Common use of Annual Financials Clause in Contracts

Annual Financials. As soon as practicable and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne and its Subsidiaries, including Consolidated and consolidating balance sheets of Ceradyne and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable to the Administrative Agent, together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect thereto.

Annual Financials. As soon as practicable available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne audited Consolidated financial statements of Parent and its Subsidiaries, including Consolidated and consolidating balance sheets of Ceradyne and its Subsidiaries as consisting of the end of such Fiscal Year and annual Consolidated and consolidating statements of income and a Consolidated balance sheet, statement of operations, stockholders' equity (deficit) and cash flows of Ceradyne and its Subsidiaries flows, setting forth in comparative form, in each case, Consolidated figures for such the prior Fiscal Year, which financial statements shall be prepared in each case accompanied accordance with GAAP, certified without qualification (other than a qualification approved by an opinion the Agents) by Ernst & Young or other independent certified public accountants of recognized national standing selected by Parent and acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable to the Administrative AgentAgents, together with and accompanied by (i) a certificate of such accounting firm to schedule prepared by the Lender Parties stating that chief financial officer, showing in reasonable detail the course of calculations used in determining compliance with the regular audit of the business of Ceradyne financial covenants under Sections 5.02(b) and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof5.04 hereof, (ii) a schedule in form satisfactory report from such accountants to the Administrative Agent effect that in connection with their audit examination, nothing has come to their attention to cause them to believe that a Default had occurred or, if they believe a Default has occurred, specifying the details thereof; provided that such report shall not, and shall not be deemed to, contain any conclusion by such accountants with respect to (x) whether any event, act or condition has or is expected to have a Material Adverse Effect or (y) any Default the existence of which is subject to the determination or opinion of the computations used by Agents, the Borrower and such accountants in determining, as of Lenders or the end of such Fiscal Year, compliance with the covenants contained in Section 5.04Required Lenders, provided further, however, that such report shall describe in the event of reasonable detail any change in event, act or condition that is, or is reasonably expected to be, required under generally accepted accounting principles used auditing standards to be mentioned in an auditor's opinion on the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAPof Parent and its Subsidiaries, taken as a whole, and (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect thereto.95

Annual Financials. As soon as practicable and in any event (i) With respect to Holdings, within 90 120 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne and its SubsidiariesHoldings, including Consolidated and consolidating balance sheets of Ceradyne and its Subsidiaries as of the end of such Fiscal Year and a Consolidated and consolidating balance sheet, statements of income income, and a Consolidated statement of cash flows of Ceradyne and its Subsidiaries Holdings for such Fiscal Year, in each case accompanied by an opinion acceptable as to such audit report of an Approved Accounting Firm, which opinion shall not have any “going concern” qualification, except to the Administrative Agent extent that such a “going concern” qualification relates to the report and opinion accompanying the financial statements for the Fiscal Year immediately prior to the stated final maturity date of an independent public accountant the Advances and which qualification or statement is solely a consequence of recognized standing acceptable such impending stated final maturity date under this Agreement; provided that, in the event of any change in GAAP used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to former GAAP. (ii) Incidental to the delivery of the reporting required in subparagraph (b)(i) above, within 120 days after the end of each Fiscal Year, derivative reconciliations with respect to the Parent and its Restricted Subsidiaries (in a form reasonably satisfactory to the Administrative Agent, together and with (i) a certificate respect to calculation of income, including separate disclosures with respect to Net Income described in the last sentence of the definition of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (iiterm) a schedule in form satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained covering balance sheets, statements of income, and statements of cash flows, all in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, reasonable detail and duly certified (subject to normal year-end audit adjustments) by a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as Responsible Officer of the end Parent as having been prepared in accordance with GAAP (other than the absence of such Fiscal Yearfootnotes), certified as true and complete by the Chief Financial Officer of Ceradyne, and together with (ivA) a certificate on behalf of the Chief Financial Parent signed by a Responsible Officer of Ceradyne the Parent stating that no Event of Default has occurred and is continuing or, if a an Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Parent has taken and proposes to take with respect thereto, (B) a schedule prepared by a Responsible Officer of the Parent in form satisfactory to the Administrative Agent of the computations used by the Parent in determining a pro forma calculation of the Leverage Ratio, (C) a certificate on behalf of the Parent signed by a Responsible Officer of the Parent (1) attaching a reconciliation statement reflecting the adjustments necessary to eliminate the assets, liabilities, revenues, expenses and net income of the Unrestricted Subsidiaries in such financial statements (it being understood and agreed that such reconciliation statements shall not be audited) or, in the case of the first such list so delivered, since the Third Amendment Effective Date, (2) certifying that no Subsidiary is a Foreign Subsidiary, Excluded Subsidiary, or an Unrestricted Subsidiary except as identified therein, and (3) identifying each incurrence of Debt for Borrowed Money in an amount in excess of $20,000,000, each issuance of Equity Interests outside of the ordinary course of business with a value in excess of $20,000,000, and each Transfer of any Collateral outside of the ordinary course of business whether or not included in the Borrowing Base or the Term Borrowing Base with an aggregate value in excess of $20,000,000, in each case occurring during the period covered by the financial statements delivered with such certificate, (D) [reserved], (E) a calculation of the Fixed Charge Coverage Ratio (including, without limitation, EBITDA), in form and detail satisfactory to the Administrative Agent, and (F) to the extent not previously disclosed to the Administrative Agent, a description of any new Subsidiary and a listing of (i) any registrations, and applications for registration, of Specified Intellectual Property (x) both filed, acquired or made by, and owned by, any Loan Party, (y) exclusively licensed by any Loan Party, or (z) that are no longer constitute Excluded Assets, or(ii) any abandoned or lapsed registered Specified Intellectual Property ofowned by, or exclusively licensed by, any Loan Party, and (iii) any IP Agreements entered into, in each case of this clause (F) since the date of the most recent list delivered pursuant to this clause (F) (or, in the case of the first such list so delivered, since the ThirdFourth Amendment Effective Date); provided, with respect to this clause (F), in the case of exclusively licensed Specified Intellectual Property, such updated listing will only be required if any Loan Party has actual or constructive knowledge of such exclusively licensed Specified Intellectual Property.

