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Exhibit 10.1
 
CREDIT AGREEMENT
 
dated as of
 
June 9, 2006
 
among
 
SELECT COMFORT CORPORATION,
 
The Subsidiary Borrowers Party Hereto,
 
The Lenders Party Hereto,
 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
 
and
 
BANK OF AMERICA, N.A.,
as Syndication Agent
 
__________________________
 
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
 

 

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TABLE OF CONTENTS
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ARTICLE I    Definitions
SECTION 1.01. Defined Terms
SECTION 1.02. Classification of Loans and Borrowings
SECTION 1.03. Terms Generally
SECTION 1.04. Accounting Terms; GAAP
SECTION 1.05. Foreign Currency Calculations
SECTION 1.06. Redenomination of Certain Foreign Currencies
 
ARTICLE II    The Credits
SECTION 2.01. Commitments
SECTION 2.02. Loans and Borrowings
SECTION 2.03. Requests for Revolving Borrowings
SECTION 2.04. Swingline Loans
SECTION 2.05. Letters of Credit
SECTION 2.06. Funding of Borrowings
SECTION 2.07. Interest Election
SECTION 2.08. Termination, Increase and Reduction of Commitments
SECTION 2.09. Repayment of Loans; Evidence of Debt
SECTION 2.10. Prepayment of Loans
SECTION 2.11. Fees
SECTION 2.12. Interest
SECTION 2.13. Alternate Rate of Interest
SECTION 2.14. Increased Costs
SECTION 2.15. Break Funding Payments
SECTION 2.16. Taxes
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
SECTION 2.18. Mitigation Obligations; Replacement of Lenders
SECTION 2.19. Designation of Subsidiary Borrowers
SECTION 2.20. Additional Reserve Costs
 
ARTICLE III    Representations and Warranties
SECTION 3.01. Organization; Powers
SECTION 3.02. Authorization; Enforceability
SECTION 3.03. Governmental Approvals; No Conflicts
SECTION 3.04. Financial Condition; No Material Adverse Change
SECTION 3.05. Properties
SECTION 3.06. Litigation and Environmental Matters
SECTION 3.07. Compliance with Laws and Agreements
SECTION 3.08. Investment and Holding Company Status
SECTION 3.09. Taxes
SECTION 3.10. ERISA
SECTION 3.11. Disclosure
SECTION 3.12. Subsidiaries
    
 
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SECTION 3.13. Regulation U
 
ARTICLE IV    Conditions
SECTION 4.01. Effective Date
SECTION 4.02. Each Credit Event
SECTION 4.03. Designation of a Subsidiary Borrower
 
 
ARTICLE V    Affirmative Covenants
SECTION 5.01. Financial Statements; Ratings Change and Other Information
SECTION 5.02. Notices of Material Events
SECTION 5.03. Existence; Conduct of Business
SECTION 5.04. Payment of Obligations
SECTION 5.05. Maintenance of Properties; Insurance
SECTION 5.06. Books and Records; Inspection Rights
SECTION 5.07. Compliance with Laws
SECTION 5.08. Use of Proceeds and Letters of Credit
SECTION 5.09. Additional Guarantors
 
ARTICLE VI    Negative Covenants
SECTION 6.01. Indebtedness
SECTION 6.02. Liens
SECTION 6.03. Fundamental Changes
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
SECTION 6.05. Swap Agreements
SECTION 6.06. Restricted Payments
SECTION 6.07. Transactions with Affiliates
SECTION 6.08. Restrictive Agreements
SECTION 6.09. Minimum Interest Coverage Ratio
SECTION 6.10. Maximum Leverage Ratio
SECTION 6.11. Fiscal Year
 
 
ARTICLE VII    Events of Default
 
ARTICLE VIII    The Administrative Agent
 
ARTICLE IX    Miscellaneous
SECTION 9.01. Notices
SECTION 9.02. Waivers; Amendments
SECTION 9.03. Expenses; Indemnity; Damage Waiver
SECTION 9.04. Successors and Assigns
SECTION 9.05. Survival
SECTION 9.06. Counterparts; Integration; Effectiveness
SECTION 9.07. Severability
SECTION 9.08. Right of Setoff
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
 
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SECTION 9.10. WAIVER OF JURY TRIAL
SECTION 9.11. Headings
SECTION 9.12. Confidentiality
SECTION 9.13. Interest Rate Limitation
SECTION 9.14. USA PATRIOT Act
SECTION 9.15. Conversion of Currencies
SECTION 9.16. Appointment
 
ARTICLE X    Guaranty
SECTION 10.01. Guaranty
SECTION 10.02. Waivers
SECTION 10.03. Guaranty Absolute
SECTION 10.04. Subrogation
SECTION 10.05. Limitation on Obligations.
SECTION 10.06. Acceleration
SECTION 10.07. Termination Date
SECTION 10.08. Foreign Currency
 
 
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SCHEDULES:
 
Schedule 1.01 -- Pricing Schedule
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions

 
EXHIBITS:
 
Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Borrowing Subsidiary Agreement
Exhibit C -- Mandatory Cost Rate
Exhibit D -- Form of Borrowing Subsidiary Termination

 

 
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CREDIT AGREEMENT dated as of June 9, 2006, among SELECT COMFORT CORPORATION, the
Subsidiary Borrowers party hereto, the LENDERS party hereto, JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, as Administrative Agent and BANK OF AMERICA, N.A.,
as Syndication Agent.
 
The parties hereto agree as follows:
 
     ARTICLE I  
 
Definitions
 
SECTION 1.01.   Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Acquired Entity or Business” means either (a) the assets constituting a
business, division, facility, product line or line of business of any Person not
already a Subsidiary or (b) 80% or more of the capital stock of any such Person,
which Person shall, as a result of such acquisi-tion or merger, either (i)
become a Wholly-Owned Subsidiary of the Company (or shall be merged with and
into the Company or a Subsidiary Guarantor, with the Company or such Subsidiary
Guarantor being the surviving Person) or (ii) become a Controlled Subsidiary.
 
“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) if denominated in Dollars, (i) the LIBO Rate
for such Interest Period multiplied by (ii) the Statutory Reserve Rate, and (b)
if denominated in a Foreign Currency, the LIBO Rate for such Interest Period.
 
“Administrative Agent” means JPMorgan, in its capacity as administrative agent
for the Lenders hereunder.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Advance” means any Loan or any Letter of Credit.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Agreement” means this Credit Agreement, as amended, restated, modified or
supplemented from time to time.
 
“Agreement Currency” shall have the meaning assigned to such term in Section
9.15(b).
 
 
 
 

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“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
 
“Applicable Borrower” means, with respect to any Loan, Letter of Credit or other
amount owing hereunder or any matter pertaining to such Loan or other amount,
whichever of the Borrowers is the primary obligor on such Loan, Letter of Credit
or other amount.
 
“Applicable Creditor” shall have the meaning assigned to such term in Section
9.15(b).
 
“Applicable Lending Installation” is defined in Section 2.02(e).
 
“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.
 
“Applicable Rate” means, for any day, with respect to any Eurocurrency Loan or
with respect to the facility fees payable hereunder, the applicable rate per
annum set forth on Schedule 1.01 under the caption “Eurocurrency Spread” or
“Facility Fee Rate”, as the case may be, based upon the Leverage Ratio.
 
“Approved Fund” has the meaning assigned to such term in Section 9.04.
 
“Asset Disposition” means any sale, transfer or other disposition of any asset
of the Company or any Subsidiary in a single transaction or in a series of
related transactions (other than (a) the sale of inventory or products in the
ordinary course or the sale of obsolete or worn out property in the ordinary
course, (b) the making of payments for property and services used by the Company
or any Subsidiary in the ordinary course of business and (c) the sale of
Permitted Investments in the ordinary course of business).
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
 
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrowers” means the Company and each Subsidiary Borrower.
 
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“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date to the same Applicable Borrower and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.
 
“Borrowing Request” means a request by the Company for a Revolving Borrowing in
accordance with Section 2.03.
 
“Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit B.
 
“Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination
substantially in the form of Exhibit C.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurocurrency Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in deposits in the currency in which such Eurocurrency Loan is
denominated in the London interbank market or any other relevant jurisdiction.
 
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
 
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of Equity
Interests representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Company; or
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
board of directors of the Company nor (ii) appointed by directors so nominated.
 
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
“Charges” has the meaning set forth in Section 9.13.
 
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.
 
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“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or increased from time to time pursuant to Section
2.08 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The initial aggregate amount of the Lenders’ Commitments is $100,000,000.
 
“Company” means Select Comfort Corporation, a Minnesota corporation.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
 
“Controlled Subsidiary” of a Person means (a) any subsidiary at least 80% 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, limited liability company, association,
joint venture or similar business organization at least 80% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
Controlled.
 
“Credit Card Program Agreement” means that certain Amended and Restated Private
Label Consumer Credit Card Program Agreement dated as of December 14, 2005 among
GE Money Bank, the Company and Select Comfort Retail Corporation (the “Current
GE Agreement”) and any amendment, supplement, extension or replacement thereof,
the terms of which relating to the financial obligations of the Company and its
Subsidiaries are substantially similar to those set forth in the Current GE
Agreement.
 
“Credit Documents” means this Agreement, each promissory note, if any, delivered
pursuant to Section 2.09(e), each Borrowing Subsidiary Agreement and the
Subsidiary Guaranty.
 
“Credit Party” means each Borrower and each Subsidiary Guarantor.
 
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default..
 
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
 
“Dollars” or “$” refers to lawful money of the United States of America.
 
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“Dollar Equivalent” means, on any date of determination (a) with respect to any
amount in Dollars, such amount, and (b) with respect to any amount in any
Foreign Currency, the equivalent in Dollars of such amount, determined by the
Administrative Agent pursuant to Section 1.05 using the Exchange Rate with
respect to such Foreign Currency at the time in effect under the provisions of
such Section.
 
“Domestic Subsidiary” means each Subsidiary that is incorporated under the laws
of the United States, any State thereof or the District of Columbia.
 
“EBITDA” means, for any applicable computation period, the Company’s and
Subsidiaries’ Net Income on a consolidated basis from continuing operations,
plus, to the extent included in the determination of Net Income, (a) income and
franchise taxes paid or accrued during such period, (b) Total Interest Expense
for such period, amortization and depreciation deducted in determining Net
Income for such period and (c) non-cash equity compensation expense deducted in
determining Net Income in such period. For purposes of the computation of the
Leverage Ratio for any period during which an Acquired Entity or Business was
acquired, EBITDA shall be calculated on a pro forma basis as if such Acquired
Entity or Business had been acquired (and any related Indebtedness incurred) on
the first day of such computation period.
 
“EBITDAR” means, for any applicable computation period, EBITDA for such period,
plus, to the extent included in the determination of Net Income, Rentals for
such period. For purposes of the computation of the Interest Coverage Ratio for
any period during which an Acquired Entity or Business was acquired, EBITDAR
shall be calculated on a pro forma basis as if such Acquired Entity or Business
had been acquired (and any related Indebtedness incurred) on the first day of
such computation period.
 
“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).
 
“EMU Legislation” means the legislative measures of the European Union for the
introduction of, changeover to or operation of the euro in one or more member
states of the European Union.
 
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
 
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
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“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Company, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
 
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
 
“Euro” or “€” means the single currency of the European Union as constituted by
the treaty establishing the European Community being the Treaty of Rome, as
amended from time to time and as referred to in the EMU Legislation.
 
“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
 
“Event of Default” has the meaning assigned to such term in Article VII.
 
“Evergreen LC” means a Letter of Credit which includes a provision which
automatically extends the expiry date thereof for a specified period unless,
within some period of time in advance of the then applicable expiry date
thereof, the Administrative Agent gives notice to the beneficiary to the effect
that such Letter of Credit will not be so extended.
 
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“Exchange Rate” means on any day, for purposes of determining the Dollar
Equivalent of any currency other than Dollars, the rate at which such currency
may be exchanged into Dollars at the time of determination on such day on the
Reuters Currency pages, if available, for such currency. In the event that such
rate does not appear on any Reuters Currency pages, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the
Borrowers, or, in the absence of such an agreement, such Exchange Rate shall
instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such currency are then being conducted, at or about
such time as the Administrative Agent shall elect after determining that such
rates shall be the basis for determining the Exchange Rate, on such date for the
purchase of Dollars for delivery two Business Days later; provided that if at
the time of any such determination, for any reason, no such spot rate is being
quoted, the Administrative Agent may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be conclusive
absent manifest error.
 
“Exchange Rate Date” means, if on such date any outstanding Loan is (or any Loan
that has been requested at such time would be) denominated in a currency other
than Dollars, each of:
 
(a) the last Business Day of each calendar month,
 
(b) if an Event of Default has occurred and is continuing, any Business Day
designated as an Exchange Rate Date by the Administrative Agent in its sole
discretion, and
 
(c) each date (with such date to be reasonably determined by the Administrative
Agent) that is on or about the date of (i) a Borrowing Request or an Interest
Election Request with respect to any Revolving Borrowing or (ii) each request
for the issuance, amendment, renewal or extension of any Letter of Credit or
Swingline Loan.
 
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrowers hereunder, (a) franchise taxes or
income taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any of the Borrowers is organized or in which
its principal office is located and (c) in the case of a Foreign Lender (other
than an assignee pursuant to a request by the Company under Section 2.18(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.16(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 2.16(a).
 
