paragraph (b) only if it is entitled to claim an exemption from or a reduced rate of withholding under applicable law. A Bank that is not entitled to claim an exemption from or a reduced rate of withholding under applicable law, promptly upon written request of the applicable Borrower, shall inform the applicable Borrower in writing.

(a) If any Bank is, in its sole opinion, able to apply for any tax credit, tax deduction or other reduction in tax (a "Tax Benefit") by reason of any increased amount paid by the Company under this subsection 5.6, such Bank will use reasonable efforts to obtain such Tax Benefit and, upon receipt thereof will pay to the Company such amount, not exceeding the increased amount paid by the Company, as it considers, in its sole opinion, to be equal to the net after-tax value to such Bank of the Tax Benefit or such part thereof allocable to such withholding or deduction, having regard to all of such Bank's dealings giving rise to similar credits and to the cost of obtaining the same, less any and all expenses incurred by such Bank in obtaining such Tax Benefit (including any and all professional fees incurred therewith); provided, however, that (i) no Bank shall be obligated by this subsection 5.6 to disclose to the Company any information regarding its tax affairs or computations, (ii) nothing in this subsection 5.6 shall interfere with the right of each Bank to arrange its tax affairs as it deems appropriate and (iii) nothing in this subsection 5.6 shall impose an obligation on a Bank to obtain any Tax Benefit if, in such Bank's sole opinion, to do so would (x) impose undue hardships, burdens or expenditures on such Bank or (y) increase such Bank's exposure to taxation by the jurisdiction in question.
(b)
1.2 Company's Options upon Claims for Increased Costs and Taxes. In the event that any Affected Bank shall decline to make Eurocurrency Loans pursuant to subsection 5.4 or shall have notified the Company that it is entitled to claim compensation pursuant to subsection 5.5 or 5.6, the Company may exercise any one or both of the following options:
1.3
(a) The Company may request one or more of the Banks which are not Affected Banks to take over all (but not part) of any Affected Banks's then outstanding Loans and to assume all (but not part) of any Affected Bank's Commitments, if any. If one or more Banks shall so agree in writing (collectively, the "Assenting Banks"; individually, an "Assenting Bank") with respect to an Affected Bank, (i) the Commitments, if any, of each Assenting Bank and the obligations of such Assenting Bank under this Agreement shall be increased by its respective Allocable Share of the Commitments, if any, and of the obligations of such Affected Bank under this Agreement and (ii) each Assenting Bank shall make Loans to the Company, according to such Assenting Bank's respective Allocable Share, in an aggregate principal amount equal to the outstanding principal amount of the Loans and of such Affected Bank, on a date mutually acceptable to the Assenting Banks, such Affected Bank and the Company. The proceeds of such Loans, together with funds of the Company, shall be used to prepay the Loans, together with all interest accrued thereon and all other amounts owing to such Affected Bank hereunder (including any amounts payable pursuant to subsection 5.8 in connection with such prepayment), and, upon such assumption by the Assenting Bank and prepayment by the Company, such Affected Bank shall cease to be a "Bank" for purposes of this Agreement and shall no longer have any obligations or rights hereunder (other than any obligations or rights which according to this Agreement shall survive the termination of this Agreement).

(a) The Company may designate a replacement bank (a "Replacement Bank") to assume the Commitments, if any, and the obligations of any such Affected Bank hereunder, and to purchase the outstanding Loans of such Affected Bank and such Affected Bank's rights hereunder and with respect thereto, without recourse upon, or warranty by, or expense to, such Affected Bank (unless such Affected Bank agrees otherwise), for a purchase price equal to the outstanding principal amount of the Loans of such Affected Bank plus (i) all interest accrued and unpaid thereon and all other amounts owing to such Affected Bank hereunder and
(ii) any amount which would be payable to such Affected Bank pursuant to subsection 5.8, and upon such assumption and purchase by the Replacement Bank, such Replacement Bank shall be deemed to be a "Bank" for purposes of this Agreement and such Affected Bank shall cease to be a "Bank" for purposes of this Agreement and shall no longer have any obligations or rights hereunder (other than any obligations or rights which according to this Agreement shall survive the termination of this Agreement).

1.1 Indemnity. Each Borrower agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense (but excluding any lost profits) which such Bank may sustain or incur as a consequence of (a) default by such Borrower in payment when due of the principal amount of or interest on any Eurocurrency Loan, (b) default by such Borrower in making a borrowing of, conversion into or continuation of Eurocurrency Loans after such Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (c) default by such Borrower in making any prepayment of Eurocurrency Loans after such Borrower has given a notice thereof in accordance with the provisions of this Agreement, (d) the making of a prepayment or conversion of Eurocurrency Loans on a day which is not the last day of an Interest Period with respect thereto or (e) the prepayment of any Competitive Advance Loan, including, without limitation, in each case, any such loss or expense arising from the reemployment or repayment of funds obtained by such Bank or from fees payable to terminate the deposits from which such funds were obtained. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 1.2
1.3 Determinations. In making the determinations contemplated by subsection 5.5, 5.6 and 5.8, each Bank may make such estimates, assumptions, allocations and the like that such Bank in good faith determines to be appropriate. Upon request of the Company, each Bank shall furnish to the Company, at any time after demand for payment of an amount under subsection 5.5(a) or 5.8, a certificate outlining in reasonable detail the computation of any amounts owing. Any certificate furnished by a Bank shall be binding and conclusive in the absence of manifest error. 1.4
1.5 Change of Lending Office. If an event occurs with respect to any Bank that makes operable the provisions of subsection 5.4 or entitles such Bank to make a claim under subsection 5.5 or 5.6, such Bank shall, if requested in writing by the Company, to the extent not inconsistent with such Bank's internal policies, use reasonable efforts to (a) designate another office or offices for the making and maintaining of its Loans or (b) obtain a different source of funds or credit, as the case may be, the designation or obtaining of which will eliminate such operability or reduce materially the amount such Bank is so entitled to claim, provided that such designation or obtaining would not, in the sole discretion of such Bank, result in such Bank incurring any costs unless the Company has agreed to reimburse such Bank therefor. 1.6
1.7 Company Controls on Exposure; Calculation of Exposure; Prepayment if Exposure exceeds Commitments. The Company will implement and maintain internal accounting controls to monitor the borrowings and repayments of Loans by the Borrowers, with the object of preventing any request for any Loan that would result in (i) the Exposure of the Banks being in excess of the Commitments, (ii) the Foreign Currency Exposure exceeding $100,000,000 or (iii) the Company Guarantee Ratio exceeding 25%, and of promptly identifying and remedying any circumstance where, by reason of changes in exchange rates, (i) the aggregate amount of the Exposure exceeds the Commitments, (ii) the amount of the Foreign Currency Exposure exceeds $100,000,000 or (iii) the Company Guarantee Ratio exceeds 25%. In the event that at any time the Company determines that (i) the aggregate amount of the Exposure of the Banks exceeds the aggregate amount of the Commitments by more than 5%, (ii) the amount of the Foreign Currency Exposure exceeds $100,000,000 or (iii) the Company Guarantee Ratio exceeds 25%, the Company will, as soon as practicable but in any event within five Business Days of making such determination, make or cause to be made such repayments or prepayments of Loans as shall be necessary to cause (i) the aggregate amount of the Exposure of the Banks to no longer exceed the Commitments, (ii) the amount of the Foreign Currency Exposure not to exceed $100,000,000 and (iii) the Company Guarantee Ratio not to exceed 25%.

(a) The Administrative Agent will calculate the aggregate amount of the Exposure of the Banks from time to time, and in any event not less frequently than once during each calendar month. In making such calculations, the Administrative Agent will rely on the information most recently received by it from the Swing Line Banks in respect of outstanding Swing Line Loans, and from Banks in respect of outstanding Competitive Advance Loans. Upon making each such calculation, the Administrative Agent will inform the Company and the Banks of the results thereof.
(b)
(c) In the event that on any date the Administrative Agent calculates that (i) the aggregate amount of the Exposure of the Banks exceeds the aggregate amount of the Commitments by more than 5%, (ii) the Foreign Currency Exposure exceeds $100,000,000 or (iii) the Company Guarantee Ratio exceeds 25%, the Administrative Agent will give notice to such effect to the Company. Within five Business Days after receipt of any such notice, the Company will, as soon as practicable but in any event within five Business Days of receipt of such notice, make or cause to be made such repayments or prepayments of Loans as shall be necessary to cause (i) the aggregate amount of the Exposure of the Banks to no longer exceed the Commitments, (ii) the Foreign Currency Exposure not to exceed $100,000,000 and (iii) the Company Guarantee Ratio not to exceed 25%.

(e) If at any time the Committed Exposure of any Bank exceeds such Bank's Commitment, upon demand of such Bank, the Company will within one Business Day prepay Loans in such amounts that after giving effect to such prepayment the Committed Exposure of such Bank does not exceed its Commitment.
(f)
(g) Any prepayment required to be made pursuant to this subsection 5.11 shall be accompanied by payment of amounts payable, if any, pursuant to subsection 5.8 in respect of the amount so prepaid.

