Exhibit 10.4
 

EXECUTION COPY

$150,000,000
 
CREDIT AGREEMENT
 
AMONG
 
RALCORP HOLDINGS, INC.
 
as Borrower,
 
THE LENDERS NAMED HEREIN,
 
JPMORGAN CHASE BANK, N.A.,
 
as Administrative Agent,
 
CITIBANK, N.A.,
as Syndication Agent,

and
WACHOVIA BANK, NATIONAL ASSOCIATION,
U.S. BANK NATIONAL ASSOCIATION,
SUNTRUST BANK,
and
PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agents

 
DATED AS OF
 
December 27, 2005

J.P. MORGAN SECURITIES INC.
and
CITIGROUP GLOBAL MARKETS INC.
as Co-Lead Arrangers
 

     

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TABLE OF CONTENTS

ARTICLE I DEFINITIONS 
ARTICLE II THE FACILITY 
2.1. The Facility.
2.2. Ratable Advances.
2.3. Competitive Bid Advances.
2.4. Swing Line Loans.
2.5. Availability of Funds
2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment.
2.7. Minimum Amount of Each Ratable Advance
2.8. Optional Principal Payments
2.9. Changes in Interest Rate, etc
2.10. Rates Applicable After Default
2.11. Method of Payment
2.12. Notes; Telephonic Notices
2.13. Interest Payment Dates; Interest and Fee Basis
2.14. Notification of Advances, Interest Rates, Prepayments, Commitment
Reductions and Issuance Requests
2.15. Lending Installations
2.16. Non-Receipt of Funds by the Administrative Agent
2.17. Taxes.
2.18. Administrative Agent’s Fees
2.19. Facility Letters of Credit.
2.20. Extension of Facility Termination Date
ARTICLE III CHANGE IN CIRCUMSTANCES 
3.1. Yield Protection
3.2. Changes in Capital Adequacy Regulations
3.3. Availability of Types of Advances
3.4. Funding Indemnification
3.5. Lender Statements; Survival of Indemnity
ARTICLE IV CONDITIONS PRECEDENT 
4.1. Initial Loans and Facility Letters of Credit
4.2. Each Future Advance and Facility Letter of Credit
ARTICLE V REPRESENTATIONS AND WARRANTIES 
5.1. Corporate Existence and Standing
5.2. Authorization and Validity
5.3. Compliance with Laws and Contracts
5.4. Governmental Consents
5.5. Financial Statements
5.6. Material Adverse Change
5.7. Taxes
5.8. Litigation and Contingent Obligations
5.9. Subsidiaries and Capitalization
 

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5.10. ERISA
5.11. Defaults
5.12. Federal Reserve Regulations
5.13. Investment Company; Public Utility Holding Company Act
5.14. Certain Fees
5.15. Solvency
5.16. Ownership of Properties
5.17. Indebtedness
5.18. Subordinated Indebtedness
5.19. Employee Controversies
5.20. Material Agreements
5.21. Environmental Laws
5.22. Insurance
5.23. Disclosure
5.24. Material Foreign Subsidiaries
ARTICLE VI COVENANTS 
6.1. Financial Reporting
6.2. Use of Proceeds
6.3. Notice of Default
6.4. Conduct of Business
6.5. Taxes
6.6. Insurance
6.7. Compliance with Laws
6.8. Maintenance of Properties
6.9. Inspection
6.10. Capital Stock and Dividends
6.11. Indebtedness
6.12. Merger
6.13. Sale of Assets
6.14. Sale of Accounts
6.15. Investments and Purchases
6.16. Contingent Obligations
6.17. Liens
6.18. Lease Rentals
6.19. Affiliates
6.20. Subordinated Indebtedness; Other Indebtedness
6.21. Environmental Matters
6.22. Change in Corporate Structure; Fiscal Year
6.23. Inconsistent Agreements
6.24. Financial Covenants
6.25. ERISA Compliance.
6.26. Material Subsidiaries
6.27. Material Foreign Subsidiaries
 
 
 

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ARTICLE VII DEFAULTS 
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 
8.1. Acceleration
8.2. Amendments
8.3. Preservation of Rights
ARTICLE IX GENERAL PROVISIONS 
9.1. Survival of Representations
9.2. Governmental Regulation
9.3. Taxes
9.4. Headings
9.5. Entire Agreement
9.6. Several Obligations; Benefits of this Agreement
9.7. Expenses; Indemnification
9.8. Numbers of Documents
9.9. Accounting
9.10. Severability of Provisions
9.11. Nonliability of Lenders
9.12. CHOICE OF LAW
9.13. CONSENT TO JURISDICTION
9.14. WAIVER OF JURY TRIAL
9.15. Disclosure
9.16. Counterparts
9.17. Confidentiality
9.18. USA PATRIOT Act
ARTICLE X THE ADMINISTRATIVE AGENT 
10.1. Appointment
10.2. Powers
10.3. General Immunity
10.4. No Responsibility for Loans, Recitals, etc
10.5. Action on Instructions of Lenders
10.6. Employment of Agents and Counsel
10.7. Reliance on Documents; Counsel
10.8. Administrative Agent’s Reimbursement and Indemnification
10.9. Notice of Default
10.10. Rights as a Lender
10.11. Lender Credit Decision
10.12. Successor Administrative Agent
10.13. Syndication Agent; Documentation Agents
ARTICLE XI SETOFF; RATABLE PAYMENTS 
11.1. Setoff
11.2. Ratable Payments
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 
12.1. Successors and Assigns
12.2. Participations.
 
 

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12.3. Assignments.
12.4. Dissemination of Information
12.5. Tax Treatment
ARTICLE XIII NOTICES 
13.1. Giving Notice
13.2. Change of Address

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EXHIBITS
 
Exhibit A - Note (Ratable Loan)
Exhibit B - Note (Competitive Bid Loan)
Exhibit C  - Competitive Bid Quote Request
Exhibit D - Invitation for Competitive Bid Quotes
Exhibit E - Competitive Bid Quote
Exhibit F - Note (Swing Line Loan)
Exhibit G - Compliance Certificate
Exhibit H - Assignment Agreement
Exhibit I - Form of General Counsel Opinion
 
 
SCHEDULES
 
Schedule 1 - Commitments
Schedule 5.8 - Material Contingent Obligations
Schedule 5.9 - Subsidiaries and Capitalization
Schedule 5.14 - Brokers’ Fees
Schedule 5.16 - Properties
Schedule 5.17 - Indebtedness
Schedule 5.24 - Material Foreign Subsidiaries
Schedule 6.15 - Investments
Schedule 6.17 - Liens
 

     

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CREDIT AGREEMENT
 

This Credit Agreement, dated as of December 27, 2005, is among RALCORP HOLDINGS,
INC., a Missouri corporation, the Lenders, JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent, CITIBANK, N.A., individually and as
Syndication Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, individually and as
Documentation Agent, U.S. BANK NATIONAL ASSOCIATION, individually and as
Documentation Agent, PNC BANK, NATIONAL ASSOCIATION, individually and as
Documentation Agent, and SUNTRUST BANK, individually and as Documentation Agent.
 
R E C I T A L S:
 
A. The Borrower has requested that the Lenders make financial accommodations to
it in an initial aggregate principal amount of $150,000,000, the proceeds of
which the Borrower will use for the (i) general corporate needs of the Borrower
and its Subsidiaries, (ii) working capital for the Borrower and its
Subsidiaries, and (iii) non-hostile acquisitions by the Borrower.
 
B. The Lenders are willing to extend such financial accommodations on the terms
and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Administrative Agent hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
As used in this Agreement:
 
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a given
Lender for the relevant Absolute Rate Interest Period, the rate of interest per
annum (rounded to the nearest 1/100 of 1%) offered by such Lender and accepted
by the Borrower.
 
"Absolute Rate Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Absolute Rate Loans made by some or all of the Lenders to
the Borrower at the same time and for the same Interest Period.
 
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes setting
forth Absolute Rates pursuant to Section 2.3.
 
"Absolute Rate Interest Period" means, with respect to an Absolute Rate Advance,
a period of not less than 7 and not more than 180 days commencing on a Business
Day selected by the Borrower pursuant to this Agreement. If such Absolute Rate
Interest Period would end on a day which is not a Business Day, such Absolute
Rate Interest Period shall end on the next succeeding Business Day.
 
 

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"Absolute Rate Loan" means a Loan which bears interest at the Absolute Rate.
 
"Accounts Receivable Financing Program" means a program of sales or
securitization of, or transfers of interests in, accounts receivable and related
contract rights ("Receivables") by the Borrower or any Subsidiary on a limited
recourse basis pursuant to which the aggregate amount of financing thereunder at
any time outstanding shall not exceed 15% of the total assets of the Borrower
and its Subsidiaries, provided that such sale or transfer qualifies as a sale
under Agreement Accounting Principles.
 
"Adjusted EBITDA" means, for any applicable computation period, the sum of (a)
EBIT for such period plus (b) the Borrower’s and Subsidiaries’ amortization and
depreciation deducted in determining Net Income for such period; provided,
however, that (i) Adjusted EBITDA shall be calculated giving pro forma effect
for any Permitted Purchase during such period as though such Permitted Purchase
occurred on the first day of such period, and (ii) in the event that the
Borrower sells or otherwise disposes of all or any portion of the capital stock
of Vail Resorts, Inc. during such period, then Adjusted EBITDA shall be
calculated by subtracting (adding) all equity earnings (losses) attributable to
such divested interest for such period.
 
"Adjusted Net Income" means, for any computation period (a) Net Income for such
period, minus (plus) (b) earnings (losses) during such period attributable to
the equity investment by the Borrower and its Subsidiaries in Vail Resorts, Inc.
and included in the computation of Net Income for such period, plus (c) to the
extent not included in the computation of Net Income for such period, the sum of
all proceeds in excess of book value (net of related costs, expenses, fees and
taxes) received by the Borrower or any Subsidiary of the Borrower during such
period from the sale or other disposition of the capital stock of Vail Resorts,
Inc.
 
"Administrative Agent" means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
 
"Advance" means a borrowing hereunder consisting of the aggregate amount of the
several Loans made by some or all of the Lenders to the Borrower on the same
Borrowing Date, of the same Type (or on the same interest basis in the case of
Competitive Bid Advances) and, when applicable, for the same Interest Period and
includes a Competitive Bid Advance and a Swing Line Loan.
 
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
 
 

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                  "Aggregate Commitment" means the aggregate of the Commitments
of all the Lenders hereunder. The initial Aggregate Commitment is $150,000,000
as of the date hereof, as adjusted from time to time pursuant to the terms of
this Agreement.
 
"Agreement" means this Credit Agreement, as it may be amended, modified or
restated and in effect from time to time.
 
"Agreement Accounting Principles" means generally accepted accounting principles
as in effect from time to time, applied in a manner consistent with those used
in preparing the Financial Statements; provided, however, that for purposes of
all computations required to be made with respect to compliance by the Borrower
with Section 6.24, such term shall mean generally accepted accounting principles
as in effect on the date hereof, applied in a manner consistent with those used
in preparing the Financial Statements.
 
"Alternate Base Rate" means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Rate for such day and (b) the Federal Funds
Effective Rate most recently determined by the Administrative Agent plus ½ of 1%
per annum.
 
"Alternate Base Rate Advance" means a Ratable Advance which bears interest at
the Alternate Base Rate.
 
"Alternate Base Rate Loan" means a Ratable Loan which bears interest at the
Alternate Base Rate.
 
"Alternate Swing Line Rate" means a rate agreed upon from time to time by the
Borrower and the Swing Line Lender.
 
"Applicable Commitment Fee Percentage" means, subject to the last sentence of
this definition, for any period, the applicable of the following percentages in
effect with respect to such period as the Net Leverage Ratio shall fall within
the indicated ranges:
 
                           Net Leverage Ratio                     Applicable
Commitment Fee Percentage

Greater than
But less than or Equal to
 
3.25:1.0
--------
0.150%
2.50:1.0
3.25:1.0
0.125%
1.75:1.0
2.50:1.0
0.090%
    --
 
1.75:1.0
 
0.080%
 

 
The Net Leverage Ratio shall be calculated by the Borrower as of the end of each
of its Fiscal Quarters commencing December 31, 2005 and shall be reported to the
Administrative Agent pursuant to a certificate executed by an Authorized Officer
of the Borrower and delivered in accordance with Section 6.1(d) hereof. The
Applicable Commitment Fee Percentage shall be adjusted, if necessary, quarterly
as of the tenth day after the required delivery date for the certificate
referenced above; provided, that if such certificate, together with the
financial statements to which such certificate relates, are not delivered by
such tenth day, then the Applicable Commitment Fee Percentage shall be equal to
0.150% until such certificate and related financial statements are so delivered.
Until adjusted as described above for the Fiscal Quarter ended December 31, 2005
the Applicable Commitment Fee Percentage shall be equal to 0.090%.
 
 

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"Applicable Eurodollar Margin" means, subject to the last sentence of this
definition, for any period, the applicable of the following percentages in
effect with respect to such period as the Net Leverage Ratio shall fall within
the indicated ranges:
 
                    Net Leverage Ratio                     ApplicableEurodollar
Margin
 
Greater than
But less than or Equal to
 
3.25:1.0
--------
0.750%
2.50:1.0
3.25:1.0
0.625%
1.75:1.0
2.50:1.0
0.500%
    --
1.75:1.0
0.400%

 
The Net Leverage Ratio shall be calculated by the Borrower as of the end of each
of its Fiscal Quarters commencing December 31, 2005 and shall be reported to the
Administrative Agent pursuant to a certificate executed by an Authorized Officer
of the Borrower and delivered in accordance with Section 6.1(d) hereof. The
Applicable Eurodollar Margin shall be adjusted, if necessary, quarterly as of
the tenth day after the required delivery date for the certificate referenced
above; provided, that if such certificate, together with the financial
statements to which such certificate relates, are not delivered by such tenth
day, then the Applicable Eurodollar Margin shall be equal to 0.750% until such
certificate and related financial statements are so delivered. Until adjusted as
described above for the Fiscal Quarter ended December 31, 2005, the Applicable
Eurodollar Margin shall be equal to 0.500%.
 
"Arrangers" means J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and
their respective successors.
 
"Article" means an article of this Agreement unless another document is
specifically referenced.
 
"Asset Disposition" means any sale, transfer or other disposition of any asset
of the Borrower or any Subsidiary in a single transaction or in a series of
related transactions (other than the sale of inventory or unused or obsolete
equipment in the ordinary course).
 
"Authorized Officer" means any of the president, chief financial officer,
treasurer or controller of the Borrower, acting singly.
 
"Bankruptcy Code" means Title 11, United States Code, sections 1 et seq., as the
same may be amended from time to time, and any successor thereto or replacement
therefor which may be hereafter enacted.
 
"Borrower" means Ralcorp Holdings, Inc., a Missouri corporation.
 
 

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"Borrowing Date" means a date on which an Advance is made or a Facility Letter
of Credit is issued hereunder.
 
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market, and (b) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities.
 
"Capitalized Lease" of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
 
"Capitalized Lease Obligations" of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles.
 
"Change" is defined in Section 3.2.
 
"Change in Control" means (a) the acquisition by any Person, or two or more
Persons acting in concert, including without limitation any acquisition effected
by means of any transaction contemplated by Section 6.12, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of the Borrower, or (b) during any period of
25 consecutive calendar months, commencing on the date of this Agreement, the
ceasing of those individuals (the "Continuing Directors") who (i) were directors
of the Borrower on the first day of each such period or (ii) subsequently became
directors of the Borrower and whose initial election or initial nomination for
election subsequent to that date was approved by a majority of the Continuing
Directors then on the board of directors of the Borrower, to constitute a
majority of the board of directors of the Borrower.
 
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
 
"Commercial Letter of Credit" means a trade or commercial Facility Letter of
Credit issued by an Issuer pursuant to Section 2.19 hereof.
 
"Commitment" means, for each Lender, the obligation of such Lender to make Loans
(other than Swing Line Loans) and participate in Facility Letters of Credit not
exceeding the amount set forth in Schedule 1 hereto and as set forth in any
Notice of Assignment relating to any assignment which has become effective
pursuant to Section 12.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
 
"Competitive Bid Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
 
 

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"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
 
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.
 
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan, expressed as a
percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from
such Eurodollar Base Rate.
 
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit B hereto, with appropriate insertions, duly executed and delivered to
the Administrative Agent by the Borrower for the account of a Lender and payable
to the order of such Lender, including any amendment, modification, renewal or
replacement of such promissory note.
 
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the form
of Exhibit E hereto completed and delivered by a Lender to the Administrative
Agent in accordance with Section 2.3.4.
 
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit C hereto completed and delivered by the
Borrower to the Administrative Agent in accordance with Section 2.3.2.
 
"Condemnation" is defined in Section 7.8.
 
"Consolidated" or "consolidated", when used in connection with any calculation,
means a calculation to be determined on a consolidated basis for the Borrower
and its Subsidiaries in accordance with Agreement Accounting Principles.
 
"Consolidated Interest Expense" means, with respect to any period, the sum
(without duplication) of (i) Consolidated interest expense of the Borrower and
its Consolidated Subsidiaries for such period before the effect of interest
income, as reflected on the Consolidated statements of income for the Borrower
and its Consolidated Subsidiaries for such period, and (ii) Consolidated
interest, yield or discount accrued during such period on the aggregate
outstanding investment or claim held by purchasers, assignees or other
transferees of (or of interests in) receivables of the Borrower and its
Consolidated Subsidiaries in connection with a revolving Accounts Receivable
Financing Program (regardless of the accounting treatment of such Accounts
Receivable Financing Program).
 