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“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
 
“Financial Officer” means the chief financial officer, principal accounting
officer, vice president-finance or controller of the Company.
 
“Foreign Currency” means with respect to any Revolving Loan, Euros, Sterling and
any other currency acceptable to the Administrative Agent and each of the
Lenders that is freely available, freely transferable and freely convertible
into Dollars and in which dealings in deposits are carried on in the London
interbank market.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Company is organized. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“Foreign Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of any jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
 
“GAAP” means generally accepted accounting principles in the United States of
America.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term
 
 
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Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Guarantee made by any guarantor
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made and (b) the maximum amount for which such guarantor may be liable
pursuant to the terms of the instrument embodying such Guarantee, unless (in the
case of a primary obligation that is not Indebtedness) such primary obligation
and the maximum amount for which such guarantor may be liable are not stated or
determinable, in which case the amount of such Guarantee shall be such
guarantor’s maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith.
 
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances and (k) all Off-Balance Sheet
Liabilities. The Indebtedness of any Person (x) shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor, and (y) shall exclude any liability or obligations arising from a
breach of a representation, warranty or other contractual obligation (other than
a Guarantee) arising under the Credit Card Program Agreement.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Information Memorandum” means the Confidential Information Memorandum dated
April 21, 2006 relating to the Company and the Transactions.
 
“Interest Coverage Ratio” means as of the end of any fiscal quarter of the
Company, the ratio of (a) EBITDAR to (b) the sum of Total Interest Expense plus
Rentals, in each case for the period of four fiscal quarters then ended,
computed on a consolidated basis for the Company and its Subsidiaries.
 
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“Interest Election Request” means a request by the Company to convert or
continue a Revolving Borrowing in accordance with Section 2.07.
 
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December, (b)
with respect to any Eurocurrency Borrowing, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
 
“Interest Period” means with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Company may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
 
“Issuing Bank” means JPMorgan, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section
2.05(i). The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
 
“JPMorgan” means JPMorgan Chase Bank, National Association, a national banking
association, and its successors.
 
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
 
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Company at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
 
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to Section 2.08(d) or an Assignment
and
 
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Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.
 
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
 
“Leverage Ratio” means, at any time, the ratio of Total Debt at such time to
EBITDA for the most recently completed four fiscal quarters of the Company,
computed on a consolidated basis for the Company and its Subsidiaries.
 
“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the Quotation Day for such Interest
Period by reference to the British Bankers’ Association Interest Settlement
Rates for deposits in the currency of such Borrowing (as reflected on the
applicable Telerate screen page), for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the “LIBO Rate” shall be the
average (rounded upward, if necessary, to the next 1/100 of 1%) determined by
the Administrative Agent of the respective interest rates per annum reported to
the Administrative Agent by JPMorgan and each other Lender selected by the
Administrative Agent (JPMorgan and each such other Lender, the “Reference
Lenders”) as the rate at which each Reference Lender offers to place deposits in
the currency of such Borrowing for such Interest Period to first-class banks in
the London interbank market at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period.
 
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
 
“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.
 
“Local Time” means (a) with respect to a Loan or Borrowing denominated in
Dollars, New York City time and (b) with respect to a Loan or Borrowing
denominated in any Foreign Currency, London time.
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole, (b) the ability of any Credit
Party to perform any of its obligations under the Credit Documents or (c) the
rights of or benefits available to the Lenders under the Credit Documents.
 
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Company and its Subsidiaries in an aggregate principal amount
exceeding $10,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Company or any Subsidiary in
respect of any Swap Agreement at any time shall be the
 
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 maximum aggregate amount (giving effect to any netting agreements) that the
Company or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.
 
“Material Subsidiary” means a Domestic Subsidiary held directly by the Company
or any Subsidiary Guarantor that is a Domestic Subsidiary which (a) as of the
date hereof, has assets having a book value in excess of $15,000,000 or which
generated in excess of $5,000,000 of net income over the four fiscal quarter
period most recently ended prior to the date hereof, or (b) thereafter, has or
acquires assets having a book value in excess of $15,000,000 or which generated
in excess of $5,000,000 of net income over the four fiscal quarter period most
recently ended prior to the time of computation.
 
“Maturity Date” means June 9, 2011.
 
“Maximum Rate” has the meaning set forth in Section 9.15.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
 
“Net Income” means, for any computation period, with respect to the Company 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 (determined before the deduction of minority interests) as
determined in accordance with GAAP.
 
“Non-Extension Date” means, with respect to any Evergreen LC, the date by which
the Issuing Bank must give notice to the beneficiary thereof of the non-renewal
of such Evergreen LC in order to avoid the automatic extension of the expiry
date thereof.
 
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any liability under any so-called “synthetic lease” arrangement
or transaction entered into by such Person, or (c) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person.
 
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
 
“Participant” has the meaning set forth in Section 9.04.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
 
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“Permitted Acquisition” means the acquisition by the Company or a Wholly-Owned
Subsidiary thereof of an Acquired Entity or Business (including by way of merger
of such Acquired Entity or Business with and into the Company (so long as the
Company is the surviving corporation) or a Wholly-Owned Subsidiary thereof (so
long as the Wholly-Owned Subsidiary is the surviving corporation); provided
that, in each case, (a) the consideration paid or to be paid by the Company or
such Wholly-Owned Subsidiary consists solely of cash (including proceeds of
Revolving Loans or Swingline Loans), the issuance or incurrence of Indebtedness
otherwise permitted by Section 6.01, the issuance of common stock of the Company
to the extent no Default or Event of Default exists pursuant to clause (m) of
Article VII or would result therefrom and the assumption/acquisition of any
Indebtedness (calculated at face value) which is permitted to remain outstanding
in accordance with the requirements of Section 6.01; (b) in the case of the
acquisition of 80% or more of the capital stock of any Person (including by way
of merger), such Person shall own no capital stock of any other Person
(excluding de minimis amounts) unless either (i) such Person owns 100% of the
capital stock of such other Person or (ii) (x) such Person and its Wholly-Owned
Subsidiaries own at least 80% of the consolidated assets of such other Person
and its Subsidiaries and (y) any non-Wholly-Owned Subsidiary of such Person was
a non-Wholly-Owned Subsidiary prior to the date of such Permitted Acquisition of
such Person; (c) the Acquired Entity or Business acquired pursuant to the
respective Permitted Acquisition is in a business permitted by Section 6.03(c);
(d) in the case of an acquisition of stock, such acquisition shall have been
approved by the board of directors of the Acquired Entity or Business; and (e)
all applicable requirements of Sections 6.03 and 6.04(f) applicable to Permitted
Acquisitions are satisfied.
 
“Permitted Encumbrances” means:
 
(a) Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 5.04;
 
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
 
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;
 
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
 
(e) judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;
 
(f)  easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any
 
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monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Company or any Subsidiary; and
 
(g)  Liens arising by virtue of any statutory or common law provision relating
to banker's liens, rights of set-off or similar rights and remedies as to
deposit accounts or other funds maintained with a creditor depository
institution; provided, that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Board and
(ii) such deposit account is not intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution;
 
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
 
“Permitted Investments” means:
 
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America, in each case
maturing within 36 months from the date of acquisition thereof;
 
(b) obligations issued by any Federal agency of the United States of America, in
each case maturing within 36 months from the date of acquisition thereof;
 
(c)  municipal investments and direct obligations of any State of the United
States of America, in each case with a rating of A or higher by S&P and/or A2 or
higher by Moody's and a maximum maturity of 36 months (for securities where the
interest rate is adjusted periodically (e.g. floating rate securities), the
reset date will be used to determine the maturity date);
 
(d) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, a rating of A-2
from S&P or P-2 from Moody’s;
 
(e) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 36 months from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
 
(f) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (e) above;
 
(g)  money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P or Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000;
 
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(h)  investments in auction rate securities with a rating of A or higher by S&P
and/or Moody's and a maximum maturity of one year, for which the reset date will
be used to determine the maturity date;
 
(i)  investments in variable rate demand notes with a rating of A or higher by
S&P and/or A2 or higher by Moody's and a maximum maturity of one year, for which
the reset date will be used to determine the maturity date;
 
(j) investments in corporate and bank debt including, but not limited to,
corporate bonds and loan participations. The minimum rating for such investments
must be rated “A-2” and/or “P-2” or have a long term rating of BBB by S&P and/or
Baa2 by Moody’s respectively; and
 
(k) other investments made in accordance with the Company's investment policy as
in effect on the Effective Date in the form previously provided to the
Administrative Agent and the Lenders and other immaterial changes thereto.
 
“Permitted Securitization” means any receivables financing program providing for
the sale of accounts receivables, payment intangibles, accounts or notes
receivable and related rights by the Company or its Subsidiaries to an SPC for
cash and other nominal consideration reasonably satisfactory to the
Administrative Agent in transactions purporting to be sales (and treated as
sales for GAAP purposes), which SPC shall finance the purchase of such assets by
the sale, transfer, conveyance, lien or pledge of such assets to one or more
limited purpose financing companies, special purpose entities and/or other
financial institutions, in each case pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
 
“Quotation Day” means, with respect to any Eurocurrency Borrowing and any
Interest Period, the day on which it is market practice in the relevant
interbank market for prime banks to give quotations for deposits in the currency
of such Borrowing for delivery on the first day of such Interest Period. If such
quotations would normally be given by prime banks on more than one day, the
Quotation Day will be the last of such days.
 
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“Receivables Transaction Attributed Indebtedness” means the amount of
obligations outstanding under the legal documents entered into as part of any
Permitted Securitization on any date of determination that would be
characterized as principal if such Permitted Securitization were structured as a
secured lending transaction rather than as a purchase.
 
“Register” has the meaning set forth in Section 9.04.
 
“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.
 
“Rentals” of a Person means, with respect to any period, the aggregate amount of
rental expense deducted in computing Net Income of such Person. For purposes of
the computation of the Interest Coverage Ratio for any period during which an
Acquired Entity or Business was acquired, Rentals shall be calculated on a pro
forma basis as if such Acquired Entity or Business had been acquired (and any
related Indebtedness incurred) on the first day of such computation period.
 
“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing more than 50% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time; provided, that
if there are only two or three Lenders, the Required Lenders shall mean at least
two Lenders having Revolving Credit Exposures and unused Guarantees representing
at least 66⅔% of the sum of the total Revolving Credit Exposures and unused
Commitments at such time.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Company or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Company or any option, warrant or other right
to acquire any such Equity Interests in the Company.
 
“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and its
LC Exposure and Swingline Exposure at such time.
 
“Revolving Loan” means a Loan made pursuant to Section 2.01.
 
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc.
 
“SPC” means a special purpose, bankruptcy-remote Person formed for the sole and
exclusive purpose of engaging in activities in connection with the purchase,
sale and financing of accounts receivable, payment intangibles, accounts or
notes receivable and related rights in connection with and pursuant to a
Permitted Securitization.
 
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“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
 
“Sterling” or “£” means the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
 
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
 
“Subsidiary” means any subsidiary of the Company.
 
“Subsidiary Borrower” means a wholly-owned Subsidiary designated as such by the
Company pursuant to Section 2.19.
 
“Subsidiary Guarantor” means each Subsidiary of the Company which is a party to
the Subsidiary Guaranty.

“Subsidiary Guaranty” means the Subsidiary Guaranty dated as of the date hereof
made by the Subsidiaries party thereto in favor of the Administrative Agent and
the Lenders, as the same may be amended, restated, modified or supplemented from
time to time. The Subsidiary Guarantors initially party to the Subsidiary
Guaranty are so designated on Schedule 3.12 hereto.
 
“Substantial Portion” means, with respect to the property of the Company and its
Subsidiaries, property which (a) represents more than 10% of the consolidated
assets of the Company and its Subsidiaries as would be shown in the consolidated
financial statements of the Company and its Subsidiaries as at the beginning of
the twelve-month period ending with the last day of the month preceding the
month in which such determination is made, or (b) is responsible for more than
10% of the consolidated net sales or of the consolidated net income of the
 
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Company and its Subsidiaries as reflected in the financial statements referred
to in clause (a) above.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Company or the
Subsidiaries shall be a Swap Agreement.
 
“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
 
“Swingline Lender” means JPMorgan, in its capacity as lender of Swingline Loans
hereunder.
 
“Swingline Loan” means a Loan made pursuant to Section 2.04.
 
“Swingline Rate” means ABR or such other rate per annum upon which the
Applicable Borrower and the Swingline Lender may agree with respect to such
Loan.
 
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
 
“Total Debt” means, all Indebtedness of the Company and its Subsidiaries, on a
consolidated basis, calculated in accordance with GAAP plus, without
duplication, (a) all Off-Balance Sheet Liabilities, (b) the face amount of all
outstanding letters of credit in respect of which the Company or any Subsidiary
has any actual or contingent reimbursement obligation and (c) the principal
amount of all Guarantees of the Company and its Subsidiaries.
 
“Total Interest Expense” means, for any period, total cash interest expense
deducted in the computation of Net Income for such period (including that
attributable to Capital Lease Obligations and interest paid under synthetic
leases) of the Company and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Company and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs of rate hedging in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).
 
“Transactions” means the execution, delivery and performance by the Borrowers of
this Agreement and any Borrowing Subsidiary Agreements, the borrowing of Loans,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
 
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“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, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled (other than in the case of Foreign Subsidiaries, director’s
qualifying shares and/or other nominal amounts of shares required to be held by
Persons other than the Company and its Subsidiaries under applicable law).
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
SECTION 1.02.   Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).
 
