Exhibit 10.1

 

 

FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of June 30, 2011

 

among

 

REGIS CORPORATION,

 

VARIOUS FINANCIAL INSTITUTIONS,

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent, Swing Line Lender and Issuer,

 

BANK OF AMERICA, N.A.,

as Syndication Agent,

 

and

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

U.S. BANK NATIONAL ASSOCIATION

and

WELLS FARGO BANK, N.A.,

as Documentation Agents

 

Arranged by

J.P. MORGAN SECURITIES LLC

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

Joint Lead Arrangers and Joint Bookrunners

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

ARTICLE I

DEFINITIONS

1

 

1.01

Certain Defined Terms

1

1.02

Other Interpretive Provisions

24

1.03

Accounting Principles

25

1.04

Currency Equivalents Generally

26

1.05

Letter of Credit Amounts

26

 

 

 

ARTICLE II

THE CREDITS

26

 

2.01

Amounts and Terms of Commitments

26

2.02

Loan Accounts

26

2.03

Procedure for Borrowing

27

2.04

Conversion and Continuation Elections

28

2.05

The Swing Line Loans

30

2.06

Utilization of Commitments in Offshore Currencies

32

2.07

Voluntary Termination or Reduction of Commitments

34

2.08

Prepayments

35

2.09

Repayment

35

2.10

Interest

35

2.11

Fees

36

2.12

Computation of Fees and Interest

37

2.13

Payments by the Company

37

2.14

Payments by the Lenders to the Administrative Agent

38

2.15

Sharing of Payments, Etc.

38

2.16

Subsidiary Guaranty

39

2.17

Increase in Commitments; Additional Lenders

39

2.18

Additional Cash Collateral

40

2.19

Defaulting Lenders

41

 

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ARTICLE III

THE LETTERS OF CREDIT

44

 

3.01

The Letter of Credit Subfacility

44

3.02

Issuance, Amendment and Renewal of Letters of Credit

45

3.03

Risk Participations, Drawings and Reimbursements

47

3.04

Repayment of Participations

48

3.05

Role of the Issuers

49

3.06

Obligations Absolute

49

3.07

Cash Collateral Pledge

50

3.08

Letter of Credit Fees

50

3.09

UCP; ISP

51

 

 

 

ARTICLE IV

TAXES, YIELD PROTECTION AND ILLEGALITY

51

 

4.01

Taxes

51

4.02

Illegality

53

4.03

Increased Costs and Reduction of Return

53

4.04

Funding Losses

54

4.05

Inability to Determine Rates

54

4.06

Reserves on Offshore Rate Loans

55

4.07

Certificates of Lenders

55

4.08

Substitution of Lenders

55

4.09

Survival

55

 

 

 

ARTICLE V

CONDITIONS PRECEDENT

56

 

5.01

Conditions to Effectiveness

56

5.02

Conditions to All Credit Extensions

57

 

 

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

58

 

6.01

Existence and Power

58

6.02

Authorization; No Contravention

58

6.03

Governmental Authorization

58

 

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6.04

Binding Effect

58

6.05

Litigation

59

6.06

No Default

59

6.07

ERISA Compliance

59

6.08

Use of Proceeds; Margin Regulations

60

6.09

Title to Properties

60

6.10

Taxes

60

6.11

Financial Condition

60

6.12

Environmental Matters

60

6.13

Labor Relations

61

6.14

Regulated Entities

61

6.15

No Burdensome Restrictions

61

6.16

Copyrights, Patents, Trademarks and Licenses, etc.

62

6.17

Subsidiaries

62

6.18

Insurance

62

6.19

Swap Obligations

62

6.20

Solvency

62

6.21

Full Disclosure

62

 

 

 

ARTICLE VII

AFFIRMATIVE COVENANTS

63

 

7.01

Financial Statements

63

7.02

Certificates; Other Information

63

7.03

Notices

64

7.04

Preservation of Existence, Etc.

65

7.05

Maintenance of Property

66

7.06

Insurance

66

7.07

Payment of Obligations

66

7.08

Compliance with Laws

66

7.09

Compliance with ERISA

66

7.10

Inspection of Property and Books and Records

67

7.11

Environmental Laws

67

7.12

Use of Proceeds

67

 

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7.13

Further Assurances

67

7.14

Guaranties

68

7.15

Note Agreement Amendment

68

 

 

 

ARTICLE VIII

NEGATIVE COVENANTS

69

 

8.01

Limitation on Liens

68

8.02

Disposition of Assets

69

8.03

Consolidations and Mergers

70

8.04

Loans and Investments

71

8.05

Limitation on Indebtedness

72

8.06

Transactions with Affiliates

72

8.07

Margin Regulations

73

8.08

Contingent Obligations

73

8.09

Restrictive Agreements

73

8.10

ERISA

73

8.11

Change in Business

73

8.12

Accounting Changes

73

8.13

Amendments to Charter

74

8.14

Leverage Ratio

74

8.15

Fixed Charge Coverage Ratio

74

8.16

Minimum Net Worth

74

8.17

Most Favored Lender Status

74

8.18

Restricted Payments

74

 

 

 

ARTICLE IX

EVENTS OF DEFAULT

75

 

9.01

Event of Default

75

9.02

Remedies

77

9.03

Rights Not Exclusive

78

 

 

 

ARTICLE X

THE ADMINISTRATIVE AGENT

78

 

10.01

Appointment and Authorization

78

10.02

Liability

79

 

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10.03

Reliance by Administrative Agent

79

10.04

Delegation of Duties

80

10.05

Resignation by Administrative Agent

80

10.06

Independent Credit Decision

80

10.07

Notice of Default

81

10.08

Indemnification of Administrative Agent

81

10.09

Guaranty Matters

81

10.10

Other Agents

81

 

 

 

ARTICLE XI

MISCELLANEOUS

82

 

11.01

Amendments and Waivers

82

11.02

Notices

83

11.03

No Waiver; Cumulative Remedies

84

11.04

Costs and Expenses

84

11.05

Company Indemnification

85

11.06

Marshalling; Payments Set Aside

85

11.07

Successors and Assigns

86

11.08

Assignments, Participations, etc.

86

11.09

Confidentiality

88

11.10

Set-off

89

11.11

Automatic Debits of Fees

90

11.12

Notification of Addresses, Lending Offices, Etc.

90

11.13

Counterparts

90

11.14

Severability

90

11.15

No Third Parties Benefited

91

11.16

GOVERNING LAW AND JURISDICTION

91

11.17

WAIVER OF JURY TRIAL

91

11.18

Judgment

92

11.19

Entire Agreement

92

11.20

Euro Currency

92

11.21

Effect of Amendment and Restatement

93

11.22

USA PATRIOT Act Notice

93

 

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Regis Corporation

13

 

SCHEDULES

 

Schedule 1.01(a)

Pricing Schedule

 

Schedule 1.01(b)

Existing Letters of Credit

 

Schedule 2.01

Commitments and Pro Rata Shares

 

Schedule 6.11

Financial Condition

 

Schedule 6.12

Environmental Matters

 

Schedule 6.17

Capitalization; Subsidiaries and Minority Interests

 

Schedule 8.01

Permitted Liens

 

Schedule 8.04

Investments

 

Schedule 8.05

Permitted Indebtedness

 

Schedule 11.02

Administrative Agent’s Payment Office; Certain Addresses for Notices

 

 

 

 

EXHIBITS

 

 

 

 

 

Exhibit A

Form of Notice of Borrowing/Conversion/Continuation

 

Exhibit B

Form of Compliance Certificate

 

Exhibit C

Form of Assignment and Acceptance

 

Exhibit D

Form of Confirmation

 

Exhibit E

Copy of Subsidiary Guaranty

 

 

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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

 

This FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered
into as of June 30, 2011 among Regis Corporation, a Minnesota corporation (the
“Company”), the several financial institutions from time to time party to this
Agreement (collectively, the “Lenders”, and individually each a “Lender”), Bank
of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A.
(“JPMorgan”), as administrative agent for the Lenders (together with any
successor thereto in such capacity, the “Administrative Agent”).

 

WHEREAS, the Lenders are willing to extend commitments to make loans to, and
issue or participate in letters of credit for the account of, the Company on the
terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.01                           Certain Defined Terms.  The following terms have
the following meanings:

 

“Acquired Person” - see the definition of “EBITDA”.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.

 

“Additional Default” means any provision contained in any document or instrument
creating or evidencing Indebtedness of the Company or any Subsidiary that
permits the holder or holders of Indebtedness to accelerate (with the passage of
time or giving of notice or both) the maturity thereof or otherwise requires the
Company or any Subsidiary to purchase such Indebtedness prior to the stated
maturity thereof and that either (i) is similar to Defaults and Events of
Default hereunder (or the related definitions in this Article I), but contains
one or more percentages, amounts or formulas that is more restrictive or has a
shorter grace period than those set forth herein or is more beneficial to the
holders of such other Indebtedness (and such provision shall be deemed an
Additional Default only to the extent that it is more restrictive, has a shorter
period or is more beneficial) or (ii) is different from the subject matter of
the Defaults and Events of Default hereunder (or the related definitions in this
Article I).

 

1

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“Additional Financial Covenant” means any financial covenant applicable to the
Company or any Subsidiary (regardless of whether such provision is labeled or
otherwise characterized as a financial covenant), the subject matter of which
either (i) is similar to that of the covenants in Sections 8.14 through 8.16 (or
the related definitions in this Article I), but contains one or more
percentages, amounts or formulas that is more restrictive, or more favorable to
the Persons entitled to the benefits thereof, than those set forth herein or
more beneficial to the holder or holders of the Indebtedness created or
evidenced by the document in which such covenant or similar restriction is
contained (and such covenant or similar restriction shall be deemed an
Additional Financial Covenant only to the extent that it is more restrictive or
more beneficial) or (ii) is a financial covenant that is different from the
subject matter of the covenants in Sections 8.14 through 8.16.

 

“Administrative Agent” - see the preamble.

 

“Administrative Agent’s Payment Office” means (a) in respect of payments in
Dollars, the address for payments set forth on Schedule 11.02 or such other
address as the Administrative Agent may from time to time specify, and (b) in
the case of payments in any Offshore Currency, such address as the
Administrative Agent may from time to time specify in accordance with
Section 11.02.

 

“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.

 

“Additional Lender” has the meaning specified in Section 2.17.

 

“Additional Offshore Currency” has the meaning specified in subsection 2.06(b).

 

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.

 

“Aggregate Commitment” means the aggregate Commitments of the Lenders.

 

“Agreement” - see the preamble.

 

“Applicable Currency” means, as to any particular payment or Loan, Dollars or
the Offshore Currency in which it is denominated or payable.

 

“Applicable Facility Fee Percentage” - see Schedule 1.01(a).

 

“Applicable Margin” - see Schedule 1.01(a).

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit

 

2

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in the ordinary course of its business and that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.

 

“Arranger” means each of J.P. Morgan Securities LLC and Merrill Lynch, Pierce,
Fenner & Smith Incorporated in its capacity as a joint lead arranger and joint
bookrunner hereunder, and “Arrangers” means both of them.

 

“Asset Disposition” has the meaning specified in Section 8.02.

 

“Assignee” has the meaning specified in subsection 11.08(a).

 

“Associated Costs Rate” means, for any Offshore Currency Loan for any Interest
Period, a percentage rate per annum as determined on the first day of such
Interest Period by the Administrative Agent or the Swing Line Lender as
reflecting the cost, loss or difference in return which would be suffered or
incurred by a Lender as a result of (a) funding (at the Offshore Rate and on a
match funded basis) any special deposit or cash ratio deposit required to be
placed with the Bank of England and/or the Financial Services Authority (or any
other authority which replaces any of their respective functions) and/or (b) any
charge imposed by the Bank of England and/or the Financial Services Authority
(or any other authority which replaces any of their respective functions).

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.

 

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101, et
seq.).

 

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the
Prime Rate in effect on such day; (b) the Federal Funds Rate in effect on such
day plus ½ of 1%; and (c) the sum of 1.00% plus the Offshore Rate that would be
applicable for an Interest Period of one month beginning on such day (or if such
day is not a Business Day, the immediately preceding Business Day).  Any change
in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.

 

“Base Rate Loan” means a Loan or an L/C Advance that bears interest based on the
Base Rate.

 

“Borrowing” means a borrowing hereunder consisting of Revolving Loans of the
same Type made to the Company on the same day by the Lenders under Article II
and, in the case of Offshore Rate Loans, having the same Interest Period.  The
making of a Swing Line Loan shall not constitute a Borrowing.

 

“Borrowing Date” means any date on which a Borrowing occurs under Section 2.03.

 

3

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“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois or New York, New York are authorized or
required by law to close, and (a) with respect to disbursements and payments in
Dollars, a day on which dealings are carried on in the applicable offshore
Dollar interbank market; (b) with respect to disbursements and payments in and
calculations pertaining to Euros, means a TARGET Day; and (c) with respect to
disbursements and payments in and calculations pertaining to any other Offshore
Currency, a day on which commercial banks in London are open and dealings in
such Offshore Currency are carried on in the applicable offshore foreign
exchange interbank market in which disbursement of or payment in such Offshore
Currency will be made or received hereunder.

 

“Capital Lease” has the meaning specified in the definition of “Capital Lease
Obligations”.

 

“Capital Lease Obligations” means all monetary obligations of the Company or any
of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease (a “Capital Lease”).

 

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

 

“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, the
applicable Issuer and the Lenders, as additional collateral for the L/C
Obligations, cash or deposit account balances, or, if the Administrative Agent
and such Issuer shall agree in their sole discretion, other credit support, in
each case pursuant to documentation in form and substance satisfactory to the
Administrative Agent and such Issuer (which documents are hereby consented to by
the Lenders).  Derivatives of such term shall have corresponding meanings.  The
Company hereby grants the Administrative Agent, for the benefit of the
Administrative Agent, the Issuers and the Lenders, a security interest in all
such cash and deposit account balances of the Company.  Such Cash Collateral
shall be maintained in blocked deposit accounts at JPMorgan.  The Administrative
Agent shall invest any and all available funds deposited in such deposit
accounts, within 10 Business Days after the date the relevant funds become
available, in securities issued or fully guaranteed or insured by the United
States Government or any agency thereof backed by the full faith and credit of
the United States having maturities of three months from the date of acquisition
thereof (collectively, “Governmental Obligations”).  The Company hereby
acknowledges and agrees that the Administrative Agent shall not have any
liability with respect to, and the Company hereby indemnifies the Administrative
Agent against, any loss resulting from the acquisition of Governmental
Obligations, and the Administrative Agent shall not have any obligation to
monitor the trading activity of any Governmental Obligation on and after the
acquisition thereof for the purpose of obtaining the highest

 

4

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possible return with respect thereto, the Administrative Agent’s responsibility
being limited to acquiring Governmental Obligations.

 

“Cash Equivalents” means:

 

(a)                                  securities issued or fully guaranteed or
insured by the United States Government or any agency thereof and (i) backed by
the full faith and credit of the United States or such other countries where the
Company or its Subsidiaries have operations, (ii) purchased in the ordinary
course of business consistent with past practices and (iii) having maturities of
not more than twelve months from the date of acquisition;

 

(b)                                 certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse repurchase agreements
and bankers’ acceptances, having in each case a term of not more than twelve
months, issued by any Lender, or by any U.S. commercial bank or non-U.S.
commercial bank in the ordinary course of business consistent with past
practices having combined capital and surplus of not less than $100,000,000
whose short term securities are rated at least A-1 by Standard & Poor’s Ratings
Group, a division of The McGraw Hill Companies, Inc. (“S&P”), and P-1 by Moody’s
Investors Service, Inc. (“Moody’s”); and

 

(c)                                  commercial paper of an issuer rated at
least A-1 by S&P or P-1 by Moody’s and in either case having a tenor of not more
than three months.

 

“CERCLA” has the meaning specified in the definition of “Environmental Laws.”

 

“Change in Law” means the occurrence, after the date of this Agreement, of
either (a) the introduction of or any change in or in the interpretation of any
law or regulation or (b) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law); provided that notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith by
any Governmental Authority and (ii) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States regulatory authorities, in each case pursuant to Basel III, shall
in each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Change of Control” means (a) any Person or any two or more Persons acting in
concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of capital stock of the Company (or other securities convertible
into such capital stock) representing 20% or more of the combined voting power
of all capital stock of the Company entitled to vote in the election of
directors, other than capital stock having such power only by reason of the
happening of a contingency; or (b) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period

 

5

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constituted the Company’s board of directors (together with any new directors
whose election by the Company’s board of directors or whose nomination for
election by the Company’s stockholders was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reasons other than death or disability to
constitute a majority of the directors then in office.

 

“Code” means the Internal Revenue Code of 1986.

 

“Commitment” has the meaning specified in Section 2.01.

 

“Commitment Increase” has the meaning specified in Section 2.17.

 

“Company” - see the preamble.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit B.

 

“Computation Date” has the meaning specified in subsection 2.06(a).

 

“Confirmation” means a confirmation agreement substantially in the form of
Exhibit D.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the “primary obligations”) of another Person (the “primary
obligor”), including any obligation of that Person (i) to purchase, repurchase
or otherwise acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition 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 holder of any such primary obligation against loss in respect
thereof (each, a “Guaranty Obligation”); (b) with respect to any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered, or such services are ever
performed or tendered; or (d) in respect of any Swap Contract.  The amount of
any Contingent Obligation, (x) in the case of Guaranty Obligations, shall be
deemed equal to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof,
(y) in the case of Contingent Obligations in respect of Swap Contracts, shall be
deemed equal to

 

6

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the aggregate Swap Termination Value of such Swap Contracts, and (z) in the case
of other Contingent Obligations shall be deemed equal to the maximum reasonably
anticipated liability in respect thereof.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.

 

“Conversion/Continuation Date” means any date on which, under Section 2.04, the
Company (a) converts Loans of one Type to another Type, or (b) continues as
Loans of the same Type, but with a new Interest Period, Loans having Interest
Periods expiring on such date.

 

“Credit Extension” means (a) the making of any Loan and (b) the Issuance of any
Letter of Credit.

 

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.

 

“Default Rate” - see Section 2.10.

 

“Defaulting Lender” means, subject to Section 2.19(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Company in writing that such failure
is the result of such Lender’s good faith determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied, or (ii) pay to the Administrative Agent, an Issuer, the
Swing Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Line Loans) within two Business Days of the date when due, (b) has
notified the Company, the Administrative Agent, an Issuer or the Swing Line
Lender in writing that it does not intend or expect to comply with all or any
portion of its funding obligations hereunder or generally under other agreements
in which it commits to extend credit, or has made a public statement to that
effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s good faith determination that a condition precedent to funding
(which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by
the Administrative Agent or the Company, to confirm in a manner satisfactory to
the Administrative Agent that it will comply (and is financially able to comply)
with its prospective funding obligations hereunder, or (d) has, or has a direct
or indirect parent company that has, (i) become the subject of a bankruptcy,
insolvency or similar proceeding, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or

 

7

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similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity; provided that a
Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in such Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender.  Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to subsection 2.19(b)) upon delivery
of written notice of such determination to the Company, each Issuer, the Swing
Line Lender and each Lender.

 

“Designated Offshore Currency” means Euros, pounds sterling and Canadian
Dollars.

 

“Dollar Equivalent” means, at any time, (a) as to any amount denominated in
Dollars, the amount thereof at such time, and (b) as to any amount denominated
in an Offshore Currency, the equivalent amount in Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate for the purchase
of Dollars with such Offshore Currency on the most recent Computation Date
provided for in subsection 2.06(a).

 

“Dollars”, “dollars” and “$” each mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary of the Company that is organized
under the laws of the United States or any state thereof.

 

“EBITDA” means, for any period, for the Company and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the total, without
duplication, of:

 

(a)                                  net income (or net loss) for such period,
excluding any gains or losses from sales of assets and any extraordinary
non-cash gains or losses during such period (provided that the net income of any
Person that is not a Subsidiary of the Company shall be included in the
consolidated net income of the Company only to the extent of the amount of cash
dividends or distributions paid by such Person to the Company or to a
consolidated Subsidiary of the Company); plus

 

(b)                                 to the extent included in the determination
of such net income (or net loss), the sum, without duplication, of (i) all
amounts treated as expenses for depreciation (including, without duplication,
non-cash losses (net of non-cash gains) upon the closing and abandonment of any
non-franchised store locations), plus (ii) all amounts treated as expenses for
interest paid or accrued, plus (iii) all amounts treated as expenses for
amortization of intangibles of any kind, plus (iv) all taxes paid or accrued and
unpaid on

 

8

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or measured by income, plus (v) any non-cash interest expense on Indebtedness
convertible into shares of common stock of the Company; plus

 

(c)                                  the amount of any other charge in respect
of non-recurring expenses for such period arising in connection with
Acquisitions, to the extent approved by the Administrative Agent and the
Required Lenders; plus

 

(d)                                 up to $5,000,000 in the aggregate for such
period of (i) non-recurring cash charges in connection with restructurings and
(ii) external professional fees and diligence expenses relating to Acquisitions
(whether or not consummated); plus

 

(e)                                  if the Company or any Subsidiary acquires a
Person (an “Acquired Person”) in an Acquisition during such period, all of the
Acquired Person’s EBITDA (calculated for such Person as set forth above without
giving effect to clause (c)) for the four fiscal quarters then ended; minus

 

(f)                                    if the Company or any Subsidiary sells
all or substantially all of the stock or assets of any Subsidiary during such
period, the EBITDA of such Subsidiary (calculated for such Person as set forth
above without giving effect to clause (c)) for the four fiscal quarters then
ended; plus

 

(g)                                 all non-cash losses and expenses and
non-cash impairment charges (including non-cash compensation expense and
non-cash impairment of goodwill and other intangibles or arising in connection
with any Joint Venture) to the extent deducted in determining such net income;
minus

 

(h)                                 all cash payments made during such period
that arise out of non-cash losses or expenses and impairment charges taken in
any previous period.

 

“EBITDAR” means, for any period, for the Company and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the sum of (a) EBITDA
for such period, minus (b) any Acquired Person’s EBITDA added to the
determination of EBITDA for the four fiscal quarters then ended pursuant to the
proviso set forth in the definition of EBITDA, plus (c) the EBITDA of any
Subsidiary deducted from the determination of EBITDA for the four fiscal
quarters then ended pursuant to the proviso set forth in the definition of
EBITDA, plus (d) all Rental Expense for such period.

 

“Effective Amount” means (a) with respect to any Loan on any date, the aggregate
outstanding principal Dollar Equivalent amount thereof after giving effect to
any Borrowing, prepayment or repayment of Loans occurring on such date and any
Swing Line Loan made on such date; and (b) with respect to any outstanding L/C
Obligations on any date, the Dollar Equivalent amount of such L/C Obligations on
such date after giving effect to any Issuance occurring on such date and any
other change in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letter of Credit or any reduction in the maximum amount available for
drawing under any Letter of Credit taking effect on such date.

 

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“Effective Date” means the date on which all conditions precedent set forth in
Section 5.01 are satisfied or waived by all Lenders (or, in the case of
subsection 5.01(e), waived by the Person entitled to receive such payment).

 

“Eligible Assignee” means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000; (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the “OECD”), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States;
(c) a Person that is primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary,
(d) an Approved Fund and (e) any other Person (other than the Company or an
Affiliate thereof) that has been approved in writing as an Eligible Assignee by
the Company (prior to the occurrence and continuance of an Event of Default,
except in the case of a Replacement Lender designated by the Company pursuant to
Section 4.08) and the Administrative Agent; provided further that no Specified
Competitor may be an Eligible Assignee.

 

“Environmental Claims” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment
or threat to public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or otherwise alleging
liability or responsibility for damages (punitive or otherwise), investigation,
cleanup, removal, remedial or response costs, restitution, civil or criminal
penalties, injunctive relief, or other type of relief, resulting from or based
upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placements, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from any property,
whether or not owned by the Company or any Subsidiary or taken as collateral, or
in connection with any operations of the Company.

 

“Environmental Laws” means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, and the Emergency Planning and Community
Right-to-Know Act.

 

“Environmental Permits” has the meaning specified in subsection 6.12(b).

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

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“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which the Company or such ERISA
Affiliate was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; (f) the imposition of any liability to the PBGC under
Title IV of ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA Affiliate; or (g) the
determination that any Pension Plan is considered an at-risk plan or a plan in
endangered or critical status within the meaning of Sections 430, 431 and 432 of
the Code or Sections 303, 304 and 305 of ERISA.

 

“Euro” means the single currency of participating member states of the European
Monetary Union.

 

“Eurodollar Reserve Percentage” has the meaning specified in the definition of
“Offshore Rate”.

 

“Event of Default” means any event or circumstance specified in Section 9.01.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Existing Letters of Credit” means the outstanding letters of credit previously
issued under the Existing Credit Agreement and set forth on Schedule 1.01(b).

 

“Existing Credit Agreement” means the Fourth Amended and Restated Credit
Agreement dated as of July 12, 2007 among the Company, various financial
institutions and JPMorgan, as administrative agent.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement, and any current or future regulations or official interpretations
thereof; provided that “FATCA” shall also include any amendments to Sections
1471 through 1474 of the Code that are substantively comparable, but only if the
requirements in such amended version for avoiding the withholding are not
materially more onerous than the requirements in the current version.

 

11

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“Federal Funds Rate” means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) 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 that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

 

“Fee Letters” has the meaning specified in subsection 2.11(a).

 

“Fixed Charges” means, with respect to the Company and its Subsidiaries on a
consolidated basis, as of any date of determination, (a) interest expense paid
or accrued on outstanding Indebtedness for the period of four fiscal quarters
ending on the date of determination (excluding non-cash interest expense on
Indebtedness convertible into shares of common stock of the Company), and
(b) Rental Expense paid or accrued in such period.

 

“Foreign Subsidiary” means any Subsidiary of the Company other than a Domestic
Subsidiary

 

“FRB” means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to each Issuer, such Defaulting Lender’s Pro Rata Share of the
outstanding obligations with respect to Letters of Credit issued by such Issuer
other than any such obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof, and (b) with respect to the
Swing Line Lender, such Defaulting Lender’s Pro Rata Share of outstanding Swing
Line Loans made by the Swing Line Lender other than Swing Line Loans as to which
such Defaulting Lender’s participation obligation has been reallocated to other
Lenders in accordance with the terms hereof.

 

“Funded Debt” of any Person means, without duplication, all Indebtedness of such
Person.

 

“Further Taxes” means any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges (including
net income taxes and franchise taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts payable or paid pursuant to
Section 4.01.

 

“FX Trading Office” means the Chicago office of JPMorgan, or such other office
of JPMorgan as the Administrative Agent may designate from time to time.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements

 

12

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of the Financial Accounting Standards Board (or agencies with similar functions
of comparable stature and authority within the U.S. accounting profession),
which are applicable to the circumstances as of the date of determination.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

 

“Guarantor” means any Subsidiary of the Company from time to time party to the
Subsidiary Guaranty in accordance with Section 7.14.

 

“Guaranty Obligation” has the meaning specified in the definition of “Contingent
Obligation.”

 

“Hazardous Materials” means all those substances that are regulated by, or which
may form the basis of liability or a standard of conduct under, any
Environmental Law, including any substance identified under any Environmental
Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or petroleum
or petroleum-derived substance or waste.

 

“Honor Date” has the meaning specified in subsection 3.03(b).

 

“Indebtedness” of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
reimbursement or payment obligations with respect to Surety Instruments and all
L/C Obligations; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by such Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capital Lease Obligations; (g) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP; (h) all indebtedness referred to in clauses (a) through
(g) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a)

 

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through (h) above.  For all purposes of this Agreement, the Indebtedness of any
Person shall include all recourse Indebtedness of any partnership or joint
venture or limited liability company in which such Person is a general partner
or a joint venturer or a member and as to which such Person is or may become
directly liable.

 

“Indemnified Liabilities” has the meaning specified in Section 11.05.

 

“Indemnified Person” has the meaning specified in Section 11.05.

 

“Independent Auditor” has the meaning specified in subsection 7.01(a).

 

“Insolvency Proceeding” means, with respect to any Person, (a) any case, action
or proceeding with respect to such Person before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each case undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.

 

“Interest Payment Date” means (a) as to any Offshore Rate Loan, the last day of
each Interest Period applicable to such Loan and the date of any payment
(including any prepayment) in full of such Loan under Section 2.08, (b) as to
any Base Rate Loan, the last day of each calendar quarter and the date of any
payment (including any prepayment) in full of all Loans hereunder, and (c) as to
any Swing Line Loan denominated in an Offshore Currency, on the date of any
payment (including any prepayment) of such Loan; provided that if any Interest
Period for an Offshore Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.

 

“Interest Period” means, as to any Offshore Rate Loan, the period commencing on
the Borrowing Date of such Loan or on the Conversion/Continuation Date on which
such Loan is converted into or continued as an Offshore Rate Loan, and ending on
the date seven days or one, two, three or six months thereafter as selected by
the Company in its Notice of Borrowing;

 

provided that:

 

(a)                                  if any Interest Period (other than a
seven-day Interest Period) would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following 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 preceding
Business Day;

 

(b)                                 any Interest Period (other than a seven-day
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 the
calendar month at the end of such Interest Period; and

 

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(c)                                  no Interest Period for any Loan shall
extend beyond the Termination Date.

 

“Investments” has the meaning specified in Section 8.04.

 

“IRS” means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.