"Consolidated Person" means, for the taxable year of reference, each Person
which is a member of the affiliated group of the Borrower if Consolidated
returns are or shall be filed for such affiliated group for federal income tax
purposes or any combined or unitary group of which the Borrower is a member for
state income tax purposes.
 
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract or application for a Letter of Credit.
 
 

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"Controlled Group" means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
 
"Conversion/Continuation Notice" is defined in Section 2.9.
 
"Default" means an event described in Article VII.
 
"EBIT" means, for any applicable computation period, the Borrower’s and
Subsidiaries’ Net Income on a consolidated basis, plus (a) consolidated federal,
state, local and foreign income and franchise taxes paid or accrued during such
period and (b) Consolidated Interest Expense for such period, minus (or plus)
equity earnings (or losses) during such period attributable to equity
investments by the Borrower and its Subsidiaries in the capital stock or other
equity interests in any Person which is not a Subsidiary (other than Vail
Resorts, Inc.).
 
"Environmental Claims" means all claims, investigations, litigation,
administrative proceedings, notices, requests for information, whether pending
or threatened, or judgements or orders, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for any
violation of any Environmental Laws, or for any Release or injury to the
environment.
 
"Environmental Laws" means all federal, state and local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, direct duties, requests, licenses, approvals,
certificates, decrees, standards, permits and other authorizations of, and
agreements with, any Governmental Authority, in each case relating to
environmental, health, safety and land use matters, including without
limitations, chemical substances, air emissions, effluent discharges and the
storage, treatment, transport and disposal of Hazardous Materials.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
"Eurodollar Advance" means a Eurodollar Bid Rate Advance or a Eurodollar Ratable
Advance, or both, as the case may be.
 
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes setting
forth Eurodollar Bid Rates pursuant to Section 2.3.
 
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the applicable British Bankers’ Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Bloomberg
Screen BBAM as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Eurodollar Interest Period, and having a maturity equal to such
Eurodollar Interest
 

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Period of one, two, three or six months shall end on (but exclude) the day which
corresponds numerically to such date one, two, three or six months thereafter;
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such Eurodollar Interest
Period shall end on the last Business Day of such next, second, third or sixth
succeeding month. If a Eurodollar Interest Period would otherwise end on a day
which is not a Business Day, such Eurodollar Interest Period shall end on the
next succeeding Business Day; provided, however, that if, with respect to a
Eurodollar Interest Period of one, two, three or six months, said next
succeeding Business Day falls in a new month, such Eurodollar Interest Period
shall end on the immediately preceding Business Day.
 
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan made by
a given Lender for the relevant Eurodollar Interest Period, the sum of (a) the
Eurodollar Base Rate and (b) the Competitive Bid Margin offered by such Lender
and accepted by the Borrower.
 
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.
 
"Eurodollar Bid Rate Loan" means a Loan which bears interest at the Eurodollar
Bid Rate.
 
"Eurodollar Interest Period" means, with respect to a Eurodollar Ratable Advance
or a Eurodollar Bid Rate Advance, a period of seven days or one, two, three or
six months commencing on a Business Day selected by the Borrower pursuant to
this Agreement. A Eurodollar Interest Period of one, two, three or six months
shall end on (but exclude) the day which corresponds numerically to such date
one, two, three or six months thereafter; provided, however, that if there is no
such numerically corresponding day in such next, second, third or sixth
succeeding month, such Eurodollar Interest Period shall end on the last Business
Day of such next, second, third or sixth succeeding month. If a Eurodollar
Interest Period would otherwise end on a day which is not a Business Day, such
Eurodollar Interest Period shall end on the next succeeding Business Day;
provided, however, that if, with respect to a Eurodollar Interest Period of one,
two, three or six months, said next succeeding Business Day falls in a new
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day.
 
"Eurodollar Loan" means a Eurodollar Ratable Loan or Eurodollar Bid Rate Loan,
or both, as the case may be.
 
"Eurodollar Ratable Advance" means an Advance which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.3.
 
"Eurodollar Ratable Loan" means a Loan requested by the Borrower pursuant to
Section 2.2.3 which bears interest at a Eurodollar Rate.
 
 

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"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for the
relevant Eurodollar Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(ii) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (b) the Applicable Eurodollar Margin plus
(c) only in the case of Eurodollar Ratable Advances having a seven day Interest
Period, .125%. The Eurodollar Rate shall be rounded to the next higher multiple
of 1/16 of 1% if the rate is not such a multiple.
 
"Existing Credit Agreement" means that certain credit agreement among JPMorgan
Chase Bank, N.A., as administrative agent, the financial institutions party
thereto, and Ralcorp Holdings, Inc. dated as of October 15, 2004, as amended.
 
"Facility Letter of Credit" means a Letter of Credit issued pursuant to Section
2.19.
 
"Facility Letter of Credit Obligations" means as at the time of determination
thereof, the sum of (a) the Reimbursement Obligations then outstanding and (b)
the aggregate then undrawn face amount of the then outstanding Facility Letters
of Credit.
 
"Facility Letter of Credit Sublimit" means an aggregate amount of $50,000,000.
 
"Facility Termination Date" means December 27, 2010, as such date may be
extended pursuant to Section 2.20.
 
"Federal Funds Effective Rate" means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
 
"Financial Statements" is defined in Section 5.5.
 
"Fiscal Quarter" means one of the four three-month accounting periods comprising
a Fiscal Year.
 
"Fiscal Year" means the twelve-month accounting period ending September 30 of
each year.
 
"Governmental Authority" means any government (foreign or domestic) or any state
or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including without limitation any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including without limitation any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned or controlled by or subject to the control of any of the
foregoing.
 
 

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"Guarantors" means Bremner, Inc., Flavor House Products, Inc., Nutcracker
Brands, Inc., RH Financial Corporation, Ripon Foods, Inc., Sugar Kake Cookie
Inc., Heritage Wafers, LLC, The Carriage House Companies, Inc., Bakery Chef,
L.L.C., Community Shops, Inc., The Bun Basket, Inc., Lofthouse Bakery Products,
Inc., Medallion Foods, Inc. and each other Material Subsidiary.
 
"Hazardous Materials" means any toxic or hazardous waste, substance or chemical
or any pollutant, contaminant, chemical or other substance defined or regulated
pursuant to any Environmental Laws, including, without limitation, asbestos,
petroleum or crude oil.
 
"Indebtedness" of a Person means such Person’s (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or similar instruments,
(e) Capitalized Lease Obligations, (f) Rate Hedging Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Facility Letter of Credit and the face amount of any other
Letter of Credit, (i) obligations under so-called åsynthetic leasesæ and (j)
repurchase obligations or liabilities of such Person with respect to accounts or
notes receivable sold by such Person.
 
"Initial Lender" means any Lender as of the date hereof.
 
"Interest Expense Coverage Ratio" means for any applicable computation period of
the Borrower, the ratio of EBIT to the Borrower’s Consolidated Interest Expense
for such period, all as determined in accordance with Agreement Accounting
Principles.
 
"Interest Period" means a Eurodollar Interest Period or an Absolute Rate
Interest Period. Notwithstanding the foregoing, each Swing Line Loan bearing
interest at the Alternate Swing Line Rate shall be deemed to have an Interest
Period of from one to seven days as agreed upon between the Borrower and the
Swing Line Lender.
 
"Investment" of a Person means any loan, advance (other than commission, travel
and similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than accounts receivable arising in the
ordinary course of business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, partnership interests, notes,
debentures or other securities of any other Person made by such Person.
 
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive Bid
Quotes substantially in the form of Exhibit D hereto, completed and delivered by
the Administrative Agent to the Lenders in accordance with Section 2.3.3.
 
"Issuance Request" is defined in Section 2.19.4.
 
"Issuer" means JPMorgan Chase Bank, N.A.
 
 

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"Lenders" means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.
 
"Lending Installation" means, with respect to a Lender or the Administrative
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Administrative Agent.
 
"Letter of Credit" of a Person means a letter of credit or similar instrument
which is issued upon the application of such Person or upon which such Person is
an account party or for which such Person is in any way liable.
 
"Letter of Credit Cash Collateral Account" is defined in Section 8.1. Such
account and the related cash collateralization shall be subject to documentation
satisfactory to the Administrative Agent.
 
"Leverage Ratio" means, with respect to the Borrower on a consolidated basis
with its Subsidiaries, at the end of any Fiscal Quarter, the ratio of (a) Total
Debt at the end of such Fiscal Quarter to (b) Adjusted EBITDA for the four
Fiscal Quarters then ending.
 
"Lien" means any security interest, lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
 
"Loan" means, with respect to a Lender, such Lender’s portion of any Advance and
"Loans" means, with respect to the Lenders, the aggregate of all Advances. The
terms "Loan" and "Loans" shall also include any Swing Line Loans.
 
"Loan Documents" means this Agreement, the Notes, the Subsidiary Guaranty, the
Reimbursement Agreements and the other documents and agreements contemplated
hereby and executed by the Borrower in favor of the Administrative Agent or any
Lender.
 
"Margin Stock" has the meaning assigned to that term under Regulation U.
 
"Material Adverse Effect" means a material adverse effect on (a) the business,
Property, condition (financial or other) and results of operations of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform its obligations under the Loan Documents, or (c) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders thereunder.
 
"Material Foreign Subsidiary" means a Subsidiary of the Borrower organized under
the laws of a jurisdiction located outside the United States and at any time
having assets with a fair market value in excess of $10,000,000.
 
"Material Subsidiary" means a Subsidiary of the Borrower organized under the
laws of a jurisdiction located within the United States and at any time having
assets with a fair market value in excess of $10,000,000; provided, however,
that any special purpose Subsidiary established for the purpose of entering into
the Accounts Receivable Financing Program shall not be a Material Subsidiary.
 
 

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"Moody’s" means Moody’s Investor Services, Inc.
 
"Multiemployer Plan" means an employee pension benefit plan, as defined in
section 3(2) of ERISA, maintained pursuant to a collective bargaining agreement
or any other arrangement to which the Borrower or any member of the Controlled
Group is a party to which more than one employer outside of the Controlled Group
is obligated to make contributions.
 
"Net Debt" means (a) Total Debt, plus (b) the aggregate principal amount of all
Indebtedness of a special purpose Subsidiary of the Borrower formed in
connection with the sale of accounts receivable and other forms of off-balance
sheet financing, minus (c) the amount of cash held by the Borrower in excess of
$10,000,000, minus (d) 50% of the market value of the Borrower’s equity
interests in Vail Resorts, Inc. as of the end of the most recently ended Fiscal
Quarter.
 
"Net Income" means, for any computation period, with respect to the Borrower on
a consolidated basis with its Subsidiaries (other than any Subsidiary which is
restricted from declaring or paying dividends or otherwise advancing funds to
its parent whether by contract or otherwise), cumulative net income earned
during such period as determined in accordance with Agreement Accounting
Principles, but (i) excluding any non-cash charges (except any non-cash charges
that require accrual of a reserve for anticipated future cash payments) or
non-cash gains (except any non-cash gains resulting in the Borrower’s accrual of
a receivable which will result in a cash in-flow at a later date), which charges
or gains are unusual, non-recurring or extraordinary, (ii) excluding any
non-cash stock based incentive-related expenses, and (iii) including, to the
extent not otherwise included in the determination of Net Income, all cash
dividends and cash distributions received by the Borrower or any Subsidiary from
any Person in which the Borrower or such Subsidiary has made an Investment
pursuant to Section 6.15(j).
 
"Net Leverage Ratio" means, with respect to the Borrower on a consolidated basis
with its Subsidiaries, at the end of any Fiscal Quarter, the ratio of (a) Net
Debt at the end of such Fiscal Quarter to (b) Adjusted EBITDA for the four
Fiscal Quarters then ending.
 
"Net Worth" means at any date the consolidated common stockholders’ equity of
the Borrower and its consolidated Subsidiaries determined in accordance with
Agreement Accounting Principles.
 
"Notes" means, collectively, the Competitive Bid Notes, the Ratable Notes and
the Swing Line Note; and "Note" means any one of the Notes.
 
"Notice of Assignment" is defined in Section 12.3.2.
 
"Obligations" means all unpaid principal of and accrued and unpaid interest on
the Notes, the Facility Letter of Credit Obligations and all other liabilities
(if any), whether actual or contingent, of the Borrower with respect to Facility
Letters of Credit, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any
Lender, the Administrative Agent or any indemnified party hereunder arising
under any of the Loan Documents.
 
 

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"Participants" is defined in Section 12.2.1.
 
"Payment Date" means the last day of each March, June, September and December.
 
"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.
 
"Permitted Purchase" means an acquisition permitted by Section 6.15(m).
 
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, limited liability company, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
 
"Plan" means an employee pension benefit plan, as defined in Section 3(2) of
ERISA, as to which the Borrower or any member of the Controlled Group may have
any liability.
 
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in
effect at its principal office in New York City (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
 
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
 
"pro-rata" means, when used with respect to a Lender, and any described
aggregate or total amount, an amount equal to such Lender’s pro-rata share or
portion based on its percentage of the Aggregate Commitment or if the Aggregate
Commitment has been terminated, its percentage of the aggregate principal amount
of outstanding Advances and Facility Letter of Credit Obligations.
 
"Purchase" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any ongoing business or all or substantially
all of the assets of any firm, corporation or division or line of business
thereof, whether through purchase of assets, merger or otherwise, or (b)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership.
 
"Purchasers" is defined in Section 12.3.1.
 
"Ralston Obligations" means the indemnification obligations of the Borrower
existing on the date hereof in favor of Ralston Purina Company with respect to
its guaranty of the obligations of Ralston Resorts, Inc. under the Sports
Facilities Refunding Revenue Bonds identified on Schedule 5.8.
 
 

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"Ratable Advance" means a borrowing hereunder consisting of the aggregate amount
of the several Ratable Loans made by the Lenders to the Borrower at the same
time, of the same Type and for the same Interest Period.
 
"Ratable Borrowing Notice" is defined in Section 2.2.3.
 
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2 hereof.
 
"Ratable Note" means a promissory note in substantially the form of Exhibit A
hereto, duly executed and delivered to the Administrative Agent by the Borrower
for the account of each Lender and payable to the order of a Lender in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
 
"Rate Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, interest rate swaps, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants, and (b) any
and all cancellations, buybacks, reversals, terminations or assignments of any
of the foregoing.
 
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
 
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of such Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
 
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to such Persons.
 
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
 
 

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"Reimbursement Agreement" means a letter of credit application and reimbursement
agreement in such form as the Issuer may from time to time employ in the
ordinary course of business.
 
"Reimbursement Obligations" means, at any time, the aggregate (without
duplication) of the Obligations of the Borrower to the Lenders, the Issuer
and/or the Administrative Agent in respect of all unreimbursed payments or
disbursements made by the Lenders, the Issuer and/or the Administrative Agent
under or in respect of draws made under the Facility Letters of Credit.
 
"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.
 
"Release" is defined in the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. 39601 et seq.
 
"Rentals" of a Person means the aggregate fixed amounts payable by such Person
under any operating lease of Property.
 
"Reportable Event" means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
 
"Required Lenders" means Lenders in the aggregate having at least 51% of the
Aggregate Commitment or, if the Aggregate Commitment has been terminated, 51% of
the sum of (a) the aggregate unpaid principal amount of the outstanding Loans
plus (b) the aggregate amount of the outstanding Facility Letter of Credit
Obligations.
 
"Reserve Requirement" means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on Eurocurrency liabilities.
 
"Risk-Based Capital Guidelines" is defined in Section 3.2.
 
"S&P" means Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.
 
"Section" means a numbered section of this Agreement, unless another document is
specifically referenced.
 
 
 

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"Single Employer Plan" means a Plan subject to Title IV of ERISA maintained by
the Borrower or any member of the Controlled Group for employees of the Borrower
or any member of the Controlled Group, other than a Multiemployer Plan.
 
"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 Agreement
Accounting Principles 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.
 
"Standby Letter of Credit" means a Facility Letter of Credit which is not a
Commercial Letter of Credit. 
 
"Subordinated Indebtedness" of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Administrative Agent.
 
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
 
"Subsidiary Guaranty" means that certain Guaranty, dated as of the date hereof,
duly executed and delivered by the Guarantors in favor of the Administrative
Agent, on behalf of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
 
"Substantial Portion" means, with respect to the Property of the Borrower and
its Subsidiaries, Property which (a) represents more than 15% of the
consolidated tangible assets of the Borrower and its Subsidiaries, as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the end of the Fiscal Quarter next preceding the date on
which such determination is made, or (b) is responsible for more than 5% of the
consolidated Net Income from continuing operations of the Borrower and its
Subsidiaries for the 12-month period ending as of the end of the Fiscal Quarter
next preceding the date of determination.
 
"Swing Line Lender" means JPMorgan Chase Bank, N.A. or any other Lender as a
successor Swing Line Lender.
 
"Swing Line Commitment" means the obligation of the Swing Line Lender to make
Swing Line Loans hereunder in an aggregate amount at any one time outstanding
not to exceed $15,000,000. The Swing Line Commitment will automatically and
permanently terminate on the Facility Termination Date.
 
 
 

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"Swing Line Loan" means a Loan made by the Swing Line Lender pursuant to Section
2.4.
 
"Swing Line Note" means a promissory note substantially in the form of Exhibit F
hereto, duly executed and delivered to the Administrative Agent by the Borrower
and payable to the order of the Swing Line Lender in the amount of its Swing
Line Commitment, including any amendment, modification, renewal or replacement
of such promissory note.
 
"Termination Event" means, with respect to a Plan which is subject to Title IV
of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any
other member of the Controlled Group from such Plan during a plan year in which
the Borrower or any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an amendment of such
Plan as a termination under Section 4041 of ERISA, (d) the institution by the
PBGC of proceedings to terminate such Plan or (e) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
appointment of a trustee to administer, such Plan.
 