Annual Financials. As soon as practicable available and in any event within ----------------- (i) 90 days after the Closing Date, audited financial statements for the Borrower and its Subsidiaries and for Pioneer, on a Consolidated and consolidating basis (as applicable, and recognizing that the consolidating financial statements will not be audited), consisting of balance sheets as at December 31, 1998 and the related statements of operations, income, stockholders' equity and cash flows and (ii) 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files Year (commencing with the Securities and Exchange Commission 1999 Fiscal Year), audited financial statements for such year for Ceradyne the Borrower and its Subsidiaries, including Subsidiaries on a Consolidated and consolidating basis (recognizing that the consolidating financial statements will not be audited), consisting of balance sheets of Ceradyne and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income operations, income, stockholders' equity and a Consolidated statement of cash flows of Ceradyne and its Subsidiaries flows, setting forth in comparative form in each case the figures for such the previous Fiscal Year, which financial statements referred to in each case accompanied clauses (i) and (ii) shall be prepared in accordance with GAAP, certified without qualification, by an opinion acceptable to the Administrative Agent independent certified public accounting firm of an independent public accountant of recognized national standing or otherwise acceptable to the Administrative Agent, together with . The financial statements required by clause (iii) above shall be accompanied by (A) a certificate of Quarterly Compliance Certificate, (ii) a letter from such accounting firm to the Lender Parties stating that effect that, in the course of the regular connection with their audit of the business of Ceradyne and its Subsidiariesexamination, which nothing has come to their attention during such audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge examination to cause them to believe that a Default has occurred and is continuing, or if, in the opinion Event of such accounting firm, a Default has occurred (or specifying those Defaults and is continuingEvents of Default that they became aware of), a statement as it being understood that such audit examination extended only to accounting matters and that no special investigation was made with respect to the nature thereofexistence of Defaults or Events of Default, provided that such letter can be obtained without any additional cost to any Loan Party, and (iiiii) the annual letters to such accountants (to the extent not subject to attorney-client privilege) in connection with their audit examination detailing contingent liabilities and material litigation matters. Requirements to provide audited financial information hereunder with respect to the Borrower and its Subsidiaries on a schedule Consolidated basis may be satisfied by providing the same financial information for Holdings and its Subsidiaries on a Consolidated basis so long as the requisite adjustments for such alternate presentation are clearly shown therein in a manner satisfactory in form satisfactory and substance to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect theretoRequired Lenders.