 

“Issuance Date” has the meaning specified in subsection 3.01(a).

 

“Issue” means, with respect to any Letter of Credit, to issue or to extend the
expiry of, or to renew or increase the amount of, such Letter of Credit; and the
terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.

 

“Issuer” means each of JPMorgan and Bank of America, N.A., in its capacity as an
issuer of Letters of Credit, together with any replacement letter of credit
issuer arising under subsection 10.01(b).

 

“Joint Venture” means any single-purpose corporation, partnership, limited
liability company, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now or
hereafter formed by the Company or any of its Subsidiaries with another Person
in order to conduct a common venture or enterprise with such Person.

 

“JPMorgan” - see the preamble.

 

“Judgment Currency” has the meaning specified in Section 11.18.

 

“L/C Advance” means each Lender’s participation in any L/C Borrowing in
accordance with its Pro Rata Share.

 

“L/C Amendment Application” means an application form for amendment of
outstanding letters of credit as shall at any time be in use by the applicable
Issuer, as such Issuer shall request.

 

“L/C Application” means an application form for issuances of letters of credit
as shall at any time be in use by the applicable Issuer, as such Issuer shall
request.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which shall not have been reimbursed on the date when made or
converted into a Borrowing of Loans pursuant to subsection 3.03(d).

 

“L/C Commitment” means the commitment of the Issuers to Issue and/or maintain,
and the commitment of the Lenders severally to participate in, Letters of Credit
from time to time Issued or outstanding under Article III, in an aggregate
amount not to exceed $200,000,000 on any date; provided that the L/C Commitment
is a part of the Aggregate Commitment, rather than a separate, independent
commitment.

 

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“L/C Obligations” means at any time the sum of (a) the aggregate undrawn amount
of all Letters of Credit then outstanding, plus (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all outstanding L/C
Borrowings.

 

“L/C-Related Documents” means the Letters of Credit, the L/C Applications, the
L/C Amendment Applications and any other document relating to any Letter of
Credit, including any standard form documents used by the applicable Issuer for
letter of credit issuances.

 

“Lead Agents” means, collectively, the Administrative Agent, the Syndication
Agent and the Arrangers, and “Lead Agent” means any of them.

 

“Lender” has the meaning specified in the introductory clause hereto. 
References to the “Lenders” shall include each financial institution acting as
an Issuer and the Swing Line Lender; for purposes of clarification only, to the
extent such Person may have any rights or obligations in addition to those of
the Lenders due to its status as an Issuer or as Swing Line Lender,
respectively, its status as such will be specifically referenced.

 

“Lending Office” means, as to any Lender, the office or offices, branches,
subsidiaries or affiliates of such Lender specified as its applicable lending
office in such Lender’s Administrative Questionnaire, or such other office or
offices, branches, subsidiaries or affiliates as such Lender may from time to
time notify the Company and the Administrative Agent.

 

“Letters of Credit” means (a) each Existing Letter of Credit, and (b) any
standby or commercial letter of credit Issued by an Issuer pursuant to
Article III on or after the date of this Agreement.

 

“Leverage Ratio” means, as of any date of determination, the ratio of (a) all
Funded Debt of the Company and its Subsidiaries determined on a consolidated
basis as of such date to (b) EBITDA for the period of four fiscal quarters
ending on such date.

 

“Lien” means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.

 

“Loan” means an extension of credit by a Lender to the Company under Article II
or Article III in the form of a Revolving Loan, Swing Line Loan or L/C Advance.

 

“Loan Documents” means this Agreement, each Note, the Fee Letters, the
L/C-Related Documents, the Confirmation, the Subsidiary Guaranty, the Rate Swap

 

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Documents and all other documents delivered to the Administrative Agent or any
Lender in connection herewith.

 

“Loan Parties” means, collectively, the Company and each Guarantor, and “Loan
Party” means any of them.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the FRB.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, liabilities (actual or
contingent), condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole; (b) a material impairment of
the ability of the Company or any Subsidiary to perform its payment or other
material obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Subsidiary of any Loan Document to
which it is a party.

 

“Multiemployer Plan” means a “multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes,
is making or is obligated to make contributions or, during the preceding three
calendar years, has made, or has been obligated to make, contributions.

 

“Net Worth” means the consolidated shareholders’ equity of the Company and its
Subsidiaries as determined in accordance with GAAP.

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver, or amendment that (i) requires the approval of all affected Lenders in
accordance with the terms of Section 11.01 and (ii) has been approved by the
Required Lenders.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

 

“Note” means a promissory note executed by the Company in favor of a Lender
pursuant to subsection 2.02(b).

 

“Note Agreement” means the Amended and Restated Private Shelf Agreement dated as
of October 3, 2000 between the Company and the purchasers named therein.

 

“Notice of Borrowing” means a Notice of Borrowing/Conversion/Continuation in
substantially the form of Exhibit A.

 

“Obligations” means all advances, debts, liabilities, obligations, covenants and
duties arising under any Loan Document owing by the Company or any Subsidiary to
any Lender, the Administrative Agent or any Indemnified Person, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due or now existing or hereafter arising.

 

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“Offshore Currency” means at any time any Additional Offshore Currency and any
Designated Offshore Currency.

 

“Offshore Currency Loan” means any Offshore Rate Loan denominated in an Offshore
Currency.

 

“Offshore Currency Loan Sublimit” means $50,000,000.

 

“Offshore Rate” means, for any Interest Period, with respect to Offshore Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/100th of 1%) determined by the Administrative
Agent as follows:

 

Offshore Rate =

LIBO Rate

 

 

1.00 - Eurodollar Reserve Percentage

 

 

Where,

 

“Eurodollar Reserve Percentage” means for any day during any Interest Period,
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the FRB to which any Lender is subject for eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the FRB), which
reserve percentages shall include those imposed pursuant to such Regulation D;
provided that (i) Offshore Rate Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation and
(ii) the Eurodollar Reserve Percentage shall be adjusted automatically on and as
of the effective date of any change in any such reserve percentage; and

 

“LIBO Rate” means:  (a) with respect to any Offshore Rate Loan for any Interest
Period, (i) except for Offshore Rate Loans denominated in Euros, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time), at approximately 11:00 a.m. (London time), two Business Days prior to the
commencement of such Interest Period (or, in the case of an Offshore Rate Loan
denominated in pounds sterling, on the first day of such Interest Period), as
the rate for dollar deposits with a maturity comparable to such Interest Period,
and (ii) with respect to Offshore Rate Loans denominated in Euro, the rate
appearing on the Reuters Screen EURIBOR01 Page (it being understood that this
rate is the Euro interbank offered rate (known as the “EURIBOR Rate”) sponsored
by the Banking Federation of the European Union and the Financial Markets
Association) at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period as the rate for deposits in Euro
with a maturity comparable to such Interest Period.  In the event that either
such rate is not available at such time for any reason, then the “LIBO Rate”
with

 

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respect to such Offshore Rate Loan for such Interest Period shall be the rate at
which deposits in the relevant currency for delivery on the first day of such
Interest Period in Same Day Funds in the approximate amount of the Offshore Rate
Loan being made, continued or converted by JPMorgan and with a term equivalent
to such Interest Period would be offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period (or, in the case of an Offshore Rate Loan
denominated in pounds sterling, on the first day of such Interest Period); and

 

(b)  for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m. (London
time) two Business Days prior to such date for Dollar deposits being delivered
in the London interbank market for a term of one month commencing that day or
(ii) if such rate is not available at such time for any reason, the rate per
annum determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the date of determination in Same Day Funds in the
approximate amount of the Base Rate Loan being made or maintained by JPMorgan
and with a term equal to one month would be offered by the principal London
office of the Administrative Agent in immediately available funds in the London
interbank market at the date and time of determination.

 

The Offshore Rate shall be adjusted automatically as to all applicable Loans
then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.

 

“Offshore Rate Loan” means a Revolving Loan that bears interest based on the
Offshore Rate and may be an Offshore Currency Loan or a Loan denominated in
Dollars.

 

“Organization Documents” means, for any Person, the certificate or articles of
formation and the bylaws or similar governing documents of such Person, any
certificate of determination or instrument relating to the rights of preferred
equityholders of such Person, any rights or similar agreement with respect to
the equityholders of such Person, and all applicable resolutions of the board of
directors or similar governing body (or any committee thereof) of such Person.

 

“Other Taxes” means any present or future stamp, court or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.

 

“Overnight Rate” means, for any day, the rate of interest per annum at which
overnight deposits in the relevant Applicable Currency, in the amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by JPMorgan’s London Branch to major
banks in the London or other applicable offshore interbank market.

 

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“Participant” has the meaning specified in subsection 11.08(e).

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.

 

“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Company or any ERISA Affiliate sponsors,
maintains, or to which it makes, is making or is obligated to make
contributions, or otherwise has any liability, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.

 

“Permitted Acquisitions” has the meaning specified in Section 8.04.

 

“Permitted Liens” has the meaning specified in Section 8.01.

 

“Permitted Swap Obligations” means all obligations (contingent or otherwise) of
the Company existing or arising under Swap Contracts, provided that each of the
following criteria is satisfied:  (a) such obligations are (or were) entered
into by the Company in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments or assets
held or reasonably anticipated by such Person, or changes in the value of
securities issued by the Company in conjunction with a securities repurchase
program not otherwise prohibited hereunder, and not for purposes of speculation
or taking a “market view”, and (b) such Swap Contracts do not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party (i.e.; such Swap
Contracts do not elect the “first method” of calculating a termination payment)
under the 1992 Master ISDA Agreement.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company or any ERISA Affiliate sponsors or maintains or to which the
Company or any ERISA Affiliate makes, is making or is obligated to make
contributions or otherwise has any liability and includes any Pension Plan.

 

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“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan as its prime rate in effect at its office located at 270
Park Avenue, New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

“Pro Rata Share” means, as to any Lender, (a) at any time at which the
Commitments remain outstanding, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at such time of such Lender’s
Commitment divided by the Aggregate Commitment, and (b) after the termination of
the Commitments, the percentage equivalent (expressed as a decimal, rounded to
the ninth decimal place) at such time of the Effective Amount of such Lender’s
outstanding Loans (including such Lender’s ratable share of outstanding Swing
Line Loans and L/C Obligations) divided by the aggregate Effective Amount of the
outstanding Loans and L/C Obligations of all of the Lenders; provided that, if
and so long as any Lender is a Defaulting Lender, such Lender’s Pro Rata Share
shall be deemed for purposes of this definition to be reduced to the extent of
the defaulted amount and the Pro Rata Share of each Issuer and the Swing Line
Lender, in each case as applicable, shall be deemed for purposes of this
definition to be increased to such extent.

 

“Rate Swap Documents” means, collectively, all Swap Contracts entered into
between the Company and any Lender or any Affiliate of a Lender in respect of
any portion of the Obligations.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Rental Expense” means, for any period, the sum of (a) all store rental payments
(excluding lease termination payments), (b) all common area maintenance payments
and (c) all real estate taxes paid by the Company and its Subsidiaries, in each
case, with respect to non-franchised store locations (and not, for avoidance of
doubt, with respect to office or warehouse locations).

 

“Replacement Lender” has the meaning specified in Section 4.08.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
or the regulations thereunder, other than any such event for which the 30-day
notice requirement under ERISA has been waived in regulations issued by the
PBGC.

 

“Required Lenders” means at any time Lenders having Pro Rata Shares totaling
more than 50%.

 

“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which the Person or any of its property is subject.

 

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“Responsible Officer” means the chief financial officer of the Company or any
other officer having substantially the same authority and responsibility.

 

“Revolving Loan” has the meaning specified in Section 2.01.

 

“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Offshore Currency, same day or other funds as may be determined
by the Administrative Agent to be customary in the place of disbursement or
payment for the settlement of international banking transactions in the relevant
Offshore Currency.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Solvent” means, when used with respect to a Person, that (a) the fair saleable
value of the assets of such Person is in excess of the total amount of the
present value of its liabilities (including for purposes of this definition all
liabilities (including loss reserves as determined by such Person), whether or
not reflected on a balance sheet prepared in accordance with GAAP and whether
direct or indirect, fixed or contingent, secured or unsecured, disputed or
undisputed), (b) such Person is able to pay its debts or obligations in the
ordinary course as they mature and (c) such Person does not have unreasonably
small capital to carry out its business as conducted and as proposed to be
conducted.  “Solvency” shall have a correlative meaning.

 

“Specified Acquisition Debt” means Indebtedness of a Person that was the subject
of an Acquisition by the Company or any Subsidiary in an aggregate amount not to
exceed $10,000,000 at any one time outstanding that (a) remains outstanding no
more than 90 days after the date on which such Acquisition was consummated,
(b) is the subject of a default under the terms thereof solely as a result of
the consummation of such Acquisition, and (c) has not been accelerated or
otherwise become immediately repayable and in respect of which the lenders
thereof have not exercised any available remedies.

 

“Specified Competitor” means any Person that the Company identifies to the
Administrative Agent in writing as a direct competitor of the Company or any of
its Subsidiaries.

 

“Spot Rate” for a currency means the rate quoted by JPMorgan as the spot rate
for the purchase by JPMorgan of such currency with another currency through its
FX Trading Office at approximately 11:00 a.m. (London time) on the date two
Business Days prior to the date as of which the foreign exchange computation is
made.

 

“Subsidiary” of a Person means any corporation, association, partnership,
limited liability company, joint venture (excluding, in the case of the Company
or a Subsidiary, any Joint Venture) or other business entity the accounts of
which would be consolidated with those of such Person in such Person’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date.  Unless the context otherwise clearly
requires, references herein to a “Subsidiary” refer to a Subsidiary of the
Company.

 

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“Subsidiary Guaranty” means the Guaranty dated as July 12, 2007 by certain of
the Subsidiaries in favor of the Administrative Agent and the Lenders, a copy of
which is attached hereto as Exhibit E.

 

“Surety Instruments” means all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, performance
bonds, surety bonds and similar instruments.

 

“Swap Contract” means any agreement, whether or not in writing, relating to any
transaction that is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap or option, bond, note or
bill option, interest rate option, forward foreign exchange transaction, cap,
collar or floor transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option to enter
into any of the foregoing) or any combination of the foregoing, and, unless the
context otherwise clearly requires, any master agreement relating to or
governing any or all of the foregoing.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a) the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

 

“Swing Line Commitment” means at any time, the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.05.

 

“Swing Line Lender” means JPMorgan, in its capacity as the provider of Swing
Line Loans.

 

“Swing Line Loan” means a Loan made by the Swing Line Lender.

 

“Syndication Agent” means Bank of America, N.A. in its capacity as syndication
agent for the Lenders hereunder.

 

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Administrative Agent to be a suitable replacement) is open for the settlement of
payments in Euro.

 

“Taxes” means any and all present or future taxes, levies, assessments, imposts,
duties, deductions, fees, withholdings or similar charges, and all liabilities
with respect thereto, excluding, in the case of each Lender and the
Administrative Agent, respectively, (a) taxes imposed on or measured by its net
income by the jurisdiction (or any political

 

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subdivision thereof) under the laws of which such Lender or the Administrative
Agent, as the case may be, is organized or maintains a Lending Office and
(b) any United States withholding taxes imposed by FATCA.

 

“Termination Date” means the earlier to occur of:

 

(a)                                  June 30, 2016; and

 

(b)                                 the date on which the Commitments terminate
in accordance with the provisions of this Agreement.

 

A “Type” of Loan means its status as either a Base Rate Loan or an Offshore Rate
Loan.

 

“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“United States” and “U.S.” each means the United States of America.

 

“Wholly-Owned” means any corporation, association, partnership, limited
liability company, joint venture or other business entity in which (other than
directors’ qualifying shares or other immaterial local ownership required by
law) 100% of the equity interests of each class having ordinary voting power,
and 100% of the equity interests of every other class, in each case, at the time
as of which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.

 

1.02                           Other Interpretive Provisions.  (a)   The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.

 

(b)                                 The words “hereof”, “herein”, “hereunder”
and similar words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and subsection, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

 

(c)                                  (i)                                     The
term “documents” includes any and all instruments, documents, agreements,
certificates, indentures, notices and other writings, however evidenced.

 

(ii)                                  The term “including” is not limiting and
means “including without limitation.”

 

(iii)                               In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”, and the
word “through” means “to and including.”

 

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(iv)                              The term “property” includes any kind of
property or asset, real, personal or mixed, tangible or intangible.

 

(d)                                 Unless otherwise expressly provided herein,
(i) references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document,
(ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such statute or regulation and (iii) any reference
to a particular time means such time in Chicago, Illinois.

 

(e)                                  The captions and headings of this Agreement
are for convenience of reference only and shall not affect the interpretation of
this Agreement.

 

(f)                                    This Agreement and other Loan Documents
may use several different limitations, tests or measurements to regulate the
same or similar matters.  All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.  Unless
otherwise expressly provided, any reference to any act of the Administrative
Agent or the Lenders by way of consent, approval or waiver shall be deemed
modified by the phrase “in its/their sole discretion”.

 

(g)                                 This Agreement and the other Loan Documents
are the result of negotiations among and have been reviewed by counsel to the
Administrative Agent, the Company and the other parties, and are the products of
all parties.  Accordingly, they shall not be construed against the Lenders or
the Administrative Agent merely because of the Lenders’ or the Administrative
Agent’s involvement in their preparation.

 

1.03                           Accounting Principles.  (a)    Unless the context
otherwise clearly requires, all accounting terms not expressly defined herein
shall be construed, and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied; provided that
notwithstanding any provision of any Loan Document to the contrary, for purposes
of this Agreement and each other Loan Document (other than covenants to deliver
financial statements), the determination of whether a lease constitutes a
capital lease or an operating lease and whether obligations arising under a
lease are required to be capitalized on the balance sheet of the lessee
thereunder and/or recognized as interest expense in the lessee’s financial
statements shall be determined under generally accepted accounting principles in
the United States as of the date of this Agreement, notwithstanding any
modifications or interpretive changes thereto that may occur thereafter.

 

(b)                                 References herein to “fiscal year” and
“fiscal quarter” refer to such fiscal periods of the Company.

 

(c)                                  If any change in GAAP occurs after the date
of this Agreement and such change results in a material variation in the method
of calculation of financial covenants or other terms of this Agreement, then the
Company, the Administrative Agent and the Lenders agree to amend such provisions
of this Agreement so as to equitably reflect such change so that the

 

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criteria for evaluating the Company’s financial condition will be the same after
such change as if such change had not occurred.

 

(d)                                 Notwithstanding the foregoing provisions of
this Section 1.03 or any other provision of this Agreement, the outstanding
principal amount of all Indebtedness of any Person shall be equal to the actual
outstanding principal amount thereof irrespective of the amount that might
otherwise be accounted for under GAAP as the amount of the liability of such
Person with respect to such Indebtedness, and any determination of the net
income (or net loss), equity or assets of any Person shall not take into account
any effect of marking any such outstanding Indebtedness of such Person to market
value.

 

1.04                           Currency Equivalents Generally.  For all purposes
of this Agreement (but not for purposes of the preparation of any financial
statements delivered pursuant hereto), the equivalent in any Offshore Currency
or other currency of an amount in Dollars, and the equivalent in Dollars of an
amount in any Offshore Currency or other currency, shall be determined at the
Spot Rate.

 

1.05                           Letter of Credit Amounts.  Unless otherwise
specified, all references herein to the amount of a Letter of Credit at any time
shall be deemed to mean the undrawn face amount thereof in effect at such time
(giving effect to all automatic increases in the maximum amount available to be
drawn thereunder provided for in such Letter of Credit or any L/C-Related
Document, whether or not any such automatic increase is in effect at such time).

 

ARTICLE II

 

THE CREDITS

 

2.01                           Amounts and Terms of Commitments.  Each Lender
severally agrees, on the terms and conditions set forth herein, to make loans to
the Company denominated in Dollars or in an Offshore Currency (each such loan, a
“Revolving Loan”) from time to time on any Business Day during the period from
the Effective Date to the Termination Date, in an aggregate principal Dollar
Equivalent amount not to exceed at any time outstanding the amount set forth
opposite such Lender’s name on Schedule 2.01 (such amount, as the same may be
reduced under Section 2.07 or as a result of one or more assignments under
Section 11.08, such Lender’s “Commitment”); provided that, after giving effect
to any Borrowing of Revolving Loans, (a) the Effective Amount of all outstanding
Loans and of all L/C Obligations, shall not exceed the Aggregate Commitment and
(b) the Effective Amount of the Revolving Loans of any Lender plus the
participation of such Lender in the Effective Amount of all L/C Obligations and
such Lender’s Pro Rata Share of the Effective Amount of any outstanding Swing
Line Loans shall not exceed such Lender’s Commitment; and provided further, that
after giving effect to any Borrowing of Offshore Currency Loans, the sum of the
Effective Amount of all outstanding Offshore Currency Loans plus the Effective
Amount of all outstanding Swing Line Loans denominated in Offshore Currencies
shall not exceed the Offshore Currency Loan Sublimit.  Within the limits of each
Revolving Lender’s Commitment, and subject to the other terms and conditions
hereof, the Company may borrow under this Section 2.01, prepay under
Section 2.08 and reborrow under this Section 2.01.

 

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2.02                           Loan Accounts.  (a)   The Loans made by each
Lender and the Letters of Credit Issued by each Issuer shall be evidenced by one
or more accounts or records maintained by such Lender or Issuer, as the case may
be, in the ordinary course of business.  The accounts or records maintained by
the Administrative Agent, each Issuer and each Lender shall be conclusive absent
manifest error of the amount of the Loans made by the Lenders to the Company and
the Letters of Credit Issued for the account of the Company, and the interest
and payments thereon.  Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Company hereunder
to pay any amount owing with respect to the Loans or any Letter of Credit.

 

(b)                                 Upon the request of any Lender made through
the Administrative Agent, the Loans made by such Lender may be evidenced by a
Note instead of or in addition to its records or accounts.  The Company
irrevocably authorizes each such Lender to record on the schedule annexed to its
Note the date, amount and maturity of each Loan made by it and the amount and
Applicable Currency of each payment of principal thereon.  Any such schedule
shall be conclusive absent manifest error; provided that the failure of a Lender
to make, or an error in making, a notation thereon shall not limit or otherwise
affect the obligations of the Company hereunder or under such Lender’s Note.

 

2.03                           Procedure for Borrowing.  (a)   Each Borrowing
(other than an L/C Advance) shall be made upon the Company’s irrevocable notice
delivered to the Administrative Agent in the form of a Notice of Borrowing
(which notice must be received by the Administrative Agent prior to 12:00 noon
(i) three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans denominated in Dollars, (ii) four Business Days prior to the
requested Borrowing Date, in the case of Offshore Currency Loans, and (iii) on
the requested Borrowing Date, in the case of Base Rate Loans), specifying:

 

(A)                              the amount of such Borrowing, which shall be in
an aggregate minimum amount of (1) in the case of a Borrowing of Base Rate
Loans, $500,000 or any multiple of $100,000 in excess thereof, (2) in the case
of a Borrowing of Offshore Rate Loans denominated in Dollars, $1,000,000 or any
multiple of $500,000, and (3) in the case of Offshore Currency Loans, the Dollar
Equivalent of $1,000,000 or any multiple of 500,000 units of the Applicable
Currency in excess thereof;

 

(B)                                the requested Borrowing Date, which shall be
a Business Day;

 

(C)                                the Type of Loans comprising such Borrowing
and in the case of an Offshore Rate Loan, the Applicable Currency;

 

(D)                               with respect to Offshore Rate Loans, the
duration of the Interest Period applicable to such Loans included in such
notice; provided that if such Notice of Borrowing fails to specify the duration
of the Interest Period for any Borrowing comprised of Offshore Rate Loans, such
Interest Period shall be one month; and

 

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(E)                                 wire instructions pursuant to which the
proceeds of such Borrowing are to be disbursed.

 

(b)                                 The Administrative Agent will promptly
notify each Lender of its receipt of any Notice of Borrowing and of the amount
of such Lender’s Pro Rata Share of that Borrowing.

 

(c)                                  Each Lender will make the amount of its Pro
Rata Share of each Borrowing available to the Administrative Agent for the
account of the Company at the Administrative Agent’s Payment Office on the
Borrowing Date requested by the Company in Same Day Funds and in the Applicable
Currency (i) in the case of a Borrowing comprised of Loans in Dollars, by
2:00 p.m., and (ii) in the case of a Borrowing comprised of Offshore Currency
Loans, by such time as the Administrative Agent may specify.  The aggregate of
the amounts made available to the Administrative Agent by the Lenders will
promptly thereafter be made available to the Company pursuant to the wire
instructions set forth in the applicable Notice of Borrowing in like funds as
received by the Administrative Agent.

 

(d)                                 After giving effect to any Borrowing or any
conversion or continuation of Loans pursuant to Section 2.04, unless the
Administrative Agent shall otherwise consent, there may not be more than 10
different Interest Periods in effect.

 

(e)                                  The Company hereby authorizes the Lenders
and the Administrative Agent to accept Notices of Borrowing based on telephonic
notices made by any Person that the Administrative Agent or any Lender in good
faith believes to be acting on behalf of the Company.  The Company agrees to
deliver promptly to the Administrative Agent a written confirmation of each
telephonic notice, signed by a Responsible Officer or an authorized designee. 
If the written confirmation differs in any material respect from the action
taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error.

 

2.04                           Conversion and Continuation Elections.  (a)  The
Company may, upon irrevocable notice to the Administrative Agent in accordance
with subsection 2.04(b):

 

(i)                                     elect, as of any Business Day, in the
case of Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of Offshore Rate Loans, to convert Loans (or any part
thereof in an amount not less than the Dollar Equivalent of $500,000 or any
multiple of 100,000 units of the Applicable Currency in excess thereof) into
Loans of any other Type; or

 

(ii)                                  elect as of the last day of the applicable
Interest Period, to continue Offshore Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than the Dollar
Equivalent of $500,000, or any multiple of 100,000 units of the Applicable
Currency in excess thereof);

 

provided that if at any time the aggregate amount of Offshore Rate Loans
denominated in Dollars in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $500,000, such
Offshore Rate Loans denominated in Dollars shall

 

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automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.

 

(b)                                 The Company shall deliver a Notice of
Borrowing to be received by the Administrative Agent not later than 12:00 noon
at least (i) three Business Days in advance of the applicable
Conversion/Continuation Date, if the relevant Loans are to be converted into or
continued as Offshore Rate Loans in Dollars, (ii) four Business Days in advance
of the Conversion/Continuation Date, if the relevant Loans are to be converted
into or continued as Offshore Currency Loans, and (iii) on the
Conversion/Continuation Date, if the relevant Loans are to be converted into
Base Rate Loans, specifying:

 

(A)                              the proposed Conversion/Continuation Date;

 

(B)                                the aggregate amount of Loans to be converted
or continued;

 

(C)                                the Type of Loans resulting from the proposed
conversion or continuation and in the case of an Offshore Rate Loan, the
Applicable Currency; and

 

(D)                               other than in the case of conversions into
Base Rate Loans, the duration of the requested Interest Period.

 

(c)                                  If upon the expiration of any Interest
Period applicable to Offshore Rate Loans denominated in Dollars, the Company has
failed to timely select a new Interest Period to be applicable to such Offshore
Rate Loans, or if any Default or Event of Default then exists, the Company shall
be deemed to have elected to convert such Offshore Rate Loans into Base Rate
Loans effective as of the expiration date of such Interest Period.  If the
Company has failed to select a new Interest Period to be applicable to Offshore
Currency Loans prior to the fourth Business Day in advance of the expiration
date of the current Interest Period applicable thereto as provided in
subsection 2.04(b), or if any Default or Event of Default shall then exist,
subject to the provisions of subsection 2.06(d), the Company shall be deemed to
have elected to continue such Offshore Currency Loans for a one-month Interest
Period.

 

(d)                                 The Administrative Agent will promptly
notify each Lender of its receipt of a Notice of Borrowing, or, if no timely
notice is provided by the Company, the Administrative Agent will promptly notify
each Lender of the details of any automatic conversion.  All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans, with respect to which the notice was given, held
by each Lender.

 

(e)                                  Unless the Required Lenders otherwise
consent, during the existence of a Default or Event of Default, the Company may
not elect to have a Loan in Dollars converted into or continued as an Offshore
Rate Loan in Dollars, or an Offshore Currency Loan continued on the basis of an
Interest Period exceeding one month.

 

(f)                                    The Company hereby authorizes the Lenders
and the Administrative Agent to accept Notices of Conversion/Continuation based
on telephonic notices made by any Person the Administrative Agent or any Lender
in good faith believes to be acting on behalf of

 

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the Company.  The Company agrees to deliver promptly to the Administrative Agent
a written confirmation of each telephonic notice, signed by a Responsible
Officer.  If the written confirmation differs in any material respect from the
action taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error.