SECTION 1.03.   Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
 
SECTION 1.04.   Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Company notifies the Administrative Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Company that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the
 
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application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
 
SECTION 1.05.   Foreign Currency Calculations. (a) For purposes of determining
the Dollar Equivalent of any Advance denominated in a Foreign Currency or any
related amount, the Administrative Agent shall determine the Exchange Rate as of
the applicable Exchange Rate Date with respect to each Foreign Currency in which
any requested or outstanding Advance is denominated and shall apply such
Exchange Rates to determine such amount (in each case after giving effect to any
Advance to be made or repaid on or prior to the applicable date for such
calculation). 
 
(b)  For purposes of any determination under Section 6.01, 6.02, 6.04 or 6.09 or
under Article VII, all amounts incurred, outstanding or proposed to be incurred
or outstanding in currencies other than Dollars shall be translated into Dollars
at the currency exchange rates in effect on the date of such determination;
provided that no Default shall arise as a result of any limitation set forth in
Dollars in Section 6.01 or 6.02 being exceeded solely as a result of changes in
currency exchange rates from those rates applicable at the time or times
Indebtedness or Liens were initially consummated in reliance on the exceptions
under such Sections. For purposes of any determination under Section 6.04 or
6.09, the amount of each investment, asset disposition or other applicable
transaction denominated in a currency other than Dollars shall be translated
into Dollars at the currency exchange rate in effect on the date such
investment, disposition or other transaction is consummated. Such currency
exchange rates shall be determined in good faith by the Borrowers.
 

SECTION 1.06.   Redenomination of Certain Foreign Currencies. (a) Each
obligation of any party to this Agreement to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the Effective Date shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London Interbank Market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Borrowing in the currency of such member state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.
 
(b)  Without prejudice and in addition to any method of conversion or rounding
prescribed by any EMU Legislation and (i) without limiting the liability of any
Borrower for any amount due under this Agreement and (ii) without increasing any
Commitment of any Lender, all references in this Agreement to minimum amounts
(or integral multiples thereof) denominated in the national currency unit of any
member state of the European Union that adopts the Euro as its lawful currency
after the Effective Date shall, immediately upon such adoption, be replaced by
references to such minimum amounts (or integral multiples thereof) as shall be
specified herein with respect to Borrowings denominated in Euros.
 
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(c)  Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro or any other Foreign Currency.
 
     ARTICLE II  
 
The Credits
 
SECTION 2.01.   Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans denominated in Dollars and
Foreign Currencies to one or more of the Borrowers from time to time during the
Availability Period in an aggregate principal amount that will not result in (a)
such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment, (b)
the sum of the total Revolving Credit Exposures exceeding the total Commitments,
(c) the Dollar Equivalent of the aggregate amount of all Revolving Loans
denominated in Foreign Currency exceeding $50,000,000, or (d) the Dollar
Equivalent of the aggregate amount of all Revolving Loans to Subsidiary
Borrowers which are Foreign Subsidiaries exceeding $50,000,000. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Revolving Loans.
 
SECTION 2.02.   Loans and Borrowings. (a) Each Revolving Loan shall be made as
part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.
 
(b)  Subject to Section 2.14, (i) each Revolving Borrowing denominated in
Dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the
Company may request in accordance herewith and (ii) each Revolving Borrowing
denominated in a Foreign Currency shall be comprised entirely of Eurocurrency
Loans. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may
make any Eurocurrency Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Applicable Borrower to repay such
Loan in accordance with the terms of this Agreement.
 
(c)  At the commencement of each Interest Period for any Eurocurrency Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $1,000,000; provided
that an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $500,000 and not less than $500,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of 10 Eurocurrency
 
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Revolving Borrowings outstanding. Notwithstanding the foregoing, Loans which are
not denominated in Dollars may be made in amounts and increments in the
applicable Foreign Currency satisfactory to the Administrative Agent.
 
(d)  Notwithstanding any other provision of this Agreement, the Company shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.
 
(e)  Notwithstanding any other provision of this Agreement, each Lender at its
option may make any ABR Loan or Eurocurrency Loan by causing any domestic or
foreign office, branch or Affiliate of such Lender (an “Applicable Lending
Installation”) to make such Loan that has been designated by such Lender to the
Administrative Agent. All terms of this Agreement shall apply to any such
Applicable Lending Installation of such Lender and the Loans and any Notes
issued hereunder shall be deemed held by each Lender for the benefit of any such
Applicable Lending Installation. Each Lender may, by written notice to the
Administrative Agent and the Company, designate replacement or additional
Applicable Lending Installations through which Loans will be made by it and for
whose account Loan payments are to be made.
 
SECTION 2.03.   Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Company shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurocurrency Borrowing, not later than 12:00
noon, New York City time, (i) if the Applicable Borrower is a Foreign Subsidiary
or the Borrowing is to be denominated in a Foreign Currency, four Business Days
before the date of the proposed Borrowing, or (ii) otherwise, three Business
Days before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, (i) if the Applicable
Borrower is a Foreign Subsidiary, one Business Day before the date of the
proposed Borrowing or (ii) otherwise, on the date of the proposed Borrowing.
Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Borrowing Request in a form approved by the Administrative Agent and
signed by the Company. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:
 
(i)  the identity of the Applicable Borrower;
 
(ii)  the aggregate amount of the requested Borrowing;
 
(iii)  the currency (which may be Dollars or a Foreign Currency) in which such
Borrowing is to be denominated;
 
(iv)  the date of such Borrowing, which shall be a Business Day;
 
(v)  in the case of a Borrowing denominated in Dollars, whether such Borrowing
is to be an ABR Borrowing or a Eurocurrency Borrowing;
 
(vi)  in the case of a Eurocurrency Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by clause (a) of the
definition of the term “Interest Period”; and
 
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(vii)  the location and number of the Applicable Borrower’s account to which
funds are to be disbursed, which shall comply with the requirements of Section
2.07.
 
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing, unless such Revolving
Borrowing is denominated in a Foreign Currency, in which case such Revolving
Borrowing shall be a Eurocurrency Borrowing. If no Interest Period is specified
with respect to any requested Eurocurrency Revolving Borrowing, then the Company
shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
 
SECTION 2.04.   Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans in Dollars to
any Borrower which is not a Foreign Subsidiary from time to time during the
Availability Period, in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding $15,000,000, or (ii) the sum of the total Revolving
Credit Exposures exceeding the total Commitments; provided that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Company may borrow, prepay and reborrow
Swingline Loans.
 
(b)  To request a Swingline Loan, the Company shall notify the Administrative
Agent of such request by telephone (confirmed by telecopy), not later than 12:00
noon, New York City time, on the day of a proposed Swingline Loan in the case of
Swingline Loans denominated in Dollars and not later than 10:00 a.m., Local Time
on the day of any other proposed Swingline Loan. Each such notice shall be
irrevocable and shall specify (i) the requested date (which shall be a Business
Day), (ii) the amount of the requested Swingline Loan and (iii) the identity of
the Applicable Borrower. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Company. The Swingline
Lender shall make each Swingline Loan available to the Company by means of a
credit to the general deposit account of the Company with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
 
(c)  The Swingline Lender may by written notice given to the Administrative
Agent not later than 10:00 a.m., New York City time, on any Business Day require
the Lenders to acquire participations on such Business Day in all or a portion
of the Swingline Loans outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender’s Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender’s Applicable
Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and
 
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shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Company of any participations in any Swingline Loan acquired pursuant
to this paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from the Company (or other party on
behalf of the Company) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Company for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Company of any default in the payment thereof.
 
SECTION 2.05.   Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, any Borrower may request the issuance of Letters of
Credit denominated in Dollars for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by such Borrower to, or entered into by such Borrower with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
 
(b)  Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Applicable Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension, but in any case notice given not
later than 11:00 a.m., New York City time, three Business Days prior to such
date shall be deemed to be sufficient) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof, and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the Applicable Borrower also
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Applicable Borrower shall be
deemed to represent and
 
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warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $25,000,000 and (ii) the sum of
the total Revolving Credit Exposures shall not exceed the total Commitments.
 
(c)  Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date; provided that with the prior
consent of the Administrative Agent and the Issuing Bank, such Issuing Bank may
issue or extend Evergreen Letters of Credit with a later expiration date so long
as on the Maturity Date, whether or not an Event of Default exists, the
Applicable Borrower shall deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to the undrawn amount of all outstanding Evergreen Letters
of Credit with an expiration date later than five Business Days prior to the
Maturity Date. If the Applicable Borrower is required to provide an amount of
cash collateral hereunder as a result of an approaching Maturity Date, such
amount (to the extent not applied as aforesaid) shall be returned to such
Borrower within three (3) Business Days after all Letters of Credit have expired
and all related reimbursement obligations satisfied in full.
 
(d)  Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by any Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to any Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
 
(e)  Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Applicable Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if such Borrower shall have received notice of
such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by such Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that such Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that such Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
(i) if such LC Disbursement is not less than $1,000,000, the Applicable
 
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Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 that such payment be financed with an ABR
Revolving Borrowing and (ii) if such LC Disbursement is not less than $500,000,
the Applicable Borrower (if not a Foreign Subsidiary) may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.04 that such payment be financed with a Swingline Loan, in each case, in an
equivalent amount and, to the extent so financed, such Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan, as applicable. If the Applicable Borrower
fails to make such payment when due, such amount shall bear interest at the
Alternate Base Rate and the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from such Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Applicable Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from any Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Revolving Loans or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve any
Borrower of its obligation to reimburse such LC Disbursement.
 
(f)  Obligations Absolute. Each Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, such Borrower’s obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to any Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by each Borrower to the extent permitted by applicable
 
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law) suffered by such Borrower that are caused by the Issuing Bank’s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
 
(g)  Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Applicable Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve any Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
 
(h)  Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Applicable Borrower shall reimburse such LC Disbursement in full on
the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that such Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if
such Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
 
(i)  Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among the Company, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrowers shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
 
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(j)  Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that any Borrower receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, such Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to such Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrowers under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrowers’
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated, be applied to satisfy other
obligations of the Borrowers under this Agreement. If the Borrowers are required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrowers within three Business Days after all Events
of Default have been cured or waived.
 
(k)  Evergreen Letters of Credit. The Lenders agree that, while an Evergreen LC
is outstanding and prior to the Maturity Date, at the option of the Applicable
Borrower and upon the written request of such Borrower received by the Issuing
Bank (with a copy to the Administrative Agent) no more than fifty (50) days and
at least twenty (20) days (or such shorter time as the Issuing Bank may agree in
a particular instance) prior to the effective Non-Extension Date thereof, the
Issuing Bank shall be entitled to authorize or permit the automatic extension of
such Evergreen LC. Each such request from a Borrower for extension of an
Evergreen LC shall be in writing and shall specify: (i) the Evergreen LC to be
extended; (ii) the proposed effective date of extension of the Evergreen LC
(which shall be a Business Day except to the extent it is the expiry date of the
applicable Evergreen LC and no action of the Issuing Bank is required on such
date); (iii) the revised expiry date of the Evergreen LC (which, subject to
Section 2.05(c), shall not be later than the earlier of (A) the date one year
after the then effective expiry date of such Evergreen LC and (B) the date that
is five Business Days prior to the Maturity Date); and (iv) such other matters
as the Issuing Bank may reasonably require. The Issuing Bank shall be under no
obligation to so extend or permit the extension of any Evergreen LC if the
Issuing Bank would have no obligation as of the proposed effective date of
extension to issue or amend such Evergreen LC in its extended form under the
terms of this Agreement (including Section 4.02). If as of the date twenty (20)
days prior to the Non-Extension Date of any Evergreen LC the Issuing Bank would
be entitled to authorize the extension of such Evergreen LC in accordance with
this Section 2.05(k) upon the request of a Borrower but the Issuing Bank shall
not have received a request from such Borrower to cause or permit such extension
or a written direction from such Borrower to not cause or permit such extension,
such Borrower shall be deemed to
 
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have delivered a request to cause the extension of such Letter of Credit. In
addition, upon the direction of a Borrower for any Evergreen LC, the Issuing
Bank shall give such notice as is necessary to prevent an automatic extension of
the expiry date of such Evergreen LC; provided, however, that in no event shall
the Issuing Bank have liability to any party thereto for its failure to give
such notice if written direction to give such notice is received by the Issuing
Bank less than twenty (20) days prior to the Non-Extension Date for such
Evergreen LC. The Issuing Bank will provide to the Administrative Agent and the
Applicable Borrower a copy of any notice of non-extension given to an Evergreen
LC beneficiary pursuant to this Section.
 
SECTION 2.06.   Funding of Borrowings. (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Local Time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.04. The Administrative Agent will make such Loans available to the
Applicable Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Applicable Borrower maintained with the
Administrative Agent in New York City (or, in the case of Subsidiary Borrowers
or Loans denominated in a Foreign Currency, in such other location as may be
designated by the Administrative Agent) and designated by the Company in the
applicable Borrowing Request; provided that ABR Revolving Loans made to finance
the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
 
(b)  Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Applicable Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Applicable Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, (x) the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation (in the case
of a Borrowing denominated in Dollars) or (y) the rate reasonably determined by
the Administrative Agent to be the cost to it of funding such amount (in the
case of a Borrowing denominated in a Foreign Currency) or (ii) in the case of
the Applicable Borrower, the interest rate applicable to such Borrowing;
provided, that any payment made by such Borrower shall be made without prejudice
to any claim such Borrower may have against the Lender failing to make such
payment to the Administrative Agent. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.
 