Annual Financials. As soon as practicable available and ----------------- in any event within 90 days after the end of each Fiscal Yearfiscal year of the Borrower, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Borrower and its Subsidiaries, including therein a Consolidated and consolidating balance sheets sheet of Ceradyne the Borrower and its Subsidiaries as of the end of such Fiscal Year fiscal year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne the Borrower and its Subsidiaries for such Fiscal Yearfiscal year, in each case accompanied by either an unqualified opinion, or an opinion acceptable to the Administrative Agent Required Lenders, of an Price Waterhouse or Deloitte & Touche or other independent public accountant accountants of recognized standing acceptable to the Administrative AgentRequired Lenders, together with (i) a certificate of such accounting firm to the Lender Parties Lenders stating that in the course of the regular audit of the business of Ceradyne the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereofthereof (provided that in no event shall such accountants be liable as a result of this Agreement by reason of any failure to obtain knowledge of any Default that would not be disclosed in the course of their audit examination), (ii) a schedule setting forth in form satisfactory to the Administrative Agent of reasonable detail the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Yearfiscal year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, 5.04 and (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer chief financial officer of Ceradyne the Borrower stating that that, to the knowledge of such officer, no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect thereto.

Annual Financials. As soon as practicable available and in any event within 90 95 days after the end of each Fiscal Yearfiscal year of Global, (i) a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne Global and its Subsidiaries, including therein Consolidated and consolidating balance sheets of Ceradyne Global and its Subsidiaries as of the end of such Fiscal Year fiscal year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne Global and its Subsidiaries for such Fiscal Yearfiscal year, in each case accompanied by an opinion acceptable to the Administrative Agent Required Lenders of an the independent public accountant accountants of Global, who shall be of recognized standing acceptable to the Administrative AgentRequired Lenders and (ii) a Consolidated unaudited balance sheet of Global Operations, KCL Holdings, IMC Global Potash Holdings and the Joint Venture Company and its Subsidiaries and of the Joint Venture Company as of the end of such fiscal year and Consolidated unaudited statements of income and cash flows of such Borrower and its Subsidiaries and of the Joint Venture Company for such fiscal year, together with (iA) a certificate of such accounting firm to the Lender Parties Lenders stating that in the course of the regular audit of the business of Ceradyne Global and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (iiB) a schedule in form satisfactory to the Administrative Agent Agents of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Yearfiscal year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, 5.04 and (ivC) a certificate of the Chief Financial Officer treasurer or chief financial officer of Ceradyne Global stating that no Default has occurred and is continuing or, if a Default default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne Global has taken and proposes to take with respect thereto.

Annual Financials. As soon as practicable available and in any event within 90 forty-five (45) days after the end of each Fiscal Yearfiscal year of the Borrower, a copy of the annual audit financial report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission (audited, if otherwise required by Lender) for such year for Ceradyne the Borrower, its parent company and its Subsidiaries, including therein a Consolidated and consolidating balance sheets sheet of Ceradyne the Borrower, its parent company and its Subsidiaries as of the end of such Fiscal Year fiscal year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne the Borrower, its parent company and its Subsidiaries for such Fiscal Yearfiscal year, in each case accompanied by an opinion opinion, acceptable to the Administrative Agent Lender, of an Deloitte & Touche or other independent public accountant accountants of recognized standing standing, acceptable to the Administrative Agent, Lender together with (i) a certificate of such accounting firm (if required) to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne the Borrower, its parent company and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, thereof (provided that in no event shall such accountants be liable as a result of this Agreement by reason of any failure to obtain knowledge of any Default that would not be disclosed in the course of their audit examination); (ii) a schedule setting forth in form satisfactory to the Administrative Agent of reasonable detail the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Yearfiscal year, compliance with the covenants contained in Section 5.046.4 (if required), provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, and; (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer chief financial officer of Ceradyne the Borrower stating that that, to the knowledge of such officer, no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect thereto.