"Thomson" means Thomson BankWatch Inc.
 
"Total Debt" means (a) all Indebtedness of the Borrower and its Subsidiaries, on
a consolidated basis, reflected on a balance sheet prepared in accordance with
Agreement Accounting Principles, plus, without duplication (b) the face amount
of all outstanding Letters of Credit in respect of which the Borrower or any
Subsidiary has any reimbursement obligation and the principal amount of all
Contingent Obligations of the Borrower and its Subsidiaries, minus (c) to the
extent included in clause (b) above, (i) up to $25,000,000 in aggregate face or
principal amount of surety bonds and Letters of Credit relating to workers’
compensation and similar benefits and (ii) the Ralston Obligations.
 
"Transferee" is defined in Section 12.4.
 
"Type" means, with respect to any Advance, its nature as an Alternate Base Rate
Advance, Eurodollar Advance or Absolute Rate Advance.
 
"UCC" means the New York Uniform Commercial Code as amended or modified and in
effect from time to time.
 
"Unfunded Liability" means the amount (if any) by which a Single Employer Plan’s
actuarial accrued liability exceeds its actuarial asset value, as determined by
the then most recent valuation for such plan used to determine the measures of
funded status required to be reported to the Internal Revenue Service.
 
"Unmatured Default" means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.
 
 

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"Unrefunded Swing Line Loans" is defined in Section 2.4(d).
 
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, association, joint venture, limited
liability company or similar business organization 100% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
 
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
 
ARTICLE II
 
THE FACILITY
 
2.1.  The Facility.
 
2.1.1. Description of Facility. The Lenders hereby establish in favor of the
Borrower a revolving credit facility pursuant to which, and upon the terms and
subject to the conditions herein set out:
 
(a) each Lender severally agrees to make Ratable Loans to the Borrower in
accordance with Section 2.2 in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment less the sum of (i) the amount of
such Lender’s pro-rata share of the outstanding principal amount of all
Competitive Bid Advances (regardless of which Lender or Lenders made such
Competitive Bid Advances) exclusive of Competitive Bid Advances being repaid
substantially contemporaneously with the making of any such Ratable Loans, plus
(ii) the amount of such Lender’s pro-rata share of the outstanding principal
amount of all Swing Line Loans exclusive of Swing Line Loans being repaid
substantially contemporaneously with the making of any such Ratable Loans, plus
(iii) the amount of such Lender’s pro-rata share of the outstanding Facility
Letter of Credit Obligations exclusive of Facility Letter of Credit Obligations
being repaid substantially contemporaneously with the making of any such Ratable
Loans;
 
(b) each Lender may, in its sole discretion, make bids to make Competitive Bid
Loans to the Borrower, and make such Loans, in accordance with Section 2.3; and
 
(c) the Swing Line Lender agrees to make Swing Line Loans to the Borrower in
accordance with Section 2.4.
 
2.1.2. Facility Amount. In no event may the sum of (a) the aggregate principal
amount of all outstanding Advances (including the Ratable Advances, the
Competitive Bid Advances and the Swing Line Loans) plus (b) the outstanding
amount of Facility Letter of Credit Obligations at any time exceed the Aggregate
Commitment. If at any time the aggregate amount of the sum of the Loans and the
 
 

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 Facility Letter of Credit Obligations exceeds the Aggregate Commitment, the
Borrower shall repay immediately its then outstanding Loans (first Swing Line
Loans, then Ratable Loans and then Competitive Bid Loans) in such amount as may
be necessary to eliminate such excess; provided, that if an excess remains after
repayment of all outstanding Loans, then the Borrower shall cash collateralize
the Facility Letter of Credit Obligations by depositing into the Letter of
Credit Cash Collateral Account such amount as may be necessary to eliminate such
excess.
 
2.1.3. Availability of Facility. Subject to the terms of this Agreement, from
and including the date hereof to, but not including the Facility Termination
Date the Borrower may borrow, repay and reborrow Advances hereunder. All
outstanding Loans and Advances and all other unpaid Obligations shall be due and
payable in full by the Borrower on the Facility Termination Date.
 
2.2.  Ratable Advances.
 
2.2.1. Ratable Advances. Each Ratable Advance hereunder shall consist of
borrowings made from the several Lenders ratably in proportion to the amounts of
their respective Commitments. The Borrower’s obligation to pay the principal of,
and interest on, the Ratable Advances shall be evidenced by the Ratable Notes.
Although the Ratable Notes shall be dated the date of the initial Advance,
interest in respect thereof shall be payable only for the periods during which
the Loans evidenced thereby are outstanding and, although the stated amount of
each Ratable Note shall be equal to the applicable Lender’s Commitment, each
Ratable Note shall be enforceable, with respect to the Borrower’s obligation to
pay the principal amount thereof, only to the extent of the unpaid principal
amount of the Ratable Loans at the time evidenced thereby.
 
2.2.2 Ratable Advance Rate Options. The Ratable Advances may be Alternate Base
Rate Advances or Eurodollar Ratable Advances, or a combination thereof, selected
by the Borrower in accordance with Section 2.2.3 or 2.2.4.  No Ratable Advance
may mature after, or have an Interest Period which extends beyond, the Facility
Termination Date.
 
2.2.3. Method of Selecting Types and Interest Periods for Ratable Advances. The
Borrower shall select the Type of each Ratable Advance and, in the case of each
Eurodollar Ratable Advance, the Eurodollar Interest Period applicable to such
Ratable Advance from time to time. The Borrower shall give the Administrative
Agent irrevocable notice (a "Ratable Borrowing Notice") not later than 12:00
noon (Chicago time) on the Borrowing Date of each Alternate Base Rate Advance
and three Business Days before the Borrowing Date for each Eurodollar Ratable
Advance. Notwithstanding the foregoing, a Ratable Borrowing Notice for an
Alternate Base Rate Advance may be given not later than 30 minutes after the
time which the Borrower is required to reject one or more bids offered in
connection with an Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable
Borrowing Notice for a Eurodollar Ratable Advance may be given not later than 30
minutes after the time the Borrower is required to reject one or more bids
offered in connection with a Eurodollar Auction pursuant to Section 2.3.6. A
Ratable Borrowing Notice shall specify:
 
 
 

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(a)  the Borrowing Date, which shall be a Business Day, of such Ratable Advance;
 
(b)  the aggregate amount of such Ratable Advance, which, when added to all
outstanding Ratable Advances, Swing Line Loans and Competitive Bid Advances and
after giving effect to the repayment of any such outstanding Advances or Loans
out of the proceeds of the requested Ratable Advance, shall not exceed the
Aggregate Commitment;
 
(c)  the Type of Advance selected; and
 
(d)  in the case of each Eurodollar Ratable Advance, the Eurodollar Interest
Period applicable thereto (which may not end after the Facility Termination
Date).
 
2.2.4. Conversion and Continuation of Outstanding Ratable Advances. Alternate
Base Rate Advances shall continue as Alternate Base Rate Advances unless and
until such Alternate Base Rate Advances are converted into Eurodollar Ratable
Advances. Each Eurodollar Ratable Advance shall continue as a Eurodollar Ratable
Advance until the end of the then applicable Eurodollar Interest Period
therefor, at which time such Eurodollar Ratable Advance shall be automatically
converted into an Alternate Base Rate Advance unless the Borrower shall have
given the Administrative Agent a Conversion/Continuation Notice requesting that,
at the end of such Eurodollar Interest Period, such Eurodollar Ratable Advance
continue as a Eurodollar Ratable Advance for the same or another Eurodollar
Interest Period. Subject to the terms of Section 2.7, the Borrower may elect
from time to time to convert all or any part of a Ratable Advance of any Type
into any other Type or Types of Ratable Advances; provided that any conversion
of any Eurodollar Ratable Advance shall be made on, and only on, the last day of
the Eurodollar Interest Period applicable thereto. The Borrower shall give the
Administrative Agent irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of a Ratable Advance or continuation of a Eurodollar Ratable
Advance not later than 10:00 a.m. (Chicago time) at least one Business Day, in
the case of a conversion into an Alternate Base Rate Advance, or at least three
Business Days, in the case of a conversion into or continuation of a Eurodollar
Ratable Advance, prior to the date of the requested conversion or continuation,
specifying:
 
(a)  the requested date, which shall be a Business Day, of such conversion or
continuation;
 
(b) the aggregate amount and Type of Ratable Advance which is to be converted or
continued; and
 
(c) the amount and Type(s) of Ratable Advance(s) into which such Ratable Advance
is to be converted or continued and, in the case of a conversion into or
continuation of an Eurodollar Ratable Advance, the duration of the Eurodollar
Interest Period applicable thereto.
 
 
 

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2.3.  Competitive Bid Advances.
 
2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant to
Section 2.2, but subject to the terms and conditions of this Agreement
(including, without limitation, the limitation set forth in Section 2.1.2 as to
the maximum aggregate principal amount of all outstanding Advances and Facility
Letter of Credit Obligations hereunder), prior to the Facility Termination Date
the Borrower may, as set forth in this Section 2.3, request the Lenders to make
offers to make Competitive Bid Advances to the Borrower. Each Lender may, but
shall have no obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section 2.3. The Borrower’s obligation to pay the principal of, and interest on,
the Competitive Bid Advances shall be evidenced by the Competitive Bid Notes.
Although the Competitive Bid Notes shall be dated the date of the initial
Advance, interest in respect thereof shall be payable only for the periods
during which the Loans evidenced thereby are outstanding. Each Competitive Bid
Loan shall be repaid in full by the Borrower on the last day of the Interest
Period applicable thereto.
 
2.3.2. Competitive Bid Quote Request. When the Borrower wishes to request offers
to make Competitive Bid Loans under this Section 2.3, it shall transmit to the
Administrative Agent by telecopy a Competitive Bid Quote Request substantially
in the form of Exhibit C hereto so as to be received no later than (a) 10:00
a.m. (Chicago time) at least five Business Days prior to the Borrowing Date
proposed therein, in the case of a Eurodollar Auction or (b) 9:00 a.m. (Chicago
time) at least one Business Day prior to the Borrowing Date proposed therein, in
the case of an Absolute Rate Auction specifying:
 
(a) the proposed Borrowing Date, which shall be a Business Day, for the proposed
Competitive Bid Advance;
 
(b) the aggregate principal amount of such Competitive Bid Advance;
 
(c) whether the Competitive Bid Quotes requested are to set forth a Eurodollar
Bid Rate, an Absolute Rate, or both; and
 
(d) the Interest Period applicable thereto (which may not end after the Facility
Termination Date).
 
The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within 5 Business Days (or such other number of
days as the Borrower and the Administrative Agent may agree) of any other
Competitive Bid Quote Request. A Competitive Bid Quote Request that does not
conform substantially to the format of Exhibit C hereto shall be rejected, and
the Administrative Agent shall promptly notify the Borrower of such rejection by
telecopy.
 
2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any event before
the close of business on the same Business Day of receipt of a Competitive Bid
Quote Request that is not rejected pursuant to Section 2.3.2, the Administrative
Agent shall send to each of the Lenders by telex or telecopy an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit D hereto, which
shall constitute an invitation by the Borrower to each Lender to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which such
Competitive Bid Quote Request relates in accordance with this Section 2.3.
 

 
                          2.3.4.  Submission and Contents of Competitive Bid
Quotes.

 
(a)  Each Lender may, in its sole discretion, submit a Competitive Bid Quote
containing an offer or offers to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must comply
with the requirements of this Section 2.3.4 and must be submitted to the
Administrative Agent by telex or telecopy at its offices specified in or
pursuant to Article XIII not later than (i) 9:00 a.m. (Chicago time) at
least four Business Days prior to the proposed Borrowing Date, in the case of a
Eurodollar Auction or (ii) 9:00 a.m. (Chicago time) on the proposed Borrowing
Date, in the case of an Absolute Rate Auction (or, in either case upon
reasonable prior notice to the Lenders, such other time and date as the Borrower
and the Administrative Agent may agree); provided that Competitive Bid Quotes
submitted by JPMorgan Chase Bank, N.A. may only be submitted if the
Administrative Agent or JPMorgan Chase Bank, N.A. notifies the Borrower of the
terms of the offer or offers contained therein not later than 15 minutes prior
to the latest time at which the relevant Competitive Bid Quotes must be
submitted by the other Lenders. Subject to Articles IV and VIII, any Competitive
Bid Quote so made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
 
(b) Each Competitive Bid Quote shall be in substantially the form of Exhibit E
hereto and shall in any case specify:
 
(i) the proposed Borrowing Date, which shall be the same as that set forth in
the applicable Invitation for Competitive Bid Quotes;
 
(ii) the principal amount of the Competitive Bid Loan for which each such offer
is being made, which principal amount (a) may be greater than, less than or
equal to the Commitment of the quoting Lender, (b) must be at least $5,000,000
and an integral multiple of $1,000,000, and (c) may not exceed the principal
amount of Competitive Bid Loans for which offers were requested;
 
(iii)  in the case of a Eurodollar Auction, the Competitive Bid Margin offered
for each such Competitive Bid Loan;
 
(iv) the minimum amount, if any, of the Competitive Bid Loan which may be
accepted by the Borrower;
 
(v) in the case of an Absolute Rate Auction, the Absolute Rate offered for each
such Competitive Bid Loan; and
 
(vi) the identity of the quoting Lender.
 
 
 

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(c) The Administrative Agent shall reject any Competitive Bid Quote that:
 
(i) is not substantially in the form of Exhibit E hereto or does not specify all
of the information required by Section 2.3.4(b);
 
(ii) contains qualifying, conditional or similar language, other than any such
language contained in Exhibit E hereto;
 
(iii) proposes terms other than or in addition to those set forth in the
applicable Invitation for Competitive Bid Quotes; or
 
(iv) arrives after the time set forth in Section 2.3.4(a).
 
If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(c), then the Administrative Agent shall promptly notify the relevant
Lender of such rejection.
 
2.3.5.    Notice to Borrower.  The Administrative Agent shall promptly notify
the Borrower of the terms (a) of any Competitive Bid Quote submitted by a Lender
that is in accordance with Section 2.3.4 and (b) of any Competitive Bid Quote
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Lender with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by
the Administrative Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error in
such former Competitive Bid Quote. The Administrative Agent’s notice to the
Borrower shall specify the aggregate principal amount of Competitive Bid Loans
for which offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request and the respective principal amounts and
Eurodollar Bid Rates or Absolute Rates, as the case may be, so offered.
 
2.3.6.       Acceptance and Notice by Borrower. Not later than (a) 10:00 a.m.
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (b) 10:00 a.m. (Chicago time) on
the proposed Borrowing Date, in the case of an Absolute Rate Auction (or, in
either case upon reasonable prior notice to the Lenders, such other time and
date as the Borrower and the Administrative Agent may agree), the Borrower shall
notify the Administrative Agent of its acceptance or rejection of the offers so
notified to it pursuant to Section 2.3.5; provided, however, that the failure by
the Borrower to give such notice to the Administrative Agent shall be deemed to
be a rejection of all such offers. In the case of acceptance, such notice (a
"Competitive Bid Borrowing Notice") shall specify the aggregate principal amount
of offers for each Interest Period that are accepted. The Borrower may accept
any Competitive Bid Quote in whole or in part (subject to the terms of Section
2.3.4(b)(iv)); provided that:
 
(a) the aggregate principal amount of each Competitive Bid Advance may not
exceed the applicable amount set forth in the related Competitive Bid Quote
Request,
 
 
 

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(b) acceptance of offers may only be made on the basis of ascending Eurodollar
Bid Rates or Absolute Rates, as the case may be, and
 
(c) the Borrower may not accept any offer that is described in Section 2.3.4(c)
or that otherwise fails to comply with the requirements of this Agreement.
 
2.3.7.      Allocation by Administrative Agent. If offers are made by two or
more Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Lenders as nearly as possible
(in such multiples, not greater than $1,000,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amount of such
offers; provided, however, that no Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Administrative
Agent of the amounts of Competitive Bid Loans shall be conclusive in the absence
of manifest error. The Administrative Agent shall promptly, but in any event on
the same Business Day, notify each Lender of its receipt of a Competitive Bid
Borrowing Notice and the aggregate principal amount of such Competitive Bid
Advance allocated to each participating Lender.
 
2.4.          Swing Line Loans.

(a)       On the terms and subject to the conditions and relying upon the
representations and warranties herein set forth, the Swing Line Lender agrees at
any time and from time to time from and including the date hereof to but
excluding the earlier of the Facility Termination Date and the termination of
the Commitments or the Swing Line Commitment, in accordance with the terms
hereof, to make Swing Line Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed the lesser of (i) the amount of its
Swing Line Commitment at such time and (ii) an amount equal to (A) the Aggregate
Commitment at such time, minus (B) the sum of the aggregate principal amounts of
all Ratable Loans, Competitive Bid Loans and Swing Line Loans outstanding at
such time, minus (C) the aggregate Facility Letter of Credit Obligations
outstanding at such time. The Swing Line Loans shall be made by the Swing Line
Lender, at the option of the Borrower, either at the Alternate Base Rate or at
the Alternate Swing Line Rate. All Swing Line Loans shall be in a minimum amount
of $100,000 and in any integral multiple of $100,000 if in excess thereof. In no
event shall any Swing Line Loan be made hereunder if (i) the Administrative
Agent and the Swing Line Lender shall have received notice from the Required
Lenders prior to any such Swing Line Loan that a condition specified in Section
4.1 or 4.2 has not been satisfied and (ii) such condition shall not have been
subsequently waived in compliance with Section 8.2.
 