2. SECTION REPRESENTATIONS AND WARRANTIES

To induce the Agents, the Administrative Agent and the Banks to enter into this Agreement and to make the Loans, the Company and each Subsidiary Borrower (in so far as the representations and warranties by such Subsidiary Borrower relate to it) hereby represents and warrants to each Agent, the Administrative Agent and each Bank that:

1.1 Financial Condition. The audited consolidated balance sheets of the Company and its consolidated Subsidiaries as at December 31, 1997 and the related consolidated statements of income and of cash flows for the fiscal year ended on such date, reported on by Ernst & Young LLP, copies of which have heretofore been furnished to each Bank or will be furnished to each Bank that has not already received such copies, present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. The unaudited consolidating balance sheet of the Company and its consolidated Subsidiaries by principal operating group as at September 30, 1998, the related unaudited consolidating statement of operations and retained earnings for the portion of the fiscal year ended on September 30, 1998, and the press release of the Company with respect to its earnings for fiscal year ended December 31, 1998 (dated February 24, 1999), certified by a Responsible Officer, copies of which have heretofore been furnished to each Bank or will be furnished to each Bank that has not already received such copies, present fairly the consolidating financial condition of the Company and its consolidated Subsidiaries by principal operating group as at such date, and the consolidating results of their operations for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein). Neither the Company nor any of its consolidated Subsidiaries had, at the date of the most recent balance sheet referred to above, any material Guarantee Obligation, contingent liability or liability for taxes, or any long-term lease or unusual forward or long-term commitment, including, without limitation, any interest rate or foreign currency swap or exchange transaction, which is not reflected in the foregoing statements or referred to in the notes thereto. During the period from September 30, 1998 to and including the date hereof there has been no sale, transfer or other disposition by the Company or any of its consolidated Subsidiaries of any material part of its business or property and no purchase or other acquisition of any business or property (including any Capital Stock of any other Person) material in relation to the consolidated financial condition of the Company and its consolidated Subsidiaries at September 30, 1998 (except as otherwise disclosed in writing to the Banks prior to the Closing Date).

1.1 No Change. Since December 31, 1997 there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. 1.2
1.3 Corporate Existence; Compliance with Law. Each of the Company and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate or other power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing could not reasonably be expected to have a Material Adverse Effect, and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 1.4
1.5 Corporate Power; Authorization; Enforceable Obligations. The Company and each of its Subsidiaries has the corporate or other power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and the execution, delivery and performance of the Credit Documents to which it is a party. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents. This Agreement has been, and each other Credit Document to which the Company or any of its Subsidiaries is a party will be, duly executed and delivered on behalf of the Company or such Subsidiary, as the case may be. This Agreement constitutes, and each other Credit Document to which it is a party when executed and delivered will constitute, a legal, valid and binding obligation of the Company or any of its Subsidiaries party thereto enforceable against the Company or such Subsidiary, as the case may be, in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 1.6
1.7 No Legal Bar. The execution, delivery and performance of the Credit Documents to which the Company or any of its Subsidiaries is a party, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or Contractual Obligation of the Company or of any of its Subsidiaries (except for violations of Contractual Obligations which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect) and will not result in, or require, the creation or imposition of any Lien on any of its or their respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation, except for the Liens expressly permitted by subsection 9.3. 1.8
1.9 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Subsidiaries or against any of its or their respective properties or revenues with respect to any of the Credit Documents or any of the transactions contemplated hereby or thereby. 1.10
1.11 No Default. No Default or Event of Default has occurred and is continuing. 1.12
1.13 Ownership of Property; Liens. Each of the Company and its Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by subsection 9.3. 1.14
1.15 Intellectual Property. The Company and each of its Subsidiaries owns, or is licensed to use, all domestic and foreign trademarks, tradenames, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted (the "Intellectual Property"). No claim has been asserted and is pending or, to the knowledge of the Company, has been threatened by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Company know of any valid basis for any such claim. The use of such Intellectual Property by the Company and its Subsidiaries does not infringe on the rights of any Person. 1.16
(i) Year 2000 Matters. Any reprogramming required to permit the proper functioning, in and following the year 2000, of the Company's computer systems and equipment containing embedded microchips (including systems and equipment supplied by others or with which Company's systems interface) and the testing of all such systems and equipment, as so reprogrammed, will be completed by September 30, 1999. The cost to the Company of such reprogramming and testing and of the reasonably foreseeable consequences of year 2000 to the Company (including, without limitation, reprogramming errors and, to the best knowledge of the Company, the failure of others' systems or equipment) will not result in a Default or a Material Adverse Effect. Except for such of the reprogramming referred to in the preceding sentence as may be necessary, the computer and management information systems of the Company and its Subsidiaries are and, with ordinary course upgrading and maintenance, will continue for the term of this Agreement to be, sufficient to permit the Company to conduct its business without Material Adverse Effect.

1.1 Taxes. Each of the Company and its consolidated Subsidiaries has filed or caused to be filed all tax returns which, to the knowledge of the Company, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any unfiled tax returns for taxes, and unpaid taxes, fees and other charges, (a) the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Company or its consolidated Subsidiaries, as the case may be, or (b) which in each case, individually or in the aggregate, would not cause the Company and its consolidated Subsidiaries to have a liability in excess of $5,000,000 or the Dollar Equivalent Amount thereof); no notice of tax Lien has been filed, and, to the knowledge of the Company, no claim is being asserted by any taxing authority, with respect to any such tax, fee or other charge except for claims the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Company or its consolidated Subsidiaries, as the case may be, and claims for amounts which, in the aggregate, do not exceed $5,000,000. 1.2
1.3 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose which violates the provisions of the regulations of such Board of Governors. If requested by any Bank or the Administrative Agent, the Company will furnish to the Administrative Agent and each Bank a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. 1.4
1.5 ERISA. Each Plan which is intended to be qualified under Section 401(a) (or 403(a) as appropriate) of the Code and each related trust agreement, annuity contract or other funding instrument which is intended to be tax-exempt under
Section 501(a) of the Code is so qualified and tax-exempt and has been so qualified and tax-exempt during the period from its adoption to date. No event has occurred in connection with which the Company or any Commonly Controlled Entity or any Plan, directly or indirectly, could reasonably be expected to be subject to any material liability under ERISA, the Code or any other law, regulation or governmental order or under any agreement, instrument, statute, rule of law or regulation pursuant to or under which the Company or a Subsidiary has agreed to indemnify or is required to indemnify any person against liability incurred under, or for a violation or failure to satisfy the requirements of, any such statute, regulation or order. No Reportable Event has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. The present value of all accrued benefits under each Single Employer Plan maintained by the Company or any Commonly Controlled Entity or for which the Company or any Commonly Controlled Entity has or could have any liability (based on those assumptions used to fund the Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits. Neither the Company nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan, and neither the Company nor any Commonly Controlled Entity could reasonably be expected to become subject to any liability under ERISA if the Company or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The present value (determined using actuarial and other assumptions which are reasonable in respect of the benefits provided and the employees participating) of the unfunded liability of the Company and each Commonly Controlled Entity for benefits under all unfunded retirement or severance plans, programs, policies or other arrangements (including, without limitation, post retirement benefits to be provided to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA)), whether or not funded does not, in the aggregate, exceed $5,000,000 (excluding those arrangements set forth on Schedule 6.13). 1.6
1.7 Investment Company Act; Other Regulations. Neither the Company nor any Subsidiary of the Company is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. Neither the Company nor any Subsidiary of the Company is subject to regulation under any Federal or State statute or regulation which limits its ability to incur Indebtedness. 1.8
1.9 Subsidiaries. On the Closing Date, the only Subsidiaries of the Company, and the only material partnerships or joint ventures in which the Company or any Subsidiary has an interest, are those set forth on Schedule 6.15. On the Closing Date, the Company owns the percentage of the issued and outstanding Capital Stock or other evidences of the ownership of each Subsidiary, partnership or joint venture set forth on Schedule 6.15 as set forth on such Schedule. On the Closing Date, except as set forth on Schedule 6.15, no such Subsidiary, partnership or joint venture has issued any securities convertible into shares of its Capital Stock. The outstanding stock and securities (or other evidence of ownership) of such Subsidiaries, partnerships or joint ventures owned by the Company and its Subsidiaries are owned by the Company and its Subsidiaries free and clear of all Liens, warrants, options or rights of others of any kind whatsoever except for Liens permitted by subsection 9.3. 1.10
1.11 Accuracy and Completeness of Information. No document furnished or statement made in writing to the Banks by the Company in connection with the negotiation, preparation or execution of this Agreement or any of the other Credit Documents contains any untrue statement of a material fact, or omits to state any such material fact necessary in order to make the statements contained therein not misleading, in either case which has not been corrected, supplemented or remedied by subsequent documents furnished or statements made in writing to the Banks. All other written information, reports and other papers and data with respect to the Company and its Subsidiaries (other than financial statements), furnished to the Banks by the Company, or on behalf of the Company, were (a) in the case of those not prepared for delivery to the Banks, to the Company's knowledge, at the time the same were so furnished, complete and correct in all material respects for the purposes for which the same were prepared and (b) in the case of those prepared for delivery to the Banks, to the Company's knowledge, complete and correct in all material respects, or have been subsequently supplemented by other information, reports or other papers or data, to the extent necessary to give the Banks a true and accurate knowledge of the subject matter in all material respects, it being understood that financial projections as to future events are not to be viewed as facts and that actual results may differ from projected results. 1.12
1.13 Purpose of Loans. The proceeds of the Loans shall be used by the Company for working capital purposes in the ordinary course of business and for general corporate purposes of the Company and, to the extent permitted hereunder, its Subsidiaries. 1.14
1.15 Senior Indebtedness. The principal of and interest on the Loans, the Reimbursement Obligations and the Company's obligations under the Company Guarantee are and will continue to be within the definition of "Senior Indebtedness" or any similar term under the Subordinated Debentures. 1.16
1.17 Environmental Matters. Except as set forth on Schedule 6.19 or insofar as there is no reasonable likelihood of a Material Adverse Effect arising from any combination of facts or circumstances inconsistent with any of the following:
1.18
1.19 The facilities and properties owned or operated by the Company or any of its Subsidiaries (the "Properties") do not contain, and to the knowledge of the Company or its Subsidiaries, have not previously contained, any Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could reasonably be expected to give rise to liability under, any applicable Environmental Law.