Annual Financials. As soon as practicable available and in any event within 90 95 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year Fiscal Year for Ceradyne the Borrower and its Subsidiaries, including therein the Consolidated and consolidating balance sheets of Ceradyne the Borrower and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income operations, stockholders' equity and a Consolidated statement of cash flows of Ceradyne the Borrower and its Subsidiaries for such Fiscal Year, in each case accompanied by an unqualified opinion, or an opinion otherwise reasonably acceptable to the Administrative Agent Required Lenders, of an any internationally recognized accounting firm, or other independent public accountant accountants of recognized standing reasonably acceptable to the Administrative Agent, setting forth in comparative form, in the case of each such Consolidated balance sheet, the corresponding figures as of the last day of the immediately preceding Fiscal Year, and, in the case of each such Consolidated statement of operations, stockholders' equity and cash flows, the corresponding figures for the corresponding period in the immediately preceding Fiscal Year, together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.045.04 (including with respect to each such Section, provided that where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence), (ii) in the event of any change in the generally accepted accounting principles used by the Borrower in the preparation of such the audited Consolidated financial statementsstatements referred to above in this Section 5.03(c) from GAAP, Ceradyne the Borrower shall also provideprovide a reasonably detailed description of such changes and, if and to the extent necessary for the determination of compliance with Section 5.02(g) or 5.04, a statement of reconciliation conforming such audited Consolidated financial statements to GAAP, and (iii) in the event that the Borrower receives a schedule of all Material Contracts of Ceradyne and letter from its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating independent public accountants that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect theretocopy of such letter.

Annual Financials. As soon as practicable available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Borrower and its Subsidiaries, including therein Consolidated and consolidating balance sheets of Ceradyne the Borrower and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne the Borrower and its Subsidiaries for such Fiscal Year, and the annual internal operating statement, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP (except for the annual internal operating statement) and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year in each case (except for the annual internal operating statement) accompanied by an opinion acceptable to the Administrative Agent of an independent public accountant accountants of recognized national standing reasonably acceptable to the Administrative AgentAgent (without a “going concern” or like qualification or exception and without any qualification or exception to the scope of such audit) to the effect that such Consolidated and consolidating financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, together with (i) a certificate of such accounting firm to the Lender Parties Lenders stating that in the course of the regular audit of the business of Ceradyne the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a an Event of Default has occurred and is continuing, or if, in the opinion of such accounting firm, a an Event of Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory Compliance Certificate from the Borrower to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne the Borrower shall also provide, if necessary for the determination of compliance with Section 5.04, a statement description of reconciliation conforming such changes and the related effect on such financial statements to GAAP, and (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (ivA) a certificate of the Chief a Financial Officer of Ceradyne the Borrower stating that no Event of Default has occurred and is continuing or, if a an Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect theretothereto and (B) a schedule in form satisfactory to the Administrative Agent of the computations used in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04.

Annual Financials. As soon as practicable available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne audited Consolidated financial statements of Parent and its Subsidiaries, including consisting of the annual Consolidated balance sheet, statement of operations, stockholders' equity (deficit) and consolidating balance sheets cash flows, setting forth in comparative form, in each case, Consolidated figures for the prior Fiscal Year, which financial statements shall be prepared in accordance with GAAP, certified without qualification (other than a qualification approved by the Agents) by Ernst & Young or other independent certified public accountants of Ceradyne recognized national standing selected by Parent and acceptable to the Agents, and accompanied by (i) a schedule prepared by the chief financial officer, showing in reasonable detail the calculations used in determining compliance with the financial covenants under Sections 5.02(b) and 5.04 hereof, (ii) a report from such accountants to the effect that in connection with their audit examination, nothing has come to their attention to cause them to believe that a Default had occurred or, if they believe a Default has occurred, specifying the details thereof; provided that such report shall not, and shall not be deemed to, contain any conclusion by such accountants with respect to (x) whether any event, act or condition has or is expected to have a Material Adverse Effect or (y) any Default the existence of which is subject to the determination or opinion of the Agents, the Lenders or the Required Lenders, provided further, however, that such report shall describe in reasonable detail any event, act or condition that is, or is reasonably expected to be, required under generally accepted auditing standards to be mentioned in an auditor's opinion on the financial statements of Parent and its Subsidiaries, taken as a whole, and (iii) a certification of Designated Officers of Parent and the Borrower certifying that (A) all such financial statements are complete and correct and present fairly in all material respects in accordance with GAAP the Consolidated financial position and the Consolidated results of operations and cash flows of Parent and its Subsidiaries as of at the end of such Fiscal Year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable to the Administrative Agent, together with (iB) a certificate no Default exists as of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing time or, if a any Default has occurred then exists, specifying the details and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect theretoanticipated effect thereof.