(b) The Borrower shall give the Swing Line Lender (with a copy to the
Administrative Agent) telephonic, written or telecopy notice (in the case of
telephonic notice, such notice shall be promptly confirmed in writing or by
telecopy) not later than noon, Chicago time, on the day of a proposed Swing Line
Loan. Such notice shall be delivered on a Business Day, shall be irrevocable and
shall refer to this Agreement and shall specify the requested Borrowing Date
(which shall be a Business Day) and amount of such Swing Line Loan.
 
 

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(c)     The Swing Line Lender shall by 2:00 p.m., Chicago time, on the requested
Borrowing Date, make the requested Swing Line Loan by crediting the principal
amount thereof, in immediately available funds, to the account of the Borrower
maintained with the Swing Line Lender or to such other account as may be
designated by the Borrower and be acceptable to the Swing Line Lender.
 
(d)     The Swing Line Loans shall be evidenced by the Swing Line Note and each
Swing Line Loan shall be paid in full by the Borrower on the earlier of the
Facility Termination Date and the date five Business Days after the making of
such Swing Line Loan.
 
(e)     Notwithstanding the occurrence of any Default or Unmatured Default or
noncompliance with the conditions precedent set forth in Article IV, if (i) by
noon Chicago time on the fifth Business Day following the Borrowing Date of any
Swing Line Loan the Administrative Agent shall not have received a Ratable
Borrowing Notice delivered by the Borrower pursuant to Section 2.2.3 requesting
that Ratable Loans be made pursuant to Section 2.2 on the immediately succeeding
Business Day in an amount at least equal to the aggregate principal amount of
such Swing Line Loan or (ii) on any date the Swing Line Lender in its sole
discretion shall so request with respect to the outstanding Swing Line Loans,
the Administrative Agent shall be deemed to have received a Ratable Borrowing
Notice from the Borrower pursuant to Section 2.2.3 requesting that a Ratable
Advance of Alternate Base Rate Loans be made pursuant to Section 2.2 on such
immediately succeeding Business Day in an amount equal to the aggregate amount
of such Swing Line Loans, and the procedures set forth in Section 2.5 shall be
followed in making such Alternate Base Rate Loans. The proceeds of such
Alternate Base Rate Loans (or other Loans described in Section 2.4(e)(i), if
requested) received by the Administrative Agent shall be immediately delivered
to the Swing Line Lender and applied to the direct repayment of such Swing Line
Loans to the extent thereof. Effective on the day such Ratable Loans are made,
the portion of the Swing Line Loans so paid shall no longer be outstanding as
Swing Line Loans and shall be outstanding as Ratable Loans of the Lenders
bearing interest at a rate determined by reference to the Alternate Base Rate,
in accordance with the provisions of this Article II. The Borrower authorizes
the Administrative Agent and the Swing Line Lender to charge the Borrower’s
account maintained with the Swing Line Lender (up to the amount available in
such account) in order to immediately pay the amount of the Swing Line Loans to
the extent amounts received from the Lenders are not sufficient to repay in full
such Swing Line Loans. If any portion of any such amount paid (or deemed paid)
to the Swing Line Lender should be recovered by or on behalf of the Borrower
from the Swing Line Lender in the event of the bankruptcy or reorganization of
the Borrower or otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by Section 11.2.
 
(f)     If, for any reason (including, without limitation, the occurrence of a
Default described in Section 7.6 or 7.7 of Article VII), Alternate Base Rate
Loans may not be, or are not, made pursuant to paragraph (e) of this Section 2.4
to repay Swing Line Loans as required by such paragraph, effective on the date
such Alternate Base Rate Loans would otherwise have been made, (i) each Lender
severally, unconditionally and irrevocably agrees that it shall, without regard
to the occurrence of any Unmatured Default or Default, purchase a
 
 
 

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participating interest in such Swing Line Loans ("Unrefunded Swing Line Loans")
in an amount equal to the amount of Alternate Base Rate Loans which would
otherwise have been made by such Lender pursuant to paragraph (e) of this
Section 2.4 and (ii) each Unrefunded Swing Line Loan previously bearing interest
at the Alternate Swing Line Rate shall commence accruing interest at the
Alternate Base Rate. Each Lender will immediately transfer to the Administrative
Agent, in immediately available funds, the amount of its participation, and the
proceeds of such participation shall be distributed by the Administrative Agent
to the Swing Line Lender in such amount as will reduce the amount of the
participating interest retained by the Swing Line Lender in the Swing Line Loans
to the amount of the Alternate Base Rate Loans which were to have been made by
the Swing Line Lender pursuant to paragraph (e) of this Section 2.4. In the
event a Lender fails to make available to the Swing Line Lender the amount of
such Lender’s participation as provided in this paragraph (f), the Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest at the customary rate set by the Swing Line Lender for
correction of errors among banks for one Business Day and thereafter at the
Alternate Base Rate then in effect. All payments in respect of Unrefunded Swing
Line Loans and participations therein shall be made in accordance with Section
2.12.
 
(g)     Each Lender’s obligation to make Ratable Loans pursuant to paragraph (e)
of this Section 2.4 and to purchase participating interests pursuant to
paragraph (f) of this Section 2.4 shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender or
the Borrower may have against the Swing Line Lender, the Borrower or any other
Person, as the case may be, for any reason whatsoever; (ii) the occurrence or
continuance of a Default or Unmatured Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower or any of its Subsidiaries;
(iv) any breach of this Agreement by the Borrower, any of its Subsidiaries or
any Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
 
2.5.  Availability of Funds. Not later than 1 p.m. (Chicago time) on each
Borrowing Date, each Lender (or in the case of a Competitive Bid Advance, each
Lender making a portion of such Advance) shall make available its Loan or Loans
(other than Swing Line Loans), in funds immediately available in Chicago to the
Administrative Agent at its address specified pursuant to Article XIII. The
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agent’s aforesaid address.

2.6.  Commitment Fee; Reductions and Increases in Aggregate Commitment.
 
(a) The Borrower agrees to pay to the Administrative Agent for the ratable
account of each Lender a commitment fee equal to the Applicable Commitment Fee
Percentage per annum on the daily unborrowed portion of such Lender’s Commitment
(without giving effect to any outstanding Swing Line Loans or Competitive Bid
Loans) from the date hereof to and including the Facility Termination Date
applicable to such Lender, payable in arrears on each Payment Date hereafter and
on the Facility Termination Date.
 
 
 

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(b)     The Borrower may permanently reduce the Aggregate Commitment in whole,
or in part ratably among the Lenders, in a minimum amount of $10,000,000 or any
integral multiple of $1,000,000 in excess thereof, upon at least three Business
Days’ written notice to the Administrative Agent, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
Aggregate Commitment may not be reduced below the sum of (i) the aggregate
principal amount of the outstanding Loans, plus (ii) the aggregate amount of the
outstanding Facility Letter of Credit Obligations. All accrued commitment fees
shall be payable on the effective date of any termination of the obligations of
the Lenders to make Loans hereunder.
 
(c)     The Borrower may, from time to time, at its option, seek to increase the
Aggregate Commitment by up to $150,000,000 in the aggregate (i.e., the Aggregate
Commitment shall not exceed $300,000,000) upon at least three (3) Business Days’
prior notice to the Administrative Agent, which notice shall specify the amount
of any such requested increase (which shall be in an amount not less than
$25,000,000) and shall be delivered at a time when no Default or Unmatured
Default has occurred or is continuing. The Borrower may, after giving such
notice, offer the increase in the Aggregate Commitment to any of the existing
Lenders and/or to other banks, financial institutions or other entities
acceptable to the Administrative Agent on a non pro-rata basis in such amounts
as determined by the Borrower and agreed to by the Administrative Agent. The
Borrower may elect to accept an increase in the Aggregate Commitment in an
amount equal to the aggregate increased commitments offered to the Borrower. No
increase in the Aggregate Commitment shall become effective until (i) the
existing or new Lender extending such incremental commitment amount and the
Borrower shall have executed and delivered to the Administrative Agent an
agreement in writing in form and substance reasonably acceptable to the
Administrative Agent pursuant to which such Lender states its Commitment amount
and agrees to assume and accept the obligations and rights of a Lender hereunder
and (ii) the Borrower has provided the Administrative Agent with such related
certificates, opinions and other documents as the Administrative Agent may
reasonably request. In conjunction with such increase, the Lenders (new or
existing) shall accept (and the existing Lenders shall make) an assignment at
par of an interest in the Loans and Facility Letter of Credit Obligations
outstanding at the time of such Aggregate Commitment increase such that, after
giving effect thereto, all Loans and Facility Letter of Credit Obligations are
held by the Lenders on a pro-rata basis. The Borrower shall make any payments
under Section 3.4 resulting from such assignments.
 
2.7.  Minimum Amount of Each Ratable Advance. Each Ratable Advance shall be in
the minimum amount of $10,000,000 (and in integral multiples of $1,000,000 if in
excess thereof); provided, however, that (a) any Alternate Base Rate Advance may
be in the amount of the unused Aggregate Commitment or in an amount borrowed
pursuant to Section 2.4(e) and (b) in no event shall more than eight (8)
Eurodollar Advances be permitted to be outstanding at any time.

2.8.  Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Advances (other than Competitive Bid
Advances, which may not be voluntarily prepaid), or, in a minimum aggregate
amount of $5,000,000 (or $100,000 in the case of Swing Line Advances) or any
integral multiple of $1,000,000 (or $100,000 in the case of Swing Line Advances)
in excess thereof,
 
 
 

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any portion of the outstanding Advances (other than Competitive Bid Advances)
upon (a) one Business Day’s prior notice to the Administrative Agent in the case
of an Alternate Base Rate Advance, (b) three Business Days’ prior notice to the
Administrative Agent in the case of a Eurodollar Advance or (c) notice to the
Administrative Agent before noon on the date of such prepayment in the case of a
Swing Line Advance. Any prepayment of a Eurodollar Advance prior to the last day
of the applicable Eurodollar Interest Period shall be subject to the indemnity
provisions of Section 3.4.

2.9.  Changes in Interest Rate, etc. Each Alternate Base Rate Advance shall bear
interest at the Alternate Base Rate from and including the date of such Advance
or the date on which such Advance was converted into an Alternate Base Rate
Advance to (but not including) the date on which such Alternate Base Rate
Advance is paid or converted to a Eurodollar Ratable Advance. Changes in the
rate of interest on that portion of any Advance maintained as an Alternate Base
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance, Absolute Rate Advance and Swing Line Loan
shall bear interest from and including the first day of the Interest Period
applicable thereto to, but not including, the last day of such Interest Period
at the interest rate determined as applicable to such Eurodollar Advance,
Absolute Rate Advance or Swing Line Loan. No Interest Period may end after the
Facility Termination Date.

2.10.  Rates Applicable After Default. Notwithstanding anything to the contrary
contained in Section 2.2.3 and 2.2.4, no Advance may be made as, converted into
or continued as a Eurodollar Ratable Advance (except with the consent of the
Administrative Agent and the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing. During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that each Eurodollar Advance, Alternate Base Rate
Advance and Swing Line Loan shall bear interest (for the remainder of the
applicable Interest Period in the case of Eurodollar Advances and Absolute Rate
Advances) at a rate per annum equal to the rate otherwise applicable plus two
percent (2%) per annum; provided, however, that such increased rate shall
automatically and without action of any kind by the Lenders become and remain
applicable until revoked by the Required Lenders in the event of a Default
described in Section 7.6 or 7.7.

2.11.  Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent’s address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (Chicago time) on the date when due and shall be applied
ratably by the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
that the Administrative Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Administrative Agent from such Lender. The Administrative Agent is hereby
authorized to charge the account of the Borrower maintained with JPMorgan Chase
Bank, N.A. for each payment of principal, interest and fees as it becomes due
hereunder, if the Administrative Agent has provided the Borrower with notice of
each such payment at least one day prior to its becoming due hereunder.
 
 
 

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2.12.  Notes; Telephonic Notices. Each Lender is hereby authorized to record the
principal amount of each of its Loans and each repayment on the schedule
attached to its Note; provided, however, that neither the failure to so record
nor any error in such recordation shall affect the Borrower’s obligations under
such Note. The Borrower hereby authorizes the Lenders and the Administrative
Agent to extend, convert or continue Advances, effect selections of Types of
Advances, submit Competitive Bid Quotes and to transfer funds based on
telephonic notices made by any person or persons the Administrative Agent or any
Lender in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative Agent or
any Lender, of each telephonic notice signed by an Authorized Officer or another
management level employee designated in writing by an Authorized Officer to the
Administrative Agent. 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.

2.13.  Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Alternate Base Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which an
Alternate Base Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest upon each Swing Line Loan shall be payable
upon the date such Swing Line Loan is repaid and at its maturity. Interest
accrued on each Eurodollar Advance or Absolute Rate Advance shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Advance or Absolute Rate Advance is prepaid, whether by acceleration
or otherwise, and at maturity. Interest accrued on each Eurodollar Advance or
Absolute Rate Advance having an Interest Period longer than three months shall
also be payable on the last day of each three-month interval during such
Interest Period. Interest and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (Chicago time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.

2.14.  Notification of Advances, Interest Rates, Prepayments, Commitment
Reductions and Issuance Requests. Promptly after receipt thereof, the
Administrative Agent will notify each Lender of the contents of each Aggregate
Commitment reduction notice, Ratable Borrowing Notice, Conversion/Continuation
Notice, Invitation for Competitive Quotes, Issuance Request and repayment notice
received by it hereunder. The Administrative Agent will notify each Lender of
the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
 
 
 

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2.15.  Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or telex notice to the
Administrative Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.

2.16.  Non-Receipt of Funds by the Administrative Agent. Unless the Borrower or
a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (a)
in the case of a Lender, the proceeds of a Loan, or (b) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
the Borrower has not in fact made such payment to the Administrative Agent, the
Lenders shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to the Federal Funds
Effective Rate for such day. If any Lender has not in fact made such payment to
the Administrative Agent, such Lender or the Borrower shall, on demand by the
Administrative Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (a) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day, or (b) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.

2.17.  Taxes.
 
(a)  Any payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes or any other tax based upon any income imposed
on the Administrative Agent or any Lender by the jurisdiction in which the
Administrative Agent or such Lender is incorporated or has its principal place
of business. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other
 
 

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 amounts payable hereunder at the rates or in the amounts specified in or
pursuant to this Agreement; provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the U.S. or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section 2.17. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as practicable
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by any Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section 2.17
shall survive the termination of this Agreement and the payment of all other
amounts payable hereunder.
 
(b) At least five Business Days prior to the first date on which interest or
fees are payable hereunder for the account of any Lender, each Lender that is
not incorporated under the laws of the United States of America, or a state
thereof, agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form W-8BEN or W-8ECI further undertakes to deliver to each
of the Borrower and the Administrative Agent two additional copies of such form
(or a successor form) on or before the date that such form expires (currently,
three successive calendar years for Form W-8BEN and one calendar year for Form
W-8ECI) or becomes obsolete or after the occurrence of any event requiring a
change in the most recent forms so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the Borrower
or the Administrative Agent, in each case certifying that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes, unless an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
 
218.  Administrative Agent’s Fees. The Borrower shall pay to the Administrative
Agent those fees, in addition to the commitment fees referenced in Section
2.6(a), in the amounts and at the times separately agreed to between the
Administrative Agent and the Borrower.

2.19.  Facility Letters of Credit.
 
2.19.1.  Issuance of Facility Letters of Credit. (a) From and after the date
hereof, the Issuer agrees, upon the terms and conditions set forth in this
Agreement, to issue at the request and for the account of the Borrower, one or
more Facility Letters of Credit; provided, however, that the Issuer shall not be
under any obligation to issue, and shall not issue, any Facility Letter of
Credit if (i) any order, judgment or decree of any governmental authority or
other regulatory body with jurisdiction over the Issuer shall purport by its
terms to
 
 

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 enjoin or restrain such Issuer from issuing such Facility Letter of Credit, or
any law or governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) from any governmental authority or
other regulatory body with jurisdiction over the Issuer shall prohibit, or
request that the Issuer refrain from, the issuance of Facility Letters of Credit
in particular or shall impose upon the Issuer with respect to any Facility
Letter of Credit any restriction or reserve or capital requirement (for which
the Issuer is not otherwise compensated) or any unreimbursed loss, cost or
expense which was not applicable, in effect and known to the Issuer as of the
date of this Agreement and which the Issuer in good faith deems material to it;
(ii) one or more of the conditions to such issuance contained in Section 4.2 is
not then satisfied; or (iii) after giving effect to such issuance, the aggregate
outstanding amount of the Facility Letter of Credit Obligations would exceed the
Facility Letter of Credit Sublimit.
 
(b)     In no event shall: (i) the aggregate amount of the Facility Letter of
Credit Obligations at any time exceed the Facility Letter of Credit Sublimit;
(ii) the sum at any time of (A) the aggregate amount of Facility Letter of
Credit Obligations and (B) the aggregate principal balance of outstanding
Advances exceed the amount of the Aggregate Commitment; or (iii) the expiration
date of any Facility Letter of Credit (including, without limitation, Facility
Letters of Credit issued with an automatic "evergreen" provision providing for
renewal absent advance notice by the Borrower or the Issuer), or the date for
payment of any draft presented thereunder and accepted by the Issuer, be later
than the date five (5) Business Days before the Facility Termination Date.
 