SECTION 2.07.   Interest Elections. (a) Each Revolving Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurocurrency Revolving Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Company may elect to
convert such Borrowing to a different Type, in
 
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the case of Borrowings denominated in Dollars, or to continue such Borrowing
and, in the case of a Eurocurrency Revolving Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Company may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
 
(b)  To make an election pursuant to this Section, the Company shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Company were requesting a
Revolving Borrowing of the Type and denominated in the Foreign Currency
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Company.
 
(c)  Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
 
(i)  the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
 
(ii)  the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
 
(iii)  whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and
 
(iv)  if the resulting Borrowing is a Eurocurrency Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month’s duration.
 
(d)  Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e)  If the Company fails to deliver a timely Interest Election Request with
respect to a Eurocurrency Revolving Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing (unless such Borrowing is denominated in a
 
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Foreign Currency, in which case such Borrowing shall be continued as a
Eurocurrency Borrowing with an Interest Period of one month’s duration
commencing on the last day of such Interest Period). Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Company, then, so long as an Event of Default is continuing (i) no
outstanding Revolving Borrowing may be converted to or continued as a
Eurocurrency Borrowing, (ii) unless repaid, each Eurocurrency Revolving
Borrowing denominated in Dollars shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto, and (iii) unless repaid, each
Eurocurrency Revolving Borrowing denominated in a Foreign Currency shall be
continued as a Eurocurrency Revolving Borrowing with an Interest Period of one
month’s duration.
 
SECTION 2.08.   Termination, Increase and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
 
(b)  The Company may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $1,000,000
and (ii) the Company shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.09, the sum of the Revolving Credit Exposures would exceed the total
Commitments.
 
(c)  The Company shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Company pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Company may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Company (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Commitments shall be permanent. Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
 
(d)  On up to four occasions, the Company may, from time to time, at its option,
seek to increase the total Commitments by up to an aggregate amount of
$75,000,000 (resulting in maximum total Commitments of $175,000,000) upon at
least three (3) Business Days’ prior written notice (or at least ten (10)
Business Days' prior written notice if there are any outstanding Loans
denominated in a Foreign Currency) to the Administrative Agent, which notice
shall specify the amount of any such increase and shall be delivered at a time
when no Default has occurred and is continuing. After delivery of such notice,
the Administrative Agent or the Company, in consultation with the Administrative
Agent, may offer the increase (which may be declined by any Lender in its sole
discretion) in the total Commitments on either a ratable basis to the Lenders or
on a non pro-rata basis to one or more Lenders and/or to other Lenders or
entities reasonably acceptable to the Administrative Agent and the Company. No
increase in the total Commitments shall become effective until the existing or
new Lenders extending such incremental Commitment amount and the Company shall
have delivered to the Administrative
 
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Agent a document in form reasonably satisfactory to the Administrative Agent
pursuant to which any such existing Lender states the amount of its Commitment
increase, any such new Lender states its Commitment amount and agrees to assume
and accept the obligations and rights of a Lender hereunder and the Company
accepts such incremental Commitments. The Lenders (new or existing) shall accept
an assignment from the existing Lenders, and the existing Lenders shall make an
assignment to the new or existing Lender accepting a new or increased
Commitment, of a direct or participation interest in each then outstanding Loan
and Letter of Credit such that, after giving effect thereto, all Revolving
Credit Exposure hereunder is held ratably by the Lenders in proportion to their
respective Commitments. Assignments pursuant to the preceding sentence shall be
made in exchange for the principal amount assigned plus accrued and unpaid
interest and facility and letter of credit fees. The Company shall make any
payments under Section 2.15 resulting from such assignments. Any such increase
of the total Commitments shall be subject to receipt by the Administrative Agent
from the Company of such supplemental opinions, resolutions, certificates and
other documents as the Administrative Agent may reasonably request.
 
SECTION 2.09.   Repayment of Loans; Evidence of Debt. (a) Each Applicable
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each of its
Revolving Loans on the Maturity Date, and (ii) to the Swingline Lender the then
unpaid principal amount of each of its Swingline Loans on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving
Borrowing is made, the Company shall repay all Swingline Loans then outstanding.
 
(b)  Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
 
(c)  The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
 
(d)  The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
 
(e)  Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Applicable Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent.
 
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Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
 
(f)  If at any time the aggregate Revolving Credit Exposure of the Lenders
exceeds the aggregate Commitments of the Lenders, the Company shall immediately
prepay the Loans or the Company shall cause each Applicable Borrower to
immediately prepay the Loans as to which it is the obligor in the amount of such
excess. To the extent that, after the prepayment of all Loans an excess of the
Revolving Credit Exposure over the aggregate Commitments still exists, the
Company shall promptly cash collateralize or cause the Applicable Borrower to
promptly cash collateralize the Letters of Credit in the manner described in
Section 2.06(j) in an amount sufficient to eliminate such excess.
 
(g) The Administrative Agent will determine the aggregate LC Exposure and the
Dollar Equivalent of each Loan on each Exchange Rate Date. If at any time the
sum of such amounts exceeds the aggregate Commitments of the Lenders, the
Company shall immediately prepay the Loans or the Company shall cause each
Applicable Borrower to immediately prepay the Loans as to which it is the
obligor in the amount of such excess. To the extent that, after the prepayment
of all Loans an excess of the sum of such amounts over the aggregate Commitments
still exists, the Company shall promptly cash collateralize or cause the
Applicable Borrower to promptly cash collateralize the Letters of Credit in the
manner described in Section 2.06(j) in an amount sufficient to eliminate such
excess.

 
SECTION 2.10.   Prepayment of Loans. (a) The Borrowers shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section.
 
(b)  The Company shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurocurrency Revolving Borrowing denominated in a Foreign Currency, not later
than 12:00 noon, New York City time, four Business Days before the date of
prepayment, (ii) in the case of prepayment of a Eurocurrency Revolving Borrowing
denominated in Dollars, not later than 12:00 noon, New York City time, three
Business Days before the date of prepayment, (iii) in the case of prepayment of
an ABR Revolving Borrowing by a Borrower which is a Foreign Subsidiary, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment or (iv) in the case of prepayment of an ABR Revolving Borrowing by a
Borrower which is not a Foreign Subsidiary or of a Swingline Loan, not later
than 12:00 noon, New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.09, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be
 
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in an amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Revolving Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
 
SECTION 2.11.   Fees. (a) The Company agrees to pay to the Administrative Agent
for the account of each Lender a facility fee, which shall accrue at the
Applicable Rate on the daily amount of the Commitment of such Lender (whether
used or unused) during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates; provided that, if such
Lender continues to have any Revolving Credit Exposure after its Commitment
terminates, then such facility fee shall continue to accrue on the daily amount
of such Lender’s Revolving Credit Exposure from and including the date on which
its Commitment terminates to but excluding the date on which such Lender ceases
to have any Revolving Credit Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof; provided that any facility fees accruing
after the date on which the Commitments terminate shall be payable on demand.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
 
(b)  Each Applicable Borrower agrees to pay (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit as to which such Applicable Borrower is the
obligor, which shall accrue at the same Applicable Rate used to determine the
interest rate applicable to Eurocurrency Revolving Loans on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate or rates per annum separately agreed upon between the Company and the
Issuing Bank on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
 
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(c)  The Company agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Company and the Administrative Agent.
 
(d)  All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of facility fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
 
SECTION 2.12.   Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate.
 
(b)  The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
 
(c)  Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by any of the Borrowers hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
 
(d)  Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurocurrency Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
 
(e)  All interest hereunder shall be computed on the basis of a year of 360
days, except that (i) interest on Borrowings denominated in Sterling shall be
computed on the basis of a year of 365 days, (ii) interest on Borrowings
denominated in any other Foreign Currency for which it is required by applicable
law or customary to compute interest on the basis of a year of 365 days or, if
required by applicable law or customary, 366 days in a leap year, shall be
computed on such basis, and (iii) interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
 
SECTION 2.13.   Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing denominated in any currency:
 
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(a)  the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
 
(b)  the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurocurrency Borrowing denominated
in such currency shall be ineffective and (ii) such Borrowing shall be converted
to or continued as on the last day of the Interest Period applicable thereto (A)
if such Borrowing is denominated in Dollars, an ABR Borrowing or (B) if such
Borrowing is denominated in a Foreign Currency, as a Borrowing bearing interest
at such rate as the Administrative Agent determines adequately reflects the
costs to the Lenders of making or maintaining such Borrowing, and (ii) if any
Borrowing Request requests a Eurocurrency Borrowing in such currency, such
Borrowing shall be made as an ABR Borrowing (if such Borrowing is requested to
be made in Dollars) or shall be made as a Borrowing bearing interest at such
rate as the Administrative Agent determines adequately reflects the costs to the
Lenders of making or maintaining such Borrowing. The Administrative Agent shall
promptly advise the Company of any such alternative interest rate.
 
SECTION 2.14.   Increased Costs. (a) If any Change in Law shall:
 
(i)  impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
 
(ii)  impose on any Lender or the Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurocurrency Loans made by such
Lender or any Letter of Credit or participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Company will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
 
(b)  If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such
 
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Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the
Issuing Bank’s holding company, if any, as a consequence of this Agreement or
the Loans made by, or participations in Letters of Credit held by, such Lender,
or the Letters of Credit issued by the Issuing Bank, to a level below that which
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies and the policies of
such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Company will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.
 
(c)  A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Borrowers shall jointly and severally pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
 
(d)  Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
 
SECTION 2.15.   Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurocurrency Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.10(b) and is revoked in accordance therewith) or (d) the assignment of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Company pursuant to Section 2.18, then,
in any such event, the Applicable Borrower shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurocurrency
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement
 
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of such period, for dollar deposits of a comparable amount and period from other
banks in the eurocurrency market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Applicable Borrower shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.
 
SECTION 2.16.   Taxes. (a) Any and all payments by or on account of any
obligation of any of the Borrowers hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if any
of the Borrowers shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Applicable Borrower shall make such deductions and (iii) the Applicable Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
 
(b)  In addition, the Applicable Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
 
(c)  The Applicable Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of such
Applicable Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
 
(d)  As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Applicable Borrower to a Governmental Authority, the Applicable
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
 
(e)  Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Applicable
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate.
 
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(f)  If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by one of the Borrowers or with respect to which one of the
Borrowers has paid additional amounts pursuant to this Section 2.16, it shall
pay over such refund to the Applicable Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Applicable Borrower
under this Section 2.16 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the
Applicable Borrower, upon the request of the Administrative Agent or such
Lender, agrees to repay the amount paid over to the Applicable Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to any of
the Borrowers or any other Person.
 
SECTION 2.17.   Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a)
Each of the Borrowers shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in
immediately available funds, without set off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder of (i) principal or interest in respect of any Loan shall be made in
the currency in which such Loan is denominated, (ii) reimbursement obligations
shall be made in the currency in which the Letter of Credit in respect of which
such reimbursement obligation exists is denominated or (iii) any other amount
due hereunder or under another Loan Document shall be made in Dollars. Any
payment required to be made by the Administrative Agent hereunder shall be
deemed to have been made by the time required if the Administrative Agent shall
at or before such time, have taken the necessary steps to make such payment in
accordance with the regulations or operating procedures of the clearing or
settlement system used by the Administrative Agent to make such payment.
 
(b)  If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance
 
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with the amounts of principal and unreimbursed LC Disbursements then due to such
parties.
 
(c)  If any Lender shall, by exercising any right of set off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any of the Borrowers pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Company or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each of the Borrowers consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against such Applicable Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of the Applicable Borrower in the amount of such participation.
 
(d)  Unless the Administrative Agent shall have received notice from the
Applicable Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Applicable Borrower will not make such payment, the
Administrative Agent may assume that the Applicable Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Applicable Borrower has not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, (i) at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation (in
the case of an amount denominated in Dollars) and (ii) the rate reasonably
determined by the Administrative Agent to be the cost to it of funding such
amount (in the case of an amount denominated in a Foreign Currency).
 
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(e)  If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.
 
SECTION 2.18.   Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if any of the Borrowers is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16 or 2.20, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14, 2.16 or 2.20, as the case
may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. Each
Lender also agrees to use its commercially reasonable efforts to make such
designation or assignment prior to the occurrence of any circumstance described
in Section 2.14, 2.16 or 2.20 in the event it has knowledge of such circumstance
prior to its occurrence or as soon thereafter as it becomes aware thereof. Each
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
 
(b)  If any Lender requests compensation under Section 2.14, or if any of the
Borrowers is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16 or
2.20, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Company may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent (and
if a Commitment is being assigned, the Issuing Bank), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Company (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16 or 2.20, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply.
 
SECTION 2.19.   Designation of Subsidiary Borrowers. The Company may at any time
and from time to time designate any Subsidiary as a Subsidiary Borrower by
delivery to the Administrative Agent of a Borrowing Subsidiary Agreement
executed by such Subsidiary and the Company and the satisfaction of the other
conditions precedent set forth in Section 4.03, and
 
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upon such delivery and satisfaction such Subsidiary shall for all purposes of
this Agreement be a Subsidiary Borrower and a party to this Agreement until the
Company shall have executed and delivered to the Administrative Agent a
Borrowing Subsidiary Termination with respect to such Subsidiary, whereupon such
Subsidiary shall cease to be a Subsidiary Borrower and a party to this
Agreement; provided, that no Foreign Subsidiary may act as a Subsidiary Borrower
unless approved by the Administrative Agent. Notwithstanding the preceding
sentence, no Borrowing Subsidiary Termination will become effective as to any
Subsidiary Borrower at a time when any principal of or interest on any Loan to
such Borrower shall be outstanding hereunder, provided that such Borrowing
Subsidiary Termination shall be effective to terminate the right of such
Subsidiary Borrower to make further Borrowings under this Agreement. As soon as
practicable upon receipt of a Borrowing Subsidiary Agreement, the Administrative
Agent shall furnish a copy thereof to each Lender.
 