(a) The Properties and all operations at the Properties are in compliance with all applicable Environmental Laws, and there is no contamination at, under or to the knowledge of the Company about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by the Company or any of its Subsidiaries (the "Business") which could materially interfere with the continued operation of the Properties.

(a) Neither the Company nor any of its Subsidiaries has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor does the Company or any of its Subsidiaries have knowledge or reason to believe that any such notice will be received or is being threatened.

(a) To the knowledge of the Company or any of its Subsidiaries, Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, any Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability under, any applicable Environmental Law.

(a) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Company or any of its Subsidiaries, threatened, under any Environmental Law to which the Company or any Subsidiary is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other analogous administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business.

(a) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of the Company or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably give rise to liability under any applicable Environmental Laws.

1. SECTION CONDITIONS PRECEDENT

1.1 Conditions to Closing Date. The occurrence of the Closing Date, and the agreement of each Bank to make the initial Loan requested to be made by it on or after the Closing Date, shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions precedent:

(a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Company, with a counterpart for each Bank, (ii) for the account of each Bank, the Company Guarantee executed and delivered by a duly authorized officer of the Company, with a counterpart or conformed copy for each Bank and (iii) each Initial Subsidiary Guarantee, executed and delivered by a duly authorized officer of the Guarantor party thereto, with a counterpart or a conformed copy for each Bank.

(a) Corporate Proceedings of each Loan Party. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of each Loan Party (except any Foreign Subsidiary Borrower) authorizing (i) the execution, delivery and performance of each Credit Document to which it is a party and (ii) in the case of each Borrower (except any Foreign Subsidiary Borrower), the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of such Borrower as of the Closing Date, which certificate shall be in form and substance satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded.

(a) Fees and Expenses. The Administrative Agent shall have received the fees and expenses to be received on or prior to the Closing Date pursuant to subsection 5.1(b).

(a) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Bank, the following executed legal opinions:

(i) the executed legal opinion of Milbank, Tweed, Hadley & McCloy LLP, counsel to the Company and the Subsidiary Borrowers, substantially in the form of Exhibit G-1, with such modifications therein as shall be reasonably requested or approved by the Administrative Agent; and

(i) the executed legal opinion of Robert E. Klatell, general counsel of the Company, substantially in the form of Exhibit G-2, with such modifications therein as shall be reasonably requested or approved by the Administrative Agent.

Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement and the other Credit Documents as the Administrative Agent may reasonably require.

No Material Litigation. No litigation, inquiry, injunction or restraining order shall be pending, entered or threatened (including any proposed statute, rule or regulation) which in the reasonable judgment of any Bank could have a Material Adverse Effect.

(a) Amendments of 1995 Credit Agreement and Note Purchase Agreement. The Administrative Agent shall have received copies of any amendments, modifications or waivers to the 1995 Credit Agreement and the Note Purchase Agreement required to permit the transactions contemplated hereby.

(a) Notice of Guarantee Ceiling Amount. The Administrative Agent shall have received with a counterpart for each Bank, a Notice of Guarantee Ceiling Amount, dated the Closing Date, with appropriate insertions, executed by a Responsible Officer of the Company.

(a) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Administrative Agent.

1.1 Conditions to Each Loan. The agreement of each Bank to make any Loan requested to be made by it on any date (excluding any Committed Rate Loan made pursuant to a Notice of Swing Line Refunding, or pursuant to subsection 2.6(c) if the Dollar Equivalent Amount thereof is not increased) is subject to the satisfaction of the following conditions precedent:
1.2
(a) Representations and Warranties. Each of the representations and warranties made by the Company and its Subsidiaries in or pursuant to the Credit Documents
(other than, in respect of each Loan made after the Closing Date, Section 6.2) shall be true and correct in all material respects on and as of such date as if made on and as of such date.

(a) No Default. No Default or Event of Default shall have occurred and be continuing on such date after giving effect to the Loans requested to be made on such date.

(a) No Material Adverse Change in Subsidiary Borrowers. If such Loan is made to a Subsidiary Borrower, no event which has or could reasonably expected to have a material adverse effect on the ability of such Subsidiary Borrower to perform its obligations under this Agreement shall have occurred.

(a) Borrowing Certificate. In the case of the first requested borrowing subsequent to the Closing Date, the Administrative Agent shall have received with a counterpart for each Bank, a certificate of the Company, dated as of such date, substantially in the form of Exhibit E, with appropriate insertions and attachments, satisfactory in form and substance to the Administrative Agent, executed by the President, Executive Vice President or any Vice President and the Secretary or any Assistant Secretary of the Company.

(e) Foreign Subsidiary Opinion. If such Loan is requested to be made to a Foreign Subsidiary Borrower incorporated in England or Germany, the Company shall deliver to the Administrative Agent on or prior to such date (i) an executed Foreign Subsidiary Opinion of counsel to such Foreign Subsidiary Borrower and (ii) a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of such Foreign Subsidiary Borrower authorizing (1) the execution, delivery and performance of each Credit Document to which it is a party and (2) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of such Foreign Subsidiary Borrower as of the Closing Date, which certificate shall be in form and substance satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded.

Each borrowing by any Borrower shall constitute a representation and warranty by the Company and such Borrower as of the date of such Loan that the conditions contained in this subsection 7.2 have been satisfied.

1. SECTION AFFIRMATIVE COVENANTS

The Company hereby agrees that, so long as the Commitments remain in effect, any Loan remains outstanding and unpaid or any other amount is owing to any Bank any Agent or the Administrative Agent hereunder, the Company shall and
(except in the case of delivery of financial information, reports and notices)
shall cause each of its Subsidiaries to:

1.1 Financial Statements. Furnish to each Bank:

(a) as soon as available, but in any event within 120 days after the end of each fiscal year of the Company, a copy of the audited consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of operations and shareholders equity and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by Ernst & Young or other independent certified public accountants of nationally recognized standing reasonably acceptable to the Required Banks;

(a) as soon as available, but in any event within 120 days after the end of each fiscal year of the Company, the unaudited consolidating balance sheet of the Company and its consolidated Subsidiaries by principal operating group as at the end of such year and the related unaudited consolidating statements of operations of the Company and its consolidated Subsidiaries by principal operating group for such year, setting forth in each case in comparative form the figures for the previous year, certified pursuant to subsection 8.2(b) by a Responsible Officer as fairly presenting the consolidating financial condition and results of operations of the Company and its consolidated Subsidiaries by principal operating group;

(a) as soon as available, but in any event within 60 days after the end of each of the first three quarterly periods of each fiscal year of the Company, the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of operations and shareholders' equity and of cash flows of the Company and its consolidated Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for such quarter of the previous year, certified by a Responsible Officer as fairly presenting in all material respects when considered in relation to the consolidated financial statements of the Company and its consolidated Subsidiaries (subject to normal year-end audit adjustments); provided that the Company may in lieu of furnishing such unaudited consolidated balance sheet furnish to each Bank its Form 10-Q filed with the Securities and Exchange Commission or any successor or analogous Governmental Authority for the relevant quarterly period; and

(a) as soon as available, but in any event within 60 days after the end of each of the first three quarterly periods of each fiscal year of the Company, the unaudited consolidating balance sheet of the Company and its consolidated Subsidiaries by principal operating group as at the end of such quarter and the related unaudited consolidating statements of operations of the Company and its consolidated Subsidiaries by principal operating group for such quarter and the portion of the fiscal year through the end of such quarter, in the case of the unaudited consolidating balance sheet setting forth in comparative form the figures for the previous year (but not the corresponding figures for such quarter of the previous year) and in the case of the statements of operations setting forth in comparative form the figures for such quarter of the previous year, certified by a Responsible Officer as fairly presenting the consolidating financial condition and results of operations of the Company and its consolidated Subsidiaries by principal operating group (subject to normal year- end audit adjustments);

the financial statements to be furnished pursuant to this subsection 8.1 shall fairly present the consolidated (or consolidating by principal operating group, as appropriate) financial position and results of operations of the Company and its consolidated Subsidiaries in accordance with GAAP (subject, in the case of subsections 8.1(c) and (d), to normal year-end audit adjustments and the absence of complete footnotes) applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or Responsible Officer, as the case may be, and disclosed therein).