2.19.2  Participating Interests. Immediately upon the issuance by the Issuer of
a Facility Letter of Credit in accordance with Section 2.19.4, each Lender shall
be deemed to have irrevocably and unconditionally purchased and received from
the Issuer, without recourse, representation or warranty, an undivided
participation interest equal to its pro-rata share of the Aggregate Commitment
of the face amount of such Facility Letter of Credit and each draw paid by the
Issuer thereunder.  Each Lender’s obligation to pay its proportionate share of
all draws under the Facility Letters of Credit, absent gross negligence or
willful misconduct by the Issuer in honoring any such draw, shall be absolute,
unconditional and irrevocable and in each case shall be made without
counterclaim or set-off by such Lender.
 
2.19.3  Facility Letter of Credit Reimbursement Obligations. (a) The Borrower
agrees to pay to the Issuer of a Facility Letter of Credit (i) on each date that
any amount is drawn under each Facility Letter of Credit a sum (and interest on
such sum as provided in clause (ii) below) equal to the amount so drawn plus all
other charges and expenses with respect thereto specified in Section 2.19.6 or
in the applicable Reimbursement Agreement and (ii) interest on any and all
amounts remaining unpaid under this Section 2.19.3 until payment in full at the
Alternate Base Rate plus the margin specified in Section 2.10. The Borrower
agrees to pay to the Issuer the amount of all Facility Letter of Credit
Reimbursement Obligations owing in respect of any Facility Letter of Credit
immediately when due, under all circumstances,
 
 
 

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including, without limitation, any of the following circumstances: (w) any lack
of validity or enforceability of this Agreement or any of the other Loan
Documents; (x) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against a beneficiary named in a Facility
Letter of Credit, any transferee of any Facility Letter of Credit (or any Person
for whom any such transferee may be acting), any Lender or any other Person,
whether in connection with this Agreement, any Facility Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
Facility Letter of Credit); (y) the validity, sufficiency or genuineness of any
document which the Issuer has determined in good faith complies on its face with
the terms of the applicable Facility Letter of Credit, even if such document
should later prove to have been forged, fraudulent, invalid or insufficient in
any respect or any statement therein shall have been untrue or inaccurate in any
respect; or (z) the surrender or impairment of any security for the performance
or observance of any of the terms hereof.
 
(b)     Notwithstanding any provisions to the contrary in any Reimbursement
Agreement, the Borrower agrees to reimburse the Issuer for amounts which the
Issuer pays under such Facility Letter of Credit no later than the time
specified in this Agreement. If the Borrower does not pay any such Facility
Letter of Credit Reimbursement Obligations when due, the Borrower shall be
deemed to have immediately requested that the Lenders make an Alternate Base
Rate Advance under this Agreement in a principal amount equal to such
unreimbursed Facility Letter of Credit Reimbursement Obligations. The
Administrative Agent shall promptly notify the Lenders of such deemed request
and, without the necessity of compliance with the requirements of Sections 2.2.3
and 4.2, each Lender shall make available to the Administrative Agent its Loan
in the manner prescribed for Alternate Base Rate Advances. The proceeds of such
Loans shall be paid over by the Administrative Agent to the Issuer for the
account of the Borrower in satisfaction of such unreimbursed Facility Letter of
Credit Reimbursement Obligations, which shall thereupon be deemed satisfied by
the proceeds of, and replaced by, such Alternate Base Rate Advance.
 
(c)     If the Issuer makes a payment on account of any Facility Letter of
Credit and is not concurrently reimbursed therefor by the Borrower and if for
any reason an Alternate Base Rate Advance may not be made pursuant to paragraph
(b) above, then as promptly as practical during normal banking hours on the date
of its receipt of such notice or, if not practicable on such date, not later
than noon (Chicago time) on the Business Day immediately succeeding such date of
notification, each Lender shall deliver to the Administrative Agent for the
account of the Issuer, in immediately available funds, the purchase price for
such Lender’s interest in such unreimbursed Facility Letter of Credit
Obligations, which shall be an amount equal to such Lender’s pro-rata share of
such payment. Each Lender shall, upon demand by the Issuer, pay the Issuer
interest on such Lender’s pro-rata share of such draw from the date of payment
by the Issuer on account of such Facility Letter of Credit until the date of
delivery of such funds to the Issuer by such Lender at a rate per annum,
computed for actual days elapsed based on a 360-day year, equal to the Federal
Funds Effective Rate for such period; provided, that such payments shall be made
by the Lenders only in the event and to the extent that the Issuer is not
reimbursed in full by the Borrower for interest on the amount of any draw on the
Facility Letters of Credit.
 
 

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(d)     At any time after the Issuer has made a payment on account of any
Facility Letter of Credit and has received from any other Lender such Lender’s
pro-rata share of such payment, such Issuer shall, forthwith upon its receipt of
any reimbursement (in whole or in part) by the Borrower for such payment, or of
any other amount from the Borrower or any other Person in respect of such
payment (including, without limitation, any payment of interest or penalty fees
and any payment under any collateral account agreement of the Borrower or any
Loan Document but excluding any transfer of funds from any other Lender pursuant
to Section 2.19.3(b)), transfer to such other Lender such other Lender’s ratable
share of such reimbursement or other amount; provided, that interest shall
accrue for the benefit of such Lender from the time such Issuer has made a
payment on account of any Facility Letter of Credit; provided, further, that in
the event that the receipt by the Issuer of such reimbursement or other amount
is found to have been a transfer in fraud of creditors or a preferential payment
under the United States Bankruptcy Code or is otherwise required to be returned,
such Lender shall promptly return to the Issuer any portion thereof previously
transferred by the Issuer to such Lender, but without interest to the extent
that interest is not payable by the Issuer in connection therewith.
 
2.19.4  Procedure for Issuance.  Prior to the issuance of each Facility Letter
of Credit, and as a condition of such issuance, the Borrower shall deliver to
the Issuer (with a copy to the Administrative Agent) a Reimbursement Agreement
signed by the Borrower, together with such other documents or items as may be
required pursuant to the terms thereof, and the proposed form and content of
such Facility Letter of Credit shall be reasonably satisfactory to the Issuer.
Each Facility Letter of Credit shall be issued no earlier than two (2) Business
Days after delivery of the foregoing documents, which delivery may be by the
Borrower to the Issuer by telecopy, telex or other electronic means followed by
delivery of executed originals within five (5) days thereafter. The documents so
delivered shall be in compliance with the requirements set forth in Section
2.19.1(b), and shall specify therein (i) the stated amount of the Facility
Letter of Credit requested, (ii) the effective date of issuance of such
requested Facility Letter of Credit, which shall be a Business Day, (iii) the
date on which such requested Facility Letter of Credit is to expire, which shall
be a Business Day prior to the date five (5) Business Days prior to the Facility
Termination Date, (iv) the entity for whose benefit the requested Facility
Letter of Credit is to be issued, which shall be the Borrower or a Subsidiary,
and (v) the aggregate amount of Facility Letter of Credit Obligations which are
outstanding and which will be outstanding after giving effect to the requested
Facility Letter of Credit issuance. The delivery of the foregoing documents and
information shall constitute an "Issuance Request" for purposes of this
Agreement. Subject to the terms and conditions of Section 2.19.1 and provided
that the applicable conditions set forth in Section 4.2 hereof have been
satisfied, the Issuer shall, on the requested date, issue a Facility Letter of
Credit on behalf of the Borrower in accordance with the Issuer’s usual and
customary business practices. In addition, any amendment of an existing Facility
Letter of Credit shall be deemed to be an issuance of a new Facility Letter of
Credit and shall be subject to the requirements set forth above. The Issuer
shall give the Administrative Agent prompt written notice of the issuance of any
Facility Letter of Credit.
 
 
 

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2.19.5  Nature of the Lenders’ Obligations. (a) As between the Borrower and the
Lenders, the Borrower assumes all risks of the acts and omissions of, or misuse
of the Facility Letters of Credit by, the respective beneficiaries of the
Facility Letters of Credit. In furtherance and not in limitation of the
foregoing, the Lenders shall not be responsible for (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for an issuance of a Facility
Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility 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; (iii) the failure of the beneficiary of a
Facility Letter of Credit to comply fully with conditions required to be
satisfied by any Person other than the Issuer in order to draw upon such
Facility Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; (v) errors in the interpretation of technical terms; (vi) the
misapplication by the beneficiary of a Facility Letter of Credit of the proceeds
of any drawing under such Facility Letter of Credit; or (vii) any consequences
arising from causes beyond control of the Issuer.
 
(b)     In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuer
under or in connection with the Facility Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not put the
Administrative Agent or any Lender under any resulting liability to the Borrower
or relieve the Borrower of any of its obligations hereunder to the Issuer or any
such Person.
 
2.19.6  Facility Letter of Credit Fees. The Borrower hereby agrees to pay to the
Administrative Agent for the account of the Issuer or the Lenders, as
applicable, letter of credit fees with respect to each Facility Letter of Credit
from and including the date of issuance thereof until the date such Facility
Letter of Credit is fully drawn, canceled or expired, (a) for the account of the
Issuer, computed at such rate as may be agreed upon between the Issuer and the
Borrower, on the aggregate initial face amount of such Facility Letter of Credit
payable on the date of issuance, and (b) for the ratable account of the Lenders,
equal to (i) in the case of Commercial Letters of Credit, 50% of the Applicable
Eurodollar Margin times the aggregate initial face amount of such Commercial
Letter of Credit, payable upon the date of issuance thereof, and (ii) in the
case of Standby Letters of Credit, the Applicable Eurodollar Margin times the
aggregate amount from time to time available to be drawn on such Standby
Facility Letter of Credit, calculated with respect to actual days elapsed on the
basis of a 360-day year and payable quarterly in arrears on each Payment Date in
each year and upon the expiration, cancellation or utilization in full of such
Facility Letter of Credit. In addition to the foregoing, the Borrower agrees to
pay the Issuer any other fees customarily charged by it in respect of Letters of
Credit issued by it.
 
2.20.  Extension of Facility Termination Date. The Borrower may request an
extension of the Facility Termination Date by submitting a request for an
extension to the Administrative Agent (an "Extension Request") no more than 60
days but no less than 40 days prior to the then effective Facility Termination
Date. The Extension Request must specify the new Facility Termination Date
requested by the Borrower and the date (which must be at least 30 days after the
Extension Request is delivered to the Administrative Agent) as of which the
 
 
 

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Lenders must respond to the Extension Request (the "Extension Date"). The new
Facility Termination Date shall be no more than 364 days after the Extension
Date, including the Extension Date as one of the days in the calculation of the
days elapsed. Promptly upon receipt of an Extension Request, the Administrative
Agent shall notify each Lender of the contents thereof and shall request each
Lender to approve the Extension Request. Each Lender may, in its sole
discretion, elect to approve or deny such Extension Request. Failure of a Lender
to respond to an Extension Request by the Extension Date shall be deemed a
refusal to approve such Extension Request. Each Lender approving the Extension
Request shall deliver its written consent no later than the Extension Date. Any
consent delivered by a Lender to the Administrative Agent prior to the Extension
Date may be revoked prior to the Extension Date by the Lender giving written
notice of such revocation to the Administrative Agent before the Extension Date.
If the consent of the Required Lenders is received by the Administrative Agent
and remains in effect on the Extension Date, the Facility Termination Date
specified in the Extension Request shall become effective on the Extension Date
only as to those Lenders which provided an effective consent. The then effective
Facility Termination Date shall be unchanged with respect to the Lenders which
did not provide an effective consent, and the Commitments of such Lenders shall
terminate on the unchanged Facility Termination Date, and the Borrower shall
repay all Obligations (including, without limitation, any indemnity obligations
pursuant to Section 3.4) to such Lenders on or before such date, notwithstanding
the provisions of Section 11.2. The Administrative Agent shall promptly notify
the Borrower and each Lender of the Facility Termination Date for each Lender.
In no event shall the Borrower be entitled to seek or obtain more than two
extensions pursuant to this Section 2.20.
 

 ARTICLE III
 
CHANGE IN CIRCUMSTANCES
 
3.1.  Yield Protection. If, after the date hereof, the adoption of or any change
in any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith,

(a)     subjects any Lender or any applicable Lending Installation to any tax,
duty, charge or withholding on or from payments due from the Borrower (excluding
taxation of the overall net income of any Lender or applicable Lending
Installation imposed by the jurisdiction in which such Lender or Lending
Installation is incorporated or has its principal place of business), or changes
(excluding increases in the income tax rates imposed by the jurisdiction in
which the applicable Lender or Lending Installation is incorporated or has its
principal place of business) the basis of taxation of principal, interest or any
other payments to any Lender or Lending Installation in respect of its Loans,
its interest in the Facility Letters of Credit or other amounts due it
hereunder, or
 
(b)     imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Advances), or
 
 

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(c)     imposes any other condition the result of which is to increase the cost
to any Lender or any applicable Lending Installation of making, funding or
maintaining Loans or issuing Facility Letters of Credit or reduces any amount
receivable by any Lender or any applicable Lending Installation in connection
with any Loans or Facility Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference to
the amount of Loans held, Facility Letters of Credit issued or participated in
or interest received by it, by an amount deemed material by such Lender,
 
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or resulting in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans, its interest in the Facility Letters of Credit and its
Commitment.
 
3.2.  Changes in Capital Adequacy Regulations.  If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans, its
interest in the Facility Letters of Credit or its obligation to make Loans or
participate in or issue Facility Letters of Credit hereunder (after taking into
account such Lender’s policies as to capital adequacy).   "Change" means (a) any
change after the date of this Agreement in the Risk-Based Capital Guidelines, or
(b) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender.  "Risk-Based Capital Guidelines" means (a) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement and (b) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
entitled "International Convergence of Capital Measurements and Capital
Standards" and any amendments to such regulations adopted prior to the date of
this Agreement.

3.3.  Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available, or (b) the interest rate applicable to a Type of Advance does not
accurately or fairly reflect the cost of making or maintaining such Advance,
then the Administrative Agent shall suspend the availability of the affected
Type of Advance until such circumstance no longer exists and require any
Eurodollar Advances of the affected Type to be repaid.
 
 
 

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3.4.  Funding Indemnification. If any payment of a Eurodollar Advance or Swing
Line Advance bearing interest at the Alternate Swing Line Rate occurs on a date
which is not the last day of the applicable Interest Period, whether because of
acceleration, prepayment or otherwise, or any such Advance is not made on the
date specified by the Borrower for any reason other than default by the Lenders,
the Borrower will indemnify the Administrative Agent and each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Advance.

3.5.  Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a Type of
Advance under Section 3.3, so long as such designation is not disadvantageous to
such Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if any,
under Section 3.1, 3.2 or 3.4. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by the Borrower
of the written statement. The obligations of the Borrower under Sections 3.1,
3.2 and 3.4 shall survive payment of the Obligations and termination of this
Agreement.
 
 
ARTICLE IV
 
CONDITIONS PRECEDENT
 
4.1.  Initial Loans and Facility Letters of Credit. The Lenders shall not be
required to make the initial Advances hereunder and the Issuer shall not be
required to issue any Facility Letter of Credit hereunder unless the Borrower
has furnished the following to the Administrative Agent with sufficient copies
for the Lenders and the other conditions set forth below have been satisfied, in
each case on or before January 13, 2006:

(a)     Charter Documents; Good Standing Certificates. Copies of the certificate
of incorporation of the Borrower, together with all amendments and other
modifications thereto, certified by the appropriate governmental officer in its
jurisdiction of incorporation, together with a good standing certificate issued
by the Secretary of State of the jurisdiction of its incorporation and such
other jurisdictions as shall be requested by the Administrative Agent.
 
(b)     By-Laws and Resolutions. Copies, certified by the Secretary or Assistant
Secretary of the Borrower, of its by-laws and of its Board of Directors’
resolutions authorizing the execution, delivery and performance of the Loan
Documents to which the Borrower is a party.
 
 
 

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(c)     Secretary’s Certificate. An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Borrower, which shall identify by name
and title and bear the signature of the officers of the Borrower authorized to
sign the Loan Documents and to make borrowings hereunder, upon which certificate
the Administrative Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower.
 
(d)     Officer’s Certificate. A certificate, dated the date hereof, signed by
an Authorized Officer of the Borrower, in form and substance satisfactory to the
Administrative Agent, to the effect that: (i) on the initial Borrowing Date
(both before and after giving effect to the making of any Loans (or issuance of
any Facility Letters of Credit hereunder) no Default or Unmatured Default has
occurred and is continuing; (ii) no injunction or temporary restraining order
which would prohibit the making of any Loans (or issuance of any Facility
Letters of Credit) or other litigation which could reasonably be expected to
have a Material Adverse Effect is pending or, to the best of such Person’s
knowledge, threatened; (iii) each of the representations and warranties set
forth in Article V of this Agreement is true and correct on and as of the
initial Borrowing Date; and (iv) since September 30, 2005, no event or change
has occurred that has caused or evidences a Material Adverse Effect.
 
(e)     Legal Opinions. A written opinion of C. G. Huber, General Counsel for
the Borrower and the Guarantors, addressed to the Administrative Agent and the
Lenders in the form of Exhibit I attached hereto.
 
(f)     Notes. Notes payable to the order of each of the Lenders duly executed
by the Borrower.
 
(g)     Loan Documents. Executed originals of this Agreement and each of the
Loan Documents, which shall be in full force and effect, together with all
schedules, exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant hereto and thereto.
 
(h)     Letters of Direction. Written money transfer instructions with respect
to Advances in form and substance acceptable to the Administrative Agent and its
counsel addressed to the Administrative Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as the
Administrative Agent may have reasonably requested.
 
(i)     Guarantor Charter Documents; Good Standing Certificates. Copies of the
articles or certificates of incorporation of each Guarantor, together with all
amendments thereto, both certified by the Secretary or Assistant Secretary of
such Guarantor, together with a good standing certificate issued by the
Secretary of State of the jurisdiction of its incorporation and such other
jurisdictions as shall be requested by the Administrative Agent.
 