SECTION 2.20.   Additional Reserve Costs. (a) For so long as any Lender is
required to make special deposits with the Bank of England or comply with
reserve assets, liquidity, cash margin or other requirements of the Bank of
England, to maintain reserve asset ratios or to pay fees, in each case in
respect of such Lender’s Eurocurrency Loans or Swingline Foreign Currency Loans,
such Lender shall be entitled to require the Applicable Borrower to pay,
contemporaneously with each payment of interest on each of such Loans,
additional interest on such Loan at a rate per annum equal to the Mandatory
Costs Rate calculated in accordance with the formula and in the manner set forth
in Exhibit C hereto.
 
(b) For so long as any Lender is required to comply with reserve assets,
liquidity, cash margin or other requirements of any monetary or other authority
(including any such requirement imposed by the European Central Bank or the
European System of Central Banks, but excluding requirements reflected in the
Statutory Reserve Rate or the Mandatory Costs Rate) in respect of any of such
Lender’s Eurocurrency Loans and Swingline Foreign Currency Loans, such Lender
shall be entitled to require the Applicable Borrower to pay, contemporaneously
with each payment of interest on each of such Lender’s Loans subject to such
requirements, additional interest on such Loan at a rate per annum specified by
such Lender to be the cost to such Lender of complying with such requirements in
relation to such Loan.

(c) Any additional interest owed pursuant to paragraph (a) or (b) above shall be
determined by the applicable Lender, which determination shall be conclusive
absent manifest error, and notified to the Applicable Borrower (with a copy to
the Administrative Agent) as soon as reasonably practical, but in no event later
than five Business Days before each date on which interest is payable for the
applicable Loan, and such additional interest so notified to the Applicable
Borrower by such Lender shall be payable to the Administrative Agent for the
account of such Lender on each date on which interest is payable for such Loan.

 
ARTICLE III  
 
Representations and Warranties
 
The Company represents and warrants to the Administrative Agent and the Lenders
that:
 
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SECTION 3.01.   Organization; Powers. Each of the Company and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
 
SECTION 3.02.   Authorization; Enforceability. The Transactions are within the
Borrowers’ corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrowers and constitutes a legal, valid and
binding obligation of the Borrowers, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
 
SECTION 3.03.   Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Company or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Company or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Company or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Company or
any of its Subsidiaries.
 
SECTION 3.04.   Financial Condition; No Material Adverse Change. (a) The Company
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended December 31, 2005, reported on by KPMG LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended March 31, 2006, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Company and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
 
(b)  Since December 31, 2005, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries, taken as a whole.
 
SECTION 3.05.   Properties. (a) Each of the Company and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
 
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(b)  Each of the Company and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
 
SECTION 3.06.   Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve this Agreement or the Transactions.
 
(b)  Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
 
(c)  Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect.
 
SECTION 3.07.   Compliance with Laws and Agreements. Each of the Company and
each of its Subsidiaries is in compliance with all laws, regulations and orders
of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
 
SECTION 3.08.   Investment and Holding Company Status. Neither the Company nor
any of its Subsidiaries is (a) an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 2005.
 
SECTION 3.09.   Taxes. Each of the Company and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
 
SECTION 3.10.   ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability
 
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is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.
 
SECTION 3.11.   Disclosure. The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of the Company to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
 
SECTION 3.12.   Subsidiaries. As of the Effective Date, the Company has no
Subsidiaries other than those Subsidiaries listed on Schedule 3.12. Schedule
3.12 correctly sets forth, as of the Effective Date, (i) the percentage
ownership (direct or indirect) of the Company in each class of capital stock or
other equity of its Subsidiaries and also identifies the direct owner thereof,
and (ii) the jurisdiction of organization of each such Subsidiary. Schedule 3.12
correctly identifies those Subsidiaries which constitute Material Subsidiaries
as of the Effective Date.
 
SECTION 3.13.   Regulation U. Margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) constitutes less than 25% of
the value of those assets of the Company and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder. Neither the
making of any Loan or issuance of any Letters of Credit hereunder, the use of
the proceeds thereof, nor any other aspect of the financing of the Acquisition,
will violate or be inconsistent with the provisions of Regulation T, Regulation
U or Regulation X of the Board of Governors of the Federal Reserve System.
 
     ARTICLE IV  
 
Conditions
 
SECTION 4.01.   Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
 
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(a)  The Administrative Agent (or its counsel) shall have received from each
party to any Credit Document either (i) a counterpart of each Credit Document to
which it is a party signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of such Credit Document) that such party
has signed a counterpart of.
 
(b)  The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Oppenheimer Wolff & Donnelly LLP, counsel for the Borrowers and the
Subsidiary Guarantors, covering such matters relating to the Borrowers, the
Subsidiary Guarantors, the Credit Documents or the Transactions as the Required
Lenders shall reasonably request. The Borrowers hereby request such counsel to
deliver such opinion.
 
(c)  The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrowers and
the Subsidiary Guarantors, the authorization of the Transactions and any other
legal matters relating to the Borrowers, the Subsidiary Guarantors, the Credit
Documents or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.
 
(d)  The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Company, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
 
(e)  The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out of pocket expenses required to be
reimbursed or paid by the Company hereunder.
 
(f)  The Administrative Agent shall have received, if applicable, a Borrowing
Subsidiary Agreement for any Subsidiary Borrower being designated as such as of
the Effective Date.
 
(g)  The total commitments under the Company’s May 23, 2003 Credit Agreement
with Bank of America, N.A. shall have been terminated, all loans thereunder
shall have been repaid in full, together with interest thereon, all letters of
credit, if any, issued thereunder shall have been terminated and all other
amounts owing pursuant to thereto and all agreements related thereto shall have
been repaid in full, all such agreements shall have been terminated on terms and
conditions satisfactory to the Administrative Agent and be of no further force
or effect, and the Administrative Agent shall have received a payoff letter in
form and substance acceptable to the Administrative Agent from Bank of America,
N.A. to such effect.
 
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to
 
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Section 9.02) at or prior to 3:00 p.m., New York City time, on June 30, 2006
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
 
SECTION 4.02.   Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing (other than any Borrowing the proceeds of which
are used exclusively to repay a Borrowing of the same amount), and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to the satisfaction of the following conditions:
 
(a)  The representations and warranties of the Company set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable (except any such representation or warranty that expressly relates
to or is made expressly as of a specific earlier date, in which case such
representation or warranty shall be true and correct with respect to or as of
such specific earlier date).
 
(b)  At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
 
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Company on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
 
SECTION 4.03.   Designation of a Subsidiary Borrower. The designation of a
Subsidiary Borrower pursuant to Section 2.19 is subject to the condition
precedent that the Company or such proposed Subsidiary Borrower shall have
furnished or caused to be furnished to the Administrative Agent:
 
(a)  Copies, certified by the Secretary or Assistant Secretary of such
Subsidiary, of its Board of Directors’ resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for the Administrative Agent)
approving the Borrowing Subsidiary Agreement and any other Credit Documents to
which such Subsidiary is becoming a party;
 
(b)  An incumbency certificate, executed by the Secretary or Assistant Secretary
of such Subsidiary, which shall identify by name and title and bear the
signature of the officers of such Subsidiary authorized to request Borrowings
hereunder and sign the Borrowing Subsidiary Agreement and the other Credit
Documents to which such Subsidiary is becoming a party, upon which certificate
the Administrative Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Company or such Subsidiary;
 
(c)  Opinions of counsel to such Subsidiary, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel, with respect to the
laws of its jurisdiction of organization and such other matters as are
reasonably requested by counsel to the Administrative Agent and addressed to the
Administrative Agent and the Lenders; and
 
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(d)  Any promissory notes requested by any Lender, and any other instruments and
documents reasonably requested by the Administrative Agent, each in such form as
the Administrative Agent may reasonably require.
 

 
ARTICLE V  
 
Affirmative Covenants
 
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Company covenants and agrees with
the Lenders that:
 
SECTION 5.01.   Financial Statements; Ratings Change and Other Information. The
Company will furnish to the Administrative Agent for distribution to each
Lender:
 
(a)  within 90 days after the end of each fiscal year of the Company, its
audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by KPMG LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
 
(b)  within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
 
(c)  concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of the Company (i) certifying as
to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.10 and 6.11 and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such
 
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change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
 
(d)  concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
 
(e)  promptly after Moody’s or S&P shall have announced the issuance of a
corporate credit rating for the Company or a change in the Company’s corporate
credit rating, written notice of such rating issuance or change; and
 
(f)  promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.
 
SECTION 5.02.   Notices of Material Events. The Company will furnish to the
Administrative Agent for distribution to each Lender written notice of the
following promptly after learning thereof:
 
(a)  the occurrence of any Default;
 
(b)  the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Company or any
Affiliate thereof that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;
 
(c)  the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount exceeding
$5,000,000; and
 
(d)  any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
 
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
 
SECTION 5.03.   Existence; Conduct of Business. The Company will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
 
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SECTION 5.04.   Payment of Obligations. The Company will, and will cause each of
its Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Company or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
 
SECTION 5.05.   Maintenance of Properties; Insurance. The Company will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
 
SECTION 5.06.   Books and Records; Inspection Rights. The Company will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Company will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
 
SECTION 5.07.   Compliance with Laws. The Company will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
 
SECTION 5.08.   Use of Proceeds and Letters of Credit. The proceeds of the Loans
will be used only for general corporate purposes of the Company and its
Subsidiaries. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X. Letters of Credit
will be issued only to support general corporate purposes of the Company and its
Subsidiaries.
 
SECTION 5.09.   Additional Guarantors; Release of Guarantors. (a) Effective upon
any Domestic Subsidiary which is not, as of the date hereof, a Material
Subsidiary becoming a Material Subsidiary, the Company shall cause such Domestic
Subsidiary to, within ten (10) Business Days execute and deliver to the
Administrative Agent for the benefit of the Lenders a joinder to the Subsidiary
Guaranty. The Company shall promptly notify the Administrative Agent at any time
at which any such Domestic Subsidiary becomes a Material Subsidiary.
 
(b)   If, as of the date on which any financial statements are delivered
pursuant to Section 5.01(b), the aggregate assets of all Domestic Subsidiaries
of the Company that are not Subsidiary Guarantors (any such Subsidiary, a
“Non-Subject Subsidiary”) are determined to
 
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exceed ten percent (10%) of the consolidated total assets of the Company and its
Subsidiaries as of the date of such financial statements, then the Company shall
cause one or more of such Non-Subject Subsidiaries to promptly execute a
Subsidiary Guaranty so that either (i) the aggregate assets of all Non-Subject
Subsidiaries do not exceed ten percent (10%) of the consolidated total assets of
the Company and its Subsidiaries or (ii) all Domestic Subsidiaries have executed
a Subsidiary Guaranty.
 
(c)  If any Domestic Subsidiary acting as a Subsidiary Guarantor ceases to be a
Material Subsidiary and/or is no longer required to act as a Subsidiary
Guarantor pursuant to paragraph (b) above (as demonstrated in each case to the
reasonable satisfaction of the Administrative Agent), then such Subsidiary shall
be released from the Subsidiary Guarantee promptly following the request of the
Company.
 
 
  ARTICLE VI  
 
Negative Covenants
 
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Company covenants and agrees with the Lenders that:
 
SECTION 6.01.   Indebtedness. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
 
(a)  Indebtedness created hereunder and under the other Credit Documents;
 
(b)  Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;
 
(c)  Indebtedness of the Company to any Subsidiary and of any Subsidiary to the
Company or any other Subsidiary;
 
(d)  Guarantees by the Company of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Company or any other Subsidiary;
 
(e)  (i) Indebtedness of the Company or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations, so long as such Indebtedness is incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) any Indebtedness assumed in connection with
the acquisition of any such assets or secured by a Lien on any such assets prior
to the acquisition thereof (including, in each case, the acquisition of such
assets through the purchase of the capital stock or other equity interests of a
Person holding such assets), and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof;
 
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provided, that the aggregate principal amount of all such Indebtedness incurred
pursuant to clauses (i) and (ii), together with any outstanding Indebtedness
incurred pursuant to clause (f), shall not exceed $75,000,000 at any time
outstanding;
 
(f)  Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (f), together with any outstanding
Indebtedness incurred pursuant to clause (e), shall not exceed $75,000,000 at
any time outstanding;
 
(g)  Indebtedness of the Company or any Subsidiary as an account party in
respect of trade letters of credit;
 
(h)  Indebtedness of SPCs incurred in connection with Permitted Securitizations;
provided that the aggregate outstanding amount of such Receivables Transaction
Attributed Indebtedness shall at no time exceed $75,000,000; and
 
(i)  other unsecured Indebtedness; provided that (i) such incurrence would not
cause a breach of Section 6.09 or 6.10, as determined on a pro forma basis after
giving effect thereto, and (ii) the aggregate principal amount of Indebtedness
of the Company’s Subsidiaries permitted by this clause (i) shall not exceed
$10,000,000 at any time outstanding.
 