Annual Financials. As soon as practicable available and in any event within 90 ninety (90) days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Borrower and its Subsidiaries, including therein a Consolidated balance sheet of the Borrower and its Subsidiaries, and consolidating balance sheets of Ceradyne Borrower and its Subsidiaries Subsidiaries, as of the end of such Fiscal Year and a Consolidated and consolidating statements statement of income and a Consolidated statement of cash flows of Ceradyne the Borrower and its Subsidiaries Subsidiaries, and consolidating statements of income of the Borrower and its Subsidiaries, for such Fiscal Year, in each case setting forth in comparative form the corresponding figures for the prior Fiscal Year and the corresponding figures from the budget for such Fiscal Year and in each case accompanied (in the case of such Consolidated financial statements) by an opinion of Ernst & Young LLP or other independent certified public accountants of recognized national standing acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable (which opinion shall contain no qualification with respect to the Administrative Agentcontinuance of the Borrower and its Subsidiaries as going concerns and shall state that such financial statements fairly present in all material respects the financial position of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated, in each case in conformity with GAAP), together with (ia) a certificate letter of such accounting firm to the Lender Parties Administrative Agent and Lenders stating that in the course of the regular audit of the business of Ceradyne the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof; provided, (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles GAAP used in the preparation of such financial statements, Ceradyne the Borrower shall also provide, if necessary for the determination of compliance with Section 5.048.12, a statement of reconciliation conforming such financial statements to GAAP, and (iiib) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as Compliance Certificate of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate chief financial officer of the Chief Financial Officer of Ceradyne Borrower (i) stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect thereto77 thereto and (ii) containing a schedule in form and detail satisfactory to the Administrative Agent of the computations used by the Borrower in determining compliance with the financial covenants contained in Section 8.12, provided, that in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 8.12, a statement of reconciliation conforming such financial statements to GAAP.

Annual Financials. As soon as practicable available and in any event within 90 days after the end of each Fiscal Year, a copy of the an annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Parent and its Subsidiaries, including therein a Consolidated and consolidating balance sheets sheet of Ceradyne the Parent and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements statement of income and a Consolidated statement of cash flows of Ceradyne the Parent and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Administrative Agent Required Lenders of an BDO Xxxxxxx, LLP or other independent public accountant accountants of recognized standing acceptable to the Administrative AgentRequired Lenders, together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne the Parent and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to report setting forth all of the Borrower's IFN revenues and PRI revenues by circuit (or as otherwise agreed by the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAPAgent), (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as Financial Covenants Certificate stating the Borrower's calculation of the end ratios set forth in Section 5.02(q) for the last quarter of such Fiscal Year and maximum Capital Expenditures for such Fiscal Year, certified a statement as true to the amount of proceeds from any sale of assets, including obsolete equipment, received during such Fiscal Year (provided, that any such sale of assets individually or as part of a series of related transactions resulted in receipt of proceeds in excess of $100,000 in such Fiscal Year), and complete by a statement of the Chief Financial Officer Borrower's calculation of CeradyneExcess Cash Flow for such Fiscal Year, each with supporting documentation and in reasonable detail, and (iv) a certificate Financial Covenants Certificate stating that the representations and warranties in each Loan Document are correct in all material respects on and as of the Chief Financial Officer such date, other than any such representations or warranties that, by their terms, refer to a specific date other than such date, in which case as of Ceradyne stating such date and that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect thereto.