(j)     Guarantor  By-Laws and Resolutions. Copies, certified by the Secretary
or Assistant Secretary of each Guarantor, of its by-laws and Board of Directors’
resolutions of such Guarantor (and resolutions of other bodies, if any are
deemed necessary by counsel for the Administrative Agent) authorizing the
execution, delivery and performance of the Loan Documents to which each such
Guarantor is a party.
 
 

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(k)     Guarantor Secretary’s Certificate. An incumbency certificate, executed
by the Secretary or Assistant Secretary of each Guarantor, which shall identify
by name and title and bear the signature of the officers of such Guarantor
authorized to sign the Loan Documents upon which certificate the Administrative
Agent and the Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
 
(l)     Termination of Existing Credit Agreement. The Existing Credit Agreement
shall have terminated and all outstanding obligations thereunder shall be paid
in full and all commitments thereunder shall have terminated.
 
(m)     Other. Such other documents as the Administrative Agent, any Lender or
their counsel may have reasonably requested.
 
4.2.  Each Future Advance and Facility Letter of Credit. The Lenders shall not
be required to make any Advance and the Issuer shall not be obligated to issue
any future Facility Letter of Credit unless on the applicable Borrowing Date:

(a)     There exists no Default or Unmatured Default and none would result from
such Advance or issuance of such Facility Letter of Credit;
 
(b)     The representations and warranties contained in Article V are true and
correct as of such Borrowing Date;
 
(c)     A Borrowing Notice or Issuance Request, as applicable, shall have been
properly submitted; and
 
(d)     All legal matters incident to the making of such Advance or issuance of
such Facility Letter of Credit shall be satisfactory to the Lenders and their
counsel.
 
Each Ratable Borrowing Notice and Competitive Bid Quote Request with respect to
each such Advance and each Issuance Request with respect to each such Facility
Letter of Credit shall constitute a representation and warranty by the Borrower
that the conditions contained in Section 4.2 have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit G hereto as a condition to making an Advance or issuing a Facility
Letter of Credit.
 
 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES
 
The Borrower represents and warrants to the Administrative Agent and the Lenders
that:
 
5.1.  Corporate Existence and Standing. The Borrower and each Material
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
duly qualified and in good standing as a foreign corporation and is duly
authorized to conduct its business in each jurisdiction in which its business is
conducted or proposed to be conducted except where the failure to be so
qualified or authorized could not reasonably be expected to have a Material
Adverse Effect.
 
 
 
 
 

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5.2.  Authorization and Validity. The Borrower and each Guarantor have all
requisite power and authority (corporate and otherwise) and legal right to
execute and deliver (or file, as the case may be) each of the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery (or filing, as the case may be) by the Borrower and each Guarantor of
the Loan Documents to which it is a party and the performance of their
respective obligations thereunder have been duly authorized by proper corporate
proceedings and the Loan Documents constitute legal, valid and binding
obligations of the Borrower or such Guarantor, as applicable, enforceable
against the Borrower or such Guarantor, as applicable, in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity.

5.3.  Compliance with Laws and Contracts. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Neither the execution and delivery by the Borrower or any Guarantor of
the Loan Documents to which it is a party, the application of the proceeds of
the Loans and the Facility Letters of Credit, the consummation of any
transaction contemplated in the Loan Documents, nor compliance with the
provisions of the Loan Documents will, or at the relevant time did, (a) violate
any law, rule, regulation (including Regulation T, Regulation U and Regulation
X), order, writ, judgment, injunction, decree or award binding on the Borrower
or any Subsidiary or the Borrower’s or any Subsidiary’s charter, articles or
certificate of incorporation or by-laws, (b) violate the provisions of or
require the approval or consent of any party to any indenture, instrument or
agreement to which the Borrower or any Subsidiary 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
Liens permitted by, the Loan Documents) in, of or on the property of the
Borrower or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement, or (c) require any consent of the stockholders of any
Person.

5.4.  Governmental Consents. No order, consent, approval, qualification,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of, Governmental Authority, or
any subdivision thereof, any securities exchange or other Person is or at the
relevant time was required to authorize, or is or at the relevant time was
required in connection with the execution, delivery, consummation or performance
of, or the legality, validity, binding effect or enforceability of, any of the
Loan Documents, the application of the proceeds of the Loans or the Facility
Letters of Credit or any other transaction contemplated in the Loan Documents.

5.5.  Financial Statements. The Borrower has heretofore furnished to each of the
Lenders the September 30, 2005 audited consolidated financial statements of the
Borrower and its Subsidiaries (collectively, the "Financial Statements"). Each
of the Financial Statements was prepared in accordance with Agreement Accounting
Principles and fairly presents the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such dates and the
consolidated results of their operations for the respective periods then ended
(except, in the case of such unaudited statements, for normal year-end audit
adjustments).
 
 
 
 
 

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5.6.  Material Adverse Change. Since September 30, 2005, there has been no
change from that reflected in the Financial Statements, in the business,
Property, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole which could reasonably be
expected to have a Material Adverse Effect.

5.7.  Taxes. The Borrower and its Subsidiaries have filed or caused to be filed
in correct form all United States federal and applicable foreign, state and
local tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any Subsidiary, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which no
Lien exists. No tax liens have been filed and no claims are being asserted with
respect to any such taxes which could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of any taxes or other governmental charges are
in accordance with Agreement Accounting Principles.

5.8.  Litigation and Contingent Obligations. There is no litigation,
arbitration, proceeding, inquiry or governmental investigation (including,
without limitation, by the Federal Trade Commission) pending or, to the
knowledge of any of their officers, threatened against or affecting the Borrower
or any Subsidiary or any of their respective Properties which could reasonably
be expected to have a Material Adverse Effect or to prevent, enjoin or unduly
delay the making of the Loans or the issuance of Facility Letters of Credit
under this Agreement. Neither the Borrower nor any Subsidiary has any material
Contingent Obligations except as set forth on Schedule 5.8.

5.9.  Subsidiaries and Capitalization.   Schedule 5.9 hereto contains an
accurate list of all of the existing Subsidiaries as of the date of this
Agreement, setting forth their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable,
and are free and clear of all Liens, other than the Liens created by the Loan
Documents. No authorized but unissued or treasury shares of capital stock of the
Borrower or any Subsidiary are subject to any option, warrant, right to call or
commitment of any kind or character. Except as set forth on Schedule 5.9,
neither the Borrower nor any Subsidiary has any outstanding stock or securities
convertible into or exchangeable for any shares of its capital stock, or any
right issued to any Person (either preemptive or other) to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to any of its capital stock or any stock or securities
convertible into or exchangeable for any of its capital stock other than as
expressly set forth in the certificate or articles of incorporation of the
Borrower or such Subsidiary. Neither the Borrower nor any Subsidiary is subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock or any convertible securities, rights
or options of the type described in the preceding sentence except as otherwise
set forth on Schedule 5.9. Except as set forth on Schedule 5.9, as of the date
hereof the Borrower does not own or hold, directly or indirectly, any capital
stock or equity security of, or any equity or partnership interest in any Person
other than such Subsidiaries and Vail Resorts, Inc.
 
 
 
 
 

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5.10.  ERISA. Each of the Borrower and each member of the Controlled Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan. Neither the Borrower nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to any Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect. Each Plan complies in all respects
with all applicable requirements of law and regulations, except where the
failure to so comply could not reasonably be expected to cause the relevant Plan
to become disqualified under the Code. Neither the Borrower nor any member of
the Controlled Group has, with respect to any Plan, failed to make any
contribution or pay any amount required under Section 412 of the Code or Section
302 of ERISA or the terms of such Plan. There are no pending or, to the
knowledge of the Borrower, threatened claims, actions, investigations or
lawsuits against any Plan, any fiduciary thereof, or the Borrower or any member
of the Controlled Group with respect to a Plan which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any member
of the Controlled Group has engaged in any prohibited transaction (as defined in
Section 4975 of the Code or Section 406 of ERISA) in connection with any Plan
which would subject such Person to any material liability. Within the last five
years neither the Borrower nor any member of the Controlled Group has engaged in
a transaction which resulted in a Single Employer Plan with an Unfunded
Liability being transferred out of the Controlled Group. No Termination Event
has occurred or is reasonably expected to occur with respect to any Plan which
is subject to Title IV of ERISA.

5.11.  Defaults. No Default or Unmatured Default has occurred and is continuing.

5.12.  Federal Reserve Regulations. Neither the Borrower nor any Subsidiary is
engaged, directly or indirectly, principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying Margin Stock. Neither the
making of any Advance or issuance of any Facility Letters of Credit hereunder,
the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation T, Regulation U or Regulation X. Following the
application of the proceeds of the Loans, less than 25% of the value (as
determined by any reasonable method) of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will continue to be,
represented by Margin Stock.

5.13.  Investment Company; Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is, or after giving effect to any Advance will be,
an "nvestment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. Neither
the Borrower nor any Subsidiary is a "holding company" or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
 
 
 
 
 

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5.14.  Certain Fees. Other than as disclosed on Schedule 5.14, no broker’s or
finder’s fee or commission was, is or will be payable by the Borrower or any
Subsidiary with respect to the transactions contemplated by this Agreement. The
Borrower hereby agrees to indemnify the Administrative Agent and the Lenders
against and agrees that it will hold each of them harmless from any claim,
demand or liability for broker’s or finder’s fees or commissions alleged to have
been incurred by the Borrower in connection with any of the transactions
contemplated by this Agreement and any expenses (including, without limitation,
attorneys’ fees and time charges of attorneys for the Administrative Agent or
any Lender, which attorneys may be employees of the Administrative Agent or any
Lender) arising in connection with any such claim, demand or liability.

5.15.  Solvency. As of the date hereof, after giving effect to the consummation
of the transactions contemplated by the Loan Documents and the payment of all
fees, costs and expenses payable by the Borrower or its Subsidiaries with
respect to the transactions contemplated by the Loan Documents, each of the
Borrower and each Guarantor is Solvent.

5.16.  Ownership of Properties. Except as set forth on Schedule 5.16 hereto, the
Borrower and its Subsidiaries have a subsisting leasehold interest in, or good
and marketable title, free of all Liens, other than those permitted by Section
6.17 or by any of the other Loan Documents, to all of the properties and assets
reflected in the Financial Statements as being owned by it, except for assets
sold, transferred or otherwise disposed of in the ordinary course of business
since the date thereof. There are no actual, threatened or alleged defaults with
respect to any leases of real property under which the Borrower or any
Subsidiary is lessee or lessor which could reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries own or possess rights
to use all material licenses, patents, patent applications, copyrights, service
marks, trademarks and trade names necessary to continue to conduct their
business as heretofore conducted, and no such license, patent or trademark has
been declared invalid, been limited by order of any court or by agreement or is
the subject of any infringement, interference or similar proceeding or
challenge, except for proceedings and challenges which could not reasonably be
expected to have a Material Adverse Effect.

5.17.  Indebtedness. Attached hereto as Schedule 5.17 is a complete and correct
list of all Indebtedness of the Borrower and its Subsidiaries outstanding on the
date of this Agreement (other than Indebtedness in a principal amount not
exceeding $100,000 for a single item of Indebtedness and $500,000 in the
aggregate for all such Indebtedness), showing the aggregate principal amount
which was outstanding on such date.

5.18.  Subordinated Indebtedness. The principal of and interest on the Notes and
all other Obligations will constitute "senior debt" as that or any similar term
is or may be used in any other instrument evidencing or applicable to any
Subordinated Indebtedness of the Borrower.

5.19.  Employee Controversies. There are no strikes, work stoppages or
controversies pending or threatened between the Borrower or any Subsidiary and
any of its employees, other than strikes, work stoppages or controversies
arising in the ordinary course of business, which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
 
 
 
 
 

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5.20.  Material Agreements. Neither the Borrower nor any Subsidiary is a party
to any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse Effect
or which restricts or imposes conditions upon the ability of the Borrower or any
Subsidiary to (a) pay dividends or make other distributions on its capital stock
(b) make loans or advances to the Borrower, (c) repay loans or advances from
Borrower or (d) grant Liens to the Administrative Agent to secure the
Obligations. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.

5.21.  Environmental Laws. The Borrower and its Material Subsidiaries each
conduct in the ordinary course of business a review of the effects of then
existing Environmental Laws and then existing Environmental Claims on its
business, condition (financial and other), results of operations and Property,
and as a result thereof the Borrower and its Material Subsidiaries have
reasonably concluded that the application of such Environmental Laws and the
existence of such Environmental Claims, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.

5.22.  Insurance. The Borrower and its Subsidiaries maintain with financially
sound and reputable insurance companies insurance on their Property in such
amounts and covering such risks as is consistent with sound business practice.

5.23.  Disclosure. None of the (a) information, exhibits or reports furnished or
to be furnished by the Borrower or any Subsidiary to the Administrative Agent or
to any Lender in connection with the negotiation of the Loan Documents, or (b)
representations or warranties of the Borrower or any Subsidiary contained in
this Agreement, the other Loan Documents or any certificate or other written
information furnished to the Administrative Agent or the Lenders by or on behalf
of the Borrower or any Subsidiary pursuant to a request from the Administrative
Agent or the Lenders permitted hereunder and for use in connection with the
transactions contemplated by this Agreement, contained, contains or will contain
any untrue statement of a material fact or omitted, omits or will omit to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. The pro forma financial information contained in such materials is based
upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made. There is no fact known to the Borrower (other than
matters of a general economic nature) that has had or could reasonably be
expected to have a Material Adverse Effect and that has not been disclosed
herein or in such other documents, certificates and other written information
furnished to the Lenders for use in connection with the transactions
contemplated by this Agreement.

5.24.  Material Foreign Subsidiaries. Except as set forth on Schedule 5.24
hereto, as of the Closing Date, Borrower has no Material Foreign Subsidiaries.
 
 
 
 
 

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ARTICLE VI

 
COVENANTS
 
During the term of this Agreement, unless the Required Lenders shall otherwise
consent in writing:
 
6.1.  Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, consistently applied, and furnish
to the Lenders:

(a)     As soon as practicable and in any event within 95 days after the close
of each of its Fiscal Years, an unqualified audit report certified by
independent certified public accountants, acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated and
consolidating basis (consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance sheets as of the
end of such period and related statements of income, retained earnings and cash
flows (but not consolidating statements of retained earnings or cash flows)
accompanied by a certificate of said accountants that, in the course of the
examination necessary for their certification of the foregoing, they have
obtained no knowledge of Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
 
(b)     As soon as practicable and in any event within 50 days after the close
of the first three Fiscal Quarters of each of its Fiscal Years, for itself and
its Subsidiaries, consolidated and consolidating unaudited balance sheets as at
the close of each such period and consolidated and consolidating statements of
income, retained earnings and cash flows (but not consolidating statements of
retained earnings or cash flows) for the period from the beginning of such
Fiscal Year to the end of such quarter, all certified by an Authorized Officer.
 
(c)     As soon as available, but in any event not later than the last Business
Day in November of each year, a copy of the plan and forecast of the Borrower,
and its Subsidiaries for the next Fiscal Year organized by individual lines of
business (including a projected consolidated and consolidating balance sheet,
income statement and funds flow statement).
 
(d)     Together with the financial statements required by clauses (a) and (b)
above, a compliance certificate in substantially the form of Exhibit G hereto
signed by an Authorized Officer showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the nature and
status thereof.
 
(e)     Within 270 days after the close of each Fiscal Year, a statement of the
Unfunded Liabilities of each Single Employer Plan, certified as correct by an
actuary enrolled under ERISA.
 
 
 
 
 
 

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(f)     As soon as possible and in any event within 10 days after the Borrower
knows that any Termination Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer, treasurer or controller of the
Borrower, describing said Termination Event and the action which the Borrower
proposes to take with respect thereto.
 
(g)     As soon as possible and in any event within 10 days after the Borrower
learns thereof, notice of the assertion or commencement of any claims, action,
suit or proceeding against or affecting the Borrower or any Subsidiary which
could reasonably be expected to have a Material Adverse Effect.
 
(h)     Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished.
 
(i)     Promptly upon the filing thereof, copies of all registration statements
and annual, quarterly, monthly or other regular reports which the Borrower or
any of its Subsidiaries files with the Securities and Exchange Commission.
 
(j)     Such other information (including non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably request.
 
6.2.  Use of Proceeds. The Borrower will, and will cause each Subsidiary to, use
the proceeds of the Advances to meet the general corporate and working capital
needs of the Borrower and its Subsidiaries, including the making of stock
redemptions and repurchases, dividends on its capital stock, Investments and
non-hostile Purchases, all as permitted hereunder. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances or any
Facility Letter of Credit to purchase or carry any "margin stock" (as defined in
Regulation U) or to finance the Purchase of any Person which has not been
approved and recommended by the board of directors (or functional equivalent
thereof) of such Person.
 
6.3.  Notice of Default. The Borrower will give prompt notice in writing to the
Lenders of the occurrence of (a) any Default or Unmatured Default and (b) of any
other event or development, financial or other, relating specifically to the
Borrower or any of its Subsidiaries (and not of a general economic or political
nature) which could reasonably be expected to have a Material Adverse Effect.

6.4.  Conduct of Business. The Borrower will, and will cause each Subsidiary to,
carry on and conduct its business in substantially the same manner as is
presently conducted or in other consumer products markets and the manufacturing
of ingredients therefor, and to do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to maintain such authority could not reasonably be
expected to have a Material Adverse Effect.

6.5.  Taxes. The Borrower will, and will cause each Subsidiary to, timely file
complete and correct United States federal and applicable foreign, state and
local tax returns required by applicable law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside.
 