SECTION 6.02.   Liens. The Company will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
 
(a)  Permitted Encumbrances;
 
(b)  any Lien on any property or asset of the Company or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Company or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
 
(c)  any Lien existing on any property or asset prior to the acquisition thereof
by the Company or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Company or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
 
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(d)  Liens on fixed or capital assets acquired, constructed or improved by the
Company or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by Section 6.01(e), (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 90% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the Company or any
Subsidiary;
 
(e)  Liens upon assets of an SPC granted in connection with a Permitted
Securitization and customary backup Liens granted by the transferor in accounts
receivable and related rights transferred to an SPC in accordance with a
Permitted Securitization;
 
(f)  Liens securing Indebtedness owed by any Foreign Subsidiary to the Company
or any Subsidiary Guarantor;
 
(g)  rights of holders of notes or debentures issued by the Company or any
Subsidiary in deposits placed in trust to legally or “in substance” defese such
notes or debentures;
 
(h)  Liens consisting of pledges of cash collateral or government securities to
secure, on a mark-to-market basis, obligations under Swap Agreements, so long as
the aggregate value of such collateral does not exceed $5,000,000 at any one
time outstanding; and
 
(i)  other Liens securing Indebtedness at no time exceeding $10,000,000 in
aggregate principal amount.
 
SECTION 6.03.   Fundamental Changes. (a) The Company will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing, (i) any
Subsidiary may merge into the Company in a transaction in which the Company is
the surviving corporation, (ii) any Person may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary (and, if either such
Subsidiary is a Subsidiary Guarantor, then the surviving entity shall also be a
Subsidiary Guarantor) and (iii) any Subsidiary may liquidate or dissolve if the
Company determines in good faith that such liquidation or dissolution is in the
best interests of the Company and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.
 
(b)  The Company will not, nor will it permit any Subsidiary to, make any Asset
Disposition except for (i) Asset Dispositions among the Borrowers and one or
more Domestic Subsidiaries or Subsidiary Guarantors or among any Domestic
Subsidiaries or Subsidiary Guarantors, (ii) Asset Dispositions by Foreign
Subsidiaries (other than a Subsidiary Borrower)
 
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that are not Subsidiary Guarantors to the Company or any Subsidiary, (iii) Asset
Dispositions expressly permitted by Sections 6.02, 6.04, 6.06 or 6.07, (iv)
transfers of accounts receivable (and rights ancillary thereto) pursuant to, and
in accordance with the terms of, a Permitted Securitization; provided that the
Receivables Transaction Attributed Indebtedness pursuant to Permitted
Securitizations may at no time exceed $75,000,000 and (v) other Asset
Dispositions of property that, together with all other property of the Company
and its Subsidiaries previously leased, sold or disposed of in Asset
Dispositions made pursuant to this Section 6.03(b)(v) during the twelve-month
period ending with the month in which any such lease, sale or other disposition
occurs, do not constitute a Substantial Portion of the property of the Company
and its Subsidiaries.
 
(c)  The Company will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Company and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
 
SECTION 6.04.   Investments, Loans, Advances, Guarantees and Acquisitions. The
Company will not, and will not permit any of its Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
Wholly-Owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:
 
(a)  Permitted Investments;
 
(b)  investments by the Company in the capital stock of its Subsidiaries;
 
(c)  loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary;
 
(d)  Guarantees constituting Indebtedness permitted by Section 6.01;
 
(e)  the Subsidiary Guarantee;
 
(f)  subject to the provisions of this Section 6.04(f) and the requirements
contained in the definition of Permitted Acquisition, the Company and its
Wholly-Owned Subsidiaries may from time to time effect Permitted Acquisitions,
so long as: (i) no Default shall have occurred and be continuing at the time of
the consummation of the proposed Permitted Acquisition or immediately after
giving effect thereto (determined on a pro forma basis in respect of Sections
6.09 and 6.10); (ii) if the proposed Permitted Acquisition is for aggregate
consideration of $25,000,000 or more, the Company shall have given to the
Administrative Agent for distribution to each Lender written notice of such
proposed Permitted Acquisition on the earlier of (x) the date on which the
Permitted Acquisition is publicly announced and (y) ten (10) Business Days prior
to consummation of such Permitted Acquisition (or such shorter period of time as
may be reasonably acceptable to the Administrative Agent), which notice shall be
executed by its chief financial officer or vice president-finance and shall
describe in reasonable
 
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detail the principal terms and conditions of such Permitted Acquisition; and
(iii) at the time of any such Permitted Acquisition involving the creation or
acquisition of a Subsidiary, or the acquisition of capital stock or other Equity
Interest of any Person, the Company and its Subsidiaries shall have complied
with Section 5.09;
 
(g)  investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
 
(h)  loans and advancements to officers and employees of the Company and its
Subsidiaries for moving, relocation and travel expenses and other similar
expenditures, in each case in the ordinary course of business, in an aggregate
amount not to exceed $2,500,000 at any time (determined without regard to any
write-downs or write-offs of such loans and advances);
 
(i)  loans by the Company to officers, directors and employees of the Company
and its Subsidiaries in connection with their purchase of capital stock of the
Company, so long as no cash is paid by the Company to any thereof in connection
with such purchase;
 
(j)  investments evidenced by Swap Agreements entered into pursuant to Section
6.05;
 
(k)  investments by an SPC in connection with a Permitted Securitization;
 
(l)  investments in joint ventures so long as (i) such joint venture is engaged
in a business satisfying the requirements of Section 6.03(c) and (ii) the amount
of all investments contributed to such joint venture and all other joint
ventures by the Company and its Subsidiaries does not exceed $75,000,000 in the
aggregate;
 
(m)   investments consisting of credit sale contracts generated by retail
customers of the Borrower or any of its Subsidiaries in the ordinary course of
business; and
 
(n)   so long as no Default exists or would occur after giving effect thereto,
other investments not otherwise permitted by clauses (a) through (l) above in an
amount not to exceed $25,000,000 in the aggregate.
 
SECTION 6.05.   Swap Agreements. The Company will not, and will not permit any
of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Company or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Company or any of its Subsidiaries), and (b) Swap Agreements entered into
in order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Company or
any Subsidiary.
 
SECTION 6.06.   Restricted Payments. The Company will not, and will not permit
any of its Subsidiaries to, declare, pay or make, or agree to declare, pay or
make, directly or indirectly, any Restricted Payment, except (a) the Company may
declare and pay dividends with respect to its Equity Interests payable solely in
additional shares of its common stock, (b)
 
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Subsidiaries may declare and pay dividends ratably with respect to their Equity
Interests, (c) the Company may make Restricted Payments pursuant to and in
accordance with stock plans or other benefit plans for management or employees
of the Company and its Subsidiaries and (d) the Company may make other
Restricted Payments so long as (i) the aggregate of all such other Restricted
Payments made after the date hereof does not exceed the sum of $150,000,000 plus
50% of the aggregate of all positive Net Income of the Company for each fiscal
quarter completed after the date hereof and (ii) no Default has occurred and is
continuing or would occur after giving effect thereto. 
 
SECTION 6.07.   Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties, (b)
transactions between or among the Company and its Wholly-Owned Subsidiaries not
involving any other Affiliate, (c) transactions permitted under Sections
6.01(c), 6.02(f) and 6.04(g) and (h) and (d) the making of any Restricted
Payment permitted by Section 6.06.
 
SECTION 6.08.   Restrictive Agreements. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Company or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the
Company or any other Subsidiary; provided that (i) the foregoing shall not apply
to restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.08 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided that such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness, (v) the foregoing shall not apply to
restrictions or conditions upon any SPC imposed in connection with a Permitted
Securitization, and (vi) clause (a) of the foregoing shall not apply to (A)
customary provisions in leases and other contracts restricting the assignment
thereof or limiting Liens securing indebtedness incurred for purposes of
financing the acquired assets to which such Liens attach or (B) negative pledge
provisions contained in documentation evidencing the issuance by the Company of
debt securities with an aggregate principal amount not to exceed $50,000,000 at
any one time outstanding, so long as such documentation provides for the
granting of Liens if such debt securities are equally and ratably secured.
 
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SECTION 6.09.   Minimum Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio as of the end of any fiscal quarter of the Company to be
less than or equal to 2.75 to 1.00.
 
SECTION 6.10.   Maximum Leverage Ratio. The Company will cause the Leverage
Ratio to be less than 3.00 to 1.00 at all times.
 
SECTION 6.11.   Fiscal Year. The Company shall not, nor shall it permit any
Subsidiary to, change its fiscal year to end on any date other than the Saturday
closest to December 31 of each year.
 
  ARTICLE VII  
 
Events of Default
 
If any of the following events (“Events of Default”) shall occur:
 
(a)  any of the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement or any cash
collateral amount due pursuant to Section 2.05(j) when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
 
(b)  any of the Borrowers shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five days;
 
(c)  any representation or warranty made or deemed made by or on behalf of the
Company or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material respect when made
or deemed made;
 
(d)  the Company shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.03 (with respect to the Company’s
existence) or 5.08 or in Article VI;
 
(e)  the Company shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to the
Company (which notice will be given at the request of any Lender);
 
(f)  the Company or any Subsidiary shall fail to make any payment (whether of
principal or interest or otherwise and regardless of amount) in respect of any
Material
 
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Indebtedness, when and as the same shall become due and payable (after
accounting for any period of grace available before an event of default would
occur thereunder);
 
(g)  any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
 
(h)  an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
 
(i)  the Company or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
 
(j)  the Company or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
 
(k)  one or more judgments for the payment of money in an aggregate amount in
excess of $5,000,000 shall be rendered against the Company, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Company or any Subsidiary to enforce any such judgment;
 
(l)  an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Company and its
Subsidiaries in an
 
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aggregate amount exceeding (i) $5,000,000 in any year or (ii) $15,000,000 for
all periods;
 
(m)  a Change in Control shall occur; or
 
(n)  except as otherwise provided in Section 6.03(a), the Subsidiary Guaranty or
any provisions thereof shall cease to be in full force or effect as to any
Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting for or on
behalf of any Subsidiary Guarantor shall deny or disaffirm such Subsidiary
Guarantor’s obligations under the Subsidiary Guaranty;
 
then, and in every such event (other than an event with respect to any of the
Borrowers described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Company, take
either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to any of the Borrowers
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
 
ARTICLE VIII  
 
The Administrative Agent
 
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
 
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
 
The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have
          
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any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing as directed by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except
as expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Company or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
 
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Company. Upon any such
resignation, the Required Lenders shall have the right, subject, at any time at
which no Default is outstanding, to the prior written consent of the Company
(which shall not be unreasonably withheld or delayed), to appoint a
 
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successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Company to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Company and
such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
 
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
 
The Administrative Agent shall be permitted from time to time to designate one
of its Affiliates to perform the duties to be performed by the Administrative
Agent hereunder with respect to Loans and Borrowings denominated in Foreign
Currencies. The provisions of this Article VIII shall apply to any such
Affiliate mutatis mutandis.
 
The title "Syndication Agent" is purely honorific, and the Person designated as
the "Syndication Agent" shall not have any duties or responsibilities in such
capacity.
 
    ARTICLE IX  
 
Miscellaneous
 
SECTION 9.01.   Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
 
(i)  if to the Company or any Subsidiary Borrower, to it at 6105 Trenton Lane
North, Minneapolis, Minnesota 55442, Attention of Don Heidemann (Telecopy No.
(763) 551-7889);
 
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(ii)  if to the Administrative Agent, (A) in the case of Dollar-denominated
Borrowings, to JPMorgan Loan Services, Agency Closing Unit, 211 South Clark
Street, 19th Floor, Chicago, Illinois 60603, Attention of Sharon K. Bosch
(Telecopy No. (312) 385-7107) and (B) in the case of Borrowings denominated in
another currency, to J.P. Morgan Europe Limited, 125 London Wall, London EC2Y
5AJ, United Kingdom, Attention Loan and Agency Services: Belinda Lucas (Telecopy
No. (00 44 (0) 207) 777-2360);
 
(iii)  if to the Issuing Bank, to it at JPMorgan Chase Bank, National
Association, Global Trade Services, 300 South Riverside Plaza, Chicago, Illinois
60606, Attention of Victorio De Guzman (Telecopy No. (312) 954-2457);
 
(iv)  if to the Swingline Lender, JPMorgan Loan Services, Agency Closing Unit,
211 South Clark Street, 19th Floor, Chicago, Illinois 60603, Attention of Sharon
K. Bosch (Telecopy No. (312) 385-7107); and
 
(v)  if to any other Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.
 
(b)  Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Company may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
 
(c)  Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
 
SECTION 9.02.   Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrowers therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
 
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(b)  Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders or by the Company and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender, (vi) except as required under
Section 5.09(c) or in connection with a transaction permitted by Section 6.03,
release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty, without the written consent of each Lender or (vii) change Article X
in a manner that would materially alter the obligations of the Company
thereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be.
 
(c)  Notwithstanding the foregoing, upon the execution and delivery of all
documentation required by Section 2.08(d) to be delivered in connection with an
increase to the aggregate Revolving Commitment, the Administrative Agent, the
Borrowers and the new or existing Lenders whose Revolving Commitments have been
affected may and shall enter into an amendment hereof (which shall be binding on
all parties hereto and the new Lenders) solely for the purpose of reflecting any
new Lenders and their new Revolving Commitments and any increase in the
Revolving Commitment of any existing Lender.
 