 

2.05                           The Swing Line Loans.  (a)  Subject to the terms
and conditions hereof, the Swing Line Lender agrees to make Swing Line Loans to
the Company denominated in Dollars or in an Offshore Currency from time to time
prior to the Termination Date in an aggregate principal amount at any one time
outstanding not to exceed a Dollar Equivalent of $30,000,000; provided that
(i) after giving effect to any Swing Line Loan, the Effective Amount of all
Revolving Loans, Swing Line Loans and L/C Obligations at such time shall not
exceed the Aggregate Commitment at such time, (ii) the Swing Line Lender shall
not be required to make a Swing Line Loan to refinance an outstanding Swing Line
Loan, (iii) the Effective Amount of all outstanding Offshore Currency Loans plus
the Effective Amount of all outstanding Swing Line Loans denominated in Offshore
Currencies shall not exceed the Offshore Currency Loan Sublimit and
(iv) notwithstanding Section 2.01, the Effective Amount of the Revolving Loans
and Swing Line Loans of the Swing Line Lender, plus the participation of the
Swing Line Lender in the Effective Amount of all L/C Obligations, may exceed
JPMorgan’s Commitment so long as the condition set forth in the previous proviso
is satisfied.  Prior to the Termination Date, the Company may use the Swing Line
Commitment by borrowing, prepaying the Swing Line Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.  All Swing
Line Loans denominated in Dollars shall bear interest at the Base Rate plus the
Applicable Margin for Base Rate Loans and shall not be entitled to be converted
into Loans that bear interest at any other rate.  Each Swing Line Loan
denominated in an Offshore Currency shall bear interest at a rate separately
agreed to by the Company and the Swing Line Lender; provided that upon the
purchase by the Lenders of participating interests in such Swing Line Loan
pursuant to clause (e) below, such Swing Line Loan shall be redenominated in
Dollars on the basis of the Spot Rate and shall thereafter bear interest at the
Base Rate plus the Applicable Margin for Base Rate Loans.

 

(b)                                 The Company may borrow under the Swing Line
Commitment on any Business Day until the Termination Date; provided that the
Company shall give the Swing Line Lender irrevocable written notice signed by a
Responsible Officer or an authorized designee (which notice must be received by
the Swing Line Lender prior to (i) 2:00 p.m. on the requested borrowing date, in
the case of a Swing Line Loan denominated in Dollars, or (ii) 10:30 a.m. three
Business Days prior to the requested borrowing date, in the case of a Swing Line
Loan denominated in an Offshore Currency (or, in each case, such other time as
the Swing Line Lender and the Company may agree)) with a copy to the
Administrative Agent specifying the amount of the requested Swing Line Loan,
which shall be in a minimum Dollar Equivalent amount of $250,000 and an integral
multiple of (x) if denominated in Dollars, $250,000, or (y) if denominated in an
Offshore Currency, 250,000 units of such currency.  The proceeds of the Swing
Line Loan will be made available by the Swing Line Lender to the Company in
immediately available funds at the office of the Swing Line Lender by 4:00 p.m.
on the requested date of borrowing.  The Company may, at any time and from time
to time on any Business Day, prepay the Swing Line Loans, in whole or in part,
without premium or penalty, by notifying the Swing Line Lender, prior to
3:00 p.m. (A) in the case of a Swing Line Loan denominated in

 

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Dollars, on the date of prepayment, and (B) in the case of a Swing Line Loan
denominated in an Offshore Currency, three Business Days prior to the date of
prepayment, of the date, amount and currency of prepayment, with a copy to the
Administrative Agent.  If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein.  Partial
prepayments shall be in a minimum Dollar Equivalent amount of $250,000 and an
integral multiple of (1) if denominated in Dollars, $250,000, and (2) if
denominated in an Offshore Currency, 250,000 units of such currency.

 

(c)           If any Swing Line Loan shall remain outstanding at 11:00 a.m. on
the earlier of (i) the 15th day following the date of such Swing Line Loan and
(ii) the last day of a calendar month following the date such Swing Line Loan is
made (so long as such day is at least two Business Days after such Swing Line
Loan is made), and if by such time on such earlier day the Administrative Agent
shall have received neither (x) a Notice of Borrowing delivered by the Company
pursuant to Section 2.03 requesting that Revolving Loans be made pursuant to
Section 2.01 on the immediately succeeding Business Day in an amount at least
equal to the principal amount of such Swing Line Loan nor (y) any other notice
satisfactory to the Administrative Agent indicating the Company’s intent to
repay such Swing Line Loan on or before the immediately succeeding Business Day
with funds obtained from other sources, then on such Business Day the Swing Line
Lender shall (and on any Business Day the Swing Line Lender in its sole
discretion may), on behalf of the Company (which hereby irrevocably directs the
Swing Line Lender to act on its behalf) request the Administrative Agent to
notify each Lender to make a Revolving Loan that is (A) in an amount equal to
such Lender’s Pro Rata Share of the amount of such Swing Line Loan and
(B) denominated in the Applicable Currency of such Swing Line Loan; provided
that, if such Swing Line Loan is denominated in an Additional Offshore Currency
for which a Borrowing of Revolving Loans would be unavailable pursuant to
Section 2.06(c), such Swing Line Loan shall be redenominated in Dollars on the
basis of the Spot Rate prior to the making of such Revolving Loans by the
Lenders.  Unless any of the events described in subsection 9.01(f) or (g) shall
have occurred with respect to the Company (in which event the procedures of
clause (e) of this Section 2.05 shall apply) each Lender shall make the proceeds
of its Revolving Loan available to the Administrative Agent for the account of
the Swing Line Lender at the Administrative Agent’s Payment Office in
immediately available funds prior to 1:00 p.m. on the Business Day next
succeeding the date such notice is given.  The proceeds of such Revolving Loans
shall be immediately applied to repay the outstanding Swing Line Loans. 
Effective on the day such Revolving Loans are made, the portion of the Swing
Line Loans so paid shall no longer be outstanding as Swing Line Loans.  The
Company shall pay to the Swing Line Lender in the Applicable Currency, promptly
following the Swing Line Lender’s demand, the amount of its outstanding Swing
Line Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such outstanding Swing Line Loans.

 

(d)           Notwithstanding anything herein to the contrary, the Swing Line
Lender (i) shall not be obligated to make any Swing Line Loan if the conditions
set forth in Article V have not been satisfied and (ii) shall not make any
requested Swing Line Loan if, prior to 3:00 p.m. on the date of such requested
Swing Line Loan, it has received a written notice from the Administrative Agent
or any Lender directing it not to make further Swing Line Loans because one or
more of the conditions specified in Article V are not then satisfied.

 

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(e)           If prior to the making of a Revolving Loan required to be made
pursuant to subsection 2.05(c) an Event of Default described in subsection
9.01(f) or 9.01(g) shall have occurred and be continuing with respect to the
Company, each Lender will, on the date such Revolving Loan was to have been made
pursuant to the notice described in subsection 2.05(b), purchase a participating
interest in each outstanding Swing Line Loans in an amount equal to its Pro Rata
Share of the Effective Amount of such Swing Line Loan; provided that, if such
Swing Line Loan is denominated in an Additional Offshore Currency that would be
unavailable for a Borrowing of Revolving Loans pursuant to Section 2.06(c), such
Swing Line Loan shall be redenominated in Dollars on the basis of the Spot Rate
immediately prior to such purchase.  Each Lender will immediately transfer to
the Administrative Agent for the benefit of the Swing Line Lender the amount of
its participation in immediately available funds in the Applicable Currency.

 

(f)            Whenever, at any time after a Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to the
Administrative Agent for delivery to each Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender’s participating interest was
outstanding and funded) and in the Applicable Currency; provided that in the
event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Administrative Agent for delivery to
the Swing Line Lender any portion thereof previously distributed by the Swing
Line Lender to it.

 

(g)           Each Lender’s obligation to make the Revolving Loans referred to
in subsection 2.05(c) and to purchase participating interests pursuant to
subsection 2.05(e) shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender or the Company may have against the
Swing Line Lender, the Company or any other Person 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, (iv) any breach of this Agreement or any other Loan Document by the
Company, any Subsidiary or any other Lender or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.06         Utilization of Commitments in Offshore Currencies.

 

(a)           The Administrative Agent will determine the Dollar Equivalent
amount with respect to any (i) Borrowing comprised of Offshore Currency Loans as
of the requested Borrowing Date, (ii) outstanding Offshore Currency Loans and
outstanding Swing Line Loans denominated in Offshore Currencies as of the last
Business Day of each calendar quarter and (iii) outstanding Offshore Currency
Loans and outstanding Swing Line Loans denominated in Offshore Currencies as of
any redenomination date pursuant to this Section 2.06 or Section 4.05 (each such
date under clauses (i) through (iii), a “Computation Date”).  Upon receipt of
any Notice of Borrowing, the Administrative Agent will promptly notify each
Revolving Lender thereof and of the amount of such Lender’s Pro Rata Share of
the applicable Borrowing.  In the case of a Borrowing comprised of Offshore
Currency Loans, the related Notice of Borrowing will provide the approximate
amount of each Lender’s Pro Rata Share of such Borrowing, and

 

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the Administrative Agent will, upon the determination of the Dollar Equivalent
amount of such Borrowing as specified in such Notice of Borrowing, promptly
notify each Lender of the exact amount of such Lender’s Pro Rata Share of such
Borrowing.

 

(b)           The Company shall be entitled to request that Revolving Loans
hereunder also be permitted to be made in any other lawful currency constituting
a eurocurrency (excluding Dollars), in addition to the eurocurrencies specified
in the definition of “Designated Offshore Currency”, that in the opinion of the
Lenders is at such time freely traded in the offshore interbank foreign exchange
markets and is freely transferable and freely convertible into Dollars (an
“Additional Offshore Currency”).  The Company shall deliver to the
Administrative Agent any request for designation of an Additional Offshore
Currency in accordance with Section 11.02, to be received by the Administrative
Agent not later than 11:00 a.m. at least ten Business Days in advance of the
date of any Borrowing hereunder proposed to be made in such Additional Offshore
Currency.  Upon receipt of any such request the Administrative Agent will
promptly notify the Lenders thereof, and each Lender will use its best efforts
to respond to such request within two Business Days of receipt thereof and any
failure to respond in such time period shall be deemed to be a rejection
thereof.  Each Lender may grant or accept such request in its sole discretion. 
The Administrative Agent will promptly notify the Company of the acceptance or
rejection of any such request.

 

(c)           In the case of a proposed Borrowing comprised of Loans denominated
in an Additional Offshore Currency, the Lenders shall be under no obligation to
make Offshore Currency Loans in the requested Additional Offshore Currency as
part of such Borrowing if the Administrative Agent has received notice from any
Lender by 2:00 p.m. four Business Days prior to the day of such Borrowing that
such Lender cannot provide Loans in the requested Additional Offshore Currency,
in which event the Administrative Agent will give notice to the Company and the
Lenders no later than 9:30 a.m. on the third Business Day prior to the requested
date of such Borrowing that the Borrowing in the requested Additional Offshore
Currency is not then available to all Lenders.  If the Administrative Agent
shall have so notified the Company that any such Borrowing in a requested
Additional Offshore Currency is not then available, the Company may, by notice
to the Administrative Agent not later than 10:30 a.m. three Business Days prior
to the requested date of such Borrowing, withdraw the Notice of Borrowing
relating to such requested Borrowing.  If, prior to such time, the Company
withdraws such Notice of Borrowing, the Borrowing requested therein shall not
occur and the Administrative Agent will promptly so notify each Lender.  If,
prior to such time, the Company does not withdraw such Notice of Borrowing and
does not request the making of a Swing Line Loan in such Additional Offshore
Currency, the Administrative Agent will promptly so notify each Lender and such
Notice of Borrowing shall be deemed to be a Notice of Borrowing that requests a
Borrowing comprised of Base Rate Loans in an aggregate amount equal to the
amount of the originally requested Borrowing as expressed in Dollars in such
Notice of Borrowing, and in such notice by the Administrative Agent to each
Lender the Administrative Agent will state such aggregate amount of such
Borrowing in Dollars and such Lender’s Pro Rata Share thereof.

 

(d)           In the case of a proposed continuation of Offshore Currency Loans
for an additional Interest Period pursuant to Section 2.04, the Lenders shall be
under no obligation to continue such Offshore Currency Loans if the
Administrative Agent has received notice from any of the Lenders by 4:00 p.m.
three Business Days prior to the day of such continuation that

 

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such Lender cannot continue to provide Loans in the Offshore Currency, in which
event the Administrative Agent will give notice to the Company not later than
9:00 a.m. on the second Business Day prior to the requested date of such
continuation that the continuation of such Offshore Currency Loans in the
Offshore Currency is not then available, and notice thereof also will be given
promptly by the Administrative Agent to the Lenders.  If the Administrative
Agent shall have so notified the Company that any such continuation of Offshore
Currency Loans is not then available, any Notice of Borrowing with respect
thereto shall be deemed withdrawn and such Offshore Currency Loans shall be
redenominated into Base Rate Loans in Dollars with effect from the last day of
the Interest Period with respect to any such Offshore Currency Loans.  The
Administrative Agent will promptly notify the Company and the Lenders of any
such redenomination and in such notice by the Administrative Agent to each
Lender the Administrative Agent will state the aggregate Dollar Equivalent
amount of the redenominated Offshore Currency Loans as of the Computation Date
with respect thereto and such Lender’s Pro Rata Share thereof.

 

(e)           Notwithstanding anything herein to the contrary, during the
existence of a Default or an Event of Default, upon the request of the Required
Lenders, all or any part of any outstanding Offshore Currency Loans shall be
redenominated and converted into Base Rate Loans in Dollars with effect from the
last day of the Interest Period with respect to any such Offshore Currency
Loans.  The Administrative Agent will promptly notify the Company of any such
redenomination and conversion request.

 

2.07         Voluntary Termination or Reduction of Commitments.  (a)  The
Company may, upon not less than five Business Days’ prior notice to the
Administrative Agent, terminate the Commitments, or permanently reduce the
Commitments by an aggregate minimum amount of $5,000,000 or any multiple of
$1,000,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, (a) the Effective
Amount of all outstanding Revolving Loans, Swing Line Loans and L/C Obligations
together would exceed the amount of the Aggregate Commitment then in effect,
(b) the Effective Amount of all L/C Obligations then outstanding would exceed
the L/C Commitment or (c) the sum of the Effective Amount of all outstanding
Offshore Currency Loans and the Effective Amount of all outstanding Swing Line
Loans denominated in Offshore Currencies would exceed the Offshore Currency Loan
Sublimit.  Once reduced in accordance with this Section, the Commitments may not
be increased.  Any reduction of the Commitments shall be applied to each Lender
according to its Pro Rata Share.  If and to the extent specified by the Company
in the notice to the Administrative Agent, some or all of the reduction in the
Aggregate Commitment shall be applied to reduce the L/C Commitment and/or the
Offshore Currency Loan Sublimit; provided that the L/C Commitment shall be
reduced to the extent necessary to cause the L/C Commitment to be equal to 50%
of the Aggregate Commitment after giving effect to any such reduction.  All
accrued commitment fees and letter of credit fees to, but not including, the
effective date of any reduction or termination of Commitments, shall be paid on
the effective date of such reduction or termination.

 

(b)           At no time shall the Swing Line Commitment exceed the Aggregate
Commitment, and any reduction of the Aggregate Commitment which reduces the
Aggregate Commitment below the then-current amount of the Swing Line Commitment
shall result in an automatic corresponding reduction of the Swing Line
Commitment to the amount of the

 

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Aggregate Commitment, as so reduced, without any action on the part of the Swing
Line Lender.  At no time shall the Swing Line Commitment exceed the Commitment
of the Swing Line Lender, and any reduction of the Aggregate Commitment which
reduces the Commitment of the Swing Line Lender below the then-current amount of
the Swing Line Commitment shall result in an automatic corresponding reduction
of the Swing Line Commitment to the amount of the Commitment of the Swing Line
Lender, as so reduced, without any action on the part of the Swing Line Lender.

 

2.08         Prepayments.  (a)  Subject to Section 4.04, the Company may, at any
time or from time to time, upon not less than four Business Days’ irrevocable
notice to the Administrative Agent in the case of Offshore Rate Loans, and not
later than 12:00 noon on the prepayment date, in the case of Base Rate Loans,
prepay Revolving Loans ratably among the Lenders in whole or in part, in minimum
Dollar Equivalent amounts of $500,000 or any Dollar Equivalent multiple of
$100,000 in excess thereof.  Such notice of prepayment shall specify the date
and amount of such prepayment and whether such prepayment is of Base Rate Loans
or Offshore Rate Loans, or any combination thereof, and the Applicable
Currency.  Such notice shall not thereafter be revocable by the Company and the
Administrative Agent will promptly notify each Lender of its receipt of any such
notice, and of such Lender’s Pro Rata Share of such prepayment.  If such notice
is given by the Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together, in the case of Offshore Rate Loans, with accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 4.04.

 

(b)           Subject to Section 4.04, if on any Computation Date the
Administrative Agent shall have determined that the Effective Amount of all
Loans then outstanding exceeds the Aggregate Commitment by more than $250,000
due to a change in applicable rates of exchange between Dollars and the Offshore
Currency, then the Administrative Agent may and at the direction of the Required
Lenders shall give notice to the Company that a prepayment is required under
this Section, and the Company agrees to promptly (but in no event later than
three Business Days following receipt of such notice) make prepayments of Loans
such that, after giving effect to all such prepayments, the Effective Amount of
all Loans plus the Effective Amount of L/C Obligations does not exceed the
Aggregate Commitment.

 

(c)           Subject to Section 4.04, if on any date the Effective Amount of
all Revolving Loans and Swing Line Loans then outstanding plus the Effective
Amount of all L/C Obligations exceeds the Aggregate Commitment, the Company
shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans and L/C Advances by an amount equal to
the applicable excess.

 

2.09         Repayment.  The Company shall repay to the Lenders on the
Termination Date the aggregate principal amount of Loans outstanding on such
date.

 

2.10         Interest.  (a)  Each Revolving Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to (i) the Offshore Rate or the Base Rate, as the case may
be (and subject to the Company’s right to convert to the other Type of Loan
under Section 2.04), plus (ii) the Applicable Margin for the relevant Type of

 

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Loan plus (iii) if such Loans are Offshore Currency Loans, the Associated Costs
Rate, if applicable.

 

(b)           Interest on each Loan shall be paid in arrears on each applicable
Interest Payment Date.  During the existence of any Event of Default, interest
on all Loans shall be paid on demand of the Administrative Agent (or the
Administrative Agent at the request or with the consent of the Required
Lenders).

 

(c)           Notwithstanding subsection 2.10(a), while any Event of Default
under subsection 9.01(a) exists, after acceleration, or upon request of the
Required Lenders during the existence of any other Event of Default, the Company
shall pay interest (after as well as before entry of judgment thereon to the
extent permitted by law) on the amount of all outstanding Obligations, at a rate
per annum (the “Default Rate”) which is determined by adding 2% per annum to the
applicable interest rate otherwise then in effect for such Obligations; provided
that on and after the expiration of any Interest Period applicable to any
Offshore Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall, during the
continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans plus 2%.  The Administrative Agent will use reasonable efforts to give the
Company notice of the imposition of the Default Rate; provided that the failure
of the Administrative Agent to give such notice shall not affect the Company’s
obligations to pay the Default Rate.

 

(d)           Anything herein to the contrary notwithstanding, the obligations
of the Company to any Lender hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Lender would be contrary to the provisions of
any law applicable to such Lender limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Lender, and in such
event the Company shall pay such Lender interest at the highest rate permitted
by applicable law.

 

2.11         Fees.  In addition to certain fees described in Section 3.08:

 

(a)           Administrative Agent’s and Arrangers’ Fees.  The Company agrees to
pay such fees to the Administrative Agent and the Arrangers as are required by
the letter agreements (the “Fee Letters”) entered into from time to time by the
Company, the Administrative Agent and/or the Arrangers.

 

(b)           Facility Fees.  The Company shall pay to the Administrative Agent
for the account of each Lender a facility fee equal to the Applicable Facility
Fee Percentage on the average daily amount of such Lender’s Commitment
(regardless of usage), computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter.  Such facility fee shall accrue from the
Effective Date to the Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter, commencing on
September 30, 2011,  through the Termination Date, with the final payment to be
made on the Termination Date; provided that, in connection with any reduction or
termination of Commitments under Section 2.07 or an increase of Commitments
under Section 2.17, the

 

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accrued facility fee calculated for the period ending on such date shall also be
paid on the date of such reduction or termination, with the following quarterly
payment being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date.  The facility fees provided in
this subsection shall accrue at all times after the above-mentioned commencement
date, including at any time during which one or more conditions in Article V are
not met.

 

2.12         Computation of Fees and Interest.  (a)  All computations of
interest for Base Rate Loans when the Base Rate is determined by the Prime Rate
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365/366-day year);
provided that computations of interest for Offshore Currency Loans will be made
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed if that is the market standard for the applicable Offshore Currency. 
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.

 

(b)           Each determination of an interest rate or a Dollar Equivalent
amount by the Administrative Agent shall be conclusive and binding on the
Company and the Lenders in the absence of manifest error.  The Administrative
Agent will, at the request of the Company or any Lender, deliver to the Company
or such Lender, as the case may be, a statement showing the quotations used by
the Administrative Agent in determining any interest rate or Dollar Equivalent
amount.

 

2.13         Payments by the Company.

 

(a)           All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim.  Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Administrative Agent
for the account of the Lenders at the Administrative Agent’s Payment Office,
and, with respect to principal of, interest on, and any other amounts relating
to, any Offshore Currency Loan, shall be made in the Offshore Currency in which
such Loan is denominated or payable, and, with respect to all other amounts
payable hereunder, shall be made in Dollars.  Such payments shall be made in
Same Day Funds, and (i) in the case of Offshore Currency payments, no later than
such time on the dates specified herein as may be determined by the
Administrative Agent to be necessary for such payment to be credited on such
date in accordance with normal banking procedures in the place of payment, and
(ii) in the case of any Dollar payments, no later than 11:00 a.m. on the date
specified herein.  The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as expressly provided
herein) of such principal, interest, fees or other amounts, in like funds as
received.  Any payment which is received by the Administrative Agent later than
11:00 a.m. (or later than the time specified by the Administrative Agent as
provided in clause (i) above (in the case of Offshore Currency payments)), shall
be deemed to have been received on the following Business Day, and any
applicable interest or fee shall continue to accrue.

 

(b)           Whenever any payment hereunder is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.

 

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(c)           Unless the Administrative Agent receives notice from the Company
prior to the date on which any payment is due to the Lenders that the Company
will not make such payment in full as and when required, the Administrative
Agent may assume that the Company has made such payment in full to the
Administrative Agent on such date in Same Day Funds and the Administrative Agent
may (but shall not be so required), in reliance upon such assumption, distribute
to each Lender on such due date an amount equal to the amount then due such
Lender.  If and to the extent the Company has not made such payment in full to
the Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate or, in the case of a payment in an Offshore Currency, the
Overnight Rate, for each day from the date such amount is distributed to such
Lender until the date repaid.

 

2.14         Payments by the Lenders to the Administrative Agent.  (a)  Unless
the Administrative Agent receives notice from a Lender on or prior to the
Effective Date or, with respect to any Borrowing after the Effective Date, at
least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Administrative
Agent for the account of the Company the amount of that Lender’s Pro Rata Share
of the Borrowing, the Administrative Agent may assume that each Lender has made
such amount available to the Administrative Agent in Same Day Funds on the
Borrowing Date and the Administrative Agent may (but shall not be so required),
in reliance upon such assumption, make available to the Company on such date a
corresponding amount.  If and to the extent any Lender shall not have made its
full amount available to the Administrative Agent in Same Day Funds and the
Administrative Agent in such circumstance has made available to the Company such
amount, that Lender shall on the Business Day following such Borrowing Date make
such amount available to the Administrative Agent, together with interest at the
Federal Funds Rate, or, in the case of a payment in an Offshore Currency, the
Overnight Rate, for each day during such period, together with any overdraft or
similar costs incurred by the Administrative Agent as the result of the failure
of such Lender to make such funds available to the Administrative Agent.  A
notice of the Administrative Agent submitted to any Lender with respect to
amounts owing under this subsection (a) shall be conclusive absent manifest
error.  If such amount is so made available, such payment to the Administrative
Agent shall constitute such Lender’s Revolving Loan on the date of Borrowing for
all purposes of this Agreement.  If such amount is not made available to the
Administrative Agent on the Business Day following the Borrowing Date, the
Administrative Agent will notify the Company of such failure to fund and, upon
demand by the Administrative Agent, the Company shall pay such amount to the
Administrative Agent for the Administrative Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.

 

(b)           The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.

 

2.15         Sharing of Payments, Etc.  If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Revolving Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its

 

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ratable share (or other share contemplated hereunder), such Lender shall
immediately (a) notify the Administrative Agent of such fact and (b) purchase
from the other Lenders such participations in the Revolving Loans made by them
as shall be necessary to cause such purchasing Lender to share the excess
payment pro rata with each of them; provided that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender, such purchase
shall to that extent be rescinded and each other Lender shall repay to the
purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of
(i) the amount of such paying Lender’s required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered.  The Company agrees that any Lender so purchasing a participation
from another Lender may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off, but subject to
Section 11.10) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments.

 

2.16         Subsidiary Guaranty.  All obligations of the Company under this
Agreement and all other Loan Documents shall be unconditionally guaranteed by
the Guarantors pursuant to the Subsidiary Guaranty.

 

2.17         Increase in Commitments; Additional Lenders.  (a)  The Company may,
upon at least 10 Business Days’ notice to the Administrative Agent (of which
notice the Administrative Agent shall promptly provide a copy to the Lenders),
propose to increase the Commitments; provided that the Company has not
previously terminated all or any portion of the Commitments pursuant to
Section 2.07 hereof; and provided, further, that before and after giving effect
to the applicable Commitment Increase (as defined below) (i) no Event of Default
has occurred and is continuing or would result therefrom and (ii) no such
Commitment Increase shall increase the Offshore Currency Loan Sublimit or the
amount of the Swing Line Commitment or the L/C Commitment (the aggregate amount
of any such increase, the “Commitment Increase”), to be allocated among the
Lenders in a manner mutually acceptable to the Company and the Administrative
Agent.  Each requested Commitment Increase shall be in an aggregate minimum
amount of $25,000,000 or any multiple of $1,000,000 in excess thereof; provided
that (i) the Company shall not be permitted to make more than one request for a
Commitment Increase during any fiscal year of the Company and (ii) the aggregate
amount of all such increases shall not exceed $200,000,000.

 

(b)           The Company, with the consent of the Administrative Agent (which
shall not be unreasonably withheld or delayed prior to the occurrence and
continuance of an Event of Default or a Default), but without the consent of any
other Lenders, may designate one or more other banks or other financial
institutions (which may be, but need not be, one or more of the existing
Lenders; and for greater certainty, no existing Lender shall have any obligation
to increase its Commitment) which at the time agree in the case of any such bank
or financial institution that is an existing Lender to increase its applicable
Commitment and, in the case of any other such bank or financial institution
(each an “Additional Lender”), to become a party to this Agreement.  The sum of
the increases in the Commitments of the existing Lenders pursuant

 

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to this subsection (b) plus the Commitments of the Additional Lenders shall not
in the aggregate exceed the amount of the Commitment Increase.

 

(c)           An increase in the Commitments pursuant to this Section 2.17 shall
become effective upon the receipt by the Administrative Agent of an agreement in
form and substance satisfactory to the Administrative Agent signed by the
Company, by each Additional Lender and by each other Lender whose Commitment is
to be increased, setting forth the new Commitments of such Lenders and setting
forth the agreement of each Additional Lender to become a party to this
Agreement and to be bound by all the terms and provisions hereof, together with
such evidence of appropriate corporate authorization on the part of the Company
with respect to the Commitment Increase as the Administrative Agent may
reasonably request, if any.

 

(d)           Upon the effectiveness of a Commitment Increase pursuant to this
Section 2.17, the Commitment amounts set forth on Schedule 2.01 shall be deemed
amended, reflecting the increases of the Commitments of existing Lenders and the
addition of the new Commitments of the Additional Lenders, if any.  Concurrently
with the effectiveness of such increase and any additional extension of credit
in connection therewith, each Lender shall fund its Pro Rata Share of the
outstanding Revolving Loans, Swing Loans and overdue L/C Obligations relating to
L/C Advances, if any, to the Administrative Agent, so that after giving effect
thereto each Lender, including the Additional Lenders, if any, holds its Pro
Rata Share of the outstanding Revolving Loans, Swing Loans and L/C Obligations
relating to each Loan to which it is a party, and the Company shall pay to each
Lender all amounts due under Article IV hereof as a result of any prepayment of
any outstanding Offshore Rate Loans resulting from any Lender’s funding of Loans
previously funded by other Lenders.

 

2.18         Additional Cash Collateral.  At any time that there shall exist a
Defaulting Lender, within one Business Day following the written request of the
Administrative Agent or the applicable Issuer (with a copy to the Administrative
Agent) the Company shall Cash Collateralize such Issuer’s Fronting Exposure with
respect to such Defaulting Lender (determined after giving effect to
subsection 2.19(a)(iv) and any Cash Collateral provided by such Defaulting
Lender).

 

(a)           The Company and, to the extent provided by any Defaulting Lender,
such Defaulting Lender hereby grant to the Administrative Agent, for the benefit
of each Issuer, and agrees to maintain, a first priority security interest in
all such Cash Collateral as security for the applicable Defaulting Lenders’
obligation to fund participations in respect of Letters of Credit, to be applied
pursuant to clause (b) below.  If at any time the Administrative Agent
determines that Cash Collateral is subject to any right or claim of any Person
other than the Administrative Agent and each Issuer as herein provided (other
than any Lien described in subsection 10.8(a) or (h)), or that the total amount
of such Cash Collateral is less than the aggregate Fronting Exposure the Company
will, promptly upon demand by the Administrative Agent, pay or provide to the
Administrative Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency (after giving effect to any Cash Collateral provided
by the Defaulting Lenders).