 
 
 
 

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6.6.  Insurance. The Borrower will, and will cause each Subsidiary to, maintain
with financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice for similarly situated businesses in the industries in which
the Borrower and its Subsidiaries operate, and the Borrower will furnish to the
Administrative Agent and any Lender upon request full information as to the
insurance carried.

6.7.  Compliance with Laws. The Borrower will, and will cause each Subsidiary
to, comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, the failure to comply
with which could reasonably be expected to have a Material Adverse Effect.

6.8.  Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

6.9.  Inspection. The Borrower will, and will cause each Subsidiary to, permit
the Administrative Agent and the Lenders, by their respective representatives
and agents, to inspect any of the Property, corporate books and financial
records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the Borrower
and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Lenders may designate.
The Borrower shall reimburse the Administrative Agent and the Lenders for any
costs and expenses incurred in connection with any such inspection, examination
or copies made during the pendency of a Default. The Borrower will keep or cause
to be kept, and cause each Subsidiary to keep or cause to be kept, appropriate
records and books of account in which complete entries are to be made reflecting
its and their business and financial transactions, such entries to be made in
accordance with Agreement Accounting Principles consistently applied.

6.10.  Capital Stock and Dividends. The Borrower will not, nor will it permit
any Subsidiary to issue or have outstanding any preferred stock, other than
preferred stock not having mandatory redemption, retirement and other repurchase
dates commencing less than 91 days after the Facility Termination Date then in
effect.

6.11.  Indebtedness. The Borrower will not, nor will it permit any Subsidiary
to, create, incur or suffer to exist any Indebtedness, except:

(a)     the Loans;
 
 
 
 
 

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(b)     Indebtedness existing on the date hereof and described in Schedule 5.17;
 
(c)     Contingent Obligations permitted by Section 6.16;
 
(d)     Rate-Hedging Obligations incurred in the ordinary course of business;
 
(e)     Indebtedness arising in connection with the Accounts Receivable
Financing Program; and
 
(f)     other Indebtedness so long as immediately after giving effect to the
incurrence of such Indebtedness, the Borrower is in compliance with the
financial covenants set forth in Section 6.24.
 
6.12.  Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that (a) a
Wholly-Owned Subsidiary may merge into the Borrower or any Wholly-Owned
Subsidiary of the Borrower, (b) the Borrower or any Subsidiary may merge or
consolidate with any other Person so long as the Borrower or such Subsidiary is
the continuing or surviving corporation and, prior to and after giving effect to
such merger or consolidation, no Default or Unmatured Default shall exist, and
(c) any Subsidiary may enter into a merger or consolidation as a means of
effecting a disposition permitted by Section 6.13.

6.13.  Sale of Assets. The Borrower will not, nor will it permit any Subsidiary
to, lease, sell, transfer or otherwise dispose of its Property to any other
Person except for (a) sales of inventory or unused or obsolete equipment in the
ordinary course of business, (b) sales of Borrower’s or any of Borrower’s
Subsidiaries’ stock in Vail Resorts, Inc., and (c) leases, sales, transfers or
other dispositions of its Property that, together with all other Property of the
Borrower and its Subsidiaries previously leased, sold, transferred or otherwise
disposed of (other than inventory or unused or obsolete equipment sold in the
ordinary course of business and accounts receivables transactions permitted by
Section 6.14) as permitted by this Section 6.13 since the date hereof, do not
constitute a Substantial Portion of the Property of Borrower and its
Subsidiaries.

6.14.  Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse, except that the Borrower or any Subsidiary
may sell or otherwise grant an interest in its accounts receivable to other
Persons, in each case pursuant to an Accounts Receivable Financing Program.

6.15.  Investments and Purchases. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Investments (including, without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any Purchases, except:

(a)     Short-term obligations of, or fully guaranteed by, the United States of
America and short-term obligations of United States government agencies;
 
 
 
 
 

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(b)     Commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s;
 
(c)     Demand deposit and money market bank accounts maintained in the ordinary
course of business with Initial Lenders or with commercial banks which are
members of the Federal Deposit Insurance Corporation;
 
(d)     Bankers acceptances and certificates of deposit issued by and time
deposits with Initial Lenders or with commercial banks (whether domestic or
foreign) rated B or better by Thomson, A or better by S&P or A2 or better by
Moody’s;
 
(e)     Repurchase agreements with Initial Lenders or with commercial banks
(whether domestic or foreign) rated B or better by Thomson, A or better by S&P
or A2 or better by Moody’s, so long at least 102% of the principal amount of
each repurchase agreement is collateralized by obligations of, or fully
guaranteed by, the United States of America or by commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s;
 
(f)     Loan participations and master notes with corporations rated A-1 or
better by S&P or P-1 or better by Moody’s and with Initial Lenders or with
commercial banks rated B or better by Thomson, A or better by S&P or A2 or
better by Moody’s;
 
(g)     Money market preferred stock accounts in corporations rated A or better
by S&P or A2 or better by Moody’s or in other corporations so long as such
Investments are secured by Letters of Credit issued by Initial Lenders or by
commercial banks rated B or better by Thomson, A or better by S&P or A2 or
better by Moody’s;
 
(h)     Existing Investments in Subsidiaries and additional Investments in
Guarantors;
 
(i)     Other Investments in existence on the date hereof and described in
Schedule 6.15 hereto;
 
(j)     Other Investments in Persons or Subsidiaries which are not Guarantors
(including, without limitation, (i) any Investment in a joint venture and (ii)
the creation of and the Investment in any Subsidiary that is not a Guarantor) in
an aggregate amount not exceeding $20,000,000;
 
(k)     Investments in, and the creation of, any special purpose Subsidiary
created for the purpose of entering into the Accounts Receivable Financing
Program;
 
(l)     Additional equity Investments in Vail Resorts, Inc. necessary to permit
the Borrower to retain equity accounting treatment for such Investment;
 
(m)     (i) Non-hostile Purchases in the same line of business or related or
ancillary businesses as the Borrower (including but not limited to consumer
packaged goods), not exceeding $50,000,000 in the case of any single Purchase or
series of related Purchases, provided that (A) there shall exist no Default or
Unmatured Default either immediately before or immediately after giving effect
to any such
 
 
 
 
 

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Purchase and (B) the representations and warranties contained in Article V are
true and correct both immediately before and immediately after giving effect to
any such Purchases, or (ii) non-hostile Purchases in the same line of business
or related or ancillary businesses as the Borrower (including but not limited to
consumer packaged goods), in excess of $50,000,000 in the case of any single
Purchase or series of related Purchases, provided that (A) there shall exist no
Default or Unmatured Default either immediately before or immediately after
giving effect to any such Purchases, (B) the representations and warranties
contained in Article V are true and correct both immediately before and
immediately after giving effect to any such Purchases, and (C) the Borrower
submits pro forma financial statements for the most recent period of four
consecutive Fiscal Quarters for which financial statements have been furnished
or are due pursuant to Section 6.1 and a certificate executed by an Authorized
Officer of the Borrower prior to closing any such transaction showing that the
Borrower is in compliance with Section 6.24 (treating such Purchase as having
occurred on the first day of such four-quarter period); and
 
(n)     United States mutual funds that invest solely in any of the Investments
described in subsections (a) through (g) above.
 
6.16.  Contingent Obligations. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) by endorsement of instruments for deposit or
collection in the ordinary course of business, (b) the Subsidiary Guaranty and
(c) the Ralston Obligations.

6.17.  Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:

(a)     Liens for taxes, assessments or governmental charges or levies on its
Property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with generally
accepted principles of accounting shall have been set aside on its books;
 
(b)     Liens imposed by law, such as carriers’, warehousemen’s and mechanics’
liens and other similar liens arising in the ordinary course of business which
secure the payment of obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
 
(c)     Liens arising out of pledges or deposits under worker’s compensation
laws, unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation;
 
(d)     Liens arising out of good faith deposits in connection with or to secure
performance of statutory obligations, surety and appeal bonds, government
contracts, leases otherwise permitted hereunder, performance and return of money
bonds and other similar obligations incurred in the ordinary course of business;
 
 
 
 
 

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(e)     Easements, minor defects or irregularities in title, building
restrictions and such other encumbrances or charges against real property, all
of which as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect (i) the
marketability of the same or (ii) interfere with the use thereof in the business
of the Borrower or the Subsidiaries;
 
(f)     Liens existing on the date hereof and described in Schedule 6.17 hereto,
including extensions, renewals and replacements thereof in whole or in part, so
long as the principal amount of the Indebtedness secured thereby at the time of
such extension, renewal or replacement is limited to all or any part of the
Property (including improvements thereon) securing the Lien so extended, renewed
or replaced;
 
(g)     Liens on the Property of a Subsidiary of the Borrower and exclusively
securing Indebtedness of such Subsidiary to the Borrower or any Guarantor;
 
(h)     Liens of purchasers or providers of financing under an Accounts
Receivable Financing Program in accordance with Section 6.14 herein;
 
(i)     Liens on the capital stock of any Material Foreign Subsidiary and
exclusively securing Indebtedness permitted by Section 6.11, so long as such
Liens are pari passu or junior to the Liens granted pursuant to Section 6.27;
 
(j)     Liens on the capital stock of Vail Resorts, Inc. in connection with the
sale or forward sale of such stock; and
 
(k)    Other Liens securing aggregate principal Indebtedness at no time
exceeding $25,000,000.
 
6.18.  Lease Rentals. The Borrower will not, nor will it permit any Subsidiary
to, create, incur or suffer to exist obligations for Rentals in excess of
$40,000,000 during any one Fiscal Year on a non-cumulative basis in the
aggregate for the Borrower and its Subsidiaries.

6.19.  Affiliates. The Borrower will not, and will not permit any Subsidiary to,
enter into any transaction (including, without limitation, the purchase or sale
of any Property or service) with, or make any payment or transfer to, any
Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower’s or such Subsidiary’s business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms-length
transaction, (b) transactions among the Borrower and Guarantors and (c) in
connection with the Accounts Receivable Financing Program.

6.20.  Subordinated Indebtedness; Other Indebtedness. The Borrower will not, and
will not permit any Subsidiary to, make any amendment or modification to the
indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness.
 
 
 
 
 

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6.21.  Environmental Matters. The Borrower shall and shall cause each of its
Material Subsidiaries to conduct in the ordinary course of its business reviews
of the effects of then existing Environmental Laws and then existing
Environmental Claims on its business, condition (financial and other), results
of operations and Property and to take all actions required by such
Environmental Laws and in respect of such Environmental Claims, except where the
failure to so act could not reasonably be expected to have a Material Adverse
Effect.

6.22.  Change in Corporate Structure; Fiscal Year. The Borrower shall not, nor
shall it permit any Subsidiary to, (a) permit any amendment or modification to
be made to its certificate or articles of incorporation or by-laws which is
materially adverse to the interests of the Lenders or (b) change its Fiscal Year
to end on any date other than September 30 of each year.

6.23.  Inconsistent Agreements. The Borrower shall not, nor shall it permit any
Subsidiary to, enter into any indenture, agreement, instrument or other
arrangement which, (a) directly or indirectly prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence of the Obligations, the granting of Liens to secure the
Obligations (other than agreements by the Borrower that it will grant Liens to
secure any Rate Hedging Obligations to the same extent as, and pari passu with,
any Liens granted to secure the Obligations), the provision of the Subsidiary
Guaranty, the amending of the Loan Documents or the ability of any Subsidiary
(other than a special purpose Subsidiary created for the purpose of entering
into the Accounts Receivable Financing Program) to (i) pay dividends or make
other distributions on its capital stock, (ii) make loans or advances to the
Borrower or (iii) repay loans or advances from the Borrower or (b) contains any
provision which would be violated or breached by the making of Advances, by the
issuance of Facility Letters of Credit or by the performance by the Borrower or
any Subsidiary of any of its obligations under any Loan Document.

6.24.  Financial Covenants. The Borrower on a consolidated basis with its
Subsidiaries shall:

6.24.1. Leverage Ratio. As of the end of each Fiscal Quarter, maintain a
Leverage Ratio of not more than 3.50:1.00
 
6.24.2. Interest Expense Coverage Ratio. As of the end of each four Fiscal
Quarters ending after the date hereof, maintain an Interest Expense Coverage
Ratio of not less than 3.00:1.00
 
6.25.  ERISA Compliance.
 
With respect to any Plan, neither the Borrower nor any Subsidiary shall:
 
(a)     engage in any åprohibited transactionæ (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of the
Code in excess of $10,000,000 could be imposed;
 
 
 
 
 

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(b)     permit the occurrence of any Termination Event which could result in a
liability to the Borrower or any other member of the Controlled Group in excess
of $10,000,000; or
 
(c)     permit the establishment or amendment of any Plan or fail to comply with
the applicable provisions of ERISA and the Code with respect to any Plan which
could result in liability to the Borrower or any other member of the Controlled
Group which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
 
6.26.  Material Subsidiaries. The Borrower shall cause each of its Subsidiaries
which becomes a Material Subsidiary on or after the date hereof to join the
Subsidiary Guaranty as a Guarantor pursuant to a joinder agreement in the form
attached to the Subsidiary Guaranty within thirty (30) days of such Person
becoming a Material Subsidiary.

6.27.  Material Foreign Subsidiaries. Within thirty (30) days after any Person
becomes a Material Foreign Subsidiary, the Borrower shall, or shall cause its
applicable Subsidiary to, pledge to the Administrative Agent 65% of the capital
stock of such Person to secure the Obligations and shall deliver such documents
as the Administrative Agent may reasonably require in connection therewith.
Notwithstanding the foregoing, the Borrower shall cause RH Financial Corporation
to, pledge to the Administrative Agent 65% of the capital stock of each of
Waffle Holdings Ltd., a corporation organized under the laws of British
Columbia, and Western Waffles Corp., a corporation organized under the laws of
British Columbia, within sixty (60) days of the Closing Date.
 
 
ARTICLE VII

DEFAULTS
 
The occurrence of any one or more of the following events shall constitute a
Default:
 
7.1.  Any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent
under or in connection with this Agreement, any other Loan Document, any Loan,
any Facility Letter of Credit or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be false in any
material respect on the date as of which made or deemed made.

7.2.  Nonpayment of (a) any principal of any Note or any Reimbursement
Obligation when due, or (b) any interest upon any Note or any commitment fee or
other fee or obligations under any of the Loan Documents within five days after
the same becomes due.

7.3.  The breach by the Borrower of any of the terms or provisions of Section
6.2, Section 6.3(a) or Sections 6.10 through 6.24.

 
 
 
 

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7.4.  The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within thirty (30) days after written notice
from the Administrative Agent or any Lender.

7.5.  Failure of the Borrower or any of its Subsidiaries to pay any Indebtedness
aggregating in excess of $25,000,000 when due; or the default by the Borrower or
any of its Subsidiaries in the performance of any term, provision or condition
contained in any agreement or agreements under which any such Indebtedness was
created or is governed, or the occurrence of any other event or existence of any
other condition, the effect of any of which is to cause, or to permit the holder
or holders of such Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity; or any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the stated maturity
thereof.

7.6.  The Borrower or any of its Subsidiaries shall (a) have an order for relief
entered with respect to it under the federal bankruptcy laws as now or hereafter
in effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute any proceeding seeking an order for
relief under the federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (e)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6, (f) fail to contest in good faith any appointment
or proceeding described in Section 7.7 or (g) become unable to pay, not pay, or
admit in writing its inability to pay, its debts generally as they become due.

7.7.  Without the application, approval or consent of the Borrower or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section 7.6(d)
shall be instituted against the Borrower or any of its Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty consecutive days.

7.8.  Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
 
 
 
 
 

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7.9.  The Borrower or any of its Subsidiaries shall fail within thirty days to
pay, bond or otherwise discharge any judgments or orders for the payment of an
aggregate amount in excess of $15,000,000, which is not covered by undisputed
insurance or stayed on appeal or otherwise being appropriately contested in good
faith and as to which no enforcement actions have been commenced.

7.10.  Any Change in Control shall occur.

7.11.  The Subsidiary Guaranty shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Subsidiary Guaranty, or any Guarantor shall fail to
comply with any of the terms or provisions of the Subsidiary Guaranty, or any
Guarantor denies that it has any further liability under the Subsidiary
Guaranty, or gives notice to such effect.

7.12.  The Unfunded Liabilities of all Single Employer Plans shall exceed in the
aggregate an amount which could reasonably be expected to have a Material
Adverse Effect or any Reportable Event shall occur in connection with any Plan.

7.13.  The Borrower or any other member of the Controlled Group shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $15,000,000.

 
ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
 
8.1.  Acceleration. If any Default described in Section 7.6 or 7.7 occurs with
respect to the Borrower, the obligations of the Lenders to make Loans or issue
Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Administrative Agent or any Lender. If any other
Default occurs, the Required Lenders (or the Administrative Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans or issue Facility Letters of Credit hereunder, or declare
the Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives. In
addition to the foregoing, following the occurrence and during the continuance
of a Default, so long as any Facility Letter of Credit has not been fully drawn
and has not been canceled or expired by its terms, upon demand by the
Administrative Agent, the Borrower shall deposit in an account (the "Letter of
Credit Cash Collateral Account") maintained with JPMorgan Chase in the name of
the Administrative Agent, for the ratable benefit of the Lenders and the
Administrative Agent, cash in an amount equal to the
 
 
 
 
 

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aggregate undrawn face amount of all outstanding Facility Letters of Credit and
all fees and other amounts due or which may become due with respect thereto. The
Borrower shall have no control over funds in the Letter of Credit Cash
Collateral Account, which funds shall be invested by the Administrative Agent
from time to time in its discretion in certificates of deposit of JPMorgan Chase
Bank, N.A. having a maturity not exceeding thirty days. Such funds shall be
promptly applied by the Administrative Agent to reimburse the Issuer for drafts
drawn from time to time under the Facility Letters of Credit. Such funds, if
any, remaining in the Letter of Credit Cash Collateral Account following the
payment of all Obligations in full or the earlier termination of all Defaults
shall, unless the Administrative Agent is otherwise directed by a court of
competent jurisdiction, be promptly paid over to the Borrower.