(d)  If, in connection with any proposed waiver, amendment or modification of
any of the provisions of this Agreement as contemplated by clauses (i) through
(vi) of Section 9.02(b), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Company may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment) and shall grant its
consent to the proposed waiver, amendment or modification; provided, that (i)
the Company shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, each Issuing Bank), which consent
shall not unreasonably be withheld, and (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other
 
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amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Company (in the case
of all other amounts).
 
SECTION 9.03.   Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall
jointly and severally pay (i) all reasonable out of pocket expenses incurred by
the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
 
(b)  The Borrowers shall jointly and severally indemnify the Administrative
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
 
(c)  To the extent that any Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
 
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claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.
 
(d)  To the extent permitted by applicable law, the Borrowers shall not assert,
and hereby waive, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
 
(e)  All amounts due under this Section shall be payable promptly after written
demand therefor.
 
SECTION 9.04.   Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) the
Borrowers may not assign or otherwise transfer any of their respective rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
 
(b)  (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:
 
(A)  the Company, provided that no consent of the Company shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee;
 
(B)  the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender with a Commitment immediately prior to giving effect to such
assignment; and
 
(C)  the Issuing Bank.
 
(ii)  Assignments shall be subject to the following additional conditions:
 
(A)  except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
 
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Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Company and the Administrative Agent otherwise consent, provided that no such
consent of the Company shall be required if an Event of Default has occurred and
is continuing;
 
(B)  each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;
 
(C)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 payable by either the assignee or the assignor;
and
 
(D)  the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Company and its
affiliates, the Credit Parties and their related parties or their respective
securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws,
including Federal and state securities laws.
 
For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:
 
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
 
(iii)  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
 
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(iv)  The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
 
(v)  Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e),
2.06(b), 2.17(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
 
(c) (i) Any Lender may, without the consent of the Borrowers, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall
 
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be entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.17(c) as though it were a
Lender.
 
(ii)  A Participant shall not be entitled to receive any greater payment under
Section 2.14 or 2.16 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Company’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Company
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 2.16(e) as though
it were a Lender.
 
(d)  Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
 
SECTION 9.05.   Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
 
SECTION 9.06.   Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an
 
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
 
SECTION 9.07.   Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
 
SECTION 9.08.   Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any of the
Borrowers against any of and all the obligations of such Person now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
 
SECTION 9.09.   Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.
 
(b)  Each of the Borrowers hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against the Borrowers or their respective properties in the courts of any
jurisdiction.
 
(c)  Each of the Borrowers hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
 
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(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
 
SECTION 9.10.   WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 9.11.   Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
 
SECTION 9.12.   Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Company and its obligations, (g) with the consent of the Company or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
from a source other than the Company. For the purposes of this Section,
“Information” means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a non-confidential
basis prior to disclosure by the Company; provided that, in the case of
information received from the Company after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
 
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EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12(a)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE COMPANY AND ITS RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING
THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.
 
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
COMPANY OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY AND ITS AFFILIATES,
THE CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES) AND
ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE COMPANY AND THE
ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.
 
SECTION 9.13.   Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
 
SECTION 9.14.   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 Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies such Person, which information includes the names and addresses
of the Borrowers and other information that will allow such Lender to identify
the Borrowers in accordance with the Act.
 
SECTION 9.15.   Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one
currency into another currency, each party hereto agrees, to the fullest extent
that it may effectively do so, that
 
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the rate of exchange used shall be that at which in accordance with normal
banking procedures in the relevant jurisdiction the first currency could be
purchased with such other currency on the Business Day immediately preceding the
day on which final judgment is given.
 
(b)  The obligations of each Borrower in respect of any sum due to any party
hereto or any holder of the obligations owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Applicable
Creditor against such loss. The obligations of the Company contained in this
Section 9.15 shall survive the termination of this Agreement and the payment of
all other amounts owing hereunder.
 
SECTION 9.16.   Appointment. Each Subsidiary Borrower hereby authorizes and
empowers the Company to act as its representative and attorney-in-fact for the
purposes of signing documents and giving and receiving notices (including
borrowing requests and interest elections hereunder) and other communications in
connection with the this Agreement and the transactions contemplated thereby and
for the purposes of modifying or amending any provision of this Agreement and
further agrees that the Administrative Agent and each Lender may conclusively
rely on the foregoing authorization.
 
     ARTICLE X  
 
Guaranty
 
SECTION 10.01.   Guaranty. For valuable consideration, the receipt of which is
hereby acknowledged, and to induce the Lenders to make advances to each
Subsidiary Borrower, the Company hereby absolutely and unconditionally
guarantees prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all existing
and future obligations of each Subsidiary Borrower to the Administrative Agent
and the Lenders and their Affiliates, or any of them, under or with respect to
the Credit Documents or any Swap Agreements, whether for principal, interest,
fees, expenses or otherwise (collectively, the “Guaranteed Obligations”).
 
SECTION 10.02.   Waivers. The Company waives notice of the acceptance of this
guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. The Company further waives presentment, protest, notice of
notices delivered or demand made on any Subsidiary Borrower or action or
delinquency in respect of the Guaranteed Obligations or any part thereof,
including any right to require the Administrative Agent and the Lenders to sue
the Subsidiary Borrower, any other guarantor or any other Person obligated with
respect to the Guaranteed Obligations or any part thereof, or otherwise to
enforce payment thereof against any collateral securing the Guaranteed
Obligations or any part thereof; provided that if at any time
 
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any payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of any of the Subsidiary Borrowers or otherwise, the Company’s
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had not been made and whether or not the
Administrative Agent or the Lenders are in possession of this guaranty. The
Administrative Agent and the Lenders shall have no obligation to disclose or
discuss with the Company their assessments of the financial condition of the
Subsidiary Borrowers.
 
SECTION 10.03.   Guaranty Absolute. This guaranty is a guaranty of payment and
not of collection, is a primary obligation of the Company and not one of surety,
and the validity and enforceability of this guaranty shall be absolute and
unconditional irrespective of, and shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral; (c) any
waiver of any right, power or remedy or of any default with respect to the
Guaranteed Obligations or any part thereof or any agreement relating thereto or
with respect to any collateral; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral, any other guaranties with respect to the
Guaranteed Obligations or any part thereof, or any other obligation of any
Person with respect to the Guaranteed Obligations or any part thereof; (e) the
enforceability or validity of the Guaranteed Obligations or any part thereof or
the genuineness, enforceability or validity of any agreement relating thereto or
with respect to any collateral; (f) the application of payments received from
any source to the payment of obligations other than the Guaranteed Obligations,
any part thereof or amounts which are not covered by this guaranty even though
the Administrative Agent and the Lenders might lawfully have elected to apply
such payments to any part or all of the Guaranteed Obligations or to amounts
which are not covered by this guaranty; (g) any change in the ownership of any
Subsidiary Borrower or the insolvency, bankruptcy or any other change in the
legal status of any Subsidiary Borrower; (h) the change in or the imposition of
any law, decree, regulation, order or other governmental act which does or might
impair, delay or in any way affect the validity, enforceability or the payment
when due of the Guaranteed Obligations; (i) the failure of the Company or any
Subsidiary Borrower to maintain in full force, validity or effect or to obtain
or renew when required all governmental and other approvals, licenses or
consents required in connection with the Guaranteed Obligations or this
guaranty, or to take any other action required in connection with the
performance of all obligations pursuant to the Guaranteed Obligations or this
guaranty; (j) the existence of any claim, setoff or other rights which the
Company may have at any time against any Subsidiary Borrower or any other Person
in connection herewith or an unrelated transaction; or (k) any other
circumstances, whether or not similar to any of the foregoing, which could
constitute a defense to a guarantor; all whether or not the Company shall have
had notice or knowledge of any act or omission referred to in the foregoing
clauses (a) through (k) of this paragraph. It is agreed that the Company’s
liability hereunder is several and independent of any other guaranties or other
obligations at any time in effect with respect to the Guaranteed Obligations or
any part thereof and that the Company’s liability hereunder may be enforced
regardless of the existence, validity, enforcement or non-enforcement of any
such other guaranties or other obligations or any provision of any applicable
law or regulation purporting to
 
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prohibit payment by any Subsidiary Borrower of the Guaranteed Obligations in the
manner agreed upon between such Subsidiary Borrower and the Administrative Agent
and the Lenders.
 
SECTION 10.04.   Subrogation. The Company hereby agrees not to assert any right,
claim or cause of action, including, without limitation, a claim for
subrogation, reimbursement, indemnification or otherwise, against any Subsidiary
Borrower arising out of or by reason of this guaranty or the obligations
hereunder, including, without limitation, the payment or securing or purchasing
of any of the Guaranteed Obligations by the Company unless and until the
Guaranteed Obligations are indefeasibly paid in full and any commitment to lend
under this Agreement and any other Credit Documents is terminated.
 
SECTION 10.05.   Limitation on Obligations. 
 
(i)  The provisions of this guaranty are severable, and in any action or
proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the Company under this guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of the Company’s liability under this guaranty, then,
notwithstanding any other provision of this guaranty to the contrary, the amount
of such liability shall, without any further action by the Company, the
Administrative Agent or any Lender, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the Company’s
“Maximum Liability”). This Section 10.05 with respect to the Maximum Liability
of the Company is intended solely to preserve the rights of the Administrative
Agent of the Lenders hereunder to the maximum extent not subject to avoidance
under applicable law, and neither the Company nor any other person or entity
shall have any right or claim under this Section 10.05 with respect to the
Maximum Liability, except to the extent necessary so that the obligations of the
Company hereunder shall not be rendered voidable under applicable law.
 
(ii)  The Company agrees that the Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of the Company without impairing
this guaranty or affecting the rights and remedies of the Administrative Agent
and the Lenders hereunder. Nothing in this Section 10.05(b) shall be construed
to increase the Company’s obligations hereunder beyond its Maximum Liability.
 
SECTION 10.06.   Acceleration. The Company agrees that, as between the Company
on the one hand, and the Lenders and the Administrative Agent, on the other
hand, the obligations of each Subsidiary Borrower guaranteed under this
Article X may be declared to be forthwith due and payable, or may be deemed
automatically to have been accelerated, as provided in Article VII hereof for
purposes of this Article X, notwithstanding any stay, injunction or other
prohibition (whether in a bankruptcy proceeding affecting such Subsidiary
Borrower or otherwise) preventing such declaration as against such Subsidiary
Borrower and that, in the event of such declaration or automatic acceleration,
such obligations (whether or not due and payable by such Subsidiary Borrower)
shall forthwith become due and payable by the Company for purposes of this
Article X.
 
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SECTION 10.07.   Termination Date. This guaranty shall continue in effect until
the date the Commitments shall have been terminated or otherwise expired in
accordance with its terms and all of the Guaranteed Obligations have been paid
in full.
 
SECTION 10.08.   Foreign Currency. The specification of payment in a specific
currency at a specific place and time pursuant to this Agreement, any Note or
any other Loan Document is essential. That currency or those currencies are also
the currency of account and payment under this guaranty. If the Company is
unable for any reason to effect payment of a specific currency (other than
Dollars) as required by the preceding sentence or if the Company defaults in the
payment when due of any payment of a specific currency (other than Dollars)
under this guaranty, the Administrative Agent may, at its option, require such
payment to be made to the Administrative Agent’s principal office in the
equivalent amount in Dollars at the Administrative Agent’s then current selling
rate for electronic transfers of that currency to the place or places where the
Guaranteed Obligations were payable. In the event that any payment, whether
pursuant to a judgment or otherwise, does not result in payment of the amount of
currency due under this guaranty, upon conversion to the currency of account and
transfer to the place specified for payment, the Administrative Agent and the
Lenders shall have an independent cause of action against the Company for the
deficiency.
 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 
                                                    SELECT COMFORT CORPORATION,
as a
                                                    Borrower
 
                                                    By:  /s/ James C. Raabe
                                                    Name:  James C. Raabe
                                                    Title:  SVP and Chief
Financial Officer
 
 
                                                    SELECT COMFORT RETAIL
CORPORATION, as a
                                                    Borrower
 
                                                    By:  /s/ James C. Raabe
                                                    Name:  James C. Raabe
                                                    Title:  SVP and Chief
Financial Officer
 
 
                                                    SELECT COMFORT DIRECT
CORPORATION, as a
                                                    Borrower
 
                                                    By:  /s/ James C. Raabe
                                                    Name:  James C. Raabe
                                                    Title:  SVP and Chief
Financial Officer
 
 
                                                    SELECT COMFORT SC
CORPORATION, as a
                                                    Borrower
 
                                                    By:  /s/ James C. Raabe
                                                    Name:  James C. Raabe
                                                    Title:  SVP and Chief
Financial Officer
 

Signature Page to Credit Agreement

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                                                    JPMORGAN CHASE BANK,
NATIONAL
                                                    ASSOCIATION, individually
and as
                                                    Administrative Agent
 
                                                    By:  /s/ James M. Sumoski
                                                    Name:  James M. Sumoski
                                                    Title:  Vice President

 

Signature Page to Credit Agreement

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                                                    BANK OF AMERICA, N.A.,
individually and as
                                                    Syndication Agent
 
                                                    By:  /s/ Steven K. Kessler
                                                    Name:  Steven K. Kessler
                                                    Title:  Senior Vice
President

 

 

Signature Page to Credit Agreement

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                                                    CITICORP USA, INC.
 