 

(b)           Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.18 or Section 2.19 in
respect of Letters of Credit

 

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shall be applied to the satisfaction of the Defaulting Lender’s obligation to
fund participations in respect of Letters of Credit (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

 

(c)           Cash Collateral (or the appropriate portion thereof) provided to
reduce any Issuer’s Fronting Exposure shall no longer be required to be held as
Cash Collateral pursuant to this Section 2.18, and shall promptly be returned to
the Company following (i) the elimination of the applicable Fronting Exposure
(including by the termination of Defaulting Lender status of the applicable
Lender), or (ii) the determination by the Administrative Agent and the
applicable Issuer that there exists excess Cash Collateral; provided that,
subject to Section 2.19, the Person providing Cash Collateral and such Issuer
may agree that Cash Collateral shall be held to support future anticipated
Fronting Exposure or other obligations.

 

2.19         Defaulting Lenders.

 

(a)           Defaulting Lender Adjustments.  Notwithstanding anything to the
contrary contained in this Agreement or any other Loan Document, if any Lender
becomes a Defaulting Lender, then, until such time as such Lender is no longer a
Defaulting Lender, to the extent permitted by applicable law:

 

(i)            Such Defaulting Lender’s right to approve or disapprove any
amendment, waiver or consent with respect to this Agreement shall be restricted
as set forth in Section 11.01.

 

(ii)           Any payment of principal, interest, fees or other amounts
received by the Administrative Agent for the account of such Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Article IX or
otherwise) or received by the Administrative Agent from a Defaulting Lender
pursuant to Section 11.10 shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, to the payment on a pro rata basis of any amounts owing by such
Defaulting Lender to each Issuer or the Swing Line Lender hereunder; third, to
Cash Collateralize each Issuer’s Fronting Exposure with respect to such
Defaulting Lender in accordance with Section 2.18; fourth, as the Company may
request (so long as no Default or Event of Default exists), to the funding of
any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Company, to be held in a deposit account (as contemplated by the definition
of “Cash Collateralize” in Article I) and released pro rata in order to (x)
satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize each Issuer’s
future Fronting Exposure with respect to such Defaulting Lender with respect to
future Letters of Credit issued under this Agreement, in accordance with Section
2.18; sixth, to the payment of amounts owing to the Lenders, each Issuer or the
Swing Line Lender as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, any Issuer or the Swing

 

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Line Lender against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Company as a result of any judgment of a court of competent jurisdiction
obtained by the Company against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any Loan or L/C Borrowing in respect of which such Defaulting Lender
has not fully funded its appropriate share, and (y) such Loan was made or the
related Letter of Credit was issued at a time when the conditions set forth in
Section 5.02 were satisfied or waived, such payment shall be applied solely to
pay the Loans of, and L/C Borrowings owed to, all Non-Defaulting Lenders on a
pro rata basis prior to being applied to the payment of any Loans of, or L/C
Borrowings owed to, such Defaulting Lender until such time as all Loans and
funded and unfunded participations in Letters of Credit and Swing Line Loans are
held by the Lenders pro rata in accordance with their respective Pro Rata Shares
without giving effect to clause (iv) below. Any payment, prepayment or other
amount paid or payable to a Defaulting Lender that are applied (or held) to pay
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
subsection 2.19(a) or Section 2.18 shall be deemed paid to and redirected by
such Defaulting Lender, and each Lender irrevocably consents to the foregoing.

 

(iii)          (A) No Defaulting Lender shall be entitled to receive any
facility fee (pursuant to subsection 2.11(b) or otherwise) for any period during
which that Lender is a Defaulting Lender except to the extent allocable to the
sum of (1) the outstanding amount of the Loans funded by it and (2) its Pro Rata
Share of the stated amount of Letters of Credit and Swing Line Loans for which
it has provided Cash Collateral pursuant to Section 2.18 (and the Company shall
(x) be required to pay to each Issuer and each Swing Line Lender, as applicable,
the amount of such fee allocable to its Fronting Exposure arising from that
Defaulting Lender and (y) not be required to pay the remaining amount of such
fee that otherwise would have been required to have been paid to that Defaulting
Lender) and (B) each Defaulting Lender shall be entitled to receive Letter of
Credit fees pursuant to Section 3.08 for any period during which that Lender is
a Defaulting Lender only to the extent allocable to its Pro Rata Share of the
stated amount of Letters of Credit for which it has provided Cash Collateral
pursuant to Section 2.18; and with respect to any Letter of Credit fee not
required to be paid to any Defaulting Lender pursuant to the foregoing clause
(B), the Company shall (x) pay to each Non-Defaulting Lender that portion of any
such Letter of Credit fee otherwise payable to such Defaulting Lender with
respect to such Defaulting Lender’s participation in Letters of Credit that has
been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below,
(y) pay to each Issuer the amount of any such fee otherwise payable to such
Defaulting Lender to the extent allocable to such Issuer’s Fronting Exposure to
such Defaulting Lender, and (z) not be required to pay the remaining amount of
any such fee.

 

(iv)          All or any part of such Defaulting Lender’s participation in
Letters of Credit and Swing Line Loans shall be reallocated among the
Non-Defaulting

 

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Lenders in accordance with their respective Pro Rata Shares (calculated without
regard to such Defaulting Lender’s Commitment) but only to the extent that (x)
the conditions set forth in Section 5.02 are satisfied at the time of such
reallocation (and, unless the Company shall have otherwise notified the
Administrative Agent at such time, the Company shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause the sum of (A) the Dollar Equivalent
principal amount of all Loans of any Non-Defaulting Lender plus (B) such
Non-Defaulting Lender’s Pro Rata Share of the sum of the outstanding Swing Line
Loans and the aggregate stated amount of all Letters of Credit to exceed such
Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute
a waiver or release of any claim of any party hereunder against a Defaulting
Lender arising from such Lender having become a Defaulting Lender, including any
claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation.

 

(v)           If the reallocation described in clause (iv) above cannot, or can
only partially, be effected, the Company shall, without prejudice to any right
or remedy available to it hereunder or under law, (x) first, prepay Swing Line
Loans in an amount equal to the Swing Line Lender’s Fronting Exposure and (y)
second, Cash Collateralize each Issuer’s Fronting Exposure in accordance with
the procedures set forth in Section 2.18.

 

(b)           Defaulting Lender Cure.  If the Company, the Administrative Agent,
the Swing Line Lender and each Issuer agree in writing that a Lender is no
longer a Defaulting Lender, the Administrative Agent will so notify the parties
hereto, whereupon as of the effective date specified in such notice and subject
to any conditions set forth therein (which may include arrangements with respect
to any Cash Collateral), such Lender will, to the extent applicable, purchase at
par that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Loans and funded and unfunded participations in Letters of Credit and Swing Line
Loans to be held pro rata by the Lenders in accordance with their respective Pro
Rata Shares (without giving effect to clause (a)(iv) above), whereupon such
Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on
behalf of the Company while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

 

(c)           New Swing Line Loans/Letters of Credit.  So long as any Lender is
a Defaulting Lender, (i) the Swing Line Lender shall not be required to fund any
Swing Line Loan unless it is reasonably satisfied that it has no Fronting
Exposure after giving effect to such Swing Line Loan and (ii) no Issuer shall be
required to issue, extend, renew or increase any Letter of Credit unless it is
reasonably satisfied that it has no Fronting Exposure after giving effect
thereto.

 

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ARTICLE III

 

THE LETTERS OF CREDIT

 

3.01         The Letter of Credit Subfacility.  (a)  On the terms and conditions
set forth herein (i) each Issuer agrees, (A) from time to time on any Business
Day, during the period from the Effective Date to the day which is five days
prior to the Termination Date, to issue Letters of Credit for the account of the
Company and to amend or renew Letters of Credit previously issued by it, in
accordance with subsections 3.02(c) and 3.02(d), and (B) to honor drafts under
the Letters of Credit issued by it; and (ii) the Lenders severally agree to
participate in Letters of Credit Issued for the account of the Company; provided
that no Issuer shall be obligated to Issue, and no Lender shall be obligated to
participate in, any Letter of Credit if as of the date of Issuance of such
Letter of Credit (the “Issuance Date”) (x) the Effective Amount of all L/C
Obligations plus the Effective Amount of all Revolving Loans and of all Swing
Line Loans exceeds the Aggregate Commitment, (y) the participation of any Lender
in the Effective Amount of all L/C Obligations plus the Effective Amount of the
Revolving Loans of such Lender and such Lender’s Pro Rata Share of any
outstanding Swing Line Loans exceeds such Lender’s Commitment or (z) the
Effective Amount of L/C Obligations exceeds the L/C Commitment.  Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Company’s ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Company may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed.

 

(b)           No Issuer is under any obligation to, and no Issuer shall, Issue
any Letter of Credit if:

 

(i)            any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain such Issuer from
Issuing such Letter of Credit, or any Requirement of Law applicable to such
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such Issuer is not otherwise compensated hereunder) not
in effect on the Effective Date, or shall impose upon such Issuer any
unreimbursed loss, cost or expense which was not applicable on the Effective
Date and which such Issuer in good faith deems material to it;

 

(ii)           such Issuer has received written notice from any Revolving
Lender, the Administrative Agent or the Company, on or prior to the Business Day
prior to the requested date of Issuance of such Letter of Credit, that one or
more of the applicable conditions contained in Article V is not then satisfied;

 

(iii)          the expiry date of any requested Letter of Credit is (A) subject
to subsection 3.02(d), more than one year after the date of Issuance, unless the
Required Lenders have approved such expiry date in writing, or (B) in any case,
after the Termination Date, unless all of the Lenders have approved such expiry
date in writing or the Company has Cash Collateralized such Letter of Credit;

 

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(iv)          any requested Letter of Credit does not provide for drafts, or is
not otherwise in form and substance acceptable to such Issuer, or the Issuance
of a Letter of Credit shall violate any applicable policies of such Issuer; or

 

(v)           such Letter of Credit is in a face amount less than $25,000,
unless such amount is approved by the Administrative Agent and such Issuer, or
is to be denominated in a currency other than Dollars.

 

3.02         Issuance, Amendment and Renewal of Letters of Credit.  (a)  Each
Letter of Credit shall be issued upon the irrevocable written request of the
Company received by the applicable Issuer (with a copy sent by the Company to
the Administrative Agent) at least three Business Days (or such shorter time as
such Issuer may agree in a particular instance in its sole discretion) prior to
the proposed date of issuance.  Each such request for issuance of a Letter of
Credit shall be by facsimile, confirmed immediately in an original writing, in
the form of an L/C Application (or such other form as shall be acceptable to the
applicable Issuer), and shall specify in form and detail satisfactory to such
Issuer: (i) the proposed date of issuance of the Letter of Credit (which shall
be a Business Day); (ii) the face amount of the Letter of Credit; (iii) the
expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as such Issuer may require.

 

(b)           Promptly following its receipt of a request for the Issuance of
any Letter of Credit, the applicable Issuer will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received a
copy of the L/C Application or L/C Amendment Application from the Company and,
if not, such Issuer will provide the Administrative Agent with a copy thereof. 
Unless the applicable Issuer has received notice on or before the Business Day
immediately preceding the date such Issuer is to issue a requested Letter of
Credit from the Administrative Agent (A) directing such Issuer not to issue such
Letter of Credit because such issuance is not then permitted under subsection
3.01(a) as a result of the limitations set forth in clauses (1) through (3)
thereof or subsection 3.01(b)(ii); or (B) that one or more conditions specified
in Article V are not then satisfied; then, subject to the terms and conditions
hereof, such Issuer shall, on the requested date, Issue a Letter of Credit for
the account of the Company in accordance with such Issuer’s usual and customary
business practices.

 

(c)           From time to time while a Letter of Credit is outstanding and
prior to the Termination Date, the applicable Issuer will, upon the written
request of the Company received by such Issuer (with a copy sent by the Company
to the Administrative Agent) at least three Business Days (or such shorter time
as such Issuer may agree in a particular instance in its sole discretion) prior
to the proposed date of amendment, amend any Letter of Credit issued by it. 
Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, made in the form of an
L/C Amendment Application and shall specify in form and detail satisfactory to
the applicable Issuer:  (i) the Letter of Credit to be amended; (ii) the
proposed date of amendment of the Letter of Credit (which shall be a Business
Day); (iii) the nature of the proposed amendment; and (iv) such other matters as
such Issuer may require.  No Issuer shall be under any obligation to amend any
Letter of Credit if:  (A) such

 

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Issuer would have no obligation at such time to issue such Letter of Credit in
its amended form under the terms of this Agreement; or (B) the beneficiary of
any such Letter of Credit does not accept the proposed amendment to the Letter
of Credit.  The Administrative Agent will promptly notify the Lenders of the
receipt by it of any L/C Application or L/C Amendment Application.

 

(d)           The Issuers and the Lenders agree that, while a Letter of Credit
is outstanding and prior to the Termination Date, at the option of the Company
and upon the written request of the Company received by the applicable Issuer
(with a copy sent by the Company to the Administrative Agent) at least five days
(or such shorter time as such Issuer may agree in a particular instance in its
sole discretion) prior to the proposed date of notification of renewal, such
Issuer shall be entitled to authorize the automatic renewal of any Letter of
Credit issued by it; provided that any such automatic renewal Letter of Credit
must permit the Issuer to prevent any such extension at least once in each
12-month period (commencing with the date of issuance of such Letter of Credit)
by giving prior notice to the beneficiary thereof not later than a day in each
such 12-month period to be agreed upon at the time such Letter of Credit is
issued.  Each such request for renewal of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, in the form of an L/C
Amendment Application, and shall specify in form and detail satisfactory to the
applicable Issuer: (i) the Letter of Credit to be renewed; (ii) the proposed
date of notification of renewal of such Letter of Credit (which shall be a
Business Day); (iii) the revised expiry date of such Letter of Credit; and (iv)
such other matters as such Issuer may require.  No Issuer shall be under any
obligation to renew any Letter of Credit if: (A) such Issuer would have no
obligation at such time to issue or amend such Letter of Credit in its renewed
form under the terms of this Agreement; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed renewal of the Letter of Credit. 
If any outstanding Letter of Credit shall provide that it shall be automatically
renewed unless the beneficiary thereof receives notice from the applicable
Issuer that such Letter of Credit shall not be renewed, and if at the time of
renewal such Issuer would be entitled to authorize the automatic renewal of such
Letter of Credit in accordance with this subsection 3.02(d) upon the request of
the Company but such Issuer shall not have received any L/C Amendment
Application from the Company with respect to such renewal or other written
direction by the Company with respect thereto, such Issuer shall nonetheless be
permitted to allow such Letter of Credit to renew, and the Company and the
Lenders hereby authorize such renewal, and, accordingly, such Issuer shall be
deemed to have received an L/C Amendment Application from the Company requesting
such renewal.

 

(e)           Each Issuer may, at its election (or as required by the
Administrative Agent (or the Administrative Agent at the direction of the
Required Lenders)), deliver any notices of termination or other communications
to any applicable Letter of Credit beneficiary or transferee, and take any other
action as necessary or appropriate, at any time and from time to time, in order
to cause the expiry date of such Letter of Credit to be a date not later than
the Termination Date.

 

(f)            This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).

 

(g)           Each Issuer will also deliver to the Administrative Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of

 

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Credit, to an advising bank or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of Credit.

 

3.03         Risk Participations, Drawings and Reimbursements.  (a)  Immediately
upon the Issuance of each Letter of Credit (or, in the case of an Existing
Letter of Credit, on the Effective Date), each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the applicable
Issuer a participation in such Letter of Credit and each drawing thereunder in
an amount equal to the product of (i) the Pro Rata Share of such Lender, times
(ii) the maximum amount available to be drawn under such Letter of Credit and
the amount of such drawing, respectively.  For purposes of Section 2.01, each
Issuance of a Letter of Credit shall be deemed to utilize the Commitment of each
Lender by an amount equal to the amount of such participation.

 

(b)           In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the applicable Issuer will promptly
notify the Company.  The Company shall reimburse the applicable Issuer prior to
11:00 a.m. on each date that any amount is paid by such Issuer under any Letter
of Credit (each such date, an “Honor Date”), in an amount equal to the amount so
paid by such Issuer; provided that if the Company does not receive notice of the
amount paid by the applicable Issuer prior to 10:00 a.m. on such Honor Date, the
Company shall reimburse such Issuer, in an amount equal to the amount so paid by
such Issuer, not later than 10:00 a.m. on the Business Day immediately following
the date on which the Company receives notice of the amount so paid by such
Issuer (and such reimbursement shall include interest for the period from the
Honor Date to the date of reimbursement at the Base Rate plus the Applicable
Margin (or such other rate as the Company and such Issuer shall agree) on the
amount so reimbursed).  In the event the Company fails to reimburse the
applicable Issuer the full amount of any drawing under any Letter of Credit by
the time specified in the previous sentence, such Issuer will promptly notify
the Administrative Agent, and the Administrative Agent will promptly notify each
Lender thereof, and the Company shall be deemed to have requested that Base Rate
Loans in an amount equal to such unreimbursed amount be made by the Revolving
Lenders to be disbursed on the Honor Date under such Letter of Credit, subject
to the amount of the unutilized portion of the Aggregate Commitment and subject
to the conditions set forth in Section 5.02.  Any notice given by an Issuer or
the Administrative Agent pursuant to this subsection 3.03(b) may be oral if
immediately confirmed in writing (including by facsimile); provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.

 

(c)           Each Revolving Lender shall upon any notice pursuant to subsection
3.03(b) make available to the Administrative Agent for the account of the
relevant Issuer an amount in Dollars and in immediately available funds equal to
its Pro Rata Share of the amount of the drawing, whereupon the participating
Lenders shall (subject to subsection 3.03(d)) each be deemed to have made a
Revolving Loan consisting of a Base Rate Loan to the Company in that amount.  If
any Lender so notified fails to make available to the Administrative Agent for
the account of the applicable Issuer the amount of such Lender’s Pro Rata Share
of the amount of the drawing by no later than 12:00 noon on the Honor Date, then
interest shall accrue on such amount, from the Honor Date to the date such
Lender makes such payment, at a rate per annum equal to the Federal Funds Rate
in effect from time to time during such period.  The Administrative Agent will
promptly give notice of the occurrence of the Honor Date, but failure

 

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of the Administrative Agent to give any such notice on the Honor Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligations under this Section 3.03 once notice
has been provided.

 

(d)           With respect to any unreimbursed drawing that is not converted
into Revolving Loans consisting of Base Rate Loans to the Company in whole or in
part, because of the Company’s failure to satisfy the conditions set forth in
Section 5.02 or for any other reason, the Company shall be deemed to have
incurred from the applicable Issuer an L/C Borrowing in the Dollar Equivalent of
the amount of such drawing, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for Base Rate Loans plus 2.0%
per annum, and each Lender’s payment to such Issuer pursuant to subsection
3.03(c) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction
of its participation obligation under this Section 3.03.

 

(e)           Each Lender’s obligation in accordance with this Agreement to make
the Revolving Loans or L/C Advances, as contemplated by this Section 3.03, as a
result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the applicable Issuer and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against such
Issuer, the Company or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, an Event of Default or a Material
Adverse Effect; or (iii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that each Lender’s
obligation to make Revolving Loans under this Section 3.03 is subject to the
conditions set forth in Section 5.02.

 

3.04         Repayment of Participations.  (a)  Upon (and only upon) receipt by
the Administrative Agent for the account of an Issuer of immediately available
funds from the Company (i) in reimbursement of any payment made by such Issuer
under the Letter of Credit with respect to which any Lender has paid the
Administrative Agent for the account of such Issuer for such Lender’s
participation in the Letter of Credit pursuant to Section 3.03 or (ii) in
payment of interest thereon, the Administrative Agent will promptly pay to each
Lender, in the same funds as those received by the Administrative Agent for the
account of such Issuer, the amount of such Lender’s Pro Rata Share of such
funds, and such Issuer shall receive the amount of the Pro Rata Share of such
funds of any Lender that did not so pay the Administrative Agent for the account
of such Issuer.

 

(b)           If the Administrative Agent or an Issuer is required at any time
to return to the Company, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made by
the Company to the Administrative Agent for the account of such Issuer pursuant
to subsection 3.04(a) in reimbursement of a payment made under the Letter of
Credit or interest or fee thereon, each Lender shall, on demand of the
Administrative Agent, forthwith return to the Administrative Agent or such
Issuer the amount of its Pro Rata Share of any amounts so returned by the
Administrative Agent or such Issuer plus interest thereon from the date such
demand is made to the date such amounts are returned by such Lender to the
Administrative Agent or such Issuer, at a rate per annum equal to the Federal
Funds Rate in effect from time to time.

 

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3.05         Role of the Issuers.  (a)  Each Lender and the Company agree that,
in paying any drawing under a Letter of Credit, the applicable Issuer shall not
have any responsibility to obtain any document (other than any documents
expressly required by the Letter of Credit) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the Person
executing or delivering any such document.

 

(b)           None of the Administrative Agent, any Related Party thereof, or
any of the respective correspondents, participants or assignees of an Issuer
shall be liable to any Lender for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.

 

(c)           The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided that this assumption is not intended to, and shall not, preclude the
Company’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement.  Neither the
Administrative Agent nor any Related Party thereof, nor any of the respective
correspondents, participants or assignees of an Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (viii) of
Section 3.06; provided that, anything in such clauses to the contrary
notwithstanding, that the Company may have a claim against an Issuer, and such
Issuer may be liable to the Company, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by the
Company which the Company proves were caused by such Issuer’s willful misconduct
or gross negligence or such Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a document strictly
complying with the terms and conditions of a Letter of Credit.  In furtherance
and not in limitation of the foregoing: (i) an Issuer may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary; and (ii)
no Issuer shall be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.

 

3.06         Obligations Absolute.  The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the applicable Issuer for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:

 

(i)            any lack of validity or enforceability of this Agreement or any
L/C-Related Document;

 

(ii)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Company in respect of any
Letter of Credit or any other amendment or waiver of or any consent to departure
from any L/C-Related Document;

 

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(iii)          the existence of any claim, recoupment, set-off, defense or other
right that the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), such Issuer or any other Person, whether
in connection with this Agreement, the transactions contemplated hereby or by
the L/C-Related Documents or any unrelated transaction;

 

(iv)          any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any error, omission, interruption, loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any
Letter of Credit;

 

(v)           any error in interpretation of technical terms or any consequence
arising from causes beyond the control of such Issuer;

 

(vi)          any payment by such Issuer under any Letter of Credit against
presentation of a document that does not strictly comply with the terms of any
Letter of Credit; or any payment made by such Issuer under any Letter of Credit
to any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of any
Letter of Credit, including any arising in connection with any Insolvency
Proceeding;

 

(vii)         any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the obligations of the Company in respect of any
Letter of Credit; or

 

(viii)        any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Company or a
guarantor.

 

3.07         Cash Collateral Pledge.  Upon (i) the request of the Administrative
Agent or the Required Lenders, (A) if any Event of Default has occurred and is
continuing, or (B) if, as of the Termination Date, any Letters of Credit may for
any reason remain outstanding and partially or wholly undrawn, or (ii) the
termination of the Aggregate Commitment, then the Company shall immediately Cash
Collateralize the L/C Obligations in an amount equal to such L/C Obligations.

 

3.08         Letter of Credit Fees.  (a)  The Company shall pay to the
Administrative Agent for the account of each of the Lenders a letter of credit
fee with respect to the Letters of Credit equal to the Applicable Margin times
the average daily maximum amount available to be drawn of the outstanding
Letters of Credit, computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon Letters of Credit outstanding for that
quarter as calculated by the Administrative Agent; provided that any letter of
credit fees otherwise payable for the account of a Defaulting Lender with
respect to any Letter of Credit as to which such Defaulting Lender has not
provided Cash Collateral satisfactory to the applicable Issuer pursuant to this
Section 3.08 shall be payable, to the maximum extent permitted by applicable
Law, to the

 

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other Lenders in accordance with the upward adjustments in their respective Pro
Rata Shares allocable to such Letter of Credit pursuant to Section 2.19, with
the balance of such fee, if any, payable to the applicable Issuer for its own
account.  Such letter of credit fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter during which Letters
of Credit are outstanding, commencing on the first such quarterly date to occur
after the Effective Date, through the Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Termination Date (or such later expiration date).

 

(b)           The Company shall pay to the applicable Issuer, for its sole
account, a letter of credit fronting fee for each Letter of Credit Issued by
such Issuer equal to 0.125% per annum of the face amount (or increased or
decreased face amount, as the case may be) of such Letter of Credit.  Such
Letter of Credit fronting fee shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter during which such Letter of
Credit is outstanding, commencing on the first such quarterly date to occur
after such Letter of Credit is Issued, through the Termination Date (or such
later date upon which such Letter of Credit shall expire), with the final
payment to be made on the Termination Date (or such later expiration date).

 

(c)           The Company shall pay to the applicable Issuer, for its sole
account, from time to time on demand the normal issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
such Issuer relating to letters of credit as from time to time in effect.

 

3.09         UCP; ISP.  The Uniform Customs and Practice for Documentary Credits
as published by the International Chamber of Commerce most recently at the time
of issuance of any commercial Letter of Credit shall (unless otherwise expressly
provided in such Letter of Credit) apply to such Letter of Credit, and the
International Standby Practices as published by the International Chamber of
Commerce most recently at the time of issuance of any standby Letter of Credit
shall (unless otherwise expressly provided in such Letter of Credit) apply to
such Letter of Credit.

 

ARTICLE IV

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

4.01         Taxes.  (a)  Any and all payments by the Company to each Lender or
the Administrative Agent under this Agreement and any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any Taxes. 
In addition, the Company shall pay all Further Taxes and Other Taxes.

 

(b)           If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, then:

 

(i)            the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and

 

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withholdings applicable to additional sums payable under this Section), such
Lender or the Administrative Agent, as the case may be, receives and retains an
amount equal to the sum it would have received and retained had no such
deductions or withholdings been made;

 

(ii)           the Company shall make such deductions and withholdings;

 

(iii)          the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable law;
and

 

(iv)          the Company shall also pay to each Lender (or the Administrative
Agent for the account of such Lender) or the Administrative Agent, at the time
interest is paid, Further Taxes in the amount that the respective Lender
specifies as necessary to preserve the after-tax yield such Lender would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed.

 

(c)           The Company agrees to indemnify and hold harmless each Lender and
the Administrative Agent for the full amount of (i) Taxes, (ii) Other Taxes and
(iii) Further Taxes in the amount that Lender or the Administrative Agent
specifies as necessary to preserve the after-tax yield such Lender or
Administrative Agent would have received if such Taxes, Other Taxes or Further
Taxes had not been imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes, Other Taxes or Further Taxes were correctly or
legally asserted.  Payment under this indemnification shall be made within 30
days after the date the applicable Lender or the Administrative Agent makes
written demand therefor.

 

(d)           Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Lender or
the Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to such
Lender or the Administrative Agent.

 

(e)           If the Company is required to pay any amount to any Lender
pursuant to subsection (b) or (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the sole
judgment of such Lender is not otherwise disadvantageous to such Lender.

 

(f)            Any Lender that is organized under the laws of a jurisdiction
other than that in which the Company is located and that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Company is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Company (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Company as will
permit such payments to be made without withholding or at a reduced rate.

 

(g)           If a payment made to a Lender or an Issuer under a Loan Document
would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender
or Issuer were to

 

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fail to comply with the applicable reporting requirements of FATCA (including
those contained in section 1471(b) or 1472(b) of the Code, as applicable), such
Lender or Issuer shall deliver to the Company and the Administrative Agent, at
the time or times prescribed by law and at such time or times reasonably
requested by the Company or the Administrative Agent, such documentation
prescribed by applicable law (including as prescribed by section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Company or Administrative Agent as may be necessary for such
Person to comply with its obligations under FATCA to determine that such Lender
or Issuer has or has not complied with its obligations under FATCA and, as
necessary, to determine the amount to deduct and withhold from such payment. 
Solely for purposes of this Section 4.01(g), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement, whether or not such
amendments are included in the definition set forth in Section 1.01.

 

4.02         Illegality.  (a)  If any Lender determines that any Change in Law
has made it unlawful, or that any central bank or other Governmental Authority
has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make Offshore Rate Loans, then, on notice thereof by such Lender to
the Company through the Administrative Agent, any obligation of such Lender to
make Offshore Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Company that the circumstances giving rise to such
determination no longer exist.

 

(b)           If a Lender determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Lender (with a copy to the Administrative Agent), prepay in
full such Offshore Rate Loans of such Lender then outstanding, together with
interest accrued thereon and amounts required under Section 4.04, either on the
last day of the Interest Period thereof, if such Lender may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Offshore Rate Loan.  If the Company
is required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Lender, in the amount of
such repayment, a Base Rate Loan.

 

(c)           If the obligation of any Lender to make or maintain Offshore Rate
Loans has been so terminated or suspended, the Company may elect, by giving
notice to such Lender through the Administrative Agent that all Loans which
would otherwise be made by such Lender as Offshore Rate Loans shall be instead
Base Rate Loans.

 

(d)           Before giving any notice to the Administrative Agent under this
Section, the affected Lender shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of such
Lender, be illegal or otherwise disadvantageous to such Lender.