1.1 Certificates; Other Information. Furnish to each Bank:
1.2
(a) concurrently with the delivery of the financial statements referred to in subsection 8.1(a), a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in subsections 8.1(a) and 8.1(b), a certificate of a Responsible Officer substantially in the form of Exhibit H;

(a) concurrently with the delivery of the financial statements referred to in subsection 8.1(c), a certificate of a Responsible Officer (i) stating that, to the best of such Responsible Officer's knowledge, the Company has observed and performed all of its covenants and other agreements contained in this Agreement and the other Credit Documents to which it is a party to be observed or performed by it, (ii) that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified therein and (iii) setting forth calculations supporting compliance with subsections 9.1(a), (b) and (c), 9.2 and 9.5;

(a) as soon as delivered, a copy of the letter, addressed to the Company, of the certified public accountants who prepared the financial statements referred to in subsection 8.1(a) for such fiscal year and otherwise referred to as a "management letter";

(a) within five days after the same are sent, copies of all financial statements and reports which the Company sends to its stockholders generally, and within five days after the same are filed, copies of all financial statements and reports which the Company or any of its Subsidiaries may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority;

(a) concurrently with the delivery of the financial statements referred to in subsections 8.1(a) and 8.1(c) and upon any incurrence or prepayment of any lien, guarantee or indebtedness which decreases the Guarantee Ceiling Amount by more than 5%, a Notice of Guarantee Ceiling Amount as of the last day of such fiscal period or as the date of such occurrence; and

(a) promptly, such additional documents, instruments, legal opinions or financial and other information as the Administrative Agent or any Bank may from time to time reasonably request.

1.1 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, including, without limitation, all obligations in respect of taxes, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Company or its Subsidiaries, as the case may be, or where the failure to pay, discharge or otherwise satisfy could not reasonably be expected to have a Material Adverse Effect. 1.2
1.3 Conduct of Business and Maintenance of Existence. Continue to engage in business of the same general type as now conducted by it and preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business except as otherwise permitted pursuant to subsection 9.4; comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 1.4
1.5 Maintenance of Property; Insurance. Keep all property useful and necessary in its business in good working order and condition, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to each Bank, upon written request, full information as to the insurance carried. 1.6
1.7 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which the entries are, in all material respects, full, true and correct in conformity with sound business practice and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and, upon reasonable notice under the circumstances, permit representatives of the Administrative Agent to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Company and its Subsidiaries with officers and employees of the Company and its Subsidiaries and with its independent certified public accountants. 1.8
1.9 Notices. Promptly, after the Company becomes aware thereof, give notice to the Administrative Agent and each Bank of:
1.10
(a) the occurrence of any Default or Event of Default;

(a) any (i) default or event of default under any Contractual Obligation of the Company or any of its Subsidiaries or (ii) litigation, investigation or proceeding which may exist at any time between the Company or any of its Subsidiaries and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect or cause a Default or an Event of Default;

(a) any litigation or proceeding affecting the Company or any of its Subsidiaries (i) in which the amount involved is $5,000,000 or more and not covered by insurance or (ii) in which injunctive or similar relief is sought which could reasonably be expected to have a Material Adverse Effect;

(a) the following events: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating (other than a standard termination under Section 4041(b) of ERISA), Reorganization or Insolvency of, any Plan;

(a) any change, development or event involving a prospective change, which has had or could reasonably be expected to have a Material Adverse Effect; and

Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto.

(a) Environmental Laws. Comply with, and take all reasonable efforts to ensure compliance by all tenants and subtenants, if any, in all material respects with, all applicable Environmental Laws and obtain and comply in all material respects with and maintain, and undertake all reasonable efforts to ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.
(b)
(c) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not reasonably be expected to have a Material Adverse Effect.

1.2 Additional Subsidiary Guarantees. In the event that any Domestic Subsidiary which is not a Guarantor shall account for more than 5% of Total Assets at any date, take all actions necessary to cause such Domestic Subsidiary to execute and deliver a Subsidiary Guarantee, within 60 days of the occurrence of such event. 1.3
2. SECTION NEGATIVE COVENANTS

The Company hereby agrees that, so long as the Commitments remain in effect, any Loan remains outstanding and unpaid or any other amount is owing to any Bank or the Administrative Agent hereunder:

1.1 Financial Condition Covenants. The Company shall not:
1.2
(a) Maintenance of Indebtedness. Permit Consolidated Total Debt at any time to exceed an amount equal to 55% of Consolidated Total Capitalization.

(a) Maintenance of Net Worth. Permit Consolidated Net Worth at any time to be less than an amount equal to the sum of $750,000,000 plus 40% of cumulative Consolidated Net Income for the fiscal quarter commencing April 1, 1995 and for each fiscal quarter thereafter (without subtraction for any fiscal quarter during which Consolidated Net Income is a negative number).

Interest Coverage. Permit for any period of four consecutive fiscal quarters at any time the ratio of Adjusted Consolidated EBITDA to Consolidated Cash Interest Expense to be less than 3.0 to 1.0.

1.1 Limitation on Indebtedness of Domestic Subsidiaries. The Company shall not permit any of its Domestic Subsidiaries to, and the Domestic Subsidiaries shall not, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except (a) Indebtedness in an aggregate amount not to exceed 10% of Consolidated Net Worth, (b) any Indebtedness of Domestic Subsidiaries pursuant to any of the Credit Documents and (c) any Indebtedness of the Domestic Subsidiaries pursuant to the Subsidiary Guarantees under (and as defined in) the 1995 Credit Agreement. 1.2
1.3 Limitation on Liens. The Company shall not, and shall not permit any of its Domestic Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for:
1.4
(a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Company or its Domestic Subsidiaries, as the case may be, in conformity with GAAP;

(a) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings;

(a) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements;

(a) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(a) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Company or such Domestic Subsidiary; and

(a) Liens (not otherwise permitted hereunder) which secure obligations not exceeding (as to the Company and all Domestic Subsidiaries) a Dollar Equivalent Amount equal to 5% of Consolidated Net Worth at any time outstanding.

1.1 Limitation on Fundamental Changes. The Company (a) shall not, and shall not permit any of its Domestic Subsidiaries to, directly or indirectly, enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets and (b) shall not, and shall not permit any of its Subsidiaries, to make any material change in its present method of conducting business, except:
1.2
(i) any Subsidiary may be merged or consolidated with or into the Company (provided that the Company shall be the continuing or surviving corporation) or with or into any one or more wholly-owned Domestic Subsidiaries; and

(i) any Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Company or any other wholly owned Domestic Subsidiary.

1.1 Limitation on Modifications of Debt Instruments. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, amend, modify or change, or consent or agree to any amendment, modification or change to any of the terms of any Subordinated Indebtedness or any agreement which sets forth the terms of any Subordinated Indebtedness, except amendments, modifications or changes which would not (directly or indirectly) increase the amount of any payment of principal thereof, increase the interest rate or premium payable thereon, increase the amount of fees or any other amounts payable with respect thereto, shorten the scheduled amortization or average weighted life thereof, shorten the date for payment of interest thereon, shorten the final maturity thereof or modify the subordination provisions thereof. 1.2 1.3
2. SECTION EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(i) Any Borrower shall fail to pay any principal of any Loan owing by it when due (whether at the stated maturity, by acceleration or otherwise) in accordance with the terms hereof; or (ii) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; or

(a) Any representation or warranty made or deemed made by the Company or any Subsidiary herein or in any other Credit Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Credit Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or

(a) The Company or any Subsidiary shall default in the observance or performance of any agreement contained in Section 9 and, with respect to subsections 9.2 and 9.3, such default shall continue unremedied for a period of 30 days; or

(a) The Company or any Subsidiary shall default in the observance or performance of any other agreement contained in this Agreement or any other Credit Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after the Company has knowledge thereof; or

(a) Any of the Credit Documents shall cease, for any reason, to be in full force and effect, or the Company shall so assert in writing; or

(a) The subordination provisions applicable to any Subordinated Indebtedness, for any reason, cease to be in full force and effect, or any Person shall so assert to the Company in writing and the Company shall not promptly contest such assertion; or

(a) The Company or any of its consolidated Subsidiaries shall (i) default in any payment of principal of or interest of any Indebtedness (other than the Loans) or in the payment of any Guarantee Obligation, in either case with an outstanding principal amount in excess of a Dollar Equivalent Amount equal to $5,000,000 when due beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness or Guarantee Obligation was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or such Guarantee Obligation to become payable; or

(a) (i) Any Borrower or any Subsidiary that accounts for more than 5% of Total Assets at any date shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Borrower or any such Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Borrower or any such Subsidiary any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Borrower or any such Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or

(a) (i) Any Person shall engage in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Company or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Banks, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Banks is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to subject the Company to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of the Company; or

(a) One or more judgments or decrees shall be entered against the Company or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance) of a Dollar Equivalent Amount equal to $5,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

(a) The Company Guarantee or any Subsidiary Guarantee shall cease, for any reason, to be in full force and effect or any Guarantor party thereto shall so assert; or

(a) A Change in Control shall occur; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (h) above with respect to the Company, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement shall become immediately due and payable and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks, the Administrative Agent shall, by notice to the Company declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks, the Administrative Agent shall, by notice to the Company, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable.

Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived.

1. SECTION THE ADMINISTRATIVE AGENT; THE ARRANGER

1.1 Appointment. Each Bank hereby irrevocably designates and appoints Chase as the Administrative Agent of such Bank under this Agreement and the other Credit Documents, and each such Bank irrevocably authorizes Chase, as the Administrative Agent for such Bank, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against the Administrative Agent.

1.1 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 1.2
1.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Company or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for any failure of the Company to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of the Company. 1.4
1.5 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Banks or all of the Banks, as may be required hereunder, as it deems appropriate or it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected from liability to the Banks in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Banks or all of the Banks, as may be required hereunder, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and their respective successors and assigns. 1.6
1.7 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Bank or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks or all of the Banks, as may be required hereunder; provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 1.8
1.9 Non-Reliance on Administrative Agent and Other Banks. Each Bank expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Company, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Company and made its own decision to make its Loans hereunder and enter into this Agreement and the other Credit Documents to which it is or will be a party. Each Bank also represents that it will, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Company and its Subsidiaries which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 1.10
1.11 Indemnification. The Banks agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this subsection (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent or any in any way relating to or arising out of this Agreement, any of the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Administrative Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 1.12
1.13 Administrative Agent in Its Individual Capacity. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Company and any of its Subsidiaries as though the Administrative Agent were not the Administrative Agent hereunder and under the other Credit Documents. With respect to its Loans made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Bank and may exercise the same as though it were not the Administrative Agent, and the terms "Bank" and "Banks" shall include the Administrative Agent in its individual capacity. 1.14
1.15 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 10 days' notice to the Banks; provided that any such resignation shall not be effective until a successor agent has been appointed and approved in accordance with this subsection 11.9, and such successor agent has accepted its appointment. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Credit Documents, then the Required Banks shall appoint from among the Banks a successor administrative agent for the Banks, which successor agent shall be approved by the Company (which approval shall not be unreasonably withheld), whereupon such successor administrative agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. After any retiring Administrative Agent's resignation as Administrative Agent, the provisions of this subsection shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Credit Documents. 1.16
1.17 The Arranger. Each Bank acknowledges that the Arranger, in such capacity, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement or the other Credit Documents. 1.18 1.19
2. SECTION MISCELLANEOUS

(a) Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this subsection. The Required Banks may, or, with the written consent of the Required Banks, the Administrative Agent may, from time to time, (i) enter into with the Loan Parties party thereto written amendments, supplements or modifications to this Agreement and the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Banks or of the Loan Parties hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Banks or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend the scheduled date of maturity of any Loan or reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date of any payment thereof or increase the aggregate amount or extend the expiration date of any Bank's Commitment, in each case without the consent of each Bank directly affected thereby, or (ii) amend, modify or waive any provision of this subsection or reduce the percentage specified in the definition of Required Banks, or consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement and the other Credit Documents or amend, modify or waive subsection 5.3(a) or 12.6(a), or release any Subsidiary from its Subsidiary Guarantee or release the Company from the Company Guarantee, in each case without the written consent of all the Banks, or (iii) amend, modify or waive any provision of Section 11 without the written consent of the then Administrative Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Company, the Subsidiary Borrowers, the Banks, the Agents, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Company, the Banks and the Administrative Agent shall be restored to their former position and rights hereunder and under any other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

(a) In addition to amendments effected pursuant to the foregoing paragraph (a), Schedules II, III and IV may be amended as follows:
(b)
(i) Schedule II will be amended to add Subsidiaries of the Company as additional Subsidiary Borrowers upon (A) execution and delivery by the Company, any such Subsidiary Borrower and the Administrative Agent, of a Joinder Agreement providing for any such Subsidiary to become a Subsidiary Borrower, and (B) delivery to the Administrative Agent of (1) if reasonably requested by the Administrative Agent, a legal opinion in respect of such additional Subsidiary Borrower and (2) such other documents with respect thereto as the Administrative Agent shall reasonably request.

(i) Schedule II will be amended to remove any Subsidiary as a Subsidiary Borrower upon (A) execution and delivery by the Company of a Schedule Amendment providing for such amendment and (b) repayment in full of all outstanding Loans of such Subsidiary Borrower.

(i) Schedule III will be amended to designate other Banks as additional or replacement Swing Line Banks upon execution and delivery by the Company, the Administrative Agent and such additional or replacement Swing Line Bank of a Schedule Amendment providing for such amendment. In the case of any replacement of a Swing Line Bank pursuant to a Schedule Amendment, the existing Swing Line Bank replaced pursuant thereto shall cease to be a Swing Line Bank upon the effectiveness of such Schedule Amendment and the repayment of all Swing Line Loans owing to such replaced Swing Line Bank.

(i) Schedule III will be amended to change administrative information (including the Swing Line Rate definition) with respect to Swing Line Banks, upon execution and delivery by the Company, the Administrative Agent and such Swing Line Bank of a Schedule Amendment providing for such amendment.

(i) Schedule IV will be amended to change administrative information contained therein (other than any interest rate definition, Funding Time, Payment Time or notice time contained therein), upon execution and delivery by the Company and the Administrative Agent of a Schedule Amendment providing for such amendment.

(i) Schedule IV will be amended to conform any Funding Time, Payment Time or notice time contained therein to then-prevailing market practices, upon execution and delivery by the Company, the Required Banks and the Administrative Agent of a Schedule Amendment providing for such amendment.

(i) Schedule IV will be amended to change any interest rate definition contained therein, upon execution and delivery by the Company, all the Banks and the Administrative Agent of a Schedule Amendment providing for such amendment.

(a) The Administrative Agent shall give prompt notice to each Bank of any amendment effect pursuant to subsection 12.1(b).
(b)
1.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or five days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of the Company, the Subsidiary Borrowers and the Administrative Agent, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Loans:

1.3
     The Company:     Arrow Electronics, Inc.
                      25 Hub Drive
                      Melville, New York  11747
                      Attention:  Robert E. Klatell and
                      Ira M. Birns
                      Telecopy:  (516) 391-1683
                      Telephone: (516) 391-1848

     The Administrative Agent:   The Chase Manhattan Bank
                                 270 Park Avenue, 47th Floor
                                 New York, New York  10017
                                 Attention: Michael Lancia
                                 Telecopy: (212) 270-5120
                                 Telephone: (212) 270-2468

with a copy to:

Chase Bank Agent Bank Services Group
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Maggie Swales
Telecopy: (212) 552-5662
Telephone: (212) 552-7472

The Subsidiary Borrowers: c/o Arrow Electronics, Inc. 25 Hub Drive Melville, New York 11747 Attention: Robert E. Klatell and Ira M. Birns Telecopy: (516) 391-1683 Telecopy: (516) 391-1848

; provided that any Notice of Borrowing, Notice of Continuation, Notice of Conversion, Notice of Swing Line Outstandings, Notice of Swing Line Refunding, Notice of Guarantee Ceiling Amount, Notice of Prepayment, or any notice pursuant to subsections 2.4 or 2.5 shall not be effective until received.