Annual Financials. (i) As soon as practicable available and in any event within 90 days after the end of each Fiscal YearYear (or, if earlier, within five Business Days after such date as the Parent is required to file its annual report on Form 10-K for such Fiscal Year with the Securities and Exchange Commission), a copy of the annual Consolidated audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Parent and its Subsidiaries, including therein a Consolidated and consolidating balance sheets sheet of Ceradyne the Parent and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income and a Consolidated statement of cash flows of Ceradyne the Parent and its Subsidiaries for such Fiscal Year, all reported on in a manner reasonably acceptable to the Securities and Exchange Commission in each case and accompanied by an opinion of PricewaterhouseCoopers LLP or other independent public accountants of recognized standing reasonably acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable to the Administrative AgentRequired Lenders, together with (iA) a certificate of such accounting firm to the Lender Parties Chief Financial Officer, Chief Accounting Officer or Chief Compliance Officer of the Parent stating that in the course of the regular audit of the business of Ceradyne and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, if a Default has occurred and is continuing, a statement as to the nature thereofthereof and the action that the Parent has taken a proposes to take with respect thereto, and (iiB) a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by the Borrower and such accountants Parent in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04. (ii) As soon as available and in any event within 120 days after the end of each Fiscal Year, provided that in a copy of the event of any change in generally accepted accounting principles used in annual Consolidated audit report for such year for each Loan Party (other than the preparation Parent) and its Subsidiaries including therein a Consolidated balance sheet of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne Loan Party and its Subsidiaries as of the end of such Fiscal Year and Consolidated statements of income and cash flows of such Loan Party and its Subsidiaries for such Fiscal Year, certified as true all in reasonable detail and complete prepared in accordance with GAAP, in each case accompanied by an opinion acceptable to the Chief Financial Officer Required Lenders of Ceradyne, and PricewaterhouseCoopers LLP or other independent public accountants of recognized standing acceptable to the Required Lenders (ivit being understood that the Borrower shall be deemed to have satisfied the requirements of this clause 5.03(b)(ii) if its financial statements are included in a certificate footnote to the financial statements of the Chief Financial Officer Parent referred to in clause 5.03(b)(i) in a manner consistent with past practice).. (iii) As soon as available and in any event within 20 days after submission, each statutory statement of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as the Loan Parties (or any of them) in the form submitted to the nature thereof and Supervisor of Insurance, the action that Ceradyne has taken and proposes to take with respect theretoInsurance Division of the Bermuda Monetary Authority.

Annual Financials. As soon as practicable available and in any event within not later than ----------------- 90 days after the end of each Fiscal Yearfiscal year of the Borrower and the Parent, as applicable, (i) a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne and its Subsidiaries, including Consolidated and consolidating balance sheets of Ceradyne the Borrower, the Parent and its their respective Subsidiaries (separately aggregated for (i) the Borrower and the Borrower's Subsidiaries [including the Permitted Other Subsidiaries], and (ii) the Parent and the Parent's Subsidiaries) as of the end of such Fiscal Year fiscal year and the related Consolidated and consolidating statements of income income, shareholders' equity and a Consolidated statement of cash flows of Ceradyne the Borrower, the Parent and their respective Subsidiaries (separately aggregated for (i) the Borrower and the Borrower's Subsidiaries [including the Permitted Other Subsidiaries], and (ii) the Parent and the Parent's Subsidiaries) for such fiscal year, and the corresponding figures as at the end of, and for, the preceding fiscal year, and with respect to the Consolidated financial statements of the Parent and its Subsidiaries for such Fiscal Year, in each case accompanied certified by an opinion Coopers & Xxxxxxx L.L.P. or other independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent of an independent public accountant of recognized standing acceptable Agents and including, if requested by either Agent, any management letters delivered by such accountants to the Administrative AgentParent in connection with such audit, together with (iA) a certificate Compliance Certificate duly executed by a Responsible Officer and (B) a completed Borrowing Base Certificate duly executed by a Responsible Officer setting forth the components of the Borrowing Base as of the day of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne financial statements and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to the Administrative Agent statements of the computations used Capital Expenditures, expenditures for FF&E and operating income of each Hotel Property owned by the Borrower, the Parent or any of their respective Subsidiaries and for all such Hotel Properties in the aggregate (separately aggregated for (i) the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with Borrower's Subsidiaries [including the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of CeradynePermitted Other Subsidiaries], and (ivii) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof Parent and the action Parent's Subsidiaries). During the occurrence of an Event of Default, either Agent can require that Ceradyne has taken the audited financial statements required under this Section 5.06(c) be provided for each of such Hotel Properties and proposes to take with respect theretothe Borrower and the Borrower's Subsidiaries on a Consolidated and consolidating basis.