 

4.03         Increased Costs and Reduction of Return.  (a)  If any Lender
determines that, due to any Change in Law, there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
Offshore Rate Loans or participating in Letters of Credit, or, in the case of an
Issuer, any increase in the cost to such Issuer of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the Company
shall be liable for, and shall from

 

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time to time, upon demand (with a copy of such demand to be sent to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.

 

(b)           If any Lender shall have determined that any Change in Law,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and (taking
into consideration such Lender’s or such corporation’s policies with respect to
capital adequacy and such Lender’s desired return on capital) determines that
the amount of such capital is increased as a consequence of its Commitment,
loans, credits or obligations under this Agreement, then, upon demand of such
Lender to the Company through the Administrative Agent, the Company shall pay to
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such increase.

 

4.04         Funding Losses.  The Company shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:

 

(a)           the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;

 

(b)           the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a similar notice;

 

(c)           the failure of the Company to make any prepayment in accordance
with any notice delivered under Section 2.08;

 

(d)           any payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest Period
(including in connection with the syndication of the Commitments); and

 

(e)           the automatic conversion under Section 2.04 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;

 

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained, except to the
extent such loss or expense arises as a result of such Lender being replaced
pursuant to and in accordance with Section 4.08 because it is a Defaulting
Lender.  For purposes of calculating amounts payable by the Company to the
Lenders under this Section and under subsection 4.03(a), each Offshore Rate Loan
made by a Lender (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBO Rate
used in determining the Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Offshore Rate Loan is in
fact so funded.

 

4.05         Inability to Determine Rates.  If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the Offshore Rate for any

 

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requested Interest Period with respect to a proposed Offshore Rate Loan, or that
the Offshore Rate applicable pursuant to subsection 2.11(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Company and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Offshore Rate
Loans hereunder shall be suspended until the Administrative Agent revokes such
notice in writing.  Upon receipt of such notice, the Company may revoke any
Notice of Borrowing then submitted by it.  If the Company does not revoke such
notice, the Lenders shall make, convert or continue the Loans, as requested by
the Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made as, converted into or continued as, as the
case may be, Base Rate Loans instead of Offshore Rate Loans.

 

4.06         Reserves on Offshore Rate Loans.  The Company shall pay to each
Lender, as long as such Lender shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), other than reserve requirements included in the calculation of
the Offshore Rate, additional costs on the unpaid principal amount of each
Offshore Rate Loan to the Company equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), payable on each date on which
interest is payable on such Loan, provided the Company shall have received at
least 15 days’ prior written notice (with a copy to the Administrative Agent) of
such additional interest from such Lender.  If a Lender fails to give notice 15
days prior to the relevant Interest Payment Date, such additional interest shall
be payable 15 days from receipt of such notice.

 

4.07         Certificates of Lenders.  Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Company (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to such Lender hereunder, and such certificate shall be
conclusive and binding on the Company in the absence of manifest error.

 

4.08         Substitution of Lenders.  Upon the receipt by the Company from any
Lender of a claim for compensation under Section 4.03 or Section 4.06, of notice
that it cannot make Offshore Rate Loans under Section 4.02, or of a claim for
Taxes or Further Taxes under Section 4.01, or if any Lender is a Defaulting
Lender or a Non-Consenting Lender with respect to a pending amendment or waiver
(any of the foregoing Lenders, an “Affected Lender”), then the Company may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent (i) require such Affected Lender to assign and delegate to an Eligible
Assignee designated by the Company all or a ratable part of all of such Affected
Lender’s Loans and Commitment at the face amount thereof (a “Replacement
Lender”); or (ii) request one more of the other Lenders to acquire and assume
all or part of such Affected Lender’s Loans and Commitment.  Any such
designation of a Replacement Lender under clause (i) shall be subject to the
prior written consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed).  Any transfer of Loans and Commitments shall
be accompanied by the payment of any amounts due to the Affected Lender under
Sections 4.01, 4.03, 4.04 (calculated as if the assigned Loans were prepaid on
the date of assignment) and 4.06 and shall be made in accordance with
Section 11.08; provided that the processing fee referenced in
Section 11.08(a) shall not be required to be paid.

 

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4.09         Survival.  The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations, and the Company
will have no obligation to pay any amount hereunder unless a demand is made
within 180 days after the date upon which the Administrative Agent’s or the
applicable Lender’s right to reimbursement arises; provided that, if the Change
in Law giving rise to such right to reimbursement is retroactive, then such
180-day period shall be extended to include the period of retroactive effect
hereof.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

5.01         Conditions to Effectiveness.  The effectiveness of this Agreement
is subject to the condition that the Administrative Agent shall have received
all of the following, in form and substance satisfactory to the Administrative
Agent and each Lender, and (in the case of any document listed below) in
sufficient copies for each Lender:

 

(a)           Credit Agreement.  This Agreement executed by each party hereto;

 

(b)           Resolutions; Incumbency.

 

(i)            Copies of the resolutions of the board of directors of each Loan
Party authorizing the transactions contemplated hereby, certified as of the
Effective Date by the Secretary or an Assistant Secretary of such Loan Party;
and

 

(ii)           A certificate of the Secretary or Assistant Secretary of each
Loan Party certifying the names and true signatures of the officers of such Loan
Party authorized to execute, deliver and perform, as applicable, this Agreement
and all other Loan Documents to be delivered by it hereunder;

 

(c)           Organization Documents; Good Standing. Each of the following
documents:

 

(i)            the articles or certificate of incorporation and the bylaws of
each Loan Party as in effect on the Effective Date, certified as of the
Effective Date by the Secretary or Assistant Secretary of such Loan Party; and

 

(ii)           a good standing certificate or certificate of status for each
Loan Party from the Secretary of State (or similar, applicable Governmental
Authority) of its state of organization;

 

(d)           Legal Opinion.  An opinion of K&L Gates LLP, counsel to the
Company and the Guarantors, addressed to the Administrative Agent and the
Lenders.

 

(e)           Payment of Fees.  Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Effective Date, together with Attorney Costs of JPMorgan to the extent
invoiced prior to or on the Effective Date, plus such additional amounts of
Attorney Costs as shall constitute JPMorgan’s reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings

 

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(provided that such estimate shall not thereafter preclude final settling of
accounts between the Company and JPMorgan); including any such costs, fees and
expenses arising under or referenced in Sections 2.11 and 11.04;

 

(f)            Certificate.  A certificate signed by a Responsible Officer,
dated as of the Effective Date, stating that:

 

(i)            the representations and warranties contained in Article VI are
true and correct in all material respects on and as of such date, as though made
on and as of such date;

 

(ii)           no Default or Event of Default exists or would result from the
Credit Extension; and

 

(iii)          there has not occurred since June 30, 2010 any event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect;

 

(g)           Confirmation.  The Confirmation executed by each Guarantor as of
the Effective Date;

 

(h)           Repayment of Prior Indebtedness.  All outstanding Indebtedness of
the Company or any Subsidiary not specified on Schedule 8.05 or otherwise
permitted by Section 8.05 shall have been paid in full and all commitments to
create such Indebtedness, all guaranties supporting such Indebtedness and all
Liens securing such Indebtedness shall have been terminated; and

 

(i)            Other Documents.  Such other approvals, opinions, documents or
materials as the Administrative Agent or any Lender may request.

 

5.02         Conditions to All Credit Extensions.  The making of each Credit
Extension is subject to the satisfaction of the following conditions precedent
on the date of such Credit Extension:

 

(a)           Notice, Application.  The Administrative Agent shall have received
a Notice of Borrowing or, in the case of any Issuance of any Letter of Credit,
the applicable Issuer and the Administrative Agent shall have received an L/C
Application or L/C Amendment Application, as required under Section 3.02;

 

(b)           Continuation of Representations and Warranties.  The
representations and warranties in Article VI shall be true and correct in all
material respects on and as of such Borrowing Date or Issuance Date with the
same effect as if made on and as of such Borrowing Date or Issuance Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date); and

 

(c)           No Existing Default.  No Default or Event of Default shall exist
or shall result from such Credit Extension.

 

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Each Notice of Borrowing, L/C Application or L/C Amendment Application submitted
by the Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice and as of each Borrowing
Date or Issuance Date, as applicable, that the conditions in this Section 5.02
are satisfied.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

The Company represents and warrants to the Administrative Agent and each Lender
that:

 

6.01         Existence and Power.  The Company and each of its Subsidiaries:

 

(a)           is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation;

 

(b)           has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, to carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents to which it is a party;

 

(c)           is duly qualified as a foreign corporation and is licensed 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
or license; and

 

(d)           is in compliance with all Requirements of Law; except, in each
case referred to in clause (c) or clause (d), to the extent that the failure to
do so could not reasonably be expected to have a Material Adverse Effect.

 

6.02         Authorization; No Contravention.  The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary organizational action, and do
not and will not:

 

(a)           contravene the terms of any of such Person’s Organization
Documents;

 

(b)           conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or

 

(c)           violate any Requirement of Law.

 

6.03         Governmental Authorization.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
the Agreement or any other Loan Document.

 

6.04         Binding Effect.  Each Loan Document to which a Loan Party is a
party constitutes the legal, valid and binding obligation of such Person,
enforceable against such Person in

 

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accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability.

 

6.05         Litigation.  There are no actions, suits, investigations,
proceedings, claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Company or its Subsidiaries or any of
their respective properties:

 

(a)           which purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or

 

(b)           as to which there exists a substantial likelihood of an adverse
determination, which determination could reasonably be expected to have a
Material Adverse Effect.  No injunction, writ, temporary restraining order or
any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Loan Document, or directing that the
transactions provided for herein or therein not be consummated as herein or
therein provided.

 

6.06         No Default.  No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company.  As of the Effective Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Effective Date,
create an Event of Default under subsection 9.01(e).

 

6.07         ERISA Compliance.

 

(a)           Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.  Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.

 

(b)           There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.  There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.

 

(c)           (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability to the PBGC under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA);  (iv) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of

 

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notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; (v) neither
the Company nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA; (vi) the Company and each ERISA
Affiliate has met all applicable requirements under the Pension Funding Rules in
respect of each Pension Plan, and no waiver of the minimum funding standards
under the Pension Funding Rules has been applied for or obtained; and (vii) as
of the most recent valuation date for any Pension Plan, the funding target
attainment percentage (as defined in Section 430(d)(2) of the Code is 60% or
higher and neither the Company nor any ERISA Affiliate knows of any facts or
circumstances that could reasonably be expected to cause the funding target
attainment percentage for any such plan to drop below 60% as of the most recent
valuation date.

 

6.08         Use of Proceeds; Margin Regulations.  The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12. 
Neither the Company nor any Subsidiary is generally engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.

 

6.09         Title to Properties.  The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  As of
the Effective Date, the property of the Company and its Subsidiaries is subject
to no Liens, other than Permitted Liens.

 

6.10         Taxes.  The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.

 

6.11         Financial Condition.  (a)  The audited consolidated financial
statements of the Company and its Subsidiaries dated June 30, 2010, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for the fiscal year ended on that date:

 

(x)            were prepared in accordance with GAAP consistently applied
throughout the period covered thereby;

 

(y)           fairly present the financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations for the period
covered thereby; and

 

(z)            except as specifically disclosed in Schedule 6.11, show all
material indebtedness and other liabilities, direct or contingent, of the
Company and its Subsidiaries as of the date thereof.

 

(b)           Since June 30, 2010 there has been no Material Adverse Effect.

 

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6.12         Environmental Matters.  Except as specifically disclosed in
Schedule 6.12:

 

(a)           The on-going operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability in excess of $5,000,000 in the aggregate (exclusive of
amounts payable under insurance policies and indemnity agreements which the
Company or such Subsidiary reasonably expects to receive).

 

(b)           The Company and each of its Subsidiaries have obtained all
licenses, permits, authorizations and registrations required under any
Environmental Law (“Environmental Permits”) and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.

 

(c)           None of the Company, any of its Subsidiaries or any of their
respective present property or operations is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to (i) any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material or (ii) to the extent that it
could reasonably be expected to have a Material Adverse Effect, any claim,
proceeding or written notice from any Person regarding any Environmental Law,
Environmental Claim or Hazardous Material.

 

(d)           There are no Hazardous Materials or other conditions or
circumstances existing with respect to any property of the Company or any
Subsidiary, or arising from operations prior to the Effective Date, of the
Company or any of its Subsidiaries that would reasonably be expected to give
rise to Environmental Claims with a potential liability of the Company and its
Subsidiaries in excess of $5,000,000 in the aggregate for all such conditions,
circumstances and properties.  In addition, (i) neither the Company nor any
Subsidiary has any underground storage tanks (x) that are not properly
registered or permitted under applicable Environmental Laws or (y) that are
leaking or disposing of Hazardous Materials off-site, and (ii) the Company and
its Subsidiaries have met all material notification requirements under
applicable Environmental Laws.

 

6.13         Labor Relations.  There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company’s knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority.

 

6.14         Regulated Entities.  None of the Company, any Person controlling
the Company, or any Subsidiary, is an “Investment Company” within the meaning of
the Investment Company Act of 1940.  Neither the Company nor any Subsidiary is
subject to regulation under the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness.

 

6.15         No Burdensome Restrictions.  Neither the Company nor any Subsidiary
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization

 

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Document, or any Requirement of Law, which could reasonably be expected to have
a Material Adverse Effect.

 

6.16         Copyrights, Patents, Trademarks and Licenses, etc.  The Company and
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person.  To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.

 

6.17         Subsidiaries.  As of the Effective Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.17 and has no equity investments in any other corporation or entity other than
those specifically disclosed in part (b) of Schedule 6.17.

 

6.18         Insurance.  The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company in such amounts, with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and are
similarly situated.

 

6.19         Swap Obligations.  Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contract, other than
Permitted Swap Obligations.  The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.

 

6.20         Solvency.   The Company and each of its Subsidiaries are Solvent.

 

6.21         Full Disclosure.  None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company or its Subsidiaries to the Lenders prior to the Effective
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.

 

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ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, unless the Required Lenders waive compliance in writing:

 

7.01         Financial Statements.  The Company shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:

 

(a)           as soon as available, but not later than the earlier of (i) the
date of filing thereof with the SEC and (ii) 90 days after the end of each
fiscal year (commencing with the fiscal year ending June 30, 2011), a copy of
the audited consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year and the related consolidated statements of income,
shareholders’ equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, and accompanied by
the opinion of PriceWaterhouseCoopers LLP or another nationally-recognized
independent public accounting firm (“Independent Auditor”) which report shall
state that such consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years.  Such opinion shall not be qualified or limited
because of a restricted or limited examination by the Independent Auditor of any
material portion of the Company’s or any Subsidiary’s records or because of a
“going concern” exception; and

 

(b)           as soon as available, but not later than the earlier of (i) the
date of filing thereof with the SEC and (ii) 45 days after the end of each of
the first three fiscal quarters of each fiscal year (commencing with the fiscal
quarter ending September 30, 2011), a copy of the unaudited consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the end of
such fiscal quarter and the related consolidated and consolidating statements of
income, shareholders’ equity and cash flows for the period commencing on the
first day and ending on the last day of such fiscal quarter, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Company and the Subsidiaries.

 

7.02         Certificates; Other Information.  The Company shall furnish to the
Administrative Agent:

 

(a)           concurrently with the delivery of the financial statements
referred to in subsections 7.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer;

 

(b)           concurrently with the delivery of the financial statements
referred to in subsection 7.01(a), (i) a consolidating balance sheet and income
statement for such year (which need not be audited) and setting forth in
comparative form the figures for the previous fiscal year, and (ii) a budget for
the next succeeding fiscal year;

 

(c)           promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodic or special reports (including Forms 10K, 10Q and 8K) that the
Company or any Subsidiary may make to, or file with, the SEC; and

 

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(d)           promptly, such additional information regarding the business,
financial or corporate or other organizational affairs of the Company or any
Subsidiary as the Administrative Agent (or the Administrative Agent, at the
request of any Lender) may from time to time reasonably request.

 

The Company hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders and the Issuers materials and/or information provided
by or on behalf of Company hereunder (collectively, “Company Materials”) by
posting Company Materials on IntraLinks or another similar electronic system
(the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with
respect to Company or its securities) (each, a “Public Lender”).  The Company
hereby agrees that (w) all Company Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Company Materials “PUBLIC,” the Company shall be
deemed to have authorized the Administrative Agent, the Issuers and the Lenders
to treat such Company Materials as either publicly available information or not
material information (although it may be sensitive and proprietary) with respect
to the Company or its securities for purposes of United States Federal and state
securities laws; (y) all Company Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent shall be entitled to treat any Company
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.

 

7.03         Notices.  The Company shall promptly notify the Administrative
Agent and each Lender:

 

(a)           of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;

 

(b)           of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including, to the extent so applicable,
(i) any breach or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority; (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws; or (iv) any
other Environmental Claim;

 

(c)           of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Administrative Agent and each Lender a copy of any
notice with respect to such event that is filed with a Governmental Authority
and any notice delivered by a Governmental Authority to the Company or any ERISA
Affiliate with respect to such event:

 

(i)            an ERISA Event;

 

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(ii)           a material increase in the Unfunded Pension Liability of any
Pension Plan;

 

(iii)          the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by the Company or any ERISA Affiliate;
or

 

(iv)          the adoption of any amendment to a Plan subject to Section 412 of
the Code, if such amendment results in a material increase in contributions or
Unfunded Pension Liability;

 

(d)           of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries;

 

(e)           upon, but in no event later than 15 days after, any officer of the
Company or any Subsidiary becoming aware of (i) any and all enforcement,
investigation, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against the Company or any Subsidiary or any
of their respective properties pursuant to any applicable Environmental Laws
which could reasonably be expected to have a Material Adverse Effect, (ii) all
other material Environmental Claims, and (iii) any environmental or similar
condition on any real property adjoining or in the vicinity of the property of
the Company or any Subsidiary that could reasonably be anticipated to cause such
property of the Company or such Subsidiary or any part thereof to be subject to
any material restrictions on the ownership, occupancy, transferability or use of
such property under any Environmental Laws; and

 

(f)            upon the reasonable request from time to time of the
Administrative Agent, the Swap Termination Values, together with a description
of the method by which such values were determined, relating to any
then-outstanding Swap Contract to which the Company or any of its Subsidiaries
is party.

 

Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer setting forth details of the occurrence referred to therein,
and stating what action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time.  Each notice under subsection
7.03(a) shall describe with particularity any and all clauses or provisions of
this Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.

 

7.04         Preservation of Existence, Etc.  The Company shall, and shall cause
each Subsidiary to:

 

(a)           preserve and maintain in full force and effect its existence and
good standing under the laws of its state or jurisdiction of formation;

 

(b)           preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.03 and sales of assets permitted by
Section 8.02;

 

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(c)           use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and

 

(d)           preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

 

7.05         Maintenance of Property.  The Company shall maintain and preserve,
and shall cause each Subsidiary to maintain and preserve, all its property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted, and make all necessary repairs thereto and renewals and
replacements thereof.

 

7.06         Insurance.  The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers’
compensation insurance, public liability insurance and property and casualty
insurance.

 

7.07         Payment of Obligations.  The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:

 

(a)           all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary; and

 

(b)           all material lawful claims which, if unpaid, would by law become a
Lien upon its property in violation of Section 8.01.

 

7.08         Compliance with Laws.  The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.  In
addition, the Company shall (a) ensure, and cause each Subsidiary to ensure,
that no Person that owns a controlling interest in or otherwise controls the
Company or any Subsidiary is or shall be listed on the Specially Designated
Nationals and Blocked Person List or other similar list maintained by the Office
of Foreign Assets Control (“OFAC”), the Department of the Treasury, or included
in any Executive Orders, (b) not use or permit the use of the proceeds of the
Loans to violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto, and (c) comply, and cause
each Subsidiary to comply, with all applicable Bank Secrecy Act (“BSA”) laws and
regulations.

 

7.09         Compliance with ERISA.  The Company shall, and shall cause each of
its ERISA Affiliates to:  (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is

 

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qualified under Section 401(a) of the Code to maintain such qualification; and
(c) make all required contributions to any Plan subject to Section 412 of the
Code.

 

7.10         Inspection of Property and Books and Records.  The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary.  The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Administrative Agent or any Lender to visit
and inspect any of their respective properties, to examine their respective
company, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of the Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Company; provided that when an Event of Default exists the Administrative
Agent or any Lender may do any of the foregoing at the expense of the Company at
any time during normal business hours and without advance notice; provided,
further, that neither the Administrative Agent nor any Lender shall conduct any
environmental testing of any owned or leased facility of the Company or any
Subsidiary without the prior written consent of the Company, which shall not
unreasonably be withheld.

 

7.11         Environmental Laws.  (a)  The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws, the violation of which could reasonably
be expected to result in liability to the Company and its Subsidiaries in excess
of $5,000,000 in the aggregate (net of any payments under insurance policies or
indemnity agreements which the Company or such Subsidiary reasonably expects to
receive).

 

(b)           Upon the written request of the Administrative Agent or any
Lender, the Company shall submit and cause each of its Subsidiaries to submit,
to the Administrative Agent with sufficient copies for each Lender, at the
Company’s sole cost and expense, at reasonable intervals, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant to
subsection 7.03(e), that could, individually or in the aggregate, result in
liability in excess of $5,000,000 (net of any payments under insurance policies
or indemnity agreements which the Company or such Subsidiary reasonably expects
to receive).

 

7.12         Use of Proceeds.  The Company shall use the proceeds of the Loans
(a) to finance Permitted Acquisitions and to pay certain fees and expenses
related thereto, (b) for working capital, capital expenditures, stock
repurchases and dividends and other general corporate purposes not in
contravention of any Requirement of Law or of any Loan Document; provided that
any stock of the Company that is repurchased by the Company shall be immediately
retired and (c) to refinance the Existing Credit Agreement and other existing
Indebtedness.

 

7.13         Further Assurances.  (a)  The Company shall ensure that all written
information, exhibits and reports furnished to the Administrative Agent or the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material

 

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fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Administrative Agent and the Lenders and correct any defect or
error that may be discovered therein or in any Loan Document or in the
execution, acknowledgment or recordation thereof.

 

(b)           Promptly upon request by the Administrative Agent or the Required
Lenders, the Company shall (and shall cause any of its Subsidiaries to) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, certificates, assurances and other
instruments the Administrative Agent or such Lenders, as the case may be, may
reasonably require from time to time in order (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document, and (ii) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Administrative Agent and the Lenders the rights granted or now or hereafter
intended to be granted to the Lenders under any Loan Document or under any other
document executed in connection therewith.

 

7.14         Guaranties.  (a)  The Company shall (i) cause each Domestic
Subsidiary that accounted for more than 5% of the consolidated (gross) revenues
of the Company and its Subsidiaries during the most recent 12-month period for
which financial statements are available pursuant to Section 7.01 (the “Test
Period”), calculated (x) on an actual and a pro forma basis for any Subsidiary
created or acquired after the beginning of such Test Period and (y) giving
effect to any material intercompany transactions after the beginning of such
Test Period, to be a party to the Subsidiary Guaranty; and (ii) if all Domestic
Subsidiaries that are not parties to the Subsidiary Guaranty accounted for 10%
or more of the consolidated (gross) revenues of the Company and its Subsidiaries
for the most recent Test Period, cause one or more of such Domestic Subsidiaries
to promptly execute the Subsidiary Guaranty so that, upon such execution, such
10% threshold is no longer exceeded.  The Company shall promptly notify the
Administrative Agent at any time at which, in accordance with this Section 7.14,
any Subsidiary is required to become a party to the Subsidiary Guaranty.

 

(b)           Without limiting subsection (a) above, the Company shall at all
times cause each Subsidiary that guarantees any other Indebtedness of the
Company to be a Guarantor.

 

7.15         Note Agreement Amendment.  The Company shall, within 30 days after
the Effective Date, deliver evidence to the Administrative Agent and the Lenders
that the negative covenants in the Note Agreement (and related definitions) have
been amended in a manner consistent with the applicable covenants set forth in
Article VIII (and related definitions) and otherwise reasonably satisfactory to
the Administrative Agent; provided that if the Company does not deliver such
evidence within such 30-day period, the applicable covenants set forth in
Article VIII (and related definitions) shall thereafter be deemed to be amended
automatically to conform to the applicable covenants set forth in Article VIII
(and related definitions) of the Existing Credit Agreement (without giving
effect to the termination thereof) until the Company delivers such evidence.

 

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ARTICLE VIII

 

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, unless the Required Lenders waive compliance in writing:

 

8.01         Limitation on Liens.  The Company shall not, and shall not permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or permit
to exist any Lien upon or with respect to any part of its property, whether now
owned or hereafter acquired, other than the following (“Permitted Liens”):

 

(a)           any Lien existing on property of the Company or any Subsidiary on
the Effective Date and set forth in Schedule 8.01 securing Indebtedness
outstanding on such date;

 

(b)           any Lien created under any Loan Document;

 

(c)           Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.07, provided that no notice
of lien has been filed or recorded under the Code;

 

(d)           carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;

 

(e)           Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation;

 

(f)            Liens on the property of the Company or its Subsidiaries securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases or statutory obligations, (ii) Contingent Obligations in
connection with performance bonds, surety bonds and appeal bonds and (iii) other
non-delinquent obligations of a like nature, in each case, incurred in the
ordinary course of business; provided that all such Liens in the aggregate could
not reasonably be expected to cause a Material Adverse Effect;

 

(g)           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 interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;

 

(h)           Liens securing obligations in respect of Capital Leases on assets
subject to such leases, provided that such Capital Leases are otherwise
permitted hereunder; and

 

(i)            other Liens securing Indebtedness that does not exceed in the
aggregate at any one time outstanding the lesser of (x) 4% of Net Worth as set
forth in the most recently delivered Compliance Certificate pursuant to
Section 7.02(a) and (y) the maximum amount of such secured Indebtedness that,
when aggregated with all other outstanding Priority Debt (within

 

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the meaning of the Note Agreement), would be permitted under the Note Agreement;
provided that such Liens may not secure (A) the Note Agreement or (B) any other
Indebtedness (excluding Capital Lease Obligations) to a bank, insurance company
or other financial institution in excess of $20,000,000.

 

8.02         Disposition of Assets.  The Company shall not, and shall not permit
any Subsidiary to, directly or indirectly, (x) issue any equity interests of any
Subsidiary to any Person (other than a Joint Venture) which is not the Company
or a Subsidiary or (y) sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) any property, including
accounts and notes receivable, with or without recourse (each, an “Asset
Disposition”), or enter into any agreement to do any of the foregoing, except:

 

(a)           dispositions of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;

 

(b)           the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;

 

(c)           dispositions made by the Company or any Subsidiary to any
Wholly-Owned Subsidiary which is a Guarantor, or dispositions made by any
Subsidiary to the Company;

 

(d)           dispositions made in connection with Investments permitted under
Section 8.04; and

 

(e)           dispositions not otherwise permitted hereunder which are made for
fair market value; provided that (i) at the time of any disposition, no Default
or Event of Default shall exist or shall result from such disposition, and
(ii) the aggregate value of all assets so sold by the Company and its
Subsidiaries after the Effective Date, together, shall not (x) represent more
than 10% of the total assets of the Company and its Subsidiaries as of the last
day of the fiscal quarter most recently ended for which the Company has
delivered financial statements pursuant to Section 7.01 or (y) be related to
more than 10% of the consolidated net income of the Company and its Subsidiaries
for the 12-month period ending as of the end of the fiscal quarter next
preceding the date of determination;

 

provided that no Asset Disposition with respect to the equity interests or
Indebtedness of any Subsidiary or any note or account receivable may be made if
such Asset Disposition would be prohibited by the terms of the Note Agreement.

 

8.03         Consolidations and Mergers.  The Company shall not, and shall not
permit any Subsidiary to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default or Event of Default exists immediately before and after giving effect to
such transaction:

 

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(a)           any Subsidiary may merge with the Company or another Subsidiary;
provided that (i) in the case of any transaction between a Subsidiary and the
Company, the Company shall be the continuing or surviving corporation, (ii) in
the case of any transaction between a Subsidiary and a Wholly-Owned Subsidiary,
such Wholly-Owned Subsidiary shall be the continuing or surviving corporation or
entity, and (iii) in the case of any transaction between a Domestic Subsidiary
and a Foreign Subsidiary, such Domestic Subsidiary shall be the continuing or
surviving corporation or entity;

 

(b)           any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Company or another Wholly-Owned
Subsidiary;

 

(c)           any Subsidiary may merge or consolidate with another Person in
order to effect a Permitted Acquisition;

 

(d)           so long as it is the surviving entity, the Company may merge or
consolidate with another Person in order to effect a Permitted Acquisition; and

 

(e)           the Company and Subsidiaries may make Investments permitted under
Section 8.04.