No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

1.1 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the other Credit Documents and the making of the Loans hereunder. 1.2
1.3 Payment of Expenses and Taxes. The Company agrees (a) to pay or reimburse the Administrative Agent and the Arranger for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and the Arranger,
(b) to pay or reimburse each Bank and the Administrative Agent for all its reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit Documents and any such other documents upon the occurrence of an Event of Default, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and to the several Banks, and (c) to pay, indemnify, and hold each Bank, each Agent, the Arranger and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Bank, each Agent, the Arranger and the Administrative Agent (and their respective directors, officers, employees and agents) (collectively, the "indemnified person") harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Credit Documents and any such other documents, including, without limitation, any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Company, any of its Subsidiaries or any of the Properties (it being understood that costs and expenses incurred in connection with the enforcement or preservation of rights under this Agreement and the other Credit Documents shall be paid or reimbursed in accordance with clause (b) above rather than this clause (d)) (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the Company shall have no obligation hereunder to any indemnified person with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of such indemnified person or (ii) legal proceedings commenced against the Administrative Agent or any Bank by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such. Any payments required to be made by the Company under this subsection 12.5 shall be made within 30 days of the demand therefor. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 1.4
(a) Successors and Assigns; Participations and Assignments. This Agreement shall be binding upon and inure to the benefit of the Company, the Subsidiary Borrowers, the Banks, the Administrative Agent, all future holders of the Loans and their respective successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Bank.
(b)
(c) Any Bank may, in the ordinary course of its commercial lending business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Bank, any Commitment of such Bank or any other interest of such Bank hereunder and under the other Credit Documents. In the event of any such sale by a Bank of a participating interest to a Participant, such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any such Loan for all purposes under this Agreement and the other Documents, and the Company, the Subsidiary Borrowers and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement and the other Credit Documents. Each of the Company and the Subsidiary Borrowers agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement, provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Banks the proceeds thereof as provided in subsection 12.7(a) as fully as if it were a Bank hereunder. Each of the Company and the Subsidiary Borrowers also agrees that each Participant shall be entitled to the benefits of subsections 5.5, 5.6 or 5.8 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Bank; provided that, in the case of subsection 5.6, such Participant shall have complied with the requirements of said subsection and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by such transferor Bank to such Participant had no such transfer occurred. Each participating interest under this Agreement sold by a Bank to a Participant after the Closing Date shall be under terms providing that such Participant's rights to consent or withhold consent in respect of actions by such selling Bank under this Agreement shall be limited to such actions that, pursuant to subsection 12.1, require the consent of all the Banks. Each Bank selling or granting a participation shall indemnify the Borrowers and the Administrative Agent for any taxes and liabilities that they may sustain as a result of such Bank's failure to withhold and pay any taxes applicable to payments by such Bank to its participant in respect of such participation.

(e) Any Bank may, in the ordinary course of its commercial lending business and in accordance with applicable law, at any time and from time to time assign to any Bank or any affiliate thereof or, with the consent of the Administrative Agent and the Company (which shall not be unreasonably withheld), to an additional bank or financial institutions ("an Assignee") all or any part of its rights and obligations under this Agreement and the Loans pursuant to an Assignment and Acceptance, executed by such Assignee, such assigning Bank (and, in the case of an Assignee that is not then a Bank or an affiliate thereof, by the Administrative Agent and the Company) and delivered to the Administrative Agent for its acceptance and recording in the Register. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Bank hereunder with a Commitment as set forth therein, and (y) the assigning Bank thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Bank's rights and obligations under this Agreement, such assigning Bank shall cease to be a party hereto). Notwithstanding anything herein to the contrary, no Assignee shall be entitled to receive any greater amount pursuant to subsections 5.5, 5.6 or 5.8 than the transferor Bank would have been entitled to receive in respect of the amount of the Commitment transferred by such transferor Bank to such Assignee had no such transfer occurred, unless following the date of such assignment, a change in any applicable Requirement of Law or any interpretation thereof shall have occurred which entitles such Assignee to claim additional amounts pursuant to such subsections.
(f)
(g) The Administrative Agent shall maintain at its address referred to in subsection 12.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount of the Loans owing hereunder to, each Bank from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Company, the Administrative Agent and the Banks may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice.
(h)
(i) Upon its receipt of an Assignment and Acceptance executed by an assigning Bank and an Assignee (and, in the case of an Assignee that is not then a Bank or an affiliate thereof, by the Administrative Agent) together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Banks and the Company.
(j)
(k) The Company authorizes each Bank to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee any and all financial information in such Bank's possession concerning the Company and its Affiliates which has been delivered to such Bank by or on behalf of the Company pursuant to this Agreement or which has been delivered to such Bank by or on behalf of the Company in connection with such Bank's credit evaluation of the Company and its Affiliates prior to becoming a party to this Agreement so long as each such prospective Transferee shall execute a confidentiality agreement containing provisions substantially similar to the provisions contained in the next succeeding sentences of this paragraph (f). The Administrative Agent and each Bank shall hold nonpublic information obtained pursuant to the requirements of this Agreement other than information (i) that is, or generally becomes, available to the public, (ii) that was or becomes available to the Administrative Agent or any Bank on a nonconfidential basis or (iii) that becomes available to the Administrative Agent or any Bank from a Person or other source that is not, to the best knowledge of the Administrative Agent or such Bank, as the case may be, otherwise bound by a confidentiality obligation to the Company, in accordance with its customary procedures for treatment of confidential information and in accordance with safe and sound banking practices and in any event, may make disclosure reasonably required by any Governmental Authority or representative thereof pursuant to subpoena or other legal process or as otherwise required by law, order or regulation. Unless specifically prohibited by applicable law, regulation, rule or court order, the Administrative Agent and each Bank shall notify the Company of any request by any Governmental Authority or representative thereof (other than any such request in connection with an examination of the financial condition of the Administrative Agent or such Bank by such Governmental Authority) for disclosure of such information by the Administrative Agent or such Bank so that any of them may seek an appropriate protective order. Except as may be required by an order of a court of competent jurisdiction and to the extent set forth therein, neither the Administrative Agent nor any Bank shall be obligated or required to return any materials furnished by the Company. Nothing in this paragraph (f) shall prohibit the Administrative Agent or any Bank from disclosing nonpublic information to its examiners, regulators and professional advisors.

(m) Nothing herein shall prohibit any Bank from pledging or assigning any Loan to any Federal Reserve Bank in accordance with applicable law or require any Bank to obtain the consent of any Loan Party in order to pledge or assign any Loan to any Federal Reserve Bank in accordance with applicable law.
(n)
(o) Adjustments; Set-off. If any Bank (a "benefitted Bank") shall at any time receive any payment of all or part of its Loans then due and owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 12(h), or otherwise), in a greater proportion than any such payment to or collateral received by any other Bank, if any, in respect of such other Bank's Loans then due and owing to it, or interest thereon, such benefitted Bank shall purchase for cash from the other Banks a participating interest in such portion of each such other Bank's Loans, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Each of the Company and the Subsidiary Borrowers agrees that each Bank so purchasing a portion of another Bank's Loan may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Bank were the direct holder of such portion.
(p)
(q) In addition to any rights and remedies of the Banks provided by law, each Bank shall have the right, without prior notice to the Company or any Subsidiary Borrower, any such notice being expressly waived by the Company and the Subsidiary Borrowers to the extent permitted by applicable law, upon any amount becoming due and payable by any Borrower hereunder or under this Agreement or the other Credit Documents (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Bank or any branch or agency thereof to or for the credit or the account of such Borrower, as the case may be. Each Bank agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application.
(r)
1.5 Power of Attorney. Each Subsidiary Borrower hereby grants to the Company an irrevocable power of attorney to act as its attorney-in-fact with regard to matters relating to this Agreement, the Applications and each other Credit Document, including, without limitation, execution and delivery of any amendments, supplements, waivers or other modifications hereto or thereto, receipt of any notices hereunder or thereunder and receipt of service of process in connection herewith or therewith. Each Subsidiary Borrower hereby explicitly acknowledges that the Administrative Agent and each Bank has executed and delivered this Agreement and each other Credit Document to which it is a party, and has performed its obligations under this Agreement and each other Credit Document to which it is a party, in reliance upon the irrevocable grant of such power of attorney pursuant to this subsection 12.8. The power of attorney granted by each Subsidiary Borrower hereunder is coupled with an interest. 1.6
1.7 Judgment. (a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given. 1.8
1.9 (b) The obligation of any Borrower in respect of any sum due to any Bank or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement or the other Credit Documents (the "Agreement Currency"), be discharged only to the extent that on the Business Day following receipt by such Bank or the Administrative Agent (as the case may be) of any sum adjudged to be so due in the Judgment Currency such Bank or the Administrative Agent (as the case may be) may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to such Bank or the Administrative Agent (as the case may be) in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Bank or the Administrative Agent (as the case may be) against such loss, and if the amount of the Agreement Currency so purchased exceeds the sum originally due to any Bank or the Administrative Agent (as the case may be), such Bank or the Administrative Agent (as the case may be) agrees to remit to such Borrower such excess. 1.10
1.11 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent. 1.12
1.13 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 1.14
1.15 Integration. This Agreement and the other Credit Documents represent the agreement of the Company, the Subsidiary Borrowers, the Administrative Agent and the Banks with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Bank relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 1.16
1.17 GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 1.18
1.19 Submission To Jurisdiction; Waivers. (a) Each of the Company and the Subsidiary Borrowers hereby irrevocably and unconditionally:
1.20
(i) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Credit Documents to which it is a party, or for recognition and enforcement of any judgement in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in subsection 12.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(v) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages.

(b) Each Subsidiary Borrower hereby irrevocably appoints the Company as its agent for service of process in any proceeding referred to in subsection 12.14(a) and agrees that service of process in any such proceeding may be made by mailing or delivering a copy thereof to it care of the Company at its address for notice set forth in subsection 12.2.