If, within ten Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
 
8.2.  Amendments. Subject to the provisions of this Article VIII, the Required
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender:

(a)     Extend the final maturity of any Loan or Note or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest or
fees thereon;
 
(b)     Reduce the percentage specified in the definition of Required Lenders;
 
(c)     Reduce the amount of or extend the date for the mandatory payments
required under Section 2.1.2, increase the amount of the Commitment of any
Lender hereunder (except in accordance with Section 2.6(c)), or amend Section
2.6(c) to allow the Aggregate Commitment to increase by more than $100,000,000;
 
(d)    Subject to Section 2.20, extend the Facility Termination Date or permit
any Facility Letter of Credit to have an expiry date beyond the Facility
Termination Date then in effect;
 
(e)     Amend this Section 8.2;
 
(f)     Release any Guarantor from the Subsidiary Guaranty; or
 
(g)    Permit any assignment by the Borrower of its Obligations or its rights
hereunder.
 
 
 
 
 

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No amendment of any provision of this Agreement relating to (i) the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, (ii) the Issuer or the Facility Letters of Credit shall be
effective without the consent of the Issuer or (iii) Swing Line Loans shall be
effective without the consent of the Swing Line Lender. The Administrative Agent
may waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
 
8.3.  Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
 
 
ARTICLE IX
 
GENERAL PROVISIONS
 
9.1.  Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement or of the Borrower or any Subsidiary
contained in any Loan Document shall survive delivery of the Notes and the
making of the Loans herein contemplated.

9.2.  Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

9.3.  Taxes. Any stamp, documentary or similar taxes, assessments or charges
payable or ruled payable by any governmental authority in respect of the Loan
Documents shall be paid by the Borrower, together with interest and penalties,
if any.

9.4.  Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

9.5.  Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Administrative Agent, and the Lenders relating to the subject matter thereof
other than the fee letter dated November 18, 2005 in favor of JPMorgan Chase
Bank, N.A.
 
 
 
 
 

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9.6.  Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.

9.7.  Expenses; Indemnification. The Borrower shall reimburse the Administrative
Agent, and the Arrangers for any costs, internal charges and out-of-pocket
expenses (including attorneys’ fees and time charges of attorneys for the
Administrative Agent and the Arrangers, which attorneys may be employees of the
Administrative Agent or any Arranger) paid or incurred by the Administrative
Agent or any Arranger in connection with the preparation, negotiation,
execution, delivery, review, amendment, modification, syndication and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Administrative Agent, the Arrangers and the Lenders for any costs, internal
charges and out-of-pocket expenses (including attorneys’ fees and time charges
of attorneys for the Administrative Agent, the Arrangers and the Lenders, which
attorneys may be employees of the Administrative Agent, any Arranger or the
Lenders) paid or incurred by the Administrative Agent, any Arranger or any
Lender in connection with the collection and enforcement of the Loan Documents.
The Borrower further agrees to indemnify the Administrative Agent, each Arranger
and each Lender, its directors, officers and employees against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Administrative Agent, any Arranger or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby or thereby or the
direct or indirect application or proposed application of the proceeds of any
Loan hereunder or the use or intended use of any Facility Letter of Credit,
except to the extent that they arise out of the gross negligence or willful
misconduct of the party seeking indemnification. The obligations of the Borrower
under this Section shall survive the termination of this Agreement.

9.8.  Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.

9.9.  Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.

9.10.  Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
 
 
 
 
 

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9.11.  Nonliability of Lenders. The relationship between the Borrower and the
Lenders and the Administrative Agent shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Administrative Agent nor any
Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower’s business
or operations. The Borrower shall rely entirely upon its own judgment with
respect to its business, and any review, inspection or supervision of, or
information supplied to the Borrower by the Administrative Agent or the Lenders
is for the protection of the Administrative Agent and the Lenders and neither
the Borrower nor any other Person is entitled to rely thereon. The Borrower
agrees that neither the Administrative Agent nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any punitive, special, indirect or consequential damages
suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby or the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith.

9.12.  CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

9.13.  CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK COUNTY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF
THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK COUNTY, NEW YORK;
PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT IN OTHER COURTS IF JURISDICTION
MAY NOT BE OBTAINED IN A COURT IN NEW YORK COUNTY, NEW YORK.

9.14.  WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
 
 
 
 
 

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9.15.  Disclosure. The Borrower and each Lender hereby (a) acknowledge and agree
that JPMorgan Chase Bank, N.A. and/or its Affiliates from time to time may hold
other investments in, make other loans to or have other relationships with the
Borrower, including, without limitation, in connection with any interest rate
hedging instruments or agreements or swap transactions, and (b) waive any
liability of JPMorgan Chase Bank, N.A. or such Affiliate to the Borrower or any
Lender, respectively, arising out of or resulting from such investments, loans
or relationships other than liabilities arising out of the gross negligence or
willful misconduct of JPMorgan Chase Bank, N.A. or its Affiliates.

9.16.  Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Administrative Agent and the Lenders and each party has notified
the Administrative Agent that it has taken such action.

9.17.  Confidentiality. Each Lender agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information provided to it by the Borrower, or by the Administrative Agent on
the Borrower’s behalf, in connection with this Agreement or any other Loan
Document, and no Lender shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement, except
to the extent such information (a) was or becomes generally available to the
public other than as a result of a disclosure by such Lender, or (b) was or
becomes available on a non-confidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality agreement
with the Borrower or its agents known to such Lender; provided, further,
however, that any Lender may disclose such information (i) after being advised
by counsel (including internal counsel), at the request or pursuant to any
requirement of any governmental or regulatory authority to which such Lender is
subject or in connection with an examination of such Lender by any such
authority; (ii) pursuant to subpoena or other court process, provided that, if
it is lawful to do so, such Lender shall give prompt notice to the Borrower of
service thereof so that the Borrower may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this Section 9.17;
(iii) after being advised by counsel (including internal counsel), when required
to do so in accordance with the provisions of any applicable requirement of law;
(iv) to the extent reasonably required in connection with any litigation or
proceeding involving the Borrower or any of its Subsidiaries to which the
Administrative Agent, any Lender or their respective Affiliates may be party,
(v) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document, (vi) to such Lender’s
independent auditors and other professional advisors as to which such
information has been identified as confidential, and (vii) to such Lender’s
Affiliates which have agreed to be bound by the same confidentiality obligations
as apply to such Lender.
 
 
 
 
 

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9.18.  USA PATRIOT Act. Each Lender that is subject to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "Act") hereby notifies the Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in
accordance with the Act.
 
 
ARTICLE X

THE ADMINISTRATIVE AGENT
 
10.1.  Appointment. JPMorgan Chase Bank, N.A. is hereby appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
authorizes the Administrative Agent to act as the administrative agent of such
Lender. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article X. The Administrative Agent shall not have
a fiduciary relationship in respect of the Borrower or any Lender by reason of
this Agreement.

10.2.  Powers. The Administrative Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Administrative
Agent by the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent shall have no implied duties to the
Lenders, or any obligation to the Lenders to take any action thereunder, except
any action specifically provided by the Loan Documents to be taken by the
Administrative Agent.

10.3.  General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except for
its or their own gross negligence or willful misconduct.

10.4.  No Responsibility for Loans, Recitals, etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder, (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered to the Administrative Agent and
not waived at closing, or (d) the validity, effectiveness, sufficiency,
enforceability or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith. The Administrative Agent shall have
no duty to disclose to the Lenders information that is not required to be
furnished by the Borrower to the Administrative Agent at such time, but is
voluntarily furnished by the Borrower to the Administrative Agent (either in its
capacity as Administrative Agent or in its individual capacity).
 
 
 
 
 

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10.5.  Action on Instructions of Lenders. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders (or, to the extent required by Section 8.2, all Lenders),
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders and on all holders of Notes. The
Administrative Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.

10.6.  Employment of Agents and Counsel. The Administrative Agent may execute
any of its duties as Administrative Agent hereunder and under any other Loan
Document by or through employees, agents and attorneys-in-fact and shall not be
answerable to the Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other Loan
Document. 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
facility provided for herein as well as activities as Administrative Agent.

10.7.   Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.

10.8  Administrative Agent’s Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to their respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (a) for
any amounts not reimbursed by the Borrower for which the Administrative Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (b) for any
other expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents, and (c) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents;
provided, that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Administrative
Agent. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
 
 
 
 
 

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10.9.  Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders.

10.10.  Rights as a Lender. In the event the Administrative Agent is a Lender,
the Administrative Agent shall have the same rights and powers hereunder and
under any other Loan Document as any Lender and may exercise the same as though
it were not the Administrative Agent, and the term "Lender" or "Lenders" shall,
at any time when the Administrative Agent is a Lender, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender.

10.11.  Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. 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 deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.

10.12.  Successor Administrative Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower, such
resignation to be effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been appointed, forty-five
days after the retiring Administrative Agent gives notice of its intention to
resign. Upon any such resignation, the Required Lenders shall have the right to
appoint, on behalf of the Lenders, a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
resigning Administrative Agent’s giving notice of its intention to resign, then
the resigning Administrative Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent. If the Administrative Agent has
resigned and no successor Administrative Agent has been appointed, the Lenders
may perform all the duties of the Administrative Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the
 
 
 
 
 

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Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $50,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Administrative Agent. Upon the effectiveness of the resignation
of the Administrative Agent, the resigning Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation of an Administrative
Agent, the provisions of this Article X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.

10.13.  Syndication Agent; Documentation Agents. Any Lender identified in this
Agreement as a Syndication Agent or a Documentation Agent shall not 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 such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same acknowledgments
with respect to such Lenders as it makes with respect to the Administrative
Agent in Section 10.11.
 

ARTICLE XI
 
SETOFF; RATABLE PAYMENTS
 
11.1.  Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due.

11.2.  Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2 or 3.4) in a greater proportion than its pro-rata share of such
Loans, such Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to Indebtedness of the Borrower to a
Lender, other than Indebtedness evidenced by any of the Notes held by such
Lender, such amount shall be applied ratably to such other Indebtedness and to
the Indebtedness evidenced by such Notes.
 
 
ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
 
12.1.  Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns, except that (a) the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents,
and (b) any assignment by any Lender must be made in compliance with Section
12.3. Notwithstanding clause (b) of this Section, any Lender may at any time,
without the consent of the Borrower or the Administrative Agent, assign all or
any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal Reserve
Bank shall release the transferor Lender from its obligations hereunder. The
Administrative Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 12.3 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Administrative Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.

12.2.  Participations.
 
12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Lender’s interest
in any Facility Letter of Credit Obligation, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under the Loan Documents.
 
12.2.2. Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver which effects any of the modifications referenced in clauses (a) through
(g) of Section 8.2.
 
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its
 
 
 
 
 

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participating interest were owing directly to it as a Lender under the Loan
Documents; provided, that each Lender shall retain the right of setoff provided
in Section 11.1 with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1, agrees
to share with each Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
 
12.3.  Assignments.
 
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents; provided, however, that in the case of an
assignment to an entity which is not a Lender or an Affiliate of a lender, such
assignment shall be in a minimum amount of $5,000,000 (or less if such amount is
the entire amount of such assigning Lender’s Commitment). Such assignment shall
be substantially in the form of Exhibit H hereto or in such other form as may be
agreed to by the parties thereto. The consent of the Administrative Agent, the
Issuer and, so long as no Default is continuing, the Borrower shall be required
prior to an assignment becoming effective with respect to a Purchaser. Such
consent shall not be unreasonably withheld.
 
12.3.2. Effect; Effective Date. Upon (a) delivery to the Administrative Agent of
a notice of assignment, substantially in the form attached as Exhibit I to
Exhibit H hereto (a "Notice of Assignment"), together with any consents required
by Section 12.3.1, and (b) payment of a $3,500 fee to the Administrative Agent
for processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. On and after the
effective date of such assignment, (a) such Purchaser shall for all purposes be
a Lender party to this Agreement and any other Loan Document executed by the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and (b)
the transferor Lender shall be released with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser without any further
consent or action by the Borrower, the Lenders or the Administrative Agent. Upon
the consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Administrative Agent and the Borrower shall
make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case, to the extent applicable, in principal
amounts reflecting their Commitment, as adjusted pursuant to such assignment.
 
12.4.  Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of the Borrower and its Subsidiaries.

12.5.  Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 2.17.
 
 
 
 
 

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ARTICLE XIII
 
NOTICES
 
13.1.  Giving Notice. Except as otherwise permitted by Section 2.12 with respect
to borrowing notices, all notices and other communications provided to any party
hereto under this Agreement or any other Loan Document shall be in writing, by
facsimile, first class U.S. mail or overnight courier and addressed or delivered
to such party at its address set forth below its signature hereto or at such
other address as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with first class postage
prepaid, return receipt requested, shall be deemed given three (3) Business Days
after deposit in the U.S. mail; any notice, if transmitted by facsimile, shall
be deemed given when transmitted; and any notice given by overnight courier
shall be deemed given when received by the addressee.

13.2.  Change of Address. The Borrower, the Administrative Agent and any Lender
may each change the address for service of notice upon it by a notice in writing
to the other parties hereto.

[signature pages to follow]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

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IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have
executed this Agreement as of the date first above written.

RALCORP HOLDINGS, INC.
 
By:           /s/ Scott Monette            
 
Print Name: Scott Monette
 
Title: Corporate Vice President and Treasurer
 
Address:    800 Market Street
                     St. Louis, Missouri 63101
                     Attn: Treasurer
 
Telecopy:   (314) 877-7729
Telephone: (314) 877-7113
 

 
 

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JPMORGAN CHASE BANK, N.A.,
Individually and as Administrative Agent
 
By:             /s/ Jason A. Rastovski                
 
Print Name:    Jason A. Rastovski
 
Title: Vice President
 
Address:  IL1-0364
                  21 S. Clark Street
                  Chicago, IL  60670
Attn: 
 
Telecopy:   (312) 325-3235
Telephone: (312) 325-3239
 

 
 

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CITIBANK, N.A.,
Individually and as Syndication Agent
 
By:           /s/  Wajeeh Faheem        
 
Print Name:     Wajeeh Faheem
 
Title:                 Vice President
 
                                        Address: 
Phone:  
Fax:  
 
 
 
 
 
 
 
 

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CITIBANK, N.A.,
Individually and as Syndication Agent
 
By:            /s/  Chris Conway                
 
Print Name:     Chris Conway
 
Title:                 Director
 
                                        Address:  388 Greenwich Street, 23rd Fl
                                                          New York, NY  10013
Phone:      (212) 816-3126
Fax:           (646) 843-3982
 
 

 
 
 

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WACHOVIA BANK, NATIONAL
ASSOCIATION,
Individually and as Documentation Agent

By:               /s/ Denis Waltrich            
Print Name:       Denis Waltrich
 
Title:                  Associate
 
Address: One South Broad Street
                  PA4830
                  Philadelphia, PA 19107
                  Attention:  Denis Waltrich
Phone:      (267) 321-6713
Fax:           (267) 321-6700
 

 
 

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U.S. BANK NATIONAL ASSOCIATION,
Individually and as Documentation Agent

By:                    /s/ John Holland            
 
Print Name:           John Holland
 
Title:                      Senior Vice President
 
Address:   One U.S. Bank Plaza
                    SL-MO-T12M
            St. Louis, MO  63101
Attention:  John Holland
Phone:  (314) 418-1315
Fax:       (314) 418-3859
 

 
 

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SUNTRUST BANK,
Individually and as Documentation Agent

By:            /s/ Michael Lapresi                 
 
Print Name:    Michael Lapresi
 
Title:               Managing Director
 
Address:   303 Peachtree Street
                                    Mail Code 1922
                                    3rd Floor
                                    Atlanta, GA 30308
Attention: Michel Odermatt

Phone:        (404) 532-0232
Fax:  (404) 230-5305

 
 

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PNC BANK, NATIONAL ASSOCIATION,
Individually and as Documentation Agent

By:               /s/ Norm Harkleroad         
Print Name:      Norm Harkleroad
 
Title:                 Vice President
 
 

 
 

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HARRIS N.A.,
Individually as Lender

By:               /s/ Betzaida Erdelyi         
 
Print Name:       Betzaida Erdelyi
 
Title:                   Vice President
 
    Address:   111 W. Monroe Street, 20W
    Attention: Tara B. Cuprisin
    Phone:       (312) 461-4049
    Fax:            (312) 765-8095
 
 
 
 
 

 
 

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COBANK, ACB,
Individually and as Lender

By:               /s/ S. Richard Dill                   
 
Print Name:       S. Richard Dill
 
Title:                   Vice President
 
    Address:   5500 South Quebec Street
    Attention: S. Richard Dill
 
    Phone:       (303) 740-4197
    Fax:            (303) 796-1462
    E-mail:       rdill@cobank.com
 
 
 
 
 
 

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COMMERCE BANK, N.A.,
Individually and as Documentation Agent

By:               /s/ Frank W. Sant                  
 
Print Name:       Frank W. Sant
 
Title:                   Assistant Vice President
 
    Address:   800 Forsyth Blvd.
                               St. Louis, MO  63105
    Attention: Frank W. Sant
    Phone:       (314) 746-3636
    Fax:            (314) 746-3783