 

8.04         Loans and Investments.  The Company shall not purchase or acquire,
or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligation or other
security of, or any interest in, any Person, or make or commit to make any
Acquisition, or make or commit to make any advance, loan, extension of credit or
capital contribution to or any other investment in, any Person including any
Affiliate of the Company (together, “Investments”), except for:

 

(a)           Investments held by the Company or any Subsidiary in the form of
Cash Equivalents;

 

(b)           extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;

 

(c)           Investments by the Company or any Subsidiary in Wholly-Owned
Subsidiaries or in the form of unsecured loans made by any Subsidiary to the
Company;

 

(d)           Investments incurred in order to consummate Acquisitions otherwise
permitted herein (“Permitted Acquisitions”), provided that (i) such Acquisitions
are undertaken in accordance with all applicable Requirements of Law, (ii) the
prior, effective written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the Person to be acquired (and its
stockholders or equivalent equity holders, if necessary) is obtained,
(iii) after giving effect to such Acquisition, no Default or Event of Default
shall have occurred and be continuing (including in respect of Sections 8.14,
8.15 and 8.16 on a pro forma basis as of the last day of the preceding fiscal
quarter), (iv) the Company provides the Administrative Agent, for the benefit of
the Lenders, prior to consummating any such Acquisition (or series of related
Acquisitions) for which the total consideration (other than stock of the
Company) exceeds $50,000,000, a Compliance Certificate executed by a Responsible
Officer evidencing compliance with clause (iii) above, and (v) the Person or
business which is

 

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the subject of such Acquisition is in the same or similar line of business as
the Company and its Subsidiaries;

 

(e)           other Investments (excluding Permitted Acquisitions but including
Investments in Joint Ventures) in addition to the foregoing Investments
permitted by this Section 8.04; provided that (i) the total amount of
Investments permitted under this Section 8.04(e) does not exceed in the
aggregate at any one time outstanding 30% of Net Worth as set forth in the most
recently delivered Compliance Certificate pursuant to Section 7.02(a) and
(ii) the aggregate amount of such Investments made in or to Persons that are not
in the same or similar line of business in which the Company and its
Subsidiaries are engaged as of the Effective Date shall not exceed 10% of Net
Worth as set forth in the most recently delivered Compliance Certificate
pursuant to Section 7.02(a);

 

(f)            Investments of a nature not contemplated by the foregoing clauses
hereof that are outstanding as of the Effective Date and set forth in Schedule
8.04 hereto; and

 

(g)           Investments in the form of repurchase of the Company’s or any
Subsidiary’s capital stock or Indebtedness approved by the Company’s board of
directors (or the Subsidiary’s equivalent managers or directors) that would not
otherwise result in a Default or an Event of Default.

 

For the avoidance of doubt, contributions made by the Company or any ERISA
Affiliate to any Pension Plan or other employee benefit plan (including
qualified plans) of the Company or such ERISA Affiliate shall not constitute an
Investment by the Company or such ERISA Affiliate under this Section 8.04.

 

8.05         Limitation on Indebtedness.  The Company shall not, and shall not
permit any Subsidiary to, create, incur, assume, permit to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

 

(a)           Indebtedness incurred pursuant to this Agreement;

 

(b)           Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.08;

 

(c)           Indebtedness existing on the Effective Date and set forth in
Schedule 8.05;

 

(d)           Indebtedness incurred in connection with Capital Leases in an
aggregate outstanding amount not to exceed $50,000,000 at any time;

 

(e)           unsecured intercompany Indebtedness so long as the related
Investment is permitted by Section 8.04;

 

(f)            Indebtedness under the Existing Credit Agreement, so long as such
Indebtedness is repaid concurrently with the making of the initial Credit
Extensions hereunder; and

 

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(g)           other Indebtedness incurred by the Company or any Subsidiary from
time to time; provided that after giving effect to such Indebtedness,
(i) Section 8.14 would not be violated (as determined on a pro forma basis as of
the last day of the previous fiscal quarter) and (ii) the aggregate outstanding
amount of such Indebtedness of Subsidiaries that are not Guarantors shall not at
any time exceed 10% of Net Worth.

 

8.06         Transactions with Affiliates.  Except for intercompany Indebtedness
otherwise permitted hereunder, the Company shall not, and shall not permit any
Subsidiary to, enter into any transaction with any Affiliate of the Company,
except upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm’s-length transaction with a
Person not an Affiliate of the Company or such Subsidiary.

 

8.07         Margin Regulations.  The Company shall not, whether directly or
indirectly, and whether immediately, incidentally or ultimately, purchase or
carry any Margin Stock or extend credit to others for the purpose of purchasing
or carrying Margin Stock.

 

8.08         Contingent Obligations.  The Company shall not, and shall not
permit any Subsidiary to, create, incur, assume or permit to exist any
Contingent Obligation except:

 

(a)           endorsements for collection or deposit in the ordinary course of
business;

 

(b)           Permitted Swap Obligations;

 

(c)           L/C Obligations;

 

(d)           Contingent Obligations constituting Investments permitted under
Section 8.04; and

 

(e)           other Contingent Obligations (other than L/C Obligations) of the
Company and its Subsidiaries not to exceed in the aggregate at any one time
outstanding 7.5% of Net Worth as set forth in the most recently delivered
Compliance Certificate pursuant to Section 7.02(a).

 

8.09         Restrictive Agreements.  The Company shall not, nor shall it permit
any of its Subsidiaries to, enter into any indenture, agreement, instrument or
other arrangement which directly or indirectly prohibits or restrains, or has
the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the ability of any Subsidiary to (a) pay dividends or make
other distributions (i) on its Capital Stock or (ii) with respect to any other
interest or participation in, or measured by, its profits, (b) make loans or
advances to the Company or any Subsidiary, (c) repay loans or advances from the
Company or any Subsidiary or (d) transfer any of its properties or assets to the
Company or any Subsidiary.

 

8.10         ERISA.  The Company shall not, and shall not permit any of its
Subsidiaries to, (i) terminate any Plan subject to Title IV of ERISA so as to
result in any material (in the opinion of the Required Lenders) liability to the
Company or any ERISA Affiliate, (ii) permit to exist any ERISA Event or any
other event or condition, which presents the risk of a material (in the opinion
of the Required Lenders) liability to the Company or any ERISA Affiliate,
(iii) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any

 

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Multiemployer Plan so as to result in any material (in the opinion of the
Required Lenders) liability to the Company or any ERISA Affiliate or (iv) enter
into any new Plan or modify any existing Plan in a manner that (a) increases its
obligations thereunder and (b) could result in any material (in the opinion of
the Required Lenders) liability to the Company or any ERISA Affiliate.

 

8.11         Change in Business.  The Company shall not, and shall not permit
any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the Effective Date.

 

8.12         Accounting Changes.  The Company shall not, and shall not permit
any Subsidiary to, (a) make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or (b) change the fiscal year
of the Company or of any Subsidiary; provided that the fiscal year of the
Company and its Subsidiaries may be changed to a year ending December 31.

 

8.13         Amendments to Charter.  The Company shall not, and shall not permit
any Subsidiary to, (a) amend or modify any term or provision of its certificate
or articles of formation or bylaws (or similar organizational document) which is
materially adverse to the Administrative Agent or the Lenders without the prior
written consent of the Required Lenders or (b) issue any preferred stock or
other preferred equity interest.

 

8.14         Leverage Ratio.  The Company shall not, as of the last day of any
fiscal quarter, permit its Leverage Ratio to be greater than 3.00 to 1.0.

 

8.15         Fixed Charge Coverage Ratio.  The Company shall not, as of the last
day of any fiscal quarter, permit its ratio of (a) EBITDAR for the period of
four fiscal quarters then ending to (b) Fixed Charges for such four fiscal
quarter period to be less than 1.30 to 1.0.

 

8.16         Minimum Net Worth.  The Company shall not, as of the last day of
any fiscal quarter, permit Net Worth to be less than the sum of (a) $850,000,000
plus (b) on a cumulative basis, 25% of the positive net income earned during
each fiscal quarter commencing on or after April 1, 2011 plus (c) on a
cumulative basis, 50% of the net cash proceeds received from the issuance of
equity securities of the Company after the Effective Date.

 

8.17         Most Favored Lender Status.  The Company shall not, and shall not
permit any Subsidiary to, enter into, assume or otherwise be bound or obligated
under Material Debt Agreement (as defined below) containing one or more
Additional Financial Covenants or Additional Defaults, without the prior written
consent of the Required Lenders; provided that if the Company or any Subsidiary
shall enter into, assume or otherwise become bound by or obligated under any
Material Debt Agreement without the prior written consent of the Required
Lenders, the terms of this Agreement shall, without any further action on the
part of the Company, the Administrative Agent or any Lender, be deemed to be
amended automatically to include each Additional Financial Covenant and each
Additional Default contained in Material Debt Agreement, but only for so long as
such Additional Financial Covenant or Additional Default remains in effect under
such Material Debt Agreement.  The Company shall promptly execute and deliver at
its expense (including Attorney Costs) an amendment to this Agreement in

 

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form and substance satisfactory to the Required Lenders evidencing the amendment
of this Agreement to include any such Additional Financial Covenant and/or
Additional Default; provided that the execution and delivery of such amendment
shall not be a precondition to the effectiveness of the effectiveness of any
amendment as provided for in this Section 8.17.  For purposes of the foregoing,
“Material Debt Agreement” means any agreement (or group of related agreements)
under which the Company and/or any Subsidiary at any time incurs (directly, by
assumption, by operation of law or otherwise) or has the right to incur
(pursuant to committed financing) Indebtedness in excess of $50,000,000;
provided that any such agreement (or group of related agreements) shall cease to
be a Material Debt Agreement if the total amount of Debt and unfunded
commitments thereunder is permanently reduced to $30,000,000 or less.

 

8.18         Restricted Payments.  The Company shall not, and shall not permit
any Subsidiary to, (i) declare or pay any dividend or make any other
distribution (whether in cash, securities or other property) on any of its stock
or other equity interests or any warrants, options or other rights with respect
thereto (any of the foregoing, “Equity Interests”) or (ii) purchase, redeem or
otherwise acquire for value any of its Equity Interests (any such declaration,
payment, distribution, purchase, redemption or other acquisition, a “Restricted
Payment”); provided that:

 

(a)           any Subsidiary may declare and pay dividends, and make other
distributions, to the Company or any other Subsidiary;

 

(b)           the Company may declare and pay stock dividends; and

 

(c)           so long as no Default or Event of Default exists, the Company and
its Subsidiaries may make other Restricted Payments; provided that if the
Leverage Ratio as of the last day of the most recently ended fiscal quarter was
greater than:

 

(1)    2.25 to 1.0 but equal to or less than 2.50 to 1.0, then neither the
Company nor any Subsidiary will make any Restricted Payment pursuant to this
clause (c) if, after giving effect thereto, the aggregate amount of all such
Restricted Payments made during the 12-month period ending on the date of such
Restricted Payment would exceed $35,000,000; or

 

(2)    2.50 to 1.0, then neither the Company nor any Subsidiary will make any
Restricted Payment pursuant to this clause (c) if, after giving effect thereto,
the aggregate amount of all such Restricted Payments made during the 12-month
period ending on the date of such Restricted Payment would exceed $25,000,000.

 

ARTICLE IX

 

EVENTS OF DEFAULT

 

9.01         Event of Default.  Any of the following shall constitute an “Event
of Default”:

 

(a)           Non-Payment.  The Company fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or of any L/C Obligation,
or (ii) within five days after the same becomes due, any interest, fee or any
other amount payable hereunder or under any other Loan Document; or

 

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(b)           Representation or Warranty.  Any representation or warranty by the
Company or any Subsidiary made or deemed made herein or in any other Loan
Document, or contained in any certificate, document or financial or other
statement by the Company, any Subsidiary or any Responsible Officer, furnished
at any time under this Agreement, or in or under any other Loan Document, is
incorrect in any material respect on or as of the date made or deemed made; or

 

(c)           Specific Defaults.  The Company fails to perform or observe any
term, covenant or agreement contained in Section 7.03 or in Article VIII; or

 

(d)           Other Defaults.  Any Loan Party fails to perform or observe any
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which any senior officer of the Company knew or
reasonably should have known of such failure or (ii) the date upon which written
notice thereof is given to the Company by the Administrative Agent or any
Lender; or

 

(e)           Cross-Default.  (i) The Company or any Subsidiary (A) fails to
make any payment in respect of any Indebtedness (other than Specified
Acquisition Debt) or Contingent Obligation (other than in respect of Swap
Contracts), having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $10,000,000 when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure;
or (B) fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument relating
to any such Indebtedness (other than Specified Acquisition Debt) or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable, or to be required to be repurchased, prior to its stated
maturity, or such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from (1) any
event of default under such Swap Contract as to which the Company or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (2) any
Termination Event (as so defined) as to which the Company or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Company or such Subsidiary as a result thereof is greater than
$10,000,000; provided that any Event of Default arising under clause (i)(B) in
respect of Indebtedness evidenced or governed by the Note Agreement shall be
determined without regard to any amendment to or waiver of any provision of the
Note Agreement or any related document or instrument entered into by the parties
thereto in anticipation of, concurrent with or subsequent to the occurrence of
any such event or circumstance; or

 

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(f)            Insolvency; Voluntary Proceedings.  The Company or any Subsidiary
(i) ceases or fails to be solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course;
(iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing; or

 

(g)           Involuntary Proceedings.  (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company’s or any Subsidiary’s
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or

 

(h)           ERISA.  (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company or any ERISA Affiliate under Title IV of
ERISA to such Pension Plan or Multiemployer Plan or to the PBGC in an aggregate
amount for all such Pension Plans and Multiemployer Plans in excess of
$1,000,000, less any outstanding amounts under clauses (ii) and (iii); (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans and
Multiemployer Plans at any time exceeds $1,000,000, less any outstanding amounts
under clauses (i) and (iii) (determined, in respect of Multiemployer Plans, by
reference to the Unfunded Pension Liability for which the Company or any ERISA
Affiliate may be liable); or (iii) the Company or any ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000, less any outstanding amounts under clauses (i) and (ii); or

 

(i)            Monetary Judgments.  One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $5,000,000 (or, if less, the applicable threshold
set forth in the corresponding provision of the Note Agreement) or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 10 days after the entry thereof; or

 

(j)            Non-Monetary Judgments.  Any non-monetary judgment, order or
decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 20 consecutive days during

 

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which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

 

(k)           Change of Control.  There occurs any Change of Control; or

 

(l)            Loss of Licenses.  Any Governmental Authority revokes or fails to
renew any license, permit or franchise of the Company or any Subsidiary, or the
Company or any Subsidiary for any reason loses any license, permit or franchise,
or the Company or any Subsidiary suffers the imposition of any restraining
order, escrow, suspension or impound of funds in connection with any proceeding
(judicial or administrative) with respect to any license, permit or franchise,
in each case to the extent that the same individually, collectively or
cumulatively, does or would reasonably be expected to have a Material Adverse
Effect; or

 

(m)          Guarantor Defaults.  Any Guarantor fails in any material respect to
perform or observe any term, covenant or agreement in the Subsidiary Guaranty;
or the Subsidiary Guaranty is for any reason partially (including with respect
to future advances) or wholly revoked or invalidated, or otherwise ceases to be
in full force and effect, or any Guarantor or any other Person contests in any
manner the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.

 

9.02         Remedies.  If any Event of Default occurs, the Administrative Agent
shall, at the request of, or may, with the consent of, the Required Lenders,

 

(a)           declare the Commitment of each Lender to make Loans and any
obligation of each Issuer to Issue Letters of Credit to be terminated, whereupon
such Commitments and obligations shall be terminated;

 

(b)           declare an amount equal to the maximum aggregate amount that is or
at any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or shall
be entitled at such time to present, the drafts or other documents required to
draw under such Letters of Credit) to be immediately due and payable, and
declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and

 

(c)           exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

 

provided that upon the occurrence of any event specified in subsection (f) or
(g) of Section 9.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and any obligation of an Issuer to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Administrative Agent, either Issuer
or any Lender.

 

9.03         Rights Not Exclusive.  The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or

 

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remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

10.01       Appointment and Authorization.  (a)   Each of the Lenders and the
Issuers hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof, together with such actions and powers as are reasonably incidental
thereto.  The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.  The Lenders and
the Issuers acknowledge that, pursuant to such activities, JPMorgan or its
Affiliates may receive information regarding the Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Subsidiary) and acknowledge that the Administrative
Agent shall not be under any obligation to provide such information to them. 
With respect to its Loans and Letters of Credit, JPMorgan shall have the same
rights and powers under this Agreement as any other Lender and Issuer and may
exercise the same as though it were not the Administrative Agent.

 

(b)           Each Issuer shall act on behalf of the Lenders with respect to any
Letter of Credit Issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Required Lenders to act for such Issuer with respect thereto; provided
that such Issuer shall have all of the benefits and immunities (i) provided to
the Administrative Agent in this Article X with respect to any acts taken or
omissions suffered by such Issuer in connection with Letters of Credit Issued by
it or proposed to be Issued by it and the application and agreements for letters
of credit pertaining to the Letters of Credit as fully as if the term
“Administrative Agent”, as used in this Article X, included such Issuer with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to such Issuer.

 

10.02       Liability.  The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein.  Without limiting the
generality of the foregoing, (a) none of the Administrative Agent or any Related
Party thereof shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or an Event of Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.01), including for the avoidance of
doubt any action that may be in violation of the automatic stay under any
bankruptcy, insolvency or similar law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any bankruptcy, insolvency or similar law, and (c) except as

 

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expressly set forth herein, none of the Administrative Agent or any Related
Party thereof shall have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by such Person or any Affiliate
thereof in any capacity.  The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.01) or in the
absence of its own gross negligence or willful misconduct.  The Administrative
Agent shall be deemed not to have knowledge of any Default or Event of Default
unless and until written notice thereof is given to the Administrative Agent by
the Company or a Lender, and the Administrative Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article V or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.

 

10.03       Reliance by Administrative Agent.  (a) The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by
the proper Person.  The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Company), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

(b)           For purposes of determining compliance with the conditions
specified in Section 5.01, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.

 

10.04       Delegation of Duties.  The Administrative Agent may perform any and
all its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent.  The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties.  The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 

10.05       Resignation by Administrative Agent.  Subject to the appointment and
acceptance of a successor Administrative Agent as provided in this paragraph,
the Administrative Agent

 

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may resign at any time by notifying the Lenders, the Issuers and the Company. 
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Company, to appoint a successor.  If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuers, appoint a successor Administrative Agent, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor.  After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 11.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

 

10.06                     Independent Credit Decision.  Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.

 

10.07                     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, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Administrative Agent (or the
Administrative Agent for the account of the Lenders), unless the Administrative
Agent shall have received written notice from a Lender or the Company referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”.  The Administrative Agent will notify the
Lenders of their  receipt of any such notice.  The Administrative Agent shall
take such action with respect to such Default or Event of Default as may be
requested by the Required Lenders in accordance with Article IX; provided that
unless and until the Administrative Agent has received any such request, 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 or in the best interest of the Lenders.

 

10.08                     Indemnification of Administrative Agent.  Whether or
not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Administrative Agent and its Related Parties (to the
extent not reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so), in accordance with such Lender’s Pro Rata
Share of all Loans and Commitments, from and against any and all Indemnified
Liabilities; provided that no Lender shall be liable for the payment to the

 

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Administrative Agent or any Related Party thereof of any portion of such
Indemnified Liabilities resulting from such Person’s gross negligence or willful
misconduct.  Without limitation of the foregoing, each Lender shall reimburse
the Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Company.  The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Administrative Agent.

 

10.09                     Guaranty Matters.  The Administrative Agent shall, and
the Lenders irrevocably authorize the Administrative Agent to, upon the written
request of the Company so long as no Default or Event of Default exists, release
any Guarantor from its obligations under the Subsidiary Guaranty if, after
giving effect to such release, the Company is in compliance with Section 7.14. 
Upon request by the Administrative Agent at any time, the Lenders will confirm
in writing the Administrative Agent’s authority to release any Guarantor from
its obligations under the Subsidiary Guaranty pursuant to this Section 10.09.

 

10.10                     Other Agents.  None of the Lenders identified on the
facing page or signature pages of this Agreement as a “syndication agent” or a
“documentation agent” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such.  Without limiting the foregoing, none of the Lenders so
identified as a “syndication agent” or a “documentation agent” shall have or be
deemed to have any fiduciary relationship with any Lender.  Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.01                     Amendments and Waivers.  No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent to any
departure by any Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Company and acknowledged by the
Administrative Agent, and each such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that no such amendment, waiver or consent shall:

 

(a)                                  waive any condition set forth in
Section 5.01 without the written consent of each Lender;

 

(b)                                 extend or increase the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without
the written consent of such Lender;

 

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(c)                                  postpone any date fixed by this Agreement
or any other Loan Document for any payment (excluding mandatory prepayments, if
any) of principal, interest, fees or other amounts due to the Lenders (or any of
them) hereunder or under any other Loan Document without the written consent of
each Lender directly affected thereby;

 

(d)                                 reduce the principal of, or the rate of
interest specified herein on, any Loan or L/C Borrowing, or (subject to clause
(iv) of the proviso below) any fee or other amount payable hereunder or under
any other Loan Document without the written consent of each Lender directly
affected thereby; provided that only the consent of the Required Lenders shall
be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Company to pay interest at the Default Rate;

 

(e)                                  change any provision of this Section or the
definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;

 

(f)                                    amend Section 2.15 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender; or

 

(g)                                 release all or substantially all of the
Guarantors from the Subsidiary Guaranty without the written consent of each
Lender;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the applicable Issuer in addition to the Required Lenders
and/or each directly-affected Lender, as the case may be, affect the rights or
duties of such Issuer under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Required Lenders and/or each directly-affected
Lender, as the case may be, affect the rights or duties of the Swing Line Lender
under this Agreement; (iii) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Required
Lenders and/or each directly-affected Lender, as the case may be, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letters may be amended, or rights or privileges
thereunder waived, in a writing executed only by the respective parties
thereto.  Notwithstanding anything to the contrary in this Agreement, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
modification, waiver or consent hereunder, except that (x) the Commitment of
such Defaulting Lender may not be increased or extended without the consent of
such Defaulting Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms directly
affects any Defaulting Lender more adversely (other than as a result of the
relative size of its Commitment) than other affected Lenders shall require the
consent of such Defaulting Lender.

 

11.02                     Notices.  (a)   All notices, requests, consents,
approvals, waivers and other communications shall be in writing (including,
unless the context expressly otherwise provides, by facsimile transmission or
(subject to Section 11.02(c) below) electronic mail, provided that any matter
transmitted by the Company by facsimile (i) shall be immediately confirmed by a

 

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telephone call to the recipient at the number specified on Schedule 11.02 or, in
the case of a Lender, in such Lender’s Administrative Questionnaire), and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, emailed, faxed or delivered, to the address or facsimile number
specified for notices on Schedule 11.02 (or, in the case of a Lender, in such
Lender’s Administrative Questionnaire); or, as directed to the Company or the
Administrative Agent, to such other address as shall be designated by such party
in a written notice to the other parties, and as directed to any other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Administrative Agent.

 

(b)                                 All such notices, requests and
communications shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or transmitted in
legible form by facsimile machine, respectively, or if mailed, upon the third
Business Day after the date deposited into the U.S. mail, or if delivered, upon
delivery; except that notices pursuant to Article II, III or X to the
Administrative Agent shall not be effective until actually received by the
Administrative Agent, and notices pursuant to Article III to an Issuer shall not
be effective until actually received by such Issuer at the address specified on
Schedule 11.02.

 

(c)                                  Notices, requests and communications to the
Lenders and the Issuers may be delivered or furnished by electronic
communication (including electronic mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or any Issuer pursuant to
Article II or Article III if such Lender or such Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices
under such Article II or  Article III by electronic communication.  The
Administrative Agent or the Company may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

 

(d)                                 Unless the Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an electronic mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return electronic mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed to
have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor

 

(e)                                  Any agreement of the Administrative Agent
and the Lenders herein to receive certain notices by telephone, facsimile or
electronic mail is solely for the convenience and at the request of the
Company.  The Administrative Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Administrative Agent and the Lenders shall not have
any liability to the Company or other Person on account of any action taken or
not taken by the Administrative

 

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Agent or the Lenders in reliance upon such telephonic or facsimile notice.  The
obligation of the Company to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Administrative Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.

 

(f)                                    The effectiveness of any Loan Document
transmitted and/or signed by facsimile or electronic mail (in PDF) and
signatures shall, subject to applicable law, have the same force and effect as
manually-signed originals and shall be binding on all Loan Parties, the
Administrative Agent and the Lenders.  The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided that the failure to request or deliver the same shall
not limit the effectiveness of any facsimile or electronic mail (PDF) document
or signature.

 

11.03                     No Waiver; Cumulative Remedies.  No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder, 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.

 

11.04                     Costs and Expenses.  The Company shall:

 

(a)                                  whether or not the transactions
contemplated hereby are consummated, pay or reimburse each Lead Agent within
five Business Days after demand (subject to subsection 5.01(e)) for all
reasonable out-of-pocket costs and expenses incurred by such Lead Agent in
connection with the development, preparation, delivery, administration,
syndication and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other document prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs of a single counsel to the Lead
Agents (except to the extent that any Lead Agent or such counsel determines that
separate counsel is necessary to avoid a conflict of interest);

 

(b)                                 pay or reimburse each Lead Agent and each
Lender within five Business Days after demand (subject to subsection 5.01(e))
for all reasonable out-of-pocket costs and expenses (including Attorney Costs of
a single counsel, except to the extent that any Lead Agent, any Lender or such
counsel determines that separate counsel is necessary to avoid a conflict of
interest) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any right or remedy under this Agreement or any
other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any “workout” or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding); and

 

(c)                                  pay or reimburse JPMorgan (including in its
capacity as the Administrative Agent) within five Business Days after demand
(subject to subsection 5.01(e)) for all reasonable appraisal (including the
allocated cost of internal appraisal services), audit,

 

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environmental inspection and review (including the allocated cost of such
internal services), search and filing costs, fees and expenses, incurred or
sustained by JPMorgan (including in its capacity as the Administrative Agent) in
connection with the matters referred to under subsections (a) and (b) of this
Section.

 

11.05                     Company Indemnification.  Whether or not the
transactions contemplated hereby are consummated, the Company shall indemnify,
defend and hold each Lead Agent, its Related Parties and each Lender and each of
its respective Affiliates, officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an “Indemnified Person”) harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following repayment of the Loans, the termination of the Letters of Credit
or the Commitments and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender or assignment by any Lender of
its Loans or Commitments) be imposed on, incurred by or asserted against any
Indemnified Person in any way relating to or arising out of this Agreement or
any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Loans
or Letters of Credit or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”); provided that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent resulting from the gross negligence or willful misconduct of such
Indemnified Person.  The agreements in this Section shall survive payment of all
other Obligations.

 

11.06                     Marshalling; Payments Set Aside.  Neither the
Administrative Agent nor any Lender shall be under any obligation to marshall
any assets in favor of the Company or any other Person or against or in payment
of any or all of the Obligations.  To the extent that the Company makes a
payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.

 

11.07                     Successors and Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lead Agent and each Lender.

 

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11.08                     Assignments, Participations, etc.  (a)   Any Lender
may, with the written consent of the Company (at all times other than during the
existence of an Event of Default), the Administrative Agent, the Swing Line
Lender and the Issuers, which consents shall not be unreasonably withheld or
delayed, at any time assign and delegate to one or more Eligible Assignees (each
an “Assignee”) all, or any part of all, of the Loans, the Commitments, the L/C
Obligations and the other rights and obligations of such Lender hereunder, in a
minimum amount (other than with respect to an assignment to an Eligible Assignee
that is a Lender or an Affiliate or an Approved Fund of such assigning Lender)
of $5,000,000 or, if less, the total amount of such Lender’s outstanding Loans
and/or Commitments (provided that no written consent of the Company, the
Administrative Agent, the Swing Line Lender or either Issuer shall be required
in connection with any assignment and delegation by a Lender to an Eligible
Assignee that is a Lender or an Affiliate or Approved Fund of such assigning
Lender); provided that the Company and the Administrative Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Company and the Administrative Agent by
such Lender and the Assignee; (ii) such Lender and its Assignee shall have
delivered to the Company and the Administrative Agent an Assignment and
Acceptance in the form of Exhibit C (“Assignment and Acceptance”) and (iii) the
assignor Lender or Assignee has paid to the Administrative Agent a processing
fee in the amount of $3,500; provided further that no such assignment shall be
made to any Defaulting Lender or any of its Subsidiaries, or any Person that,
upon becoming a Lender hereunder, would be a Defaulting Lender.  Each Assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire in which the assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Company, the other Loan Parties and their
related parties or their respective securities) will be made available and who
may receive such information in accordance with such Assignee’s compliance
procedures and applicable laws, including federal and state securities laws.

 

(b)                                 From and after the date that the
Administrative Agent notifies the assignor Lender that it has received (and, if
required, provided its consent with respect to) an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder (including any obligation under Section 10.10) have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents; provided that, except to the extent otherwise expressly agreed
by the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from such Lender’s
having been a Defaulting Lender.

 

(c)                                  Within five Business Days after its receipt
of notice by the Administrative Agent that it has received an executed
Assignment and Acceptance and payment of the processing fee (and, if required,
provided that it consents to such assignment in accordance with subsection
11.08(a)), the Company shall execute and deliver to the Administrative Agent, to
the extent requested by the applicable Assignee, a Note evidencing such
Assignee’s purchased

 

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Loans and Commitment.  Immediately upon each Assignee’s making its processing
fee payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom.  The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.