                                                    By:  /s/ Carrie Stead
                                                    Name:  Carrie Stead
                                                    Title:  Vice President
 
 

Signature Page to Credit Agreement

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                                                    WELLS FARGO BANK, NATIONAL
                                                    ASSOCIATION
 
                                                    By:  /s/ Kent A. Paulson
                                                    Name:  Kent A. Paulson
                                                    Title:  Vice President

 

Signature Page to Credit Agreement

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                                                    BRANCH BANKING AND TRUST CO.
 
 
                                                    By:  /s/ Gregory A. Drabik
                                                    Name:  Gregory A. Drabik
                                                    Title:  Assistant Vice
President
 
 
 

Signature Page to Credit Agreement
 
 
 

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Schedule 1.01

PRICING SCHEDULE

 
Applicable Rate
 
 
Level I
    Status
 
 
Level II
Status
 
 
Level III
Status
 
 
Level IV
Status
 
 
Level V
Status
 
 
Eurocurrency
Spread
 
 
0.41 %
 
 
 
0.50%
 
 
 
0.60%
 
 
 
0.70%
 
 
 
0.80%
 
Facility Fee Rate
0.09%
 
0.125%
 
0.15%
 
0.175%
 
0.20%
 

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

“Financials” means the annual or quarterly financial statements of the Company
delivered pursuant to Section 5.01 of this Agreement.

“Level I Status” exists at any date if, as of the last day of the fiscal quarter
of the Company referred to in the most recent Financials, the Leverage Ratio is
less than 1.00 to 1.00.

“Level II Status” exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status and (ii) the Leverage Ratio is less
than 1.50 to 1.00.

“Level III Status” exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is less than 2.00 to 1.00.

“Level IV Status” exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Leverage Ratio is less than 2.50 to 1.00.

“Level V Status” exists at any date if the Company has not qualified for Level I
Status, Level II Status, Level III Status or Level IV Status.

“Status” means Level I Status, Level II Status, Level III Status, Level IV
Status, or Level V Status.

The Applicable Rate shall be determined in accordance with the foregoing table
based on the Company’s Status as reflected in the then most recent Financials.
Adjustments, if any, to the Applicable Rate shall be effective five Business
Days after the Administrative Agent has received the applicable Financials. If
the Company fails to deliver the Financials to the Administrative Agent at the
time required pursuant to the Credit Agreement, then the Applicable Rate shall
be the highest Applicable Rate set forth in the foregoing table until five days
after such Financials are so
 
 
 

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

 
delivered. Until adjusted commencing with the delivery of the Company’s
Financials with respect to the fiscal quarter ending June 30, 2006, Level I
Status shall be deemed to exist.

2

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Schedule 2.01

Commitments

JPMorgan Chase Bank, National Association
$27,000,000
Bank of America, N.A.
$23,000,000
Citicorp USA, Inc.
$20,000,000
Wells Fargo Bank, National Association
$15,000,000
Branch Banking and Trust Co.
$15,000,000
TOTAL
$100,000,000

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EXHIBIT A
 
ASSIGNMENT AND ASSUMPTION
 
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
 
For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees, and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
 
1. Assignor:                                                                  
        
 
2. Assignee:                                                                    
                        [and is an Affiliate/Approved Fund of [identify
Lender]1]
 
3.
Borrower(s):                                                                      
 
4. Administrative Agent: ______________________, as the administrative agent
under the Credit Agreement
 
5. Credit Agreement: The $100,000,000 Credit Agreement dated as of June 9, 2006
among Select Comfort Corporation, the Subsidiary Borrowers party thereto, the
Lenders parties  
    thereto, JPMorgan Chase Bank, National Association, as Administrative Agent,
and the other agents parties thereto.
 
 

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1  Select as applicable.
 
 
 

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6.  Assigned Interest:
 

 
Aggregate Amount of Commitment/Loans for all Lenders
Amount of Commitment/Loans Assigned
Percentage Assigned of Commitment/Loans2 
Revolving Credit
$
$
%
       

 
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
 
The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Credit Parties and their related parties or
their respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.
 
The terms set forth in this Assignment and Assumption are hereby agreed to:
 
ASSIGNOR
 
[NAME OF ASSIGNOR]
 
By:
                                                                Title:
 
ASSIGNEE
 
[NAME OF ASSIGNEE]
 
By:
                                                   Title:
 
[Consented to and]3  Accepted:
 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
Administrative Agent and Issuing Bank
 

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2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
3 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
 
2
 

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

 
 
By
Title:
 
 
[Consented to:]4 
 
SELECT COMFORT CORPORATION
 
By
 
Title:
 

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4 To be added only if the consent of the Company is required by the terms of the
Credit Agreement.

3

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ANNEX 1
 
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
 
1. Representations and Warranties.
 
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Credit Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Documents or any collateral thereunder, (iii) the financial condition of the
Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Credit Document or (iv) the performance or observance by the
Company, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Credit Document.
 
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender.
 
2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.
 
 
 

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

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

2

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EXHIBIT B

[FORM OF]
 
BORROWING SUBSIDIARY AGREEMENT
 
BORROWING SUBSIDIARY AGREEMENT dated as of [_____], among Select Comfort
Corporation, a Minnesota corporation (the “Company”), [Name of Subsidiary
Borrower], a [__________] (the “New Borrowing Subsidiary”), and JPMorgan Chase
Bank, National Association, as Administrative Agent (the “Administrative
Agent”).
 
Reference is hereby made to the Credit Agreement dated as of June 9, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Company, the Subsidiary Borrowers from time to time party
thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank,
National Association, as Administrative Agent and Bank of America, N.A., as
Syndication Agent. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
Under the Credit Agreement, the Lenders have agreed, upon the terms and subject
to the conditions therein set forth, to make Loans to certain Subsidiary
Borrowers (collectively with the Company, the “Borrowers”), and the Company and
the New Borrowing Subsidiary desire that the New Borrowing Subsidiary become a
Subsidiary Borrower. In addition, the New Borrowing Subsidiary hereby authorizes
the Company to act on its behalf as and to the extent provided for in Article II
of the Credit Agreement. [Notwithstanding the preceding sentence, the New
Borrowing Subsidiary hereby designates the following officers as being
authorized to request Borrowings under the Credit Agreement on behalf of the New
Subsidiary Borrower and sign this Borrowing Subsidiary Agreement and the other
Credit Documents to which the New Borrowing Subsidiary is, or may from time to
time become, a party: [______________].]
 
Each of the Company and the New Borrowing Subsidiary represents and warrants
that the representations and warranties of the Company in the Credit Agreement
relating to the New Borrowing Subsidiary and this Agreement are true and correct
on and as of the date hereof, other than representations given as of a
particular date, in which case they shall be true and correct as of that date.
[The Company and the New Borrowing Subsidiary further represent and warrant that
the execution, delivery and performance by the New Borrowing Subsidiary of the
transactions contemplated under this Agreement and the use of any of the
proceeds raised in connection with this Agreement will not contravene or
conflict with the provisions of section 151 of the Companies Act 1985 of England
and Wales (as amended).]5 [INSERT OTHER PROVISIONS REASONABLY REQUESTED BY
ADMINISTRATIVE AGENT OR ITS COUNSEL] The Company agrees that the guarantee of
the Company contained in the Credit Agreement will apply to the obligations of
the New Borrowing Subsidiary. Upon execution of this Agreement by each of the
Company, the New Borrowing Subsidiary and the Administrative Agent, the New
Borrowing Subsidiary shall be a party to the Credit Agreement and shall
 
 
 
 

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

1 To be included only if a New Borrowing Subsidiary will be a Borrower organized
under the laws of England and Wales.
 
 
 

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

 
 
constitute a “Subsidiary Borrower” for all purposes thereof, and the New
Borrowing Subsidiary hereby agrees to be bound by all provisions of the Credit
Agreement.
 
    This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
 

 
[Signature Page Follows]

2

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized officers as of the date first appearing above.
 

 
SELECT COMFORT CORPORATION
 
 
 
By: _________________________________
   Name:
   Title:
 
     
[NAME OF NEW BORROWING SUBSIDIARY]
 
 
 
By: _________________________________
  Name:
  Title:
 
     
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
Administrative Agent
 
 
By: _________________________________
  Name:
  Title:
 

3

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EXHIBIT C
 
MANDATORY COST RATE

1.    Definitions.

In this Exhibit E:

“Act” means the Bank of England Act of 1998.

The terms “Eligible Liabilities” and “Special Deposits” have the meanings
ascribed to the them under or pursuant to the Act or by the Bank of England (as
may be appropriate), on the day of the application of the formula set forth in
this Exhibit C.

“Fee Base” has the meaning ascribed to it for the purposes of, and shall be
calculated in accordance with, the Fees Regulations.

“Fees Regulations” means, as appropriate, either: (i) the Banking Supervision
(Fees) Regulations 1998, or (ii) such regulations as from time to time may be in
force, relating to the payment of fees for banking supervision in the United
Kingdom.

“FSA” means the Financial Services Authority.

2. Calculation of the Mandatory Cost Rate.

The Mandatory Cost Rate is an incremental per annum addition to the interest
rate charged with respect to each Eurocurrency Loan to compensate the Lenders
for the cost attributable to such Eurocurrency Loan resulting from the
imposition from time to time under or pursuant to the Act and/or by the Bank of
England and/or the FSA (or other United Kingdom governmental authorities or
agencies) of a requirement to place non-interest bearing or Special Deposits
(whether interest bearing or not) with the Bank of England and/or pay fees to
the FSA calculated by reference to the liabilities used to fund the relevant
Eurocurrency Loan.

The “Mandatory Cost Rate” is the rate determined by the Administrative Agent to
be equal to the rate (rounded upward, if necessary, to the next higher 1/100 of
1%) resulting from the application of the following formula:

For Sterling:

AB +C(B-D) + E x 0.01
100 - (A+C)
 

 
 
 

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

 

For other Agreed Currencies:

E x 0.01
   300

where on the day of application of the formula,

 
A
is the percentage of Eligible Liabilities (in excess of any stated minimum)
which the Administrative Agent is from time to time required to maintain as an
interest free cash ratio deposit with the Bank of England.

 
B
is the Eurocurrency Base Rate applicable to the related Eurocurrency Loan.

 
C
is the level of interest-bearing Special Deposits, expressed as a percentage of
Eligible Liabilities, which the Administrative Agent is required from time to
time to maintain by the Bank of England (or other United Kingdom governmental
authority or agency).

 
D
is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on Special Deposits.

 
E
is the rate payable by the Administrative Agent to the FSA pursuant to the Fees
Regulations and expressed in pounds per 1,000,000 Sterling of the Fee Base of
the Administrative Agent.

(A, B, C and D are to be expressed in the formula as numbers and not as
percentages. A negative result obtained from subtracting D from B shall be
counted as zero.)

The Mandatory Cost Rate attributable to a Eurocurrency Loan for any period shall
be calculated at or about 11:00 a.m. (London time) on the first day of such
period for the duration of such period.

The determination of the Mandatory Cost Rate by the Administrative Agent in
relation to any period shall, in the absence of manifest error, be conclusive
and binding on all parties hereto.

2

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EXHIBIT D
 
[FORM OF]
 
BORROWING SUBSIDIARY TERMINATION
 
JPMorgan Chase Bank, National Association,
as Administrative Agent
for the Lenders referred to below
Chase Tower
Chicago, Illinois 60670
Attention: [__________]

[Date]
 
Ladies and Gentlemen:
 
The undersigned, Select Comfort Corporation (the “Company”), refers to the
Credit Agreement dated as of June 9, 2006 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Company, the
Subsidiary Borrowers from time to time party thereto, JPMorgan Chase Bank,
National Association, as Administrative Agent and Bank of America, N.A., as
Syndication Agent. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
 
The Company hereby terminates the status of [______________] (the “Terminated
Borrowing Subsidiary”) as a Subsidiary Borrower under the Credit Agreement. [The
Company represents and warrants that no Loans made to the Terminated Borrowing
Subsidiary are outstanding as of the date hereof and that all amounts payable by
the Terminated Borrowing Subsidiary in respect of interest and/or fees (and, to
the extent notified by the Administrative Agent or any Lender, any other amounts
payable under the Credit Agreement) pursuant to the Credit Agreement have been
paid in full on or prior to the date hereof.] [The Company acknowledges that the
Terminated Borrowing Subsidiary shall continue to be a Borrower until such time
as all Loans made to the Terminated Borrowing Subsidiary shall have been paid
and all amounts payable by the Terminated Borrowing Subsidiary in respect of
interest and/or fees (and, to the extent notified by the Administrative Agent or
any Lender, any other amounts payable under the Credit Agreement) pursuant to
the Credit Agreement shall have been paid in full, provided that the Terminated
Borrowing Subsidiary shall not have the right to make further Borrowings under
the Credit Agreement.]
 

 
[Signature Page Follows]
 
 

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

 

This instrument shall be construed in accordance with and governed by the laws
of the State of New York.
 
        Very truly yours,

        SELECT COMFORT CORPORATION

         By: ______________________________
         Name:
         Title:

Copy to:     JPMorgan Chase Bank, National Association
131 South Dearborn Street
Chicago, Illinois 60603

 
2
 

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