1.1 Acknowledgments. Each of the Company and the Subsidiary Borrowers hereby acknowledges that:
1.2
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents;

(a) none of the Administrative Agent or any Bank has any fiduciary relationship with or duty to the Company and the Subsidiary Borrowers arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Administrative Agent and the Banks, on one hand, and the Company and the Subsidiary Borrowers, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(a) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Banks or among the Company and the Subsidiary Borrowers and the Banks.

1.1 WAIVERS OF JURY TRIAL. THE COMPANY, THE SUBSIDIARY BORROWERS, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
1.1
1.2

ARROW ELECTRONICS, INC.

By:   /s/ Robert E. Klatell
      ------------------------
      Name:  Robert E. Klatell
      Title: Executive Vice President

ARROW ELECTRONICS GmbH

By:   /s/ Robert E. Klatell
      ------------------------
      Name:  Robert E. Klatell
      Title: Managing Director

ARROW ELECTRONICS (UK) LTD.

By:   /s/ Robert E. Klatell
      ------------------------
      Name:  Robert E. Klatell
      Title: Vice President

THE CHASE MANHATTAN BANK, as
Administrative Agent, as an Agent and as a Bank

By:   /s/ Michael Lancia
      ---------------------
      Name:  Michael Lancia
      Title: Vice President

BANCA POPOLARE DI MILANO

By:   /s/ Fulvio Montanari
      -----------------------
      Name:  Fulvio Montanari
      Title: First Vice President


By:   /s/ Esperanza Quintero
      -------------------------
      Name:  Esperanza Quintero
      Title: Vice President

THE BANK OF NOVA SCOTIA

By:   /s/ J. Alan Edwards
      ----------------------
      Name:  J. Alan Edwards
      Title: Authorized Signatory

BANKERS TRUST COMPANY

By:   /s/ Gina S. Thompson
      -----------------------
      Name:  Gina S. Thompson
      Title: Vice President

BANQUE NATIONALE DE PARIS

By:  /s/ Richard L. Sted
     ----------------------
     Name:  Richard L. Sted
     Title: Senior Vice President


By:   /s/ Richard Pace
      -------------------
      Name:  Richard Pace
      Title: Vice President
             Corporate Banking Division

BAYERISCHE LANDESBANK
GIROZENTRALE, CAYMAN ISLANDS
BRANCH

By:   /s/ Peter Obermann
      ---------------------
      Name:  Peter Obermann
      Title: Senior Vice President


By:   /s/ James H. Boyle
      ---------------------
      Name:  James H. Boyle
      Title: Second Vice President

CARIPLO-CASSA DI RISPARMIO DELLE
PROVINCIE LOMBARDE S.P.A.

By:   /s/ Charles W. Kennedy
      -------------------------
      Name:  Charles W. Kennedy
      Title: F.V.P.


By:   /s/ Maria Elena Greene
      -------------------------
      Name:  Maria Elena Greene
      Title: A.V.P.

CREDIT INDUSTRIEL ET COMMERCIAL
(C.I.C. PARIS)

By:   /s/ R. Barrois
      -----------------
      Name:  R. Barrois
      Title:


By:   /s/ S. Francis
      -----------------
      Name:  S. Francis
      Title:

DEN DANSKE BANK AKTIESELSKAB,
CAYMAN ISLANDS BRANCH

By:   /s/ Peter L. Hargraves
      -------------------------
      Name:  Peter L. Hargraves
      Title: Vice President


By:   /s/ John A. O'Neill
      ----------------------
      Name:  John A. O'Neill
      Title: Vice President

THE FIRST NATIONAL BANK OF CHICAGO

By:   /s/ David R. Arias
      ---------------------
      Name:  David R. Arias
      Title: Corporate Banking Officer

FLEET BANK, NATIONAL ASSOCIATION

By:   /s/ Magda Hayden
      -------------------
      Name:  Magda Hayden
      Title: Senior Vice President

HSBC BANK USA

By:   /s/ Rochelle Forster
      -----------------------
      Name:  Rochelle Forster
      Title: Vice President

MELLON BANK, N.A.

By:   /s/ Laurie G. Dunn
      ---------------------
      Name:  Laurie G. Dunn
      Title: Vice President

NATIONSBANK, N.A.

By:   /s/ Sharon Ellis
      -------------------
      Name:  Sharon Ellis
      Title: Vice President

STANDARD CHARTERED BANK

By:   /s/ David D. Cutting
      -----------------------
      Name:  David D. Cutting
      Title: Senior Vice President


By:   /s/ Kristina McDavid
      -----------------------
      Name:  Kristina McDavid
      Title: Vice President

COMMERCIAL PAPER
PRIVATE PLACEMENT AGREEMENT,

4(2) Program,

among

ARROW ELECTRONICS, INC., as Issuer,

and,

as Placement Agents,

CHASE SECURITIES INC.,
BANK OF AMERICA SECURITIES LLC,
GOLDMAN, SACHS & CO., and
MORGAN STANLEY & CO. INCORPORATED,

Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of November 9, 1999, between the Issuer and The Chase Manhattan Bank, as Issuing and Paying Agent.

Dated as of

November 9, 1999

COMMERCIAL PAPER
PRIVATE PLACEMENT AGREEMENT

This agreement ("Agreement") sets forth the understandings among the Issuer and the Placement Agents (each an "Agent" and collectively the "Agents") in connection with the issuance and sale by the Issuer of its short-term promissory notes through the Agents (the "Notes").

Certain terms used in this Agreement are defined in Section 6 hereof.

The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.

Section 1. Offers, Sales and Resales of Notes.

1.1 While (i) the Issuer has and shall have no obligation to sell the Notes to the Agents or to permit the Agents to arrange any sale of the Notes for the account of the Issuer, and (ii) the Agents have and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where any Agent purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by such Agent in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein.

1.2 So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of each Agent, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more agents which may from time to time after the date hereof become agents with respect to the Notes by executing with the Issuer one or more agreements which contain provisions substantially identical to Section 1 of this Agreement, of which the Issuer hereby undertakes to provide each Agent prompt notice or (b) in transactions with one of the Agents. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than agents as specifically permitted in this
Section 1.2.

1.3 The Notes shall be in a minimum denomination or minimum amount, whichever is applicable, of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the relevant Agent and the Issuer, shall have (a) maturities not exceeding 180 days from the date of issuance (exclusive of days of grace) for Notes sold from the date of this Agreement to May 31, 2000, and, thereafter, (b) maturities not exceeding 270 days from date of issuance (exclusive of days of grace), and shall not contain any provision for extension, renewal or automatic "rollover."

1.4 The authentication, delivery and payment of the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement and the Notes shall be either individual bearer physical certificates or represented by book-entry Notes registered in the name of DTC or its nominee in the form or forms annexed to the Issuing and Paying Agency Agreement

1.5 If the Issuer and any Agent shall agree on the terms of the purchase of any Note by such Agent or the sale of any Note arranged by such Agent (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Agent's services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Agent, to the Issuer. Except as otherwise agreed, in the event that any Agent is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, such Agent shall promptly notify the Issuer, and if the Agent has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Agent against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default or negligence by the Agent, the Issuer shall reimburse the Agent on an equitable basis for the Agent's loss of the use of such funds for the period such funds were credited to the Issuer's account.

1.6 The Agents and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes:

(a) Offers and sales of the Notes by or through the Agents shall be made only to: (i) investors reasonably believed by the relevant Agent to be Qualified Institutional Buyers, Institutional Accredited Investors or Sophisticated Individual Accredited Investors, and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which the relevant Agent reasonably believes to be an Institutional Accredited Investor.

(b) Resales and other transfers of the Notes by the holders thereof by or through any Agent or the Issuer shall, in either case, be made only in accordance with the restrictions in the legends described in clause (e) below.

(c) No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of each Agent, the Issuer shall not issue any press release or place or publish any "tombstone" or other advertisement relating to the Notes.

(d) No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes.

(e) Offers and sales of the Notes by the Issuer through any Agent shall be made in accordance with Rule 506 under the Securities Act, and shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each Note offered and sold pursuant to this Agreement.

(f) Each Agent shall furnish or shall have furnished to each purchaser of Notes being sold through such Agent to such ultimate purchaser for the first time a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the relevant Agent and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained.

(g) The Issuer agrees, for the benefit of each Agent and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to each Agent and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d).

(h) In the event that any Note offered or to be offered by the Agents would be ineligible for resale under Rule 144A, the Issuer shall immediately notify each Agent (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to each Agent an amendment or supplement to the Private Placement Memorandum describing the Notes that are ineligible, the reason for such ineligibility and any other relevant information relating thereto.

(i) The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by
Section 3(a)(3) of the Securities Act. The Issuer agrees that, should it at any time while any Notes are outstanding issue any commercial paper in reliance on such exemption, (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of such commercial paper by being placed in a separate account, (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of such commercial paper are not integrated with the offering and sale of Notes hereunder, and (c) the Issuer will comply with each of the requirements of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States.