 

(d)                                 In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the Company and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by such
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, each Issuer,
the Swing Line Lender and each other Lender hereunder (and interest accrued
thereon), and (y) acquire (and fund as appropriate) its full pro rata share of
all Loans and participations in Letters of Credit and Swing Line Loans in
accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event
that any assignment of rights and obligations of any Defaulting Lender hereunder
shall become effective under applicable law without compliance with the
provisions of this paragraph, then the assignee of such interest shall be deemed
to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

 

(e)                                  Any Lender may at any time sell to one or
more commercial banks (other than a Defaulting Lender) or other Persons not
Affiliates or Specified Competitors of the Company (a “Participant”)
participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the “originating Lender”) hereunder and under
the other Loan Documents; provided that (i) the originating Lender’s obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Company, each Issuer, the Swing Line Lender and the Administrative Agent shall
continue to deal solely and directly with the originating Lender in connection
with the originating Lender’s rights and obligations under this Agreement and
the other Loan Documents and (iv) no Lender shall transfer or grant any
participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Lenders as described in clause (a) (but
only in respect of any increase of any Commitment of any originating Lender),
(b) or (e) of the first proviso to Section 11.01. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections
4.01, 4.03 and 11.05 as though it were also a Lender hereunder, and if amounts
outstanding under this Agreement are due and 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 set-off 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
Lender under this Agreement.

 

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(f)                                    Notwithstanding any other provision in
this Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement
and the Note held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR §203.14, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.

 

11.09                     Confidentiality.  (a) Each Lender agrees to take and
to cause its Affiliates to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all information identified as
“confidential” by the Company and provided to it by the Company or any
Subsidiary, or by the Administrative Agent on the Company’s or such Subsidiary’s
behalf, under this Agreement or any other Loan Document (“Information”), and
neither it nor any of its Affiliates shall use any Information other than in
connection with or in enforcement of this Agreement and the other Loan Documents
or in connection with other business now or hereafter existing or contemplated
with the Company or any Subsidiary, except to the extent such Information
(i) was or becomes generally available to the public other than as a result of
disclosure by any Lender; or (ii) was or becomes available on a 
non-confidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company known to any
Lender; provided that any Lender may disclose such Information (A) at the
request or pursuant to any requirement of any Governmental Authority to which
the Lender is subject or in connection with an examination of such Lender by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Administrative Agent, any Lender or their
respective Affiliates may be party; (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document; (F) to such Lender’s independent auditors and other professional
advisors; (G) to any Participant or Assignee, actual or potential, provided that
such Person agrees to keep such Information confidential to the same extent
required of the Lenders hereunder; (H) as to any Lender or its Affiliate, as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Lender or such Affiliate; (I) to its Affiliates; and (J) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about such Lender’s investment portfolio in connection with ratings issued with
respect to such Lender.

 

(b)                                 EACH LENDER ACKNOWLEDGES THAT INFORMATION AS
DEFINED IN SECTION 11.09(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT
MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND  ITS
RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS
DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC
INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.

 

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(c)                                  ALL INFORMATION, INCLUDING REQUESTS FOR
WAIVERS AND AMENDMENTS, FURNISHED BY THE COMPANY OR THE ADMINISTRATIVE AGENT
PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE
SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION
ABOUT THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE COMPANY AND THE
ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.

 

11.10                     Set-off.  In addition to any rights and remedies of
the Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to time,
with the prior consent of the Administrative Agent but without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the Company against any and all Obligations owing to such Lender, now
or hereafter existing, irrespective of whether or not the Administrative Agent
or such Lender shall have made demand under this Agreement or any Loan Document
and although such Obligations may be contingent or unmatured; provided that if
any Defaulting Lender shall exercise any such right of set-off, (a) all amounts
so set off shall be paid over immediately to the Administrative Agent for
further application in accordance with the provisions of Section 2.19 and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Administrative
Agent, each Issuer and the Lenders, and (y) the Defaulting Lender shall provide
promptly to the Administrative Agent a statement describing in reasonable detail
the obligations of the Loan Party as to which it exercised such right of
set-off.  Each Lender agrees promptly to notify the Company after any such
set-off and application made by such Lender or such Affiliate; provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

11.11                     Automatic Debits of Fees.  With respect to any
principal or interest due on the Loans, unreimbursed L/C Obligation, facility
fee, arrangement fee, letter of credit fee or other fee, or any other cost or
expense (including Attorney Costs) due and payable to any Lead Agent under the
Loan Documents, the Company hereby irrevocably authorizes JPMorgan to debit any
deposit account of the Company with JPMorgan or any of its Affiliates in an
amount such that the aggregate amount debited from all such deposit accounts
does not exceed such fee or other cost or expense.  If there are insufficient
funds in such deposit accounts to cover the amount of the fee or other cost or
expense then due, such debits will be reversed (in whole or in part, in such
Lead Agent’s sole discretion) and such amount not debited shall be deemed to be
unpaid.  No such debit under this Section shall be deemed a set-off.

 

11.12                     Notification of Addresses, Lending Offices, Etc.  Each
Lender shall notify the Administrative Agent in writing of any changes in the
address to which notices to such Lender should be directed, of addresses of any
Lending Office, of payment instructions in respect of all

 

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payments to be made to it hereunder and of such other administrative information
as the Administrative Agent shall reasonably request.

 

11.13                     Counterparts.  This Agreement may be executed in any
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.  Delivery of an executed
counterpart hereof by facsimile or in .pdf format shall be effective as delivery
of a manually executed counterpart hereof.

 

11.14                     Severability.  The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.  Without limiting the foregoing provisions of this
Section 11.14, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability, as
determined in good faith by the Administrative Agent, an Issuer or a Swing Line
Lender, as applicable, then such provisions shall be deemed to be in effect only
to the extent not so limited.

 

11.15                     No Third Parties Benefited.  This Agreement is made
and entered into for the sole protection and legal benefit of the Company, the
Lenders and the Lead Agents and their respective Related Parties, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.

 

11.16                     GOVERNING LAW AND JURISDICTION.  (A)  THIS AGREEMENT
AND  EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAW OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICTS OF
LAW PROVISIONS THEREOF); PROVIDED THAT THE COMPANY, THE ADMINISTRATIVE AGENT AND
THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(B)                                ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE
COMPANY, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO.  EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER

 

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PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.

 

11.17                     WAIVER OF JURY TRIAL.  EACH OF THE COMPANY, EACH
LENDER AND THE ADMINISTRATIVE AGENT WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY, ANY RELATED PARTY OF THE
ADMINISTRATIVE AGENT, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE.  EACH OF THE COMPANY, EACH LENDER AND THE
ADMINISTRATIVE AGENT AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. 
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENT, RENEWAL, SUPPLEMENT OR
MODIFICATION TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

11.18                     Judgment.  If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or under any other
Loan Document in one currency into another currency, 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 that on which final judgment is given.  The
obligation of the Company in respect of any such sum due from it to the
Administrative Agent or any Lender hereunder or under the other Loan Documents
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 (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender 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 the Administrative Agent or such Lender in the Agreement
Currency, the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Administrative Agent or such Lender or the
Person to whom such obligation was owing against such loss.  If the amount of
the Agreement Currency so purchased is greater than the sum originally due to
the Administrative Agent or such Lender in such currency, the Administrative
Agent or such Lender agrees to return the amount of any excess to the Company
(or to any other Person who may be entitled thereto under applicable law).

 

11.19                     Entire Agreement.  This Agreement, together with the
other Loan Documents, embodies the entire agreement and understanding among the
Company, the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and

 

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understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.

 

11.20                     Euro Currency.  (a)   If at any time that an Offshore
Currency Loan is outstanding, the relevant Offshore Currency is replaced as the
lawful currency of the country that issued such Offshore Currency (the “Issuing
Country”) by the Euro then such Offshore Currency Loan shall be automatically
converted into a Loan denominated in Euros in a principal amount equal to the
amount of Euros into which the principal amount of such Offshore Currency Loan
would be converted pursuant to the laws of the Issuing Country and thereafter
(i) no further Loans will be available in such Offshore Currency and (ii) all
references in the Loan Documents to such Offshore Currency shall be deemed to be
the Euro.

 

(b)                                 The Company agrees, at the request of any
Lender, to compensate each Lender for any loss, cost, expense or reduction in
return that such Lender shall reasonably determine shall be incurred or
sustained by such Lender as a result of the implementation of the European
Monetary Union and the Euro and that would not have been incurred or sustained
by such Lender but for the transactions provided for herein.  A certificate of
any such Lender setting forth such Lender’s determination of the amount or
amounts necessary to compensate such Lender shall be delivered to the
Administrative Agent for delivery to the Company and shall be conclusive absent
manifest error so long as such determination is made by such Lender on a
reasonable basis.  The Company shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.  The agreements and
obligations of the Company in this Section 11.20 shall survive the payment of
all obligations.

 

11.21                     Effect of Amendment and Restatement.  The Company, the
Lenders that are parties to the Existing Credit Agreement (which constitute
“Required Lenders” under and as defined in the Existing Credit Agreement),
JPMorgan, as administrative agent under the Existing Credit Agreement and as the
Administrative Agent agree that upon the effectiveness of this Agreement,
(a) the Existing Credit Agreement shall be amended and restated in the form
hereof (and, except for any provision of the Existing Credit Agreement that by
its terms survives any termination thereof, the Existing Credit Agreement shall
have no further force or effect); (b) the “Commitments” under the Existing
Credit Agreement shall be superseded and replaced by the Commitments hereunder
(and, except in its capacity as an Issuer or the Swing Line Lender, no “Lender”
under the Existing Credit Agreement shall have any obligation to make loans or
other credit extensions to the Company, or to buy participations therein, in
excess of its Commitment, if any, hereunder), without regard to any notice
requirement set forth in Section 2.07 of the Existing Credit Agreement; (c) the
outstanding “Revolving Loans” and participation interests in other credit
extensions under the Existing Credit Agreement shall be reallocated among the
Lenders so that, after giving effect to such reallocation, each Lender has the
proper principal amount of outstanding Loans and participation interests in
other credit extensions hereunder (giving effect to any fronting arrangements)
based upon its reallocated Commitment.

 

11.22                     USA PATRIOT Act Notice.  Each Lender that is subject
to the Act (as hereinafter defined) and the Administrative Agent (each for
itself and not on behalf of any Lender) hereby notifies the Company that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Company, which information
includes the name and

 

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address of the Company and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Company in accordance with
the Act.

 

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

 

 

REGIS CORPORATION

 

 

 

 

 

By:

/s/ Brent A. Moen

 

Title:

Senior Vice President and Chief Financial Officer

 

1

--------------------------------------------------------------------------------

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent, as an Issuer, as Swing Line Lender and as a Lender

 

 

 

 

 

By:

/s/ Krys Szremski

 

Title:

Vice President

 

2

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A.,

 

as Syndication Agent, as an Issuer and as a Lender

 

 

 

 

 

By:

/s/ Steven K. Kessler

 

Title:

Senior Vice President

 

3

--------------------------------------------------------------------------------

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. as a Lender

 

 

 

 

 

By:

/s/ Victor Pierzchalski

 

Title:

Authorized Signatory

 

4

--------------------------------------------------------------------------------

 

 

U.S. BANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By:

/s/ Mila Yakolev

 

Title:

Assistant Vice President

 

5

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, N.A., as a Lender

 

 

 

 

 

By:

/s/ Peter K. Kiedrowski

 

Title:

Director

 

6

--------------------------------------------------------------------------------

 

 

FIFTH THIRD BANK, as a Lender

 

 

 

 

 

By:

/s/ Gary Losey

 

Title:

Vice President Corporate Banking

 

7

--------------------------------------------------------------------------------

 

 

PNC BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By:

/s/ Alison L. Kirker

 

Title:

Credit Officer

 

8

--------------------------------------------------------------------------------

 

 

ROYAL BANK OF CANADA, as a Lender

 

 

 

 

 

By:

/s/ Dustin Craven

 

Title:

Attorney-in-Fact

 

9

--------------------------------------------------------------------------------

 

SCHEDULE 1.01(a)

 

PRICING SCHEDULE

 

The Applicable Margin for Offshore Rate Loans and for Base Rate Loans, the
Letter of Credit fee rate and the Applicable Facility Fee Percentage shall be
determined in accordance with the table below based on the applicable Leverage
Ratio (as determined in accordance with the most recent annual audited or
quarterly unaudited financial statements delivered pursuant to Section 7.1 and
the corresponding compliance certificate delivered pursuant to subsection
7.2(a) (the “Financials”)). As of the Effective Date, Level II shall apply. 
Adjustments, if any, to the Applicable Margin and the Applicable Facility Fee
Percentage shall be effective five Business Days after the earlier of (a) the
date on which the Company is required to file its Financials with the SEC and
(b)(i) in the case of the annual audited Financials, 90 days after the end of
each fiscal year of the Company, and (ii) in the case of the quarterly unaudited
Financials, 45 days after the end of each of the first three quarters of each
fiscal year of the Company; provided that if the Company fails to file any
Financials on a timely basis, Level IV shall apply until such Financials are
filed.

 

Level

 

Level I

 

Level II

 

Level III

 

Level IV

 

Leverage Ratio

 

<1.75 to 1.0

 

>1.75 to 1.0 and <2.25 to 1.0

 

>2.25 to 1.0 and <2.75 to 1.0

 

>2.75 to 1.0

 

Applicable Margin for Offshore Rate Loans/ Letter of Credit Fee Rate (bps)

 

125.0

 

145.0

 

165.0

 

185.0

 

Applicable Margin for Base Rate Loans (bps)

 

25.0

 

45.0

 

65.0

 

85.0

 

Applicable Facility Fee Percentage (bps)

 

25.0

 

30.0

 

35.0

 

40.0

 

 

If, as a result of any restatement of or other adjustment to Financials or for
any other reason, the Lenders determine that (a) the Leverage Ratio as
calculated by the Company as of any applicable date was inaccurate and (b) a
proper calculation of the Leverage Ratio would have resulted in different
pricing for any period, then (i) if the proper calculation of the Leverage Ratio
would have resulted in higher pricing for such period, the Company shall
automatically and retroactively be obligated to pay to the Administrative Agent
for the benefit of the Lenders, promptly following demand by the Administrative
Agent (accompanied by supporting materials (which may be in the form of
Financials prepared by the Company or the Company’s independent auditors)), an
amount equal to the excess of the amount of interest and fees that should have
been paid for such period over the amount of interest and fees actually paid for
such period; and (ii) if the proper calculation of the Leverage Ratio would have
resulted in lower pricing for such period, the Lenders shall have no obligation
to repay any interest or fees to the Company; provided that if, as a result of
any restatement or other event a proper calculation of the Leverage Ratio would
have resulted in higher pricing for one or more periods and lower pricing for
one or more other periods (due to the shifting of income or expenses from one
period to another period or any similar reason), then the amount payable by the
Company pursuant to clause (i) above shall be based upon the excess, if any, of
the amount of interest and fees that should have been paid for all applicable
periods over the amount of interest and fees paid for all such periods.

 

--------------------------------------------------------------------------------

 

SCHEDULE 1.01(b)

 

EXISTING LETTERS OF CREDIT

 

ISSUER

 

L/C #

 

BENEFICIARY

 

EXPIRY DATE

 

STATED 
AMOUNT

 

Bank of America, N.A.

 

68030544

 

Hartford Fire insurance

 

July 1, 2012

 

$

22,200,000

 

Bank of America, N.A.

 

68030545

 

Atlantic Mutual

 

July 1, 2012

 

$

1,250,000

 

Bank of America, N.A.

 

68030653

 

Progress Energy

 

July 1, 2011

 

$

50,000

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 2.01

 

COMMITMENTS AND PRO RATA SHARES

 

Lenders

 

Commitment

 

Pro Rata Share

 

JPMorgan Chase Bank, N.A.

 

$

75,000,000

 

18.75

%

Bank of America, N.A.

 

$

75,000,000

 

18.75

%

The Bank of Tokyo Mitsubishi UFJ, Ltd.

 

$

55,000,000

 

13.75

%

U.S. Bank National Association

 

$

55,000,000

 

13.75

%

Wells Fargo Bank, N.A.

 

$

50,000,000

 

12.50

%

Fifth Third Bank

 

$

40,000,000

 

10.00

%

PNC Bank, National Association

 

$

25,000,000

 

6.25

%

Royal Bank of Canada

 

$

25,000,000

 

6.25

%

TOTAL

 

$

400,000,000

 

100.00

%

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.11

 

FINANCIAL CONDITION

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.12

 

ENVIRONMENTAL MATTERS

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.17

 

SUBSIDIARIES

 

Subsidiaries of
Regis Corporation

 

Jurisdiction

 

% Ownership
Structure

 

 

 

 

 

 

1.

The Barbers, Hairstyling for Men & Women, Inc.

 

Minnesota

 

100.00% Regis Corporation

 

A. WCH, Inc.*

 

Minnesota

 

100.00% The Barbers, Hairstyling for Men & Women, Inc.

 

1. We Care Hair Realty, Inc.*

 

Delaware

 

100.00% WCH, Inc.

 

 

 

 

 

 

2.

Supercuts, Inc.

 

Delaware

 

100% Regis Corporation

 

A. Supercuts Corporate Shops, Inc.

 

Delaware

 

100% Supercuts, Inc.

 

B. Tulsa’s Best Haircut LLC

 

Oklahoma

 

50% Supercuts, Inc.

 

 

 

 

 

 

3.

RPC Acquisition Corp.

 

Minnesota

 

100.00% Regis Corporation

 

A. RPC Corporate Shops, Inc.

 

Minnesota

 

100% RPC Acquisition Corp

 

 

 

 

 

 

4.

Regis Corp.

 

Minnesota

 

100.00% Regis Corporation

 

 

 

 

 

 

5.

Regis Insurance Group, Inc.

 

Vermont

 

100.00% Regis Corporation

 

 

 

 

 

 

6.

 Regis, Inc.

 

Minnesota

 

100.00% Regis Corporation

 

 

 

 

 

 

7.

First Choice Haircutters International Corp.

 

Delaware

 

100.00% Regis Corporation

 

 

 

 

 

 

8.

Cutco Acquisition Corp.

 

Minnesota

 

100.00% Regis Corporation

 

A. Great Expectations Precision Haircutters Of Evans Towne Center, Inc*

 

 

 

100.00% Cutco Acquisition Corp.

 

B. Great Expectations Precision Haircutters of Northlake Mall, Inc*

 

 

 

100.00% Cutco Acquisition Corp.

 

 

 

 

 

 

9.

Regis International Ltd.

 

Minnesota

 

100.00% Regis Corporation

 

 

 

 

 

 

10.

N.A.H.C. Acquisition LLC*

 

Minnesota

 

100.00% Regis Corporation

 

 

 

 

 

 

11.

EEG, Inc.

 

Delaware

 

55.10% Regis Corporation

 

 

 

 

 

 

12.

HC (USA), Inc.

 

Delaware

 

100.00% Regis Corporation

 

1. HCM Industries, Inc.

 

Florida

 

100.00% HC (USA), Inc.

 

2. Hair Club for Men, Ltd., Inc.

 

Florida

 

100.00% HC (USA), Inc.

 

a. Hair Club for Men, LLC

 

Delaware

 

100.00% Hair Club for Men, Ltd., Inc.

 

i. HCMG, LLC

 

Delaware

 

100.00% Hair Club for Men, LLC

 

b. HCA Advertising Services, Inc.

 

New York

 

100.00% Hair Club for Men, Ltd., Inc.

 

c. Hair Club for Men, Ltd.

 

Delaware

 

100.00% Hair Club for Men, Ltd., Inc.

 

d. 3115038 Canada, Inc.

 

Canada Federal

 

100.00% Hair Club for Men, Ltd., Inc.

 

e. Hair Club for Men, Ltd.

 

Illinois

 

50.00% Hair Club for Men, Ltd., Inc.

 

f. Hair Club for Men of Milwaukee, Ltd.

 

Wisconsin

 

50.00% Hair Club for Men, Ltd., Inc.

 

g. TTEM, LLC*

 

Delaware

 

100.00% Hair Club for Men, Ltd., Inc.

 

h. HCMA Staffing, LLC

 

Delaware

 

100.00% Hair Club for Men, Ltd., Inc.

 

 

 

 

 

 

13.

Salon Management Corporation

 

California

 

100.00% Regis Corporation

 

--------------------------------------------------------------------------------

 

Subsidiaries of
Regis Corporation

 

Jurisdiction

 

% Ownership
Structure

 

 

 

 

 

 

 

A. Salon Management Corporation of New York*

 

New York

 

100.00% Salon Management Corporation

 

 

 

 

 

 

14.

Regis Netherlands, Inc

 

Minnesota

 

100.00% Regis Corporation

 

 

 

 

 

 

15.

Roger Merger Subco LLC

 

Delaware

 

100.00% Regis Corporation

 

 

 

 

 

 

16.

RGS International SNC

 

Luxemburg

 

99.99% Regis Corporation

 

 

 

 

 

00.01% Roger Merger Subco, LLC

 

A. Regis International Holdings SARL

 

Luxemburg

 

100.00% RGS International SNC

 

1. Regis Holdings (Canada), Ltd

 

Nova Scotia

 

100.00% Regis International Holdings SARL

 

a. First Choice Haircutters, Ltd

 

Nova Scotia

 

100.00% Regis Holdings (Canada), Ltd

 

b. Magicuts, Ltd

 

Nova Scotia

 

100.00% Regis Holdings (Canada), Ltd

 

2. RHS Netherlands Finance B.V.

 

Netherlands

 

100.00% Regis International Holdings SARL

 

3. RHS Netherlands Holdings B.V.

 

Netherlands

 

100.00% Regis International Holdings SARL

 

a. RHS UK Holdings Ltd*

 

United Kingdom

 

100.00% RHS Netherlands Holdings BV

 

1. Haircare Ltd*

 

United Kingdom

 

100.00% RHS UK Holdings Ltd

 

i. Haircare Gmbh

 

Germany

 

100.00% Haircare Ltd

 

ii. York Ave Beauty Salons

 

Canada

 

50.00% Haircare Ltd

 

iii. Sagestyle Ltd*

 

United Kingdom

 

100.00% Haircare Ltd

 

iv. Haircare UK Ltd*

 

United Kingdom

 

100.00% Haircare Ltd

 

v. Regis UK Limited

 

United Kingdom

 

100.00% Haircare Ltd

 

A. 8 Inactive Subsidiaries*

 

United Kingdom

 

100.00% Regis UK Limited

 

B. Blinkers Group, Ltd*

 

United Kingdom

 

100.00% Regis UK Limited

 

1. Blinkers Property, Ltd*

 

United Kingdom

 

100.00% Blinkers Group, Ltd

 

2. HCUK Hair, Ltd*

 

United Kingdom

 

100.00% RHS UK Holdings Ltd

 

4. Regis Merger SARL

 

Luxemburg

 

100.00% Regis International SNC

 

a. Regis Netherlands Merger BV

 

Netherlands

 

100.00% Regis Merger SARL

 

b. Provalliance, SAS

 

France

 

30.00% Regis Merger SARL

 

c. Provost Participations SAS

 

France

 

Regis Merger SARL

 

 

 

 

 

 

17.

 Mark Anthony, Inc.

 

North Carolina

 

100.00% Regis Corporation

 

--------------------------------------------------------------------------------

 

*Inactive Entities

 

 

 

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.01

 

PERMITTED LIENS

 

SCHEDULE 8.01

 

PERMITTED LIENS

 

Regis Corporation

 

Regis Corporation and certain Subsidiaries have granted numerous liens in favor
of PNC Bank, N.A. (“PNCEF”). Such liens are attached to various salon and
warehouse equipment and the Salt Lake Distribution Center.

 

The following UCC financing statements have been filed with the Minnesota
Secretary of State’s office with respect to Regis Corporation:

 

·                  Number 200717214325 in favor of Trimarc Financial, Inc.

 

·                  Number 200719407611 in favor of DJK Vista Ridge Management
L.L.C., 221 W 6th Street #1300, Austin, TX, 78701

 

·                  Number 200915991781 in favor of CIT Technology Financing
Services, Inc. 10201 Centurion Parkway N. #100, Jacksonville, FL 32256

 

·                  Number 200916345235 in favor of CIT Technology Financing
Services, Inc. 10201 Centurion Parkway N. #100, Jacksonville, FL 32256

 

·                  Number 200916345300 in favor of CIT Technology Financing
Services, Inc. 10201 Centurion Parkway N. #100, Jacksonville, FL 32256

 

·                  Number 200916345867 in favor of CIT Technology Financing
Services, Inc. 10201 Centurion Parkway N. #100, Jacksonville, FL 32256

 

·                  Number 200916998937 in favor of Pearland Town Center Limited
Partnership CBL & Associates Limited Partnership, 11200 Broadway St # 2751,
Pearland, TX 77584

 

·                  Number 201020773249 in favor of Noreast Capital Corporation,
428 Fourth Street #1, Annapolis, MD 21403

 

·                  Number 201021466517 in favor of Bankers Leasing Company, PO
Box 7740, Urbandale, IA 50323

 

The collateral for these filings are specific equipment provided by such
parties, and the aggregate amount owing to all such parties is less than $1
million.

 

The Barbers, Hairstyling for Men and Women

 

The following UCC financing statements have been filed with the Minnesota
Secretary of State’s office with respect to this entity:

 

--------------------------------------------------------------------------------

 

·                  Number 200916273412 in favor of Dudro Torrington, L.L.C., all
property located within or upon the premises known as 512 Winston Road,
Torrington, CT

 

The collateral for the foregoing financing statements we believe secures the
obligations of Regis Corp. under the lease for such premises.

 

Supercuts, Inc.

 

The following UCC financing statements have been filed with the Delaware
Secretary of State’s office with respect to this entity:

 

·                  Number 3564497 in favor of Vestar DRM OCO, L.L.C.: all
property located within or upon premises known as 21001 North Tatum Boulevard,
Suite TT-3, Desert Ridge Marketplace, Phoenix, AZ, 85050

 

·                  Number 32325234 in favor of Washington Place, LP: all
property located at 10117 East Washington St., Indianapolis, IN

 

·                  Number 41569765 in favor of Vestar Arizona XXXI, L.L.C.: all
property located within or upon the premises known as Shops J, Suite 103 Happy
Valley Town Center, Phoenix, AZ and real estate located in Meridian, Maricopa
County, AZ

 

·                  Number 3769724 in favor of Vestar California XXVI, L.L.C.:
all property located within or upon the premises known as Suite B, Building
C-6B, Pico Rivera Towne Center, Pico Rivera, California

 

·                  Number 1502452 in favor of Westbank Market, LP: all property
located within or upon the premises known as 3300 Bee Caves Road, Suite 775,
Austin TX 78746

 

The collateral for each of the foregoing five financing statements we believe
secures the obligations of Supercuts, Inc. under the lease for such premises.

 

Regis Corp.

 

The following UCC financing statement has been filed with the Minnesota
Secretary of State’s office with respect to this entity:

 

·                  Number 200719407611 in favor of DJK Vista Ridge Management,
L.L.C.: all property located within or upon the premises known as 2303 Ranch
Road 620 South, Lakeway, TX 78734

 

·                  Number 200810174011 in favor of WRI/Chino Hills, L.L.C.: all
property located within or upon the premises known as 4200 Chino Hills Parkway,
Suite 845, Chino Hills, CA 91709

 

·                  Number 200917978873 in favor of Uhlmann-Arlington, L.L.C.:
all property located within or upon the premises known as 4201 South Cooper
Street, Suite 133, Arlington, TX, 76015

 

--------------------------------------------------------------------------------

 

·                  Number 20108683747 in favor of West Frisco Properties, Ltd.,
Dallas Western Properties, Inc., G.P..: all property located within or upon the
premises known as 4851 Legacy Drive, Suite 306, Frisco, TX 75034

 

The collateral for each of the foregoing four financing statements we believe
secures the obligations of Regis Corp. under the lease for such premises.

 

Regis Inc.

 

The following UCC financing statement has been filed with the Minnesota
Secretary of State’s office with respect to this entity:

 

·                  Number 200814056355 in favor of Pitney Bowes Global Financial
Services, L.L.C.: all equipment manufactured, sold, distributed, or financed by
Pitney Bowes Inc.

 

The collateral for the foregoing financing statements we believe secures the
obligations of Regis Inc. under the lease for such premises.

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.04

 

INVESTMENTS

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.05

 

EXISTING DEBT

 

Senior Notes

 

Amount

 

Rate

 

Due

 

$

12,857,143

 

6.69

%

06/07/13

 

$

50,000,000

 

8.50

%

09/27/17

 

$

75,000,000

 

8.50

%

12/27/17

 

 

Syndicated Revolving Credit Facilities

 

Amount

 

Rate

 

Due

 

$

0

 

LIBOR + 2.25%

 

07/12/12

 

 

Convertible Notes

 

Amount

 

Rate

 

Due

 

$

172,500,000

 

5.00

%

07/14/14

 

 

Other Debt

 

PNC Leases

 

$

22,225,486

 

Other (including acquired)

 

$

1,472,585

 

 

Other Contingent Obligations

 

Guarantees for Line of Credit on behalf of Empire

 

$

2,459,345

 

 

Other Letters of Credit — Various Jean Louis David Lessors

 

303 Park Avenue South Associates

 

$

30,000

 

52nd Lex Co.

 

$

84,000

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 11.02

 

ADMINISTRATIVE AGENT’S PAYMENT OFFICE; CERTAIN ADDRESSES FOR NOTICES

 

JPMORGAN CHASE BANK, as Administrative Agent:

 

For Borrowing Notices and Payments in U.S. Dollars:

 

JPMorgan Chase Bank, N.A.

Loan and Agency Services

10 South Dearborn Street, 7th Floor

Chicago, Illinois 60603

Mail Code IL1-0010

Attention:  Nida G. Mischke

Facsimile:  (312) 385-7096

 

with a copy to

 

JPMorgan Chase Bank, N.A.