Annual Financials. As soon as practicable available and in any event ------------------ within (i) 90 days after the Closing Date, audited financial statements for Panolam International and its Subsidiaries and for Pioneer, on a Consolidated and consolidating basis (as applicable, and recognizing that the consolidating financial statements will not be audited), consisting of balance sheets as at December 31, 1998 and the related statements of operations, income, stockholders' equity and cash flows and (ii) 90 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files Year (commencing with the Securities and Exchange Commission 1999 Fiscal Year), audited financial statements for such year for Ceradyne Panolam International and its Subsidiaries, including Subsidiaries on a Consolidated and consolidating basis (recognizing that the consolidating financial statements will not be audited), consisting of balance sheets of Ceradyne and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income operations, income, stockholders' equity and a Consolidated statement of cash flows of Ceradyne and its Subsidiaries flows, setting forth in comparative form in each case the figures for such the previous Fiscal Year, which financial statements referred to in each case accompanied clauses (i) and (ii) shall be prepared in accordance with GAAP, certified without qualification, by an opinion acceptable to the Administrative Agent independent certified public accounting firm of an independent public accountant of recognized national standing or otherwise acceptable to the Administrative Agent, together with . The financial statements required by clause (iii) above shall be accompanied by (A) a certificate of Quarterly Compliance Certificate, (ii) a letter from such accounting firm to the Lender Parties stating that effect that, in the course of the regular connection with their audit of the business of Ceradyne and its Subsidiariesexamination, which nothing has come to their attention during such audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge examination to cause them to believe that a Default has occurred and is continuing, or if, in the opinion Event of such accounting firm, a Default has occurred (or specifying those Defaults and is continuingEvents of Default that they became aware of), a statement as it being understood that such audit examination extended only to accounting matters and that no special investigation was made with respect to the nature thereofexistence of Defaults or Events of Default, provided that, such letter can be obtained -------------- without any additional cost to any Loan Party, and (iiiii) the annual letters to such accountants (to the extent not subject to attorney or solicitor client privilege) in connection with their audit examination detailing contingent liabilities and material litigation matters. Requirements to provide audited financial information hereunder with respect to Panolam International and its Subsidiaries on a schedule Consolidated basis may be satisfied by providing the same financial information for Holdings and its Subsidiaries on a Consolidated basis so long as the requisite adjustments for such alternate presentation are clearly shown therein in a manner satisfactory in form satisfactory and substance to the Administrative Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, Ceradyne shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer of Ceradyne stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne has taken and proposes to take with respect theretoRequired Lenders.

Annual Financials. As soon as practicable available and in any event within 90 120 days after the end of each Fiscal Year, a copy of the annual audit report or the report on Form 10-K which Ceradyne files with the Securities and Exchange Commission for such year for Ceradyne the Alliance Credit Agreement 83 83 Borrower and its Subsidiaries, including therein a Consolidated and consolidating balance sheets sheet of Ceradyne the Borrower and its Subsidiaries as of the end of such Fiscal Year and a Consolidated and consolidating statements statement of income and a Consolidated statement of cash flows of Ceradyne the Borrower and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Administrative Agent Required Lenders of an Deloitte & Touche LLP or other independent public accountant accountants of recognized standing acceptable to the Administrative AgentRequired Lenders, together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Ceradyne the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to the Administrative Paying Agent of the computations used by the Borrower and such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles GAAP used in the preparation of such financial statements, Ceradyne the Borrower shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, GAAP and (iii) a schedule of all Material Contracts of Ceradyne and its Subsidiaries as of the end of such Fiscal Year, certified as true and complete by the Chief Financial Officer of Ceradyne, and (iv) a certificate of the Chief Financial Officer (or person performing similar functions) of Ceradyne the Borrower stating that no Default has occurred and is continuing or, if a Default default has occurred and is continuing, a statement as to the nature thereof and the action that Ceradyne the Borrower has taken and proposes to take with respect thereto.