1.7 The Issuer hereby represents and warrants to each Agent, in connection with offers, sales and resales of Notes, as follows:

(a) The Issuer hereby confirms to the Agents that within the preceding six months neither the Issuer nor any person other than the Agents or the other agents referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Agents or the other agents referred to in Section 1.2 hereof. The Issuer also agrees that, as long as the Notes are being offered for sale by the Agents and the other agents referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Agents or the other agents referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer) for sale to, or solicit offers to buy any such security from, any person other than the Agents and the other agents referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(2) of the Securities Act and Rule 506 thereunder and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties.

(b) The Issuer represents and agrees that the proceeds of the sale of the Notes will not be currently used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System, but it is contemplated that the proceeds may be used for such purposes in the future. In the event that the Issuer determines in the future to use the proceeds of the sale of the Notes for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give each Agent at least three business days' prior written notice to that effect. The Issuer shall also give each Agent prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, and until the time that the Issuer informs the Agents that it is no longer using the proceeds from the sale of the Notes for such purposes, and, further, until such time that the amount outstanding from the date of the notice is reduced to zero, in the event that any Agent purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, such Agent will sell such Notes either (i) only to offerees it reasonably believes to be QIBs or to QIBs it reasonably believes are acting for other QIBs, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder.

Section 2. Representations and Warranties of Issuer.

The Issuer represents and warrants that:

2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of New York and has all the requisite corporate power and authority to execute, deliver and perform its obligations under the Notes, this Agreement, and the Issuing and Paying Agency Agreement.

2.2 Each of this Agreement and the Issuing and Paying Agency Agreement has been duly authorized, executed and delivered by the Issuer and constitutes the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance reorganization and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.3 The Notes have been duly authorized, and when issued, delivered and paid for as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and delivered and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency fraudulent conveyance reorganization and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.4 The offer and sale of Notes in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended.

2.5 The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer.

2.6 No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance by the Issuer of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes.

2.7 Neither the execution and delivery of this Agreement and the Issuing and Paying Agency Agreement, nor the issuance and delivery of the Notes in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the terms and provisions hereof or thereof by the Issuer, will (i) result in the creation or imposition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Issuer, or (ii) violate or result in a breach or an event of default under any of (a) the terms of the Issuer's charter documents or by-laws, (b) any contract or instrument to which the Issuer is a party or by which it or its property is bound, or (c) any law or regulation, or any order, writ, injunction or decree of any court or government instrumentality, to which the Issuer is subject or by which it or its property is bound, which, in the case of (i) and (ii)(b) and
(c), would have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Issuer, the validity of the Notes, or the ability of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.8 There is no litigation or governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting the Issuer or any of its subsidiaries which is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Issuer or the ability of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.9 The Issuer is not an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

2.10 Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The foregoing representation shall not apply to Agent Information.

2.11 Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Agents, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth above in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), and (iii) the Issuer is not in default of any of its obligations hereunder, under the Notes, or under the Issuing and Paying Agency Agreement,
(iv) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change and no development which will result in a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Issuer whether or not arising in the ordinary course of business which has not been disclosed to each Agent in writing.

Section 3. Covenants and Agreements of Issuer

The Issuer covenants and agrees that:

3.1 The Issuer will give each Agent prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of, or waiver with respect to, the Notes, or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver.

3.2 The Issuer shall, whenever there shall occur any material adverse change and or any development which will result in a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Issuer or any development or occurrence in relation to the Issuer that would be material to holders of the Notes or potential holders of the Notes (including any downgrading or receipt of any notice of intended or potential downgrading or any review for potential change in the rating accorded any of the Issuer's securities by any nationally recognized statistical rating organization which has published a rating of the Notes), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify each Agent (by telephone, confirmed in writing) of such change, development, or occurrence.

3.3 The Issuer shall from time to time furnish to each Agent such information as the Agent may reasonably request, including, without limitation, any press releases or material provided by the Issuer to any national securities exchange or rating agency, regarding (i) the Issuer's operations and financial condition, (ii) the due authorization and execution of the Notes, and (iii) the Issuer's ability to pay the Notes as they mature.

3.4 The Issuer will take all such action as any Agent may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

3.5 The Issuer will not be in default of any of its obligations hereunder, under the Notes, or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding.

3.6 The Issuer shall not issue Notes hereunder until each Agent shall have received (a) an opinion of counsel to the Issuer, addressed to the Agents, satisfactory in form and substance to each Agent, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to each Agent and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any Notes represented by a book-entry note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC, and (e) such other certificates, opinions, letters and documents as any Agent shall have reasonably requested.

3.7 The Issuer shall reimburse each Agent for such Agent's reasonable out- of-pocket expenses related to the transactions contemplated hereby , and, if applicable, for the reasonable fees and out-of-pocket expenses of such Agent's counsel. Notwithstanding the foregoing, the Agent shall not incur any expense to be covered under this section 3.7 without the prior written consent of the Issuer.

Section 4. Disclosure

4.1 The Private Placement Memorandum and its contents (other than the Agent Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense.

4.2 The Issuer agrees promptly to furnish to each Agent the Company Information as it becomes available.

4.3 (a) The Issuer further agrees to notify each Agent promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading.

(b) In the event that the Issuer gives the Agents notice pursuant to
Section 4.3(a) and any Agent notifies the Issuer that it then has Notes it is holding in inventory, the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that such Private Placement Memorandum, as amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer shall make such supplement or amendment available to each Agent.

(c) In the event that (i) the Issuer gives the Agents notice pursuant to Section 4.3(a) and (ii) no Agent notifies the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause
(b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to each Agent.

Section 5. Indemnification and Contribution

5.1 The Issuer will indemnify and hold harmless each Agent, each individual, corporation, partnership, trust, association or other entity controlling any Agent, any affiliate of any Agent or any such controlling entity and their respective directors, officers or employees (hereinafter the "Indemnitees") against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation reasonable fees and disbursements of counsel) or judgments of whatever kind or nature (each a "Claim"), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Agents included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon the Agent Information of the relevant Agent.

5.2 Provisions relating to claims made for indemnification under this
Section 5 are set forth on Exhibit B to this Agreement.

5.3 In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs incurred by any Indemnitee in connection with any Claim in the proportion of the respective economic interests of the Issuer and such Indemnitee; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by such Indemnitee do not exceed the aggregate of the commissions and fees earned by the relevant Agent hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the relevant Agent hereunder.

Section 6. Definitions.

6.1 "Claim" shall have the meaning set forth in Section 5.1.

6.2 "Company Information" at any given time shall mean the Private Placement Memorandum together with, to the extent applicable, (i) the Issuer's most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuer's most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuer's and its affiliates' other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof, and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes.

6.3 "Agent Information" shall mean, with respect to each Agent, information concerning such Agent and its affiliates and provided by such Agent in writing expressly for inclusion in the Private Placement Memorandum.

6.4 "DTC" shall mean The Depository Trust Company.

6.5 "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as amended.

6.6 "Indemnitee" shall have the meaning set forth in Section 5.1.

6.7 "Institutional Accredited Investor" shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity.

6.8 "Issuing and Paying Agency Agreement" shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time.

6.9 "Issuing and Paying Agent" shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement.

6.10 "Non-bank fiduciary or agent" shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act.

6.11 "Private Placement Memorandum" shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement).

6.12 "Qualified Institutional Buyer" shall have the meaning assigned to that term in Rule 144A under the Securities Act.

6.13 "Rule 144A" shall mean Rule 144A under the Securities Act.

6.14 "SEC" shall mean the U.S. Securities and Exchange Commission.

6.15 "Securities Act" shall mean the U.S. Securities Act of 1933, as amended.

Section 7. General

7.1 Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement.

7.2 This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.

7.3 The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Agent in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal courts located in the borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE AGENT AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7.4 This Agreement may be terminated at any time, by the Issuer with respect to any Agent, upon one business day's prior notice to such Agent, or by any Agent with respect to such itself, upon one business day's prior notice to the Issuer. Any such termination, however, shall not affect (a) the obligations of the Issuer to such Agent under Sections 3.7, 5, 7.3, and, for a period of seven business days after such termination Section 4.3, hereof, (b) the validity of this Agreement as between the Issuer and the other Agents, or (c) the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement.

7.5 This Agreement is not assignable by any party hereto without the written consent of the other parties; provided, however, that the any Agent may assign its rights and obligations under this Agreement to any affiliate.

7.6 This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

7.7 This Agreement is for the exclusive benefit of the parties hereto and their respective successors and assigns hereunder and shall not be deemed to give any right, remedy, or claim to any other person whatsoever.

7.8 The Issuer acknowledges that the Agents are acting severally, and not jointly, under this Agreement, and that no Agent shall have any responsibility whatsoever for any act or undertaking by any other Agent under or in connection with this Agreement.

[signatures are on the following page]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

ARROW ELECTRONICS, INC.,
As Issuer

CHASE SECURITIES INC.,
As Agent

BANK OF AMERICA SECURITIES LLC,
As Agent

GOLDMAN, SACHS & CO.,
As Agent

MORGAN STANLEY & CO. INCORPORATED,
As Agent