10 South Dearborn Street

Chicago, Illinois 60603

Mail Code IL1-0364

Attention:  Krys Szremski

Facsimile:  (312) 325-3239

 

For Borrowing Notices and Payments in Offshore Currencies:

 

JP Morgan Europe Limited

Loan & Agency Services

125 London Wall, London EC2Y 5AJ

Attention:  Sue Dalton

Facsimile:  44 (0) 207 777 2360

E-mail:  sue.r.dalton@jpmchase.com

 

JPMORGAN CHASE BANK, N.A., as an Issuer

 

(for Letter of Credit Issuances, Amendments, etc.)

 

10 South Dearborn Street, Chicago, Illinois 60603

Attention: Stacy Slaton

Telephone: 312-732-2548

Facsimile:   312-385-7107

Email: Chicago.lc.agency.closing.team@jpmchase.com

 

--------------------------------------------------------------------------------

 

BANK OF AMERICA, N.A., as an Issuer

(for Letter of Credit Issuances, Amendments, etc.)

 

Bank of America, N.A.

Attention: Prasanna Anna

CSR/Associate

2001 Clayton Rd. Bldg. B

Concord, CA. 94520

Telephone: 415-436-3685 ext. 62067

Facsimile: 214-290-9519

 

with a copy to

 

Bank of America, N.A.

Attention: Gail Mistretta

IL1-135-04-61

135 S. LaSalle St.

Chicago, Il  60603

Telephone: 312-992-6380

Facsimile:  312-453-4795

 

COMPANY:

 

Regis Corporation

7201 Metro Boulevard

Edina, Minnesota 55349

Attention: Director of Treasury

Facsimile: (952) 947-7701

 

--------------------------------------------------------------------------------

 

[REGIS LETTERHEAD]

 

EXHIBIT A

 

Notice of Borrowing/Conversion/Continuation

 

DATE:                           

 

Via Facsimile Transmission:                   

JPMorgan Chase Bank, N.A.

[ADDRESS]

Attention:

 

Re:

 

Regis Corporation/Fifth Amended and Restated Credit Agreement

 

 

dated as of [June 30], 2011 (the “Credit Agreement”)

 

 

Dear                                     :

 

We request a [Borrowing][conversion][continuation] of Loans as set forth below. 
[The proceeds of the applicable Borrowing should be wired as follows: [INSERT
WIRE TRANSFER INSTRUCTIONS]].

 

Prime Rate Option ([12 p.m. same-day notification)

 

 

Effective Date:

 

 

 

 

 

 

 

 

 

 

 

Current Balance:

 

 

 

 

 

 

 

 

 

 

 

Requested Advance (Payment) Amount:

 

 

 

 

 

 

 

 

 

 

 

Ending Balance:

 

 

 

 

 

 

 

 

 

LIBOR Rate Option (12 p.m. three/four business days notification)

 

 

 

 

 

 

 

 

 

 

 

Effective Date:

 

 

 

 

 

 

 

 

 

 

 

Maturing Amount:

 

 

 

 

 

 

 

 

 

 

 

Requested Increase (Decrease) Amt:

 

 

 

 

 

 

 

 

 

 

 

New LIBOR Amt:

 

 

 

 

 

 

 

 

 

 

 

Currency:

 

 

 

 

 

 

 

 

 

 

 

Interest Period:

 

 

(7 days/1, 2, 3, or 6 months)

 

 

 

 

 

 

 

 

Interest Period Maturity Date:

 

 

(to be completed by Agent)

 

 

 

 

 

 

 

 

All-In Rate:

 

 

(to be completed by Agent)

 

--------------------------------------------------------------------------------

 

The undersigned hereby certifies that before and after giving effect to the
action herein requested:  (1)  The representations and warranties contained in
Article VI of the Credit Agreement are true and correct in all material respects
as though made on and as of the date hereof (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
such representations and warranties are true and correct as of such earlier
date); (2) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and (3) the action requested herein
will not cause the Effective Amount of all outstanding Loans and of all L/C
Obligations to exceed the Aggregate Commitment.

 

Sincerely,

 

REGIS CORPORATION

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF COMPLIANCE CERTIFICATE

 

JPMorgan Chase Bank, N.A., as Administrative Agent
for the Lenders party to the Credit
Agreement referred to below
[ To be inserted  ]
Attn:

 

Ladies and Gentlemen:

 

This certificate is furnished to you by Regis Corporation (the “Company”),
pursuant to Section 7.02(a) of the Fifth Amended and Restated Credit Agreement,
dated as of June [30], 2011, among the Company, the several financial
institutions from time to time party thereto (the “Lenders”), Bank of America,
N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative
agent  (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), concurrently with the delivery of the financial
statements required pursuant to Section 7.01 of  the Credit Agreement. 
Capitalized terms but not defined herein have the respective meanings set forth
in the Credit Agreement.

 

The undersigned, on behalf of the Company, hereby certifies that:

 

I.              no Default or Event of Default has occurred and is continuing,
except as described in Attachment 1 hereto;

 

II.            the financial data and computations set forth in Schedule 1
below, evidencing compliance with the covenants set forth in Sections 8.01,
8.02, 8.04, 8.05(d), 8.08, 8.14, 8.15, 8.16 and 8.18 of the Credit Agreement are
true and correct as of                                 ,          (1) (the
“Computation Date”); and

 

III.           if the financial statements of the Company being concurrently
delivered were not prepared in accordance with GAAP, Attachment 2 hereto sets
forth any derivations required to conform the relevant data in such financial
statements to the computations set forth below.

 

--------------------------------------------------------------------------------

(1)           The last day of the accounting period for which financial
statements are being concurrently delivered.

 

--------------------------------------------------------------------------------

 

The foregoing certifications, together with the computations set forth in
Schedule 1 hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered as of  this
                 day of                             , 20    .

 

 

 

REGIS CORPORATION

 

 

 

 

By:

 

 

Name:

(2)

 

Title:

 

 

--------------------------------------------------------------------------------

(2)           To be executed by a Responsible Officer of the Company.

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

Computations

 

Section 8.01(i) Limitation on Liens

 

 

 

1.             Limitation (4% of Net Worth)(3)

 

$                        

 

2.             Actual permitted liens

 

$                        

 

 

 

 

 

Section 8.02(e) Disposition of Assets

 

 

 

1.             Permitted asset dispositions

 

$                        

 

2.             Actual asset dispositions for such period

 

$                        

 

 

 

 

 

Section 8.04(e) Loans and Investments

 

 

 

1.             Limitation (30% of Net Worth)(4)

 

$                        

 

2.             Actual Aggregate Investments

 

$                        

 

 

 

 

 

Section 8.05(d) Capital Leases

 

 

 

1.             Limitation on Indebtedness under Capital Leases

 

$50,000,000

 

2.             Actual Indebtedness under Capital Leases

 

$                        

 

 

 

 

 

Section 8.08(e) Contingent Obligations

 

 

 

1.             Limitation (7.5% of Net Worth)

 

$                        

 

2.             Actual Contingent Obligations

 

$                        

 

 

 

 

 

Section 8.14 Leverage Ratio

 

 

 

1.             Required:

 

3.00 to 1.0

 

2.             Actual:

 

 

 

(a)   Consolidated Funded Debt as of the date of determination*

 

$                        

 

(b)   EBITDA for the period of four fiscal quarters ending on the date of
determination*

 

$                        

 

Ratio of (a) to (b)

 

        to 1.0

 

 

 

 

 

Section 8.15 Fixed Charge Coverage Ratio

 

 

 

1.             Required:

 

1.30 to 1.0

 

2.             Actual:

 

 

 

(a)   EBITDAR for the period of four fiscal quarters ending on the date of
determination*

 

$                        

 

(b)   Fixed Charges for the period of four fiscal quarters ending on the date of
determination*

 

$                        

 

 

--------------------------------------------------------------------------------

(3)  Or, if less, the maximum amount of such secured Indebtedness that, when
aggregated with all other outstanding Priority Debt (within the meaning of the
Note Agreement), would be permitted under the Note Agreement

(4)  Investments in or to Persons outside the same or similar line of business
limited to 10% of Net Worth

 

--------------------------------------------------------------------------------

 

Ratio of (a) to (b)

 

        to 1.0

 

 

 

 

 

Section 8.16 Minimum Net Worth

 

 

 

1.             Required:

 

 

 

(a)   $850,000,000

 

$                        

 

(b)   25% of positive net income earned during each fiscal quarter commencing on
or after April 1, 2011

 

$                        

 

(c)   50% of net cash proceeds received from the issuance of equity securities
of the Company after the Effective Date.

 

$                        

 

Sum of (a), (b) and (c)

 

$                        

 

2.             Actual:

 

$                        

 

 

 

 

 

Section 8.18 Restricted Payments

 

 

 

1.             Leverage Ratio:

 

        to 1.0

 

2.             Limitation for trailing 12 months(5):

 

$                        

 

3.             Actual Restricted Payments made during trailing 12 months:

 

$                        

 

 

--------------------------------------------------------------------------------

*See attached detail

 

(5)  If Leverage Ratio is equal to or less than 2.25 to 1.0, no limitation; if
Leverage Ratio is greater than 2.25 to 1.0, but equal to or less than 2.50 to
1.0, limitation is $35,000,000; if Leverage Ratio is greater than 2.50:1.0,
limitation is $25,000,000.

 

--------------------------------------------------------------------------------

 

ATTACHMENT 1

 

DESCRIPTION OF ANY DEFAULTS OR EVENTS OF  DEFAULT

 

--------------------------------------------------------------------------------

 

ATTACHMENT 2

 

DERIVATIONS REQUIRED TO CONFORM RELEVANT DATA IF FINANCIAL
STATEMENTS WERE NOT PREPARED IN ACCORDANCE WITH GAAP

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor identified in item 1 below (the “Assignor”) and the Assignee identified
in item 2 below (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by the Assignor
to the Assignee pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”).  Each such sale and assignment is
without recourse to the Assignor and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by the Assignor.

 

1.

 

Assignor:

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

 

 

 

[and is an [Affiliate][Approved Fund] of [                    ]]

 

 

 

 

3.

 

Borrower:

Regis Corporation

 

 

 

 

4.

 

Administrative Agent:

JPMorgan Chase Bank, N.A., as the administrative agent under the Credit
Agreement

 

 

 

 

5.

 

Credit Agreement:

The Fifth Amended and Restated Credit Agreement dated as of [June 30], 2011
among Regis Corporation, the Lenders parties thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent

 

--------------------------------------------------------------------------------

 

6.

 

Assigned Interest:

 

 

Facility
Assigned

 

Aggregate Amount
of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Percentage Assigned
of
Commitment/Loans(6)

 

CUSIP
Number (if
any)

 

 

 

$

 

 

$

 

 

 

%

 

 

 

[7.

 

Trade Date:

                 ](7)

 

Effective Date:                                    , 20       [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

Title:

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

Title:

 

--------------------------------------------------------------------------------

(6)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

(7)  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

2

--------------------------------------------------------------------------------

 

[Consented to and](8) Accepted:

 

 

 

[JPMORGAN CHASE BANK, N.A.], as Administrative Agent

 

 

 

 

 

By

 

 

Title:

 

 

 

[Consented to:](9)

 

 

 

 

 

[JPMORGAN CHASE BANK, N.A.], as Swing Line Lender and an Issuer

 

 

 

 

 

By

 

 

Title:

 

 

 

 

 

[BANK OF AMERICA, N.A.], as an Issuer

 

 

 

 

 

By

 

 

Title:

 

 

 

 

 

[Consented to:](10)

 

 

 

REGIS CORPORATION

 

 

 

 

 

By

 

 

Title:

 

 

--------------------------------------------------------------------------------

(8)  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

(9)  To be added only if the consent of the Swing Line Lender and the Issuers
are required by the terms of the Credit Agreement.

(10)  To be added only if the consent of the Borrower is required by the terms
of the Credit Agreement.

 

3

--------------------------------------------------------------------------------

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.  Representations and Warranties.

 

1.1  Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all the
requirements to be an Eligible Assignee (subject to such consents, if any, as
may be required under the Credit Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the person exercising discretion in making its decision to acquire
the Assigned Interest, is experienced in acquiring assets of such type, (v) it
has received a copy of the Credit Agreement, and has received or has been
accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 7.01 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, (vi) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest, and (vii) if it is organized under the laws of a jurisdiction
other than that in which the Borrower is located, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

2.  Payments.  From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

--------------------------------------------------------------------------------

 

3.  General Provisions.  This Assignment and Assumption shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.  This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of Illinois.

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

CONFIRMATION

 

Dated as of June [30], 2011

 

To the Administrative Agent and the Lenders under and as defined in the Credit
Agreement referred to below

 

Please refer to the Fifth Amended and Restated Credit Agreement dated as of
[June 30], 2011 (the “Credit Agreement”), among Regis Corporation (the
“Company”), various financial institutions and JPMorgan Chase Bank, N.A., as
Administrative Agent.  Capitalized terms used but not defined herein are used as
defined in the Credit Agreement.

 

Each of the undersigned hereby confirms to the Administrative Agent and the
Lenders that, after giving effect to the effectiveness of the Credit Agreement,
the Subsidiary Guaranty (i) continues in full force and effect as a guaranty of
all obligations of the Company under the Existing Credit Agreement, all other
obligations of the Company created under the Credit Agreement, and all other
liabilities described in the Subsidiary Guaranty and (ii) continues to be a
legal, valid and binding obligation of such undersigned, enforceable against
such undersigned in accordance with its terms, subject to bankruptcy, insolvency
and similar laws affecting the enforceability of creditors’ rights generally and
to general principles of equity.

 

This Confirmation may be executed in any number of counterparts, which together
shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Confirmation by facsimile or email transmission shall be
effective as delivery of a manually executed counterpart of this Confirmation. 
This Confirmation shall be governed by, and construed in accordance with, the
law of the State of Illinois.

 

[signature page follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have executed this Confirmation by their
duly authorized officers as of the day and year first written above.

 

 

REGIS INC.

 

 

 

SUPERCUTS CORPORATE SHOPS, INC.

 

 

 

SUPERCUTS, INC.

 

 

 

THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.

 

 

 

REGIS CORP.

 

 

 

HAIR CLUB FOR MEN, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT E

 

COPY OF SUBSIDIARY GUARANTY

 

[See Attached]

 

3

--------------------------------------------------------------------------------

 

SUBSIDIARY GUARANTY

 

Dated as of July 12, 2007

 

FOR VALUE RECEIVED and in consideration of any loan or other financial
accommodation heretofore or hereafter at any time made or granted to REGIS
CORPORATION, a Minnesota corporation (the “Debtor”), the undersigned (each a
“Guarantor” and, together with each other Person that becomes a Guarantor by
executing a joinder agreement in the form of Exhibit B, collectively the
“Guarantors”) hereby, jointly and severally, absolutely, irrevocably and
unconditionally guarantee the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of (i) all “Obligations”
under and as defined in the Fourth Amended and Restated Credit Agreement dated
as of  July 12, 2007 (as restated, amended or otherwise modified from time to
time, the “Credit Agreement”; capitalized terms used but not defined herein
shall have the respective meanings set forth in the Credit Agreement) among the
Debtor, various financial institutions (the “Lenders”) and JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, the “Administrative Agent”),
and (ii) all obligations of the Debtor under any Rate Swap Document, in each
case whether direct or indirect, absolute or contingent, or now or hereafter
existing, or due or to become due (all such obligations being hereinafter
collectively called the “Guaranteed Obligations”), and the Guarantors further
agree to pay all expenses (including attorneys’ fees and legal expenses) paid or
incurred by any holder of any Guaranteed Obligation (each, a “Creditor”) in
endeavoring to collect the Guaranteed Obligations, or any part thereof, and in
enforcing this Subsidiary Guaranty; provided that each Guarantor shall only be
liable under this Subsidiary Guaranty for the maximum amount of such liability
that can be hereby incurred without rendering this Subsidiary Guaranty, as it
relates to such Guarantor, void or voidable under any applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount.
This Subsidiary Guaranty constitutes a guaranty of payment when due and not of
collection, and each Guarantor expressly agrees that it shall not be necessary
or required that any Creditor exercise any right, assert any claim or demand or
enforce any remedy whatsoever against the Debtor (or any other Person) before or
as a condition to the obligations of the Guarantors hereunder.

 

The Guarantors agree that, in the event of the dissolution or insolvency of the
Debtor or any Guarantor, or the inability of the Debtor or any Guarantor to pay
debts as they mature, or an assignment by the Debtor or any Guarantor for the
benefit of creditors, or the institution of any proceeding by or against the
Debtor or any Guarantor alleging that the Debtor or such Guarantor is insolvent
or unable to pay its debts as they mature, and if such event shall occur at a
time when an Event of Default has occurred and is continuing, but any or all of
the Guaranteed Obligations may not then be due and payable, the Guarantors will
pay to the relevant Creditor forthwith the full amount that would be payable
hereunder by the Guarantors if all Obligations were then due and payable.

 

In addition to collateral in which a security interest is granted pursuant to
the other Loan Documents to which any Guarantor is a party, if any, to secure
all obligations of the Guarantors hereunder, the Administrative Agent and the
Lenders shall have a lien upon and security interest in (and may, without demand
or notice of any kind, at any time and from time to time when any amount shall
be due and payable by the Guarantors hereunder, appropriate and apply toward the
payment of such amount, in such order of application as the Administrative Agent
may elect) any and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or moneys of or in the name of the
Guarantors now or hereafter with the Administrative Agent or any Lender and any
and all property of every kind or description of or in the name of any Guarantor

 

--------------------------------------------------------------------------------

 

now or hereafter, for any reason or purpose whatsoever, in the possession or
control of, or in transit to, the Administrative Agent or any Lender or any
agent or bailee for the Administrative Agent or any Lender.

 

This Subsidiary Guaranty shall in all respects be a continuing, absolute and
unconditional guaranty, and shall remain in full force and effect
(notwithstanding, without limitation, the dissolution of any Guarantor or that
at any time or from time to time all Guaranteed Obligations may have been paid
in full), subject to discontinuance as to any Guarantor only upon execution by
the Administrative Agent of a written notice, delivered in accordance with the
terms of the Credit Agreement, acknowledging the termination of all obligations
of such Guarantor arising hereunder.

 

The Guarantors further agree that, if at any time all or any part of any payment
theretofore applied by any Creditor to any of the Guaranteed Obligations is or
must be rescinded or returned by such Creditor for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Debtor or any Guarantor), such Guaranteed Obligations shall, for the
purposes of this Subsidiary Guaranty, to the extent that such payment is or must
be rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by such Creditor, and this Subsidiary Guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Guaranteed Obligations, all as though such application by such Creditor had not
been made.

 

Any Creditor may, from time to time, whether before or after any discontinuance
of this Subsidiary Guaranty, at its sole discretion and without notice to the
Guarantors, take any or all of the following actions: (a) retain or obtain a
security interest in any property of any third party to secure any of the
Guaranteed Obligations or any obligation hereunder; (b) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to the
Guarantors, with respect to any of the Guaranteed Obligations; (c) extend or
renew for one or more periods (whether or not longer than the original period),
alter, amend or exchange any of the Guaranteed Obligations or any of the
documentation pertaining thereto, or release or compromise any obligation of any
Guarantor hereunder or any obligation of any nature of any other obligor with
respect to any of the Guaranteed Obligations; (d) release its security interest
in, or surrender, release or permit any substitution or exchange for, all or any
part of any property securing any of the Guaranteed Obligations or any
obligation hereunder, or extend or renew for one or more periods (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property; and
(e) resort to any Guarantor for payment of any of the Guaranteed Obligations,
whether or not such Creditor (i) shall have resorted to any property securing
any of the Guaranteed Obligations or any obligation hereunder or (ii) shall have
proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Guaranteed Obligations (all of the actions referred to in
preceding clauses (i) and (ii) being hereby expressly waived by the Guarantors).

 

Any amount received by a Creditor from whatsoever source on account of the
Guaranteed Obligations may be applied by it toward the payment of such of the
Guaranteed Obligations, and in such order of application, as the Administrative
Agent shall determine.

 

Until such time as this Subsidiary Guaranty shall have been terminated in
respect of all Guarantors, no payment made by or for the account of any
Guarantor pursuant to this Subsidiary Guaranty shall entitle such Guarantor by
subrogation or otherwise to any payment by the Debtor or from or out of any
property of the Debtor, and such Guarantor shall not exercise any right or
remedy

 

2

--------------------------------------------------------------------------------

 

against the Debtor or any property of the Debtor by reason of any performance by
such Guarantor of this Subsidiary Guaranty.

 

The Guarantors hereby expressly waive: (a) notice of the acceptance by any
Creditor of this Subsidiary Guaranty, (b) notice of the existence or creation or
nonpayment of all or any of the Guaranteed Obligations, (c) presentment, demand,
notice of dishonor, protest, and all other notices whatsoever, and (d) all
diligence in collection or protection of or realization upon the Guaranteed
Obligations or any thereof, any obligation hereunder, or any security for or
guaranty of any of the foregoing.

 

Until the irrevocable payment in full of all of the Guaranteed Obligations
(other than Guaranteed Obligations under the relevant agreement with a Creditor
which expressly survive the termination of such agreement) and the termination
of all Commitments, (a) each Guarantor waives any right of subrogation,
reimbursement, indemnification and contribution (contractual, statutory or
otherwise), including any claim or right of subrogation under the Bankruptcy
Code or any successor statute, against the Debtor arising from the existence or
performance of this Subsidiary Guaranty and (b) each Guarantor waives any right
to enforce any remedy which any Creditor now has or may hereafter have against
the Debtor, and waives any benefit of, and any right to participate in, any
security now or hereafter held by a Creditor securing the Guaranteed
Obligations. Upon such irrevocable payment and termination, the Debtor shall
indemnify such Guarantor for the full amount of any payment made by such
Guarantor under this Subsidiary Guaranty and such Guarantor shall be subrogated
to the rights of the person to whom such payment shall have been made to the
extent of such payment.

 

Each Guarantor (a “Contributing Guarantor”) agrees that, if a payment shall be
made by any other Guarantor under this Subsidiary Guaranty and such other
Guarantor (the “Claiming Guarantor”) shall not have been fully indemnified by
the Debtor as provided above, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the amount of such payment multiplied
by a fraction of which the numerator shall be the net worth of the Contributing
Guarantor as of the date hereof and the denominator shall be the aggregate net
worth of all the Guarantors on such date. Any Contributing Guarantor making any
payment to a Claiming Guarantor pursuant to this paragraph shall be subrogated
to the rights of such Claiming Guarantor to the extent of such payment. All
rights of contribution and subrogation of any Guarantor hereunder shall be fully
subordinated in time and priority of payment to the Guaranteed Obligations and
all other indebtedness of the Debtor to each Creditor.

 

Any Creditor may, from time to time, whether before or after any discontinuance
of this Subsidiary Guaranty, without notice to any Guarantor, assign or transfer
any or all of the Guaranteed Obligations or any interest therein in accordance
with the terms of the Credit Agreement; and, notwithstanding any such assignment
or transfer or any subsequent assignment or transfer thereof, such Guaranteed
Obligations shall be and remain Guaranteed Obligations for the purposes of this
Subsidiary Guaranty, and each and every immediate and successive assignee or
transferee of any of the Guaranteed Obligations or of any interest therein
shall, to the extent of the interest of such assignee or transferee in the
Guaranteed Obligations, be entitled to the benefits of this Subsidiary Guaranty
to the same extent as if such assignee or transferee were a Creditor.

 

Each Guarantor hereby represents and warrants to the Administrative Agent and
the Lenders that:

 

3

--------------------------------------------------------------------------------

 

(a)           each Guarantor is duly formed, validly existing and in good
standing under the laws of its jurisdiction of formation and is duly qualified
and in good standing as a foreign entity and is duly authorized to conduct its
business in each jurisdiction in which its business is conducted or proposed to
be conducted and where the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect;

 

(b)           each Guarantor has all requisite power and authority (corporate
and otherwise) and legal right to execute and deliver this Subsidiary Guaranty
and to perform its obligations hereunder;

 

(c)           the execution and delivery by each Guarantor of this Subsidiary
Guaranty and the performance of its obligations hereunder have been duly
authorized by proper corporate or other proceedings, and this Subsidiary
Guaranty constitutes the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally; and

 

(d)           neither the execution and delivery by any Guarantor of this
Subsidiary Guaranty nor the compliance by any Guarantor with the provisions of
this Subsidiary Guaranty will, or at the relevant time did, (i) violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
any Guarantor or any Guarantor’s charter, articles or certificate of
incorporation or by-laws (or similar organizational documents), (ii) violate the
provisions of or require the approval or consent of any party to any material
indenture, instrument or agreement to which any Guarantor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien (other than Permitted Liens) in, of or on the property of any Guarantor
pursuant to the terms of any such indenture, instrument or agreement, or
(iii) require any consent of the stockholders of any Person or any Governmental
Authority.

 

Each Guarantor represents and warrants to each Creditor that all representations
and warranties relating to it contained in Article VI of the Credit Agreement
are true and correct in all material respects.

 

Each Guarantor hereby agrees that until all Obligations have been paid in full
and any and all documents relating thereto have been terminated, it shall comply
with all covenants relating to it contained in Articles VII and VIII of the
Credit Agreement.

 

Each Guarantor hereby warrants to each Creditor that such Guarantor now has and
will continue to have independent means of obtaining information concerning the
affairs, financial condition and business of the Debtor.  No Creditor shall have
any duty or responsibility to provide the Guarantors with any credit or other
information concerning the affairs, financial condition or business of the
Debtor that may come into the possession of such Creditor.

 

No delay on the part of any Creditor in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by any
Creditor of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this Subsidiary Guaranty be binding upon any
Creditor except as expressly set forth in a writing duly signed and delivered
(or consented to) by or on behalf of each Creditor. No action of any Creditor
permitted hereunder shall in any way affect or impair the rights of any Creditor
and the obligations of the Guarantors under this Subsidiary

 

4

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Guaranty.  For the purposes of this Subsidiary Guaranty, the Guaranteed
Obligations shall include all obligations of the Debtor to the Creditors arising
under or in connection with the agreements relating to the Guaranteed
Obligations, notwithstanding any right or power of the Debtor or anyone else to
assert any claim or defense as to the invalidity or unenforceability of any such
Guaranteed Obligation, and no such claim or defense shall affect or impair the
obligations of the Guarantors hereunder.  The obligations of the Guarantors
under this Subsidiary Guaranty shall be absolute and unconditional irrespective
of any circumstance whatsoever that might constitute a legal or equitable
discharge or defense of the Guarantors. The Guarantors hereby acknowledge that
there are no conditions to the effectiveness of this Subsidiary Guaranty.

 

Any Person may become a party to this Subsidiary Guaranty after the date hereof
by delivering an executed joinder agreement substantially in the form of
Exhibit B to the Administrative Agent.

 

This Subsidiary Guaranty shall be binding upon the Guarantors, and upon the
legal representatives, successors and assigns of the Guarantors; and all
references herein to the Debtor and to the Guarantors, respectively, shall be
deemed to include any successor or successors, whether immediate or remote, to
such entities. All obligations of the Guarantors hereunder shall be joint and
several.

 

All notices to the Guarantors shall be made in accordance with the terms of
Section 11.02 of the Credit Agreement to the address listed on Exhibit A.

 

THIS SUBSIDIARY GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS THEREOF).  WHEREVER POSSIBLE, EACH PROVISION OF THIS SUBSIDIARY
GUARANTY SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBSIDIARY GUARANTY SHALL BE
PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO
THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER
OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS SUBSIDIARY GUARANTY.

 

EACH OF THE GUARANTORS AND, BY THEIR ACCEPTANCE HEREOF, EACH CREDITOR, HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHT UNDER THIS SUBSIDIARY GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS SUBSIDIARY GUARANTY, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[signature page follows]

 

5

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IN WITNESS WHEREOF, the Guarantors have executed this Subsidiary Guaranty by
their duly authorized officers as of the day and year first written above.

 

 

[REGIS INC.

 

 

 

TRADE SECRET, INC.

 

 

 

SUPERCUTS CORPORATE SHOPS, INC.

 

 

 

SUPERCUTS, INC.

 

 

 

THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.

 

 

 

REGIS CORP.

 

 

 

HAIR CLUB FOR MEN, LLC]

 

 

 

By:

/s/ Eric Bakken

 

Name:

Eric Bakken

 

Title:

Vice President and Secretary of each

 

--------------------------------------------------------------------------------

 

Acknowledged and Agreed as of

the day and year first written above.

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

By:

/s/ Krys Szremski

 

Name:

Krys Szremski

 

Title:

Vice President

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

NOTICE ADDRESS

 

c/o Regis Corporation

7201 Metro Boulevard

Minneapolis, Minnesota 55439

Attention: Director of Treasury

Telephone: (952) 947-7739

Telecopy:   (952) 947-7701

 

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EXHIBIT B

 

JOINDER AGREEMENT

 

This Joinder Agreement dated as of                       ,            is
delivered pursuant to the Subsidiary Guaranty dated as of July 12, 2007 by
certain subsidiaries of Regis Corporation. (as amended, supplemented, restated
or otherwise modified from time to time, the “Subsidiary Guaranty”). The
undersigned hereby agrees that on and after the date hereof it shall be a
“Guarantor” under the Subsidiary Guaranty and be obligated to perform all of the
obligations of a Guarantor thereunder.

 

 

[GUARANTOR]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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